Jul 092012



Viewpoint:  Eliot Spitzer, Matt Taibbi, and Dennis Kelleher

Viewpoint – host Eliot Spitzer, Matt Taibbi, Rolling Stone contributing editor, and Dennis Kelleher, president and CEO of Better Markets, analyze the Libor interest rate–rigging scandal engulfing the banking industry.

VIDEO @ http://www.youtube.com/watch?v=qZWDemn_njg&feature=player_embedded



How Britain’s rate-fixing scandal might spread—and what to do about it 

Source: The Economist

“SINCE we have not more power of knowing the future than any other men, we have made many mistakes (who has not during the past five years?), but our mistakes have been errors of judgment and not of principle.” So reflected J.P. Morgan junior in 1933, in the middle of a financial crisis. Today’s bankers can draw no such comfort from their behaviour. The attempts to rig LIBOR (the London inter-bank offered rate), a benchmark interest rate, not only betray a culture of casual dishonesty; they set the stage for lawsuits and more regulation right the way round the globe. This could well be global finance’s “tobacco moment”.

The dangers of this are obvious. Popular fury and class- action suits are seldom a good starting point for new rules. Yet despite the risks of banker-bashing, a clean-up is in order, for the banking industry’s credibility is shot, and without trust neither the business nor the clients it serves can prosper. […]

READ / VIDEO @ http://www.economist.com/node/21558260



By Paul Craig Roberts, Activist Post

[…] Washington has been at war since October, 2001, when President George W. Bush concocted an excuse to order the US invasion of Afghanistan. This war took a back seat when Bush concocted another excuse to order the invasion of Iraq in 2003, a war that went on without significant success for 8 years and has left Iraq in chaos with dozens more killed and wounded every day, a new strong man in place of the illegally executed former strongman, and the likelihood of the ongoing violence becoming civil war.

Upon his election, President Obama foolishly sent more troops to Afghanistan and renewed the intensity of that war, now in its eleventh year, to no successful effect.

These two wars have been expensive. According to estimates by Joseph Stiglitz and Linda Bilmes, when all costs are counted the Iraq invasion cost US taxpayers $3 trillion dollars. Ditto for the Afghan war. In other words, the two gratuitous wars doubled the US public debt. This is the reason there is no money for Social Security, Medicare, Medicaid, food stamps, the environment, and the social safety net. Americans got nothing out of the wars, but as the war debt will never be paid off, US citizens and their descendants will have to pay interest on $6,000 billion of war debt in perpetuity.

Not content with these wars, the Bush/Obama regime is conducting military operations in violation of international law in Pakistan, Yemen, and Africa, organized the overthrow by armed conflict of the government in Libya, is currently working to overthrow the Syrian government, and continues to marshall military forces against Iran. […]

READ @ http://www.activistpost.com/2012/07/collapsing-us-economy-and-end-of-world.html



Now that Spain has become the fourth country to receive an EU bailout, the question arises why its corrupt bankers are getting away unscathed.

By Jerome Roos, RoarMag

With eurozone finance ministers agreeing late Saturday night to bail out Spain’s failing banks to the tune of 100 billion euros, the root of Europe’s protracted three-year debt crisis is finally revealed for what it always already was: a dramatically over-leveraged financial system that speculated wildly on real estate (in the case of Ireland and Spain) and government bonds (in the case of Greece and Portugal) without any consideration for the possible consequences.

As we have argued repeatedly over the past year, the euro crisis was never about excessive public expenditure; this was a banking crisis from the very start. That reality is now forcefully being driven home to Europe’s suffering population as 100 billion euros in taxpayer money are being put on the line to “rescue” Spain’s failing banking sector. And while the Spanish people suffer the brunt of two years of disastrous austerity measures, the bankers who put them in this mess are still running away with multi-million dollar bonuses.

With 400.000 families having lost their homes since the crisis began and with one in four Spaniards (and over one in two young people) now out of work, there is no doubt the average population is suffering immensely. Earlier this year, Caritas found that 22 percent of Spanish households now live below the poverty line, while another 30 percent are on the brink. As labor rights are being abolished, social safety nets dismantled and public services slashed across the board, a shocking 11 million people suddenly find themselves at risk of falling into poverty. Make no mistake: these are Depression-era figures. […]

READ @ http://roarmag.org/2012/06/for-spains-rescued-bankers-there-will-be-no-austerity/



By David Dayen, Firedoglake

If the LIBOR scandal did end up hurting local governments to a large degree, you can just add that to the list. Local governments have been easy marks for the financial industry during the last decade, engaging in all kinds of interest rate-swap deals and other vehicles for financing operations. When they turn sour, the locals, not the banks, end up holding the bag.

One city is trying to flip that script. The Oakland City Council unanimously voted to break off a deal with Goldman Sachs, using the city’s leverage to try and get out of the deal that is hurting their taxpayers. The issue concerns a familiar interest rate-swap deal, which financial institutions sell to cities as a way to hedge against higher interest rates, but which have cost cities millions by locking in higher borrowing costs.

The council voted to demand Goldman Sachs to negotiate with the city to get out of a 1998 interest rate-swap deal without having to pay a $15 million penalty. Currently, because of the locked-in rates, the deal is costing the city $4 million a year. Oakland estimates they have lost $17.5 million on the deal so far, and even though the underlying bonds were sold back four years ago, because of that $15 million penalty, the city will have to continue losing money on the deal until 2021.

So the City Council simply voted to terminate the deal. And if Goldman Sachs won’t let Oakland out, the city will stop doing any business with the bank, per the resolution. […]

READ @ http://news.firedoglake.com/2012/07/06/oakland-city-council-demands-debt-swap-renegotiation-with-goldman-sachs/



By Francesca Fiorentini, War-Times

It has been nearly two weeks since the parliament of Paraguay orchestrated an institutional coup that removed President Fernando Lugo from power and installed vice president Fernando Franco in his place, a mere 9 months before the next presidential elections.

Reading articles coming out of South America, I have been trying to wrap my head around not just what happened in Paraguay but what it could mean for the region. And I’m afraid it’s not good. When one connects the dots – many of which require further investigation–it suddenly feels as though the gains that countries in the region have made toward multi-lateral cooperation in order to guarantee economic and political sovereignty and are dangerously vulnerable.

I have always been skeptical of claims by Hugo Chavez or even anti-militarist voices here in the region that believe that the U.S. has not let go of its plans for the region in its fulfillment of “Full Spectrum Dominance”—controlling natural resources indirectly through elite puppet governments and directly through the threat of military force. Between the U.S’ refocus on the Middle East and the rise of left-leaning governments in Brazil, Venezuela, Bolivia, Argentina, Ecuador, and Uruguay, the idea of the region falling victim to the kinds of imperial/neoliberal bullying of the 70s, 80s, and 90s seemed both politically overblown and strategically unfeasible.

I am no longer so sure. […]

[…] Beyond simply the old ruling parties wanting to keep their grasp over the country, there are deeper interests at work in the coup against Lugo.

First and foremost is agribusiness. None other than the infamous Monsanto is a major player in Paraguay. The company collects royalties on the transgenic soy and cotton seeds planted throughout Paraguay, and in 2011 it collected $30 billion tax-free. And 40% of the production and refining of Paraguayan soy is owned by private U.S.-based giant Cargill ($100 billion annual profits a year). Again, agribusiness giants in Paraguay enjoy broad protections from Congress and pay no taxes. […]

READ @ http://war-times.org/node/463



Source: Journeyman Pictures

VIDEO @ http://www.youtube.com/watch?v=xsD1I9bOgEs