FDIC Propping up Foreign Banks

From The New York Times:
Guaranty Bank, a deeply troubled Texas lender, was sold on Friday to Banco Bilbao Vizcaya Argentaria of Spain in one of the largest government-assisted deals offered to a foreign firm. Federal regulators seized Guaranty Bank and simultaneously brokered the sale of its branches as well as most of the deposits and assets to BBVA Compass, the Spanish bank’s American subsidiary. The government, however, agreed to absorb most of the losses on $9.7 billion, or more than 80 percent, of the Guaranty assets included in the deal.

The failure is the fourth-largest since the financial crisis began, and the Federal Deposit Insurance Corporation projects that it will cost its deposit insurance fund about $3 billion. Stockholders in Guaranty Bank will be wiped out, but the deal ensures that its depositors will not suffer losses. Although BBVA did not take control of the failed bank’s $344 million of brokered deposits, the F.D.I.C. said that it would reimburse brokers directly for those funds.

The government also agreed to shoulder the bulk of the losses on all of Guaranty’s loans — a deal sweetener that the government has rarely extended to overseas buyers. BBVA agreed to buy $12 billion of the $13 billion assets left at Guaranty Bank, which it will ultimately sell to private investors. The F.D.I.C. agreed to take on the remaining $1 billion of assets, as well as cover losses on the $9.7 billion pool of risky loans that BBVA bought. The agreement calls for the government to take on about 80 percent of the first $2.3 billion of losses, and 95 percent of the losses above that threshold.

Loss-sharing agreements have become a standard part of the F.D.I.C.’s toolkit for resolving troubled banks, but rarely have they covered such a big portion of a failed bank’s assets. And seldom are they offered to foreign buyers. Indeed, it appears the last time that an overseas bank received federal assistance in a failed bank deal was when the Bank of Ireland scooped up four New Hampshire banks in September 1991.

How to Survive an Ambush and Roadblock

A collapse in the form of Martial Law or Bank Holiday is imminent.

Survival Blog
In the days following a societal collapse, there will be some people who will be on the move from where the problems exist to where they hope safety lies. There can be many reasons why people are on the move, and an equal number of reasons why someone else may wish to stop your progress. Getting on the move and out of a hostile area as early as possible in the wake of a collapse is a significant key to one’s survival, as well has having buddies to cover you during your travel.

The sooner you get on the road, the less your chances of encountering problems. A few people will recognize the early signs of collapse and get moving out of town long before traffic becomes a problem. Others will recognize the issue within twenty-four hours after the event takes place, and will be on the leading edge of the traffic during the exodus. The majority will not realize the seriousness until it is too late. These people will get caught-up in the traffic jam that will rival the exodus of Houston during Hurricane Rita, where I-45 and I-10 were packed full of cars stopped on the highway for 100 miles. Many people ran out of gas on the side of the road and found themselves without food or water since they had only moved a few miles in four hours.

You may be a well prepared family, but for one reason or another are caught on your heals when a collapse occurs. This leads you to stay put longer than you would have liked, but you have no better tactical choices but to lay low at home or work for a few days before bugging out. You do not want to get caught in a highway traffic jam following a collapse. If you get stuck, you will have to leave most of what you packed into your vehicle(s) and move out on foot amongst the thousands of ill-prepared people on the roads doing things they would never have considered during normal times.

Those who are forced to wait out the initial exodus and are moving out of urban areas several days or weeks after the collapse will have a higher probability of coming in contact with an expedient ambush roadblock, both in the city and on rural roads outside of small towns. An expedient ambush roadblock is one set-up in haste with readily available materials and personnel. There will be plenty of desperate people who were caught unprepared for such an event; their lack of morals and innate nature to survive will drive them to take from others, with deadly force if necessary. It is your job to protect your family and yourself from these threats, especially when on the move.

While traveling in a vehicle on the roads, you may encounter various types of roadblocks or ambush points. Some may be fairly elaborate, while others may be quite simple. All are equally deadly. The primary tactic you will need to thread your way safely through one of these expedient ambush roadblocks is what I call R.O.C.S.: Recognition, Observation, Covering Fire, and Speed.

Recognition:

Recognizing that something you see ahead is a potential ambush site is the first key to success. An ambush site can appear as a traffic accident (as illustrated in Patriots), a fallen tree near or on the road, abandoned/broken down vehicles, anything blocking all or part of the road, detours, refugees, high ground on one or both sides of the road, bridges, and anything that looks like it does not belong on, or near, a road. These are the types of expedient ambush sites that someone may quickly create in the days following a societal collapse. It is up to whomever is leading, to recognize that a potential exists and to move into the observation phase.

Observation:

Once you recognize a likely ambush point (LAP), you have two choices: divert your course and completely avoid the circumstance, or observe and evaluate the site. You can either stop well short of the potential ambush point and observe through a scope or binoculars, or have a passenger continue to observe while on the move. Observation is a form of Intel. Look for signs of movement, or things that seem out of place. Reverse what you see and put yourself in the place of the ambusher. Where would you hide? How would you set it up? How many people would you need to pull off an ambush? What weapons would you use? What tactics would you employ? What is your end game?

At this point, you need to determine if what you see is worth the risk of approach or if you need to turn around and find a different route (if possible). Anyone traveling with you should also evaluate the situation and help with risk assessment. Once a decision is made to approach and pass the observed site, cover[ing fire] is needed.

Covering Fire:

This is a two or more person/vehicle job. This means that if it is just you, your wife and the kids, that you need to move out of town in two vehicles. Hopefully you have friends traveling with you to a new location who also have a vehicle and weapons. For [overwatching] cover[ing fire] during the operation, the lead vehicle stops at a distance from the LAP that is within the range of the weapon being employed. For most weapon platforms a good distance is 100-300 yards. This ensures accurate shots and plenty of ballistic energy. The lead vehicle should place their vehicle at a 45-degree angle to the direction of travel and the weapon system should then be employed across the hood so that the engine block provides a [limited] ballistic shield for those person(s) providing cover[ing fire].

The trailing vehicles should move past the lead vehicle with Speed. Once beyond the LAP, those vehicles stop and provide cover for the other vehicle(s) yet to pass through the site. Again, the vehicles that have already passed the LAP should stop within range of the weapon(s) being employed and turn their vehicles 45-degrees to the road and take personal cover behind the engine, covering the passage of the trailing vehicles. More...

Nearly all American banks are essentially insolvent

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Bill Sardi breaks down the American banking system's insolvency in simple terms.

Days Away From Economic Chaos?

Bill Sardi

America is just a few days away from a possible day of reckoning. I again call attention to this day, August 25, when the Federal Deposit Insurance Corporation issues its 2^nd Quarter report for 2009 on the state of health of American banks.

It has not particularly alarmed Americans that its growth and prosperity have been built upon debt. The American public is a bit desensitized, particularly since the Y2K threat fizzled. We must wait and see how Americans respond to the upcoming FDIC report.

There are roughly 8400 American banks that set aside a small portion of their profits to aggregately insure bank depositors should their local bank fail. A plethora of bank failures has depleted the FDIC reserve fund from $52.8 billion in 2008 to $13 billion in the 1^st Quarter of 2009.

Alison Vekshin, writing for Bloomberg, indicates

"The failure of 77 banks this year is draining the fund, prompting the agency in May to set an emergency fee of 5 cents for every $100 of assets, excluding Tier 1 capital, to raise $5.6 billion in the second quarter. The agency has authority to set fees in the third and fourth quarters, if needed, to prevent a decline in the fund from undermining public confidence."

Vekshin goes on to report that 56 bank failures since March 31 have cost the FDIC an estimated $16 billion. (For comparison, in the 1^st Quarter, bank failures only cost the FDIC $2.2 billion.) That $16 billion bank rescue would fully deplete the FDIC fund as it only had $13 billion at the close of the 1^stQuarter. It’s possible the FDIC has already tapped into its line of credit at the Treasury Department without setting off alarm bells to the public.

The FDIC is required by law to maintain a reserve ratio, or balance divided by insured deposits, of 1.15 percent. It was at 0.27 percent as of March 31. It could be near zero at the current moment.

Banks will be assessed extra fees

The FDIC's 8400 banks will likely be assessed special fees to shore up the FDIC's treasure chest.

Bloomberg’s Vekshin, quoting Robert Strand, a senior economist at the American Bankers Association, says the industry will pay $17 billion in premiums this year, including $11.6 billion from the annual fee.

Insured institutions set aside $60.9 billion in loan loss provisions in the 1^stQ, an increase of $23.7 billion (63.6 percent) from the first quarter of 2008.

Hiding losses

Banks have been slow to foreclose, allowing mortgage holders a few months before their home is deemed in default and giving another 2 years before the property is foreclosed on its accounting books. This practice has been able to temporarily hide most of the banking collapse.

But banks must eventually write down their real estate home mortgage losses. First-quarter net charge-offs of $37.8 billion were slightly lower than the $38.5 billion the industry charged-off in the fourth quarter of 2008.

As banks write off bad home loans, this downsizes their asset values. Downsizing at a few large banks caused $302-billion decline in industry assets in the 1^stQ. The FDIC report says:

Total assets declined by $301.7 billion (2.2 percent) during the quarter, as a few large banks reduced their loan portfolios and trading accounts. This is the largest percentage decline in industry assets in a single quarter in the 25 years for which quarterly data are available. Eight large institutions accounted for the entire decline in industry assets;

You can see by the following chart that US banks are directing a great deal of their profits towards write-offs (loss provision in the following chart) for non-paying home mortgages (foreclosures). So the banks only have about $5–7 billion of profit to direct to the FDIC to shore up its quickly vanishing reserve account. This aggregate profit equates to about $890,000 profit per bank in a quarter. That is a pretty thin margin.

Zombie banks

The FDIC, which claimed only about 300 problem banks in the 1^st Quarter of 2009, but hid the fact there were about 2000 total lame banks among its 8400 members, This has given rise to the term "zombie banks," which are defined as "a financial institution with an economic net worth that is less than zero, but which continues to operate because its ability to repay its debts is shored up by implicit or explicit government credit support."

Examination of the following FDIC chart shows geographically that most banks are not making a profit.

FDIC's $13 billion against $220 billion liabilities

So just how much liability does the FDIC bear aggregately for its "problem banks?"

At the end of the 1^st Quarter in 2009 the FDIC said that figure was $220 billion. Remember now, the FDIC had only about $13 billion to over these institutions at the time. (See chart below) This figure will likely grow beyond imagination with the issuance of the FDIC 2ndQ report.

How do American banks make profit today?

So how to American banks make any money today? You can see in the following chart that in the recent past American banks derived most of their profits (45%) from residential and commercial property loans. These income sources are obviously crashing.

So the FDIC 1^st Quarter report tells all – our so-called conservative American bankers, entrusted with your hard-earned savings, with no place to turn to generate traditional profits, have entered the gambling parlor. Here is how the FDIC said it:

Sharply higher trading revenues at large banks helped FDIC-insured institutions post an aggregate net profit of $7.6 billion in the first quarter of 2009.

Trading revenues means profit generated from trading stocks and other risky investments. Recall, when your money was being financed commercial and residential property it had some collateral behind it. An asset (real estate) was held in balance against the risk of failure to pay the loan. Now bankers are "investing" your money in the stock market in what appears to be a replay of how the Japanese propped up their stock market in recent years – by simply having major companies purchase each other’s shares to prop up value.

The FDIC's 1^stQ report says: "Total equity capital of insured institutions increased by $82.1 billion in the first quarter, the largest quarterly increase since the third quarter of 2004 (when more than half of the increase in equity consisted of goodwill)."

What the hoot is "goodwill" you want to know? It is how the banks are cooking their books. Arbitrary value is being given to bank holdings.

The FDIC 1^stQ report goes on to say that:

Most of the aggregate increase in capital was concentrated among a relatively small number of institutions, including some institutions participating in the U.S. Treasury Department’s Troubled Asset Relief Program (TARP).

Banks valued by goodwill and bailout funds

So there, you can see that in addition to goodwill, the bank's capital was largely increased by bailout funds. So a dose of reality therapy will lead one to conclude that nearly all American banks are essentially insolvent.

If this leaves you feeling a bit queasy, well, you may need to reach for Dramamine when you realize the FDIC is not only broke, but it will probably announce it is tapping into its line of credit at the US Treasury Department, which is also insolvent (America is spending $1.58 trillion more than it collects in taxes this year).

Here is how Bloomberg’s Vekshin says it:

If the fund is drained, the FDIC also has the option of tapping a line of credit at the Treasury Department that Congress extended in May to $100 billion, with temporary borrowing authority of $500 billion through 2010.

Compared with savings and loan crisis

American banks weathered the savings and loan/real estate appraisal crisis in the 1980s and 1990s by loading from the US Treasury. In 1991–92, during the last part of the savings and loan crisis, the FDIC borrowed $15.1 billion from the Treasury and repaid it with interest about a year later.

But just exactly how will American banks ever pay back the treasury while facing years of write-offs from home mortgages? The banks do not have sufficient profits to offset their losses.

The entire cost of the savings and loan crisis of the 1980s and 90s was finally calculated at $153 billion, which was four times the reserves held by the FDIC (FSLIC at the time) in 1982. Of this, taxpayers paid out $124 billion while the thrift industry itself paid $29 billion. (FDIC Banking Review, volume 13, no.2, December 2000) So there is a false notion that the banks underwrite their own members’ losses. In fact, the public bears the brunt of the losses when bankers are reckless.

Bankers prodded to loan money

Sheila Bair, FDIC chief, is trying to get US bankers to begin loaning money again. But to do so bankers must begin to assess the worth of real estate at more realistic values. Then the real value of their asset package would be revealed and the banks would all collapse. Furthermore, if banks begin to loan money under their fractional banking scheme (banks loan out 10–50 fold more money than they have in reserve), then massive inflation will likely result. This would not only result in Americans bearing the brunt of higher cost of goods and services, but it could trigger Asian banks, seeing their savings devalued, to sell off their stash of US treasury bonds. America as a debtor nation depends upon billions of dollars every day, loaned from Asian banks, to stay afloat financially.

The FDIC's Bair is aghast at American bankers shift away from traditional sources of revenue backed by collateral to risky investments. Bair wants to charge banks additional fees tied to risks when their business expands beyond traditional lending, such as stock trading. This idea hasn’t advanced in Congressional committees yet. American bankers are walking a tight rope with their depositors’ money.

The mother of all bank runs?

Now if just a small portion of American bank depositors hear that the FDIC had to tap into the US Treasury for funds, and these depositors feel their banked money is at risk and want to withdraw some of it, the mother of all bank runs could ensue. This could create the day of reckoning that many have predicted. A short banking holiday would have to be declared and who knows what happens from there – troops in the streets, issuance of new currency, martial law? Don’t think those in the Federal government haven’t made plans for such an occurrence.

The unbanked

Of surprising interest, the FDIC reveals that millions of Americans don’t trust or don’t use banks. These Americans have been called the unbanked or underbanked, meaning that they "do not have access to banks or are not fully participating in the mainstream financial system," says the FDIC. The FDIC guesstimates that 10 percent of American families are "unbanked." That’s a lot of capital the banks don’t have access to. Those who hold currency outside of banks are anathema to the gods of banking.

Sources: Alison Vekshin, FDIC May Add to Special Fees as Mounting Failures Drain Reserve, Bloomberg News August 20, 2009; FDIC 2ndQuarter report 2009.

August 21, 2009Bill Sardi [send him mail] is a frequent writer on health and political topics. His health writings can be found at www.naturalhealthlibrarian.com. He is the author of You Don’t Have To Be Afraid Of Cancer Anymore.

Prepare for a global depression, the likes of which have never been seen

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Humanity is on the verge of entering into the most tumultuous period in our history. The prospects of a global depression, the likes of which have never been seen before; a truly global war, on a scale never before imagined; and societal collapse, for which nations of the world are building totalitarian police states to control populations; are increasing by the day. The major global trend forecasters are sounding the alarms on economic depression, war, a return to fascism and a total reorganization of society. Through crisis, we are seeing the reorganization of the global political economy, and the transformation of capitalism into a totalitarian capitalist world government. Capitalism has never stayed the same through its history; it has always changed and will continue to do so. Its changes are explained and analyzed through political-economic theory, both mainstream theory and critical. The changes are undertaken over years, decades and centuries. The next phase of capitalism is one in which the world moves to a state-controlled economic system, much like China, of totalitarian capitalism.

The global political economy itself is being reorganized into a world government body, consisting of one center of global power where the socio-political-economic power of the world is centralized in one institution. This is not a conspiracy theory; it is a reality. Nor is this a subject confined to the realm of “internet conspiracy theorists,” but in fact, the concept of world government originates and evolves throughout the history of capitalism and the global political economy. Mainstream and critical political-economic theory has addressed the concept of world government for centuries.

The notion of a world government has such a long history, as the forces driving the world into such a structure intertwine with the history of the modern global political economy itself. The purpose of this report is to examine the history of the global political economy in taking steps toward forming a world government, in both theory and practice. How did we get here and where are we going? More...

Two reported deaths and hundreds of adverse Tamiflu reactions

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Tamiflu puts 600,000 at greater risk of a stroke

GPs have been put on alert over fears that Tamiflu can put some people at greater risk of suffering a stroke. A Government watchdog is concerned that the anti-swine flu drug can interact with the blood-thinning medication warfarin, which is taken by more than 600,000 people in the UK. The combination can dangerously thin the blood, putting patients at risk of uncontrolled bleeding which can lead to a stroke.

The Medicines and Healthcare products Regulatory Agency has already received reports of such cases and has asked health professionals to watch out for more. Last night an expert warned that the dangers have been increased because people given Tamiflu over the national flu hotline are not being warned properly about the possible warfarin risk.

The MHRA has now received 418 reports of suspected adverse reactions to Tamiflu, including two deaths. Of these reactions,12 were are due to interactions with warfarin. The number may be small, but the MHRA is sufficiently concerned to place all such reports under 'close review'. More...

Workplace Suicides Skyrocket

Workplace suicides rose 28 percent in 2008 from the year before according to the U.S. Labor Department reports. And according to a December 2008 study in the American Journal of Preventive Medicine, white people age 40 to 64 have "recently emerged as a new high-risk group for suicide."

Susan Baker, M.P.H., of the Johns Hopkins Bloomberg School of Public Health in Baltimore, told CNN the reason for the increase is unknown. But if economic conditions continue to decline, suicides could go up. "This is a concern, especially when one looks at the high rates during the Great Depression," says Baker.

Seetal Dodd, Ph.D., a senior fellow at the University of Melbourne in Australia, has found that suicide rates tend to fluctuate with the economic trends -- at least in men. The study is cause for concern, Dodd says, because it identifies middle-aged white men as the new high-risk group for suicide -- the same section of the population at risk for suicide during an economic downturn.

"There is a considerable risk that the current economic situation may result in a further spike in the suicide rate for men of working age, especially if we start to see an increase in unemployment and a decrease in housing affordability and consumer sentiment," Dodd says.

"We ordinarily experience much, much higher rates of suicide during times of recession," says M. Harvey Brenner, professor of public health at the University of North Texas Health Science Center and Johns Hopkins University in Baltimore, Maryland.

Brenner adds that what makes this recession different is that the very wealthy -- who are generally insulated from financial worries -- have taken a huge hit, and they have further to fall.

"You would think these people have such wonderful lives," says Brenner, full of private jets, luxury homes and the best of anything that money can buy. "Yet they are capable of losing much more, because they have so much more."

According to Alpha Galileo, a research news publication, investigators at London School of Hygiene & Tropical Medicine and Oxford University estimated that soaring stress brought on by job losses could prompt a rise in suicide rates in people under-64 years of age, a rise in heart attack deaths in men between 30 and 44 years, and a rise in homicides rates, corresponding to thousands of deaths in European Union countries, such as the UK.

Professor Martin McKee, one of the report's authors noted that "Suicides are just the tip of the iceberg - rising suicide rates are a sign of many failed suicide attempts and high levels of mental distress among workers and families."

Biometric fingerprint scan required to buy school lunches

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A new lunch system is being piloted at Elyria High school in Ohio that uses student fingerprints via a biometric scan instead of cards or personal identification numbers. Only the freshman class is using the fingerprint program now, but next week the entire student body and staff will have a scan of their index fingers on file.

“When it’s really up and running it will make things go a lot smoother and faster,” said Bill Jett, general manager of Sodexo, the district’s food service provider.

According to The Chronicle Telegram's Lisa Roberson, Sodexo will pick up the $91,000 tab to implement the program districtwide with the hope of recouping expenses over the next five years. Sodexo, a French multinational corporation and one of the largest food services and facilities management companies in the world, may soon have biometric data of every student and staff member in the entire state of Ohio if they can land the contracts. With 355,000 employees, representing 130 nationalities, present on 30,600 sites in 80 countries, Sodexo also provides services to the military and correctional facilities -- that means they work closely with federal and state officials.

“I’m just really glad I don’t have to remember a number every day or have a card or something,” said a 14-year-old student. “All you have to do is put your finger down and go.”

Teenagers are so accustomed to social web networks and invasive technology, docile submission into an Orwellian world seems natural, even after the release of ominous films like the Matrix, whose dire warning of future enslavement made such an impact, some of the film's dialogue (blue pill, red pill) became as much a part of American lexicon as "Catch 22".

When public schools begin collecting biometric data on our children via corporations with defense industry contracts, you know fascist tyranny is not far behind. Run your name through this for a glimpse into the future, where virtually every aspect of your life is recoded and documented for all to see.

Ending the Federal Reserve should be the collective goal of all Americans

Whatever preconceived notions and beliefs you may harbor about gold salesman, there's no disputing the truth and wisdom in the following article written by Darryl Robert Schoon, who, like Ron Paul, understands the absolute necessity to abolish, once and for all, The Federal Reserve System.

***

Economic cycles of expansion and contraction are the inevitable result of central bank credit flows. So, too, are deflationary depressions and hyperinflations. Though far less frequent, the destruction caused by deflationary depressions and hyperinflations more than make up for their infrequency; and, today, after perhaps the longest absence of each in recent history, we are now about to experience both—perhaps this time in tandem.

This will not be just a deflationary depression, it will be deflationary depression accompanied by a monetary crisis of epic proportions. The sudden on-set and virulence of the current economic crisis caught economists and central bankers by surprise. Having successfully dismissed those who disagreed with the spread of central banking and its illegitimate off-spring, fiat money, central bankers and economists were stunned when their world of paper money suddenly collapsed in 2007. Were it not for the unprecedented flood of government aid in 2008, private bankers would have been swept away just as they were in the 1930s. But, instead, private bankers were rescued with public funds, funds which allowed them to quickly return to their avocation of profiting from the indebting of others.

DON’T FEED THE PIGEONS

Words of advice from The Banker’s Handbook. Modern banking is essentially a Ponzi-scheme on a global scale. Bernard Madoff’s Ponzi-scheme was but a smaller, private version of the public model used in the world today. What people do not understand is that bankers loan money which doesn’t exist and then receive compounding interest and repayment of previously non-existent funds in return.

While this might be considered an abomination and nightmare, it is a wet-dream for bankers and those who profit from such a system. Charging interest on the loaning of gold and silver was believed to be a sin during the Middle Ages, but, today, the charging of interest on the loaning of money that didn’t previously exist and the receiving of the previously non-existent principal back plus interest is considered nothing less than a miracle—at least by the bankers who profit thereby.

The very birth of paper money was conceived in sin. In its genesis, central banking’s paper money was always a fraud. Believed to be backed by equal amounts of gold or silver, in actuality it was never so, no more than were the demand deposits of savers available upon demand in banks.

WHERE’S THE MONEY?
THE SHELF LIFE OF A SHELL GAME

Modern banking is akin to a shell game. As long as the public doesn’t catch on or the unexpected never happens (as in a banking crisis) the fraud can and does continue. The banking crisis during Great Depression, however, almost brought the banker’s shell game to an end by exposing it for what it was—a shell game. When US depositors rushed to the banks between 1930 and 1933 to withdraw their savings, they found the banks didn’t actually have their money and thousands of banks were forced to close.

This is what happened to Bernie Madoff’s clients when they requested their money en masse in 2008. This was Bernie Madoff’s nightmare. It is also the nightmare of all bankers because—just as with Bernie Madoff—the depositors’ money isn’t really there. When the Great Depression alerted savers to the fact that the banks didn’t actually have their money, bankers and government decided something had to be done to prevent bank runs from occurring in the future.

So, they created the FDIC, the Federal Deposit Insurance Corporation, which would maintain a fund composed of bank insurance premiums that would protect depositors against any losses up to a certain proscribed amount. But while Americans now believe their savings are backed by premiums paid into the FDIC fund, no such fund exists; and, although the FDIC regularly reports how much money is in the FDIC fund, the fund itself, like modern economics, is a fraud.

Modern economics, i.e. central banking, is a shell game, a shell game where bankers with the aid of governments have foisted a highly lucrative fraud on society; and, while the fraud of the FDIC fund is egregious, it is no more egregious than the fraud of the Fed or of the economy itself.

In economies based on the fraudulent issuance of money as debt, there are only predators and victims. Bankers are the predators, society is the victim (businessmen are victims who often believe they’re predators) and governments are the well-paid-off referees in the rigged game being played out in today’s capital markets.

ALL GOOD THINGS COME TO AN END
AND BAD THINGS DO TOO

This is our salvation. The debasement of our money and our enslavement by bankers into perpetual debt is finally coming to and end; but not because those oppressed realize their plight and are finally revolting. Their slavery is ending because those so enslaved are now so indebted they are unable to pay what they owe and the prison of debt itself is now bankrupt.

Banker’s credit creates constantly compounding debt and; today, so much debt has been created the economy can no longer expand fast enough to service it or pay it back. Homeowners, workers, farmers, business people, corporations and governments are all indebted beyond their means to repay and. when debtors can’t pay what they owe, the shell game of debt-based capitalism collapses—game over.

The Federal Reserve System which substituted debt-based paper money for the gold and silver based money issued previously from the US Treasury is now 96 years old; and, if the US economy continues to decline because of the compounding levels of debt created by the Federal Reserve, the Federal Reserve System itself may be called into question before it reaches its 100 year anniversary.

The end of the Federal Reserve System should be the collective goal of all Americans; for all Americans—black, white and brown, men and women, rich and poor, tea-baggers and tree-huggers, the already born and yet-to-be born—have all been enslaved by the Fed’s substitution of its debt-based money for the gold and silver currency previously issued by the US Treasury.

Today, all Americans collectively owe more than can ever be repaid. America has been delivered into perpetual bondage by the Federal Reserve. It’s about time that changed. The descent into perpetual debt happened on our watch. It is our responsibility to now do something about it. If we owe anything to anyone, we owe this to ourselves and to our children.

Obama to impose new federal quarantine regulations

"The Obama administration is quietly dusting off an effort to impose new federal quarantine regulations, which were vigorously resisted by civil liberties organizations and the airline industry when the rules were first proposed by the Bush administration nearly four years ago."

AP To Stalk Bigger Web Fish

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Instead of going after the tens of thousands of innocuous minnow bloggers like the Drudge Retort, the Associated Press has decided to go after bigger fish.

Zachary M. Seward notes: "Tom Curley, president and chief executive of the AP, raised a ruckus last month when he seemed to tell The New York Times that using an AP headline that linked to the original article would require a copyright license. Among the more entertaining responses to that position was a blog whipped up by developer Andy Baio, who used the AP’s own RSS feeds to republish headlines, ledes, and URLs in the style to which Curley appeared to object. Baio called the simple act of protest Associated Repress.

I described the site to Kasi, who told me: 'I think that the person doing that: wonderful. We celebrate free speech.' But what if that site carried ads? Could the use of AP headlines and ledes ever amount to copyright infringement? 'At some point,' Kasi said, 'the variables start to come together that, absolutely, it would be actionable.' We were getting somewhere: Although Kasi didn’t want to lay out a rubric for the AP’s legal strategy, the most important variables appear to be frequency of use and whether that use constitutes a significant, competing, commercial business. So, no, Baio probably wouldn’t get a cease-and-desist letter for his barely read site, even if it were littered with ads, but a more prominent aggregator could."

Seward adds: "The AP would like to encourage use of its content — even full content — under terms that might not be so different from the APIs released by The New York Times and NPR. (Then again, it might be very different. The AP thus far hasn’t said what restrictions it will attach to its APIs.) I asked Kasi for an example, and he said that a mobile developer who wanted to include the AP’s articles or videos in an iPhone application could do so, probably without paying for access. Addressing the hypothetical developer, he said, 'If this becomes a runaway success, I want to be part of this kind of business arrangement with you. In the meantime, if you want to experiment, go at it.'”

Felix Salmon with Reuters chimed in with this:

The impression that Kasi gives, via Seward, is that the AP is benign at heart:

When you look at the things that we’ve actually enforced or pursued, it’s a small handful of situations. Even the ones where there’s a lot of noise being made, it is to point out the kind of conduct, of systematic conduct that we want to have addressed. But if you really push it to the extreme of, ‘OK, how many do we legally enforce in a court of law?’ It’ll be less than the number of fingers on a single hand.

This is really hard to square with the black letter of the memo, with its talk of the “legal imperatives” facing the AP. And in fact, if you examine it closely, it’s much more invidious than it sounds.

Essentially, the AP is encouraging the rest of us to remix its work — on the understanding that, statistically speaking, most of us will fail. On the other hand, if we succeed — if we go viral, like Shepard Fairey, or start making non-trivial ad revenue, like Newser, then they’ll come at us with expensive lawyers, and they won’t be friendly. What’s more, they feel that it’s strategically necessary to be very aggressive in protecting their intellectual property in such situations.

This isn’t a FUD campaign designed to make people wary of using AP content. It’s worse than that: it’s an attempt by the AP to outsource innovation to others, and then, in the handful of cases where the innovative gamble pays off, grasp substantially all the benefits of that innovation for themselves. Call it a “be evil” strategy. How else can you explain the Fairey lawsuit?

Concentration of Wealth Highest on Record

Image via Wikipedia

This should come as no surprise to anyone.

Daniel Tencer - Raw Story
The wealthiest 10 percent of Americans now have a larger share of total income than they ever have in records going back nearly a century — an even larger amount than during the Roaring Twenties, the last time the US saw such similar disparities in wealth.

In recent years, the fact that differences between rich and poor are the greatest they’ve been since the Great Depression has become a popular talking point among liberal-leaning economists.

But an updated study (PDF) from University of California-Berkeley economist Emanuel Saez shows that, in 2007, the wealth disparity grew to its highest number on record, based on US tax data going back to 1917.

According to Saez’s study, which Nobel prize-winning economist Paul Krugman drew attention to at his New York Times blog, the top 10 percent of earners in America now receive nearly 50 percent of all the income earned in the United States, a higher percentage than they did during the 1920s.

“After decades of stability in the post-war period, the top decile share has increased dramatically over the last twenty-five years and has now regained its pre-war level,” Saez writes. “Indeed, the top decile share in 2007 is equal to 49.7 percent, a level higher than any other year since [records began in] 1917 and even surpasses 1928, the peak of stock market bubble in the ‘roaring’ 1920s.”

By comparison, during most of the 1970s the top 10 percent earned around 33 percent of all the income earned in the United States.

The contrast is even starker for the super-rich. The top 0.01 percent of earners in the US are now taking home six percent of all the income, higher than the 1920s peak of five percent, and a whopping six-fold increase since the start of the Reagan administration, when the top 0.01 percent earned one percent of all the income.

There is no consensus among economists on whether large disparities in income lead to economic disruption, but it is hard to ignore the correlation between rising income inequality and the onset of economic crisis. The last time the US saw similar differences in income was in 1928 and 1929, just before the start of the Great Depression.

Saez also broke the numbers down by administration, and found that while the wealthiest few saw their incomes rise as quickly during the Bush years as they did during the Clinton years, the same was not true for the rest of the population.

Saez suggests that the economic growth seen on paper during the Bush years was little more than an illusion for the vast majority of Americans, who saw their income grow much more slowly in the 2002-2007 period than they did during the Clinton years.

During both expansions, the incomes of the top 1 percent grew extremely quickly at an annual rate over 10.3 and 10.1 percent respectively. However, while the bottom 99 percent of incomes grew at a solid pace of 2.7 percent per year from 1993–2000, these incomes grew only 1.3 percent per year from 2002–2007. As a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth.

Those results may help explain the disconnect between the economic experiences of the public and the solid macroeconomic growth posted by the US economy since 2002. Those results may also help explain why the dramatic growth in top incomes during the Clinton administration did not generate much public outcry while there has been an extraordinary level of attention to top incomes in the press and in the public debate over the last two years.

Saez, who this spring won the prestigious John Bates Clark Medal for economists under 40, links this disparity to the Bush tax cuts, noting that “top income tax rates went up in 1993 during the Clinton administration (and hence a larger share of the gains made by top incomes was redistributed) while top income tax rates went down in 2001 during the Bush administration.”

TWO MORE RECESSIONS?

The economic crisis that has taken hold over the past year isn’t over, and the world could in fact see two more recessions before the crisis is finally over, says the chief economist of Germany’s influential Deutsche Bank.

Norbert Walter told CNBC that investors are worried about the health of the US dollar, and many countries are facing difficult financial problems because of overspending by governments on bailouts and stimulus. Those things combined could push the world economy downwards not once but two more times in the near future, he said.

“I believe that the rescue packages brought on have been so costly for so many governments that the exit from this fiscal policy will be very painful, very painful indeed,” he said. “Some of us are already talking about a W-shaped recovery. I’d probably talk about a triple-U-shaped recovery because there are so many stumbling blocks here to get out of this.”

“The world is in trouble,” Walter told CNBC.