By greydogg, 99GetSmart
* THE SPANISH REVOLUTION CONTINUES
This is from Valencia, Spain today. But you wouldn’t know from watching the media, because they’ve already made the decision not to televise the revolution. Share this widely if you stand in solidarity with our brothers and sisters in Spain, who continue to fight the culture of banking corruption and greed that rules governments worldwide. Coal miners joined by thousands of supporters, marched in protest across Madrid (Spain’s capital), angry at government cuts. Spain is facing austerity across the board, in return for 30 billion Euros to rescue its ailing banks and a year’s grace to reduce its deficit. The Prime Minister is slashing social security and unemployment benefits, while raising taxes. Madrid has only 3.3 million citizen and just look at how many of them are out in the streets protesting. That’s what I call a properly done protest, and I think it’s impossible not to make yourself heard!
* SPAIN’S INDIGNADOS DISTRUBUTE FOOD TO MADRID’S POOR
[…] “The government should go after the big companies that don’t pay tax and bankers that have committed fraud and have run this country to the ground,” said Pablo Gonzalez, 52, who works for the Madrid regional government. “Instead, we have to pay.”
The aim of the latest package of measures is to chop €65 billion ($79bn) off the budget deficit through 2015, the biggest deficit-reduction plan in recent Spanish history.
Though the increase in sales taxes, which risks slowing consumption and worsening Spain’s recession, will take effect on September 1, other reforms will be left for later in the year, including a plan to speed up the gradual raising of the retirement age from to 65 to 67.
Meanwhile, Economy Minister Luis de Guindos announced the creation of a new mechanism to help Spain’s 17 regions finance themselves more easily. Some, such as Valencia in the east, are finding it increasingly difficult to tap capital markets for much-needed cash.
The latest bout of austerity is prompting widespread opposition, not least from civil servants. In Madrid, several hundred government workers blocked traffic briefly in different parts of the city.
Civil servants – whose wages were cut 5 per cent on average in 2010 in the first round of austerity cuts – are usually paid 14 times a year. The government is now axing an extra payment made just before Christmas. The prime minister, his cabinet and legislators will also suffer the cut. […]
* FOOD PRODUCTION CONCERNS 94% OF GREEKS
Source: Athens News
Greeks are the most concerned in Europe about national food security, a recent survey conducted by Eurobarometer shows.
The report, entitled “Europeans’ attitudes towards food security, food quality and the countryside”, reveals that 94 per cent of Greeks are concerned about national food security, more than twice the EU average (43%). Particularly low levels of concern are noticed in the Netherlands (11%) and Denmark (11%).
Greece also stands out as the only EU country where the majority of respondents are very concerned about food safety (61%), with the EU average being 15 per cent. […]
* KUCINICH EXPLAINS LIBOR
Late last month, Barclay’s Bank, a multinational bank and financial institution based in the United Kingdom, admitted to regulators that it tried to manipulate something called “Libor” before and during the financial crisis in 2008. “Libor” is an acronym for London Inter b ank Offered Rate. It is a rate used as a benchmark for the cost of lending throughout the financial system, and it is also used as a reference rate for a wide range of financial products like car loans, adjustable-rate mortgages, student loans and credit cards.
The Libor is not based on an objective measure of the interest for bank-to-bank loans. It is the average of a daily poll of the Association’s member banks, who give an estimate of the interest rate they think they would pay if they sought to borrow from another bank.
It is supposed to be the way the financial system assesses the overall health of the financial system, because if the banks being polled feel confident about the state of things, they report a low number, because they assume that if they had to borrow from another bank, their cost of borrowing would be low. If member banks feel a low degree of confidence in the financial system, they report a higher interest rate. And from that the Libor is calculated, affecting the interest rate on financial products around the globe.
What has emerged from the Barclay’s Bank inquiry is evidence that banks may have in fact been deliberately manipulating Libor rates for years. The evidence so far is that one arm of a bank responding to the Libor poll would change their number based on what another arm of the same bank wanted — and that other arm could consist of the bank’s traders who make their money on whether the rate goes up or down.
This means that millions of consumers, investers and businesses have been paying the wrong interest rate. Or rather, they haven’t been paying an interest rate that is set according to some legitimate benchmark. Instead they are paying a rate based on a gentlemen’s agreement at financial institutions, a method that practically incentivizes those banks to game the system to maximize their profits.
And remember, the British Bankers Association, the group that is responsible for setting the rate, is not a government agency. It is just a trade group of big banks — Bank of America, JPMorgan Chase and Deutsche Bank and others — whose decisions on such a crucial number are not based on honest accounting or rules or regulatory oversight, but on a gentlemen’s agreement of honesty.
We don’t know just how deep this scandal goes. But the fact is that if a fundamental component of our financial system has been or is being manipulated, we have the right to know about it. Banks are not above the law and they should not be allowed to operate in secrecy, especially when they have a history of taxpayer bailout and when we are forced to rely on them to provide capital for economic growth.
* WILL THE LIBOR SCANDAL LEAD TO PROSECUTIONS? SOME HIDDEN HISTORY AND CURRENT PROSPECTS
By Yves Smith, Naked Capitalism
* NEW YORK FED WAS AWARE OF FALSE REPORTING ON RATES
By Micheal J. DeLaMerced and Ben Protess, NYTimes
The Federal Reserve Bank of New York learned in April 2008, as the financial crisis was brewing, that at least one bank was reporting false interest rates.
At the time, a Barclays employee told a New York Fed official that “we know that we’re not posting um, an honest” rate, according to documents released by the regulator on Friday. The employee indicated that other big banks made similarly bogus reports, saying that the British institution wanted to “fit in with the rest of the crowd.”
Although the New York Fed conferred with Britain and American regulators about the problems and recommended reforms, it failed to stop the illegal activity, which persisted through 2009.
British regulators have said that they did not have explicit proof then of wrongdoing by banks. But the Fed’s documents, which were released at the request of lawmakers, appear to undermine those claims.
The revelations fuel concerns that regulators are ill-equipped to police big banks and that financial institutions can game the system for their own purposes. […]
* THE MARKET HAS SPOKEN — AND IT IS RIGGED
By Simon Johnson, Baseline Scenario
In the aftermath of the Barclays rate-fixing scandal, the most surprising reaction has been from people in the financial sector who fully understand the awfulness of what has happened. Rather than seeing this as an issue of law and order, some well-informed people have been drawn toward arguments that excuse or justify the behavior of the Barclays employees.
This is a big mistake, in terms of both the economics at stake and the likely political impact.
The Commodity Futures Trading Commission nailed the detailed mechanics of this deception in plain English in its “Order Instituting Proceedings” (which is also a settlement and series of admissions by Barclays). Most of the compelling quotes from traders involved this scandal come from the Order, but too few commentators seem to have read the full document. Please look at it now, if you have not done so already. […]
* DERIVATIVES: THE UNREGULATED GLOBAL CASINO FOR BANKS
Source DEMON • OCRACY.INFO
[…] LONG STORY: A derivative is a legal bet (contract) that derives its value from another asset, such as the future or current value of oil, government bonds or anything else. Ex- A derivative buys you the option (but not obligation) to buy oil in 6 months for today’s price/any agreed price, hoping that oil will cost more in future. (I’ll bet you it’ll cost more in 6 months). Derivative can also be used as insurance, betting that a loan will or won’t default before a given date. So its a big betting system, like a Casino, but instead of betting on cards and roulette, you bet on future values and performance of practically anything that holds value. The system is not regulated what-so-ever, and you can buy a derivative on an existing derivative.
Most large banks try to prevent smaller investors from gaining access to the derivative market on the basis of there being too much risk. Deriv. market has blown a galactic bubble, just like the real estate bubble or stock market bubble (that’s going on right now). Since there is literally no economist in the world that knows exactly how the derivative money flows or how the system works, while derivatives are traded in microseconds by computers, we really don’t know what will trigger the crash, or when it will happen, but considering the global financial crisis this system is in for tough times, that will be catastrophic for the world financial system since the 9 largest banks shown below hold a total of $228.72 trillion in Derivatives – Approximately 3 times the entire world economy. No government in world has money for this bailout. Lets take a look at what banks have the biggest Derivative Exposures and what scandals they’ve been lately involved in. […]
READ / GRAPHICS @ http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html
* WE’RE NOT BROKE, JUST TWISTED: EXTREME WEALTH INEQUALITY IN AMERICA
[…] We’re not broke. Not even close. The United States of America is awash in wealth. Our corporations are holding record trillions in cash. And overall individual wealth in the United States, the Credit Suisse Research Institute reported this past fall, has risen 23 percent since the year 2000, to $236,213 per American adult. […]
[…] Key Tax Facts
15,753: The number of households in 1961 with $1 million in taxable income (adjusted for inflation).
361,000: The number of households in 2011 estimated to have $1 million in taxable income.
43.1: Percent of total reported income that Americans earning $1 million paid in taxes in 1961 (adjusted for 2011 dollars)
23.1: Percent of total reported income that Americans earning $1 million are likely to pay in taxes in 2011, estimated from latest IRS data.
47.4: Percent of profits corporations paid in taxes in 1961.
11.1: Percent of profits corporations paid in taxes in 2011. […]
* FROM PENN STATE TO JPMORGAN CHASE AND BARCLAYS: DESTROYING HIGHER EDUCATION, SAVAGING CHILDREN AND EXTINGUISHING DEMOCRACY
By Henry A Giroux, Truthout
The Freeh report makes clear that there was a concerted attempt to cover-up the acts of a serial predator, Jerry Sandusky, while willfully disregarding the welfare of the children he abused. Given the reporting of the last year, much of this is not news, though the report makes clear the nature and depth of the cover-up, while providing some important new details. While the Freeh report reveals that the cover-up at the top of the Penn State administration “was an active agreement to conceal,” it raises further questions about how the justice system works in this country when it comes to prosecuting the rich and powerful who sink more and more into a bottomless pit of corruption and moral irresponsibility. At his press conference, Louis J. Freeh, when asked if criminal charges should be brought against a number of people, including former President Spanier, replied that “it’s up to others to decide whether that’s criminal.” While Freeh’s reply suggest he is acting cautiously given that some of the people who hired him may be indicted, he unknowingly touches on another related and important issue. That is, justice in America works primarily for the rich and powerful and against the poor and marginalized. And that Freeh’s response or equivocation reveals what is well known – the rich and powerful rarely get prosecuted for their crimes or what The Economist has called “the rotten heart of finance.” Just ask the CEOs who run Barclays, JPMorgan Chase, Citibank, GlaxoSmithKline, and so it goes.
Let’s be clear, what is on trial here is not simply those who colluded to protect the reputation of a storied football program and the reputation of Penn State University, but a society governed by radicalized market-driven values, a survival of the “fittest” (or most ruthless) ethic and an unregulated drive for profit-making regardless of the human and social costs. This is an ethic that now renders many children and young people as disposable, refusing to acknowledge its responsibility to future generations while creating the social, economic and political conditions in which the pain and suffering of young people simply disappears. As a number of recent banking scandals reveal, big money and the institutions it creates now engage unapologetically in massive criminal behavior and corruption, but the individuals who head these corporations extending from JPMorgan Chase Bank to Barclays are rarely prosecuted. […]