If The World's Population Were Reduced To 100

How the Goldman case is about the broken down system that allowed massive gambling in America’s housing market for the last decade.....

The case against Goldman Sachs is the ultimate conclusion to a decade long housing and gambling bubble fueled by easy money, no-documentation loans, and fraud spurred lending. While the investment banks nitpick whether a fraud was actually committed, many Americans are getting their first primetime dosage of how corrupt and absurd the crony banker system has become. To sum up the situation, Goldman helped hedge fund billionaire John Paulson find the ultimate toxic housing bet. Through various parties, it is alleged that Paulson pushed for certain undesirable toxic mortgages to be part of a giant pool of mortgages that unbeknownst to Goldman clients (the issue at hand), Paulson was making the ultimate short bet. Goldman collected fees upfront, Paulson made out like a bandit, and someone got the short end of the stick.

Wall Street is so out of touch with how bad things are in the real economy that they are fighting on the semantics if fraud actually occurred. But to many Americans watching this circus, they are wondering how in the world someone could make billions of dollars by betting against the implosion of the American housing market (a market where 69 percent at one point owned a home). That is the disturbing element now being leaked into the market and psyche of Americans. Goldman was one of those lucky banks that received a nice chunk of the trillions in bailout money pumped out by the Federal Reserve and U.S. Treasury. So what people are coming to grips with is the idea that the government essentially bailed out the decade long gambling spree of the biggest cronies we have seen in modern finance. Who benefitted from this kind of deal? The bets in fact, actually made things worse. In order to satisfy this gambling spree and make it even bigger, the message was sent out (with the implicit desire from Paulson and Goldman for junk mortgages) to brokers on the streets who kept pushing out option ARMs, Alt-As, and every other piece of crap we have come to witness so they can add it to one giant bet. It would be one thing if it was only Goldman but virtually every investment bank got in the game.

So where are we today? The market is still in complete disarray:

Source: First American Core Logic

The latest data shows that in January of 2010 the U.S. market with all of its home sales, had 29 percent of all these sales come from the distress pool. And as you can see from the chart above, a large number of distress sales will cut into the average sales price. That recent bump has come from artificial stimulus through the tax credit, HAMP stalling, and the Federal Reserve buying $1.25 trillion in mortgage backed securities keeping mortgage rates artificially low. But these things can’t last (the tax credit as of today has expired for new home purchases).

What is hard to understand from a psychological standpoint is how people can think things are good when we have over 7 million mortgages that are either 30+ days late or in some stage of foreclosure? We are, as of today even with all these new measures, near the peak of the foreclosure problem. Last month was the highest foreclosure filing month ever recorded! This is not good. How someone can interpret this as good news really baffles the senses. Until that distress percentage creeps down into the single digits, the market is highly volatile.

If you think mortgage fraud has gone away because option ARMs and sub-prime mortgages have gone the way of the dinosaurs, think again:

Source: CNN

“The report described several types of fraud that were detected most often. These include so-called “liar” loans, in which mortgage professionals knowingly listed false income claims for borrowers; inflated appraisals, in which mortgage loan officers or brokers pressure appraisers to overvalue a home so it would qualify for a bigger mortgage; and false occupancy claims, which is when buyers claim they will live in a home but are actually buying it for investment purposes.”

It isn’t like we have flushed out the industry with new rules and sensible financial regulation so why would we expect anything different? And what a stunner that California ranks as number three in the nation for mortgage fraud.

Some of the hardest hit areas are in the “fab four” states of California, Florida, Arizona, and Nevada:

Source: First American Core Logic

Riverside, the largest city in the Inland Empire had a distress sales rate of over 60 percent (the only large area to have this figure even beating out Detroit Michigan). Aside from looking at this data as just a statistic, think of each family and household that is struggling to make their mortgage payments. People don’t want to lose their homes (typically). Sure we have a unique market in California where thousands of homeowners are strategically walking away from their homes even though they have enough income to pay their bills. But the bulk of these distress cases are Americans that have lost jobs, have seen their mortgages recast/reset, or have seen their hours cut back. 1 out of 4 Americans with a mortgage is underwater on their mortgage. And that is why the amount of equity Americans have in their home is near an all time low:

Source: Calculated Risk

People forget that the housing bubble occurred at an arms distance. How so? Well follow the chain:

Borrower > (take on toxic loan with the hope that they would flip/sell before the mortgage payment went higher ideally with a much higher price).

Mortgage Broker > (didn’t care if you were unable to pay mortgage 1 year later, they get their commission upfront and higher for the more toxic loans).

Wall Street > (once they sliced it and diced it into crappy mortgage backed securities or other junk like CDOs, it was off their hands but not without a big fee – then they bet on it).

So who really was responsible for things once they went bust? You and everyone else in this country. Millions of borrowers have now lost their homes. Mortgage brokers and lenders are now fighting for small spots to push out government backed loans. Wall Street was the last untouched party but only thanks to trillions in bailout dollars. Yet it looks like this last bastion of protection is being eroded away with the push against Goldman, the number one investment bank on Wall Street.

I stumbled upon an article from Dr. John Grohol over at PsychCentral showing the most heavily prescribed psychiatric medications in the U.S.:

From 2005 to 2009, the biggest jump occurred with Xanax, a medication that is largely aimed at helping calm anxiety and anxiety associated conditions. 44 million of these prescriptions were given out in 2009. Without a doubt this economic recession is exacerbating underlying issues with many Americans (Xanax prescriptions jumped 29% from 2005 to 2009 even though our population only increased by 4%).

I look at indicators like this, or jobs, wages, cost of health care, food, and so far I haven’t seen what I would expect after pumping trillions of dollars into the economy. The typical American family has seen very little relief or help. Sure, Wall Street is up by over 70+ percent but that is because most of the money went to the crony bankers. And now the investment banks and Treasury are trying to say how great we are doing with TARP and it is going to cost much less than expected. Yet they don’t talk about the great mortgage casino:

$1.25 trillion in mortgage backed securities purchased by the Federal Reserve

$1 trillion in other loans and questionable debt the Fed took on through the alphabet soup of programs

$125+ billion to Fannie Mae and Freddie Mac that continue to support loans even though mortgage fraud is still rampant

4 out of 10 loans is now insured by the FHA which is seeing record defaults and is likely to see a bailout soon

Converting i-banks like Goldman and Morgan Stanley into bank holding companies to have access to the Fed so they can gamble even more

AIG? $47.5 Billion and a big chunk of this went straight through to Goldman for additional bad bets (do you notice how often we use bets as if we are talking about a bad gambler in Vegas?)

Wells Fargo $25 billion

Bank of America $45 billion

JP Morgan Chase $25 billion

GMAC $16.3 billion

GM $50 billion

And a long list of other items. So people aren’t buying that absurd spin that the cost will be so small:

“(Moneynews) One Treasury estimate put a cost of $87 billion on the financial bailout, well below the $250 billion the Congressional Budget Office estimated last year or other analyses that put the all-in number at $1 trillion or more.

“If you are going to do a ledger, you have to do a full and complete ledger,” Whalen told The New York Times.

“To talk about making money on short-term transactions with the TARP while you have this huge cost to the nation is incongruous.”

Analysts say a major factor missing from Treasury’s math is the huge transfer of wealth from investors to banks that resulted from the Federal Reserve’s near-zero interest-rate policy.

Banks benefit because they earn fat profits on the spread between what they pay for their deposits and what they reap on their loans, especially credit cards, which have a current average rate of 14 percent.

Savers and investors lose, especially those on fixed incomes.”

Just like people look back on Tulip Mania or the technology bubble, people will be asking how in the world did we allow so much gambling to take place with mortgages? But more importantly, they’ll be asking why we didn’t reform and fix such an obvious mistake even after so much economic pain was unleashed.

Greece braced for more violence as finance leaders ready to sign multi-million euro bailout with EU

Cash-strapped Greece is braced for more violence today as country leaders get ready to announce a deal with the EU for a controversial multi-million euro financial bailout.

The European Union and the International Monetary Fund are expected to confirm the aid, which will come in return for tough austerity measures, at a meeting this afternoon.

Greek Prime Minister George Papandreou is hoping the three-year deal – expected to reach up to 120 billion euros (£104.5billion) - will help stem a crisis that has hit the euro and shaken markets worldwide.

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A riot policeman jumps over metal railings after being set on fire by protesters throwing petrol bombs. Colleagues rushed over to him to put out the flames

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As a petrol bomb explodes at their feet, policemen leap out of the way at a May Day rally in Athens

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Part of his uniform on fire, an officer sprints to safety

However, thousands of angry protesters took to the streets of Athens yesterday over proposed conditions to the bailout, including draconian budget cuts which demonstrators believe will only affect the poor and will drag the country further into recession.

Clashes broke out between anarchists throwing petrol bombs and rocks towards riot police, who used tear gas to control the crowds at the May Day rallies.

Protesters could be heard chanting, ‘No to the IMF's junta!’, referring to the military dictatorship which ruled Greece from 1967 to 1974, and: ‘Hands off our rights! IMF and EU Commission out!’

More than half of Greeks say they will take to the streets again if the government agrees to the robust measures, according to an ALCO poll.

Foreign Office officials were 'monitoring' the situation in Greece, a popular destination for British holidaymakers. An estimated three million visited the Mediterranean country last year.

The protests came as it was revealed the economic crisis there can be traced back to a 'cover-up' by Labour governments in the Seventies.

But Whitehall files kept secret for 30 years show the chaos could have been averted if Harold Wilson and James Callaghan had vetoed the country’s entry to the then European Community.

The documents show that Callaghan, who was Foreign Secretary in Wilson’s Cabinet before succeeding him as Prime Minister, told the Cabinet that he feared Britain being ‘a minority of one’ in Europe if he opposed the Greek bid to join the EC.

One memo, written by a diplomat at the British Embassy in Athens, stated: ‘In the negotiations for Greek entry, we would do well not to rely wholly on Greek sources for our description of Greek reality.’

Another said: ‘We would be asking for trouble if Greece was allowed to join first and adopt
EC regulations later.’

Callaghan not only ignored these warnings, he also urged Ministers to make no public reference to them. Greece’s accession was ratified in 1981 – but without a proper ‘look at the books’.

Callaghan also cautioned against calling publicly for a study on problems that Spain and Portugal – both of which applied in 1977 – would cause the EC. Both have now had their economies marked down.

Shortly after Callaghan moved into No10, the Foreign Office warned about Greece’s entry: ‘The economic disadvantages for us will be substantial and it will be difficult to run the Community in ways satisfactory to us.’

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A demonstrator throws a stone to riot police during the Athens protest

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Demonstrators and police fight outside the Greek Parliament during a Mayday demonstration to protest against impending austerity measures

Yesterday, angry Greeks took part in rallies that saw riot police using tear gas to disperse protesters armed with petrol bombs and rocks in Athens.

Thousands of people took part in protests called by unions against EU demands for spending cuts in exchange for a bailout deal.

Protesters hit two television trucks with petrol bombs and vandalised a hotel.

The rescue package is expected to amount to £100billion over three years. The Greek Cabinet was due to meet at 7.30am today to ratify the aid deal. Finance Minister George Papaconstantinou is due to announce them at noon and then immediately fly to Brussels for an emergency meeting of eurozone finance ministers.

British visitors were told the Foreign Office was monitoring the protests as holidaymakers were further warned they face further disruption on Wednesday, when flights in and out of Greek airports will be cancelled during a 24-hour strike.

The International Monetary Fund believes it will take 10 years for Greece to overcome its financial crisis, according to a report to appear in Monday's Der Spiegel magazine.

Without citing any sources, the newsweekly said the IMF expects it to take that long for economic reforms to be pushed through and then bear fruit.

The International Monetary Fund has said it will provide the money over three years, along with Greece's partners in the eurozone.

IMF and EU negotiators began talks in Athens on April 21 and continued through Friday.

French Finance Minister Christine Lagarde said after a meeting of French government officials yesterday that she was confident eurozone finance ministers would approve the package by the end of the weekend.

Governments are discussing a package of up to £104billion over three years, she said.

Greece's additional austerity measures are likely to include raising consumer taxes, while docking pensions and public service pay.

Unions are furious and called on workers to rally in central Athens Saturday.

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Police walk in front of a burning broadcast van belonging to state TV. It was set on fire by a petrol bomb

'These measures are death. How people are going to live tomorrow, how they're going to survive, I do not understand,' said Nikos Diamantopoulos, who was participating in a rally organised by pro-Communist unions.

Union members were marching toward the Athens offices of the European Union and continuing to the U.S. Embassy.

Minor clashes broke out between rock-throwing anarchists and police, who responded with pepper spray.

In the northern Greek city of Thessaloniki, where more than 5,000 people demonstrated, anarchists briefly clashed with police and smashed a few storefronts and ATMs.

Conservative opposition party New Democracy and the Right-wing populist LAOS have been critical of the government but are seen as likely to support the package of measures.

Left-wing parties have vowed to escalate protests.

'The Greek people do not owe anything to anybody. Those who have brazenly robbed public money and pension funds,' Left Coalition leader Alexis Tsipras told reporters at one of the Athens rallies.

Accountant Virginia Kalapotharakou, who joined striking seamen and dockworkers rallying in the port of Piraeus, called the potential measures 'very reactionary'.

'They're trying to do away with all the rights we gained through struggles in previous years,' she said.

A default would be a serious blow to the euro currency and could hit Greek and European banks that invested in Greek government bonds. The bailout is designed to prevent that and to keep the Greek crisis from spreading to other countries that use the euro.

Greece spent freely for years and ran up debt equal to 115 percent of gross domestic product.

It has been effectively shut out of bond markets to refinance its debt pile because investors fear default and are demanding high rates of interest the government says it cannot pay.

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Supporters of Greek Communist party gather during a May Day rally at central Syntagma square in Athens

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Policemen charge at protesters who turn and flee. Left-wing parties have vowed to escalate protests

Signs that the help will soon be approved have calmed markets, which previously pushed Greece's cost of borrowing to untenably high levels high as EU and German officials showed little urgency in addressing the problem.

On Friday the interest rate gap, or spread, between Greek 10-year bonds and their benchmark German equivalent narrowed to 6.20 percentage points, from a staggering 10 points Wednesday.

But Athens was in for more bad news as credit agency Moody's Investor Services downgraded the debt rating of nine Greek banks: National Bank of Greece, EFG Eurobank Ergasias, Alpha Bank, Piraeus Bank, Emporiki Bank of Greece, Agricultural Bank of Greece, General Bank of Greece, Marfin Egnatia Bank and Attica Bank.

Moody's said the banks' might face further downgrades - a move that would come alongside Moody's ongoing review of the country's sovereign debt rating.

On Thursday, the agency confirmed that it is awaiting to see details of an EU-IMF rescue package before a possible revision of Greece's credit rating, but that a 'multi-notch downgrade' remained likely.

Testing the Limits of Freedom of Speech: Ernst Zundel Speaks Out

Foreign Policy Journal's exclusive interview with one of Europe's most well-known political prisoners.

Ernst Zundel

(TEHRAN) - Ernst Zundel is a German author and historian who has spent seven years of his life behind bars as a result of expressing his controversial viewpoints and opinions. He is a revisionist who has denied the Holocaust as described by most historians. He has been one of the most prominent political prisoners in Europe and has been jailed in three countries on two continents.

After his arrest in the U.S. in 2003, he was deported to Canada, where he was kept in prison as “a threat to the national security” for two years. After deportation to Germany in March 2005, he was convicted and sentenced in 2007 to five additional years of imprisonment on charges of holocaust denial. He was finally released on March 1, 2010.

This is the first interview Ernst Zundel has given since his release, published in the Foreign Policy Journal.

Firstly, I would like to extend my congratulations on your recent release. Were you ever mistreated or subject to any type of mental or physical punishment in breach of international conventions?

My entire treatment these past seven years by those arresting me, trying and convicting me, and keeping me in prison has been in brutal breach of international conventions. I was arrested in broad daylight on American soil by officials of the U.S. government who acted as hit squads for a nefarious lobby. There was no arrest warrant. I was not read my rights. I was whisked away in handcuffs without being allowed to get my wallet, to call my attorney, to be allowed to make my case before an American Immigration Judge or even hug my wife goodbye.

I was incarcerated in six different prisons on two continents in three countries—the USA, Canada, and Germany—without relief of any kind. In effect, I have had 10 percent of my life stolen from me – and for what “crime”? For having “overstayed my U.S. visa”?

Throughout my imprisonment, basic human rights principles were trampled underfoot repeatedly and with impunity. The worst prisons were the Canadian detention centers at Thorold, Ontario and at Toronto West, where I was held for two long years in isolation cells, ice-cold in the winter, no shoes or socks allowed. The electric light in these cells, bright enough to be able to read, was kept on 24 hours a day. Through a glass slot in the door I was checked every 20 minutes, and my activities were meticulously noted by the guards: one sheet for every day. No dignity, no privacy. My toothbrush was kept in a plastic bin in a hall. I was not allowed to speak to other prisoners.

Bed sheets were changed only after three months. No pillows. No chairs. When I wrote to my wife or to my attorneys, I had to sit on a makeshift pile of my court transcripts. No radio, no television, not even an electrical outlet to sharpen my pencils. No ball point pens, only pencil stubs, cut in half with a saw. No spoons, forks, or knives were permitted; only a white plastic spoon with a fork called a “spork” that had to be returned every time at the end of the meal. With very few exceptions when furtive guards showed me some kindness away from the surveillance cameras, I was treated as though I was the worst of criminals. That’s Canada for you, where I have lived and worked without a criminal record for more than 40 years.

It was somewhat better, but not much, in the United States. In Germany, it was quite a bit better in terms of the basic necessities, but personal mail was routinely withheld – 1,700 letters for up to five years – even after I forced a court to order that it be given to me. My so-called trial in Mannheim was a political show trial in the Stalinist mode in that my guilt was a foregone conclusion. I requested that exculpatory exhibits be allowed as validation for what I believed and had written and said. No meaningful defense was allowed. I could not put on record any forensic evidence, any historical documents, or even expert witnesses... That very request to be allowed to offer evidence was held to be a new offense of criminal behavior and could have resulted in new criminal charges – as were, in fact, lodged against my lawyers during that very trial who tried to overcome these restrictions.

Along with the rest of EU members, Germany regularly criticizes other countries for violations of free speech and human rights. However, your case demonstrated the emptiness of such claims within Europe. What’s your take on that? Is Europe really a utopia of liberty and freedom of speech?

Most European countries have only selected free speech for officially approved and sanctioned views on history. Almost all EU countries have laws in place that restrict freedom of speech under the guise of one fig leaf or other, such as the prevention of racist or neo-Nazi activities. The state decides selectively who is and what is racist. These laws are hypocritical, in Germany’s case superseding even their own Basic Law.

Dissidents are allowed very little opportunity to be read or heard in the mainstream corporate media channels of the West. The control mechanisms of the press are many, often subtle but widely understood and obeyed – fear of loss of jobs, diminished circulation, the withholding of government advertisements etc. There is no longer unrestricted freedom in any Western country, not even in the U.S. with its wonderful Constitution and Amendments such as the Bill of Rights.

Allow me here to point out to your readers the outline of a censorship practice known by its neutral term “rendition”, but more honestly defined as political kidnappings to force the silencing of dissident speech or alternate thoughts. Renditions in the West are ever more frequently practiced not only against alleged “terrorist suspects” but against ordinary political activists and writers whose viewpoints are frowned upon by such outfits as AIPAC and similar Zionist lobby and interest groups, B’nai Brith, the Canadian Jewish Congress etc.

In order to spell out what I can only describe to you in broad strokes, I’d like to briefly shed light on the period preceding my arrest in the U.S. and Canada; the conniving and the similarity in other cases like mine, where an innocuous or alleged infraction is used as a fig leaf to silence a political opponent.

Viet Dinh, a Georgetown University law professor and director of their Asian Law and Policy Studies Program who helped craft the Patriot Act, put it succinctly, as reported in an American publication called Wired that deals with freedom of speech on the net. That interview reads:

Wired News: An estimated 5,000 people have been subjected to detention since 9/11. Of those, only five — three noncitizens and two citizens — were charged with terrorism-related crimes and one was convicted. How do we justify such broad-sweeping legislation that has resulted in very few terrorist-related convictions?

Dinh: I’ve heard the 5,000 number. The official numbers released from the Department of Justice indicate approximately 500 persons have been charged with immigration violations and have been deported who have been of interest to the 9/11 investigation.

It may well be that a number of citizens were not charged with terrorism-related crimes, but they need not be. Where the department has suspected people of terrorism, it will prosecute those persons for other violations of law, rather than wait for a terrorist conspiracy to fully develop and risk the potential that that conspiracy will be missed and thereby sacrificing innocent American lives in the process.

This is exactly what happened to me. The initial reason given was an alleged immigration infraction – namely a “visa overstay”. I was no terrorist; I was a dissident writer. My political detractors knew perfectly well that I was in America legally, awaiting adjustment of status due to my marriage to an American citizen. I was in Immigration Adjustment of Status proceedings, meticulously following all the prerequisite steps. I was living openly in a rural area in Tennessee and was listed by address in the local telephone book. The U.S. government had given me a Social Security number, a work permit, a document that allowed me to leave the country and return unmolested. I had undergone and passed an FBI check and a health clearance. The only last step missing was a personal interview by an immigration official to ascertain a valid marriage to my American citizen wife.

We had been notified in writing that this interview could take as long as three years, and that no status report would be given. We were patiently waiting for that last step, a routine interview with an immigration official. Our immigration attorney had requested such an interview in writing – twice! Under oath, he testified that he had written those letters. These letters have mysteriously disappeared from our immigration file. When I was arrested, it was claimed that I had negligently “missed a hearing” which gave them grounds for an arrest due to a visa overstay. In other words, a simple bureaucratic loophole was found or fabricated that has cost me seven years of my life.

What happened to me in the context of a deliberate state policy of deception has also happened to others. Similar ruses via false accusations were used in cases like Germar Rudolf, likewise married to an American citizen, El Masri of Germany, Maher Arar of Canada, Gerd Honsik of Spain, Siegfried Verbeke of Belgium, David Irving, and now Bishop Williamson of England, to name only a few individuals who were caught between the grindstones of a criminal policy possible only under the Patriot Act in the U.S. and similar legal instruments in other countries. Embedded in that background of a widespread covert policy and practice to force political conformity, my case makes eminent sense. We are no longer dealing with an aberration. These extrajudicial renditions give 9/11 and the Patriot Act a new light as a global policy instrument of brutal censorship of unpopular thinkers and writers.

The thrust of a prestigious publication such as yours would normally deal with the policies of foreign governments, renditions, kidnappings, and incarcerations not only of foreign enemies but, as in the case of Vanunu, an Israeli-born-and-raised atomic scientist. He was no neo-Nazi, no racist, no Holocaust Denier, yet he was relentlessly pursued by the Mossad and ultimately kidnapped and jailed for 18 years.

The patterns of the breaking of international law and conventions, the use of false identities, and the brazen practice of breaking and entering by spy and intelligence agencies, etc. – these criminal activities are daily in the news. This sets the stage and makes my case a logical progression of an old, established policy, with this one difference: we are no longer talking about hunting and kidnapping alleged “Nazi war criminals” like Eichmann or stone-throwing Palestinians or even “Arab terrorists”, but instead the targeting of writers and other political dissidents in Western countries calling themselves “democracies”.

My story does not even end there. In my case, my “Holocaust Denier” profile was convenient, but passé. It was not even, as is so commonly and falsely claimed, “Denial of the Holocaust” or even more bizarre, my “visa overstay”! I was told what actually happened by a friend of ours with high-level UN connections. In his own words: “It was the Blue Booklet that did it! That’s when it was decided at the very highest level to take you out for good!”

Here is what happened, briefly: In the early months post-9/11 my wife, an avid Internetter, discovered a compelling research document entitled Stranger than Fiction: An Independent Investigation of 9/11 and the War on Terrorism by Anonymous, 11-11-02. She gave it to me over breakfast. I read it, found it interesting, and ran a few copies off on my printer for people on my mailing list. I did not write that lavishly footnoted paper. I did not research it. I merely copied it. Somebody must have concluded that I, with my background of thorough forensic investigations in other areas, showed more than ordinary interest in 9/11 as a potential political false flag common in intelligence agency operations!

During my trial in Mannheim, ostensibly for “Holocaust Denial”, portions of my monthly newsletter, where I mentioned this booklet and the 9/11 topic, were referenced by the prosecution as criminal offenses. Only after it became clear that I welcomed the opportunity to have my attorneys present forensic evidence of a potential 9/11 cover-up were those portions of the accusation against me hastily dropped, and my trial became a “Holocaust Denial” show trial in the traditional Stalinist mode, “… accuse wildly but don’t allow a defense!”

As we later found out through various freedom of information requests in various countries, there was in place for years a deliberate, convoluted plan to arrest and detain me under false pretenses so as to take me out and put me behind bars.

I mention this only as an overarching, logical example as to how diabolically clever my political opponents are in using the accusation of “Holocaust Denial” and persecution of Holocaust Revisionists as arrows in their arsenal of weaponry to shore up, consolidate, and protect their deceptively acquired power and influence.

What’s the reality behind Holocaust? Didn’t it happen at all? What about people such as Elie Wiesel, Thomas Blatt, Wladyslaw Bartoszewski and Leopold Engleitner who are Holocaust survivors and describe their own accounts of those painful days, when they personally witnessed the heart-rending demise of their parents in concentration camps and bone-crushing machines. How should we resolve these contradictions?

I will not answer this question. I would risk five more years in jail if I answered these questions honestly and truthfully. However, in the age of the Internet, others less known than I am find ways to simplify a painful, multifaceted problem, as the cartoon [Prevent Holocaust, Bomb Iran by Carlos Latuff] makes plain.

Many people of other countries have come to the categorical conclusion that the Western world is a beacon of liberty and unrestricted freedom of speech. But it sometimes seems that the reality is something else, and that people can be easily prosecuted merely for publishing views that are disliked. The booklet you published, Did Six Million Really Die?, is an example. What do you think?

Here is just one more example of what I already outlined above: We have faxes and other documents that prove on official embassy letterhead that the much vaunted and propagandized U.S. Judiciary has run interference for these kidnappers and renditioners via behind-the-scenes ex parte communication, thus engaging in a cover-up and whitewash worse than the ones practiced by those the U.S. government always blames for human rights violations in their hypocritical press campaigns, like against China in Tibet, Lukashenko in Belarus, Putin in Moscow and, of course, Iran during the recent so-called Green Revolution.

Many Zionist websites have introduced you as a white supremacist. Is that a fair characterization?

This claim is a convenient character assassination technique. I have never been a white supremacist and have stated so for decades, publicly, in countless interviews, newsletters, speeches, broadcasts, etc. It is my opponents’ modus operandi to broad-brush complex issues by politically expedient demonization.

You’re opposed to the regime of Israel because of its discriminatory and atrocious approach against the nation of Palestine. You consider yourself a pacifist who advocates stability and peace; aren’t these beliefs incompatible with your viewpoint regarding Hitler, who is internationally considered to be a notorious dictator and relentless killer? How can your peace-seeking stance come together with your approval of Hitler?

I cannot answer this question due to legal restraints. An honest and complete answer would land me in jail as a re-offender very quickly. Implicit in your question is the toxic image of me that my detractors would like you to have. To be called a Nazi is worse than being called a leper. For decades I have been on the receiving end of just such a targeted character assassination campaign. I have been jailed many times - not for advocating an ideology - but for expressing a dissident, alternative viewpoint on many topics, including Adolf Hitler’s role in history. Revisionism is not an ideology. It is merely a scientific method of re-examining historical events and of trying to understand the movers and shakers who made history a footnote to their personalities.

Let me answer your question this way: I have always abhorred any kind of violence in the pursuit of political goals. By anyone! Politically, I was and am a pacifist, much in the Gandhi style. I advocate a sober, neutral look at history, including the period known as the Third Reich. The peoples of the world, regardless of what system of government they live under, owe it to themselves to emancipate themselves of the simplistic images of propaganda and deceit posing as history.

On May 1995, your Toronto residence was the target of an arson attack which resulted in $400,000 worth of damage. A few days later, some of your extremist opponents were caught trying to break into your property. Again a few days later, you received a parcel bomb which the Toronto police detonated. Have you ever tried to lodge a complaint against them? Have they ever been lawfully sentenced?

This is the flip side of some of the questions above. While I have never advocated or engaged in violence, egregious acts of violence have been repeatedly practiced on me, of which the political kidnapping in 2003 was merely the latest. As to the fire and the bomb, no, nothing was ever resolved. The police apprehended the bomb builders and senders, but the charges laid were stayed. There seems to have been no political will at the highest levels of the Canadian government. There was no political coin to be garnered by prosecuting Jewish arsonists, who even confessed to the deed.

Do you differentiate between the Zionists and Jews as the followers of a divine, monotheistic religion?

Yes, the two are totally different. Some Orthodox Jews who are united against Zionism, such as the Neturei Karta, believe that also. They know the godfathers of Communism and Zionism followed identical policies. The guiding spirit behind the two systems is the same. Neturei Karta rabbis attended the 2006 Teheran Conference sponsored by your President in an attempt to distance themselves from what they consider to be a dangerous atheist clique in the pursuit of illegal politics of conquest of which they want no part.

The mainstream corporate media, while having already vilified you, remained silent about your release. What do you think about this? Are you going to continue your ideological path or would you prefer to keep a low profile and forget about the intellectual activities?

Ironically, that was exactly what I intended to do when I moved to Tennessee and married Ingrid; keeping a low profile and turning to private endeavors such as my love for art and music. I felt that my revisionist outreach was finished, concluded to my inner satisfaction. Let others read both sides and then judge for themselves. All the arguments, all the information needed on the Holocaust is out there, on the Internet, in tens of thousands of websites, all for the taking. How often do you have to dig up an archeological site to find yet one more bone, yet one more implicating shard? My wife likes to say that you don’t have to eat a camel to know what a cutlet tastes like. I was quite ready to retire and satisfy my creative needs and desires. I could leave the political mopping-up activities for others to complete. But could my political opponents bring themselves, as rational people might have, to likewise call it quits? No; that is simply not in their nature.

As you point out so cogently, a powerful vilification campaign is still going full blast. It keeps my name in the media for people to decide for themselves who I am. Upon my release, my wife has collected thousands and thousands of letters from readers, only three of which were negative! Not a bad record, of the millions of dollars spent and millions of words dispersed in an attempt to paint me as as a devil with horns.

Let me ask you – would your prestigious publication have cared to interview me if you thought that I deserved the label of Evil Incarnate?

[FPJ's editor note: The views and beliefs of Ernst Zundel are his own, and not those of Foreign Policy Journal. It is the policy of FPJ to uphold the principle of freedom of speech, which means freedom to say things that others may find despicable. It is otherwise a meaningless principle. It is also the position of FPJ that both sides to a story deserve to be heard. It's up to readers to draw their own conclusions and make their own judgments.]

Peter Schiff – How an Economy Grows & Why it Crashes

If We Broke Up Standard Oil, We Can Break Up the Giant Banks

If we broke up standard oil, we can break up the giant banks.

Says who?

Senator Ted Kaufman (interviewed recently by The American Prospect's Tim Fernholz):

You and Senator Sherrod Brown have proposed an amendment that would cap the size of the largest banks and, in effect, break them up. How do you sell this to people who are leery of what seems like a radical move?

First off, we've broken up things before. We broke up Standard Oil, we broke up AT&T, we broke up the accountants, too. A lot of the changes we're talking about, the mergers, are just new. When you look at the reasons these banks are so big -- and you know how big they are -- remember the reason JP Morgan Chase is so big is because they bought Washington Mutual when it was in trouble, and Wells Fargo bought Wachovia, and Bank of America bought Merrill Lynch [during the crisis]. It is pretty straightforward, now that these are back on their feet, that it makes sense to break them up.

Alan Greenspan:

U.S. regulators should consider breaking up large financial institutions considered “too big to fail,” former Federal Reserve Chairman Alan Greenspan said.

Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always step in to guarantee their obligations. That squeezes out competition and creates a danger to the financial system, Greenspan told the Council on Foreign Relations in New York.

“If they’re too big to fail, they’re too big,” Greenspan said today. “In 1911 we broke up Standard Oil -- so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”

At one point, no bank was considered too big to fail, Greenspan said. That changed after the Treasury Department under then-Secretary Hank Paulson effectively nationalized Fannie Mae and Freddie Mac, and the Treasury and Fed bailed out Bear Stearns Cos. and American International Group Inc.

“It’s going to be very difficult to repair their credibility on that because when push came to shove, they didn’t stand up,” Greenspan said.

Fed officials have suggested imposing a tax or requiring higher capital ratios on larger banks to ensure the firms’ safety and reduce some of the competitive advantage from the implied subsidy. Greenspan said that won’t work.

“I don’t think merely raising the fees or capital on large institutions or taxing them is enough,” Greenspan said. “I think they’ll absorb that, they’ll work with that, and it’s totally inefficient and they’ll still be using the savings”...

“If you don’t neutralize that, you’re going to get a moribund group of obsolescent institutions which will be a big drain on the savings of the society,” he said.

“Failure is an integral part, a necessary part of a market system,” he said. “If you start focusing on those who should be shrinking, it undermines growing standards of living and can even bring them down.”

Former chief IMF economist Simon Johnson:

Writing in the New York Times today, Joe Nocera sums up, “If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad.”

Good point – but Nocera is thinking about the wrong Roosevelt (FDR). In order to get to the point where you can reform like FDR, you first have to break the political power of the big banks, and that requires substantially reducing their economic power - the moment calls more for Teddy Roosevelt-type trustbusting, and it appears that is exactly what we will not get.

Former Secretary of Labor Robert Reich:

Neither the draft bill, nor the Committee, nor anyone on the Hill having anything to do with financial regulation, is raising what I consider to be the two key reforms necessary for avoiding another financial meltdown -- resurrecting the Glass-Steagall Act that once separated commercial from investment banking, and applying antitrust laws to the remaining five biggest Wall Street banks so none is "too big to fail."

One of the world's leading economic historians, Niall Ferguson:

What's needed is a serious application of antitrust law to the financial-services sector and a speedy end to institutions that are "too big to fail."

***

[Geithner is proposing that] there should be a new "resolution authority" for the swift closing down of big banks that fail. But such an authority already exists and was used when Continental Illinois failed in 1984.

Indeed, even the FDIC mentions Continental Illinois in the same breadth as "too big to fail" banks.

And William K. Black - the senior regulator during the S&L crisis, and an Associate Professor of both Economics and Law at the University of Missouri - says that the Prompt Corrective Action Law (PCA), 12 U.S.C. § 1831o, not only authorizes the government to seize insolvent banks, it mandates it, and that the Bush and Obama administrations broke the law by refusing to close insolvent banks. And see this. Whether or not the financial giants can be broken up using the PCA, no one can doubt that the government could find a way to break them up if it wanted.

Break 'em up ...