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Demeter

(85,373 posts)
Fri Apr 4, 2014, 08:02 PM Apr 2014

Weekend Economists Back to the Future April 4-6, 2014

Do you recognize this man?



Charles Keating in court in Los Angeles in 1992. Convicted of fraud, racketeering and conspiracy in state and federal trials, Mr. Keating went to prison for four and a half years. Credit Nick Ut/Associated Press


Charles Keating, 90, Key Figure in ’80s Savings and Loan Crisis, Dies

http://www.nytimes.com/2014/04/02/business/charles-keating-key-figure-in-the-1980s-savings-and-loan-crisis-dies-at-90.html

Charles H. Keating Jr., who went to prison and came to symbolize the $150 billion savings-and-loan crisis a generation ago after fleecing thousands of depositors with regulatory help from a group of United States senators known as the Keating Five, has died. He was 90. The death was confirmed Tuesday night by his son-in-law Gary Hall, who provided no other details. The Los Angeles Times quoted another son-in-law, Bradley J. Boland, as saying that Mr. Keating died late Monday in a hospital in Phoenix, where he had lived since 1976.

The S.&L. debacle of the 1980s and ’90s, when a thousand institutions collapsed in an implosion of reckless investments, may be a distant echo in a nation struggling to recover from more recent economic turmoil. But to millions old enough to have been dragged through the mess, Mr. Keating is remembered, perhaps unjustly, as the pre-eminent villain of an era when depositors, many of them older Americans and naïve investors, lost life savings in hometown thrifts that they thought were safe...Mr. Keating, who pleaded guilty to fraud charges, had been a young man of promise — a Navy flier during World War II, an All-American swimmer in college, the leader of a national campaign against pornography, a blustery Cincinnati lawyer and businessman whose brother was an Ohio congressman.

But in 1984, Mr. Keating, then a 61-year-old Phoenix real estate millionaire, bought Lincoln Savings & Loan, of Irvine, Calif., for $51 million, double its net worth. Lincoln, with 26 branches, made small profits on home loans, but under new state and federal rules it could make riskier investments, and Mr. Keating began pouring depositors’ savings into real estate ventures, stocks, junk bonds and other high-yield instruments. In three years, Lincoln’s assets soared to $3.9 billion, from $1 billion, and Mr. Keating was using the business as his personal cash machine, taking $34 million for himself and his family and $1.3 million more for political contributions, prosecutors said. The Federal Home Loan Bank Board, fearing wide collapses in a shaky industry, finally imposed a 10 percent limit on risky S.&L. investments. By 1987, its investigators found that Lincoln had $135 million in unreported losses and was more than $600 million over the risky-investment ceiling. Soon, the F.B.I., the Securities and Exchange Commission and other agencies were homing in.

Mr. Keating hired Alan Greenspan, soon to be chairman of the Federal Reserve, who compiled a report saying Lincoln’s depositors faced “no foreseeable risk” and praising a “seasoned and expert” management. Mr. Keating soon called on five senators who had been recipients of his campaign largess — Alan Cranston of California, Donald W. Riegle Jr. of Michigan, John Glenn of Ohio and Dennis DeConcini and John McCain of Arizona — to pressure the bank board to relax its rules and kill its investigation. All five met with regulators, and Edwin J. Gray, then the board chairman, said four of the senators — all but Mr. Riegle — “came to me like lawyers arguing for a client.” He resisted, but was replaced by a chairman more sympathetic to Mr. Keating, and the board backed off, with disastrous results for depositors and investors. Lincoln survived for two more years. On the books, assets ballooned to $5.46 billion, but billions were in speculative investments, and hidden losses soared. Lincoln talked many customers into replacing federally insured deposits with high-yielding bonds from Lincoln’s parent, American Continental, a Keating corporation that was drowning in losses. Bond buyers were not told the condition of American Continental, or that its bonds were uninsured, prosecutors said. A witness in a lawsuit years later produced a Lincoln memo advising its bond salesmen to remember that “the weak, meek and ignorant are always good targets.”

American Continental went bankrupt in 1989, and an insolvent Lincoln was seized by the government. Some 23,000 customers were left holding $250 million in worthless bonds, the life savings of many, and taxpayers paid $3.4 billion to cover Lincoln’s losses. It was the largest of 1,043 S.&L. failures from 1986 to 1995. Authoritative studies show that they cost the savings and loan industry $29 billion and taxpayers $124 billion. The government sued Mr. Keating for $1.1 billion, but he said he was broke. Convicted of fraud, racketeering and conspiracy in state and federal trials, Mr. Keating went to prison for four and a half years. Both verdicts were overturned on appeals in 1996. California dropped its case, and on the eve of a federal retrial in 1999, Mr. Keating, who always insisted he had done nothing wrong, pleaded guilty to four counts of wire and bankruptcy fraud and was sentenced to time already served.

The Keating Five — all Democrats except Mr. McCain — also insisted they had done nothing improper. The Senate Ethics Committee concluded in 1991 that none had violated laws, but it said that Senators Cranston, DeConcini and Riegle had interfered with the bank board’s inquiry and rebuked them, Mr. Cranston in the harshest terms. Senator Glenn and Senator McCain were cleared, but criticized for “poor judgment.”


Yeah, well there was a lot of that going around in the '80's...

But it's the future that worries me!
63 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Weekend Economists Back to the Future April 4-6, 2014 (Original Post) Demeter Apr 2014 OP
No bank failure this weekend, it appears Demeter Apr 2014 #1
The Eighties were awash in con men, but this one was something else. Demeter Apr 2014 #2
Legal consequences Demeter Apr 2014 #3
The High-Flying Nun: Charles Keating gave other people’s money to Mother Teresa Demeter Apr 2014 #4
From the Commentary: Demeter Apr 2014 #5
Today’s Jobs Report and the Supreme Court’s “McCutcheon” Debacle ROBERT REICH Demeter Apr 2014 #6
The World’s Policeman Is Looking Mighty Guilty By Ryan Gallagher Demeter Apr 2014 #7
Noam Chomsky: Why It's "Legal" When the U.S. Does It; Paranoia of the Superrich and Superpowerful Demeter Apr 2014 #8
U.S. judge refrains from making GM 'park' recalled cars Demeter Apr 2014 #9
Economy Adds 192,000 Jobs in March, Unemployment Rate Unchanged DEAN BAKER Demeter Apr 2014 #10
Norwegian Skydiver Almost Gets Hit by Falling Meteor — and Captures it on Film Demeter Apr 2014 #11
Hackers turn security camera DVRs into bitcoin miners Demeter Apr 2014 #12
Do-Nothing Congress Does Something: Gives GE A Big Tax Break Demeter Apr 2014 #13
Arrrgggghhh! kickysnana Apr 2014 #14
Musical Interlude hamerfan Apr 2014 #15
I don't remember it Demeter Apr 2014 #16
Thanks, Demeter! hamerfan Apr 2014 #22
Helicopter Drone Package Is 'Truly Leap-Ahead Technology' For The Marines xchrom Apr 2014 #17
How Profit Margins And Share Buybacks Contribute To Earnings Growth xchrom Apr 2014 #18
UN Human Rights Committee Finds US in Violation on 25 Counts Demeter Apr 2014 #19
Follow Futures Euro traders left clueless as Draghi threatens nothing Demeter Apr 2014 #20
The Decline of Europe IAN WELSH Demeter Apr 2014 #23
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And the Japanese, who were rankled for years by the removal of their manhood Demeter Apr 2014 #24
Lloyds Banking Group prepares for sale of more of taxpayer's stake xchrom Apr 2014 #25
How to Get Beyond Private Equity’s Parasite Economy Demeter Apr 2014 #26
Larry Summers and Wealth Inequality Demeter Apr 2014 #27
I think I have depressed my mood sufficiently to go back to the Real World Demeter Apr 2014 #28
US probing high-speed trading, Attorney General says Demeter Apr 2014 #29
Funny papers Demeter Apr 2014 #30
Ha! DemReadingDU Apr 2014 #37
Let's be Frank and Ernest Demeter Apr 2014 #41
So the future worries you? Maybe something like this? MattSh Apr 2014 #31
I have one word of hope for Ukraine Demeter Apr 2014 #34
Or maybe something like this sinks your boat? MattSh Apr 2014 #32
Why not? Sauce for the Goose Demeter Apr 2014 #33
I don't like to see people suffer... MattSh Apr 2014 #35
I cannot fault your analysis, Matt Demeter Apr 2014 #36
Wake up or perish DemReadingDU Apr 2014 #38
Not only is the US not waking up... MattSh Apr 2014 #39
Thanks, good to read what is really going on DemReadingDU Apr 2014 #40
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I really admire Putin. He's the only head of state that cares about his nation's fate Demeter Apr 2014 #59
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What a bunch of sickos banksters are Demeter Apr 2014 #44
Lauren Lyster interviews Nomi Prins DemReadingDU Apr 2014 #49
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Demeter asks: "Do you recognize this man?" MattSh Apr 2014 #48
Israeli exporters weigh options as shekel strength persists xchrom Apr 2014 #51
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Juncker launches EU campaign with soothing message to Germany xchrom Apr 2014 #54
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IMF’s Lagarde Says U.S. Job Numbers ‘Not at Potential’ xchrom Apr 2014 #56
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Merkel Says Europe Shouldn’t Fear Punishing Russia on Ukraine xchrom Apr 2014 #58
Merkel has drunk too much Koolaid Demeter Apr 2014 #60
Joe Firestone: Is the MSM Blackout on Inequality, Plutocracy, and Oligarchy Ending? Demeter Apr 2014 #61
Michael Hudson: P is for Ponzi Demeter Apr 2014 #62
Well, another Weekend draws to a close Demeter Apr 2014 #63
 

Demeter

(85,373 posts)
1. No bank failure this weekend, it appears
Fri Apr 4, 2014, 08:04 PM
Apr 2014

I'll bet there are a lot of icebergs floating just below the surface, though. It's quiet. Too Quiet.

 

Demeter

(85,373 posts)
2. The Eighties were awash in con men, but this one was something else.
Fri Apr 4, 2014, 08:07 PM
Apr 2014

The NYT Obit concludes:

Mr. Keating, a 6-foot-5-inch beanpole who walked with a swagger, never minced words about buying political influence. Asked once whether his payments to politicians had worked, he told reporters, “I want to say in the most forceful way I can: I certainly hope so.”

Charles Humphrey Keating Jr. was born in Cincinnati on Dec. 4, 1923. He attended Catholic schools and was an accomplished swimmer. He joined the Navy in World War II and became a fighter pilot but was never deployed to a combat theater. After the war, he enrolled in law school at the University of Cincinnati, won various collegiate swimming championships and was named an All-American. In 1948, he received a law degree and began practice in Cincinnati.

In 1949, he married the former Mary Elaine Fette. They had five daughters and a son. In the 1950s, Mr. Keating organized Catholic men’s groups to fight pornography and founded Citizens for Decent Literature, which under various names grew to 300 chapters and 100,000 members nationally. He became known as a stern moralist, and in 1969 was named by Richard M. Nixon to the President’s Commission on Obscenity and Pornography.

With his brother, William, Mr. Keating founded a law firm in 1952. (William was a congressman from 1971 to 1974 and later chairman of The Cincinnati Enquirer.) By the late 1950s, the law firm’s principal client was Carl H. Lindner Jr., a businessman who formed American Financial Corporation in 1960 as a sprawling conglomerate. Mr. Keating left law practice in 1972 to become American Financial’s executive vice president.

In the 1970s, the S.E.C. accused American Financial of irregularities; Mr. Lindner and Mr. Keating admitted no wrongdoing but agreed to violate no fraud statutes. After a falling-out with Mr. Lindner, Mr. Keating moved to Phoenix in 1976 to run American Continental, a real estate spinoff he acquired from American Financial. By the early 1980s, it was a major home builder in Phoenix and Denver.

Mr. Keating thus acquired millions just as the government lifted rules that had long limited the scope of investments that S.&L.s could make with depositors’ money. Lincoln became a cash cow for Mr. Keating’s investments, prosecutors said, and its failure was a metaphor for an age of excess.

In Phoenix he had worked occasionally as a real estate consultant. In their book, “Trust Me: Charles Keating and the Missing Billions” (1993), Michael Binstein and Charles Bowden wrote: “He did not simply rob a bank. He broke a bank with his dreams.”
 

Demeter

(85,373 posts)
3. Legal consequences
Fri Apr 4, 2014, 08:18 PM
Apr 2014
https://en.wikipedia.org/wiki/Charles_Keating

Keating blamed government regulators for the failure of Lincoln Savings and filed suit in order to regain control over the bank. The suit was dismissed in August 1990, with the judge calling the seizure fully justified because of the looting of the institution by Keating and his associates. By then, Keating's legal fees were running at $1 million per month.

In September 1990, Keating and his associates were indicted by the State of California on 42 counts related to having duped Lincoln's customers into buying worthless junk bonds of American Continental Corporation; Keating went to jail when he could not post a $5 million bond. He was convicted in December 1991 of 17 counts of fraud, racketeering, and conspiracy. Mother Teresa asked the court to show leniency to Keating, in recognition of the considerable sums he had donated to her charitable operations. In April 1992, California Superior Court Judge Lance Ito, however, gave Keating the maximum 10-year prison sentence, quoting Woody Guthrie, to wit "More people have suffered from the point of a fountain pen than from a gun."[102] Keating was sent to the medium-security Federal Correctional Institution, Tucson to serve his time.

In May 1992, Keating's son-in-law Robert M. Wurzelbacher Jr. (married to Keating's daughter, Elizabeth), a senior vice president of American Continental, and chief executive of an investment firm owned by Lincoln Savings, was also implicated, pleaded guilty to three federal fraud counts in connection with the collapse of the Lincoln Savings and Loan Association and agreed to testify against Keating. (In December 1993, Wurzelbacher was sentenced to a 40-month prison term.)

In January 1993, a federal conviction followed, on 73 counts of fraud, racketeering and conspiracy. In July 1993, Keating was given a 12½ year sentence. The judge ordered Keating to pay restitution of $122 million to the government, but Keating said he was $10 million in debt and had no assets to sell.

One case filed by the U.S. Securities and Exchange Commission was settled in 1994: Keating claimed to be bankrupt but agreed to repay millions should any hidden assets be discovered. A third case filed by the Resolution Trust Corporation resulted in a summary judgment of $4.3 billion against Keating and his wife in 1994, the largest judgment ever against a private person. (The judgment was overturned on appeal in 1999, on grounds that Keating could not be held personally liable to the government without a specific criminal conviction or some other decision at trial.) Throughout his imprisonment, Keating maintained his innocence, saying he was a "political prisoner" of the U.S. government and a scapegoat for the largest banking scandal in the nation's history.

In April 1996, the 9th U.S. Circuit Court of Appeals in San Francisco ruled that state trial judge Ito had mistakenly allowed the jury to convict Keating by giving them faulty instructions as the law as regarding fraud. Thus, the conviction was overturned. In December 1996, the same Court of Appeals ruled that some of the jurors in the federal case might have been influenced by their knowledge and discussion of the results of the state case, and threw out the federal conviction. Keating was freed after 4½ years in prison; he later said that staying tough during his incarceration was the thing he was proudest of. He was said to have gotten along well with other prisoners and served as best man at weddings for some that he met there.

In April 1999, on the eve of the retrial of the federal case, Keating entered a plea agreement. He admitted to having committed four counts of wire and bankruptcy fraud by extracting nearly $1 million from American Continental Corp. while already anticipating the collapse that happened weeks later. In return, the federal prosecutors dropped all other charges against him and his son, Charles Keating III. He was sentenced to time served.

In October 2000, the U.S. Supreme Court refused to hear the government's appeal of the overturning of the state conviction. This left Keating without any convictions on his record of the core charge that he had duped and defrauded investors by having them switch from insured accounts for junk bonds. State prosecutors declined to move for a retrial, saying it would bring no more than a six-month jail sentence and that many witnesses had died in the interim or were in bad health. Keating replied that if the government had left him alone, investors "would all be rich."

Final years and death

Following his release from prison, Keating separated from his wife Mary. He moved in with one of his daughters and son-in-law Gary Hall, Sr. in the Paradise Valley neighborhood of Phoenix.

During the 2000s, Keating worked as a business consultant and as of 2008 was involved in some successful real estate developments in the Phoenix market. He kept a low profile in his business operations, and declined comment during John McCain's 2008 presidential campaign when the Keating Five scandal was brought up again by the press. During his final years, Keating maintained good physical shape through swimming and walking and was able to go out in public without being recognized.

Charles Keating died in a Phoenix hospital on March 31, 2014, at the age of 90, after having suffered an undisclosed illness for several weeks.

SIC SEMPER TYRANNIS
 

Demeter

(85,373 posts)
4. The High-Flying Nun: Charles Keating gave other people’s money to Mother Teresa
Fri Apr 4, 2014, 08:25 PM
Apr 2014
http://howgoodisthat.wordpress.com/2008/07/13/charles-keating-gave-other-peoples-money-to-mother-teresa/

This is Charles Keating. He stole $252,000,000 (£126,671,335) from people who he tricked into thinking they were making low risk investments, but were in fact funding his exuberant lifestyle and his frothing at the mouth hate campaign against anything non-catholic which he considered to be therefore pornographic and sinful.

Mother Teresa really liked Charles Keating. So much so, in fact, did she really not want him to go to prison, for fleecing thousands of hard working Americans out of millions of dollars, some of which she had gratefully received as gifts from Keating, that she wrote to the trial judge on his behalf, begging for the understanding Jesus would show to such a generous man.

In her letter to the judge, she claimed to know nothing of Mr. Keating’s business or politics. To remind her of these trifling details, the deputy district attorney replied to Mother Teresa – explaining in no uncertain terms that, in his view, Jesus himself, if confronted with a man like Keating, would have no qualms about returning the money which had been given to him as it had been given to her, by a confidence trickster of Mr. Keating’s gaul and self-righteous insistence that other people are to blame for his actions.

Dear Mother Teresa:

I am a Deputy District Attorney in Los Angeles County and one of the persons who worked on the prosecution of your benefactor, Charles H. Keating, Jr. I read your letter to Judge Ito, written on behalf of Mr. Keating, which includes your admission that you know nothing about Mr. Keating’s business or the criminal charges presented to Judge Ito. I am writing to you to provide a brief explanation of the crimes of which Mr. Keating has been convicted, to give you an understanding of the source of the money that Mr. Keating gave to you, and to suggest that you perform the moral and ethical act of returning the money to its rightful owners.

The biblical slogan of your organization is ‘As long as you did it to one of these My least brethren. You did it to Me’. The ‘least’ of the brethren are among those whom Mr. Keating fleeced without flinching. As you well know, divine forgiveness is available to all, but forgiveness must be preceded by admission of sin. Not only has Mr. Keating failed to admit his sins and his crimes, he persists in selfrighteously blaming others for his own misdeeds. Your experience is, admirably, with the poor. My experience has been with the ‘con’ man and the perpetrator of the fraud. It is not uncommon for ‘con’ men to be generous with family, friends and charities. Perhaps they believe that their generosity will purchase love, respect or forgiveness. However, the time when the purchase of ‘indulgences’ was an acceptable method of seeking forgiveness died with the Reformation. No church, no charity, no organisation should allow itself to be used as salve for the conscience of the criminal.

Mother Teresa meeting the then head of the world\'s oldest intelligence agency and executor of the richest tax exempt organisation in the world.

Mother Teresa meeting the then head of the world's oldest intelligence agency and executor of the richest tax exempt organisation in the world.
I remind myself of the biblical admonition of the Prophet Micah: ’0 man, what is good and what does the Lord require of you. To do justice, love mercy and walk humbly.’ We are urged to love mercy but we must do justice. You urge Judge Ito to look into his heart – as he sentences Charles Keating – and do what Jesus would do. I submit the same challenge to you.

Ask yourself what Jesus would do if he were given the fruits of a crime; what Jesus would do if he were in possession of money that had been stolen; what Jesus would do if he were being exploited by a thief to ease his conscience? I submit that Jesus would promptly and unhesitatingly return the stolen property to its rightful owners. You should do the same. You have been given money by Mr. Keating that he has been convicted of stealing by fraud. Do not permit him the ‘indulgence’ he desires. Do not keep the money. Return it to those who worked for it and earned it!

If you contact me I will put you in direct contact with the rightful owners of the property now in your possession.


To this day Paul W. Turley awaits a reply from Mother Teresa, as do the thousands of people Charles Keating swindled. If she is the shining light of Catholic Christian values; the torch bearer of all that is moral and good, we are constantly told by the religious only those with faith in God can espouse and exude, you’ll forgive me if I don’t hold my breath while waiting for someone to effectually excuse her simple inability to read the above, understand its modest requests and act appropriately.
 

Demeter

(85,373 posts)
5. From the Commentary:
Fri Apr 4, 2014, 08:28 PM
Apr 2014


"So she had approximately 5 years to give the money back before she died. And to think they’re trying to rush her to sainthood. Perhaps these people should sue the Missionaries of Charity? And if the catholic church moves forward in reference to her sainthood, these people should sue the church. We’re sue-happy here in America. This is actually something worthy. I’m not quite sure who I hate more – George W or the catholic church."
 

Demeter

(85,373 posts)
6. Today’s Jobs Report and the Supreme Court’s “McCutcheon” Debacle ROBERT REICH
Fri Apr 4, 2014, 08:35 PM
Apr 2014
http://robertreich.org/post/81685592406



What does the Supreme Court’s “McCutcheon” decision this week have to do with today’s jobs report, showing 192,000 new jobs for March? Connect the dots. More than five years after Wall Street’s near meltdown the number of full-time workers is still less than it was in December 2007, yet the working-age population of the U.S. has increased by 13 million since then. This explains why so many people are still getting nowhere. Unemployment among those 18 to 29 is 11.4 percent, nearly double the national rate.

Most companies continue to shed workers, cut wages, and hoard their cash because they don’t have enough customers to warrant expansion. Why? The vast middle class and poor don’t have enough purchasing power, as 95 percent of the economy’s gains go to the top 1 percent. That’s why we need to (1) cut taxes on average people (say, exempting the first $15,000 of income from Social Security taxes and making up the shortfall by taking the cap off income subject to it), (2) raise the minimum wage, (3) create jobs by repairing roads, bridges, ports, and much of the rest of our crumbling infrastructure, (4) add teachers and teacher’s aides to now over-crowded classrooms, and (5) create “green” jobs and a new WPA for the long-term unemployed.

And pay for much of this by raising taxes on the top, closing tax loopholes for the rich, and ending corporate welfare.

But none of this can be done because some wealthy people and big corporations have a strangle-hold on our politics. “McCutcheon” makes that strangle-hold even tighter. Connect the dots and you see how the big-money takeover of our democracy has led to an economy that’s barely functioning for most Americans.

AND IT WAS GOING STRONG AT THE TIME OF THE SAVINGS AND LOAN DEBACLE...
 

Demeter

(85,373 posts)
7. The World’s Policeman Is Looking Mighty Guilty By Ryan Gallagher
Fri Apr 4, 2014, 08:39 PM
Apr 2014
http://www.slate.com/articles/technology/future_tense/2013/10/martin_scheinin_u_s_u_k_surveillance_programs_violate_iccpr.html

NSA snooping exposed by Snowden breaches international law, experts say. Spy agencies in the United States and the United Kingdom have argued that their recently exposed dragnet surveillance programs are legal and necessary. But international law experts are not so sure.

At a hearing in the European Parliament on Monday, the surveillance initiatives operated by the National Security Agency and its British counterpart, the Government Communications Headquarters, were the subject of legal scrutiny as part of an ongoing inquiry prompted by leaks by NSA whistleblower Edward Snowden. Participating in the session was a judge who has served in the European Court of Human Rights for 15 years, a former United Nations special rapporteur on human rights and counterterrorism, and a London-based international law professor. All three agreed that the scope of the surveillance revealed in the Snowden leaks constituted violations of both European and international laws and treaties.

Martin Scheinin, the U.N. special rapporteur on human rights and counterterrorism from 2005 to 2011, said that the Snowden leaks showed a “massive interference with the privacy rights of EU citizens and others.” The surveillance, he said, amounted to “an unlawful or arbitrary interference with privacy or correspondence, and this conclusion follows independently from multiple grounds.”

Finland-born Scheinin, who is currently the president of the International Association of Constitutional Law, added that he believed the United Kingdom and the United States “have been involved and continue to be involved” in activities that violate their obligations under the International Covenant on Civil and Political Rights. The ICCPR is a 1966 multilateral treaty that is ratified by more than 160 countries, including the United States and the United Kingdom. Article 17 of the treaty states that citizens should not be “subjected to arbitrary or unlawful interference with [their] privacy, family, home or correspondence.”

Separately, the Snowden leaks have prompted several countries—led by Germany—to push for Article 17 to be updated so that it covers spy agencies’ conduct in the “digital sphere.” Scheinin said that he supported this move—but he also suggested that within the current terms of the treaty, there is additional action that could be taken in a bid to rein in spies in the United States and the United Kingdom. He said it was possible under Article 41 of the ICCPR for countries to lodge an “inter-state complaint” about NSA and GCHQ surveillance, initiating what would amount to a sort of arbitration proceeding between countries.

The ICCPR is enforced by the U.N.’s quasijudicial Human Rights Committee, which issues recommendations that are not legally binding. However, the committee does wield significant moral authority, and if it were to rebuke NSA surveillance, it could prove highly embarrassing for the Obama administration, especially given the president’s statement in 2009 "that international law is not an empty promise, and that treaties will be enforced." Coincidentally, the Human Rights Committee is scheduled to issue a review of the United States’ compliance with the ICCPR in March 2014, and you can bet that the NSA’s international privacy violations will not be ignored.

During the European Parliament’s hearing on the issue, there was also significant focus on the possibility of redress for European Union citizens seeking to sue over Internet surveillance programs like GCHQ’s dragnet Tempora program and the NSA’s Prism and XKeyscore systems. Blasting what he called “unacceptable mass surveillance,” European Court of Human Rights judge Bostjan Zupančič said that "if the NSA is in cahoots with EU agencies, the ECHR may launch an action against the state agency of the country where the person is residing.” However, Zupančič said that citizens must exhaust their national courts first. Furthermore, he pointed out, the ECHR does not have the authority to “strike down” national laws and can award damages only to affected individuals.

If a case over the spying does ever end up in the ECHR, though, any plaintiff challenging the snooping could have a strong case. According to Douwe Korff, professor of law at London Metropolitan University, “the kind of surveillance we now know that has taken place is utterly incompatible with the most fundamental rights and data protection principles in the EU.”

The European Parliament committee investigating the surveillance is planning to issue a series of conclusions and recommendations by the end of the year. Its next hearing is due to take place on Nov. 7.
 

Demeter

(85,373 posts)
8. Noam Chomsky: Why It's "Legal" When the U.S. Does It; Paranoia of the Superrich and Superpowerful
Fri Apr 4, 2014, 08:42 PM
Apr 2014
http://www.informationclearinghouse.info/article33828.htm

This piece is adapted from “Uprisings,” a chapter in Power Systems: Conversations on Global Democratic Uprisings and the New Challenges to U.S. Empire, Noam Chomsky’s new interview book with David Barsamian (with thanks to the publisher, Metropolitan Books). The questions are Barsamian’s, the answers Chomsky’s.



Does the United States still have the same level of control over the energy resources of the Middle East as it once had?


The major energy-producing countries are still firmly under the control of the Western-backed dictatorships. So, actually, the progress made by the Arab Spring is limited, but it’s not insignificant. The Western-controlled dictatorial system is eroding. In fact, it’s been eroding for some time. So, for example, if you go back 50 years, the energy resources -- the main concern of U.S. planners -- have been mostly nationalized. There are constantly attempts to reverse that, but they have not succeeded.

Take the U.S. invasion of Iraq, for example. To everyone except a dedicated ideologue, it was pretty obvious that we invaded Iraq not because of our love of democracy but because it’s maybe the second- or third-largest source of oil in the world, and is right in the middle of the major energy-producing region. You’re not supposed to say this. It’s considered a conspiracy theory.

The United States was seriously defeated in Iraq by Iraqi nationalism -- mostly by nonviolent resistance. The United States could kill the insurgents, but they couldn’t deal with half a million people demonstrating in the streets. Step by step, Iraq was able to dismantle the controls put in place by the occupying forces. By November 2007, it was becoming pretty clear that it was going to be very hard to reach U.S. goals. And at that point, interestingly, those goals were explicitly stated. So in November 2007 the Bush II administration came out with an official declaration about what any future arrangement with Iraq would have to be. It had two major requirements: one, that the United States must be free to carry out combat operations from its military bases, which it will retain; and two, “encouraging the flow of foreign investments to Iraq, especially American investments.” In January 2008, Bush made this clear in one of his signing statements. A couple of months later, in the face of Iraqi resistance, the United States had to give that up. Control of Iraq is now disappearing before their eyes.

Iraq was an attempt to reinstitute by force something like the old system of control, but it was beaten back. In general, I think, U.S. policies remain constant, going back to the Second World War. But the capacity to implement them is declining.

Declining because of economic weakness?

Partly because the world is just becoming more diverse. It has more diverse power centers. At the end of the Second World War, the United States was absolutely at the peak of its power. It had half the world’s wealth and every one of its competitors was seriously damaged or destroyed. It had a position of unimaginable security and developed plans to essentially run the world -- not unrealistically at the time.

This was called “Grand Area” planning?

Yes. Right after the Second World War, George Kennan, head of the U.S. State Department policy planning staff, and others sketched out the details, and then they were implemented. What’s happening now in the Middle East and North Africa, to an extent, and in South America substantially goes all the way back to the late 1940s. The first major successful resistance to U.S. hegemony was in 1949. That’s when an event took place, which, interestingly, is called “the loss of China.” It’s a very interesting phrase, never challenged. There was a lot of discussion about who is responsible for the loss of China. It became a huge domestic issue. But it’s a very interesting phrase. You can only lose something if you own it. It was just taken for granted: we possess China -- and if they move toward independence, we’ve lost China. Later came concerns about “the loss of Latin America,” “the loss of the Middle East,” “the loss of” certain countries, all based on the premise that we own the world and anything that weakens our control is a loss to us and we wonder how to recover it.

Today, if you read, say, foreign policy journals or, in a farcical form, listen to the Republican debates, they’re asking, “How do we prevent further losses?”
 

Demeter

(85,373 posts)
9. U.S. judge refrains from making GM 'park' recalled cars
Fri Apr 4, 2014, 08:52 PM
Apr 2014
http://news.yahoo.com/u-judge-refrains-issuing-stop-drive-order-faulty-211734095--sector.html

A U.S. federal judge refrained on Friday from issuing an emergency order that would have parked millions of General Motors Co cars recalled for defective ignition switches linked to at least 13 deaths.
District Court Judge Nelva Gonzales Ramos at a hearing in Corpus Christi, Texas, said she would need more time to study briefs submitted by attorneys for two owners of a recalled GM car and receive documents from the carmaker's lawyers. A ruling on the requested "stop drive order" is expected in the coming days.

Since February, GM has recalled 2.6 million cars equipped with the switch. So far this year, GM has recalled a total of nearly 7 million vehicles, or about the same number recalled in the previous four years combined.

Without warning, the switches can make vehicle engines stall while operating, stop air bags from deploying, and impede power steering and power brakes from operating. This week, the automaker's Chief Executive Officer Mary Barra was grilled by two congressional committees and the company showed signs it would create a compensation fund for victims similar to a fund created by BP Plc for those affected by a 2010 oil spill. GM has said it would take a charge of $750 million in the first quarter, mostly for the recalls announced in that period, including ones linked to the defective ignition switch.

In Friday's hearing, the judge was asked by attorneys for GM vehicle owners or their survivors to order all models under recall off the road until they can be fixed. GM had told the judge through documents filed before the hearing that it was safe to operate the vehicles as long as nothing was attached to the key while it was in the ignition...
 

Demeter

(85,373 posts)
10. Economy Adds 192,000 Jobs in March, Unemployment Rate Unchanged DEAN BAKER
Fri Apr 4, 2014, 09:54 PM
Apr 2014
http://truth-out.org/news/item/22899-economy-adds-192000-jobs-in-march-unemployment-rate-unchanged

...With population growth implying labor force growth in the neighborhood of 90,000, the economy is cutting into the backlog of unemployed workers at the rate of 90,000 a month. With the economy still down close to 7 million jobs from trend levels, this would imply that we would reach full employment some time in 2020.

THIS IS INTOLERABLE!
 

Demeter

(85,373 posts)
12. Hackers turn security camera DVRs into bitcoin miners
Fri Apr 4, 2014, 10:12 PM
Apr 2014
http://rt.com/usa/hackers-security-dvrs-bitcoin-miners-913/

A computer security instructor says he's discovered that hackers have been able to infiltrate standard security cameras and then use that hardware to mine for bitcoin, the anonymous digital cryptocurrency.

Johannes Ullrich, a teacher at the computer security SANS Technology Institute, announced last Friday that he found malicious software on Hikvision digital video recorders (DVRs), which are used to record video from surveillance cameras. The virus seems to spread from device to device onto each machine it connects with on the network in question. Along with replicating, though, it also uses the closed-circuit television operators to mine for bitcoin, sending those profits back to the virus’ creator.

“Analysis of the malware is still ongoing, and any help is appreciated,” Ullrich wrote. “Here are some initial findings: The malware is an ARM Binary, indicating that it is targeting devices, not your typical x86 Linux server. The malware scans for Synology devices exposed on port 500.”

This hack is atypical because malware is generally aimed at Linux and Windows systems, whereas the Hikvision hack victimizes DVRs and even some internet routers. Wired reported that Ullrich has since found the malware running on routers, an indication that the programmers likely wrote a specific worm for operating systems.

“Though this is a novel method, it’s hardly the first time hackers have tried to bust their way into other people’s hardware in order to make some bitcoin, the popular digital currency,” Wired’s Robert McMillan wrote on Tuesday. “The bitcoin system is run by independent machines spread across the globe, and if you contribute processing power to the system, you receive some bitcoin in return. This is called mining, and hackers often seek to mine using any machines they can gain control of – including security camera DVRs.”

MORE
 

Demeter

(85,373 posts)
13. Do-Nothing Congress Does Something: Gives GE A Big Tax Break
Fri Apr 4, 2014, 10:27 PM
Apr 2014
http://www.testosteronepit.com/home/2014/4/3/do-nothing-congress-does-something-gives-ge-a-big-tax-break.html

Congress is infamous for doing nothing, as people who have lost their unemployment benefits viscerally know. However, today the Senate Financial Services Committee started the process of enacting the “Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act.” This act addresses dozens of tax breaks that ended last year. If the Congress continues to do nothing, billions more would flow into the treasury. More than enough to pick up the $10 billion tab for extending unemployment benefits. Re-enacting some of the tax breaks would be easy for members of Congress to defend to their constituents, such as a provision that allows school teachers to deduct the cost of the classroom supplies they buy out of pocket. But some provisions are simply indefensible.

The GE Loophole

General Electric is famous for paying little or no income tax. Indeed, GE was one of 26 Fortune 500 companies that was consistently profitable for the five years 2008-2012, and yet paid no income tax across those years, according to this report from Citizens for Tax Justice (CTJ). In fact, across those years GE received more than a $3 billion net refund. While GE and the rest use multiple techniques to extract your tax dollars while keeping all their profits, one has informally taken its name. The GE loophole is available to any company with financial income that it can claim was generated offshore, such as by a foreign banking subsidiary. The loophole rewards the American parent company for investing overseas by sheltering its profits from U.S. tax until the American parent brings the money home.

So GE can avoid the tax bill as long as it likes by keeping its profits invested in other countries. Not only does the loophole shortchange taxpayers, it also creates an incentive to invest overseas instead of here at home. Worse, the nature of financial income makes it relatively easy for companies to use the loophole to assign profits to subsidiaries in tax haven countries while assigning losses here at home. In 2010, Forbes dryly observed that “Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain).”


hamerfan

(1,404 posts)
15. Musical Interlude
Sat Apr 5, 2014, 07:13 AM
Apr 2014

Last edited Sat Apr 5, 2014, 09:52 AM - Edit history (1)

Crime Of The Century by Supertramp:



(I think I've used this before, but if the shoe fits....)


 

Demeter

(85,373 posts)
16. I don't remember it
Sat Apr 5, 2014, 08:58 AM
Apr 2014

It's good music though there's a twist in the message that might not be useful, towards the end...

hamerfan

(1,404 posts)
22. Thanks, Demeter!
Sat Apr 5, 2014, 09:54 AM
Apr 2014

I was looking for the studio version and didn't pay attention to the video. Updated with a live version as well.

xchrom

(108,903 posts)
17. Helicopter Drone Package Is 'Truly Leap-Ahead Technology' For The Marines
Sat Apr 5, 2014, 09:04 AM
Apr 2014
http://www.businessinsider.com/r-us-navy-testing-more-sophisticated-pilotless-helicopters-2014-05

WASHINGTON (Reuters) - The helicopter kicked up a cloud of freshly fallen snow that partly obscured the ground below, but despite the poor visibility, it gently touched down in a landing that was unremarkable except for the fact no one was at the controls.

The helicopter, filmed during testing by the Naval Research Laboratory, was piloted by a 100-pound (45-kg) sensor and software package that officials said can turn any rotary-winged aircraft into a virtually autonomous drone able to fly with minimal input from the Marine Corps troops it was designed to serve.

Rear Admiral Matthew Klunder, chief of Naval Research, said the sensor and software pack is "truly leap-ahead technology" that will let a Marine with no flight experience issue landing instructions to a cargo helicopter via tablet computer after just a few minutes of training.

Klunder, who will preview the technology for industry and military leaders at a conference in Washington on Tuesday, said the aim of the project was to give troops a simple tool for battlefield resupply, reducing the casualties inherent in using ground convoys to deliver food, water and weapons.



Read more: http://www.businessinsider.com/r-us-navy-testing-more-sophisticated-pilotless-helicopters-2014-05#ixzz2y15wF8lE

xchrom

(108,903 posts)
18. How Profit Margins And Share Buybacks Contribute To Earnings Growth
Sat Apr 5, 2014, 09:11 AM
Apr 2014
http://www.businessinsider.com/chart-sources-of-eps-growth-2014-4

There are three basic forces that drive earnings per share growth: revenue, profit margins, and share counts.

Fattening profit margins have enabled corporations to book record earnings despite weak sales growth.

Because sales have been weak, corporate managers have been reluctant to invest in business. Instead, they've been shoveling cash back to shareholders in the form of dividends and share buybacks.

Despite the falling share counts, the amount of earnings per share growth driven by buybacks has actually been relatively small.

The biggest driver of earnings growth in recent years has clearly been profit margin expansion.



Read more: http://www.businessinsider.com/chart-sources-of-eps-growth-2014-4#ixzz2y17e5luM
 

Demeter

(85,373 posts)
19. UN Human Rights Committee Finds US in Violation on 25 Counts
Sat Apr 5, 2014, 09:38 AM
Apr 2014

OBVIOUSLY, NOT A COMPREHENSIVE LIST...APPARENTLY, COVERS ONLY CURRENT VIOLATIONS

http://truth-out.org/news/item/22887-un-human-rights-committee-finds-us-in-serious-violation

... It focuses on violations of the International Covenant on Civil and Political Rights, to which the country is party. The report mentions 25 human rights issues where the United States is failing. This piece will focus on a few of those issues - Guantanamo, NSA surveillance, accountability for Bush-era human rights violations, drone strikes, racism in the prison system, racial profiling, police violence, and criminalization of the homeless.

The UN committee expressed concerned with "the limited number of investigations, prosecutions and convictions of members of the Armed Forces and other agents of the US government, including private contractors" for "unlawful killings" and "torture" during the Bush years. It welcomed the closing of the CIA black sites, but criticized the "meagre number of criminal charges brought against low-level operatives" for abuses carried out under the CIA's rendition, interrogation and detention program. The committee also found fault with the fact that many details of the CIA's torture program "remain secret, thereby creating barriers to accountability and redress for victims." In response to the 9/11 terrorist attack, the Bush administration jettisoned the Constitution and international law and openly embraced the use of torture against suspected terrorists captured overseas. The CIA tortured people in secret prisons around the world known as "black sites." Torture was sanctioned from the top down. Then-President George W. Bush, Vice President Dick Cheney, Defense Secretary Donald Rumsfeld, National Security Advisor Condoleezza Rice, lawyers and many others in the executive branch played roles in crafting nifty ways to justify, approve and implement the use of torture. Rather than be held accountable, the top-level government officials responsible for authorizing torture and other crimes have been given comfort in the public sphere. Condoleezza Rice returned to Stanford University as a political science professor. John Yoo, who authored the torture memos, is a law professor at UC Berkeley. Jose Rodriguez, a former CIA officer in the Bush administration, vigorously defends torture in his autobiography and interviews. George W. Bush, Dick Cheney and Donald Rumsfeld are able to rest comfortably in retirement and continue to defend their records...

Of the report's 25 issues, four looked at racial disparities within the United States' criminal justice system and law enforcement practices. It denounced the "racial disparities at different stages in the criminal justice system, sentencing disparities and the overrepresentation of individuals belonging to racial and ethnic minorities in prisons and jails." The committee condemned racial profiling by police and FBI/NYPD surveillance of Muslims - but it did welcome plans to reform New York City's "stop and frisk" program. It also denounced the continuing use of the death penalty and "racial disparities in its imposition that affects disproportionately African Americans." Finally, it expressed concern at "the still high number of fatal shootings by certain police forces" and "reports of excessive use of force by certain law enforcement officers . . . which have a disparate impact on African Americans, and the use of lethal force by Customs and Border Protection (CBP) officers at the US-Mexico border..."

Drone Strikes, Assassinations

To execute its perpetual global war on terrorism, the Bush administration favored large-scale, conventional land invasions and occupations, as in Iraq and Afghanistan. Obama has moved away from such operations and embraced seemingly lighter tactics of irregular warfare to continue the perpetual war, while making it less visible to Americans. Extrajudicial killing and drone strikes are the most notable methods, but others include air strikes, cruise missile attacks, cyberwarfare, special operations, and proxy wars. These tactics have meant more use of the military's Joint Special Operations Command (JSOC) and the paramilitary branch of the CIA. Both the CIA and JSOC carry out drone strikes and sometimes collaborate in joint operations. The CIA, not the military, is legally mandated to launch covert operations, which are classified and unacknowledged by the US government. However, JSOC performs essentially the same operations, particularly extrajudicial killings. Thus, transferring control of the drone program from the CIA to the military would make little difference. The UN report criticized the United States' assassination program and drone strikes. It expressed concerned with the "lack of transparency regarding the criteria for drone strikes, including the legal justification for specific attacks, and the lack of accountability for the loss of life resulting from such attacks." The United States' position for justifying its extrajudicial killing operations is that it is engaged in an armed conflict with al-Qaeda, the Taliban and "associated forces" - a term the Obama administration created to refer to co-belligerents with al-Qaeda - and that the war is in accordance with the nation's inherent right to self-defense against a terrorist enemy....The committee's report also took issue with "the unclear interpretation of what constitutes an 'imminent threat' and who is a combatant or civilian taking a direct part in hostilities, the unclear position on the nexus that should exist between any particular use of lethal force and any specific theatre of hostilities, as well as the precautionary measures taken to avoid civilian casualties in practice."


AND THE BEAT GOES ON....

 

Demeter

(85,373 posts)
20. Follow Futures Euro traders left clueless as Draghi threatens nothing
Sat Apr 5, 2014, 09:46 AM
Apr 2014
http://www.futuresmag.com/2014/04/03/euro-traders-left-clueless-as-draghi-threatens-not?

Currency traders were put through their paces during Draghi’s press conference Thursday.

The ECB left its benchmark rates unchanged, failing to grasp the nettle and stimulate the economy by opting for a negative deposit rate. The policy statement did, however, appear to take a step closer to adopting quantitative easing, which Mr. Draghi said culminated this month in a “rich discussion” on the topic. Last month, he said, there was no discussion on the topic. The sensation that a strengthening currency has started to feed through to threateningly lower inflation has shifted opinion around the Eurozone with many suggesting the ECB will ultimately move to buy bonds, much like other central banks in an effort to stimulate growth. Despite the discussion, the ECB failed to announce a move in April. QE might weaken the euro currency, while failure to act might lift the unit. Such failure to act might make the onset of QE inevitable in the future. As a result and as the intraday chart clearly illustrates, traders haven’t got a clue what to do with the euro currency!

NEITHER DOES THE EU, APPARENTLY
 

Demeter

(85,373 posts)
23. The Decline of Europe IAN WELSH
Sat Apr 5, 2014, 09:54 AM
Apr 2014
http://www.ianwelsh.net/the-decline-of-europe/



While the US is the hegemonic state, and the sicknesses of the world largely emanate from it, Europe is falling apart as well, it is simply doing so more slowly–unless you are Greece, Portugal or Spain. Europe has unquestionably swung right, and England in particular was entirely complicit in the great financial collapse. Neither were Germany, or France or pretty much everyone else not involved. Germany’s behaviour since the financial collapse has been disgusting and cruel. Nonetheless, the northern Europeans, overall, have done a better job than the US. They have made mistakes, one of which was playing along with Bush–there was an opportunity around 04 to put the boots to America, as Europe, to break America’s hegemonic power. Europe was too scared to take the chance, and as a result America has rebounded and Europe has grown weaker–in large part because they also have refused to discipline their bankers, and because they have decided to cannibalize the weak sisters. Everyone in the developed world, with the small and essentially irrelevant exception of Iceland, and perhaps the Scandinavians except Sweden, is going in the wrong direction. Apparent exceptions, like Germany, are only apparent. Germany’s exports are reliant on the Euro being lower than it otherwise would be because of weak sister nations in the Euro. Germany is cannibalizing the South of Europe to stay prosperous, but it’s not a sustainable situation.


  • The Scandinavians, overall, are handling things best, with the Swedes the worst of the bunch. They (SWEDES) have privatized a great deal, they have not been able to handle immigration well, and have developed an underclass.

  • England is completely dependent on the financial industry for its survival, having, under Thatcherism and the Labor governments which continued Thatcherism, completely destroyed its industrial base.

  • Ireland is a basket case, whose politicians repeatedly betrayed its citizens in the aftermath of the financial collapse in order to bail out banks at maximum cost to their own population.

  • France has been complicit in Germany’s crimes and seems not to understand that they can’t have their socialist policies in a Europe where everyone doesn’t break the rich.

  • The Greeks are victims, but they rolled over: they had a chance to vote for Syriza, but believed the Troika’s lies that if they just played along it wouldn’t be so bad. They failed to understand that to Germans and French, they aren’t actually Europeans and need not be treated as such.

  • Italy suffered a coup when Mario Monti was put in power without an election and imposed austerity. To be sure, his predecessor was a scumbag, but he was, y’know, elected.

  • Spain, again, made the mistake of bailing out banks.


You never borrow money from the Troika to bail out your bankers. All it does is add more unpayable debt and thus increase the depth of austerity.

Europe is on a downward trend. They started from a better place than the US (universal healthcare, decent welfare systems), but that does not alter the trajectory. Their fall is an odd mixture of an insistence on keeping the EU together, while refusing to actually make the EU a proper federal state and take care of everyone in it. As it stands, the EU does not make sense: most countries, including Greece, Italy, Spain and Portugal, but not limited to them, would be better off leaving it. Or, frankly, the rest of the EU should kick Germany out, and erect tariffs against their goods.England should be kicked out as well, for serial bad behaviour.

It is impossible, right now, to regulate the world economy in any way beneficial to ordinary citizens of the majority of states. The doctrine of free trade, which is really about free financial flows and deregulation of labor, has made actual economic policy almost impossible unless a country finds a way to opt out of the neoliberal consensus (aka. China), or use its structure to their (temporary) advantage (aka. Germany.) Everyone is going to have to learn that impoverishing other nations is not a sustainable path to wealth. We are destroying countries at a ferocious rate: Afghanistan, Pakistan, Iraq, Egypt, Libya, Syria, Greece, Portugal, the Ukraine; with many others tottering and in clear decline (Spain and Italy, for example). Europe is not immune to these trends; nor immune to the policies which cause them. In fact Europe has become a major force for idiot austerity and for destroying nations, as the core states sacrifice the South in hopes that the Gods of austerity will spare them.

They won’t.


DIALOG IN THE COMMENTARY:


Tsigantes
April 3, 2014

The perfect statement Ian, thank you.

I would only add:

(1) That the EU back in 2004 did not refuse to support the USA because no country (apart from UK, France and Greece) was willing to take on the costs of its own military defense. Political support was the price of this unwillingness.

(2) The Irish economy is now openly run and administered by Germany’s KfW, the fund originally set up to administer the Marshall plan and now operating as a sort of second central bank on behalf of German industry. Thus Ireland, the manufactured “success story” and Poster Boy Graduate of the ‘programme’ is literally today a German economic colony and ‘offshore’ base for German finance.

(3) Finally, further political/economic union in the EZ / EU will only lead to even worse conditions, since the EU’s unelected bureaucrats have 100% adopted US neo-liberal policies since the crisis. At present it is only the fragments of our retained sovereignties and democratic vote that provides any protection from full-on, unelected, Ukrainian-style policies being imposed on national populations.

Ian Welsh
April 3, 2014

Either the EU needs to go full national, in which case the “national” governments become provinces and lose meaningful power, or it needs to dissolve, imo. If it goes full national, the South and East can vote in non-Austerity governments, at least in theory. Right now Germany has a veto over any weak government’s policies: and in practice, that means every southern and Eastern state. Even France is coming under heavy pressure to go back to brutal austerity. Hollande’s unpopularity is making that even more likely.

Or just kick the Germans the hell out (OF THE EU).

xchrom

(108,903 posts)
21. US Backs Militarization Of Japan In Response To China
Sat Apr 5, 2014, 09:50 AM
Apr 2014
http://www.businessinsider.com/r-hagel-backs-japan-plan-to-bolster-self-defense-2014-04

TOKYO (Reuters) - U.S. Defense Secretary Chuck Hagel said he welcomed the possibility of Japan giving its military a greater role by allowing it to come to the aid of allies under attack.

The comment in an interview with Japan's main financial newspaper, the Nikkei, came ahead of a trip to Japan this weekend and represents the clearest U.S. support yet for Tokyo's effort to bolster its military as it faces off against a more assertive China.

"We welcome Japan's efforts to play a more proactive role in the alliance, including by re-examining the interpretation of its constitution relating to the right of collective self-defense," Hagel said in a written response to the Nikkei.

Hagel visits China, suspicious of Japan's military intentions and where memories of Japan's past militarism run deep, after Tokyo



Read more: http://www.businessinsider.com/r-hagel-backs-japan-plan-to-bolster-self-defense-2014-04#ixzz2y1HeaIFY
 

Demeter

(85,373 posts)
24. And the Japanese, who were rankled for years by the removal of their manhood
Sat Apr 5, 2014, 09:59 AM
Apr 2014

will probably be gung-ho about this development.



Gung ho /ˈɡʌŋˈhoʊ/ is a term in American English used to mean "enthusiastic" or "dedicated".

Gung ho is an anglicised pronunciation of "gōng hé" (工合 , which is also sometimes anglicised as "kung ho". "Gōng hé" is a shortened version and slogan of the "gōngyè hézuòshè" (工業合作社 or Chinese Industrial Cooperatives, which was abbreviated as INDUSCO in English.

The two Chinese characters "gōng" and "hé" are translatable individually as "work" and "together".

The linguist Albert Moe studied both the origin and the usage in English. He concludes that the term is an "Americanism that is derived from the Chinese, but its several accepted American meanings have no resemblance whatsoever to the recognized meaning in the original language" and that its "various linguistic uses, as they have developed in the United States, have been peculiar to American speech." In Chinese, concludes Moe, "this is neither a slogan nor a battle cry; it is only a name for an organization."

The term was picked up by United States Marine Corps Major Evans Carlson from his New Zealand friend, Rewi Alley, one of the founders of the Chinese Industrial Cooperatives. Carlson explained in a 1943 interview: "I was trying to build up the same sort of working spirit I had seen in China where all the soldiers dedicated themselves to one idea and worked together to put that idea over. I told the boys about it again and again. I told them of the motto of the Chinese Cooperatives, Gung Ho. It means Work Together-Work in Harmony...."

Later Carlson used gung ho during his (unconventional) command of the 2nd Marine Raider Battalion. From there, it spread throughout the U.S. Marine Corps (hence the association between the two), where it was used as an expression of spirit and into American society as a whole when the phrase became the title of a 1943 war film, Gung Ho!, about the 2nd Raider Battalion's raid on Makin Island in 1942. The term went viral after that.

https://en.wikipedia.org/wiki/Gung-ho

xchrom

(108,903 posts)
25. Lloyds Banking Group prepares for sale of more of taxpayer's stake
Sat Apr 5, 2014, 10:19 AM
Apr 2014
http://www.theguardian.com/business/2014/apr/04/lloyds-banking-group-sell-taxpayers-bank-shareholders

Preparations are under way for a sell-off of Lloyds Banking Group shares to the public after the bailed-out bank set out plans to ask its current shareholders for permission to go ahead.

In details included in the notice of its annual shareholder meeting – which also covers the election of the directors to the board and its pay policies – the bank asks shareholders to back a resolution on a "related party transaction".

This resolution is necessary because the government wants the bank to prepare a prospectus to accompany any sale of the shares to private investors and it will face hefty costs if the prospectus fails to warn of any risks facing the bank.

George Osborne has admitted he is considering a sell-off of part of the government's stake in the bank although this is not expected until at least the autumn after last month's sale of a 7.5% stake in the bank to City investors.
 

Demeter

(85,373 posts)
26. How to Get Beyond Private Equity’s Parasite Economy
Sat Apr 5, 2014, 10:20 AM
Apr 2014

feedproxy.google.com/~r/NakedCapitalism/~3/eiMoG4hcv8c/how-to-get-beyond-private-equity-parasite-economy.html?utm_source=feedburner&utm_medium=email

By Eric Garland, a writer and speaker who deals with the megatrends that affect society, economics and national security, with a special focus on the impact on ordinary people. Cross posted from his blog

THIS IS A VERY LONG POST...I'M JUST TAKING THE MIDDLE SECTION FOR RELEVANCE, ALTHOUGH THE ENTIRE THING IS INFORMATIVE AND WORTHY OF YOUR ATTENTION...

...In the end, this story isn’t about a big box music chain, but how a small number of citizens can subvert every product made, every job offered, and every purchase decision – and how we can regain control of our lives, starting with the musical instrument industry.

News on Guitar Center’s Finances – and What it Means

If you are a regular reader you know that I have been keeping close tabs on the finances of the Westlake, CA-based retail behemoth. Had their executives never made visits to my Facebook page, I never would have thought that it was worth any research, but my experience is that if you see unusually emotional behavior from technocrats, a bigger story lurks. Confirming my instincts, a perfunctory analysis of the company’s finances showed gargantuan debt structure and a liquidity crisis (also known as being broke.) Because the company is/was owned by a holding company created by private equity firm Bain Capital, it was impossible for me to deduce exactly the structure of their ownership and debt covenants. To summarize the story for those who don’t have a taste for corporate finance, just imagine you had $65,000 in credit card debt financed at a crappy rate, and that you made around $80,000 a year. Things on the horizon would look bleak, and you would be forced to either change your lifestyle or declare bankruptcy and get a fresh start. As such, irrespective of the contradictions inherent in the big box model and the general draining of wealth from their supposed middle class customers, I figured that these guys would be lucky to make it a few more months.

The other shoe dropped a few weeks back when the main holder of Guitar Center’s debt, Ares Capital Management, stepped up to take ownership in place of future bond payments. The business media reports this arrangement as an alternative to bankruptcy, which sounds about right. I expected as much, because this model is in a slow death spiral, and the only way to extract the millions of dollars owed will be to run the Bain playbook, only harder and faster. As such, my forecast is for the $500 – 600 million of inventory to be sold at cheap prices while employees and vendors get squeezed for every nickel. This is no different than the past six years of company management, according to my sources, it’s just that this time, there is a time-sensitive goal – to get the most money out before the whole thing collapses.

The latest update: More details about the Bain-Ares handoff came out around 48 hours ago. They revolve, unsurprisingly, around a restructuring of senior PIK (payment in kind) notes that offered money up front with huge balloon payments on the back end. Under the current deals, GC would owe over $950 million in 2017 alone, an amount that would be impossible to pay off. I was skeptical about any form of refinancing, since the ratings agencies have compared their debt to scratchers tickets. But Ares is charging ahead and is preparing a bond offering to the market despite all the hullaboo:

Westlake Village, Calif.-based Guitar Center is further revamping its capital structure by launching an offering of $940 million in senior notes that will be used to repay debt connected to its buyout.

The proposed offering will include $615 million in senior secured first-lien notes, which Taylor said she expects will price around 6%, as well as $325 million in senior unsecured notes, which Taylor expects will price around 8%.

Moody’s rated the proposed secured notes at B3 and proposed unsecured notes at Caa1 in a March 25 report.

Guitar Center would use the proceeds from the notes offering to repay a $675 million term loan that backed its Bain buyout. The term loan, which is priced at Libor plus 600 basis points and matures on April 9, 2017, had $617.5 million outstanding at Sept. 30, according to a regulatory filing.

Guitar Center would also repay a portion of its $375 million in 11.5% senior unsecured notes due Oct. 15, 2017.


So Moody’s is still calling GC’s debt “subprime,” for those of you who remember that term from a little financial crisis a few years back – but that doesn’t mean that it won’t find a buyer. In fact today I saw news of GC’s bond issuance tucked in between some other deals from an online publication that follows the corporate bond market for traders:

Guitar Center’s two tranches followed suit. The 6.5% secured notes due 2019 and 9.625% unsecured notes due 2020 were both pegged at 98.5/99 this morning, from 98.9 at offer apiece, according to sources. Bank of America led the bookrunner quartet, with issuance under Rule 144A for life. As reported, the deal is part of a broad recapitalization effort whereby vintage-2007 buyout loans and some bonds held by Ares Management are repaid in full, a portion of cash-pay opco bonds are swapped into equity, and all holdco PIK notes are swapped into holdco equity.


Then, it hit me. I think I threw my head back and laughed. Chances are, Ares Capital Management will find buyers for Guitar Center debt at 6 – 9% interest, because for financiers today, higher risk just means higher returns, not actual risk - just like back in the mid-2000s. Because of wealth concentrated in the financial sector, the dynamic is almost identical to what destroyed the mortgage market: Complexity obfuscated the true risk of financial instruments, which was being fobbed off onto other parties until the whole thing blew up.

Complexity: the financial structure of this operation seems absurdly complex given their business of selling guitar amps. To truly understand the structure of the Guitar Center business, I have had to consult professionals with a much deeper expertise – CEOs, CFOs, people with masters degrees in finance. Almost every one has looked at various details of the company and said, “That’s a pink zebra right there,” or, “Wow, I’ve maybe heard of that kind of thing one other time.” To understand some of their SEC filings, I had to drag up papers from the finance department of the Wharton School of Business. When you look up the corporate structure from which Bain Capital invested in Guitar Center, you find it (as of 2009) located as 3.34% of a billion-dollar investment corporation based offshore in the Cayman Islands, wedged into a financial partnership structure with a dozen other corporations.

In my experience, complexity of this sort is meant to keep casual analysts, regulators and journalists guessing – not unlike what we saw with the mortgage market eight years ago. And just so I had a good active comparator, I pulled the annual report for ExxonMobil, a company with a $290 billion market cap. Compared to GC, its filings are a relative oasis of simplicity and clarity, with the whole business laid out and finances making basic sense without enormous leaps of logic. Then again, it’s easier when you’re profitable.

Risk: None of the guys behind this deal have what Nassim Nicholas Taleb calls “skin in the game.” Nobody making decisions will lose their family fortune if it goes badly, and everybody in management stands to make substantial fees, bonuses and salaries. You see, Guitar Center used to be a musical instrument company, but now it is just one more imperial outpost for the spare financial capital of the top 0.1% of the population. For the people now supplying GC with liquidity, risk is a tool for cash flow, not a concern for survival.

When I recognized how much the financial markets have become like 2006, I finally figured out why some other financier could shell out $50 or $100 or $300 million for Guitar Center junk bonds. For the customers of private equity, a few million isn’t that much money. These investors actually need some higher-risk assets in their portfolio, rather than let their money sit around in a zero-interest rate environment. They might be like Warren Buffett and already have huge stakes in sensible things like Too-Big-To-Fail banks, railroads or Coca-Cola. This just rounds out their overall position. Make 6-9% with the chance that the company could finally go tits-up? Why not! If it pays out, then great, and if it doesn’t – tax write off!

You know who else thought like that?
The people who set the mortgage market on fire just a few years ago. They made a fortune by structuring finance in such a way that investments produced income irrespective of their true value. They could not have cared less about whether the end result was old people thrown out of their homes or eight million unemployed – that was someone else’s risk. Their risk got hedged by the taxpayer who would bail out the industry so long as the collapse was big enough, so building a decent, functional economy was besides the point.

This is the logic at play with Guitar Center. Financial parasites have taken over the host company and could not care less about the industry itself. They install some CEO who used to be selling DVD players. They swap private equity firms in and out. It doesn’t matter – it’s just another place for loose capital to suck out a few extra dollars or a tax break. After all, the entire value of the company is less than what JPMorgan paid in fines last year without breaking a sweat.

In the final analysis, this is less about business sense and more about business domination. There are dozens of industries that have been locked up by a few players in this way: mortgages, cars, pharmaceuticals, retail, you name it. Since the chances of antitrust suits under “leaders” like George W Bush and Barack Obama are so low, the tiny tranche of society with all the money can run a time-worn playbook – consolidate companies, squeeze vendors, push manufacturing overseas, lower wages, wash, rinse, repeat, discard. The numbers of the business – which suck in GC’s case – do not matter as much as control of yet another industry. As long as you have dominance over an industry, your positions are hedged for risk automatically because there is no other game in town – or at least people believe that. In the meantime, you get management fees, income from bonds, the occasional IPO payout.

And if not, you move on to the next group of suckers.


GO READ THE REST...IT'S ENTERTAINING, IN A MACABRE SORT OF WAY..
 

Demeter

(85,373 posts)
27. Larry Summers and Wealth Inequality
Sat Apr 5, 2014, 10:41 AM
Apr 2014
http://houseofdebt.org/2014/04/03/larry-summers-and-wealth-inequality.html

From the very nice blog post by Annie Lowrey:

“I asked Mr. Summers what was behind secular stagnation, and he said he was still thinking through all of its causes. But globalization, automation, income inequality and changes in corporate finance might be important factors, he said.

Income is now more concentrated in the hands of the rich. Those well-off households tend to save and invest higher proportions of their earnings than middle-class or low-income families do. That might mean, on aggregate, less spending and less demand across the economy for a given level of income.”

And here is a snippet from our post last week:

“But perhaps even more interesting are the implications for the secular stagnation hypothesis, which holds that we are in a long-run stagnating economy because of inadequate demand. Is it a coincidence that the secular stagnation hypothesis is being revived exactly when income inequality is accelerating? If a higher share of income goes to the wealthiest households who spend very little of it, then perhaps these two trends are closely related.”


Rising income and wealth inequality is not just about distributing the economic pie. It may very well have an effect on the size of the pie itself.

YOU CAN MAKE BOOK ON THAT...IT'S IN THE HISTORY OF ALL NATIONS.
 

Demeter

(85,373 posts)
28. I think I have depressed my mood sufficiently to go back to the Real World
Sat Apr 5, 2014, 11:07 AM
Apr 2014

Besides, it's lunch time. See you all later!

I always liked Moms Mabley's standard response to death of a villain:

"They say you shouldn't say nothin' about the dead unless it's good. He's dead. Good!"

 

Demeter

(85,373 posts)
29. US probing high-speed trading, Attorney General says
Sat Apr 5, 2014, 11:10 AM
Apr 2014

IT ONLY TOOK 15 YEARS, A BIG CRASH, SEVERAL SMALLER FLASH-CRASHES, AND A GREATER DEPRESSION TO GET HOLDER OUT OF HIS CHAIR...PLUS THE FBI AND THE NY ATTY GENERAL WERE CLOSING IN. HOLDER DIDN'T WANT TO GET SHUT OUT...AND THEN, THERE'S THE RECENT PUBLICITY STUNT...

http://www.cnbc.com/id/101515474

The Justice Department is investigating high-speed trading for possible insider trading, Attorney General Eric Holder told lawmakers on Friday.

The disclosure comes the same week that securities regulators and the FBI confirmed they are looking into potential wrongdoing by high-frequency stock traders.

Regulators have been examining whether ordinary investors are at an unfair disadvantage to high-speed traders, who use computer algorithms to rapidly dart in and out of trades to earn fractions of a penny that add up to big profits over time.

"I can confirm that we at the Justice Department are investigating this practice to determine whether it violates insider trading laws," Holder told a House panel at a hearing on the Justice Department's budget.

WHEN ALL ELSE FAILS, TELL THEM A GOOD STORY!

MattSh

(3,714 posts)
31. So the future worries you? Maybe something like this?
Sat Apr 5, 2014, 12:26 PM
Apr 2014

Moody’s downgrades Ukraine to ‘default imminent’ — RT Business

Moody's Investors Service has downgraded Ukraine's government bond rating one notch from Caa2 to Caa3, citing the current political crisis and deepening economic instability as reasons for its negative outlook.

The Caa rating is a credit risk grading pertaining to investments that are both very poor quality and entail a high credit risk. The current downgrade drops Ukraine from Moody's "extremely speculative" rating to "default imminent with little prospect for recovery."

Moody’s said the downgrade was driven by three factors, which “exacerbate Ukraine's more longstanding economic and fiscal fragility.”

The first factor is Ukraine’s political crisis, citing the recent regime change in Kiev and subsequent events in Crimea. The agency went on to cite Ukraine’s stressed external liquidity position, which faces continued decline in foreign currency reserves, the withdrawal of Russian financial support and a spike in gas import prices. Moody’s further noted that this assessment accounts for the near-term liquidity relief recently hammered out with the IMF. Finally, due to a “sizable fiscal deficit,” the agency expects a significant contraction of GDP and a sharp currency depreciation as the debt to GDP (Gross Domestic Product) ratio hits between 55-60 percent by year’s end.

On Thursday, Gazprom CEO Aleksey Miller announced Ukraine would begin paying $485 per thousand cubic meters of natural gas starting from April. The price rise followed a cancelation of the Black Sea hosting deal. On Wednesday President Vladimir Putin signed a federal law ending Russia’s commitment to the Kharkov Agreement, as the Black Sea port of Sevastopol is now under jurisdiction of the Russian Federation. This follows another steep hike on April 1, when the price Ukraine paid for gas went up 44 percent to $385, after Kiev failed to meet its debt repayments.

Last December, Russia offered Ukraine’s Yanukovich-led government a $15 billion loan and a 33 percent discount on natural gas: a lifeline to help its faltering economy. Moscow went through with the purchase of a $3 billion Eurobond from Kiev, though Russia later froze both the gas deal and the credit- line, due to events on the ground.

http://rt.com/business/moody-ukraine-downgrade-default-545

And it closes by saying this...

Yatsenyuk warned GDP could shrink by 3 percent in 2014, while inflation could hit up to 14 percent.

To which I call bullshit. In the last 4 months, the currency has gone from 8-1 to 11-1, a 37% devaluation. Meaning anything that's paid for in dollars, meaning just about anything that's imported, now cost 37% more. And canceling two agreements on the price of natural gas has lead to a 70% increase. In a normal year, inflation runs about 14%. I'm calling 50% for this year.

 

Demeter

(85,373 posts)
34. I have one word of hope for Ukraine
Sat Apr 5, 2014, 01:20 PM
Apr 2014

Insulation.

Retrofit, if necessary. Cut out the heating problem, use the fertile soil of Europe's breadbasket, throw out the idiots who would poison the water table through fracking, break every contract that puts Ukraine at a disadvantage, and let them whistle for their money losses.

Scrape the capital together for renewable electricity production. Go all Iceland on the banksters and oligarchs. Or die.

Not much of a choice, is it?

Same deal here. Universal, single solution advice, good for every nation and climate.

MattSh

(3,714 posts)
32. Or maybe something like this sinks your boat?
Sat Apr 5, 2014, 12:58 PM
Apr 2014

Russia’s secret weapon: crashing US economy by collapsing petrodollar - The Voice of Russia

Russia can collapse the United States, prominent US trader Jim Sinclair believes. The economist, famous for his forecasts, explains that the strength of the dollar is based on the US agreement with Saudi Arabia that all contracts for fuel deliveries be in the US dollars. Now, Moscow can collapse the petrodollar in one moment. The slapping of sanctions on Russia is tantamount to a shot in the foot. The expert explains that the only true value in the world today is the petrodollar. But Russia can collapse it by demanding Euros or Yuan for its oil.

What’s more, the US may lose its influence on Europe for good, if Russia starts selling its fuels for anything but the dollars. Angela Merkel would be only happy, for Germany, as well as other European countries would then have no need for currency markets. The rate of the Euro would then grow, while the cost of oil and gas would go down. But the United States should be ready for an abrupt increase in gasoline prices, for hyperinflation amid a poor business climate and a crash of the Dow Jones industrial average, Sinclair predicts.

But does Moscow need this kind of scenario? One of the tough measures that the West said it would resort to should be cutting Russia off the SWIFT interbank payment system. But should this happen, the sanctions would hit hardest their own authors, says a Stock Market Chair Professor at the Higher School of Economics in Moscow, Alexander Abramov, and elaborates.

"Technically, it is pretty easy to cut Russia off the SWIFT system by blocking Russian banks’ IP addresses. But SWIFT is one of the main systems that banks use for international payments. Hardly anyone in the US or Europe would like to resort to this kind of move, since banks are interrelated. If Russian banks are unable to use the system, they will fail to make timely payments to their western counter parties, which will prove quite a shock to the financial system. Now, this is by far more real a threat than using Euros to pay for oil. I think the financial world, which has just started emerging from the crisis, can’t be happy about these kinds of shocks".

http://voiceofrussia.com/news/2014_03_28/Russia-s-secret-weapon-crashing-US-economy-by-collapsing-petrodollar-5071/

 

Demeter

(85,373 posts)
33. Why not? Sauce for the Goose
Sat Apr 5, 2014, 01:16 PM
Apr 2014

Reagan did in the USSR (not really, but he didn't help matters. And he and his cult thought they did, so does it matter?).

It was corruption, a striking imbalance between what needed to be done and what actually was done, and Afghanistan that brought down the USSR. Now look at the USA today.

Same scenario applies, including Afghanistan. The Petrodollar Finagle is probably the only thing keeping the US from Zimbabwe-style inflation due to QE4ever.

The Saudis are getting pissed off with us, already. I'm not sure if they are mad about Libya, Palestine, Iran, Iraq, Nigeria, or other US insanities and failures. Probably all of the above. I'm mad about them, too! Who could blame the House of Saud? After all, wasn't 9-11 their warning to us? Thing is, I'm not pleased with the House of Saud, either.

I'm planting fruits and vegetables if Spring ever arrives. I'll try to convince the association that we need to raise chickens and rabbits, grow mushrooms in the chicken and rabbit shit, melons growing down our hills, and fish in the ponds. And solar on every roof.

They are really stubborn people around here. But they do like to eat, based on our parties...

Globalism is a curse, and the petrodollar makes it possible.

We will survive and overcome this by undoing the past 150 years of error--or we will suffer and maybe die out as a species. The choice lies before us.

MattSh

(3,714 posts)
35. I don't like to see people suffer...
Sat Apr 5, 2014, 01:55 PM
Apr 2014

Really. I don't.

But I've been of the notion for a while that in the US, shit really needs to hit the fan before there'll be any real change. There's a whole lot of shit sitting around right now, to be sure, but there seems to be a shortage of fans.

I've seen it said a couple of times that the current situation has led to a real awakening among those who call themselves Russian, whether they're in Russia, Ukraine, or elsewhere. Some very powerful forces have declared war on you so you better wake the fuck up or perish. And they're waking the fuck up. Not a hot war of course, but you don't need a hot war to install a government of your choosing anymore. What will wake up Americans?

Oh, and the ability to wage war, an actual hot war, is the only thing propping up the petrodollar. And even that's not going so well anymore. That's also why you'll never see any actual cuts to military spending.

 

Demeter

(85,373 posts)
36. I cannot fault your analysis, Matt
Sat Apr 5, 2014, 02:05 PM
Apr 2014

As one of those shat upon for years, I am more than willing to let it fly higher and higher, until it does some good. The right people have to get it in the face...and the last opportunity, 2008, was too close a shave for them. The next one will probably do it. The 1% has run out of tricks. And even they cannot subvert nature and physics.

"Some very powerful forces have declared war on you so you better wake the fuck up or perish."

That's true for any of the 99%. Other nations are waking up. This one....not so much. More often, people take it in the neck with resignation, figuring they "deserved" it. Calvinism is a curse on this nation; Calvinism and its complementary Lutheranism, martyrdom, etc. Masters and slaves.

The USA will cut military spending when the last illusion falls. May the petrodollar be the one.

MattSh

(3,714 posts)
39. Not only is the US not waking up...
Sat Apr 5, 2014, 02:56 PM
Apr 2014

Quite alarmingly, it seems this site has a long way to go to.

It's been said many a time that if you want to really understand what's going on, read the financial news. Anybody who's got a bit of loot to throw around wants to be damn sure they understand what it is they're throwing it at and why they're throwing it at it.

This thread is one of those places you you'll get some real actual news, although it's disguised as financial news.

Anyway, should you or anyone else on this thread be interested, I've been keeping a bit of a blog lately. Some of this stuff would be just too controversial here, and even some of the lesser stuff would still stir up too much drama in these parts. And some would just drop like a rock.

It's "No Bread and Circuses for You" at http://bread-circuses-today.blogspot.com

DemReadingDU

(16,000 posts)
40. Thanks, good to read what is really going on
Sat Apr 5, 2014, 03:11 PM
Apr 2014

Too much of news is so sanitized, and difficult to get the truth.

And part of the problem that Americans don't wake up, they don't get the truth.

Or don't take the time to figure out the truth because they have other priorities.

Most people really don't want to read or hear anything but the good stuff anyway.

MattSh

(3,714 posts)
47. The 4th Media » The First Real Russian Retaliation for American Sanctions
Sun Apr 6, 2014, 02:35 AM
Apr 2014

It starts:

Rosneft has recently signed a series of big contracts for oil exports to China and is close to signing a “jumbo deal” with Indian companies. In both deals, there are no US dollars involved.

Reuters reports, that Russia is close to entering a goods-for-oil swap transaction with Iran that will give Rosneft around 500,000 barrels of Iranian oil per day to sell in the global market.

The White House and the russophobes in the Senate are livid and are trying to block the transaction because it opens up some very serious and nasty scenarios for the petrodollar.

If Sechin decides to sell this Iranian oil for rubles, through a Russian exchange, such move will boost the chances of the “petroruble” and will hurt the petrodollar.

Complete story at - http://www.4thmedia.org/2014/04/06/the-first-real-russian-retaliation-for-american-sanctions/

And one more line from the story:

Note also the poke in the eye: the deal to take Iranian oil and sell it as Russian oil, bypassing the sanctions against Iran.

Seems Russia knows where their friends are; and aren't.

 

Demeter

(85,373 posts)
59. I really admire Putin. He's the only head of state that cares about his nation's fate
Sun Apr 6, 2014, 09:45 AM
Apr 2014

All the "Leaders of the Free World", as they like to style themselves, seem to care about either their bankers, or their personal bank balances. The people can go hang, or starve to death. They got theirs.

The first concern tells me that they are servants of Sauron. The second, that they are Saruman. Neither leadership style would be appropriate for either a capitalist democracy or a social democracy.

Putin may be a little short on democracy and rule of law, but aren't we all? He's heading in the right direction, to all appearances, however, unlike some nations I could name.

The Euro isn't going to blow....yet. The populations are too cowed and whipped. They probably still think there's a pony under that pile of horseshit they were sold. When it does blow....it's going to be arson. I don't think spontaneous combustion is in the cards. Not enough heat, not enough kindling, not enough friction.

So now Obama proves yet again to be all hat and no cattle or common sense. Didn't he ever read a Russian novel, even? Tolstoy could set him straight, let alone the darker authors.

But then, Obama seems to have no grasp of American nature, either. Nor the Constitution or the Democratic Party's principles. He is a man without a country in his soul.

DemReadingDU

(16,000 posts)
42. ABN Amro Ex-CEO Found Dead
Sat Apr 5, 2014, 09:41 PM
Apr 2014

4/5/14 ABN Amro Ex-CEO Found Dead
A mere two weeks since former JPMorgan banker, Kenneth Bellando jumped to his death, Bloomberg reports that the former CEO of Dutch Bank ABN Amro (and his wife and daughter) were found dead at their home after a possible "family tragedy." This expands the dismal list of senior financial services executive deaths to 12 in the last few months. The 57-year-old Jan Peter Schmittmann, was reportedly discovered by his other daughter when she arrived home that morning. Police declined to comment on the cirumstances of his (and his wife and daughter's) death. This is not the first C-level ABN Amro banker to be found dead. In 2009, former CFO Huibert Boumeester was discovered with (assumed self-inflicted) shotgun wounds.

more...
http://www.zerohedge.com/news/2014-04-05/abn-amro-ex-ceo-found-dead


murder-suicide?

 

Demeter

(85,373 posts)
45. Such a throwback, to take his wife and daughter with him to the grave
Sat Apr 5, 2014, 09:53 PM
Apr 2014

I always find most repulsive the people who cannot just go quietly shoot themselves if they must, but have to make a big scene and take hostages with them to the Judgment Day.

The only exception is the cases of elderly parent/totally disabled child. That has my compassion, although it is pessimistic of a dying parent to feel that no one could or would provide good care for the surviving child. It still isn't their choice to make.

DemReadingDU

(16,000 posts)
43. Nomi Prins: All The Presidents' Bankers: The Hidden Alliances That Drive American Power
Sat Apr 5, 2014, 09:43 PM
Apr 2014

4/5/14 All The Presidents' Bankers: The Hidden Alliances That Drive American Power
by Nomi Prins

The following is an excerpt from ALL THE PRESIDENTS’ BANKERS: The Hidden Alliances that Drive American Power by Nomi Prins (on sale April 8, 2014). Reprinted with permission from Nation Books. Nomi Prins is a former managing director at Goldman Sachs.

"The global financial landscape was evolving. Ever since World War II, US bankers hadn’t worried too much about their supremacy being challenged by other international banks, which were still playing catch-up in terms of deposits, loans, and global customers. But by now the international banks had moved beyond postwar reconstructive pain and gained significant ground by trading with Cold War enemies of the United States. They were, in short, cutting into the global market that the US bankers had dominated by extending themselves into areas in which the US bankers were absent for US policy reasons. There was no such thing as “enough” of a market share in this game. As a result, US bankers had to take a longer, harder look at the “shackles” hampering their growth. To remain globally competitive, among other things, bankers sought to shatter post-Depression legislative barriers like Glass-Steagall. They wielded fear coated in shades of nationalism as a weapon: if US bankers became less competitive, then by extension the United States would become less powerful. The competition argument would remain dominant on Wall Street and in Washington for nearly three decades, until the separation of speculative and commercial banking that had been invoked by the Glass-Steagall Act would be no more."

more...
http://www.zerohedge.com/news/2014-04-05/all-presidents-bankers-hidden-alliances-drive-american-power

 

Demeter

(85,373 posts)
44. What a bunch of sickos banksters are
Sat Apr 5, 2014, 09:48 PM
Apr 2014

Last edited Sun Apr 6, 2014, 09:46 AM - Edit history (1)

I really hope they all jump out of windows...all the big ones.

Nobody should get to live to 90 with that kind of crime on their records. Now, Keating was an amateur, compared to Blankfein and Dimon. But that was only the first act. 2008 was the second act, and we are waiting for the 3rd act and the end of this tragedy....

DemReadingDU

(16,000 posts)
49. Lauren Lyster interviews Nomi Prins
Sun Apr 6, 2014, 07:39 AM
Apr 2014

3/3/14
Money and politics have become as closely related as love and marriage. Just check out OpenSecrets.org, the web site that chronicles campaign contributions from private donors, and you'll find that financial institutions have been the biggest donors to political campaigns over the latest election cycle for 2013-2014.
Nomi Prins, author of the new book All the Presidents' Bankers: The Hidden Alliances that Drive American Power, is not surprised. She tells The Daily Ticker in the video above that the relationship between bankers and presidents is historic and runs deep.

video appx 5 minutes
http://finance.yahoo.com/blogs/daily-ticker/from-wall-to-washington-and-why-big-banks-take-big-risks-162531604.html

DemReadingDU

(16,000 posts)
50. Nomi Prins videos: Jekyll Island
Sun Apr 6, 2014, 07:48 AM
Apr 2014

3/30/14 NOMI PRINS: Jekyll Island Part 1 Birth of Federal Reserve
www.nomiprins.com

A former Wall Street managing director, Nomi Prins is a journalist, speaker and commentator on Wall Street Misdoings. She is also a senior fellow at Demos, and the author of five previous books, including Other People's Money, Jacked and It Takes a Pillage. Nomi Prins 3rd Book is taking on a Century of Financial Titans and their Alliances with America's Leaders from Teddy Roosevelt to Barack Obama in her new historical narrative: All The Presidents' Bankers: The Hidden Alliances that Drive American Power.


3/30/14 NOMI PRINS:JEKYLL ISLAND Part 2 Bankers Influence Policy



DemReadingDU

(16,000 posts)
46. Nanex's High Frequency Trading Model (Sped Up)
Sat Apr 5, 2014, 09:54 PM
Apr 2014

5/9/13 Nanex's High Frequency Trading Model (Sped Up)

Nanex released a video showing the results of half a second of worldwide high frequency trading with Johnson and Johnson stock. I simply sped up the footage to get a better feel of what it looked like. Blow Your Mind.


video appx 7.5 minutes, but you'll see the effect after only watching 2 minutes




xchrom

(108,903 posts)
51. Israeli exporters weigh options as shekel strength persists
Sun Apr 6, 2014, 09:07 AM
Apr 2014
http://uk.reuters.com/article/2014/04/06/uk-israel-economy-exports-insight-idUKBREA3503B20140406

(Reuters) - Arie Levin envisions a time in the not too distant future where his micro electronics company, AVX Corp, may no longer have operations in Israel.

Due to a sharp appreciation of the shekel against the dollar, AVX, which was founded in 1972 and makes components for wireless products, has already shifted some of its thin film production from Jerusalem to the Czech Republic.

"The deterioration of the value of the dollar versus the shekel has contributed to a 20 percent increase in our costs, which narrows down the profit margins and forces us to look for other solutions," said Levin, head of AVX Israel, which is 70 percent owned by Kyocera.

"I now have more Czech employees than Israeli," he said, noting his Israeli workforce has shrunk to 250 from 600, with many of the layoffs coming in the past year as the shekel appreciated.

xchrom

(108,903 posts)
52. Ridding Ukraine of corruption is vital, says presidential candidate
Sun Apr 6, 2014, 09:08 AM
Apr 2014
http://uk.reuters.com/article/2014/04/06/uk-ukraine-crisis-poroshenko-idUKBREA3507X20140406

(Reuters) - Ridding Ukraine of corruption is key for any new leadership, says presidential candidate Petro Poroshenko, who warns that failure will anger a "reborn" people with high expectations for real change after months of turmoil.

Poroshenko, a confectionery billionaire who is one of two leading candidates in a May 25 election, said Ukrainians had earned the right to a path to membership in the EU after the revolt that threw off president Viktor Yanukovich.

But in an interview with Reuters he also said he would not seek to join the NATO Western military alliance, a move he said would risk dividing the country while Russian troops are massed on its frontier.

After the ousting of Yanukovich, the killings of more than 100 protesters and Russia's seizure of Crimea, people will demand a radical shift by future leaders away from the sleaze and malpractice of the past, said Poroshenko, 48.

xchrom

(108,903 posts)
53. Dark markets may be more harmful than high-frequency trading
Sun Apr 6, 2014, 09:10 AM
Apr 2014
http://uk.reuters.com/article/2014/04/06/uk-analysis-dark-markets-idUKBREA3508S20140406

(Reuters) - Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges.

Some former regulators and academics say so much trading is now happening away from exchanges that publicly quoted prices for stocks on exchanges may no longer properly reflect where the market is. And this problem could cost investors far more money than any shenanigans related to high frequency trading.

When the average investor, or even a big portfolio manager, tries to buy or sell shares now, the trade is often matched up with another order by a dealer in a so-called "dark pool," or another alternative to exchanges.

Those whose trade never makes it to an exchange can benefit as the broker avoids paying an exchange trading fee, taking cost out of the process. Investors with large orders can also more easily disguise what they are doing, reducing the danger that others will hear what they are doing and take advantage of them.

xchrom

(108,903 posts)
54. Juncker launches EU campaign with soothing message to Germany
Sun Apr 6, 2014, 09:13 AM
Apr 2014
http://uk.reuters.com/article/2014/04/05/uk-eu-election-juncker-idUKBREA340HW20140405

(Reuters) - Jean-Claude Juncker kicked off his campaign to become president of the European Commission on Saturday by reassuring sceptical German conservatives that he opposed common euro zone bonds, rapid EU enlargement and unchecked power for Brussels.

The former prime minister of Luxembourg and long-time head of the Eurogroup forum of euro zone finance ministers was chosen last month as the lead candidate for Europe's centre-right parties in European Parliament elections next month.

But he has not always seen eye-to-eye with Chancellor Angela Merkel, the most powerful politician in the 28-nation EU, and his speech at a congress of her Christian Democratic Union (CDU) seemed aimed at winning over the German leader and her party.

One of the most sensitive issues for the CDU is Juncker's support, at the height of the bloc's debt crisis, for common euro zone bonds - a taboo for Merkel and her party who fear they would remove incentives for budget discipline. The easing of the crisis has snuffed out the debate about mutualising European debt, but Juncker still felt the need to address it on Saturday.

xchrom

(108,903 posts)
55. European officials line up against French deficit reprieve
Sun Apr 6, 2014, 09:16 AM
Apr 2014
http://uk.reuters.com/article/2014/04/05/uk-france-deficit-idUKBREA3408R20140405

(Reuters) - The top conservative candidate for European Commission president and the head of the German Bundesbank have come out against granting France more time to cut its deficit, warning such a move would set a dangerous precedent for other EU states.

Jean-Claude Juncker, the former prime minister of Luxembourg and long-time head of the Eurogroup forum of euro zone finance ministers, said in Berlin that France should not receive "special treatment" again after it was given two extra years to reach deficit targets only last year.

France, whose deficit stood at 4.3 percent of gross domestic product (GDP) in 2013, has signalled it wants to renegotiate the existing deadline of 2015 for bringing it down to 3 percent.

French Finance minister Michel Sapin is due to travel to Berlin on Monday to make the case for more leeway.

xchrom

(108,903 posts)
56. IMF’s Lagarde Says U.S. Job Numbers ‘Not at Potential’
Sun Apr 6, 2014, 09:28 AM
Apr 2014
http://www.bloomberg.com/news/2014-04-05/imf-s-lagarde-says-u-s-job-numbers-not-at-potential-.html

International Monetary Fund Managing Director Christine Lagarde said job creation in the U.S. is “not at potential,” as regulatory and policy uncertainties deter some companies from hiring.

In an interview with Fox News airing today, Lagarde also urged the European Central Bank to address the euro region’s risk of low inflation and said Ukraine’s government must adopt some of the measures it has pledged to take before receiving IMF money to aid its struggling economy.

U.S. payrolls rose 192,000 in March, the Labor Department reported April 3, compared with the median forecast of 200,000 in a Bloomberg survey of 90 economists.

The numbers “could be and they should be higher,” Lagarde said in the interview transcript Fox released yesterday. “What is holding us back is probably a degree of uncertainty, a lack of confidence, the fact that a lot of companies are investing into themselves more than actually investing into capacity and in job creation.”

xchrom

(108,903 posts)
57. U.S. to Boost Missile Defenses in Japan Against North Korean Threat
Sun Apr 6, 2014, 09:31 AM
Apr 2014
http://www.bloomberg.com/news/2014-04-06/u-s-to-boost-missile-defenses-in-japan-against-n-korean-threat.html

Defense Secretary Chuck Hagel today said the U.S. will expand its missile defenses in Japan to counter the North Korean threat while calling on China to act responsibly to resolve disputes over contested islands.

The U.S. will assign two more Aegis-class destroyers to Japan by 2017, expanding its regional deployment of the missile-defense warships to seven, Hagel said at a news conference in Tokyo today after meeting with Japanese counterpart Itsunori Onodera.

“A key focus for our talks today was the threat posed by North Korea,” Hagel said. “In response to Pyongyang’s pattern of provocative and destabilizing actions, including recent missile launches in violation of UN Security Council resolutions,” the U.S. “is planning to forward-deploy two additional Aegis ballistic missile-defense ships to Japan by 2017.”

Hagel, who leaves for China tomorrow, said he’ll call on the leaders of that country to act responsibly commensurate with their growing economic and military power.

xchrom

(108,903 posts)
58. Merkel Says Europe Shouldn’t Fear Punishing Russia on Ukraine
Sun Apr 6, 2014, 09:34 AM
Apr 2014
http://www.bloomberg.com/news/2014-04-05/merkel-says-europe-shouldn-t-fear-punishing-russia-on-ukraine.html

German Chancellor Angela Merkel said Russia shouldn’t underrate the European Union’s resolve to impose economic sanctions in the conflict over Ukraine.

Addressing a convention of her Christian Democratic Union party today, Merkel evoked growing up in Soviet-dominated former East Germany and said Europe shouldn’t be “filled with fear” that “a certain measure may cause problems for us.”

“These times are confronting us with the question of where we stand,” Merkel said in Berlin. “Nobody should harbor any illusion. As different as we are in Europe, it’s our good fortune to be united and we will unite to make that decision” if Russia “violates Ukraine further.”

Merkel is boosting her domestic standing as she balances warnings to Russian President Vladimir Putin and pressure for sanctions by allies such as the U.S. with Germans’ concern that relations with Russia may worsen. Her approval rating and her Christian Democratic bloc’s voter support increased in an ARD television poll published this week.
 

Demeter

(85,373 posts)
60. Merkel has drunk too much Koolaid
Sun Apr 6, 2014, 09:55 AM
Apr 2014

She needs a drying out period. I think Putin is gonna give it to her, too.

 

Demeter

(85,373 posts)
61. Joe Firestone: Is the MSM Blackout on Inequality, Plutocracy, and Oligarchy Ending?
Sun Apr 6, 2014, 10:35 AM
Apr 2014
http://www.nakedcapitalism.com/2014/04/joe-firestone-msm-blackout-inequality-plutocracy-oligarchy-ending.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29



Yves here. Although I like this piece, I believe Joe is not cynical enough about MSNBC, which has become a messaging apparatus of the Democratic party. The reason that MSNBC is now talking about inequality is Obama is pushing for a minimum wage increase, so wealth and income disparity are no longer verboten topics. Moreover, the Dems have now opened season on the Kochs and Sheldon Adelson. Both have been highly influential operators for decades. Moreover, the Kochs have been major funders of the extreme right wing campaign to make American values pro-corporate, which was set forth in 1971 in the Powell Memo.

The fact that the Dems are using inequality as a talking point to distract attention from their numerous policy failures, particularly on the economy, may be the big reason we’ve seen such an upsurge in billionaires making badshit crazy remarks about persecution of late. These statements aren’t for the hoi polli, they are for the Beltway operators, as in they had better not go Huey Long on them. As if there was even a possibility that Obama Administration was capable of that.


[b]By Joe Firestone, Ph.D., Managing Director, CEO of the Knowledge Management Consortium International (KMCI), and Director of KMCI’s CKIM Certificate program. He taught political science as the graduate and undergraduate level and blogs regularly at Corrente, Firedoglake and Daily Kos as letsgetitdone. Cross posted from New Economic Perspectives



All of a sudden MSNBC cable commentators are talking about plutocracy and oligarchy. Surprisingly, the first occurrence of this I’m aware of was Chuck Todd, reacting on his Daily Rundown show to the spectacle of Republican candidates traveling to Vegas to seek funding from Sheldon Adelson and his group of hugely wealthy Jewish Republican donors. Todd began to explore the implications of that event. He seemed exercised, and more than the slightest bit upset, about its meaning for Democracy and used the words plutocracy and oligarchy. Andrea Mitchell also discussed it later and she, too, registered apparent dismay, while using the “p” and “o” words.

Chris Hayes has been on leave during this period, so we haven’t heard from him about this. But Chris Matthews, the “oh so very slightly left-of-center insider” has been making very unfriendly noises about Adelson, the Kochs, and the Supremes, culminating today (April 3rd) with nasty references to plutocrats, oligarchs, and candidates, kissing oligarchs somewhere or other, on both his program and Al Sharpton’s.

But the most interesting outbreak of a sudden passion for democracy and hostility toward plutocracy and emerging oligarchy has occurred on The Cycle show, where, in the wake of Abby Huntsman’s oligarch-inspired attack on Social Security and entitlements generally, Krystal Ball has begun talking about inequality, Thomas Piketty’s recently published in English hyped-book on the subject, and the rise of plutocracy and oligarchy in the United States. Here are two videos from the April 1st Cycle show. In the first, Krystal Ball in introduces a discussion among Cycle co-hosts, Touré, Abby Huntsman, and Luke Russert, and Susan Ochs of the Aspen Institute, making a guest appearance.

Amid much praise of Piketty’s book and assertions that it may lead to a re-orientation in the world view of American politics there was a discussion primarily among Susan Ochs, Ball, and Huntsman, about why the rich are sitting on all their money and are not investing it in new businesses that would lower unemployment, create a positive spiral of economic growth that, in turn, would create a healthy and dynamic economy, that, in its turn, would lower inequality.

Huntsman, of course, delivered the right wing gospel, that the increasing concentration of wealth with growing inequality, predicted by Piketty, can be avoided by policies that would restore growth, with the implication being that programs funding new innovations and the proper mix of tax incentives for the rich might shift the psychology of business and persuade investors to stop sitting on their money and start creating the long-awaited full recovery. Huntsman also emphasized the talking point that people aren’t bothered by inequality as long as they themselves are making gains, a contention I critiqued recently.

Ochs, assisted by Ball, with murmurs of agreement from the other two on the panel, quickly talked her down, however, pointing out that businesspeople would be unlikely to respond to anything but increased sales, especially when they could make profits the easy way through financial activities in the international economy. Ochs, in particular, emphasized that the key to restoring a healthy economy and reducing inequality was increased demand; but, following the principle of pundits talking about problems, but rarely real solutions, she stopped short of telling us what could be done to create that demand if business will not do it.

Later in the program, Krystal Ball, in the second video, returned to the subject of inequality, and this time emphasized strongly the danger to democracy it represented. This commentary didn’t make any specific proposals, but it was quite out front in both emphasizing the problem of inequality as a threat to democracy and calling for something “radical” to be done about it...


MUCH MORE AT LINK
 

Demeter

(85,373 posts)
62. Michael Hudson: P is for Ponzi
Sun Apr 6, 2014, 10:38 AM
Apr 2014
http://www.nakedcapitalism.com/2014/04/michael-hudson-p-is-for-ponzi.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yves here. This is the latest entry in Michael Hudson’s Insider’s Economics Dictionary. Enjoy!

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond.” Originally published at his website

Part P in The Insiders Economic Dictionary.

Panic: The abrupt culminating stage of the business cycle, in which inflated asset prices collapse in price as financial securities and properties are sold to pay off debts.

Parallel Universe: The objective of modern economic methodology. A hypothetical exercise in science fiction depicting a world that conceivably could exist, given a sufficient number of internally consistent assumptions. (See Neoclassical Economics.)

Parasite: A “free luncher,” from the Latin word meaning an uninvited guest brought along to a meal or crashing the party. Parasites avoid detection by camouflaging themselves as part of the host itself, and then disable the host’s brain to prevent it from taking counter-measures to protect its own growth. The economic analogue most often cited as parasitic is rentiers. The objective of such rent-seeking activity is to obtain something for nothing – income or price without real cost-value. Financial parasites tend to ride on the backs of real estate investors monopolists and lobby politically to support and un-tax their rent-seeking activities.

Parasitism: In biology, parasites develop a strategy of gaining control of the host’s brain in order to obtain nourishment by masquerading as its natural progeny or as a part of its body. For economies, the brain in question is the government. The rentier or monopolist masquerades as contributing to the production process so that its revenue appears to be earned rather than siphoned off in a zero-sum activity.

The most successful biological parasites establish a symbiosis with their host in which they actually help the host in seeking nourishment and growth. Unsuccessful parasites devour the host without regard for the consequences, as is the case with most economic parasitism. In the case of financial parasitism, bankers and money managers have become more destructive over the centuries. (See also Debt Pollution.)

Pension-fund capitalism: A term coined in the 1950s to reflect finance capitalism’s new way of exploiting labor by withholding part of its salary to invest in stocks. Early abuses in America (and most notoriously in Chile at the hands of the Pinochet junta with the aid of the Chicago Boys) occurred when companies invested the money in their own stocks, increasing equity prices not so much by raising earnings as by organizing a flow of funds into their purchase. (See Labor Capitalism.)


SO MUCH MORE, AND 25 OTHER LETTERS!

THIS WEEKEND BROUGHT TO YOU BY THE LETTER "P"
 

Demeter

(85,373 posts)
63. Well, another Weekend draws to a close
Sun Apr 6, 2014, 12:23 PM
Apr 2014

I haven't posted half of what I intended, but it's enough to keep most people busy....and there's always another Weekend! Be seeing you!

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