US to allow spy agencies to monitor citizens' finances

RT: March 14, 2013

Washington is reportedly considering opening all US financial records to national intelligence agencies in order to prevent future crimes. Only the FBI has had unlimited access to such databases; other agencies had to file case-by-case requests.

The Obama administration is preparing legislation to enable the country’s numerous security and intelligence agencies to spy on the accounts of US citizens, Reuters has revealed. The scheme’s stated aim is to help to identify and track terrorist cells, expose money-laundering schemes, trace criminal syndicates and curb corruption.

"It's a war on money, war on corruption, on politically exposed persons, anti-money laundering, organized crime," Amit Kumar, the UN advisor on Taliban and a fellow at the Democrat-established Center for National Policy think tank told Reuters.

The plan, dated March 4, is in its early stages but appears to have no judicial obstacles, as US legislation does not prohibit the exchange of information between government bodies. However, human rights activists have already criticized the plan

The planning document obtained by Reuters that the US Treasury’s financial database, which previously was only fully accessible by the FBI, will soon be integrated with national criminal, intelligence and other databases to become accessible to “law enforcement, counter-terrorism agencies, financial regulators and the intelligence community.”

Today, the US Treasury's Financial Crimes Enforcement Network (FinCEN) does not only collect data on clients of financial institutions, it also gathers reports of so-called ‘suspicious client activity’.

An estimated 25,000 financial institutions operating inside US territory – like banks, money transfer agencies, securities dealers and casinos – are obliged to report any activity considered suspicious, such as large (over $10,000) cash transfers, strangely account structures, computer hacking, counterfeiting and suspected money laundering.

The system is arranged so that if a bank is revealed to have not reported its clients’ suspicious activities, it risks of paying severe fines. Many banks err on the side of caution, and file reports on any activity deemed even slightly unusual: Every year, 15 million ‘suspicious activity reports’ are filed to the US Treasury, which allocates considerable resources to deal with them all.


If the Obama administration’s financial spy plan is enacted, US government agencies will have access to virtually all financial information on citizens or foreigners doing business in the US.

Currently, investigating a financial crime involves unraveling a tangle of evidence that could lead to a certain person, such as demanding a specific financial dossier from FinCEN. Once agencies like CIA, NSA or Counter Terrorism Center are allowed unrestricted access to FinCEN data, it would become possible for them to target an individual and arrest them for a crime for which they are not currently under investigation.

A US Treasury spokesperson vowed the agencies will adhere to safeguards outlined in both the Bank Secrecy Act and the US PATRIOT Act: “Law enforcement and intelligence community members with access to this information are bound by these safeguards.”

But Michael German, the senior policy counsel for the American Civil Liberties Union, told Reuters that “the intelligence community simply ignores the rules” when it comes to how sensitive information is used.

German recalled Congress had refused to approve a similar plan a decade ago, but now “the guidelines were subsequently loosened… It’s in a black hole.”

‘Citizens caught up in financial crosshairs’


The new plan will do little in increasing the efficacy of “keeping America safe,” while potentially increasing, at least partially, the risk of an innocent or “wrongly-profiled” individual being caught through a misreading of banking information, Margaret Bogenrief, a founding partner of ACM Partners financial advisory firm told RT.

“The continued efforts to 'keep its citizens safe,' the US government seems be to struggling to walk that line between protection and invasion of American citizens’ privacy,” Bogenrief said. “More citizens could end up being caught up in the financial crosshairs.”

Considering that financial institution are already over-reporting on questionable activity this new plan of enforcement and power “almost guarantees an abuse, whether intentional or not,” she added.

The true unintended tragedy of this plan is that it won’t bring a significant increase in arrests of high-profile criminals, Bogenrief believes.

“Truly sophisticated criminals – whether they be members of organized crime, gangs, or terrorist groups – will already have the structures and teams in place that will assist these criminal groups in both skirting these rules and avoiding prosecution.”

The Obama administration’s financial spying plan is a shocking attack on personal freedom, independent journalist and founder of Wide Awake News, Charlie McGrath says.“Sold as an effort to stop international terror groups, the proposed measure pushes us ever closer to a complete Orwellian Police State where you are guilty without cause, evidence, or even accusation,” McGrath told RT.

Bet on Collapse

Recovery or Collapse? 
by PAUL CRAIG ROBERTS

The US financial system and, probably, the financial system of Europe, like the police, no longer serves a useful social purpose.

In the US the police have proven themselves to be a greater threat to public safety than private sector criminals. I just googled “police brutality” and up came 183,000,000 results.

The cost to society of the private financial system is even higher. Writing in CounterPunch (May 18), Rob Urie reports that two years ago Andrew Haldane, executive Director for Financial Stability at the Bank of England (the UK’s version of the Federal Reserve) said that the financial crisis, now four years old, will in the end cost the world economy between $60 trillion and $200 trillion in lost GDP. If Urie’s report is correct, this is an astonishing admission from a member of the ruling elite. Try to get your mind around these figures. The US GDP, the largest in the world, is about 15 trillion. What Haldane is telling us is that the financial crisis will end up costing the world lost real income between 4 and 13 times the size of the current Gross Domestic Product of the United States. This could turn out to be an optimistic forecast.

In the end, the financial crisis could destroy Western civilization.

Even if Urie’s report, or Haldane’s calculation, is incorrect, the obvious large economic loss from the financial crisis is still unprecedented. The enormous cost of the financial crisis has one single source–financial deregulation. Financial deregulation is likely to prove to be the mistake that destroys Western civilization. While we quake in our boots from fear of “Muslim terrorists,” it is financial deregulation that is destroying us, with help from jobs offshoring. Keep in mind that Haldane is a member of the ruling elite, not a critic of the system like myself, Michael Hudson, or Pam Martens, to mention some CounterPunch contributors.)

Financial deregulation has had dangerous and adverse consequences. Deregulation permitted financial concentration that produced “banks too big to fail,” thus requiring the general public to absorb the costs of the banks’ mistakes and reckless gambling.

Deregulation permitted banks to leverage a small amount of capital with enormous debt in order to maximize return on equity, thereby maximizing the instability of the financial system and the cost to society of the banks’ bad bets.

Deregulation allowed financial institutions to sweep aside the position limits on speculators and to dominate commodity markets, turning them into a gambling casino and driving up the prices of energy and food.

Deregulation permits financial institutions to sell naked shorts, which means to sell a company’s stock or gold and silver bullion that the seller does not possess into the market in order to drive down the price.

The informed reader can add more items to this list.

The dollar in its role as world reserve currency is the source of Washington’s power. It allows Washington to control the international payments system and to exclude from the financial system those countries that do not do Washington’s bidding. It allows Washington to print money with which to pay its bills and to purchase the cooperation of foreign governments or to fund opposition within those countries whose governments Washington is unable to purchase, such as Iran, Russia, and China. If the dollar was not the world reserve currency and actually reflected its true depreciated value from the mounting US debt and running of the printing press, Washington’s power would be dramatically curtailed.

The US dollar has come close to its demise several times recently. In 2011 the dollar’s value fall as low as 72 Swiss cents. Investors seeking safety for the value of their money flooded into Swiss francs, pushing the value of the franc so high that Switzerland’s exports began to suffer. The Swiss government responded to the inflow of dollars and euros seeking refuge in the franc by declaring that it would in the future print new francs to offset the inflows of foreign currency in order to prevent the rise in the value of the franc. In other words, currency flight from the US and Europe forced the Swiss to inflate in order to prevent the continuous rise in the exchange value of the Swiss currency.

Prior to the sovereign debt crisis in Europe, the dollar was also faced with a run-up in the value of the euro as foreign central banks and OPEC members shifted their reserves into euros from dollars. The euro was on its way to becoming an alternative reserve currency. However, Goldman Sachs, whose former employees dominate the US Treasury and financial regulatory agencies and also the European Central Bank and governments of Italy and, indirectly, Greece, helped the Greek government to disguise its true deficit, thus deceiving the private European banks who were purchasing the bonds of the Greek government. Once the European sovereign debt crisis was launched, Washington had an interest in keeping it going, as it sends holders of euros fleeing into “safe” dollars, thus boosting the exchange value of the dollar, despite the enormous rise in Washington’s own debt and the doubling of the US money supply.

Last year gold and silver were rapidly rising in price (measured in US dollars), with gold hitting $1,900 an ounce and on its way to $2,000 when suddenly short sales began dominating the bullion markets. The naked shorts of gold and silver bullion succeeded in driving the price of gold down $350 per ounce from its peak. Many informed observers believe that the reason Washington has not prosecuted the banksters for their known financial crimes is that the banksters serve as an auxiliary to Washington by protecting the value of the dollar by shorting bullion and rival currencies.

What happens if Greece exits the EU on its own or by the German boot? What happens if the other EU members reject German Chancellor Merkel’s austerity, as the new president of France promised to do? If Europe breaks apart, do more investors flee to the doomed US dollar?

Will a dollar bubble become the largest bubble in economic history?

When the dollar goes, interest rates will escalate, and bond prices will collapse. Everyone who sought safety in US Treasuries will be wiped out.

We should all be aware that such outcomes are not part of the public debate.

Recently Bill Moyers interviewed Simon Johnson, formerly chief economist of the International Monetary Fund and currently professor at MIT. It turns out that deregulation, which abolished the separation of investment banks from commercial banks, permitted Jamie Dimon’s JPMorganChase to gamble with federally insured deposits. Despite this, Moyers reports that Republicans remain determined to kill the weak Dodd-Frank law and restore full deregulation.

Simon Johnson says: “I think it [deregulation] is a recipe for disaster.” The problem is, Johnson says, that correct economic policy is blocked by the enormous donations banks make to political campaigns. This means Wall Street’s attitudes and faulty risk models will result in an even bigger financial crisis than the one from which we are still suffering. And it will happen prior to recovery from the current crisis.

Johnson warns that the Republicans will distract everyone from the real crisis by concocting another “crisis” over the debt ceiling.

Johnson says that “a few people, particularly in and around the financial system, have become too powerful. They were allowed to take a lot of risk, and they did massive damage to the economy — more than eight million jobs lost. We’re still struggling to get back anywhere close to employment levels where we were before 2008. And they’ve done massive damage to the budget. This damage to the budget is long lasting; it undermines the budget when we need it to be stronger because the society is aging. We need to support Social Security and support Medicare on a fair basis. We need to restore and rebuild revenue, revenue that was absolutely devastated by the financial crisis. People need to understand the link between what the banks did and the budget. And too many people fail to do that.”

Consequently, Johnson says, the banksters continue to receive mega-benefits while imposing enormous social costs on society.

Few Americans and no Washington policymakers understand the dire situation. They are too busy hyping a non-existent recovery and the next war. Statistician John Williams reports that when correctly measured as a cost of living indicator, which the CPI no longer is, the current inflation rate in the US is 5 to 7 percentage points higher than the officially reported rate, as every consumer knows. The unemployment rate falls because, and only because, people unable to find jobs drop out of the labor force and are no longer counted as unemployed. Every informed person knows that the official inflation and unemployment rates are fictions; yet, the presstitute media continue to report the rates with a straight face as fact.

The way the government has rigged the measure of unemployment, it is possible for the US to have a zero rate of unemployment and not a single person employed or in the work force.

The way the government has the measure of inflation rigged, it is possible for your living standing to fall while the government reports that you are better off.

Financial deregulation raises the returns from speculative schemes above the returns from productive activity. The highly leveraged debt and derivatives that gave us the financial crisis have nothing to do with financing businesses. The banks are not only risking their customers’ deposits on gambling bets but also jeopardizing the country’s financial stability and economic future.

With an eye on the approaching dollar crisis, which will wreck the international financial system, the presidents of China, Russia, Brazil, South Africa, and the prime minister of India met last month to discuss forming a new bank that would shield their economies and commerce from mistakes made by Washington and the European Union. The five countries, known as the BRICS, intend to settle their trade with one another in their own currencies and cease relying on the dollar. The fact that Russia, the two Asian giants, and the largest economies in Africa and South America are leaving the dollar’s orbit sends a powerful message of lack of confidence in Washington’s handling of financial matters.

It is ironic that the outcome of financial deregulation in the US is the opposite of what its free market advocates promised. In place of highly competitive financial firms that live or die by their wits alone without government intervention, we have unprecedented financial concentration. Massive banks, “too big to fail,” now send their multi-trillion dollar losses to Washington to be paid by heavily indebted US taxpayers whose real incomes have not risen in 20 years. The banksters take home fortunes in annual bonuses for their success in socializing the “free market” banks’ losses and privatizing profits to the point of not even paying income taxes.

In the US free market economists unleashed avarice and permitted it to run amuck. Will the disastrous consequences discredit capitalism to the extent that the Soviet collapse discredited socialism?

Will Western civilization itself survive the financial tsunami that deregulated Wall Street has produced?

Ironic, isn’t it, that the United States, the home of the “indispensable people,” stands before us as the likely candidate whose government will be responsible for the collapse of the West.

Corporate Crime in the Pharmaceutical Industry

The Scandal of Reincarnated Rats
by RUSSELL MOKHIBER

John Braithwaite is back.

The famed Australian corporate criminologist is teaming up with a former European pharmaceutical executive – Graham Dukes – and together they are completing a new book on corporate crime in the pharmaceutical industry.

The working title – Corporations, Crime and Medicines.

It’s due out early next year.

Thirty years ago, Braithwaite finished his magnum opus – Corporate Crime in the Pharmaceutical Industry (Routledge Kegan & Paul).

The book documented widespread fraud and corruption worldwide.

“In the latter part of the 1980s, I thought that the pharmaceutical industry was actually improving in its standards,” Braithwaite told Corporate Crime Reporter in an interview. “Ciba Geigy was one company that had come under particularly aggressive attack from the consumer movement. And Ciba Geigy was responding and setting up corporate social responsibility policies with a new risk management initiative that it was trying to get other companies to join up with.”

“Pfizer became the number one company in the industry. It was sending senior executives to Australia to talk to me. They were really interested in what kind of internal procedures they could be putting in place to make sure that folks like Graham and I would not be making the kinds of critiques that were in Corporate Crime in the Pharmaceutical Industry.”

“I was encouraged by that. I think actually I wasn’t conned. In the course of the 1980s, there was progress.”

“I actually finished the research for Corporate Crime in the Pharmaceutical Industry in 1980. But the book was held up for concerns about libel.”

“But 30 years on, the situation has in fact become worse in most respects. Perhaps there has been some improvement in terms of safety and manufacturing processes among the majors. But on the other hand, the largest pharmaceutical corporations in the world have done a major disservice in the way they have approached the generic industry and, in a sense, stigmatized the generic industry.”

“In Corporate Crime in the Pharmaceutical Industry, we concluded that 19 of the 20 largest U.S. pharmaceutical companies had engaged in serious corrupt activities in the course of the 1970s. And there was really no other industry in the United States that had such a consistent pattern. There were other industries – like the defense industry – that were doing terribly corrupt things. But in terms of top to bottom corruption, the pharmaceutical industry was the worst in the United States.”

“And in some ways, we are inclined to conclude that today it is even worse.”

In the area of research fraud, things are again worse 30 years later.

“A big part of the 1984 book was fraud in safety and testing of drugs,” Braithwaite said. “Remember the GD Searle company, of which Donald Rumsfeld was a CEO? They had the scandal of reincarnated rats. The rats would die when a drug was tested on them. And they would be replaced with living rats. That kind of blatant fraud is not dead in the pharmaceutical industry. There is a lot more sophisticated fraud in the form of suppression of negative safety and efficacy studies. And the boosting of positive studies.”

“But still, there is quite a lot of plain old fashion losing of negative data. And that is the same as the throwing away of the dead rat and replacing the dead rat with the reincarnated rat.”

“You generate data that a drug does not work. And you just suppress that data. It’s as if the study were never conducted and you start again and do another study until you get one that shows you what you want to find. Go to another university professor who will tell you what you want to hear.”

“That situation is, if anything. worse rather than better.”

On the Wall Street meltdown, Braithwaite says the situation could have easily been prevented.

“There was a lot of evidence that there was systemic mortgage fraud – liar loans, false representation of income and employment status of people on loans,” Braithwaite said. “And that had to do with a shift of the nature of capitalism. Banks issuing loans were no longer as interested as they should have been in assessing the capacity of the borrower to repay. Why? Because it was a move from a risk management financial sector to a risk shifting financial sector. You just slice and dice the loans and spread the risk around to a lot of other banks.”

“But it seems to me that there was a ready regulatory response to that. It was knowable that there was a problem. You had the FBI reporting as early as 2004 and 2005 that there was an epidemic of mortgage fraud in the United States. You had this huge trend up in housing loan defaults starting in the mid 2000s. These were very clear red flags.”

“The simple regulatory strategy was for prudential regulators to go to mortgage brokers and banks and say – look, your portfolio of loans has twice the default rate of the average in our state. We want to sit down with you and look into why that is. And if that very simple regulatory inspection measure had been taken, it would have quickly become apparent that there was a pattern of fraud in the loans that they were issuing. And that would have been the early preventive step.”

“And you wouldn’t have necessarily had to prosecute those banks. You would have wanted to go around the country and stop the problem. That would be the most important thing. You would prosecute the ones with the worst patterns of conduct. But the more important thing would be return to integrity in the way loans are issued. Banks return to being interested in ensuring that these were levels of repayment that could be made.”

Failure to Reflate

The Coming Credit Crunch

by MIKE WHITNEY

 

 

For the second time in three years, the banking system has collapsed, which means that the banks are no longer able to fund themselves through the normal means, the wholesale markets. This same thing happened in July 2007 when two Bear Stearns hedge funds defaulted and trillions of dollars of mortgage-backed securities–which US banks had been holding–began to sharply decline in value. In a matter of months, most of America’s big-name banks were technically insolvent although the charade continued for a full year before Lehman Brothers blew up and the rot within the system became apparent to everyone. Now the same thing is taking place in Europe.

The banks do not get the bulk of their funding through their regulated activities of taking deposits and issuing loans, but by exchanging assets for short-term loans. Naturally, when doubts arise about the quality of these assets, then trading slows to a crawl and the banks are left high-and-dry. In other words, banking has transformed itself into an unregulated multi-trillion dollar pawn shop that can shut down at a moment’s notice leaving the entire industry dead-in-the-water.

When crisis strikes, alarms go off at the central banks who then ride to the rescue with lavish taxpayer-funded bailouts. We’ve seen this play many times before, the script never changes. The central bank chiefs claim that they are just offering liquidity assistance for “temporarily” impaired assets, but, of course, that’s not true. Two years after the Fed began its purchases of toxic MBS from US banks, all of those same assets are still on the Fed’s balance sheet. The Fed’s has become a “bad bank” where the stinkpile of unmarketable dreck the banks created via financial alchemy is housed. Eventually, the losses will be passed on to the taxpayers.

Imagine if the $350,000 home that you bought at the peak of the bubble in 2005 was suddenly “unsellable” at any price. This is the situation EU banks are in. No one wants to do business with them because there are doubts about their solvency as well as questions about the value of their assets. So, the system has shut down forcing the banks have to depend more and more on funding from the ECB. Of course, it doesn’t work this way for the average working guy. When the value of his house falls or his credit score gets slashed, he just has to suck-it-up and live on less because no one will give him a loan. It’s different for bankers.

EU Banking System: How bad is it?
Last week, the ECB lent 523 banks a total of 489 billion euros for three years at 1 percent. On Wednesday, those same banks parked all of the money they borrowed (except 37 billion euros) back at the ECB in overnight deposits. (That’s 452 euros, a new record) Think about that for a minute. In other words, the system is not just broken; it is completely broken.

There’s no lending,  no exchange of assets for short-term loans,  no credit expansion, no nothing. Zilch. All there is is hoarding and a lot of PR gibberish about “emergency liquidity”, “long-term refinancing”, blah, blah, blah. The average Joe doesn’t want a bunch of excuses; they want the facts. And the fact is, this unregulated, volatile, crisis-prone system has collapsed for a second time in three years which is why the central banks are committing trillions (just look at the ECB’s exploding balance sheet) in public money to bailout speculators who’ve gamed the system. That’s all people want to know.

So what is the ECB trying to achieve by pumping all this money into the banking system?
First of all, ECB chief Mario Draghi is trying to reflate the bubble in the bond market. You see, during the boom years, capital flows into Greece, Portugal, Spain etc, boosted the value of the sovereign debt by many orders of magnitude. The main buyers of these bonds were EU banks, so they are loaded to the gills with this junk-paper. Since Greece started teetering, the value of these bonds has plunged leaving many of these banks in the red.

And the situation is even worse than it sounds, because the banks have borrowed more money than the original value of the bonds themselves. In other words, they have posted this same collateral many times over greatly increasing their leverage and their exposure. It would be like if you or I took our prize racing bike down to the pawn shop and exchanged it for a short-term loan of $3,500. Only–in this case–the pawn shop owner allowed us to hold on to the bike. Then we went to another pawn shop, and a third and a forth; posting the same bike for the same short-term loan over and over again. Pretty soon, the debt is so huge, that any disruption in the flow of business, and the whole Ponzi-debt pyramid comes tumbling down. Presently, the ECB is trying to keep that pyramid in place by inflating the value of the dodgy bonds with injections of 3-year liquidity. These loans will never be repaid.

Now take a look at this from the Wall Street Journal:

“Even after the European Central Bank doled out nearly half a trillion euros of loans to cash-strapped banks last week, fears about potential financial problems are still stalking the sector. One big reason: concerns about collateral.

The only way European banks can now convince anyone—institutional investors, fellow banks or the ECB—to lend them money is if they pledge high-quality assets as collateral.

Now some regulators and bankers are becoming nervous that some lenders’ supplies of such assets, which include European government bonds and investment-grade non-government debt, are running low.

If banks exhaust their stockpiles of assets that are eligible to serve as collateral, they potentially could encounter liquidity problems. That is what happened this fall to Franco-Belgian lender Dexia SA, which ran out of money and required a government bailout.” (“European Bank Worry: Collateral”, Wall Street Journal)

So, the banks don’t have money and they don’t have good collateral. And the reason they don’t have good collateral is because they’ve been posting the same collateral over and over again to increase leverage. So, it’s all a sham; they’re upside down and headed for trouble. Here’s more from the same article:

“In addition to fears that the banks might simply run out of eligible collateral, some bankers and regulators worry that the banks’ growing reliance on “secured lending” will make it harder for the industry to return to its past practice of funding itself by issuing unsecured bonds. That could result in a permanent funding scarcity…..

Since this summer, it has been virtually impossible for banks to issue unsecured bonds, because investors view European banks as risky investments.

In the second half of 2011, European banks issued a total of about $80 billion of senior unsecured bonds, according to data provider Dealogic. That compares to $240 billion in the same period last year and $257 billion in 2009.” (“European Bank Worry: Collateral”, Wall Street Journal)

Financial journalists love to make this stuff sound harder than it really is. Look, this is simple. No one is trading with the banks because everyone knows they’re broke. When the author says that the banks’ “growing reliance on “secured lending” will make it harder for the industry to return to its past practice of funding itself by issuing unsecured bonds”; what he means is that the banks funding-model is kaput, because the bonds the banks own are losing value and no sane person will accept them in exchange for cash-money. So, the banksters are out of luck; they have to take their begging bowl to the ECB for handouts. And that’s where we are right now.

So, what’s the bottom line? What do these new developments (Draghi’s $600B Long-Term Refinancing Operation) tell us about the condition of the EU banking system and the probability of another financial crisis?

That’s the question I asked a friend of mine who works in the credit markets. Here’s what he said:

“Ask yourself one question, what has materially changed relating to solvency issues for banks in Europe in general and solvency issues for European countries in particular?

Nothing.

A credit crunch is unavoidable, and a meltdown is a possibility.”

You can’t sum it up any better than that.

LouisCK on banks

Bank Warns Employees About Occupy Wall Street

OWS has bloomed in more than a dozen major cities all across the country. It stopped being a protest a while ago. It's a movement now. And they're scared. 

By William Rivers Pitt, TruthOut.org
Posted on October 10, 2011,

Far be it from me to accuse Gandhi of missing a note, but in the case of the 'Occupy Wall Street' protests, the Mahatma's famous quote appears to be lacking a few essential words. "First they ignore you," he said, "then they ridicule you, then they fight you, then you win."

That's not quite correct.

Certainly, the OWS protests began with a great whistling silence from the "mainstream" news media. It is only because of the resources available to the average person in this marvelous technological age we live in that word of the protest ever reached beyond its original location.

Thanks to cell phones, video cameras, digital recorders, and of course, the internet - all wielded by patriot citizens - reports, images and video of the protest began to dribble out via Twitter, Facebook and a variety of blogs and alternative news media sites like Truthout. But from the "mainstream" news, there was nothing, and nothing, and nothing.

Eventually, however, the OWS protest broke through the "mainstream" news blackout, thanks in no small part to commentators like Lawrence O'Donnell, Rachel Maddow and Keith Olbermann. Once the "mainstream" news outlets finally deigned to lower themselves to report on the rabble down on Wall Street, their tone and tenor fairly oozed contempt. The New York Times, bastion of the status quo, published an article describing each and every participant of the OWS protest as a moonbeam-riding fuzzbrain, someone reeking of patchouli who couldn't string a coherent thought together if their life depended on it...which was followed up immediately by a barrage of reports defending cops who hosed down defenseless women penned in behind nylon barriers with pepper spray, because those cops were doing exactly, precisely the right thing. Or something.

This, as usual, from the same "mainstream" news media that didn't have any problem with the gun-toting "patriots" of the Tea Party and their catastrophically-spelled signs. Well, then again, the Tea Party has corporate sponsorship, while the OWS protesters are doing this on their own. It pays - literally - to have friends in high places.

Similar disdain was heaped upon the OWS protest from every corner of the "mainstream" news realm, most especially from Fox News and the long reach of conservative talk radio. These protesters are bums, hippies, losers, anarchists, idiots, communists and fools, a drumbeat which has continued to this very day.

So.

First they ignore you: check.

Then they ridicule you: check.

According to Gandhi, the next step comes when they fight you, but here is the spot where his marvelous wisdom could use a bit of enhancement.

First they ignore you, then they ridicule you...

Then they get scared.

And they are scared, now. You can smell it. The criticism being leveled at the OWS movement has gotten far harsher in the last several days. Presidential candidate Mitt Romney recently deployed the old chestnut about "class warfare" to describe the protest. Rep. Eric Cantor doubled down on Romney's rhetoric with some of his own: "If you read the newspapers today, I for one am increasingly concerned about the growing mobs occupying Wall Street and the other cities across the country. Believe it or not, some in this town have actually condoned the pitting of Americans against Americans."

That's pretty rich right there, don't you think? Fellows like Cantor have made turning American against American their bread and butter for the last ten years..."You're with us or against us"...but I digress.

Fact: OWS has bloomed in more than a dozen major cities all across the country. It stopped being a protest a while ago. It's a movement now.

And they're scared.

Know how I know? I know because a friend in San Francisco took the time to transcribe a document he was given by the major bank he works for. The document, titled "Protest Safety Handbook," explains what a bank employee should do when confronted with the horror and terror of an OWS protest.

I am leaving the name of the bank out of this to protect my friend. Some tidbits:

The movement in New York has begun to publish a four page news paper titled The Occupied Wall Street Journal. The current edition of the published document loosely outlines the group's manifesto and intentions. The group has indicated that they have been inspired by the results from similar groups involved in the "Arab Spring" in the Middle East. The group's publication cites an intention to first to protest and then to march, escalating to civil disobedience when necessary.

These types of groups are reaching out to the disengaged and disenfranchised population of the United States for members, often encouraging the unemployed and homeless to join the movement. Often these marches and protests are unplanned and result from instant notification on "Social Networks" that produce "Flash Protest Mobs" in a matter of minutes. While this group has not yet resorted to violence the possibility exists that they can.

Safety Tips:

- Avoid poorly lit areas and isolated locations that may make you vulnerable to an attack.

- Keep the cars doors locked while driving in the area of a mob or protest march.

- Project an image of confidence and strength. Walk with a purpose and avoid hesitation, keep your head up, shoulders back and make eye contact with people you pass.

- Avoid confrontation and unnecessary contact with protesters.

- Avoid walking or driving alone. There is safety in numbers.

- Carry purses close to the body.

- Wallets and cash are best kept in a front pocket.

- Avoid wearing Bank ID or logo items outside the bank if possible.

- Keep your cell phone charged and close at hand.

- Have emergency contact information pre-programmed into your phone.

- Have your keys out and ready before you need them.

- If you feel that you're in danger or if you observe suspicious or illegal activities, call the police or dial 911.

- If confronted or attacked, try to remain calm and cooperate by following the attacker's instructions.

- Do not attempt to reason or argue with the protesters.

- Cooperate and do not risk your personal safety.

- Be a good witness and try to remember as many details of what occurred as you can.

(Emphasis added)

Makes it sound like you're walking through a war zone, right? Not a peaceful protest, but some actively dangerous Thunderdome where instant and horrible death might reach out at any time to cut you down.

The financial powers-that-be are desperate to paint this peaceful, meaningful movement as some kind of civilization-annihilating upheaval, populated by rogues, pickpockets, mobs and murderers. They need the OWS protest to be seen this way by the general public, so they can discredit it and destroy it. Fear-mongering is an old, old tactic, and they are deploying it once again.

Note well: the bank that distributed this hyper-paranoid ball of gibberish is an entire continent away from the nexus of the OWS movement in New York City.

I guess San Francisco's OWS chapter has been making some noise. Same with Boston, Dallas, and DC, and a dozen other cities.

First they ignore you.

Then they ridicule you.

Then they get scared.

Then they fight you.

Then you win.

I don't think the Mahatma would mind this small addition to his statement. It fits.
And it's true. They are scared.

You can smell it.

Intercontinental Ballistic Microfinance

by Kiva Microfunds
August 29, 2011


Intercontinental Ballistic Microfinance from Kiva Microfunds on Vimeo.

What happens when 620,000 lenders fund 615,000 entrepreneurs, students, and other microfinance borrowers around the world?

Five+ years of Kiva loan activity, in full color. Thanks to all the lenders, borrowers, partners, and team members who brightened this map - and helped to change lives in the process.

The Government Is Still Paying Banks Not To Lend

Henry Blodget | Aug. 27, 2011

One of the most outrageous "open secrets" of U.S. government policy these days is that the Federal Reserve is still paying big banks not to lend money.

And it's doing that while screwing average Americans who have been responsible and lived within their means.

Huh?

Seriously:

The Federal Reserve is quietly continuing with one of the many outrageous bank-bailout programs it initiated during the financial crisis--the one in which it pays big banks interest on their "excess reserves."

What are "excess reserves"?

Money that the banks have but aren't lending out--money that banks are just keeping on deposit at the Fed.

The Fed is paying banks 0.25% interest on this money.

0.25% interest may not sound like much, but it's more than the banks are paying you to keep money in your savings or money-market account. It's also more than you'll earn if you lend the Federal government money for 2 years.

Oh, by the way, why, exactly, are you earning so little interest in your savings accounts and money-market funds?

Well, because, thanks to another one of its bank-bailout programs, the Fed is keeping short-term interest rates at zero.

In other words, the Fed is paying banks not to lend money and screwing you, American citizens, because you're dumb enough to have saved money.

This is just so bass-ackwards it's not to be believed.

Why on earth is the Fed paying banks not to lend? Well, back in the financial crisis, the Fed wanted to find ways to secretly bail out the banks without it being screamingly obvious to every American that that was what it was doing. And this particular bailout program was one of the more successful ways it discovered of doing that. Over the past few years, this program has secretly funneled about $10 billion in risk-free cash (rough estimate) directly to the banks, just for being banks and not lending. Don't you wish you could get in on that game?

How much money are banks keeping in "excess reserves" that they might be encouraged to lend if the Fed weren't paying them not to?

Money for nothing.

Image: St. Louis Fed.

Oh, only $1.6 trillion. (See chart)

The Fed pays banks about $4 billion of interest a year on that money--the money the banks aren't lending. And bankers get big bonuses based on that interest, for being so smart as to not lend money and instead just take the free interest from the Fed.

Meanwhile, you earn next to nothing (or nothing) on the money you've saved.

We don't think GOP presidential candidate Rick Perry should have threatened to kill Ben Bernanke the other day, but we can certainly understand his frustration.

God, it's great to be a banker.

Boy, does it suck to be an average responsible American.

Bank ‘Activity’ Required For Wisconsin Voter ID

by Jacob Sloan on July 27, 2011

In the state of Wisconsin, you may be denied the ability to vote for lack of sufficient recent “bank activity”. A woman surreptitiously filmed the interactions as her 18-year-old son leaps through hurdle after hurdle in an attempt to get a constitutionally-guaranteed state ID so that he could vote. At the DMV, the pair is told that voter IDs were not issued when voters’ bank accounts did not show enough “activity.” The clerk had no answer when asked what would happen in the case of a resident who was homeless or unemployed, or too poor to maintain the minimum balance required for a checking account.

The vulture funds of death

 Source: SCMP - May 21, 2011  

Goldman Sachs, Deutsche Bank and JPMorgan Chase, which bundled and sold billions of dollars of mortgage loans, now want to help investors bet on people's deaths.

Pension funds sitting on more than $23 trillion of assets are buying insurance against the risk their members live longer than expected.

Investment banks see this as an opportunity to package that risk into bonds and other securities and create a new market for those willing to bet on life-expectancy rates. If pensioners die sooner than expected, investors profit. If they live longer, investors must compensate the pension fund for the additional costs it faces.

The hard part: finding buyers willing to take on the bets that may take 20 years or more to play out.

"Banks are increasingly looking to offer derivative solutions," said Nardeep Sangha, 43, chief executive officer of Abbey Life Assurance, a London-based Deutsche Bank unit that helps pension funds manage the risk of retirees living longer than expected. "Making the long maturity of the risks palatable for investors, including sovereign wealth funds, private-equity firms and specialist funds, is the challenge."

As insurers reach the limit of how much pension-fund liability they are willing to shoulder, companies such as JPMorgan and Prudential last year set up a group aimed at establishing and standardising a secondary market for so-called longevity risks.

They are also developing indexes that measure mortality rates and securities to let pension funds pay fixed premiums to investors in return for coverage against major deviations from projections.

Swiss Re, the world's second-biggest reinsurer, sold the world's first longevity bond in December in what it called a "test case" to sell risk to the capital markets.

Goldman Sachs and Deutsche Bank have set up insurance companies that promise to pay pensions if retirees live beyond a certain age. They typically receive a portion of the pension plan's assets in return. The banks, along with Morgan Stanley, Credit Suisse and UBS, are looking for ways to offer this risk to investors.

"Ultimately, reinsurance capacity for longevity risks will run dry, and that's why it's imperative that as the market grows and develops it is able to bring in new types of risk-takers," Sangha said.
"The obvious channel is the capital markets."

Medical advances and healthier lifestyles have made predicting life spans more difficult for pension funds. Life expectancy in the United Kingdom is increasing by one to three months every year, according to Dutch insurer Aegon. Every year of additional life expectancy typically adds as much as 4 per cent to future pension requirements, Aegon said in a report in March.
Pension funds can hedge against life-expectancy risk by transferring assets to an insurer or other counterparty that promises to pay some or all of the future liabilities.

Last year, GlaxoSmithKline, the UK's biggest drug maker, became the 10th FTSE 100 firm to buy insurance on about £900 million (HK$11.3 billion), or 15 per cent, of its UK pension obligations. That means Prudential, the UK's largest insurer, rather than the pension fund, will pay some GlaxoSmithKline pensioners should they live longer than expected.

"We're seeing more and more sophisticated mechanisms being offered," said Bill Galvin, CEO of the UK's Pensions Regulator. "From a regulatory perspective, we are concerned to ensure that trustees understand the extent to which longevity risk has been passed from their scheme, and the precise shape of any residual risk."

The UK is the world's biggest market for insuring pension liabilities after a change in accounting rules in 2004 forced companies to include pension plans on their balance sheets, increasing the volatility of earnings.

Since then, £30 billion of liabilities have been insured, about 3 per cent of the total outstanding, according to estimates by Hymans Robertson, a London-based pension consultant.

Banks and insurers completed a record £8.2 billion in longevity-risk transfers last year.

Goldman Sachs-owned Rothesay Life sold the most pension-plan insurance in 2010, while Deutsche Bank's Abbey Life completed the biggest swaps deal.

Investors may be attracted to betting on life-expectancy rates because longevity trends are not linked to movements in equities, bonds or commodity markets, said David Blake, director of the pensions institute at Cass Business School in London, who has worked with JPMorgan on the derivatives.

The complexity and risk involved in longevity assets with timelines of more than 20 years means banks are looking to create bonds that offer 5 per cent to 9 per cent in annual returns, according to Guy Coughlan, former head of longevity structuring at JPMorgan. Returns as high as the "mid-teens" are possible, he said.

But not knowing whether a bet on a group of pensioners' life spans is correct for decades prevents some hedge funds, such as London-based Leadenhall Capital Partners, from entering the marketplace. Luca Albertini, CEO of Leadenhall, said the longevity market simply was not liquid enough.

Subprime mortgages sold in the past decade were the genesis of the biggest financial meltdown since the Great Depression. Investment banks passed the risk of borrowers defaulting to the capital markets by packaging, or securitising, the loans into bonds and selling them to investors and one another.

Collateralized debt obligations were sold in such volume that when mortgage holders defaulted, governments in the US and Europe had to bail out the financial system. In much the same way, banks are now looking to securitise the risk of pensioners living longer than expected.

Securities based on life expectancy do not hold the same risks as those linked to subprime mortgages because they are "fully collateralised", minimising the risk from a counterparty failing to meet its obligations, Coughlan said.

However, David McCourt, senior policy adviser at the UK's National Association of Pension Funds, said: "There's a massive counterparty risk. People say insurance companies don't go bust, but they do. We've seen AIG and investment banks going under like Lehman.

"There's a lot of pressure on the trustees to make sure they're comfortable the deal is right because there's no going back."

Rothesay Life, the biggest pension liability insurer in the UK last year, has not joined JPMorgan and Prudential in the new London-based Life & Longevity Markets Association.  Managing Director Tom Pearce said it preferred to develop the market alone and did not expect it to be easy.

"Clearly, if there was a capital market solution that would be helpful for the market generally, but there are some challenges," he said. "The biggest is selling these very long-term risks to shorter-dated investors."

Welcome to Banktopia

The Real Losers in Bernanke's Shell Game
By MIKE WHITNEY

Let's talk turkey. The dollar is getting hammered by the day. And the dollar is getting hammered by design, because the Fed wants a weaker currency to boost exports and lower the real burden of debt on the banks. (Yes, Martha, the banks are still insolvent) So, down goes the greenback, lower and lower, pushing up gas and food prices while the buying power of the average US worker vanishes down the plughole. And this process will continue for the foreseeable future because--as Obama stated earlier in the year--Washington is committed to "doubling exports in the next 5 years." Think about that: "the next 5 years". That's the same as saying that the American worker will be reduced to third-world poverty in a half decade or so. It's a death sentence.

And none of this has anything to do with lowering unemployment or raising GDP. In fact, the revisions of first quarter GDP reveal the lies behind the policy. The first announcement from the Commerce Department put GDP at 3.2%. Remember that? Now we've slipped to 1.4% and some predict the final revision could actually show negative growth. This is from the New York Times:

"Earlier this week we wrote that several prominent economic forecasters had lowered their estimates of gross domestic product growth in the first quarter of this year. Today saw even further declines. Macroeconomic Advisers, a forecasting firm, lowered its estimate to just 1.4 percent annualized, when just a few months ago they had pegged the number at 4.1 percent.

Capital Economics likewise brought its estimate down to 1 percent, writing in a client note:

Every data release last week seemed to necessitate a further downward revision to our first-quarter GDP growth forecast. By the end of the week when the dust had finally settled, that estimate was down to only 1% at an annualized pace. Indeed, there is now even a decent outside chance that the economy contracted outright." ("G.D.P. Estimates Slide Further", New York Times)

So, it's all baloney. The economy isn't growing. How could it be? Wages are flat, credit is still shrinking, (excluding student loans) and the only reason the unemployment numbers keep dropping is because more and more people are falling off the unemployment rolls. Everyone knows that. So, while there may be a slight uptick in consumption and retail; don't be fooled. It's just because it costs more to put food on the table or drive to work, not because people are scarfing up trinkets at the mall or living the highlife.

And the American people know what's going on; they can see through this "green shoots" charade. That's why the latest survey from the New York Times showed that the "Nation's Mood (is) at the Lowest Level in Two Years" and that "Americans are more pessimistic about the nation's economic outlook and overall direction than they have been at any time since President Obama's first two months in office when the country was still officially ensnared in the Great Recession." ("Nation's Mood at Lowest Level in Two Years, Poll Shows, New York Times)

 

People have lost faith in Obama, the congress, and the political process itself. They can see that the system is broken and no longer responds to the will of the people, which is why they're throwing up their hands and giving up. It's obvious. Gallup found the same thing. Here's a clip from their recent poll:

"Americans' optimism about the future direction of the U.S. economy plunged in March for the second month in a row, as the percentage of Americans saying the economy is "getting better" fell to 33% -- down from 41% in January....Optimism about the future of the economy declined across all political parties during the first quarter....Gallup's Economic Confidence Index, which includes the economic optimism measure, also plunged in March..." ("U.S. Economic Optimism Plummets in March", Gallup)

So, all the "happy-times" propaganda has had zilch effect. The public's not buying it. They know we're in a Depression. How could they not know? They're underwater on their mortgages, they can't get a loan, their kids and Uncle Arnie can't find work, and the guy in the Oval Office won't do a damn thing to help out. Is it any wonder why so many people are giving up on capitalism entirely. Just take a look at this survey from Globescan for a real shocker:

"American public support for the free market economy has dropped sharply in the past year, and is now lower than in China, according to a GlobeScan poll released today.....When GlobeScan began tracking views in 2002, four in five Americans (80%) saw the free market as the best economic system for the future—the highest level of support among tracking countries. Support started to fall away in the following years and recovered slightly after the financial crisis in 2007/8, but has plummeted since 2009, falling 15 points in a year so that fewer than three in five (59%) now see free market capitalism as the best system for the future.

GlobeScan Chairman Doug Miller commented: "America is the last place we would have expected to see such a sharp drop in trust in the free enterprise system. This is not good news for business."

The results mean that a number of the world's major emerging economies have now matched or overtaken the USA in their enthusiasm for the free market. The Chinese and Brazilians, 67 per cent of whom regard the free market system as the best on offer, are now more positive about capitalism than Americans." ("Sharp Drop in American Enthusiasm for Free Market, Poll Shows", GlobeScan)

Can you believe it? The Chinese like capitalism better than Americans. How's that for irony? And, don't kid yourself, the average working slob isn't spending his evenings thumbing through the Communist Manifesto while strumming L'Internationale on his 6-string. That's nonsense. Americans are practical people. They know they're getting screwed by both parties which is why their support for capitalism has eroded even faster under Obama. It fell "15 points in a year" since 2009. Way to go, Barry. 

And things will only get worse when congress starts hacking away at the budget deficits, eliminating popular programs and services. That will just add more fuel to the fire and convince people that the system is beyond repair. Bottom line: Conditions will steadily deteriorate, activity will slow, and economy will enter a period of protracted stagflation.

But that doesn't mean Wall Street will suffer. Hell, no. The markets will continue to bubble ever-higher fueled by lavish injections of monetary stimulus from the Fed just as they have for the last 3 years. As Bloomberg reported earlier in the week, Bernanke does not plan to end QE2 at the end of June as scheduled, but will continue to recycle the proceeds from maturing mortgage-backed securities (MBS) into bond purchases to ensure that the Blue Chips continue to post record profits while 42 million workers scrape by on food-stamps, and a couple million more wait to get booted out of their homes. Sounds fair, doesn't it?

So, if it seems like the big banks are writing the policy; it's because they are. Think of it like this: The US government keeps two sets of books. One is a record of all the public's revenues and debts. The other is an off-balance sheet operation run by the Fed. When congress spends money, it must be approved through the normal democratic process. When the Fed spends money, it simply writes a check on an account backed by "the full faith and credit of the US Treasury" without any oversight or supervision. And, the debts that it rings-up, do not add to the budget deficits or force policymakers to impose constraints on the banks. No way. The $2 trillion in junk mortgage-backed securities (MBS) and other handouts the Fed has given to Wall Street since Lehman collapsed, should have sent the deficits into the stratosphere and forced the resolution (bankruptcy) of the nation's largest banks. But they didn't, because the Fed's losses are kept "off-budget", where they don't attract congress's scrutiny. So, anything goes. 

The only problem is that the Fed's trillion dollar Bank Welfare Project has led to diminished buying power and a plunging dollar. So, it would be more accurate to call QE2 a stealth tax on working people, instead of "monetary stimulus".(which it is not.) The truth is, Bernanke is deliberately flogging the dollar to help his underwater bank buddies stay afloat and to keep stocks "frothy". But the net-result is a huge loss of personal wealth for everyone else. These are the real losers in Bernanke's QE shell game.

Looking ahead, it will be more of the same. Stocks will continue to rally, the red ink on the Fed's balance sheet will continue to build, and the dollar will continue its agonizing descent into oblivion. 

The Fed is running the whole shooting match now and the rest of us are just bystanders with no say-so. 

Welcome to Banktopia.

Supreme Court denies banking group’s appeal to withhold Fed lending data

By Eric W. Dolan - Monday, March 21st, 2011

The Supreme Court let stand a ruling that the U.S. Federal Reserve must release data on emergency loans made to Wall Street banks during the financial crisis in 2008.

The high court declined to hear the appeals of the Clearing House Association, a group that represents major commercial banks such as Bank of America and JPMorgan. The group was seeking to reverse a ruling by a federal appeals court that ordered the Federal Reserve to disclose details about the central bank's emergency lending.

At issue were lawsuits by Bloomberg News and Fox Business Network that claimed the Federal Reserve was required to disclose details of the economic bailout under the Freedom of Information Act (FOIA).

FOIA requires federal agencies to make government documents publicly available upon request, but contains various exemptions to prevent the disclosure of sensitive information.

"We are disappointed that the Court has declined our petitions, which deal with the protection of highly confidential bank information provided to the Federal Reserve," the Clearing House Association said in a statement. "Fortunately, Congress was well aware of the sensitivity of disclosing this information. As part of the Dodd-Frank Act, Congress adopted a specific rule to ensure that in the future this confidential information will not be disclosed prematurely to the detriment of our financial system."

The Federal Reserve Board said it would comply with the court's order and was preparing to make the information available.

In recent rulings concerning the FOIA, the Supreme Court has upheld the public's right to access government information.

The Supreme Court ruled earlier this month that AT&T could not use personal privacy exemptions in the act to prevent the disclosure of federal government documents about the company. The high court also ruled that the government could not use an exemption in FOIA to withhold certain Navy maps and data from the public.

Obama and Geithner's Stupid Plan to Hand the Entire Housing Industry Over to the Banks

Obama should be punishing the banks that sabotaged the American dream of home ownership -- instead he's giving them the whole enchilada.
By Robert Scheer, Truthdig
Posted on February 17, 2011

This article first appeared on TruthDig.

A most dastardly deed occurred last Friday when the Obama administration issued a 29-page policy statement totally abandoning the federal government’s time-honored role in helping Americans achieve the goal of homeownership. Instead of punishing the banks that sabotaged the American ideal of a nation of stakeholders by “securitizing” our homesteads into poker chips to be gambled away in the Wall Street casino, Barack Obama now proposes to turn over the entire mortgage industry to those same banks.

The proposal, originated by Treasury Secretary Timothy Geithner, involves nothing less than a total “winding down” of the 80-year-old federal housing program, setting instead a new goal of a two-tiered America in which the masses are content to be mere renters of the American Dream. Such a deal for a country where, as the report concedes, “Half of all renters spend more than a third of their income on housing, and a quarter spend more than half.”

This is the same Geithner who during his tenure in the Clinton Treasury Department championed the total deregulation of the then-emerging market in collateralized debt obligations that sliced and diced people’s home mortgages into the toxic securities that created what his new report calls the greatest economic crisis since the Great Depression. Later, as president of the New York Fed, he cheered on the banks as they went hog-wild, conning folks into buying homes they couldn’t afford and stuffing them into the incomprehensible securities that form the rot at the core of our bankrupt economy.

This is a made-in-the-U.S. nightmare that we inflicted on the world, thanks to an explosion in those toxic securities brought on by the deregulation that most of the Obama economic brain trust supported when they worked for President Bill Clinton and during the ensuing bubble years when they enriched themselves. As the report admits: “The U.S. is … the only high income country in which securitization plays a major role in housing finance.” Yet instead of ending that practice Obama now calls for more of the same: “The Administration believes the securitization market should continue to play a key role in housing finance.” Indeed, the plan’s goal of eliminating Fannie Mae and Freddie Mac will dry up the alternative public funding that has provided a source of mortgage support ever since President Franklin Delano Roosevelt launched Fannie Mae to check the power of the banks over mortgages. Now Obama proposes to eliminate that check and leave would-be homeowners to the tender mercy of the banking giants.

Of course Fannie Mae and Freddie Mac also bear responsibility for the meltdown. They had morphed into for-profit enterprises and, just as with the Wall Street firms, the massive bonuses paid out to their top executives were contingent on the value of their stock prices, which in turn were fattened by the sale of those same toxic assets. As the Obama report puts it, “Fannie Mae and Freddie Mac’s profit-maximizing structure undermined their public mission.” What the administration should have proposed is to return the government-sponsored housing agencies to their original function as nonprofit entities supplementing, rather than aping, the practices of greedy bankers.

It wasn’t meant to end this way, and key Democrats, quite a few of them Clinton alums now in the Obama administration, bear the responsibility for the sad fate of Roosevelt’s dream. As the Obama proposal concedes: “Improving how housing was financed was an important part of these broader Depression-era reforms. In the 1930s, following severe mortgage market disruptions, widespread foreclosures, and sinking homeownership rates, the government created the Federal Housing Administration (FHA), Fannie Mae, the Federal Home Loan Banks (FHLBs) and several decades later, Freddie Mac to help promote secure and sustainable homeownership for future generations of Americans. Fannie Mae and Freddie Mac held true to their original mission for many years.” What the report then neglects to discuss is the demise of Roosevelt’s grand experiment at the hands of Democratic Party hustlers who turned the agencies away from their “original mission” and into their personal piggy banks while getting Democrats in Congress to approve regulations enabling their greed.

The folks around President Obama know this sad tale well because some of them were principal actors in the housing agencies’ betrayal of the public trust. Just take the case of Tom Donilon, whom Obama recently appointed to the highly sensitive position of national security adviser. It was Donilon who was the top legal counsel and lobbyist for Fannie Mae from 1999 to 2005, a period when the agency went off the tracks in backing Countrywide and other private-sector bandits in their irresponsible rip-off scams. “He was in charge of the lobbyists. … That process involved using the Hill to rein in the regulators,” noted Stephen Blumenthal, who, as director of the Office of Federal Housing Enterprise Oversight, was hindered by Donilon’s lobbying. As the report concedes without mentioning Donilon’s role, “Over the years, Fannie Mae and Freddie Mac’s aggressive lobbying efforts had successfully defeated efforts to bring them under closer supervision.”

Donilon, who received $10 million in the three years leading up to the scandal of 2004, when Fannie Mae was fined $400 million for juggling its books to enhance executive bonuses, will never have any trouble financing a home purchase. Not so the tens of millions of Americans who have lost their homes because of his reprehensible actions and the many more in the future who will be denied government support in trying to get a place of their own.

The Invisible, Growing Leaderless Revolution in America (3 articles)

Sunday, February 13, 2011 by CommonDreams.org
by Will Wilkinson
At first glance, the “leaderless revolution” in Egypt has nothing in common with the recent closing of Allyson’s, a local deli here in our small Oregon town. Until you hear why the bank called the note. “… the balance and payments are due.”

Quoting from a CommonDreams.org article by David Porter on Egypt:

“It is the slowly-accumulating momentum of hundreds of thousands of confrontations with local officials and elites… that slowly develop the courage, confidence and essential horizontal networks bubbling below the surface…”

How many Allyson’s stories are accumulating throughout America? How many business owners and employees, home owners and credit card users have had their lives turned upside down by banker’s decisions like this one, so utterly devoid of humanity?

The banker’s quote appeared in a story carried by our local paper and it wasn’t accompanied by any mitigating compassion. Apparently he didn’t feel it was necessary to show any. It’s the golden rule in action: he who has the gold makes the rules. Period. And, it’s happening everywhere.

A San Francisco friend tells me about his eleven months of futile communication with the bank that holds his mortgage. They lost his paperwork three times. All he wanted was to renegotiate the payments. Finally, he’s walking away. But first, he’s stopped making any payments at all. He’ll live in the house until he is forced to leave. When he does leave, the house will sit empty, tied up in red tape, while homeless people crowd the streets nearby.

A Texas couple fights Blue Cross and Blue Shield who have both denied coverage of life saving heart surgery for their newborn baby, on the basis that it is a pre-existing condition. Pre-existing? He was born with it. Reading the official responses from these companies… it’s the same story. They simply don’t want to pay. They are in business to make money, as are the banks. Providing some sort of service is an irritating necessity. The less actually provided, the more successful these businesses are.

Meanwhile, out on the streets where we live, the anger is building towards a breaking point. How many Allyson’s closing down, how many home owners walking away (or being driven out), how many of us losing our savings to pay for health care, how many “confrontations with local officials and elites” will it take to finally get us out on the streets? When will the world start watching a “leaderless revolution” here in America? We don’t have a dictator to oust. For us, it’s a ruling oligarchy immune to influence by voting. It’s bankers, corporations, multi-whatillionaires, an enabling government, those with the gold, the power and no interest in us, beyond milking us everyday like the docile sheep they believe us to be.

The leaderless revolution in Egypt took years to develop. There wasn’t much news about it along the way. Likewise here in the good old USA. So, when it finally erupts, as it inevitably will, it may seem like a surprise. But it won’t be; it is inevitable. The only question is “When?”

But we’re innovators, at least those of us who’ve survived so far with our imaginations intact. We don’t have to wait for thousands to march together, maybe in Times Square. We’ve actually got a lot of power right now. And, ironically, our power resides in the same place it does for those who rule us: money. Imagine the day when we take our money out of those banks and begin lending it to each other? Fifty friends in our small community coming up with $5,000 each could have saved our favorite deli.

Risky? Not as risky as banks and the carnage they wreak in our communities every day. So, am I suggesting local, citizen-operated banks? Sort of. But what I imagine is more neighborly than the word “bank” can possibly ever convey now, it’s meaning forever corrupted by the heartless behavior we’re witnessing. It’s simpler, more like friends just supporting each other. Financially. What a concept. And imagine not charging interest. No interest. No taxes. Just favors between trusting friends.

Maybe some day we will be out on the streets and the world will watch breathlessly as the next American Revolution turns tables. But we can start right now without any fanfare at all, taking baby steps to regain our power, one friendly exchange at a time. We hear the stories of grief every day and it’s our friends who are telling them. How about, instead of just sympathizing and worrying that I might be next - which explains why I’m clinging to that $5,000 I’ve got stashed in the stranger’s bank - I respond in the most practical way possible? I take my hoarded wealth and put it in play. “Here, will this help?”

What have I got to lose? Well, my $5,000. So how much have I already lost to investments gone bad? To strangers? (As I write this I’m feeling a bit like I do when I wake up from a weird dream.) Why not lose mine to friends right here in my own community? But, of course, as we all know from experience, true no-strings-attached generosity always returns rewards that far exceed the value of what we offered. We do know that, because we already give and receive with each other that way. But now may be the time to start exchanging cash. It’s been the hold out. For obvious reasons. After all, it’s the symbol of what enslaves us, the currency of the middleman.

This is probably a worst-case scenario for our masters, that we make them and their paper power unnecessary. But if they aren’t going to be neighborly, why would we really want to have anything to do with them?

++++++++++++++

Monday, February 14, 2011 by CommonDreams.org

Many Protests, One Revolution

by Jackie Smith

 

The massive rise of popular protests around the Middle East and North Africa coincided with the convening of the World Social Forum in Dakar, Senegal.  While the former were the subject of deserved and extensive media attention, the latter was virtually ignored by mainstream media. Yet all these gatherings of activists should be seen as part of a single, global movement that has been unfolding for over a decade.


While protesters in Egypt seek to topple corrupt and authoritarian rulers, activists at the World Social Forum have been doing the long-term and painstaking work of building a global movement to transform the basic structures of our world economy. It is those structures that enable the greed and brutality of individual leaders while maintaining the conditions against which Egyptians, Jordanians, Yemenis as well as Ecuadorans, Indians, and Detroiters are all resisting.

A new regime in Egypt will not fundamentally reduce youth unemployment. New leadership in Jordan will not solve the global climate crisis. Changes in local and national governments, without larger structural changes, will not end the land speculation, corporate monopolies, and militarization that plague communities worldwide.
While we must support the protests in the Middle East, it is vital that we see how they are connected to other struggles, including the massive protests last fall across Europe as well as the larger and more inclusive global justice movement that has created the World Social Forum process.

In a recent analysis of the Egyptian protests, Horace Campbell identifies the most important characteristics of these “21st century revolutions”:

1. The revolutions are made by ordinary people independent of vanguard parties and self-proclaimed revolutionaries;
    
2. They are network-based and are developing innovative tools and technologies to foster autonomous, horizontal, and cooperative networks;
    
3. They are led by ordinary people who have taken initiative and stepped up to contribute to the movement’s self-mobilization and its effort at self-emancipation;
    
4. They rely on and seek to build revolutionary non-violence for self-defense;
    
5. Their ultimate revolutionary idea is for a world where human beings can live in dignity and freedom from dictatorship and violence

What is most amazing about these features of protests in the Middle East and North Africa is that they have been part of popular struggles around the world for quite some time. Indeed, these characteristics can be found in large quantities at the World Social Forum in Dakar, and they have helped shape and sustain countless local and national social forums over the past decade.

As governments and empires use force to maintain their preferred world order, another world is being created and nurtured “from below.” We must recognize the many forms the revolution of the 21^st century takes and support it in all of its manifestations.

+++++++++++++++++++++

Monday, February 14, 2011 by CommonDreams.org

How Wall Street Greed Fueled Egypt's Turmoil

by Paul Buchheit

 

Many reasons have been cited for the runaway food costs that have plagued Egypt's citizens: increased global demand, floods and drought in grain-producing nations, reduced supplies because of biofuel production, Federal Reserve policies. But it's becoming clear that our own dirty little secret -- risky financial derivatives, like those that spurred the U.S. mortgage crisis -- have bubbled up from the toxic Wall Street pavement as a major cause. We need to dig deeper into the dirt.

The richest 1% of Americans, unlike lower-income earners who spend mostly on consumer goods, can spend much of their annual trillion dollar windfall from tax cuts and deregulation on high-stakes investment opportunities. And this they have done, with great success and little regard to the global consequences.

One of their strategies is the "long-only" commodities index fund, by which speculators keep buying even when a rising market would normally motivate them to sell. This can put massive inflationary pressure on a commodity. According to 25-year trading veteran Daniel Dicker, these investment vehicles, which didn't even exist a few years ago, have caused such a market imbalance that it's nearly impossible to avoid a bubble in food prices.

Dicker remarks about the importance to financial traders to "capitalize on the supply shortages," and about the need by governments to stockpile basic commodities to prevent food emergencies. He also notes the speed with which these trades occur. Apparently it all happens too fast for a humanitarian response.

As a result, according to the New York Times, wheat has reached its highest price in 28 years, and the effects are being felt in Egypt and Haiti and other countries whose citizens live on a few dollars a day. Harper's Magazine editor Frederick Kaufman notes that Egypt's inflation rate on food has reached 17% PER MONTH.

The financial players, says Kaufman, are investing in "imaginary wheat." In 2008 the publication Price Perceptions said, "index funds alone now own about 1 billion bushels of Chicago wheat compared to annual US production of about 500 million." 'Fantasy finance,' as Les Leopold calls it.

Not surprisingly, unregulated free market defenders deny all this. The Economist says, "there is little empirical evidence that investors cause more than fleeting distortions to commodity prices." Resource Investor claimed in 2008 that while "commodity market speculation by long-only index funds has increased markedly...most commodity futures markets experienced an equally dramatic or even greater increase in selling by commercial hedgers."

But Frederick Kaufman counters that "speculators are outnumbering the physical hedgers by about 4 to 1 in these markets." Revenues from speculative trading at Goldman Sachs alone more than quintupled over the past two years. Way back in 2007 a Market Club Trader's Blog commented that "As money has flooded into this (Goldman Sachs Commodity Index), prices have continued higher."

In his February 4, 2011 Common Dreams essay "Food, Egypt and Wall Street," Institute for Policy Studies writer Robert Alvarez cited one of the main reasons for this sordid financial state of affairs, the Commodity Futures Modernization Act of 2000: "Before this law, the Commodity Futures Trading Commission (CFTC) served as a cop on the beat, enforcing rules that prevent distortion of manipulation of prices beyond normal supply and demand. But Wall Street Banks and companies such as ENRON, and British Petroleum were determined to make a lot more money from speculation by exempting energy-derivative contracts and related swaps from government oversight."

Alvarez quotes noted hedge trader Michael McMasters: "This amounts to 'a form of electronic hoarding and greatly increases the inflationary effect of the market. It literally means starvation for millions of the world's poor.'"

We're letting a few thousand well-positioned financial experts fashion games of chance that earn them billions with other people's money. And, now, with other people's lives.

Banks and Bankers

by L. Neil Smith 

This is a new chapter just added to the "Where We Stand" website at where-we-stand.com

Banks are the means by which European aristocracy regained control of America once again following what we thought had been our Revolution.
—L. Neil Smith

I have been saying for years that, exactly like like lawyers and literary agents, bankers somehow seem to have forgotten who's the boss.

I'm not an economist (a fact I could wake up every morning and thank the gods for, if I were religious, which I'm decidedly not), but I've been dealing with banks since I was a little kid in the 1950s, and I have never liked the "cut of their jib" or the way they do business.

As I say, I'm not an economist and although I am, in nearly every sense of the expression, a "student of Ayn Rand", my interest in the subject is pretty severely limited. I have never bothered to learn the ins and outs of formal economics, of "M-1", "M-2", "M-23", and so forth, nor do I care to do it now. Money is money is money, or—in the case of the worthless slips of paper issued by governments—it's not.

I am, however, sufficiently educated in physics to understand perfectly well that you can't make something out of nothing. It's too damned bad that most politicians and voters seem to lack that simple understanding. Money today literally isn't worth the paper it's been printed on because it's been spoiled by smearing all that ink all over it.

In any case, economics is not nearly as complicated a discipline as many—especially academics and politicians—would prefer you to believe. At the dawn of modern civilization, back when individuals like Galileo Galilei began peering upward through their newly- invented telescopes, they discovered that the mechanics of the sky were not exactly as they had been described by the authorities of the day.

Instead of every visible celestial body circling around the Earth, they found that the Earth—along with several other planets—were circling around the sun. One of those planets, Jupiter, had four small worlds circling around it the way the Moon circles around us. And the stars were so remote that they didn't seem to be circling anything at all.

We learned better later.

Supporters of the old theory, including the Church, fought back, threatening the life, liberty, and physical wellbeing of supporters of the new theory. As for those they couldn't reach, they argued that the old theory needed revising slightly. The Sun, Moon, and planets didn't circle directly around the Earth, but around a line around the Earth, "explaining" why Mars appeared to travel backwards from time to time.

They called these extra circles "epicycles", and each time some modern astronomer shot their theory down, they added another layer of epicycles to the one that had preceded it, until the planets were doing circles around the circles around the circles, and so on, each iteration postponing the eventual, inevitable collapse of their position. Much more importantly, however, the contrived complexity discouraged ordinary individuals from studying the situation and seeing through the smoke and past the mirrors to a simpler and grander truth.

Economics today is in much the same state as astromomy was in the Renaissance, its complicated vocabulary and complex theorizing meant mostly to keep non-economists from seeing certain simple truths about it.

Take banks, for instance.

People seem always to have had trouble, one way or another, with banks. And, one way or another, banks seem always to have had trouble with people. It's always been an uneasy relationship which bankers and their symbiotes, the politicians, have never hesitated to exploit to the hilt. The first bank records appear to have been written on clay tablets in cuneiform. In their primeval beginning, banks were little more than fortified warehouses in which, for a reasonable fee, you could store your valuable assets—usually consisting of gold, silver, jewelry, and grain—a bit more securely than you could at home.

After a while, somebody realized—maybe it was the bankers, maybe it was their customers, tired of paying that "reasonable fee" which slowly ate away at their savings—that nobody was getting any richer with all that wealth just sitting there in the warehouse. There ought to be some way to put it to work, preferably making even more wealth.

Bankers began lending their customers' wealth, for which borrowers paid a "reasonable fee" (now we call it "interest") which the bankers split with their customers. When cultural and religious taboos didn't interfere with the process, everybody made out, and capitalism was born.

It was at this point, however, somewhere around the Middle Ages, that everybody made a couple of really tragic mistakes. The first one occurred because people are basically lazy. Most of the time, this is a wonderful thing, the primary source of all human progress. The great Thomas Edison, for example, invented the electric light bulb because, as a kid, he'd detested cleaning kerosene lamp chimneys for his mother.

Apparently people got tired of carrying all those heavy gold and silver coins around in the little leather bags you see in paintings of the times and in the movies (although a little gold and silver went a long way back then, and the real bags couldn't have been all that big and heavy). There was also considerable physical risk involved: Sam Colt wouldn't come along to make men equal for another five or six hundred years. And women, although they often carried little daggers themselves—and really intimidating pairs of scissors—unless they were accompanied by a competent bodyguard, were at the mercy of the first thug who ran across them, especially if he happened to have a sword.

Instead of lugging all those big, nasty, heavy coins around, folks took up pen and parchment instead, and started writing instructions, of a kind. If they happened to owe their local apothecary a silver florin for his sovereign remedy against tansy or gleet (which don't seem to be quite the problem today that they apparently were in times past), they would dash off a short note to their bank, saying "Please give this apothecary guy one of the silver florins from my personal hoard, [signed] Luigiano the Fairly Resplendant, Gonfaloniere of Podunchio."

History would come to call it a "bank draft" or "check".

Later on, the bank began to write such letters for their lazy customers to carry around instead of all those nasty old heavy coins. (Observe that this innovation left bodyguards fully employed.) These were called "bank notes" and they represented real wealth, for which they could be exchanged whenever someone who had them wanted coins. They were the first paper money, and later would lead to nothing but trouble.

The invention of paper money made inflation possible. The tragic, life-destroying process of inflation is often dealt with by the media—as well as by government officials—as something natural and unpredictable, like the weather, but nothing could be further from the truth.

Inflation happens whenever the amount of stuff—printed paper, for example—people use instead of real money increases, without an increase in the real money—gold, silver, etc.—it claims to represent.

One of the fundamental laws of economics (okay, so I have studied it a little bit) and of human psychology as well, observes that the more there is of anything, the less any single bit of it is worth. If there's a trillion paper dollars in circulation, and the government suddenly prints another trillion, then the paper money we've saved up is halved in value—although if the government and their pet banks spend it quickly, they can enjoy the full benefit of it before that effect gets noticed. By the time it gets to us, however, it takes twice as much money to obtain the things we need or want. In effect, half our savings have been taken away by what amounts to an invisible tax.

Interestingly, the first inflating wasn't done with paper money. I have handled a good many ancient Roman coins that were polygonal in shape instead of round, because, whenever they passed through the hands of an unscrupulous banker or merchant, their edges were clipped off, to be added to a horde of such clippings which could then be melted down to make more coins. (That's why coins today have "milled" or decorated edges, to prevent such a practice.) The coins left dishonest hands at face value, although they were actually smaller, lighter, and worth less. Thus was the Roman money supply "watered down".

The great libertarian teacher Robert LeFevre told the story of England's King Henry VIII, who loved fighting foreign wars more than anything else, and was always looking for money to pay for them. All the historic fuss over his divorce, his various wives, and the Church of England was a smokescreen, according to LeFevre. What he really wanted to do—and did—was loot the holdings of the Roman Catholic Church.

Even that money soon ran out, however, and to pay for his men and horses and golden armor, he finally instructed the treasury to make coins out of junk metal (just as we do today), give them a gold or silver wash, and get them out into the marketplace. Henry's advisors were aghast, and fearful that such a fraud would cause rioting and revolution.

Yet when the advisers checked the marketplace, after a little while, they noticed two things: first, that the phony coins were being exchanged quite briskly, even when the coating had worn off and the dull gray of their base metal could be seen clearly; and second, that there were no real gold or silver coins in sight. These were being hoarded, not circulated. Hence the observation, which came to be known as "Gresham's Law" that "bad money drives out the good" from the marketplace.

In Germany, before World War II, and in Hungary, immediately afterward, inflation with paper currency became so extreme that it's said people took their wages home in wheelbarrows, that the money would hardly pay for a loaf of bread, and that workers were paid twice a day and immediately went out and bought food before prices rose even higher.

When I was young, a common thing for kids born in the shadow of World War II, to trade back and forth were fifty million Deutschmark bills their G.I. dads had brought back from Germany. A few years later, a gold Hungarian pengo was worth thirteen trillion paper pengoes.

A possibly apocryphal story holds that the great economist Ludwig von Mises was walking with some officials past a building where the money presses were rumbling day and night. Asked what they could do to stop the terrible storm of inflation that was tearing their country apart, Von Mises simply pointed at the building and said, "Stop that noise".

Today, government and its symbiotic banks don't need printing presses. Thanks to a shady practice called "fractional reserve banking", they can lend out many times the amount of money they actually have, creating what I've called "air credit". During the Carter Administration, and then again during the Clinton Administration, banks were encouraged—even compelled—to lend non-existent money to would-be homeowners who had no way of paying it back.

Eventually, the banks, which had been promised that the government would back them up with regard to these rotten loans, got into serious trouble and had to be bailed out—with trillions more in air credit—which was the beginning of the economic mess we find ourselves in today. When other businesses began to fail—the automobile industry comes to mind—they had to be "rescued", too, with even more funny money.

Today, the dollar is worth only a small fraction of what it was just a few years ago, affecting trade and our relative position in the world.

What can be done?

From the time you are a little child with pennies, they stop at nothing to keep your money out of your hands. First, they make sure that half of it disappears in taxes. Then they convert what remains into paper and make half of that evaporate as inflation. Next, they convert what paper you have left into entries in a ledger. Finally, they convert those ledger entries into electrons, scattered into space.

There's only one way to stop them, with copper, silver, and gold, and platinum, with wealth that can't be counterfeited and that won't evaporate.

Banks and bankers must be put back in their proper place as simple guardians of the wealth of individuals. Exactly like government, they must forever be kept small and weak. There must be no special laws, no special powers or privileges for banks. Government commissions, state oversight committees, and so on soon become packed with former bankers or future bankers working overtime to make sure their businesses enjoy every government advantage possible—always to the detriment of their customers—while preventing the entry of potential marketplace competition.

Whether it's a simple burglary, mugging, rape—or fractional reserve banking—theft is theft, and fraud is fraud. Nor are any special laws required to deal with such crimes when they're committed by banks, which shouldn't be regulated any differently than, say, a filling station or a grocery store, which shouldn't be regulated at all.

Certain common sense reforms are called for.

At present, it costs a bank customer twenty or thirty or forty or fifty dollars whenever he or she bounces a check. (Retailers often add their own fees, as well.) This amounts to kicking an individual when he or she is already down, since the person didn't have enough money to begin with to cover the check. It can end up costing him or her ten or twenty times the amount of the check they bounced, simply to feed the bank's insatiable, greedy maw. Add the factor of hard times, like those we all happen to be going through at present, and these fees become a major profit item. The bank's position as a bottom-feeding scavenger on human misfortune quickly becomes clearer—and more nauseating.

Another dirty banker's trick is what might be termed the "serial overdraft" scam, in which they invariably post charges against your account before they count your deposits, resulting in a cascade of fees.

I have asked several computer-savvy individuals who have worked for banks what the actual cost of processing a draft on insufficient funds amounts to, and in no case has that amount exceeded a couple of dollars. The rest of what they charge is illegitimate, punitive, and paternalistic. It is not now, nor has it ever been, a bank's place in the scheme of things to fine their customers or punish them. They have a choice: they can lecture them or collect a reasonable fee, but not both.

Yet another corrupt practice that needs a closer examination is the way that banks will happily accept a deposit—but then deny you the use of your own money until they have "confirmed" that it's really there.

In the electronic age we live in, when data flash straight across the country and around the world at the speed of light, the practice of holding a customer's transferred funds for "confirmation" for a week, for a day, for a minute, or even for a nanosecond is nothing more than baldfaced crooked larceny. During the period when you can't enjoy free access to your money, they feel free to lend it out to others, collecting interest on it that they don't share with you. It's a scam called "the float": your money, multiplied times the money of tens of millions of other suckers being worked over the same way, amounts to millions in ill-gotten gain for the bankers every single day.

Billions every year.

And what ever happened to interest-bearing savings accounts?

Lately banks have been finding ways to force employers to deposit their employees' salaries electronically. In some situations, having a bank account has become compulsory, a condition of employment. The banks' highest objective is that you never get to see your own money. Government, of course, loves this idea, because it feeds their sick, perverse obsession with monitoring everything that individuals do, every penny they earn, everything they spend it on, everything they eat.

And every time they go to the bathroom.

At the same time banks gleefully cooperate in violating their customers' natural and Constitutional right to privacy, dignity, and individual sovereignty, fundamental concepts that appear to have disappeared altogether from both the corporate and the governmental universes.

If banks were truly private enterprises, then they would be free to do as they liked in many of these respects. Facing competition, it would pay them well to defend their customers' interests from the predations of the lawless state. Unfortunately, however, they are not private enterprises, but merely another tentacle of government, twice over: the are organized as corporations, and specially chartered as banks.

As long as they remain tentacles of government, banks must be bound, as government is supposed to be, by the Bill of Rights, and regulated within an inch of their corporate lives to prevent the abuses, petty and otherwise, that they regard as doing business as usual.

I have half-jokingly considered advocating that bank officers be compelled to get themselves tonsured, their tellers to wear monkish robes or nuns' habits, if I believed that it would improve their general attitude and encourage some humility. But clearly that would violate the Zero Aggression Principle, and it would probably only make banks and bankers even more self-righteous than they are already. Hats that were once silly in Europe are now the stuff of pomp and circumstance.

Although I invariably favor laissez-faire economic policies, and wouldn't interfere with or limit any genuinely private enterprise, I do remember a time when it seemed much nicer to do business with banks, a time when branch banking was forbidden here in the state of Colorado. The battle for individual freedom against the state must be a battle against its corporate symbiotes—especially banks—as well.

Huge, impersonal, international banking conglomerates must be broken up—within principle—and a business model much more customer-oriented substituted, instead, mostly through the process of open competition, which banks have assiduously avoided for something like 300 years. As institutions of trust, banks must be discouraged from automatically taking government's side against their customers in matters such as private records disclosure and lockbox searches, and encouraged, whenever any doubt arises, to take their customers' side, instead.

The power to create money must be taken from the government backed banking cartel called the Federal Reserve. Lawful money, as mandated by the Constitution—precious metal coins and nothing else—must be substituted for the wastebasket trash that we've become accustomed to.

Putting an end to limited liability—and the pernicious doctrine of the corporation as a person in and of itself—will aid us in this fight. Banks will be smaller, more local, and more respectful of their customers.

That means you and me.