Senate Banking Committee Votes to Confirm Yellen as Fed Boss

Yellen will oversee locked in policies established by her predecessor and engineered by bankster elite.
Kurt Nimmo
Janet Yellen moved a step closer to becoming window dressing for the Federal Reserve when the Senate Banking Committee gave her a nod on Monday. The Democrat dominated committee is expected to move Yellen’s confirmation forward to the full Senate later today. A vote is expected in December.
Republicans and Democrats agree Janet Yellen should be the next Fed syndicate boss.
Yellen, widely described as a “monetary dove” who is said to obsessively hand-wring over stubborn unemployment, will oversee locked in policies established by her predecessor and engineered by the bankster elite – ZIRP (Zero Interest Rate Policy) and QE and bond monetization forever, or at least until the bottom falls out which may or may not occur under Yellen’s reign.

The Fed now holds a balance sheet overloaded with an astounding $4 trillion. It expands at the rate of around $1 trillion per year. On Saturday, a former Fed official, Andrew Huszar, described the cartel’s asset purchase program as “the greatest backdoor Wall Street bailout of all time.” It was designed to prop up crippled zombie financial institutions that would otherwise collapse. Sold to an unwitting public as a palliative for Main Street, it is instead a criminal shell game devised by the psychopaths who run the global economy. “QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash,” Huszar writes for the Wall Street Journal.
Both Democrats and Republicans support Yellen’s confirmation. Republicans hedged at first because they believed the Fed’s easy money policy enabled Democrats and Obama to engage in a spending spree, but most of are ready to move confirmation forward. “In the end, I do believe she has the qualifications necessary to be the Fed chairman and plan to support her nomination,” said Senator Bob Corker, a Republican from Tennessee. Key senators Susan Collins, Tom Coburn, and Lindsey Graham also support the nomination.
Small hurdles remain. For instance, an effort by Senator Rand Paul of Kentucky to put the nomination on hold until there is a vote on a bill he sponsors to subject the bankster cartel masquerading as a federal agency to more congressional control. Paul admits, however, that he will not be able to block Janet Yellen’s confirmation and a continuation of Federal Reserve policy that will ultimately result in financial disaster.
Source: Infowars
Distributed by RINF Alternative News

Do Americans Prefer Deception?

There’s more to the deceit and dishonesty about Social Security and Medicare discussed in my recent columns. Congress tells us that one-half (6.2 percent) of the Social Security tax is paid by employees and that the other half is paid by employers, for a total of 12.4 percent. Similarly, we are told that a Medicare tax of 1.45 percent is levied on employees and that another 1.45 percent is levied on employers. The truth of the matter is that the burden of both taxes is borne by employees. In other words, we pay both the employee and the so-called employer share. You say, “Williams, that’s nonsense! Just look at what it says on my pay stub.” OK, let’s look at it.
Pretend you are my employer and agree to pay me $50,000 a year, out of which you’re going to send $3,100 to Washington as my share of Social Security tax (6.2 percent of $50,000), as well as $725 for my share of Medicare (1.45 percent of $50,000), a total of $3,825 for the year. To this you must add your half of Social Security and Medicare taxes, which is also $3,825 for the year. Your cost to hire me is $53,825.
If it costs you $53,825 a year to hire me, how much value must I produce for it to be profitable for you to keep me? Is it our agreed salary of $50,000 or $53,825? If you said $53,825, you’d be absolutely right. Then who pays all of the Social Security and Medicare taxes? If you said that I do, you’re right again. The Social Security and Medicare fiction was created because Americans would not be so passive if they knew that the tax they are paying is double what is on their pay stubs — not to mention federal income taxes.
The economics specialty that reveals this is known as the incidence of taxation. The burden of a tax is not necessarily borne by the party upon whom it is levied. The Joint Committee on Taxation held that “both the employee’s and employer’s share of the payroll tax is borne by the employee.” The Congressional Budget Office “assumes — as do most economists — that employers’ share of payroll taxes is passed on to employees in the form of lower wages than would otherwise be paid.” Health insurance is not an employer gift, either. It is paid for by employees in the form of lower wages.
Another part of Social Security and Medicare deception is that the taxes are officially called FICA, which stands for Federal Insurance Contributions Act. First, it’s not an insurance program. More importantly, the word “contribution” implies something voluntary. Its synonyms are alms, benefaction, beneficence, charity, donation and philanthropy. Which one of those synonyms comes close to describing how Congress gets Social Security and Medicare money from us?

There’s more deceit and dishonesty. In 1950, I was 14 years old and applied for a work permit for an after-school job. One of the requirements was to obtain a Social Security card. In bold letters on my Social Security card, which I still possess, are the words “For Social Security Purposes — Not For Identification.” That’s because earlier Americans feared that their Social Security number would become an identity number. According to the Social Security Administration website, “this legend was removed as part of the design changes for the 18th version of the card, issued beginning in 1972.” That statement assumes we’re idiots. We’re asked to believe that the sole purpose of the removal was for design purposes. Apparently, the fact that our Social Security number had become a major identification tool, to be used in every aspect of our lives, had nothing to do with the SSA’s getting rid of the legend saying “For Social Security Purposes — Not For Identification.”
I wonder whether political satirist H.L. Mencken was right when he said, “Nobody ever went broke underestimating the intelligence of the American public.”
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
COPYRIGHT 2013 CREATORS.COM

Source: The New American
Distributed by RINF Alternative News

Empire Deconstructed

Every day brings evidence of an untoward kind, a polite way of saying, the realities are piling up, whichever way one looks, of America‘s downward projection into a class-state of concentrated wealth and power buttressed by a military establishment and accompanying weakening of constitutional rights, all with the result that global hegemony—the sun never sets on an American military installation—is seen as the means of staving off systemic failures in a market-fundamentalism, bred-in-the-bones, US capitalism. Militarism becomes the surrogate for, and life belt holding up, continued economic growth, in which the absolutism of the property right trumps the many phases of internal democratization which affect, and here, instead, derogate from, the people’s well-being.
From health care to environmental protection, from privacy to educational opportunity and excellence, and the list continues on into the night, government, rather than representing the public interest and dedicated to the general welfare, is the third rail to the war machine and Wall Street, energizing both—indeed, integrating both as in the militarization-financialization of capitalism itself, an obvious bastardization of Adam Smith, which called for a rounded framework of industry and commerce in a stable, even-handed international politics and system, yet ideally suited to the un-Smithian quest and paradigm of capitalist development founded on unilateral dominance across the board, whether by fair means or foul.
Now, mostly foul. American capitalism has become inseparable from intervention, the tip of whose iceberg is drone assassination selected and ordered by POTUS. When the chief executive resorts to premeditated killing, massive surveillance, eavesdropping on world leaders, trading partnerships one-sided in character, it is evident that this capitalist formation is growing desperate, cynical, yes, senile, fearing the loss of power and place, bragging rights to global leadership, and, to remain solvent, backing into the posture of counterrevolution and permanent war. Capitalism, once upon a time, was about trade, but now, isolation and containment of supposed adversaries (China, and soon the hitherto Third World rapidly developing), with Obama‘s Pacific-first strategy and secretive Trans-Pacific Partnership key signs of a confrontational attitude, using terrorism as a crutch, to maintain ascendancy of the capitalist world—as itself the only legitimate one. To remain on top of capitalism is to deny, rule out, if needed, strangle, alternative modes, chiefly socialism, with even mixed economies running afoul of World Bank and IMF (both largely extensions of US policy) injunctions.
Today, spinal meningitis at Princeton, a rare form, which Swiss medication, not US-approved, may or may not successfully address, while Cuban medicine has produced a vaccine specifically directed to this type B meningococcal meningitis (see W.F. Whitney’s excellent article in CP, Nov. 18) but is kept out of reach because of the embargo on Cuban imports, illustrates the fanaticism of America, its capitalism, its fear, surely not of Cuba itself, but what Cuba represents, an alternative life form to the rigidified society and its institutions America has become, the Princeton students hostage to the unreasoning hatred of whatever holds the nation up to the mirror of reason and social decency. One small item in the news, but it is just such, which by their very presence, alerts us to the prevalence of social decay. There are many others.
Here are two examples, CP readers perhaps wondering why I include my Comments to the New York Times in these articles. They serve as triggers for further thought, and often contain inchoative formulations without which I could not extend the analysis. By quotidian signs of structural-political decline, I mean exactly that: daily evidences, straws in the wind if one likes, of what I take to be the makings of fascistization in America.

The first NYT Comment is to Roger Cohen’s article, “A Dangerous Interregnum,” Nov. 19, which, since I harbor few illusions about The Times (except for its strong national-security and financial investigative reporting) is all the more surprising. Not many columnists begin with a salient quote of Antonio Gramsci, which sets the tenor for the piece: “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.” (Italics, mine) Exactly the morbidity I find running through practically every aspect of public policy, including a second area, massive domestic surveillance. Thus, Adam Liptak and Jeremy Peters’s article, “Congress and Courts Weigh Restraints on N.S.A. Spying,” Nov. 18, which, to NYT’s credit, has kept surveillance in the spotlight. From different angles, we see a developing pattern hardly worthy of a democratic nation:

I
A rare treat: cogent philosophical analysis of a high standard in a Times op-ed. I felt Walter Lippmann was resurrected when we need him most. Interregnum, as though a global suspension of political-economic animation, seems accurate, except that the US, opinion polls showing Americans’ overwhelming preference for focusing on domestic rather than foreign policy notwithstanding, is loathe to surrender visions of world hegemony, and that, gained not through superior trade but through a massive military posture.
The world is tired, but the US sees this condition as an opportunity, perhaps like never before, to EXPAND its ideological influence and, equally, give its capitalism a chance for revitalization amid signs of structural decline (esp. compared with China) and societal decay.
Under Obama, the logical culmination of six decades of bipartisan intervention and somewhat ruthless market-penetration, we see a militarily overextended giant finally bearing the physical and moral costs of its outsize ambitions: a wasteland of widening class difference, a health-care system choking on its dedication to profit and privatization, banking with all of the grace of mobster-run casinos, and the social safety net springing more holes through which the citizenry’s needs remain unattended than in any other advanced economy.
Will “”think[ing] anew about changed power structures” come about before it is too late, i.e., before the US brings the rest of the world to its knees, I doubt it.
II
The moral bankruptcy of the American political system, viz., bipartisan leadership consensus on massive surveillance (hallmark of totalitarianism), is nowhere more evident than here. Surveillance, antithesis of democracy, goes hand-in-glove with international eavesdropping, and suggests a degree of social control under Obama unprecedented in US history. Drone assassination is ugly enough, but NSA‘s carte blanche for spying and a willing American public to that outrage indicate a power-hungry government which will stoop to any practice conducive to global hegemony and support of mega-corporations and -banks.
Civil liberties is a dead letter. Everything is secret. In the name of the National Security State, the Constitution becomes so much toilet paper. Perhaps the real terrorists are POTUS, his security advisers, the intelligence community, and the bulk membership of both parties. They have done more harm to American freedom than al Qaeda could possibly achieve, because the canker lies within, prerequisite to growing repression.
How liberals/progressives can still support Obama passes belief. It is difficult to imagine worse to come, so vicious are the domestic practices done under the name of counterterrorism, and whose corollaries are intervention, paramilitary operations on a global scale, and a military budget sucking out the vitals of the Republic.

Norman Pollack is the author of The Populist Response to Industrial America (Harvard) and The Just Polity (Illinois), The Humane Economy, The Just Polity, ed. The Populist Mind, and co-ed. with Frank Freidel, Builders of American Institutions. Guggenheim Fellow. Prof. Emeritus, History, Michigan State. He is currently writing The Fascistization of America: Liberalism, Militarism, Capitalism. E-mail: pollackn@msu.edu.
Source: Counterpunch

5 Signs the Rich Have Way Too Much Money

Here’s something to read after you get done trying to figure out how to make the mortgage or the rent or the car payment this month. It’s a little story about how the other half lives. Well, maybe not the other half, exactly. More like the obscenely wealthy .01%.
What do you do when you just have too darn much money? Let’s say you already have your mansion(s), your jet, your yacht, your cars, your $5,000 watches, and you’ve still got too much money left over. (Yes, this really is a problem some people have.) While many, many Americans are struggling to get by, and a very few ultra-wealthy have too much money, here are five signs that the rich are just too rich.
1) You can eat a $95,000 truffle. The restaurant Nello, a Wall Streeter hangout in New York, offers a truffle for $95,000. A Russian billionaire named Vladimir Potanin recently ate one. Keep in mind that $95,000 is to a billion as 95 cents is to $10,000. If $10,000 is an amount you find too much to fathom, it’s like 9.5 cents to $1000. (PS, enjoy the terrible reviews the place gets on Yelp.)

2) You can get a $5,000 hamburger for lunch. The Fleur de Lys restaurant in Las Vegas at Mandalay Bay offers the “Fleurburger 5000″ for $5,000. The burger consists of a Kobe beef patty “topped with a rich truffle sauce and served on a brioche truffle bun. And this burger comes with its own beverage, a bottle of 1990 Chateau Petrus that is served in Ichendorf Brunello stemware that you get to keep.”
3) You can get a $500 milkshake to go with your $5,000 hamburger. The Powder Room restaurant in Los Angeles is selling a milkshake for $500. For your money you get “special stuff: edible gold, Belgian chocolate, and a crystal ring.”
What Next?
A lunch with a $95,000 truffle, a $5000 hamburger and a $500 milkshake doesn’t even add up to pocket change. So how about a bottle of wine? Of course, you can’t just swill down any bottle of wine—life is too short. So let’s go for it.
4) A bottle of 1811 Chateau d’Yquem sold at auction for $117,000. If you want a larger bottle of wine, the Le Clos wine shop in Dubai International Airport is offering three 12-liter bottles of 2009 Château Margaux for $195,000 each.
What do you look at while you are eating and drinking your awesome, and awesomely expensive, luxury?
5) A piece by Francis Bacon sold for $142 million at an art auction. Three other pieces sold for more than $50 million; 11 for more than $20 million; and 16 sold for more than $10 million. An Andy Warhol piece sold for almost $60 million.
Too Much In The Hands Of Too Few
This really is all about too much money in the hands of too few people. Agustino Fontevecchia at Forbes writes in “The Reason Why Francis Bacon’s ‘Lucian Freud’ Is Worth $142 Million“:
As the ultra-wealthy become even wealthier, the top-end of the art market, along with real estate and other luxury sectors, have experienced an incredible surge as cash is being channeled into alternative investments.
Fontevecchia explains,
The final, and possibly most important factor is the rise of the mega-rich. “Since the recession, the wealthy appear to be becoming even wealthier, while middle-class wages are more stagnant,” said Galbraith, who notes this is apparent in the art market where the high-end is experiencing more activity. “The ultra high net worth and the newly wealthy are looking to get into the art market,” said Markley, who notes contemporary art is accessible and acts well as a status symbol. If the Forbes 400 is any indication, the wealthy are getting wealthier, with the 400 richest Americans now worth a cumulative $2 trillion, up $300 billion from a year ago and with an average net worth of a record $5 billion, an $800 million increase from a year ago.
So what if a very few people have such enormous sums? These expensive excesses of food, wine and art don’t really affect regular people like you and me. But it turns out that the distortions caused by the excesses of the ultra-wealthy affect all of us a lot.
Take the housing market. You may have noticed headlines like the following: Hedge funds crowd first-time buyers out of housing market or How Big Institutional Money Distorts Housing Prices. If you live in certain areas of the country, like the San Francisco Bay Area, rents are soaring and it is unimaginable that you might ever purchase a place to live. The ultra-wealthy are purchasing houses by the hundreds to be rented out.
Then, of course, comes the usual next step when the ultra-wealthy are involved: they use their wealth and power to get things the rest of us can’t. One frequent example is demands for tax cuts. In cash-strapped Dayton, Ohio, this story: Hedge Fund Turned Property Owner Seeks Large Tax Cuts:
“Magnetar Capital LLC, investigated by the Securities and Exchange Commission for its housing bets leading up to the property crash, acquired a rental business in January with about 1,900 properties from Charles H. Huber’s widow. In April, its management company applied for the largest cut to property tax assessments in the county’s history. The move could curb funding for public schools, the police and fire departments and services to the disabled, said Montgomery County Auditor Karl Keith.”
A terrible, wealth-worshiping philosophy has taken hold among many of our conservative policymakers. A couple of months ago a piece in Forbes, Give Back? Yes, It’s Time For The 99% To Give Back To The 1%, spelled out this conservative philosophy:
“The community” never gave anyone anything. The “community,” the “society,” the “nation” is just a number of interacting individuals, not a mystical entity floating in a cloud above them. And when some individual person—a parent, a teacher, a customer–”gives” something to someone else, it is not an act of charity, but a trade for value received in return.
[. . .] Here’s a modest proposal. Anyone who earns a million dollars or more should be exempt from all income taxes. Yes, it’s too little. And the real issue is not financial, but moral. So to augment the tax-exemption, in an annual public ceremony, the year’s top earner should be awarded the Congressional Medal of Honor. The Forbes piece says that profit—no matter how attained—is the true measure of value in society. According to one example used by the author, Goldman Sachs has “done infinitely more for mankind” than people like Mother Teresa. The author knows this is true because of Goldman Sachs’ “billions in profits.”
You may remember reading that Goldman Sachs was accused of working with a hedge fund to sell “designed-to-fail” investments to customers like pension funds, so the hedge fund could profit from betting that the investments would fail. According to this conservative philosophy, Goldman Sachs’ profits are a measure of the “value created” by the “mental effort” that Goldman and the hedge fund put into developing this scheme.
The ultra-wealth of a few may be directly related to the way many people find themselves trying to figure out how to make their mortgage/rent, car payments, etc. Four hundred Americans have more wealth than half of all Americans combined, and just the six Walton heirs have more wealth than a third of all Americans combined. Yet companies like Walmart pays its employees so little that many of them have to turn to the taxpayers for assistance like food stamps just to get by.
This worship of the ultra-wealthy is manifested in policies that give privileges to the rich the rest of us don’t receive. The principle of one-person-one-vote gives way to power and our society eventually becomes ruled by the principle of one-dollar-one-vote.
Examples of our abandonment of the principles of democracy in favor of more-for-the-wealthier include the change from “high-occupancy lanes” where cars with two or three people can bypass traffic jams to toll lanes, where drivers who have more money can purchase the right to bypass traffic jams. We also experience this when we see first-class passengers allowed to bypass the long security lines at airports.
In a recent NY Times op-ed, The Extra Legroom Society, Frank Bruni writes about how people of greater wealth can purchase the right to board a plane earlier, even the right to bypass lines or make others wait while they go around again for rides at amusement parks. While these are examples of businesses, not our government, introducing tiers for the wealthier, they show how Americans have come to accept that people with more money should be allowed to bypass them.
Bruni writes, “But lately, the places and ways in which Americans are economically segregated and stratified have multiplied, with microclimates of exclusivity popping up everywhere. The plane mirrors the sports arena, the theater, the gym. Is it any wonder that class tensions simmer?”
These are a few examples of the excesses the super-wealthy indulge in, along with examples of ways their super-wealth harms the rest of us. There are far more examples in evidence these days. Our democracy—the ability of We the People to make our own decisions about how we should be governed—is what is really at stake as more and more wealth accumulates among fewer and fewer people.

40 House Republicans Back Constitutional Challenge to Obamacare

Forty House Republicans have filed a friend-of-the-court brief in a legal challenge to the Affordable Care Act. The suit is based on the Origination Clause of the Constitution, according to Breitbart.com.

The case — Sissel vs. United States Department of Health and Human Services — was filed in federal court in 2010 by the Pacific Legal Foundation on behalf of Iraq war veteran Matt Sissel, who owns a small business in Iowa. It is to be heard by a federal appeals court in early 2014.

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The Origination Clause states, "All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other bills." Senate Majority Leader Harry Reid used a legislative "trick" so that none of the Affordable Care Act legislation originated in the House, according to Breitbart.

Reid took the Service Members Home Ownership Tax Act, which the House had passed unanimously in 2009, removed every word of its text after the first sentence, and then replaced it with the Obamacare language, the conservative website says.

In June, Judge Beryl Howell, who was appointed by President Barack Obama, dismissed Sissel's challenge, saying that "gutting and replacing" a bill was merely issuing an amendment to legislation that originated in the House.

Howell also pointed out in her decision that the Affordable Care Act was not "a bill for raising revenue," or, in other words, a tax, and ruled that the revenue raised by the bill was "incidental" to the law and was not covered by the Origination Clause.

In July, the Pacific Legal Foundation appealed Howell's ruling. The friend-of-the-court filing by the House Republicans gives Sissel's case a constitutional legitimacy, says Breitbart.

Support from 40 Republicans is vital because the Pacific Legal Foundation lawsuit "defends the constitutional authority of the lower chamber, the legislative body that is closest to the people," foundation attorney Paul J. Beard II told The Washington Times.

However the appeals court rules, the case is likely to end up with the Supreme Court and could be heard in late 2014.

Josh Blackman, assistant professor at the South Texas College of Law, says that it could turn out to be the greatest "legal mulligan" in history. The term "mulligan" is used by golfers to retake a bad shot.

"If you asked me several months ago about the likelihood of a court striking down the law on Origination Clause grounds, I would not have pegged it very high," Blackman said. "But the events of the last few months have altered my thinking. The events of the last week have crystallized it.

"In light of massive and widespread unpopularity, and tepid opposition from vulnerable Democrats, the thinking has changed. Considering the president decided to unilaterally waive one of the most significant features of the law … the legitimacy and finality of this law is far from settled.

"If the law was settled ... there would be no need for waivers."

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China Fires Shot Across Petrodollar Bow: Shanghai Futures Exchange May Price Crude Oil Futures In Yuan

With the US shale revolution set to make America the largest exporter of crude, however briefly, the influence of Saudi oil is rapidly declining. This has been felt most recently in the cold shoulder the US gave Saudi Arabia and Qatar first over the Syrian debacle, and subsequently in its overtures to break the ice with Iran over the stern objections of Israel and the Saudi lobby (for a good example of this the most recent soundbites by Prince bin Talal ). But despite the shifting commodity winds and the superficial political jawboning, the reality is that nothing threatens the US dollar's hegemony in what many claim is the biggest pillar of the currency's reserve status - the petrodollar, which literally makes the USD the only currency in which energy-strapped countries can transact in to purchase energy. This may be changing soon following news that the Shanghai Futures Exchange could price its crude oil futures contract in yuan, its chairman said on Thursday, adding that the bourse is speeding up preparatory work to secure regulatory approvals.
 In doing so China is effectively lobbing the first shot across the bow of the Petrodollar system, and more importantly, the key support of the USD in the international arena.
This would be in keeping with China's strategy to import about 100 tons of gross gold each and every month, in addition to however much gold it produces internally, in what many have also seen as a preparation for a gold-backed currency, which however would require a far broader acceptance of the renminbi in the international arena and most importantly, its intermediation in a crude pricing loop. It is precisely the latter that China is starting to focus on.
Reuters reports:

China, which overtook the United States as the world's top oil importer in September, hopes the contract will become a benchmark in Asia and has said it would allow foreign investors to trade in the contract without setting up a local subsidiary.

"China is the only country in the world that is a major crude producer, consumer and a big importer. It has all the necessary conditions to establish a successful crude oil futures contract," Yang Maijun, SHFE chairman, said at an industry conference.

Yang's presentation slides at the conference stated that the draft proposal is for the contract to be denominated in yuan and use the type of medium sour crude that China most commonly imports.

It is hardly panic time yet: Reuters adds that industry participants with direct knowledge of the plan have said the contract would be priced in the yuan, otherwise known as the Renminbi, and the U.S. dollar. However, one can argue that the CNY-pricing is for now a test to gauge acceptance of the Chinese currency, and will take on increasingly more prominence as more and more countries, first in Asia and then everywhere else, opt for the CNY-denomination and in the process boost the Renminbi to ever greater parity with the USD.
Here are the punchlines:

"The yuan has become more international and more recognised by the financial market," Chen Bo, Chinese trading firm Unipec's executive general manager, told Reuters.

"I don't think it would be unacceptable for the world to use the renminbi for commodities trading."

Certainly not, although it would also entail a depegging the CNY from the USD, something which China is for now unable and unwilling to do. Because once the Yuan is freely priced, kiss all those Wal-Mart "99 cent" deals goodbye.
Which in retrospect may be just what the US wants: a very gradual and controlled dephasing of the USD's reserve currency status. Recall that what the Fed wants at any cost is inflation which has so far failed to materialize at the level demanded by the Chair(wo)man thanks in part to cheap Chinese goods and ongoing US exporting of inflation to China. So if that means a spike in the prices of China imports - so key to keeping US inflation in check - so be it. Because we can already see the Fed's thinking on the matter - certainly it will be able to always restore the USD's supreme status in "15 minutes" or less when it so chooses.
Of course, by then China, and the Petroyuan, may have a very different view on the world.

12 Ways JP Morgan Admitted It Ripped Off Americans to the Tune of Billions

Wall Street’s latest chapter in corporate accountability is hardly satisfying, even if it is a rare admission of wrongdoing from a major bank. On Tuesday, the Justice Department announced a $13 billion settlement with J.P. Morgan for its rapacious role in the housing market bubble and collapse.
Beyond analyses showing that the government’s supposed largest fine ever might end up “closer to $2.74 billion,” and that $7 billion of it is tax deductible—tantamount to America‘s 138 million taxpayers each giving a $50 bill to Morgan—the nation’s business press is filled with praise for the bank turning a page.
No one should hold their breath waiting for the Justice Department to announce criminal charges against bank executives; even if Attorney General Eric Holder says the case it not closed. Instead, what Americans are left with is an odd legal creature—a so-called “Statement of Facts”—describing Morgan’s greedy sins.

This declaration is not written in plain English. So here’s AlterNet’s translation of what Morgan said that it did, followed by the relevant legalese. This is as close to a corporate confession of greed and deceit as Americans get today.
1. J.P. Morgan knew it had bad loans from the start.
J.P. Morgan made billions by buying high-interest mortgages and selling them as packages to investors, who expected solid returns. Inside Morgan, its contactors knew that they were buying loans that didn’t even meet the brokers’ standards.
“JPMorgan employees were informed by due diligence vendors that a number of the loans included in at least some of the loan pools that it purchased and subsequently securitized did not comply with the originators’ underwriting guidelines.”
2. J.P. Morgan knew appraisers were inflating values.
To get a mortgage, lenders require an appraisal as part of a clearance process. Morgan knew appraisers were rubber-stamping home values that were absurdly high, but ignored it. The bigger the loan, the more profit in interest payments.
“A number of the properties securing the loans had appraised values that were higher than the values derived in due diligence testing from automated valuation models, broker price opinions or other valuation due diligence methods.”
3. J.P. Morgan lied about these values to investors.
Their business was based on reselling bundles of loans, so they deliberately over-promised to investors and hid information that the loans would likely fail.
“JPMorgan represented to investors in various offering documents that loans in the securitized pools were originated “generally” in conformity with the loan originator’s underwriting guidelines.”
4. When asked about bad loans, they said, ‘Don’t worry.”
When asked about bad loans in their budled investments, the bank said they were looking at mortages one-by-one and carefully certified their loans.
“Exceptions were made based on “compensating factors,” determined after “careful consideration” on a “case-by-case basis.”
5. They were buying loans like sharks biting at bait.
J.P. Morgan went right to the worst mortgage mills and starting buying everything that they had written, which included very-high interest loans on home values that were overstated with unsupportable payments.
JPMorgan began the process of creating RMBS [residential mortgage backed securities] by purchasing pools of loans from lending institutions, such as Countrywide Home Loans, Inc., or WMC [Washington Mutual] Mortgage Corporation, that originated residential mortgages by making mortgage loans to individual borrowers.”[WMC collapsed and was taken over by the federal government in 2008].
6. Their sales pitches were filled false assurances.
J.P. Morgan’s sales team, which included newly minted M.B.A. business school graduates working the phones and higher-ups at industry conferences armed with Powerpoint presentations, boasted of quality controls and vetting.
“JPMorgan salespeople marketed its due diligence process to investors through oral communications that were often scripted by internal sales memoranda, through presentations given at industry conferences, and to certain individual investors. In marketing materials, JPMorgan represented that the originators had a “solid underwriting platform,” and that JPMorgan was familiar with and approved the originators’ underwriting guidelines.”
7. Meanwhile, Morgan knew it was buying bad loans.
Back at corporate headquarters, the auditors that Morgan hired to review the mortgages that they were buying found that a sizeable slice of them—from the originators like Countrywide—did not even meet the mortgage broker’s supposed standards, and lacked information showing borrowers could pay them back.
“JPMorgan’s due diligence vendors graded numerous loans in the samples as Event 3′s, meaning that, in the vendors’ judgment, they neither complied with the originators’underwriting guidelines nor had sufficient compensating factors, including in many instances because of missing documentation such as appraisals, or proof of income, employment or assets.”
8. They dumped bad loans, en masse, into loan pools.
Executives ignored their auditors and threw the bad loans into the larger pot, as if that would make them go away, as if their solution was diluting its impact. When that didn’t work on an individual loan basis, they signed off on bad loans in bulk.
“JPMorgan directed that a number of the uncured Event 3 loans be “waived” into the pools facilitating the purchase of loan pools, which then went into JPMorgan inventory for securitization. In addition to waiving in some of the Event 3 loans on a case-by-case basis, some JPMorgan due diligence managers also ordered “bulk” waivers.”
9. They had twice the bad loans as their standards allowed.
The bank’s internal standards allowed for up to 15 percent of their bundled loans to be risky. But Morgan’s auditors found that they had nearly double that figure. So they cooked their books, by re-grading those bad loans, from so-called “Event 3” to “Event 2” status, to make its portfolio look like it met the bank’s standards.
“From the first quarter of 2006 through the second quarter of 2007, of the 23,668 loans the vendor reviewed for JPMorgan, 6,238 of them, or 27 percent, were initially graded Event 3 loans and, according to the report, JPMorgan ultimately accepted or waived 3,238 of these Event 3 loans – 50 percent – to Event 2.”
10. They met with Countywide, but kept buying bad loans.
Morgan auditors obviously knew that they had a very big problem on their hands and met with the slippery loan originators. But that did not stop other executives from buying bundles of bad loans—such as ones where borrowers made up their income on loan applications. Instead of approving individual mortgages, Morgan picked up its pace and approved these loan purchases in bulk.
“JPMorgan Managing Directors in due diligence, trading, and sales met with representatives of the originator to discuss the loans, then agreed to purchase two loan pools without reviewing those loan pools in their entirety as JPMorgan due diligence employees and managers had previously decided; waived a number of the stated income loans into the pools; purchased the pools; and subsequently securitized hundreds of millions of dollars of loans from those pools into one security.”
11. They kept telling investors everything was peachy.
Even though this skullduggery, mismanagement and distortions was going on inside the bank’s offices and known to top Morgan executives, they said nothing and kept selling the bundles with bad loans to investors.
“None of this was disclosed to investors.”
12. Other Wall Street giants did the exact same thing.
During the financial crisis brought by the collapse of the housing market, Morgan bought Bear Stearns, an investment bank, and Washington Mutual Bank. These banks did the exact same thing as Morgan; knowingly buying mortgages that never should have been written in the first place and ignoring auditors.
“Bear Stearns would purchase loans where there was a variance from the guidelines that the managers or other employees deemed acceptable. In addition, Bear Stearns completed bulk purchases of Alt-A loan pools even though the rate of loans with exceptions in the due diligence samples indicated that the un-sampled portion of a pool likely contained additional loans with exceptions.”
And so did Washington Mutual, which failed was closed by the government’s Office of Thrift Supervision in 2008.
“WaMu did not disclose to securitization investors in written offering materials the information from its internal reviews concerning instances of borrower fraud and misrepresentations regarding borrower credit, compliance, and property valuation, in the origination of loans, including as to loans that were sold into securitizations.”
These terse, matter-of-fact sentences from Department of Justice lawyers are what a corporate confession of massive greed and wrongdoing looks like today. It’s not very satisfying or reassuring to know that banks like Morgan preyed on the public—with predatory loans, cooked books, false sales pitches and no real effort to rein in abuses—because they were making money hand over fist.
While they partied on, the collapse of the housing market eviscerated the life savings of millions of people, as home values fell and still have not recovered. Meanwhile, the fact that apparently $7 billion of the settlement will be deductible from Morgan’s taxes is maddening. That’s equal to every American taxpayer handing Morgan CEO James Dimon a $50 bill—as if he’s not rich enough.