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Robert Scheer
Change we can bank on

Robert Scheer, Creators Syndicate Inc.

Wednesday, November 19, 2008


This is not change we can believe in. Not if Robert Rubin or his protégé, Lawrence Summers, get to call the shots on the economy in President-elect Barack Obama's incoming administration. Both Clinton-era treasury secretaries deserve a great deal of the blame for the radical deregulation of the financial industry that has derailed the world economy. They both should, along with former Federal Reserve chief Alan Greenspan, perform rites of contrition and be kept at a safe distance from the leadership of our nation.

Yet Rubin and Summers are highly visible in the Obama transition team, with Summers widely touted as Obama's pick for secretary of the treasury. New York Federal Reserve President Timothy Geithner, who also worked in the treasury department under Rubin and Summers, is the other leading candidate. But it was Summers who most vehemently pushed for congressional passage of that drastic deregulation measure, the Financial Services Modernization Act, which eliminated the New Deal barriers against mergers of commercial and investment banks as well as insurance companies and stock brokers. Standing at his side as President Bill Clinton signed the legislation, Summers heralded it as "a major step forward to the 21st century" - and what a wonderful century it's proving to be.

It was also Summers who worked in cahoots with Enron and banking lobbyists, and who backed Republican Sen. Phil Gramm's Commodity Futures Modernization Act, which banned any effective government regulation of the newly unleashed derivatives market. The result was not only a temporary boon to Enron, which soon collapsed under its unbridled greed, but also to the entire Wall Street financial community.

The only opposition from within the Clinton administration came from Brooksley E. Born who, as head of the Commodity Futures Trading Commission, dared defy Summers and Rubin, as well as Greenspan. In frequent appearances before Congress, she warned that the burgeoning derivatives trading "threatens our economy without any federal agency knowing about it." In reward for her prescience, Born, a highly regarded legal expert on derivatives, was treated to scornful attacks from the old boys' network, led (again) by Rubin, Greenspan and Summers, who questioned her competency and insisted it was she who threatened the stability of the market.

That sexism, as well as stupidity and greed, might have played a role in the dismissal of Born's concerns has been raised by some of Summers' critics, who were still smarting even after his subsequent forced departure from Harvard University after disparaging women's innate ability to grasp mathematics and science. "It was Larry Summers who called her up and screamed at her," Amy Siskind, co-founder of the New Agenda, a women's rights group that grew out of the Hilary Rodham Clinton presidential campaign, told the Boston Globe to support her view that Summers is a "known misogynist."

Whatever the motives, Born was painfully right in her warnings and Summers was totally wrong in overseeing the passage of legislation that summarily prevented any government regulation of the debt instruments that have proved so disastrous. I don't know if Born, now retired at 68, would be interested in the treasury secretary position, but she is certainly far more qualified than thee other candidates under consideration.

Barring that possibility, why not go with Sheila Bair, the chair of the Federal Deposit Insurance Corporation (FDIC), who has distinguished herself by proposing a sterling alternative example of how to deal with the banking collapse? It is Bair who has most forcefully advanced the goal, advocated by Obama in his recent "60 Minutes" interview, of putting homeowners before banks. Under her leadership, the FDIC has made sure that the insured banks, which it supervises and occasionally takes over, act to prevent foreclosures rather than using government handouts to finance new bank mergers.

On Tuesday, House Democrats led by Rep. Barney Frank, D-Mass, accused Paulson of betraying congressional language authorizing the $700 billion bailout that specifically called for "mortgage foreclosure diminution." Rep. Carolyn Maloney, D-N.Y., charged, "We're basically funding mergers and acquisitions, not lending." On Friday, Bair introduced a proposal to allocate $24.4 billion of the bailout specifically to modify loans to prevent 1.5 million foreclosures, but was opposed by Treasury Secretary Henry Paulson.

Because Geithner and Summers support Paulson's approach, Obama should reject them and pick Bair to give us the kind of change he's been promising.

Robert Scheer is author of a new book, "The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America."

SC priest: No communion for Obama supporters

By MEG KINNARD, Associated Press Writer Meg Kinnard, Associated Press Writer – Thu Nov 13, 6:33 pm ET


COLUMBIA, S.C. – A South Carolina Roman Catholic priest has told his parishioners that they should refrain from receiving Holy Communion if they voted for Barack Obama because the Democratic president-elect supports abortion, and supporting him "constitutes material cooperation with intrinsic evil."

The Rev. Jay Scott Newman said in a letter distributed Sunday to parishioners at St. Mary's Catholic Church in Greenville that they are putting their souls at risk if they take Holy Communion before doing penance for their vote.

"Our nation has chosen for its chief executive the most radical pro-abortion politician ever to serve in the United States Senate or to run for president," Newman wrote, referring to Obama by his full name, including his middle name of Hussein.

"Voting for a pro-abortion politician when a plausible pro-life alternative exists constitutes material cooperation with intrinsic evil, and those Catholics who do so place themselves outside of the full communion of Christ's Church and under the judgment of divine law. Persons in this condition should not receive Holy Communion until and unless they are reconciled to God in the Sacrament of Penance, lest they eat and drink their own condemnation."

During the 2008 presidential campaign, many bishops spoke out on abortion more boldly than four years earlier, telling Catholic politicians and voters that the issue should be the most important consideration in setting policy and deciding which candidate to back. A few church leaders said parishioners risked their immortal soul by voting for candidates who support abortion rights.

But bishops differ on whether Catholic lawmakers — and voters — should refrain from receiving Communion if they diverge from church teaching on abortion. Each bishop sets policy in his own diocese. In their annual fall meeting, the nation's Catholic bishops vowed Tuesday to forcefully confront the Obama administration over its support for abortion rights.

According to national exit polls, 54 percent of Catholics chose Obama, who is Protestant. In South Carolina, which McCain carried, voters in Greenville County — traditionally seen as among the state's most conservative areas — went 61 percent for the Republican, and 37 percent for Obama.

"It was not an attempt to make a partisan point," Newman said in a telephone interview Thursday. "In fact, in this election, for the sake of argument, if the Republican candidate had been pro-abortion, and the Democratic candidate had been pro-life, everything that I wrote would have been exactly the same."

Conservative Catholics criticized Democratic presidential nominee John Kerry in 2004 for supporting abortion rights, with a few Catholic bishops saying Kerry should refrain from receiving Holy Communion because his views were contrary to church teachings.

Sister Mary Ann Walsh, spokeswoman for the U.S. Conference of Catholic Bishops, said she had not heard of other churches taking this position in reaction to Obama's win. A Boston-based group that supports Catholic Democrats questioned the move, saying it was too extreme.

"Father Newman is off base," said Steve Krueger, national director of Catholic Democrats. "He is acting beyond the authority of a parish priest to say what he did. ... Unfortunately, he is doing so in a manner that will be of great cost to those parishioners who did vote for Sens. Obama and Biden. There will be a spiritual cost to them for his words."

A man who has attended St. Mary's for 18 years said he welcomed Newman's message and anticipated it would inspire further discussion at the church.

"I don't understand anyone who would call themselves a Christian, let alone a Catholic, and could vote for someone who's a pro-abortion candidate," said Ted Kelly, 64, who volunteers his time as lector for the church. "You're talking about the murder of innocent beings."

Hi everyone;

We've uploaded Matthew Grasso performing with his Nada Brahma Music
Ensemble where he demonstrates his newly designed 25 string Raga Guitar.
They are located at our Ear Candle Productions news site: both a 23 minute version and the same piece in three parts.

Matthew tells us that these movies are not loading for him, so we are
making a request for some of you who have time to try these movies to see
if they are loading and playing for you. Please shoot me a return email
if you have the time to check them out. I can't figure out what could be
wrong because they are loading fine here on both of our computers, but I
don't doubt Matthew at all. He is in a Mac environment and we a PC, but
that didn't keep him from viewing the Intro.

A little background about the piece. Matthew Grasso is a graduate of the
San Francisco Conservatory of Music where he studied and mastered Western Classical Guitar, and he also studied with Eastern Classical Master Ali Akbar Khan.

Being Italian and Chinese, a native of San Francisco, his curiosity and
interest in combining eastern/western classical styles has influenced him
to design his own guitars, a seven string drone guitar, and a 25 string
raga-guitar, both of which are featured in this piece, PAPAMAGAMA. Scott
Reichter is the Luthier who built the guitars. The performance takes
place at the Sangati Center in San Francisco.

Here are the links:

the 23 minute piece
http://www.earcandleproductions.com/MGPapa.mov
the same piece cut up into three parts
(if you only have time to view one, part 3 is the climatic part with
raging tablas and guitars!)

http://www.earcandleproductions.com/MGPapa1.mo
http://www.earcandleproductions.com/MGPapa2.mo
http://www.earcandleproductions.com/MGPapa3.mo

Thanks for participating, if you can!

best,
davis

10:27 GMT, Wednesday, 12 November 2008
Andrew Maynard
Woodrow Wilson Center

Nanomaterials date back to Roman times but are now made in quantity

Urgent regulatory action is needed on nano-scale materials widely used in industry, the Royal Commission on Environmental Pollution has concluded.

The materials have so far shown no evidence of harm to people or the environment, the commission found.

However, it said there was a "major gap" in research about the risks posed by the materials, which are found in some 600 products globally.

The commission chair also said he would not recommend clothes with nanosilver.

"We are concerned about nanosilver in clothing getting into the environment because it could be potentially very damaging," Professor Sir John Lawton said.

Size matters?

The report focuses not on the tiny machines or electronic devices that nanotechnology has promised, but instead on the nano-sized materials that are making it into industry and consumer products.

At issue is the fact that at such tiny scales, materials behave differently than they do when they comprise larger objects.

Sir John cited fibres made from carbon nanotubes as an example. "Carbon nanofibres are fundamentally different from graphite," he said.

"That makes their behaviour in the environment and in the body very hard to predict."

However, the report stresses that the view of nanomaterials as a single category defined only by their size is limiting because different nanomaterials present markedly different potential risks.

"It is not the particle size or mode of production of a material that should concern us, but its functionality," the report states.

Despite repeated warnings, the establishment continues to lag behind emerging technologies

The government has faced calls before from independent groups for stringent industry controls and further research into the environmental risks of nanomaterials.

But, the commission noted, the potential benefits of nanomaterials meant that the rise in their use had far outstripped the knowledge of the risks they might pose.

A recent survey for the Washington DC-based Woodrow Wilson Center found more than 600 consumer products that listed nanomaterials among their ingredients, and the number of patents for nanomaterials' use was in the thousands annually.

But the materials' novelty meant that long-term effects could not yet be studied, and their limited use to date precluded studies on their build-up in the environment.

The commission's study found no evidence of harm to people or the environment to date, but warned that tests must be standardised in order to ensure future monitoring was effective.

The commission added that it saw no reason to implement a blanket ban or moratorium on the development and implementation of nanomaterials, because of the societal benefits they represented, for example, to medicine and the renewable energy industry.

Instead, it urged co-operative, international action to establish tests for their dangers and regulatory oversight.

They also suggested changing the industrial reporting of the use of nanomaterials from voluntary to mandatory, with an industry "checklist" to flag up the products that posed the highest potential risk.
Nanotube
Fibres made of carbon nanotubes are of particular concern

Independent experts consulted for the study suggested that it may be as much as two decades before the toxicological and environmental data catch up to the innovation in nanomaterials.

"The report's bottom line is clear; the safe use of novel materials requires innovative solutions to minimising risks," said Andrew Maynard, chief adviser to the emerging nanotechnologies project at the Woodrow Wilson Center.

"But despite repeated warnings, the establishment continues to lag behind emerging technologies.

"By focusing on how these materials behave, rather than what they look like, the commission have risen above circular discussions on size-related definitions, and brought the dialogue back to how certain materials might cause harm - and how this can be avoided," Professor Maynard added.

Silver lining

The commission noted a few prevalent nanomaterials that they believe to be of particular concern, including carbon nanofibres, whose constituent nanotubes have in preliminary laboratory experiments shown similar dangers to those of asbestos.

Another potential concern is nanoparticulate silver, which has made its name recently as a highly effective bacteria killer. It has been incorporated into fabrics to prevent the bacterial build-up that causes odours.

But as it is worn away during washing, nanosilver's bacteria-killing properties could wreak havoc on delicate ecosystems or municipal waste water systems that depend on bacteria.

Sir John said: "I wouldn't recommend nanosilver clothes and I wouldn't wear them myself.

"At the moment the concentrations are way below anything likely to do damage, but if it became common, it could lead to problems."

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Air Cars: A New Wind for America's Roads?
by Jim Ostroff
Thursday, October 30, 2008provided byKiplinger'sPersonalFinance


A new carmaker has a plan for cheap, environmentally friendly cars to be built all over the country

An air-powered car? It may be available sooner than you think at a price tag that will hardly be a budget buster. The vehicle may not run like a speed racer on back road highways, but developer Zero Pollution Motors is betting consumers will be willing to fork over $20,000 for a vehicle that can motor around all day on nothing but air and a splash of salad oil, alcohol or possibly a pint of gasoline.

The expertise needed to build a compressed air car, or CAV, is not rocket science, either. Years-old, off-the-shelf technology uses compressed air to drive old-fashioned car engine pistons instead of combusting gas or diesel fuel to create a burst of air to do the same thing. Indian carmaker Tata has no qualms about the technology. It has already bought the rights to make the car for the huge Indian market.

The air car can tool along at a top speed of 35 mph for some 60 miles or so on a tank of compressed air, a sufficient distance for 80% of consumers to commute to work and back and complete daily chores.

On highways, the CAV can cruise at interstate speeds for nearly 800 miles with a small motor that compresses outside air to keep the tank filled. The motor isn't finicky about fuel. It will burn gasoline or diesel as well as biodiesel, ethanol or vegetable oil.

This car leaves the highest-mpg vehicles you can buy right now in the dust. Even if it used only regular gasoline, the air car would average 106 mpg, more than double today's fuel sipping champ, the Toyota Prius. The air tank also can be refilled when it's not in use by being plugged into a wall socket and recharged with electricity as the motor compresses air.

Automakers aren't quite ready yet to gear up huge assembly line operations churning out air cars or set up glitzy dealer showrooms where you can ooh and aah over the color or style. But the vehicles will be built in factories that will make up to 8,000 vehicles a year, likely starting in 2011, and be sold directly to consumers.

There will be plants in nearly every state, based on the number of drivers in the state. California will have as many as 17 air car manufacturing plants, and there'll be around 12 in Florida, eight in New York, four in Georgia, while two in Connecticut will serve that state and Rhode Island.

The technology goes back decades, but is coming together courtesy of two converging forces. First, new laws are likely to be enacted in a few years that will limit carbon dioxide emissions and force automakers to develop ultra-high mileage cars and those that emit minuscule amounts of or no gases linked with global warming. Plug-in electric hybrids will slash these emissions, but they'll be pricey at around $40,000 each and require some changes in infrastructure -- such as widespread recharge stations -- to be practical. Fuel cells that burn hydrogen to produce only water vapor still face daunting technical challenges.

Second, the relatively high cost of gas has expedited the air car's development. Yes, pump prices have plunged since July from record levels, but remain way higher than just a few years ago and continue to take a bite out of disposable income. Refiners will face carbon emission restraints, too, and steeply higher costs will be passed along at the pump.

Tata doesn't plan to produce the cars in the U.S. Instead, it plans to charge $15 million for the rights to the technology, a fully built turnkey auto assembly plant, tools, machinery, training and rights to use trademarks.

The CAV has a big hurdle: proving it can pass federal crash tests. Shiva Vencat, president and CEO of Zero Pollution Motors, says he's not worried. "The requirements can be modeled [on a computer] before anything is built and adjusted to ensure that the cars will pass" the crash tests. Vencat also is a vice president of MDI Inc., a French company that developed the air car.

The inventor of this technology is Mr. Guy Negre, who is the founder and CEO of MDI SA, a company headquartered in Luxembourg with its R and D in Nice, France.
Copyrighted, Kiplinger Washington Editors, Inc.

Revenge of the Left across the world
Whatever the exact result of the US elections tomorrow, we must assume that the whole governing machinery of Washington and the state capitols will soon be hostile to laissez-faire thinking.


By Ambrose Evans-Pritchard
Last Updated: 3:39PM GMT 03 Nov 2008

Comments 75 | Comment on this article
Eric Hobsbawm, the doyen of Marxist history, says the current financial turmoil is the 'greatest crisis of capitalism since the 1930s'.
Eric Hobsbawm, the doyen of Marxist history, says the current financial turmoil is the 'greatest crisis of capitalism since the 1930s'. Photo: Rex

It is not just that the Democrats will win a crushing victory in both houses of Congress, perhaps reaching the 60-seat Senate threshold that lets them steam-roll legislation. It is also that the incoming class of 2008 is of a new creed. Many no longer believe – or actively reject – the free trade and free market catechisms.

As commentator Markos Moulitsas put it in Newsweek: "The big question is, will Democrats nationwide simply 'win' the night–or will they deliver an electoral drubbing so thorough that it signals the utter rejection of conservative ideology and kills the notion that America is a 'center-right' country?" he said.

No matter that statist policies were responsible for this global crisis in the first place. It was Western governments that set interest rates too low for too long, encouraging us all to abuse credit.

It was Eastern governments that held down their currencies to pursue mercantilist trade advantage, thereby accumulating vast foreign reserves that had to be recycled. Hence the bond bubble. This is the deformed creature known as Bretton Woods II. Protectionist Democrats are right to complain that the game is rigged. Free trade? Laugh on.

But at this point I have given up hoping that we will draw the right conclusions from this crisis. The universal verdict is that capitalism has run amok.

In any case the damage caused as credit retrenchment squeezes real industry is likely to be so great that Barack Obama may have to pursue unthinkable policies, just as Franklin Roosevelt had to ditch campaign orthodoxies and go truly radical after his landslide victory in 1932. Indeed, Mr Obama – if he wins – may have to start by nationalizing the US car industry.

For those who missed it, I recommend Edward Stourton's BBC interview with Eric Hobsbawm, the doyen of Marxist history.

"This is the dramatic equivalent of the collapse of the Soviet Union: we now know that an era has ended," said Mr Hobsbawm, still lucid at 91.

"It is certainly greatest crisis of capitalism since the 1930s. As Marx and Schumpeter foresaw, globalization not only destroys heritage, but is incredibly unstable. It operates through a series of crises.

"There'll be a much greater role for the state, one way or another. We've already got the state as lender of last resort, we might well return to idea of the state as employer of last resort, which is what it was under FDR. It'll be something which orients, and even directs the private economy," he said.

Dismiss this as the wishful thinking of an old Marxist if you want, but I suspect his views may be closer to the truth than the complacent assumptions so prevalent in the City.

To those who still think that business can go on as normal now that EU taxpayers have had to rescue the financial system, I can only say: what will happen to London if EU exchange controls are imposed, or if leverage is restricted by draconian laws – as demanded by the German, Dutch, and Nordic Left?

Does the UK still have a blocking minority under EU voting rules to stop a blitz of directives that could shut down half the activities of the City – or the 'Casino' as they say in Brussels? I doubt it.

Who thinks that the three key Commission posts – single market, competition, and trade – will still be held by free marketeers when the new team comes in next year?

In Germany, Oskar Lafontaine's Linke party now has 23pc support in Saarland on a Marxist pledge to nationalize banks and utilities. Needless to say, the Social Democrats (SPD) are shifting hard Left to protect their flank.

"The rule of the radical market ideology that began with Margaret Thatcher and Ronald Reagan has ended with a loud bang," said Frank-Walter Steinmeier, Germany's foreign minister and SPD candidate for chancellor next year.

"We need a comprehensive new start, so we can reestablish our society on fresh foundations. People create value, not locusts," he said.

France has its own Gaullist version on this, seizing on the crisis to launch the most far-reaching strategy of state intervention since the 1970s.

"Laissez-faire, c'est fini," said President Nicolas Sarkozy. "We will intervene massively whenever a strategic enterprise needs our money."

Such language can now be heard daily across Europe. It can only intensify as the fall-out from the EU's €1.8bn trillion (£1.4 trillion) bank rescue becomes clearer, and as Europe's elites discover that their own banks are the most leveraged in the world and have played their own Wagnerian part in Gotterdammerung.

European and UK banks are five times more exposed to emerging markets than US banks. They alone hold the collective time-bomb of $1.6 trillion (£990bn) in hard currency loans to Eastern Europe – now starting to detonate in Hungary, Ukraine, Romania, and even Russia.

At some point, Europe's political class will face the awful truth that their own credit bubbles are just as bad – and perhaps worse – than the excesses of US sub-prime property. As that occurs, the shock will move by degrees from revulsion to political rage.

Professor Hobsbawm, who spent his youth watching Hitler's rise in Berlin, has a warning for those who think this will help the Left in any recognizable form. "In the 1930s, the net political effect of the Depression was to enormously strengthen the Right," he said.

America was the great exception, as it may prove to be again. I for one will take the enlightened "socialism" of Barack Obama any day over the Hegelian broth nearing the boil in Europe.

"A little patience, and we shall see the reign of witches pass over, their spells dissolve, and the people, recovering their true sight, restore their government to its true principles. It is true that in the meantime we are suffering deeply in spirit, and incurring the horrors of a war and long oppressions of enormous public debt...If the game runs sometime against us at home, we must have patience till luck turns, and then we shall have an opportunity of winning back the principles we have lost, for this is a game where principles are at stake."
--- Thomas Jefferson, 1798

Obama When No One Is Watching - This is just beautiful
The Salon: Today


Malia Obama probably wasn´t sure if her Dad would make it home from work to watch her soccer game this past Friday night.

He´s been pretty busy lately. But her Mom and her little sister would be there.

The flow of the kids moving the ball down the field, under the lights of a chilly night in October. The families chatting on the sidelines. The starlight glow of downtown Chicago rising up from the north.

Malia Obama at mid field shouts "Mom!" And the smile, grace, and presence of the woman whose eyes never once leave her daughter---no matter who else she speaks to, waves back and sends a radiant smile.

In that one wave and smile, you see hope come alive before your very eyes.

Then just a few minutes after eight; something like a shift in earth´s gravity occurs. To the casual observer, nothing in this scene has changed. That pull of the earth´s power must have been imagined.

The true city dweller will feel it first, before they even see it. Blink your eyes and they appear.

Ringing the shadows of this soccer field are people with guns. Serious people with guns. Like oak trees that move. The phrase, "Not on my watch" flashes through your head.

You have to look hard to make sure they are even there. You never really see a gun. You´re not even sure they are moving. But when you blink your eyes, somehow their positions have changed. Something about the way they just appear calms your breathing. Instinctively you know.

These are the good guys.

With that feeling of true safety pressed firmly in your very soul; you can remember the real secret at the heart of the city: we of the city are just a million small town kid's soccer game scenes all strung together.

So the kids laugh and kick the soccer ball.

Then some guy in a blue cap walks out of the gym next door. Hands in his pocket, face down, by himself. He walks over to Malia´s Mom, who has 3 conversations going on simultaneously with folks on the sidelines.

The quiet guy in the blue cap puts his arm around Malia´s Mom. Shakes hands with a couple of the people. Talks with Malia´s Mom for a minute or two.

Just then a small miracle occurs. The quiet guy in the blue cap who nobody in the crowd of really paid all that much attention to; scrunches down so he is face to face with Malia´s little sister Sasha. He lifts up the brim on the cap.

And then, standing 15 feet behind Sasha you see what she´s seeing up close. You see that smile. That smile that resounds with the very power and the glory of the city lights behind it.

That smile now almost ready to take it's place in American history.

You can´t hear, and are happy not to hear, what he´s saying to his youngest daughter. But you do hear her giggle.

Then the father takes the daughter´s hand. The younger daughter. The one who is not in the game. The one who by all rights and purposes and measures any of us know at this time in our history---was destined not to get a lot of attention tonight.

They move back in the shadows, behind the sideline crowd. Seen only by that quiet show of force here to keep them absolutely safe.

Then the miracle: they have a foot race.

While the soccer game is still going on. Just the two of them. Sasha and her Dad take off together, both running at full speed, as fast and then faster than either of them could ever imagine. Sasha laughing, and laughing at the finish line. Her Dad swoops down and picks her up.

Then that smile. This time only for his daughter.

No one else was looking. It was just for her.

His youngest daughter´s giggle. It´s the music of his promise to make sure that everyone´s included.

And this past Friday night in Chicago: Malia Obama´s team won the game.

October 15, 2008 - 9

Copyright © 2008 Earth Policy Institute

New Energy Economy Emerging in the United States

Lester R. Brown

As fossil fuel prices rise, as oil insecurity deepens, and as concerns about climate change cast a shadow over the future of coal, a new energy economy is emerging in the United States. The old energy economy, fueled by oil, coal, and natural gas, is being replaced by one powered by wind, solar, and geothermal energy. The transition is moving at a pace and on a scale that we could not have imagined even a year ago.

Consider Texas. Long the leading oil-producing state, it is now also the leading generator of electricity from wind, having overtaken California two years ago. Texas now has nearly 6,000 megawatts of wind-generating capacity online and a staggering 39,000 megawatts in the construction and planning stages. When all this is completed, Texas will have 45,000 megawatts of wind-generating capacity (think 45 coal-fired power plants). This will more than satisfy the residential needs of the state´s 24 million people, enabling Texas to feed electricity to nearby states such as Louisiana and Mississippi.

After Texas and California, the other leaders among the 30 states with commercial-scale wind farms are Iowa, Minnesota, Washington, and Colorado. And other states are emerging as wind superpowers. Clipper Windpower and BP are teaming up to build the 5,050-megawatt Titan wind farm, the world´s largest, in eastern South Dakota. Already under development, Titan will generate five times as much electricity as the state´s 780,000 residents currently use. This project includes building a transmission line along an abandoned rail line across Iowa, feeding electricity into Illinois and the country´s industrial heartland.

Colorado billionaire Philip Anschutz is developing a 2,000-megawatt wind farm in south central Wyoming. He already has secured the rights to build a 900-mile high-voltage transmission line to California. With this investment, the door will be opened to developing scores of huge wind farms in Wyoming, a wind-rich state with few people. Another transmission line under development will run north-south, linking eastern Wyoming´s wind resources with the fast-growing Colorado cities of Fort Collins, Denver, and Colorado Springs. Wind-rich Kansas and Oklahoma are looking to build a transmission line to the U.S. Southeast to export their wealth of cheap wind energy.

California is developing a 4,500-megawatt wind farm complex in the Tehachapi Mountains northwest of Los Angeles. In the east, Maine—a wind energy newcomer—is planning to develop 3,000 megawatts of wind-generating capacity, far more than the state´s 1.3 million residents need. Further south, Delaware is planning an offshore wind farm of up to 600 megawatts, which could satisfy half of the state´s residential electricity needs. New York State, which has 700 megawatts of wind-generating capacity, plans to add another 8,000 megawatts, with most of the power being generated by winds coming off Lake Erie and Lake Ontario. And soon Oregon will nearly double its wind generating capacity with a 900-megawatt wind farm in the wind-rich Columbia River Gorge.

Wind appears destined to become the centerpiece of the new U.S. energy economy, eventually supplying several hundred thousand megawatts of electricity.

Solar power is also expanding at a breakneck pace. The nation´s wealth of solar energy is being harnessed by using both photovoltaic cells and solar thermal power plants to convert sunlight into electricity. For solar cell installations, California, with its Million Solar Roofs plan, is far and away the leader. New Jersey is also moving fast, followed by Nevada.

The largest U.S. solar cell installation today is a 14-megawatt array at Nellis Air Force Base in Nevada, but photovoltaic electricity at the commercial level is about to go big time. PG&E has entered into two solar cell power contracts with a combined capacity of 800 megawatts. Together, these plants will cover 12 square miles of desert with solar cells and will have a peak output comparable to that of a large coal-fired power plant. Solar power plants are appealing in hot climates because their highest output coincides with the peak demand for air conditioning.

Solar thermal plants that use mirrors to concentrate sunlight on a vessel containing a fluid—heating it to 750 degrees Fahrenheit to generate steam and produce power—have suddenly become an enormously attractive technology. The United States has the world´s only large solar thermal complex, a 350-megawatt project completed in 1991. But as of September 2008 there are 10 large solar thermal power plants under construction or in development in the United States, ranging in size from 180 megawatts to 550 megawatts. Eight of the plants will be built in California, one in Arizona, and one in Florida. Within the next three years, the United States will likely go from 420 megawatts of solar thermal generating capacity to close to 3,500 megawatts—an eightfold jump.

Along with wind and solar, geothermal energy is also developing at an explosive rate. As of 2008 the United States has nearly 3,000 megawatts of geothermal generating capacity, 2,500 of which are in California. Suddenly this too is changing. Some 96 geothermal power plants now under development in twelve western states are expected to double U.S. geothermal generating capacity. With California, Nevada, Oregon, Idaho, and Utah leading the way, the stage is set for the massive future development of geothermal energy. (See data).

The new energy economy will be powered largely by electricity from renewable sources. Electricity will light, heat, and cool buildings. As we shift to plug-in hybrid cars, light rail transit systems in cities, and high-speed electric intercity rail systems like those in Japan and Europe, our transport system will also be powered largely by electricity.

It is historically rare for so many interests to converge at one time and in one place as those now supporting the development of renewable energy resources in the United States. To begin with, shifting to renewables increases energy security simply because no one can cut off the supply of wind, solar, or geothermal energy. It also avoids the price volatility that has plagued oil and natural gas in recent decades. Once a wind farm or a solar thermal power plant is built, the price is stable since there is no fuel cost. Turning to renewables will also dramatically cut carbon emissions, moving us toward climate stability and thus avoiding the most dangerous effects of climate change.

The shift also will staunch the outflow of dollars for oil, keeping that capital at home to invest in the new energy economy, developing national renewable energy resources and creating jobs here. At a time of economic turmoil and rising joblessness, these new industries can generate thousands of new jobs each week. Not only are the wind, solar, and geothermal industries hiring new workers, they are also generating jobs in construction and in basic supply industries such as steel, aluminum, and silicon manufacturing. To build and operate the new energy economy will require huge numbers of electricians, plumbers, and roofers. It will also employ countless numbers of high-tech professionals such as wind meteorologists, geothermal geologists, and solar engineers.

To ensure that this shift to renewables continues at a rapid rate, national leadership is needed in one key area—building a strong national grid. Although private investors are investing in long-distance high-voltage transmission lines, these need to be incorporated into a carefully planned national grid, the electrical equivalent of President Eisenhower´s interstate highway system, in order to unleash the full potential of renewable energy wealth.

And, finally, this energy transition is being driven by an intense excitement from the realization that people are now tapping energy sources that can last as long as the earth itself. Oil wells go dry and coal seams run out, but for the first time since the industrial revolution we are investing in energy sources that can last forever. This new energy economy can be our legacy to the next generation.


Copyright © 2008 Earth Policy Institute

For more information on Earth Policy Institute´s plan to cut carbon emissions 80 percent by 2020, see Chapters 11-13 in Plan B 3.0: Mobilizing to Save Civilization, available at www.earthpolicy.org for free downloading.

Also see "Time for Plan B: Cutting Carbon Emissions 80 Percent by 2020," available in pdf at www.earthpolicy.org/Books/PB3/80by2020.htm.

Emmanuel Roman, the co-chief executive of Europe´s biggest hedge fund GLG, has warned that thousands of hedge funds are on the brink of failure as the global economy contracts with unexpected severity.


By Rowena Mason
Last Updated: 5:50PM BST 24 Oct 2008

Emmanuel Roman, of GLG Partners, said 25pc-30pc of the world´s 8,000 hedge funds would disappear "in a Darwinian process", either going bust or deciding meagre profits are not worth their efforts.

"This will go down in the history books as one of the greatest fiascos of banking in 100 years," said Mr Roman, who with Noam Gottesman, co-runs GLG, a former division of Lehman Brothers Holdings with assets of $24bn (£14.8bn). "There need to be some scapegoats, and the regulators are going to go hunt people. That will be good in the long run."

His views were echoed by Professor Nouriel Roubini, a former US Treasury and presidential adviser known for his accurate prediction of financial crises, who estimated that up to 500 hedge funds would fail within months.

Both men were speaking at the same hedge fund conference in London yesterday, and Prof Roubini said he would not be surprised if the US and other countries soon had to close their stock markets for more than a week to halt descent into "sheer panic".

The economist warned that the world is heading for a protracted recession that will end the US´s financial dominance.

"It´s the beginning of the decline of the US financial empire. The Great Depression ended in a massive war. I hope that´s not going to happen

but it´s pretty ugly now," Prof Roubini said.

He added that turmoil over world trade, currency markets and debt is likely to cause geopolitical tensions between the Western world and emerging superpowers such as Russia, China and "a bunch of unstable oil states".

The conference saw analysts, economists and hedge fund managers discussing the possibility that global recession could now last two years on fears that government bail-outs and nationalisations have failed to stop the markets slumping.

"We´re now paying the price for the biggest asset and credit bubble in history," Prof Roubini said, advising investors to stay clear of risky assets and keep money in cash. "The bail-outs have not worked because the markets are no longer rallying, and the policy-makers have run out of options."

The global financial meltdown accelerated this month, with the UK and US governments being forced to take stakes in some of the world´s biggest banks. Stock markets around the world have fallen sharply this month as investors´ concern switches to the impact on the wider economy.

"It´s like we´re walking blind in a minefield," said Prof Roubini. "Every situation has become risky and no one can trust each other. The banks are too big to be allowed to fail, but they´re also too big to save."

Research from Hedge Fund Intelligence (HFI) shows that despite one of the worst months on record for credit funds, US hedge funds alone still have $1.7trillion (£1trillion) in assets.

USDollar Death Dance



By: Jim Willie CB, GoldenJackass.com


-- Posted Thursday, 23 October 2008 | Digg This ArticleDigg It! | Source: GoldSeek.com

The USDollar rally in the last several weeks has been remarkable. At closer examination, it highly resembles a spurt prior to death. Imagine an old man who just had a heart attack, lost feeling in certain body parts, his mind not working right, plenty of nonsense gibberish coming from his mouth, and now he is dancing hard on some last gasps. The vast liquidation movement is akin to the old man going through an embalming process while dancing atop the tables at the funeral parlor, as bidding proceeds for his cadaver. Are Americans last to realize the financial structure destruction means the USEconomy does not enter a recession, but rather a bizarre unprecedented disintegration? It seems so. The liquidation of speculative positions, the massive de-leveraging, the payouts of defaulted bonds, these events are the opposite of developments toward revival or resuscitation, like business investment!! Liquidation is the exact opposite of investment, and precedes job cuts, not job creation.



The following survey of important issues is covered in depth in the October Hat Trick Letter. This month, an additional Crisis Coverage report was included, since too much has been happening, most of it confusing. Plenty of stories are occurring behind the stories, many covered. Here is a quick survey touching the surface on issues discussed and analyzed more in depth for subscribers.


FACTORS BEHIND USDOLLAR RALLY

What is pushing the USDollar up cannot be construed as anything remotely resembling healthy factors. In no way whatsoever does it resemble investment. It is more like paid off death contracts, paid off death investments, paid off transfers from toxic US bonds into what are falsely regarded as safer US bonds with a guarantee from a crippled USGovt. Foreign financial entities are liquidating on massive scale. They need a tremendous amount of USDollars in order to complete transactions. Also, a tremendous amount of USDollars are needed for CDSwap payouts as defaulted bonds are resolved. Almost all CDSwap and other credit derivatives are paid out in USDollars. The Lehman Brothers payout was full of lies, again. The Lehman Brothers total volume of corporate bonds was $160 billion, but $400 billion existed in total CDS volume tied to them! It is no surprise that the Dow and S&P500 stock indexes fell hard (by almost 400 points on Dow) and on the Lehman resolution day. And market mavens boasted of no impact on the Lehman funeral date!



The DTCC (Depository Trust & Clearing Corp) reported only a net $5.2 billion payout on the Lehman Brothers failure CDSwap resolution. The ´Dis-Trust Clearing Corp´ might want to check credit derivative experts who claim between $220 billion and $270 billion in that total after netting. By the way, the DTCC is the official banking entity that oversees all stock clearing overnight, including all the naked shorting. The de-leveraging process has left the central bankers empty handed, exposed as having empty financial cupboards. Thus the need for massive central bank swaps from the USFed, which has perversely farmed out its function to foreigners. In fact, the foreign central banks might be in possession of more US$ inventory items than the USFed. So the US central bank has asked foreign central banks to do its job, and to manage the world reserve currency? This amidst a US$ rally!?!



The Credit Default Swaps are capable of burning Hiroshima holes all over the US financial system, resulting in USEconomic implosion from eliminated bank and financial system structures almost entirely. The process has only begun, but in darkness. The other purpose for big bailouts was to prevent CDSwap explosions, risking a string of bombs to go off. The key aspect of CDSwap contracts is their hidden nature, with fuses intersecting in the dark.



When the market mavens talk about the de-leverage process, they refer to speculative investments being liquidated. Oftentimes, they do not include in the story how Wall Street firms, desperate to stave off bankruptcy, are targeting viciously their own clients. The big accounts lie in hedge funds, where the private wealthy are being decimated. Credit is being pulled. Margin calls are being delivered. Margin ratios are being raised. Those funds whose positions are aligned with the predators on Wall Street continue in their investment portfolios. Those funds in opposition are attacked with artillery, carpet bombs, and early morning raids. The USDollar is rallying amidst this type of sinister liquidation. The result has been numerous spread trades anchored by the USTreasury Bond are forced into sale. That means a USTBond buyback occurs from the short cover on the trade. Whether a spread on mortgage bonds, corporate bonds, emerging market bonds, or crude oil, or gold, the trade is liquidated, and a USTBond is bought back. NO TANGIBLE END DEMAND, ONLY USTREASRY BOND SHORT COVERS. This is the basis for a US$ rally?


WORSENING US$ FUNDAMENTALS

How many times have we seen the US stock market go down, non-government bond yields rise, the USDollar rise, and the USTBond yields fall? That has been the norm in the last few weeks. These are death signals, not investment signals. The USEconomy cannot afford liquidation and constricted credit, a well-known fact, seemingly forgotten today. These signals come amidst falling confidence, more bank distress measures, more job loss, more home foreclosures, and lately, trouble with letters of credit at port facilities.



Financial markets, including the USDollar, have yet to factor in the deep USEconomic recession. The USDollar rally flies in the face of deteriorating fundamentals. See job cut announcements at Caterpillar, Merrill Lynch, General Motors, Chrysler, several Wall Street firms including Goldman Sachs today. Weekly jobless claims at close to half a million per week, equal to peak during the unrecognized 2001 recession. See the UMichigan consumer sentiment, Philly Fed index, Empire Fed index, leading economic indicators, durable goods orders, on and on. Retail sales, the backbone of the backwards USEconomy, are plummeting. That is, the plummet is before inflation price adjustments. Car sales are plummeting also.



Exports are to be worse from the higher US$ exchange rate on the table, combined with slower foreign economies. The improved export trade has been a big boast from the lunatics running the asylum. The USEconomy is accelerating in its decline, certain to produce a recession and huge USGovt deficits. That deficit is likely to at least double and possible quadruple next year. USTreasury Bond issuance cannot conceivably finance all, or at least half, of the commitments. The printing press will do the rest, which will cut down the US$ valuation. The USDollar decline lies ahead, when the distortions slow or come to an end. Gold will soar on the other side of this liquidation.



An extreme backlash attack is coming against the USDollar. Rising import prices in foreign economies have already caused alarm. Foreigners will soon attack the US$ in a matter of time, using heavy US$-based reserves. Their banking sectors are in disarray, primarily because they are intimately tied to the US$ and USTBonds. The process has begun with Brazil and Mexico in Latin America, to use their strong reserves and sell into this queer US$ strength. That is what reserves are for. The process will spread to other nations.


GOLD MARKET CLOSE TO BREAKING

The gap between the physical gold market and paper gold market is widening. An example bears this out. In Toronto this week, a major off-market gold transaction took place. The price paid was $1075 per ounce on the physical transaction. Its volume was in the multi-million$. There was no US involvement in the transaction, and the settlement was in euros. Enormous repositioning is ongoing by the groups that will participate in the new, partially gold-backed currency. My take is this movement is from a large financial entity with global activity, and ties to central banks. It might be tied to the upcoming split in the euro, into a Nordic Euro and trashed Latin Euro. The Nordic version might contain a gold component. This and other transactions are taking place with European settlement. They are being satisfied in the alternative market, far from the distortions of COMEX. This was a physical transaction with the real metal being moved. Big shifts occur behind the scenes. A couple of months ago, 400 metric tonnes were moved into storage with the Royal Canadian Mint by a sovereign entity.



The more massive the paper manipulation, the more violent the coming correction. The asylum managers are losing control of their paper-physical arbitrage. Watch the gold lease rates, and silver lease rates, which have each more than tripled in the last two months. Lease rates precede price movement. Bullion bankers, including central banks, are reluctant to lease their physical supply. This time is no different, an event to come after the COMEX criminality is swept aside, or simply overwhelmed in return. One well-informed source, with over two decades of gold market experience, actually expects arrests to take place among COMEX officials before long.





John Embry of Sprott Asset Mgmt has raised the possibility of a December gold futures contract default. He is not predicting it, or claiming it as certain, but rather mentions how talk centers on the December gold contract as having extreme stress for actual delivery. Pressure is building. The December contract not only is end of quarter, but end of year. He suggests a possible default. He said, "there is probably going to be such an event to change perceptions." He cited a possible force majeure that could act as a "seminal event that defines the whole situation." He explained that the physical gold price would then dictate the paper gold price, a return to normalcy, and with a gigantic move up in the gold price. Right now the paper gold market is overwhelming the physical side, but the physical side is constricted on supply. He explained that hedge funds are being unwound on a massive scale, slaughtered by margin calls. The long side must call for delivery on many contracts. He also expects there will be many questions on the Exchange Traded Funds soon as well, although those are surely not as important as the COMEX contract defaults. Watch and listen to his interview on the Canadian Business News Network (CLICK HERE), and be sure to move to the 10 to 11 minute mark.


NEW BRETTON WOODS II FARCE

Last weekend in Brussels, G8 Finance Ministers met. Among other things, they discussed a reform to the global banking structures. For the many challenged on geography, that city is in Belgium, headquarters for many European Union functions, in Western Europe. Creditors were not present, which means the finance ministers were talking to themselves. Credit masters were not invited. The nations whose banking systems are in the process of implosion are essentially attempting to revise the global currency system. Those in attendance constitute the losers! However, the Arabs and Chinese were not present. This seems entirely backwards. The bankrupt nations do not dictate to the creditors terms of a revised agreement.



Imagine a large business saying the following. "We are bankrupt. We want a meeting. We are going to dictate to you bankers anyway. We are broke. Our economies are shattered. Our banking systems are in ruins. But we going to tell you how we are to restructure our debt and rework a new system. We realize our debts to you are bigger than we can ever repay. We realize we cannot continue in commerce without your continued extended credit. But we will force upon you a new system. It does not matter what your opinion is. You do not have a seat on this elite committee, sorry!" THIS FLOW IS NOT FROM THE WORLD OF REALITY!



No! Bankruptcy receivership is next, where creditors will be left with few options. They will be compelled to run management committees, and dissolve many functions of government. Creditors will probably await the G8 initiative, then summarily reject it. They will next propose their own new global financial structure. The teenager´s credit card is about to be taken away, when the irresponsible kid proposes a new repayment system, new promises, new chores done even. The kid has burned down half the neighborhood, yet thinks he can call the shots! Sadly, the parents will probably ground him and force a tutor to direct his studies, and force a strict drill sergeant to direct his work activities. His friends will not be permitted to form new teams that include him. A ´Post-US World´ is being planned, and Americans are the last to know. Entire new barter systems between a key pair of nations is about to be launched. Regional bond and commodity organizations are being formed, with exclusion of the US. The US press reports nothing on these important developments.



Foreign creditors will form new committees, which will be recognized in time as the Receivership Committee. Foreigners are watching in horror. Decisions have already been made, with Americans the last to know. In order to arrest the cancer they so clearly see, they are ready to force a complete upheaval. The USDollar will lose its global currency status, a thoroughly abused privilege. The above lack of disclosure only reinforces their motive to take action. They will move when they must, upon a system failure, or when they are challenged, or when flimsy attempts by debtors are made to dictate reform.



Without any changes forthcoming soon, the foreign banking systems and economies face huge threats to failure. To friends, family, and contacts, my approach has been to attempt to explain the underlying forces behind revolutionary financial change. Foreigners must cut off a cancerous body part, the one attached to the United States. Foreigners must cut off flow from a toxic systemic organ, the one attached to the United States. CUT IT OFF OR RISK DEATH. They must disconnect of USDollar from the global currency system attached intimately to their own financial and economic systems. They must to survive.


ARAB GOALS & MOTIVES

Arabs clearly lust to control and manage a global gold trading center. It will be in Dubai in the United Arab Emirates. The new Gulf dinar currency will pave the road to that center. The Gulf Coop Council is biding time, cutting time delay deals, warding off pressure by the USGovt, appeasing with weapons contracts from the USMilitary, and is working behind the scenes to create a new dinar currency. The new Gulf dinar is likely to be primarily gold in its backing. So, foreign nations will soon be forced to purchase the dinar for all or most of crude oil payments. This forces the purchase of gold in order to purchase crude oil. The demand for gold will thus fortify the global banking system, by means of commodity settlements. Many details are unknown, but the basic structure has been slowly come to light. A new motive flashes red in front of Arabs to institute some changes FAST. The crude oil price is down, cut in half from July. Their revenues are sharply reduced. Russia figures into the complex deal to launch the dinar. The Saudis and small sheikdoms need security protection. The next chapter will involve protection amidst a gold-backed currency, not a military-backed currency, in Saudi eyes.


ISOLATED USTREASURYS

The other side to the Arab dilemma is that the USTreasury Bond demand is quickly eroding from Petro-dollar recycle on trade surplus. The USGovt finds itself as relying far too much on foreign central banks for demand of USTBonds, relying far too much soon on the printing press. The USTBond demand is missing the oil surplus in recycle. Their reduced and unstable oil revenue motivates the Arabs to install a new payment system, based upon an end to the ugly defacto Petro-dollar standard. It shamefully is the basis of what my analysis has called a Protection Racket.



The incredible fact evident in the data is that until mid-September, the US Federal Reserve has drained liquidity from the US private banking system in order to offset its colossal bond swap bailouts for major Wall Street and New York money center banks. Their objective was to avoid undue US$ money supply growth. THEY WERE TARGETING GOLD. They essentially drained the lifeblood from the USEconomy on Main Street in order to subsidize fraud sanctioned and approved on Wall Street. Only since mid-September has the USFed been monetizing USTBond debt issuance. They are running scared, printing with abandon. The gold price is falling as the USDollar printing press is rapidly heating up, no longer offset by bank system drains. Details are in the Hat Trick Letter report.


DESERVED DISRESPECT TO GREENSPAN

Can you believe what is happening before a Congressional banking committee? Greenspan is being grilled, as his past errors are vividly pointed out. His past memos are being read back to him. His wrong premises are being questioned as having being totally discredited. His opposition to credit derivative disclosure is being challenged. His opposition to Fannie Mae reform is being challenged. He has been brought to task for his steadfast opposition for reform in the past during his tenure as USFed Chairman. He is being interrupted by lowly Congressional reps. His time to speak is being cut, in defense of others to be grilled. HE IS BEING SHOWN THE DISRESPECT DESERVED OF ANY FAILED PUBLIC OFFICIAL. Maybe they will demand to know who paid his second paycheck from Switzerland, and what his agenda was! Not likely! My view is that Greenspan was a primary key person used to take down the US banking system, to pave the way for a bigger agenda. These are intelligent people who knew what they were doing, who were the cheerleaders, even the Mythology High Priest.



Greenspan admitted a grand flaw in his free market ideology. He admitted being shocked that financial markets did not self-regulate. Hey Alan! They never self-regulate amidst a Fascist Business Model, since regulators and law enforcement is compromised as much as humanly or institutionally possible! He admitted a failure in the global financial market structure as he perceived it, a stunning admission. He acknowledged the USEconomy is faltering badly. He sees the rise in job layoffs and unemployment. He sees the retrenchment in consumer spending. He sees the price declines in housing without abatement. He forecasted a worsening recession.



His biggest admission is this. He admits to a flaw in the structural model perceived in the critically function for global banking. Wow! THAT IS A BIG ADMISSION, NOT PROPERLY PERCEIVING THE GLOBAL BANK STRUCTURE. He admits to how his risk pricing model did not take into account periods of financial stress. Hey Alan! Is that not what they are designed for? He used to boast for a full decade how offloaded risk via credit derivatives was a sign of sophistication, which enabled economic expansion. Instead, my view is that risk offload devices contributed toward an expansion atop a bubble, which when burst, killed the entire US banking system and then the USEconomy. He used to boast that credit derivatives shared the risk, but in fact it resulted in destruction on a widespread systemic basis. Recall the many claims made by Bernanke, that the subprime mortgage bond bust would be contained. The former Princeton Professor is not a good student of banking and economics! Unlike me, he is greatly encumbered by the limitations of economics credentials! Mathematics and statistics are pure science and its application as artistry.


NO SOLUTIONS FOR ECONOMY FROM BAILOUTS

Almost all US-based bailouts to date are to pay for dead financial firms. Their shareholders and bond holders and asset base have been repaired but not restored. To think this benefits the loan process is folly. It facilitates retirement to the Caribbean for corrupt bank executives. The flow of federal funds will not find its way to the people, or at least only pennies per dollar will. The ´Top-down Approach´ is destined to fail because the corruption, bond fraud, accounting fraud, financial instrument shell game, and other assorted illicit procedures are the cause of the problem, and all lie at the top of the structure intended to trickle down! To expect benefits downstream is lunacy. In fact, the devices to assist and subsidize the criminal behavior at the top are vastly expanding with multiple branches. No less than five special purpose vehicles created by JPMorgan Chase were announced on Wednesday. The number of USFed lending facilities, all to big banks, none to people on Main Street, has exploded to such an extent that one needs a sportsbook guide to comprehend all the acronyms. David Rosenberg of Merrill Lynch even coined the YAP, yet another program. Proliferation might be what the architects of the Financial Coup d´Etat intended. Confusion is the best friend of coup architects, just like truth is the first victim of war.



The people receive $1 for every $500 given to Wall Street elite in fraud redemption. The rank & file population entered a ´Revolving Door´ of loan repayments that often do not reduce the loan balance, assured to end in foreclosure within a year or so. The same nonsense of ´Trickle Down´ was prevailed when it has no past precedent of succeeding.



The lack of disclosure is a tragedy. Congress demands no better disclosure, and receives none. The Lehman Brothers resolution has been conducted in total darkness. Evidence coming my way indicates that JPMorgan is using the dead Lehman carcass as a vast private arsenal to attack hedge funds. Some such funds have most of their assets frozen, while their positions are attacked. What is happening is criminal, a climax of this administration, which has been taken over by Wall Street. A complaint has been made that Treasury Dept documents look like redacted CIA documents, hardly what is needed to instill confidence. One official decree after another undermines investor confidence, the last being short rule restrictions on financial stocks, with an exemption given to Goldman Sachs. This is a selective bailout of Wall Street, a process run by Wall Street, permitting financial crimes worthy of 1000-page indictments.


DISTRIBUTION CHANNELS INTERUPTED

Big disruptive events are occurring in the distribution system. Letters of credit are routinely being refused by export nations who distrust US sources. A fall of 10% to 20% in shipping traffic to western US ports has been reported. Ships are empty at Asian ports, some even loaded but interrupted on their voyage to US ports and European ports. Many details are given in the October Hat Trick Letter reports. Even manufacturers of shipping vessels are being severely affected, as credit has interrupted construction projects. Indian suppliers are often demanding 100% upfront on costs to east coast retailers, again showing the distrust. Almost total attention has been given to banks and credit markets and stock markets. The USEconomy is moving from recession toward something different from depression. The current interruption could actually be more like disintegration. Short-term credit is soon to interfere greatly with truckers and railways in distribution channels on the domestic side, much like letters of credit are wrecking havoc on the overseas shipper side.



The next big shoe to drop is credit cards. Bank of America has announced plans, not yet fully implemented, to cut back on credit cards to lower FICO scorers. The lower 60%-ile of credit score recipients will find themselves without credit cards at all. One friend told me that he used to own 10 credit cards. Recently, all but four were simply discontinued, but a few were not used. Other friends said most of their credit limits were slashed. Changes are coming. Then the next big shoe to drop will be commercial mortgage default. No reprieve, rest, or respite for US bankers. Changes are coming. It will force defaults in most every conceivable financial corner.


DISHONOR AMONG BANKERS

The system is breaking down. Just when the heart attack signals are actually improving, although only slightly, the USEconomy is falling off a cliff, as unprecedented decay is occurring. Some improvement has been seen with the short-term LIBOR rate, the money market funding, TED spreads, and mortgage bond spreads. But bankers and financial subsidiaries are in focus for dishonor.



The following message came yesterday to my desk. It pertains to General Electric. It involved dishonored Letters of Credit (L/C). The US banks not only distrust each other, they are engaging in criminal activity, like contract fraud. If big enough, or connected well enough to the power center, it is permitted. Again, no solutions, only proliferation of chaos.



"Try this one on. One of our clients did a bond early last year (underwritten by RBC/Dain Rauscher) backed up by a General Electric Letter of Credit. There is a tag end of $1 million. The deal was the sale and lease back of 13 bank branches. One remains. The tenant is a regional bank. RBC cannot remarket the bond now because the market is still frozen. So the client, per the documents, called on the L/C for performance (as allowed in the L/C, which extends to 2021). GE has reneged on the L/C and will not pay unless the two principals come up with $1M in cash. The client has said no way, the L/C has no such provision. GE has said, too bad, if you don´t like it, talk to our attorney. We´re not paying." Stories like this are probably surfacing all over the North American landscape. US banks are defending themselves by dishonoring contracts.


COSTA RICA PREVIEW

If people inside the United States and Canada need to try an alternative location, options abound, but time is not plentiful. One can get out of Dodge! Try Costa Rica, where the operating attitude is PURA VIDA! (pure life!) See the ´Living Costa Rica´ magazine website (CLICK HERE), whose manager VictorF joined me recently for a nice dinner in San José. I am a cheap date, no alcohol, no coffee, no supersized body.



http://www.livingcr.com



Living Costa Rica is the number one magazine about Relocation, Real Estate, and Lifestyle in Costa Rica. Its quarterly 5000 printed issues and online versions cover the entire country, in both coastal areas as well as the central valley where the capital San José is located. The magazine can be found in five star hotels, business centers, realtor offices, even gourmet restaurants. Consider a trip to the greenest country ever my laid eyes have seen, whose land has the highest proportion of national reserves on the planet. Gorgeous beaches, rich flowers and orchids, stunning trees, and more abound. The central valley has no humidity, few if any flies or mosquitoes (honestly!), and cool breezes, not without a rainy season though. My favorite trees are the emerald eucalyptus (light green smooth bark easily shed) and the fuego de montaña (fire of mountain, with fiery red blossoms at top of huge tree structures). The national economy is almost self-sufficient in agriculture and electricity production. Restaurants, clothes, and dental care come at 60% to 70% discounts. Rents come at 30% to 50% discounts. The nation contains the greatest diversity of ants, birds, and other creatures, like red frogs. Eco-tours are common to visit tropical forests with their ziplines (aerial clothes lines for movement), white water rapids (like the famous Pacuare River enjoyed last November), volcanoes (active and dormant), even butterfly sanctuaries. Check it out. The nation has no standing army, prefers love to war, and the police are friendly. The national real estate market has little leverage with bonds and mortgages, which would put it at greater risk. My apartment balcony includes a westward view, with rooftops, beautiful cloud structures, the northern foothills to the city, all lush and green. The dawn is absolutely stunning here. The air is fresh outside the main city. Ten thousands of ex-pats in the greater metropolitan area and 30 thousand in the entire country cannot be wrong.



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Jim Willie CB, editor of the "HAT TRICK LETTER"



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"Your unmatched ability to find and unmask a string of significant nuggets, and to wrap them into a meaningful mosaic of the treachery-cum-stupidity which comprise our current financial system, make yours the most informative and valuable of investment letters. You have refined the ´bits-and-pieces´ approach into an awesome intellectual tool."

(RobertN in Texas)

"Your reports scare the hell out of me every month, probably more so over time, since so many of your predictions have turned out to be very accurate. I am afraid you might be right that by the end of 2008, we are in a pretty severe situation, with civil unrest and severe financial stress on Main Street."

(GeorgeC in Minnesota)



Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com . For personal questions about subscriptions, contact him at JimWillieCB@aol.com

VOTE OBAMA !!!!!!!

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Walden Institute of Training

The Walden Institute of Training (WIT) develops and delivers quality behavioral health and professional development training to Walden House agency staff and community-based providers throughout the state of California. An integral part of Walden House, the WIT keeps staff and community participants informed and continuously trained in a rich variety of evidence-based best practices and other behavioral health, mental health and substance abuse treatment interventions.

WIT program offerings include: basic and advanced courses in Motivational Interviewing (MI); Dialectical Behavior Therapy (DBT); Seeking Safety; cognitive behavioral therapy (CBT); co-occurring disorders; tobacco cessation education; harm reduction; stages of change; recovery education; alcohol and other drug (AOD) education; HIV, hepatitis and STD education and prevention; health and safety; case management; quality management; treatment planning; individual and group interventions; cultural competence; specific populations education; train-the-trainer topics; and gender-responsive treatment interventions. The WIT also teaches and develops manualized client curriculum in areas such as relapse prevention, anger management, treatment readiness, parenting, grief and loss, and post-prison shock syndrome for use in correctional/in-custody, post-release/after-care, adolescent and community-based settings. WIT faculty is comprised of both in-house experts and community-based leaders in behavioral health education.

The WIT is approved by the American Psychological Association to sponsor continuing education for psychologists. The WIT maintains responsibility for this program and its content. Continuing education is also offered for substance abuse counselors through CAADE and CAADAC, as well as for LCSWs, MFTs, and counselors through the Board of Behavioral Sciences, and for nurses through the Board of Registered Nursing. If you are interested in participating in WIT training, becoming a WIT trainer, inviting a WIT faculty member to develop and/or deliver training, or if you want more information, please contact Melba Smith, WIT Coordinator, at 415.355.2535 or e-mail at msmith@waldenhouse.org.



UPCOMING TRAINING

As part of a city- and county-wide effort to enhance current recidivism reduction strategies, Walden House offers a comprehensive one-day workforce development training event. The event will provide training to assist local stakeholders, community based providers, and criminal justice professionals who work with offenders during their community re-integration efforts.

The Walden Institute of Training will provide the training event at no cost (FREE) to participants. However for those who wish to obtain six (6) CEUs, there will be a $15 charge that will be collected at the event (payable to Walden House), all participants must register by October 27, 2008 at http://www.whregister.org

Tuesday Nov. 4, 2008
9am-3pm
St. Mary´s Cathedral
1111 Gough St
San Francisco, CA 94102

A light lunch will be provided.

The Walden House Re-Entry Workforce

Development Training features:

Keynote Speaker Roderick Q. Hickman, former California State Secretary of Corrections

Panel Discussion with ex-offenders from San Francisco area providers

Training Sessions:

Motivational Interviewing-Presented by Lillian M. Macari

The Motivational Interviewing has been shown to increase client retention in treatment when added to an organization´s existing intake assessment procedures. This course will provide participants with an exposure to Motivational Interviewing and create a foundation from which counselors and case manager´s can improve their capacity to engage offenders in treatment and case management programs.

Objectives

In this workshop, participants will:

1. Be introduced to Motivational Interviewing

2. Recognize the importance of and rationale for using Motivational Interviewing with offenders

3. Will have received an introduction to Motivational Interviewing and be prepared to attend advanced training on Motivational Interviewing and Assessment

Developing Gang Interventions and Violence Reduction Plans- Presented by Richard Jimenez, M.A, Tony Zepeda, Los Angeles Mayors Office, Hector Lozano, California Department of Corrections and Rehabilitation, and Representatives from San Francisco´s Street Intervention Coalition.

The training will focus on providing professionals with an overview of the challenges ahead for many large metropolitan cities and Community Based Organizations in California specifically San Francisco and Los Angeles. Also the importance of support and advocacy for the many dedicated individuals currently involved in providing crisis intervention, gang intervention, violence reduction, and outreach and prevention efforts in schools. Additionally the development of programs aimed at providing sufficient resources to those who want a safe exit and transition from gang life and/or aimed at reducing the violence of hard core gang members who are unlikely to leave gang life before age 25.

Objectives

In this workshop, participants will:

1. Be introduced to a Gang Intervention and Violence Reduction Plans

2. Recognize the importance of developing city wide Gang Intervention and Violence Reduction Plan and developing collaborations to implement.

3. Will have received an introduction to a comprehensive Gang Intervention and Violence Reduction Plan

Post-prison Shock: Helping Women and Men Re-enter Communities-Presented by Dr. Vitka Eisen and Wayne Garcia

Over 2 million individuals are incarcerated in the United, the majority of whom will be returning to their community. There has been increased public attention on the needs of re-entering offenders. Typically the focus has been on employment and housing needs however little attention has been paid to the psychosocial needs resulting from the incarceration experience itself. This workshop will focus on the impact of the incarceration experience re-entering individuals. The workshop will also include suggestions for helping formerly incarcerated individuals re-integrate within community-based settings.

Objectives:

1. Explore the incarceration of men and women in the United States
2. Explore the experience of incarceration and its impact on re-entering women and men
3. Discuss treatment implications and interventions

Best Practices and Clinical Strategies for Offenders with Co-Occurring Disorders-Presented by Dr. Mardell Gavriel

This workshop is designed to provide an overview of several evidence-based practices and a discussion of key clinical strategies that can support the dual recovery process for forensic clients with both substance abuse and mental health problems. The presentation will include a framework for understanding how problem behaviors such as self-medicating with drugs and alcohol and criminality become ingrained as survival strategies. Engaging in practices and interventions that encourage clients to "retool" these strategies to support pro-social behavior and more effective living provides a foundation for recovery.

Objectives:

1. Participants will be able to understand how trauma, mental illness and addiction support the development and perpetuation of problem behaviors
2. Participants will gain an understanding of how DBT, Seeking Safety, and other key interventions can reduce recidivism and encourage positive change
3. Participants will learn how to merge validation with "change" interventions in order to build stronger therapeutic alliances, increase client retention in programs, and promote greater treatment success

TO REGISTER FOR THIS TRAINING PLEASE REGISTER AT: www.whregister.org

Vermont Citizens Vote to Indict Bush and Cheney as Criminals
User Rating: / 1

Written by Press Release
Thursday, 23 October 2008

Tuckahoe, NY (PRWEB) October 23, 2008 -- Author Paul J. Landis has completed an enhanced web site and the new "Tribune Gazette" to support updates and an updated title to his book "A Real 9/11 Commission," all of which report the strong evidence that supports the decisions by the Citizens of Vermont to "indict Bush and Cheney as criminals".. There is significant new information and additional content covering a number of critical current issues, Landis told us, thus justifying the new title "A Real 9/11 Commission Will Help Free America, Now" (ISBN 0-9760408-2-4, April 2007; US $14.75, UK, £ 9.85.) The "Tribune Gazette" has been designed to provide an affordable newspaper format and mirrors the topics covered in the updated book and web site , www.wethepeoplewethemedia.com, all available now.

Landis tells us "the book had been updated and the new web site mostly completed when I learned of the actions by the Vermont citizens that inspired the new "Tribune Gazette" headline: "Another shot that will be heard around the world!"

On March 4, 2008, the citizens of Marlboro and Brattleboro, VT voted "to indict Bush and Cheney for crimes against our Constitution."

The article read: "Shall the Select board instruct the Town Attorney to draft indictments against President Bush and Vice President Cheney for crimes against our Constitution, and publish said indictments for consideration by other authorities and shall it be the law of the town of Marlboro that law enforcement agencies hired by the Town of Marlboro, pursuant to the above-mentioned indictments, arrest and detain George Bush and Richard Cheney in Marlboro if they are not duly impeached, and prosecute or extradite them to other authorities that may reasonably contend to prosecute them?" www.wethepeoplewethemedia.com/vermont.htm

Are our courageous citizens in Vermont the first to determine that Bush and Cheney have committed criminal act, crimes against the U.S. Constitution?

"A President, any President, who maintains that he is above the law--and repeatedly violates the law--thereby commits high crimes and misdemeanors, the constitutional standard for impeachment and removal from office." See note 1 below

Impeachment: they have committed criminal acts!

The Impeachment of George W. Bush By Elizabeth Holtzman. See Note 1 below

Articles of Impeachment for President George W Bush

by Rep. Dennis Kucinich Introduced in Congress June 9, 2008.

35 Articles of Impeachment, See note 2 below.

"Vote To Impeach" Over one million signatures to Impeach Bush and Cheney

www.votetoimpeach.org

If you have not signed this petition, please do so.

Veterans for Peace: Case for Impeachment and Prosecution of Bush, Cheney, et al.

See note 3 below.

Our courageous fellow citizens in Vermont, events suggest, were being consistent with the determinations of many other U.S. citizens and patriotic groups.

"We the People - We the Media" invite all interested Americans to a front row seat in the jury box.

You are invited to participate in "A Real Citizens Commission" to consider possible High Crimes and Misdemeanors by the Bush Administration: Bush, Cheney and their Fascist PNAC Supporters

As a participant, you will be able to look at suggested Evidence and when done, as the citizens of Vermont voted in their town halls, so you will be able to vote, to "Render your Decision"

We urge you to make time and consider the evidence - objectively, regardless of your party affiliations - of criminal acts by Bush and Cheney.

**** EVIDENCE ****

Selected articles from Rep. Kucinich's 35 Articles of Impeachment:

Article I - Creating a Secret Propaganda Campaign to Manufacture a False Case for War Against Iraq.

Article II - Falsely, Systematically, and with Criminal Intent Conflating the Attacks of September 11, 2001, With Misrepresentation of Iraq as a Security Threat as Part of Fraudulent Justification for a War of Aggression.

Article XII - Initiating a War Against Iraq for Control of That Nation's Natural Resources

Article XVII - Illegal Detention: Detaining Indefinitely And Without Charge Persons Both U.S. Citizens and Foreign Captives

Article XXVIII - Torture: Secretly Authorizing, and Encouraging the Use of Torture Against Captives in Afghanistan, Iraq, and Other Places, as a Matter of Official Policy

Article XXI - Misleading Congress and the American People About Threats from Iran, and Supporting Terrorist Organizations Within Iran, With the Goal of Overthrowing the Iranian Government

Article XXVI - Announcing the Intent to Violate Laws with Signing Statements

Article XXXI - Katrina: Failure to Plan for the Predicted Disaster of Hurricane Katrina, Failure to Respond to a Civil Emergency

Article XXXIV - Obstruction of the Investigation into the Attacks of September 11, 2001

Article XXXV - Endangering the Health of 911 First Responders

Evidence of their criminal acts: "Free America Now!" on home page of We the People - We the Media": www.wethepeoplewethemedia.com/freeamnow.htm

View Real Citizens' Commission EVIDENCE Outline and "Render your Decision" Form

www.wethepeoplewethemedia.com/citcommdoc.htm

There is substantial Evidence in the new "We the People - We the Media Tribune Gazette"

www.wethepeoplewethemedia.com/tg.htm and in the updated "A Real 9/11 Commission Will Help Free America Now!"

When you have completed your review of this - and other evidence - Please "Render your Decision" www.wethepeoplewethemedia.com/citizens_commission.html

Your participation will empower those determined to see justice served, this illegal war ended, media reform and our negligent Congress exposed!

Is it not an American tragedy that we are in an election cycle and our negligent Congress has refused to dealt with these issues?

Note 1:

The Impeachment of George W. Bush

By Elizabeth Holtzman

http://www.thenation.com/doc/20060130/holtzman

Note 2:

Articles of Impeachment for President George W Bush

by Dennis Kucinich Introduced in Congress June 9, 2008.

www.impeachbush.org/site/News2?page=NewsArticle&id=5283

Note 3:

Case for Impeachment and Prosecution

Laws Violated by President George W. Bush, Vice-President Richard Cheney, public officials under their authority, and members of the U.S. Military under their command, sufficient for impeachment

http://www.veteransforpeace.org/Case_for_impeachment.vp.html

View and Order your copy of "We the People - We the Media Tribune Gazette"

www.wethepeoplewethemedia.com/tg.htm

washingtonpost.com > Politics > In The Loop
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Private Iraq Investigators Out
Agency Cancels Contract After Senator Raises Questions

By Walter Pincus
Washington Post Staff Writer
Wednesday, October 22, 2008; Page A17

The State Department suddenly canceled a contract for eight private investigators to assist U.S. officials in Iraq in "extremely complex and sensitive investigations," after a senator raised questions about whether the department had outsourced oversight of security contractors.

The eight were working at the U.S. Embassy in Baghdad, assigned to the agency's Regional Security Office to examine incidents involving U.S. personnel as part of a new Force Investigation Unit.

The unit was created after an incident last year in which 17 Iraqi civilians were allegedly killed by private security guards from the firm Blackwater, which was hired to protect State Department officials. When the agency announced the Baghdad unit last October, Undersecretary for Management Patrick F. Kennedy told reporters that no contractors would be part of the investigative teams, which would be "composed of State Department employees."

Sen. Russell Feingold (D-Wis.) wrote to Secretary of State Condoleezza Rice on Sept. 19, advising her that he had just learned that the private investigators were working in Iraq. Feingold, a member of the Foreign Relations Committee, wrote, "It is highly troubling that the Department is apparently outsourcing oversight of its security contractors."

ABC News subsequently reported that the department signed a one-year contract, worth $4.4 million, with privately owned U.S. Investigations Service, taking effect March 1. The deal also called for USIS to provide two translators, as well as a senior police adviser to liaison with Iraqi government officials.

In a letter to Feingold dated Friday, a department official wrote that "the use of contract security specialists/investigators in the FIU has been terminated." Matthew A. Reynolds, assistant secretary for legislative affairs, added that the contracted investigators were hired as "a short-term, interim measure" until the department could hire its own special agents.
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Michael John, USIS vice president for communications, said yesterday that he did not know why the contract was canceled last week. But the department said yesterday in a statement that the private investigators were no longer needed "due to the improved security situation [and] the reduction in use-of-force incidents by private security contractors in Iraq."

The agency said the eight investigators were "monitored and directed" by agents from the Bureau of Diplomatic Security, "who are federal law enforcement officials," to ensure that no direct criminal investigations were performed.

John said the adviser and translators, who were Iraqi hires, are still employed by the department.

Yesterday, Feingold said in a statement, "I am pleased the State Department has terminated what appeared to be a illegal contract." He added that he hoped the cancellation indicates "a growing recognition by this administration that there are certain things that must not be outsourced to contractors, especially oversight of other contractors."

Treasury Blacks Out Key Parts of Private Bailout Contracts
Read More: Bailout Money, Government Bailout, Henry Paulson, Wall Street Crisis, Politics News
by:David Sirota


Remember how Treasury Secretary Henry Paulson promised full transparency in spending the $700 billion bailout money? And remember how bailout opponents predicted that the failure to mandate such transparency would allow all sorts of Halliburton-style shenanigans? From the looks of the first private contracts issued by the Treasury Department, it looks like the bailout opponents were correct.

As flagged by BailoutSleuth.com, Paulson is blacking out the sections of government contracts that spell out how much private firms will be paid for their services in administering taxpayer money. Here's a page from the compensation part of a contract with Bank of New York, which has been hired to do some of the bookkeeping (because, of course, the Bush administration is happy to privatize that function):

And here's a page from the compensation part of a Treasury contract with law firm Simpson Thatcher Bartlett - a firm being hired to provide "legal advice" to the government:

Think these are doctored images? Check them out yourself on Treasury's website - the first contract is here (blacked out section on page 25 of the PDF) and the second contract is here (blacked out section on page 5 of the PDF).

So, just to review - within just a few weeks of the bailout passing, our government is blacking out the parts of public contracts that explain how much taxpayer cash private contractors are going to be paid. Perhaps this is what Paulson meant when he promised transparency - by posting these blacked out contracts on the Treasury website, the government is being transparent about exactly where it is being secretive. But I don't think that definition of transparency really flies, do you?

Of course, I wish I was surprised about this - but one of the major reasons I was opposed to this bailout from the beginning was because (as I and others repeatedly wrote) there is no real transparency at all. Now we know what "no transparency at all" really means.

Analysis Last Updated: Oct 20th, 2008 - 00:59:33

Paulson panics as UK, Germany find own solution
By F. William Engdahl
Online Journal Contributing Writer


Oct 20, 2008, 00:20

America´s de facto finance czar, US Treasury Secretary Henry Paulson, has reached for the panic button and made a dramatic 180-degree reversal of his financial bailout plan passed only days before.

On September 23 in testimony before the US Congress, Paulson, former CEO of the politically influential Wall Street investment firm, Goldman Sachs, declared his adamant opposition to the idea of the US government taking equity stakes in troubled major banks in order to provide them capital and stabilize the frozen interbank trading market. On October 13, that opposition to ´nationalization´ collapsed.

What happened to cause that sudden reversal is what interests us here. It shows the utter lack of coherency in the US financial elites over how to deal with their homegrown securitization of risk fiasco.

The Paulson plan was widely criticized among more sober US bankers and economists, including Paulson´s predecessor as Treasury secretary, Paul O´Neill who simply called the concept of using a $700 billion taxpayer bailout fund to buy ´toxic debt´ from banks ´crazy.´ All critics agreed the Paulson approach was far the most costly model and far from guaranteed to solve the underlying problem: inadequate bank capitalization following hundreds of billions of dollars in subprime and other security losses.

Yet the secretary adamantly refused to alter his plan, even after Congress rejected it in the first vote. He allowed non-related congressional items to be glued on to his original TARP plan, a plan that gave the Treasury secretary virtual dictatorial powers over US finance and, de facto, the economy. It was referred to widely as ´the financial equivalent of the USAPATRIOT Act.´

Then, on October 8 the unexpected took place. Gordon Brown, former British finance minister and now prime minister, facing a literal meltdown of the British banking system, on advice of senior staff of the Bank of England, swallowed his own opposition to bank nationalization and adopted an emergency nationalization scheme. He announced that the UK Treasury had made €64 billion available to buy bank preferred shares in eight UK banks designated by the government as strategic. The nationalization was to be partial but effective and included a €260 billion ´special liquidity scheme´ of Treasury cash to inject into the frozen interbank market, consisting of UK Treasury bills in exchange for banks´ less liquid assets as collateral.

The relevance of 1931

The move was a replay of the dramatic decision by the British Government in 1931. At that time, Britain and members of the British Commonwealth ´broke the rules of the game´ and unilaterally abandoned the international Gold Standard. In September 1931, after months of debate, the UK abandoned monetary orthodoxy and unilaterally left the Gold Standard it had rejoined in 1925.

Germany had preceded the UK, under far different circumstances, by some weeks in August 1931, by abandoning the Gold Standard.

Germany, under emergency rule without parliament under Chancellor Brüning, faced a crisis in the wake of the French decision to punish the German-Austrian economic entente. France had precipitated a banking crisis in Austria´s largest bank, the Vienna Credit-Anstalt.

The role of J.P. Morgan Bank in New York, the leading private creditor of the German banking system since the end of hyperinflation in 1923, and the Morgan controlled New York Federal Reserve under Governor George L. Harrison, was instrumental in precipitating the German banking crisis of 1931.

As a condition for its stabilization loan to the Reichsbank, Harrison demanded the Reichsbank cease lending to German commercial banks. Under maximum duress, it did. The banks collapsed.

So long as it remained on the Gold Standard, a requirement of JP Morgan and the New York Federal Reserve, Germany had to prevent capital outflows and impose higher taxes and budget austerity to persuade international creditors of its credit worthiness. As the German recession deepened, the government cut the social programs instituted after the war. It was the outbreak of the banking crisis in the summer of 1931 that made the German depression so severe. The collapse of the banks in central Europe had a major social, psychological and political impact. The rest became tragic history.

The United States, guided by Harrison and backed up by the monetary orthodoxy of President Herbert Hoover, held bitterly to the Gold Standard until March 1933 when newly inaugurated President Roosevelt left the Gold Standard. By then, the United States economy was deep in depression.

Paulson´s volte face

This time around it was again England that led the break with the rules of a US financial game by swiftly nationalizing its top eight banks, starting with the Royal Bank of Scotland (RBS) on October 8, a Wednesday. By that Friday it was clear that Germany was also moving towards a national resolution of its banking problems, problems which originated in the US spread of Asset Backed Securities and Credit Default Swaps, an exotic new area of finance which had grown up in recent years in a totally unregulated area of bank-to-bank practice to a nominal size of some $68 trillion. The French Sarkozy Plan, a €300 to 400 billion ´common bailout fund´ modelled loosely on the original Paulson Plan, was dead. German taxpayers would not pay for the excesses of French or Italian banks. It was a sea change in attitude across the EU away from a US-led global financial unity. The American Century faced catastrophe.

That was the point of Paulson´s radical shift to what in the parlance of US radical free marketers was a bolt towards the dreaded ´S´ word, socialisation of the banking system. According to my best European banking sources, had Paulson not taken radical new action at that point, as one City of London veteran banker expressed it, ´the US banks were in danger of extinction.´

On Monday, October 13, in the US Treasury, Paulson convened an emergency meeting with the heads of the nine largest US banks. According to reports from participants, Paulson handed each person a one page document to sign that they would agree to sell their stock shares in part to the US government in return for an emergency injection of $250 billion. Paulson told them they must all sign before leaving the room. Three hours and reportedly many acrimonious arguments later, all nine had signed in the largest government intervention into the US banking system since the Great Depression.

According to insider accounts from bankers here I spoke with and in New York, it was precisely the decision by the UK, backed by a similar if not yet so detailed plan from the German authorities which forced Paulson´s about face.

After the fact, in a confirmation of how weak the new Federal Reserve Chairman, Ban Bernanke is in face of the domineering personality of Paulson, Bernanke mumbled to the press that he had ´all along´ been in favor of the government buying equity shares to recapitalize the banks. Why he refused to state that publicly before the Paulson Plan won the day is unclear, but it suggests the man Bush chose to succeed Alan Greenspan was chosen for his liability not his ability or his backbone.

San Francisco Federal Reserve President Janet Yellen remarked as well, long after it had become clear that the US administration´s decision to let Lehman Brothers go bankrupt without government assistance, that it had been a horrible miscalculation.

That Lehman Bros. bankruptcy on September 15 was the ´shock heard round the world,´ which precipitated a global crisis in banking confidence resulting in the present situation. Whether Paulson and friends calculated the collapse would provide the basis to demand a US-crafted solution to the crisis remains unclear. What is clear, one of the chosen ´winners´ in the present US banking reorganization, JP Morgan Chase, played a nasty role in the final push of Lehman Bros. into insolvency the Friday prior to Lehman´s Monday declaration of insolvency. JP Morgan Chase had ´mysteriously´ withheld a $19 billion transfer that Friday which would have averted the collapse of Lehman Bros. It was an eerie echo of the nasty role played in 1931 by the House of Morgan in relation, then, to the German and European banking crisis.

After 1931 the House of Morgan never again rose to the prominent role it had held. It is looking increasingly likely that the successor to the bank, JP Morgan Chase, despite the pretensions of its head, Jamie Dimon, to invincibility, may be far more modest.
F. William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order (Pluto Press), and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca). This essay is adapted from a book he has just completed, titled Full Spectrum Dominance: The Geopolitical Agenda Behind Washington´s Global Military Buildup (release date estimated Autumn 2008). He may be contacted through his website, www.engdahl.oilgeopolitics.net.

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sez it right!

" iconicgnom (1000+ posts)
Mon Oct-20-08 03:21 PM
Response to Reply #4
48. Modern socialism as practiced by developed democracies requires a degree of political maturity.

It's difficult to achieve and maintain "socialist" programs like universal equal-access health care, or social security insurance, or education system, or an equally accessable affordable publicly owned energy grid, and etc. It requires that the adult population be mature enough politically to understand such elementary facts as that such "socialism" isn't opposed to "capitalism" and "the market economy" - but rather, it provides the foundation of an educated, healthy, relatively stress-free population having equal opportunity, in which a sound market economy can thrive.

But to an undeveloped and politically immature population words like "socialism" are as much trigger-words as "terrorism" and "communism" etc., and can be used by propagandists to herd the population into acting against its own interest.

Nowadays that kind of political immaturity is product of deliberate social engineering. It isn't "natural". In the US it goes all the way back to HUAC and McCarthy, which stood solidly against notions like "free association", categorizing some associations "american" and others "anti-american". Ronald Reagan, for example, testified before HUAC - it was the beginning of his career and set the tone for what was to come. It set an aggressive agenda of overt and covert suppression of modern political ideas, and associations.

And this deliberately induced ignorance produced a population which was eager to support foreign policies aimed at using US wealth and military power to overthrow freely elected democracies of less developed (read: powerful) countries around the world, which dared to implement "socialist" policies. Those policies continue to this day.

So words like "socialism" are very loaded in the US, in a way that they aren't in Europe, Canada, and other countries where "freedom" means the same thing for both "right" and "left". Progressives in the US have quite a fight on their hands. "

RAW STORY
Published: Sunday October 19, 2008

Congressman Dennis Kucinich (D-OH) has called for a probe into $70 billion worth of pay deals planned for employees of failed banking firms receiving government aid.

Kucinich said Sunday that he was directing his staff to immediately probe Wall Street firms that have received any portion of the $700 billion bailout plan recently passed by Congress, in response to a recent report by The Guardian outlining the firms' dramatic drops in revenue, but not in executive compensation.

That Friday report showed that over $70 billion was to be allocated towards pay deals, including discretionary bonuses, at firms such as Goldman Sachs and Citigroup.

"When Congress placed restrictions on excessive executive pay, it had no intention of permitting business as usual with respect to bonus structures," Kucinich said. "It would add insult to injury to ask taxpayers not only to bailout a firm, but to pay for bonuses as well. The Guardian's report necessitates an immediate inquiry."

European leaders press for new economic order

By JOHN LEICESTER, Associated Press Writer John Leicester, Associated Press Writer – Fri Oct 17, 2:19 pm ET
British Prime Minister Gordon Brown, right, speaks to French President Nicolas AP – British Prime Minister Gordon Brown, right, speaks to French President Nicolas Sarkozy, left, during …

PARIS – The idea is ambitious: World leaders joined by aides to the new U.S. president-elect would gather before the year's end in New York and attempt to forge a new vision for the global economy.

French President Nicolas Sarkozy has teamed up with British Prime Minister Gordon Brown to press for such a summit, and the French leader travels to Camp David this weekend to lobby President Bush to sign on.

Brown, buoyed by the praise he won for engineering a British bank bailout that inspired U.S. and European rescues, is proposing "radical changes" to the global capitalist system, including a cross-border mechanism to monitor the world's 30 biggest financial institutions. Sarkozy has floated the idea of reforming rating agencies and even exploring the future of currency systems.

Details remain vague and the obstacles are many.

But the political pendulum, at least in Europe, is swinging decisively in the direction of tighter control and supervision, away from the laissez-faire economics that fueled a colossal global boom and appear to have enabled an equally dramatic bust.

In Brown's view, what's needed is nothing less than a new version of the 1944 Bretton Woods conference that brought together Allied leaders and established a post-World War II global monetary and financial order, laying foundations for the International Monetary Fund and a currency exchange regime that lasted for three decades.

"This is a defining moment for the world economy," Brown wrote in Friday's Washington Post. "The old postwar international financial institutions are out of date. They have to be rebuilt for a wholly new era."

Behind the lofty rhetoric, Brown and Sarkozy are backed by a degree of clout.

They have proved instrumental in the past two weeks in corralling European governments to dig deep into taxpayers' pockets to shore up banks, unfreeze credit, and soothe markets.

But experts wonder whether leaders at the proposed summit will truly be able to set aside national interests and clashing legal and business cultures to agree on a common vision. In exchange for global financial stability, nations could be forced to sacrifice autonomy and economic growth under tighter regulatory shackles.

The gathering aims to bring together the Group of Eight industrial powers as well as emerging players like China and India — and countries at different stages of economic maturity will bring different needs to the table, as climate change talks have made abundantly clear.

Officials in the waning Bush administration are also politely dismissing global regulation and some observers are skeptical Europeans can sell the idea to any U.S. president.

"I'm very dubious that much can be done," said Charles Wyplosz, an international economics professor in Switzerland.

The White House is playing down the likelihood Bush will agree to a time and place for a summit when he meets this weekend with Sarkozy and European Commission President Jose Manuel Barroso.

For Brown, the banking bailouts are only phase 1 in getting finance working again. Phase 2, he argues, will require global action as sweeping as that which gave birth to the United Nations, the World Bank and the IMF in the 1940s.

At a European summit this week, Sarkozy and Brown started to flesh out their proposals, backed by Barroso and German Chancellor Angela Merkel.

The most eye-catching proposal from Brown — albeit one based on a proposed European system — envisions a cross-border monitoring program for the 30 biggest giants of global finance, such as America's Citigroup Inc. or Britain's HSBC PLC.

He also called for the 185-nation IMF to be turned into an "early warning system for the world economy," with international monitoring powers. Such reform would mark a revival for the IMF, which has receded to the sidelines of the global economy in recent years.

Sarkozy cast his net even wider. The conservative — who has in recent weeks sounded increasingly like a leftist — wants discussion on tax havens, hedge and sovereign wealth funds, the "folly" of big pay bonuses for risk-taking executives and even how many major currencies the world needs.

Some of his harshest words were for ratings agencies, hinting that he wouldn't be sorry to see them disappear altogether in the financial architecture that he and Brown say they want built.

"Do we keep them?" he asked. "What do we replace them with?

"Should they only be American?" he added, in a statement bound to get attention from U.S.-based Moody's and Standard & Poors.

As always, Sarkozy is in a hurry. Waiting three months until John McCain or Barack Obama is sworn in runs the risk of the crisis getting worse or getting better, which could frustrate the drive for fundamental reform, the French leader warned.

He suggested instead that the winner of the November election send economic aides with Bush to the summit. Sarkozy is pushing for a November or December meeting in New York, "where everything started."

"Europe wants it, Europe is asking for it, Europe will get it," he said. "If we wait for the new president that means, in the best case scenario, we would get together in the spring ... It's much too late and not acceptable."

But obstacles abound.

Brown's talk of "very large and very radical changes" could prove highly problematic in a capitalist system that has grown increasingly complex and intertwined since the end of the Cold War.

Experts say experience shows that getting nations to agree on specific rules that could crimp their economic strengths can be a long, frustrating and sometimes fruitless process. And politicians now howling that capitalism needs curing turned a deaf ear to warnings of flaws in the banking system when economic times were good, they point out.

Wyplosz predicted that leaders will find, once th