Three-quarters of the public disapprove of Congress

Image by Getty Images via Daylife

boston.com/news
Both Democrats and Republicans up for reelection in the fall face a toxic environment, according to a New York Times/CBS poll.

Three-quarters of the public disapprove of Congress, matching the highest level since the poll began asking the question in 1977. Four out of five voters thought Congress was more interested in serving special interests than the interests of voters.

Both attitudes translate into perhaps the most ominous figure for those legislators preparing their election strategy: Fewer than 1 in 10 Americans says members of Congress deserve reelection.

As the party in power, Democrats face a particular risk from a wave of voter discontent; unfavorable views of the Democratic Party (51 percent) are as high as they have been since the Republican takeover of Congress in 1994.

The nationwide telephone poll of 1,084 adults was taken from Feb. 5 through Feb. 10 and has a margin of sampling error of plus or minus three percentage points.

Marc Faber, Hugh Hendry, And Nassim Taleb Go At It In Russia

businessinsider.com
Just click below:

(Via Infectious Greed)

Why Is All This Happening? It’s the War Between Bankers

Image via Wikipedia

by Bill Sardi

The public may have casually become aware of recent news announcements about an agreed upon goal between bankers to reach an 8-percent cash reserve requirement in their institutions. A list was recently published showing few banks currently have reached this reserve requirement. This list was obviously issued to apply public pressure via the public’s ability to direct their deposits to more stable banks, thus nudging other banks to increase their reserves.

Banks deploy depositors’ money into interest-bearing loans in order to generate profits and keep a portion in reserve to meet depositors’ immediate needs. Recall that withdrawal of $16.7 billion in cash from Washington Mutual bank over a 9-day period is what drove that bank into insolvency even though it had $307 billion of (over-valued) assets and deposits of $188 billion at the time. So cash reserves are of greater importance into today’s unstable financial environment.

It all sounds so collegiate – a bunch of the world’s bankers have agreed to stabilize their institutions so as to better withstand current economic challenges and create greater public confidence in banks. News reports make it sound like bankers are cooperative. But in reality, there is a war going on between bankers, in particular central bankers, those bankers who supply money to depository banks where the public banks their money.

First shots fired

The first shots in this war were apparently fired by banks in Japan a number of years ago. This dispute between bankers is what has led to the current worldwide financial crisis.

Bruce Wiseman makes us aware of this war in his report A Look Behind The Wizard’s Curtain: The Financial Crisis: The Hidden Beginning. Wiseman’s upcoming book and movie on this topic are scheduled for release in 2010.

Wiseman reports that the top ten banks in the world in the 1970s were American banks. But in the 1980s six Japanese banks rose into the top-ten ranking. Wiseman explains this sudden rise, which was said to shift the center of world banking from New York to Tokyo, was due to the low reserves (said to be as low as 3%) kept by bankers in Japan.

With lower reserve requirements, Japanese banks had more available funds to loan than competing banks throughout the globe. These Nippon bankers could establish branch banks throughout the world and dominate the world’s financial markets.

The 8-percent reserve requirement agreed upon in the Basel I agreement, named for the location of its signing at the Bank of International Settlements in Basel, Switzerland, is intended to put the world’s banks on a level playing field when it comes to doing business outside their own countries.

Wiseman says this low-reserve requirement practiced by banks in Japan was perceived as drawing a samurai sword against the rest of the world’s bankers and this didn’t rest well with Alan Greenspan, then chairman of the US Federal Reserve Bank and Board Member of the International Bank of Settlements, a bank for the world’s central bankers headquartered in Basel, Switzerland. Something had to be done about unfair competition in the banking arena.

Bankers in Japan were informed via the Bank of International Settlements, the "central bankers’ bank," that they would not be allowed to continue their operations in major foreign markets unless they agreed to a minimum reserve requirement – the 8% rule. Japanese bankers were coerced to agree to what has become known as the Basel I accord which was signed in 1988.

Foot dragging over reforms

But it’s now 21 years later, and bankers are still dragging their feet to comply with a stability measure that, had it been implemented, may have staved off part of the current economic crisis long before it occurred.

Don’t get a false impression that Japanese banks are solely to blame for bank instability. Five investment banks in the U.S. (Goldman Sachs, Lehman Brothers, Bear Stearns, Merrill-Lynch and Morgan Stanley) appealed to the Securities Exchange Commission (SEC) and won the privilege to carry a 20-to-1 or even 30-to-1 ratio of capital to loans (not the same as cash reserves, as mentioned above).

For example, instead of these investment banks employing a more traditional capital-to-loan ratio of 10-to-1 (let’s say $1 billion of capital to issue $10 billion in loans), they were given the green light to loan at the ratio of 20-to-1 or even 30-to-1 ($1 billion of capital to issue $20 billion or even $30 billion in loans). This was a conscious decision by the SEC that probably was coerced by political influence.

Basel II spawns real estate bubble

This bankers’ war continued over the following decade and a half, culminating in Basel II in 2004, another agreement between banks to standardize reporting requirements for credit worthiness and capital that each depository bank holds. This is when the so-called "mark-to-market" rules were established. The Bank of International Settlements is attempting to get banks to value their real estate assets on real market value and to reveal all of the non-performing loans (foreclosures) they have on their books. Such revelations and transparency would doom many banks, including some of the world’s largest banks.

Basel II also made provision for reduced reserve requirements for mortgage-backed home loans. This made home loans more profitable and is set off the explosive false growth in residential real estate and created the financial bubble that finally popped in 2008. Central bankers are to blame for setting off this wild fire in the real estate market.

How many banks intend to comply?

A recent survey conducted by the Financial Stability Institute attempted to determine how many banks in 115 jurisdictions in less developed nations in Africa, Asia, Latin America and the Middle East intend to comply with Basel II. The survey was not sent to banks in Japan, possibly for good reason. The 2004 survey revealed 95 countries currently plan to comply with Basel II reporting requirements, and even more countries said they intended to comply with Basel II in a 2006 survey.

However, according to a report in Risk Magazine, the banking industry is fighting finalized reforms in the Basel II mandates, claiming the amount of capital required cannot be raised within the allotted time framework. Finance ministers and central bank governors of the 20 leading economies (called the Group of 20) wants full implementation by 2012.

Prudent banking

Prudent banking is not beyond the capability of bankers. For example, according to a Wall Street Journal article, while Basel II requires a capital to loan ratio of 9%, banks in India are required to have a 12% standard.

Bankers in China have been even more prudent. Chinese banks adhere to a cap on loan-to-deposit ratios of about 75% (the actual ratio is more like 67%), and leverage ratios (capital-to-loan ratios) in the single digits – considerably below what the big U.S. banks have been allowed to accumulate. Furthermore, in China, home buyers can only borrow up to 70% of the value of their property (60% if it's a second purchase).

Fang Xinghai, director-general of Shanghai's financial-services office, recently described the difference between the Chinese and U.S. approaches to bank regulation in the Wall Street Journal: "In the U.S., the regulators don't believe in regulation to begin with," he said, and pointed a finger at former Federal Reserve Chairman Alan Greenspan's belief that the Fed's job wasn't to prevent or deflate assets bubbles, but to "deal with the consequences."

The Wall Street Journal report goes on to say that bankers in Spain certainly incurred exposure to an overbuilt real estate market (an estimated 1.2 million unsold new homes), but they avoided further trouble by consolidating all their assets, even non-performing home loans, onto their balance sheets. For comparison, "Special investment vehicles," employed by American banks, "cooked the books" and keep risky debt off of bank ledgers.

Resorting to the unthinkable

Unable to create a level competitive field for banking, the bank reform effort has now shifted away from cooperation to a master plan to take down the world’s economies and exercise complete control in the aftermath by introduction of a master plan to control banking and currency.

According to Wiseman, the plan underway now is to intentionally "take down the United States and the U.S. dollar as the stable datum of planetary finance and replace it with something called a Global Monetary Authority" that will issue a single global currency via the world’s central bankers, who in turn distribute money to depository and investment banks.

What Wiseman is talking about here is that a small group of less than a dozen central bankers are likely to rule the world via control of currency.

As confirmation of Wiseman’s claim, the call for a "global monetary authority" was echoed by a Yale professor in the Financial Times in 2008.

What looms is a single global currency, probably issued by the International Monetary Fund (IMF), which will then exert control over the world’s banks. A more complete picture of what is likely being planned is provided here and here.

The intentional take-down of the world’s economies and establishment of a world currency will be spawned out of planned chaos which would provoke the planet’s masses to beg for relief. The new currency and its new central bank will be offered up as the quickest solution to the world’s economic turmoil.

But will world control be lost?

However, the bankers and elites risk losing control of the world that they now hold. As investigative journalist Daniel Estulin reports, "One of Bilderberg’s primary concerns accordingly is the danger that their zeal to reshape the world by engineering chaos in order to implement their long term agenda could cause the situation to spiral out of control and eventually lead to a scenario where Bilderberg and the global elite in general are overwhelmed by events and end up losing their control over the planet." (The Bilderberg Group, comprised of over 100 influential people, meets annually to discuss issues of world concern.)

Yet central bankers and elitists plod ahead, all the while attempting to tighten their grip on the masses. Following the G20 (20 leading countries of the world) meeting at the beginning of April, 2009, it was reported that, "The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity." A communiqué released by the G20 leaders stated that, "We have agreed to support a general standard drawing rights (SDR) allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity," and that, "SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century." Essentially, "they are putting a de facto world currency into play. It is outside the control of any sovereign body."

IMF plants an agent in our midst

The IMF has the right man in place to do the job in the U.S. Timothy Geithner, U.S. Treasury Secretary, was director of the Policy Development and Review Department (2001–2003) at the IMF. Geithner is also well connected in other circles. He was also part of a consulting firm in the 1980s owned by former Secretary of State Henry Kissinger. Furthermore, Geithner was also president of the Federal Reserve Bank of New York and a staffer at the Council on Foreign Relations.

Geithner, as U.S. Secretary of the Treasury, apparently sees no conflict between his duty to uphold the U.S. Constitution and a one-world currency. He goes along with the agenda to abolish the US dollar in favor of a global medium of exchange. Geithner was quoted to say: "Our hope is that we can work with Europe on a global framework, a global infrastructure which has appropriate global oversight."

What lies ahead

Foot dragging by the world’s bankers to comply with banking standards and the intentional collapse of world economies to force bank reform has dragged the world into a quagmire that could lead to mass starvation, suicide and even war. A former top British bank regulator recently called for the formation of an international bank police agency to bring the bankers into line. But such an idea appears to be too late. Efforts to usher in an IMF-issued currency appear to be steaming forward.

Such plans, to usher in a one-world government and a single currency, were made decades ago by elitists and central bankers, but they were waiting for world events to be engineered in a manner to create the perfect storm that would cause Americans to give up their sovereignty, and their greenbacks, in exchange for a new type of play money and subservience to another rule of law outside the U.S. Constitution. Professor Carroll Quigley described this covert plan in the 1960s in his book entitled Tragedy and Hope: A History Of The World In Our Time. Another broad description of this plan is found here.

World control

Few Americans catch on to the fact that central bankers, not elected representatives, have controlled America for some time now. It was the British banker Mayer Amschel Bauer Rothschild who said in 1791: "Allow me to issue and control a nation's currency, and I care not who makes its laws."

The world exists for the central bankers to plunder, and no one else. What is good for the central bankers is good enough for the rest of the world. It’s like the world is a tiger that is being slung around by its tail. If central bankers aren’t paid their dues, the world must suffer. Yet the bankers must not be deprived of their seven, eight and even nine-figure commission checks amidst the turmoil. The world is being slung into economic chaos over a long-standing war between central bankers. If the masses only knew.

December 14, 2009

Bill 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.

Depression 2010 - Western Fiat-Money Finished

Image via Wikipedia

thedailybell.com
Sluggish economy leaves many Japanese in the cold ... The global economy may be on the mend, but times are still tough for the masses of homeless, jobless people in Tokyo, where the only meal of the day is often a bowl of rice handed out by charities. Although Japan's export-driven economy is back on track, largely due to rising demand from Asia, the United Nations said its recovery was slower than other countries, and predicted only 0.9 percent growth in 2010 compared to 8.8 percent for China and 2.1 percent for the United States. This sluggish growth, combined with troubles at giant corporations in the world's second-biggest economy, has made earning a living very difficult for scores of Japanese. "I see no jobs around. It's a really tough situation," Eizo Tsuruga, a 50-year-old homeless man, told Reuters as he sat among others people eating a bowl of hot rice in the winter night. A Welfare Ministry survey showed the actual numbers of homeless had fallen to 15,000 in 2009 from 25,000 in 2003. Homeless people in Japan have traditionally been elderly, social dropouts, but with the economic situation, the demographics have changed to include laid-off workers, both young and old, and university graduates unable to find work. On a recent Sunday, more than 400 people flocked to a Tokyo park to receive free meals and blankets distributed by local charity Shinjuku Renraku Kai, more than twice the number of people the charity used to see two years ago. Many had queued for hours to ensure they got some cooked rice, often their only meal for the day. "More and more people of all ages are gathering here," said Kazuaki Kasai, a volunteer who has worked at the charity's distribution point in the park for the past 16 years. - Yahoo

Dominant Social Theme: Sometimes the global economy is down, and sometimes up.

Free-Market Analysis: Is the Western world struggling through a bad patch? Our argument, voiced with various levels of clarity at various times, is that the West is currently living through a failure of fiat money - specifically a failure of the global anchor currency: the greenback. The dollar is on its way out not because people want it to be necessarily (though some do) but simply because it is failing as a fiat currency. Central bank fiat currencies always fail. China had a number of fiat episodes and the populace was so scarred that fiat money was reportedly even banned in the 1800s. Here's a bit of history on China's melancholy brushes with unbacked paper money:

Fiat Money - China -- Flying Money

When the Chinese first started using paper money, they called it "flying money," because it could just fly from your hands. The reason for the issuance of paper money is simple. There was a copper shortage, so banks had switched to the use of iron coinage. These iron coins became over-issued and fell in value.

In the 11th century, a bank in the Szechuan province of China issued paper money in exchange for the iron coins. Initially, this was fine, because the paper money was exchangeable for gold, silver, or silk. Eventually, inflation began to take hold, as China was funding an ongoing war with the Mongols, which it eventually lost.

Genghis Khan won this war, but the Mongols didn't assume immediate control over China as they pushed westward to conquer more lands. Genghis Khan's grandson Kublai Khan united China and assumed the emperorship. After running into some setbacks with paper currency, Kublai eventually had some success with fiat money. In fact, Marco Polo said of Kublai Khan and the use of paper currency:

"You might say that [Kublai] has the secret of alchemy in perfection...the Khan causes every year to be made such a vast quantity of this money, which costs him nothing, that it must equal in amount all the treasure of the world."

Even Helicopter Ben would be impressed. Marco Polo went on to say:

"This was the most brilliant period in the history of China. Kublai Khan, after subduing and uniting the whole country and adding Burma, Cochin China, and Tonkin to the empire, entered upon a series of internal improvements and civil reforms, which raised the country he had conquered to the highest rank of civilization, power, and progress. ...

"Population and trade had greatly increased, but the emissions of paper notes were suffered to largely outrun both...All the beneficial effects of a currency that is allowed to expand with a growth of population and trade were now turned into those evil effects that flow from a currency emitted in excess of such growth. These effects were not slow to develop themselves...The best families in the empire were ruined, a new set of men came into the control of public affairs, and the country became the scene of internecine warfare and confusion." (- Daily Reckoning)

Interestingly, we can see in the above observations that fiat money first created a wonderland of progress and amusement. That's just what fiat money has done in the West and in Japan as well. It is now happening in China. Wherever fiat money travels it brings tremendous euphoria in its wake, though only to begin with. Cities are energized with false booms. Farm children flock to the urban environment to take jobs in factories producing ephemeral goods or work at useless government jobs - that are created from tax revenues during the boom time. Initially, because fiat money inevitably has a relationship to government, much of the perfection of society is attributed to a wise, fair-minded bureaucracy. The bureaucracy, by the way, believes it.

Monetary stimulation can go on for years. In America, it's been going on for nearly a century - which is probably the far end of what can be expected. But people can live and die under a central banking regime - which is usually a fiat regime (or ends up that way, anyway). Yes, it cannot be emphasized enough that fiat money (along with its enabler, central banking) is a foundational curse. Just as in China, it funds wars, makes the government look wonderfully efficient and even omnipotent, fools people into believing that the non-essential jobs they have are actually essential "modern" work - and sets the stage inevitably for regulatory regimes that must eventually descend into madness and ruin.

Fiat money empowers corporatism (in the modern age anyway) and distorts civilization by helping to implode agrarian republicanism. It is no coincidence that Thomas Jefferson despised central banking - and was in fact the most famous and influential agrarian republican. We can see the remnants of this sort of society in Switzerland, which has passed laws to maintain small farms. It is difficult to create a totalitarian society - even an ephemeral one - in a land of sturdy farmers. Such individuals grow their own food, have access to water and are willing to defend their land. America was a bit like Switzerland before the Civil War but is not now.

But today, dear reader, we would propose that the West, and the entire globe, is living through a fiat money collapse. Economies all over the world have been inflated to their fullest and people can buy no more useless gadgets and work at no more superfluous jobs. Too many useful endeavors have been marginalized and phony ones have been elevated. An implosion is taking place. The world is reverting to a kind of mathematical practicality. In America, car companies have shrunk because there are too many cars, and houses are not being built because there are too many houses. Banks are not doing deals because too many deals have been done. All that is working overtime are the printing presses. While the greenback is exceptionally at risk we would argue that the same thing is occurring, to a greater or lesser degree, in Europe, in Japan, and even in China - despite all the happy talk about the Chinese miracle. Here's a famous investor on the subject of China:

Contrarian Investor Sees Economic Crash in China ... James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true. Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc. As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China's hyper-stimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like "Dubai times 1,000 -- or worse," he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent. "Bubbles are best identified by credit excesses, not valuation excesses," he said in a recent appearance on CNBC. "And there's no bigger credit excess than in China." (- New York Times)

Everywhere, major economies are having difficulty. We do not believe by the way that it is absolute serendipity. The power elite knows very well how fiat money and central banking work. Those at the top of the economic food chain readily anticipated more power falling into their laps - and ultimately facilitating a worldwide economic regime. But we have to re-emphasize that these same powerful people apparently did not take the Internet into account. This is most important.

Conclusion: By putting in place the mechanisms that guarantee endless quasi-collapses, the power elite profits inordinately. By not understanding that this time around the entire circus would be available for endless replays on the Internet, the power elite has put the system into tremendous jeopardy. Too many have run across free-market arguments on the Internet and come to believe (this time around) that the system is unfair and even impractical. Too many have witnessed and comprehended the full gamut of central banking's apparent destructive tendencies. None of this was in the game plan, in our opinion. Yet this seeming unraveling of financial certainty has tremendous ramifications for your portfolios, dear reader. We might suggest a modicum of gold and silver as you watch various fiat money economies of the world, especially the dollar, sputter and sink.

What's UP - Police Chiefs Across US Resign? 50 CEO's Resign?

fourwinds10.com
Does anyone find this weird? This report was dated on Feb.7th, 2010.

1. Gaithersburg, MD Gaithersburg Police Chief John King resigned with little explanation last week, leaving his colleagues and community members wondering what happened.

2. Guttenberg, IA Police Chief Resigns After Seven Months on the Job, no reason

3. Harrisburg, PA - Richard Pickles retires after serving a month as Harrisburg police chief

4. Culpeper, VA When Scott Barlow announced two weeks ago he would step down from his job as chief of police with the town of Culpeper, it caught a lot of people off guard, including us.

5. Carbondale, IL - Police Chief Resigns, no reason given

6. Austin, MN - Several Austin City Council members said they were "shocked" by Austin Police Chief Paul Philipp's resignation Tuesday morning.

7. Jonesboro, GA - The City of Jonesboro’s new police chief has resigned, five weeks after being named to the top job.

8. Manassas, VA - found this quote: "I hope the Chief enjoys his retirement. Between his service in the Secret Service, Fairfax and Manassas, he’s earned it."

9. West Covina, CA - Tolich, a 21-year veteran of the force, retired nine years before he was eligible for full retirement benefits, Finance Director Thomas Bachman said.

In an email Tolich sent to members of the department, he tells fellow officers that a personal matter involving him and his family led to the sudden departure.

These were either benign stories or little info given. (Bearing in mind that a seasoned cop could probably make a pretty believable alibi for leaving.)

10. Oroville, CA

11. Burlington City, PA

12POLICE CHIEFS RESIGNING!!

. Bellmead, TX

13. Bridgeport, WV

14. Gaston, ID

15. Meigs, GA

16. Independence, LA

17. Miami, FL

18. Britt, IA

19. Nickerson, KS

20. New Holland, PA

21. Navarre, OH

22. Glocester, RI

23. Lithonia, GA

24. Harrison, NY

25. Huntsville, AL

26. Moose Lake, MN

27. Boxborough, MA

28. Sutton, WV

29. Itta Bena, MS

30. St. Cloud, FL

31. Menomonie, WI

32. Fanwood, NJ

33. Morton's Gap, KY

34. New Haven, CT

35. Guttenberg, IA

36. South Amboy, NJ

37. Santa Cruz, CA

38. Bakersfield, CA

39. South Pasadena, CA

40. Tulsa, OK

41. Hastings, MN

42. Stamford, CT

43. Dallas, TX

44. Somerville, MA

45. Greensboro, NC

46. Avon, CO

47. Benton, IL

48. Nogales, AZ

49. West Tisbury, MA

50. Gainesville, GA

51. Anniston, AL

52. West Richland, WA

53. Watford City, ND

54. Ponce Inlet, FL

55. Clearwater, FL

56. Monmouth, ME

57. Brookfield, IL

58. Ludowici, GA

59. Orland, CA

60. Springfield, NJ

61. Holt, MO

62. Brookneal, VA

63. Chesterton, IN

64. Edina, MN

65. Birmingham, MI

66. Montebello, CA

67. Vonore, TN

68. Ventnor, NJ

69. New Hartford, NY

70. Kennedy, AL

Some major cities had Police Chief turnover in 2009 (early Infragard info?)

Seattle

Atlanta

Los Angeles

Miami

San Francisco

Dallas

Add this the rumor that 50 CEO's have recently resigned:

"Most notably are telecoms, banks and energy companies. People who would have insider knowledge if something huge were about to happen.

I stopped at 50 just to get it posted, but there are more, including lots of board members and other executives."

1. Sun Microsystems
2. Royal Bank of Scotland
3. Bank Leumi of Israel
4. Lenovo
5. Wellpoint (on March 1)
6. Ingersoll-Rand
7. Gasco
8. Syntel
9. Motion Picture Television Fund
10. GrainCorp
11. Connaught Plc
12. Netplay TV
13. AgResearch
14. Zain Telecom
15. Ethan Allen Institute
16. Fahrney-Keedy Home & Village
17. Nordzucker
18. France Telecom
19. TransWorld Entertainment
20. Parlux
21. Medical Developments International Ltd
22. PBR (on March 1)
23. Aeropostale
24. Cook Islands Tourism
25. Uranium International Corp
26. San Francisco AIDS Foundation
27. Borders Books
28. YTB International
29. Western Australia Business News
30. Bergen Group Rosenberg
31. Phumelela
32. Bartow Regional Medical Center
33. NV Energy (CFO)
34. Shanda Interactive
35. NB Power
36. Empire Aero
37. Argentina Central Bank
38. Hong Kong Exchanges & Clearing (CFO)
39. Arbitron
40. Lihir Gold Ltd
41. Meredith Corp
42. Red Bull
43. Golden Harp
44. Endo Pharma
45. Nuplex
46. CLICO
47. Mirada (chairman)
48. Remedial Offshore
49. Abercrombie & Fitch Co
50. Commerce Resources (CFO)

Thousands of Greeks Strike; Flights grounded, schools closed

BBC

Greece hit by nationwide strike over austerity measures

Protesters take to the streets in Athens

Thousands of Greeks have rallied against deficit-cutting measures during a national public sector strike.

Flights have been grounded, many schools are closed and hospitals are operating an emergency-only service. The prime minister, who wants to freeze pay, gather more taxes and reform pensions, insisted that the proposals would be fully implemented.

EU leaders will discuss Greece's difficulties on Thursday amid concern the crisis could threaten the euro. European finance ministers are also due to hold a teleconference on Wednesday to talk about the issue.

Public anger

Despite heavy rain, there have been rallies across Greece throughout the day, with thousands of striking workers and pensioners gathering in the capital, Athens. Several thousand people were also reported to have protested in Greece's second city, Thessaloniki. The rallies have been mainly peaceful, but in one incident police fired tear gas at rubbish collectors who tried to drive through a police cordon.

Some demonstrators threw stones at the police but the trouble was quickly defused. The unions regard the austerity programme as a declaration of war against the working and middle classes, the BBC's Malcolm Brabant reports from the capital.

He says their resolve is strengthened by their belief that this crisis has been engineered by external forces, such as international speculators and European central bankers. "It's a war against workers and we will answer with war, with constant struggles until this policy is overturned," said Christos Katsiotis, a union member affiliated to the Communist Party, at the Athens rally.

Others in the capital either see the cuts as necessary or argue that the strike is politically motivated. "We have to implement the austerity measures, or the country will not be able to get out of this crisis," said Katerina, a private sector employee. "We have to pay for the mistakes of the past."

On Tuesday, Prime Minister George Papandreou's socialist government announced that it intends to raise the average retirement age from 61 to 63 by 2015 in a bid to save the cash-strapped pensions system.

The move comes on top of other planned austerity measures, including a public sector salary freeze and a hike in petrol prices, announced last week. More...

S&P cuts BofA, Citi outlook to negative

bizjournals.com
Standard & Poor’s Ratings Service said Tuesday that it downgraded its outlook on Bank of America and Citigroup to negative from stable.

The move underscored that the global financial crisis is far from over despite BofA, California’s largest bank, repaying the government’s investment of $45 billion in the bank under the federal Troubled Asset Relief Program in December. The revised outlook signals possible downgrades to their credit ratings.

S&P assigns counterparty and debt ratings on Bank of America and Citigroup of “A” and “A-1”

The ratings agency’s change in its outlook for the two big banks reflects the more onerous terms BofA or Citi would face if another government bailout is needed.

“We believe there is increased uncertainty about the U.S. government’s willingness to provide additional extraordinary support to highly systemically important financial institutions in a way that will benefit debt holders,” S&P analyst John Bartko said in lowering the outlook on the banks.

“We previously stated our belief that the extraordinary support was temporary. We believe markets are beginning to stabilize and the U.S. government is seeking ways to reduce the potential for moral hazard and systemic risk associated with large financial institutions,” Bartko added.

S&P pointed to proposals to tax the big banks to help recoup the cost of the bailout and a bill introduced in December to prohibit company-specific bailouts as raising concerns about the terms of another big bank bailout, if needed.

S&P’s rating on BofA gets a lift of three credit notches based on expectations that the government would step in to help BofA (NYSE: BAC) and Citigroup, (NYSE: C) given their status as systemically important financial institutions.

“We are uncertain whether BofA will be able to show sufficient additional improvement over the next two years in its operating performance and profitability to benefit its stand-alone credit profile,” Bartko said.

US food stamps set ever-higher record-32.8 million

Reuters
A record 38.2 million Americans were enrolled in the food stamp program at latest count, up 246,000 from the previous month and the latest in record-high monthly tallies that began in December 2008.

Food stamps are the primary federal anti-hunger program, helping poor people buy groceries. The Agriculture Department updated enrollment data on Friday with a preliminary figure for November.

USDA estimates up to $58 billion will be spent on food stamps this fiscal year, which ends Sept 30, with average enrollment of 40.5 million people. Food stamps were renamed the Supplemental Nutritional Assistance Program in 2008.

Participation has surged since the financial-market turmoil of late 2008 and has set records each month since December 2008, when it reached 31.78 million. Enrollment is highest during times of economic distress.

Taiwan has NT$37.8 billion exposure in Spain, Greece, Portugal

chinapost.com.
Taiwan's financial institutions have a total exposure of NT$37.8 billion (US$1.2 billion) to Spain, Greece and Portugal, the regulator said, citing a preliminary check.

Domestic banks offered credit and made investments of NT$10.6 billion, of which NT$3.2 billion are in Greece, NT$6.6 billion in Spain and NT$800 million in Portugal, the Financial Supervisory Commission said in a statement on its web site.

Taiwan's investment trust funds invested a total of NT$3.7 billion in the three nations, while insurers invested NT$19.5 billion, of which NT$120 million are in Greece, NT$19.3 million are in Spain and NT$150 million in Portugal. The regulator will closely monitor the credit situation of the three nations and the exposure of the domestic institutions.

Greek Stocks Drop 3.9%; Banks Tumble

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ALKMAN GRANITSAS
Greek stocks fell sharply Monday, extending their losing run to four sessions, as investors battered banking shares.

The Athens Stock Exchange's general index closed 3.9% lower at 1806.40 on relatively heavy turnover, while major markets firmed. Investors also demanded a higher premium for holding Greek government bonds over German Bunds, the euro zone benchmark.

"What we are clearly seeing is not a selloff in just specific Greek shares; we are seeing a wholesale selling off of the country," said Nicholas Douzinas, head of foreign markets at Intersec Securities in Athens.

"We are seeing many open sell orders on the market," he added.

Banking stocks were especially hard hit, falling 6.8%, amid speculation that Greek banks were facing financing difficulties and possibly further credit-ratings downgrades. Market leader National Bank of Greece SA dropped 8.5%, while No. 2 lender EFG Eurobank Ergasias SA dived 9% and Alpha Bank SA closed 5.4% lower.

But both Greek and foreign banking officials Monday privately denied speculation that the Greek banks were facing any financing difficulties. Analysts said that the selloff in bank stocks reflected the difficult environment facing Greek banks.

"I'm a little doubtful about all this speculation," said a senior analyst at a local bank. "But it's a fact, the market sees that the banks are facing a very difficult environment and that's weighing on banking stocks."

Indeed, Greek banks, which are due to start reporting results next week with Piraeus Bank SA on Feb. 18, are widely expected to report disappointing fourth-quarter earnings.

Since December, when Greece's sovereign debt was hit by three ratings downgrades in quick succession, the Athens stock market has lost more than 1,000 points. The index is down nearly 18% this year.

Bank shares also are suffering from the higher yields that investors are demanding for Greek debt, which indirectly affects their borrowing costs. The yield gap between 10-year Greek and German bonds widened to 3.63 percentage point Monday, up from about 3.50 percentage point on Friday.

The market's fall came ahead of a meeting Wednesday between Greek Prime Minister George Papandreou and French President Nicholas Sarkozy and a European Union summit on Thursday.

Many market participants are looking to see if Greece's EU partners will declare some kind of direct or indirect financial support for the country in an effort to forestall future borrowing problems when the country goes to the bond market in April or May.

In addition, the Greek government is to publish a much-awaited tax reform proposal on Wednesday. Civil servants also have scheduled a strike for Wednesday.

"Right now, everyone is looking ahead to Wednesday and Thursday," said Intersec Securities' Mr. Douzinas.

75% Are Angry At Government’s Current Policies

rasmussenreports.com

A new Rasmussen Reports national telephone survey shows that 75% of likely voters now say they are at least somewhat angry at the government’s current policies, up four points from late November and up nine points since September. The overall figures include 45% who are Very Angry, also a nine-point increase since September.

Just 19% now say they’re not very or not at all angry at the government’s policies, down eight points from the previous survey and down 11 from September. That 19% includes only eight percent (8%) who say they’re not angry at all and 11% who are not very angry.

Part of the frustration is likely due to the belief of 60% of voters that neither Republican political leaders nor Democratic political leaders have a good understanding of what is needed today. That finding is identical to the view last September, just after the tumultuous congressional town hall meetings the month before. But only 52% felt this way in November.

Americans are united in the belief “that the political system is broken, that most politicians are corrupt, and that neither major political party has the answers,” Scott Rasmussen explains in his new book, In Search of Self-Governance.

(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

Male voters are definitely angrier than women. Voters earning $60,000 to $100,000 per year are more frustrated than those in any other income group.

Eighty-nine percent (89%) of Republicans are angry with the government’s current policies, which is perhaps not surprising with the White House and Congress both in Democratic hands. But 78% of voters not affiliated with either major party agree.

Sixty-one percent (61%) of Democrats share that anger, but Republicans are three times as likely as Democrats to be Very Angry.

The divide between the Political Class and Mainstream voters, however, is remarkable. Eighty-eight percent (88%) of Mainstream voters are angry, but 84% of the Political Class are not. Those numbers include 57% of Mainstream voters who are Very Angry and 51% of the Political Class who are not angry at all.

But then 68% of Mainstream voters don’t think the leaders of either major political party have a good understanding of what the country needs today. Sixty-one percent (61%) of the Political Class disagree.

By comparison, the majority of Republicans, Democrats and unaffiliateds don’t believe the current political leaders have a good handle on what is needed today.

Older voters and higher-income voters share that belief most strongly.

Democratic Senate candidates are struggling in a number of states in part because of unhappiness with the government’s policies, including the controversial national health care plan. Opposition to that plan played a key part in the GOP upset Senate win last month in Massachusetts.

Most voters oppose the now-seemingly-derailed health care plan proposed by President Obama and congressional Democrats for months. They continue to have very mixed feelings about the $787-billion economic stimulus plan approved by Congress last February.

Looking back, most voters still don't approve of the multi-billion-dollar government bailouts of the financial industry and troubled automakers General Motors and Chrysler.

Forty-nine percent (49%) worry the government will try to do too much to help the economy, while 39% fear it won’t do enough.

As the economy continues to stumble along, 59% of voters believe cutting taxes is better than increasing government spending as a job-creation tool, but 72% expect the nation’s elected politicians to increase spending instead.

Eighty-three percent (83%) of Americans say the size of the federal budget deficit is due more to the unwillingness of politicians to cut government spending than to the reluctance of taxpayers to pay more in taxes.

Voters have consistently said for months that they have more confidence in their own economic judgment than that of either the president or Congress.