Robert Fisk: Endless War, Iraq and 9/11 (must-see video)

Dandelion Salad

talkingsticktv

The Age of the Warrior 9.26.08

Talk by Robert Fisk, Middle East Correspondent for The Independent (UK) and author of “The Age of the Warrior: Selected Essays by Robert Fisk” given September 26, 2008 at Seattle Public Library.

All Is Well In Stepfordville: More On The Pre-Election Chicanery of The Plunge Protection Team

by Dr. Ellen Hodgson Brown
featured writer
Dandelion Salad
Ellen’s post
Nov 3, 2008
webofdebt.com

“The Dow is a dead banana republic dictator in full military uniform propped up in the castle window with a mechanical lever moving the cadaver’s arm, waving to the Wall Street crowd.” – Michael Bolser, Le Metropole Cafe¹

It was another surreal week on Wall Street, with the Dow Jones Industrial Average rising a thousand points while the economy continued to sink into its worst financial crisis since the Great Depression. Most of this stellar climb occurred on Tuesday, October 28, when the Dow rose some 900 points, making it the largest one-day stock market rise since the Great Depression. The climb was especially remarkable in that it occurred in just the last two hours of trading, on no particularly good news. Commentators attributed it to an expectation of a half point interest rate cut by the Fed the following day, but the likelihood of a rate cut was not new news two hours before closing, and previous rate cuts have not evoked that sort of dramatic response. When the cut was actually announced, the market yawned and proceeded to drop.

Meanwhile, gold — the “go to” investment that at one time could be counted on to go up when the economy was tanking — had its worst month in 25 years. Gold rounded out the month by dropping $60 in a little over a day. Gas prices also ended 31% lower than a mere six weeks ago, all just in time to assure voters on November 4 that their fears of rampant inflation and stock market collapse were unfounded.

Nothing to See Here: Concealing a $700 Billion Boondoggle

The Stepfordville-like stability of the market may have been engineered for another reason: to divert Congress from reconsidering its $700 billion bailout bill, which is proving to be as disastrous for the taxpayers as it is lucrative for the banks. The bankers are manning the lifeboats as the taxpayers go down with the Titanic. In an October 29 article in The Nation titled “Bailout = Bush’s Final Pillage,” Naomi Klein wrote:

“When the Bush administration announced it would be injecting $250 billion into America’s banks in exchange for equity, the plan was widely referred to as ‘partial nationalization’– a radical measure required to get the banks lending again. In fact, there has been no nationalization, partial or otherwise. Taxpayers have gained no meaningful control, which is why the banks can spend their windfall as they wish (on bonuses, mergers, savings . . .) and the government is reduced to pleading that they use a portion of it for loans. . . .

“By purchasing stakes in these institutions, Treasury is sending a signal to the market that they are a safe bet . . . [b]ecause the government won’t be able to afford to let them fail. . . . That tethering of the public interest to private companies is the real purpose of the bailout plan: Treasury Secretary Henry Paulson is handing all the companies that are admitted to the program – a number potentially in the thousands – an implicit Treasury Department guarantee. . . . [F]or the banks, the best part is that the government is paying them – in some cases billions of dollars – to accept its seal of approval. . . .

“[T]he market is being told loud and clear that Washington will not allow the country’s financial institutions to bear the consequences of their behavior. This may well be Bush’s most creative innovation: no-risk capitalism. . . . Meanwhile, every day it becomes clearer that the bailout was sold on false pretenses. It was never about getting loans flowing. It was always about turning the state into a giant insurance agency for Wall Street – a safety net for the people who need it least, subsidized by the people who need it most.”

William Greider, writing in The Nation on the same day, discussed a stinging letter sent to Henry Paulson by Leo Gerard, president of the United Steelworkers, comparing the sale of very similar bank stock to the American public and to billionaire Warren Buffett, who got a much better deal. Greider wrote:

“The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson’s transaction, the taxpayers were taken for a ride – a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public’s money was a straight-out gift to Wall Street, for which taxpayers got nothing in return. . . .

“If the same rule of thumb is applied to Paulson’s grand $700 billion bailout fund, Gerard said this will constitute a gift of $350 billion from the American taxpayers ‘to reward the institutions that have driven our nation and it now appears the whole world into its most serious economic crisis in 75 years.’

“Is anyone angry? Will anyone look into these very serious accusations? Congress is off campaigning. The financiers at Treasury probably assume any public outrage will be lost in the election returns.”²

And just to make sure that public outrage is buried, the Plunge Protection Team (PPT) has been busily painting the arid landscape of the U.S. economy with roses and dewdrops.

The PPT Rides Again

For anyone who still doubts the PPT’s existence and ability to control markets, this article will expand on one I posted a week ago on the group and its behind-the-scenes activities. As noted in my earlier article, the PPT is formally called the Working Group on Financial Markets (WGFM) and was created by President Reagan’s Executive Order 12631 in 1988 in response to the October 1987 stock market crash. The WGFM includes the President, the Secretary of the Treasury, the Chairman of the Federal Reserve, the Chairman of the Securities and Exchange Commission, and the Chairman of the Commodity Futures Trading Commission. Its stated purpose is to enhance “the integrity, efficiency, orderliness, and competitiveness of our Nation’s financial markets and [maintain] investor confidence.” According to the Order:

“To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions.”³

In short, taxpayer money is being made available to manipulate markets. The shady history of the PPT was tracked by journalist John Crudele in a June 2006 New York Post series, in which he wrote:

“Back during a stock market crisis in 1989, a guy named Robert Heller – who had just left the Federal Reserve Board – suggested that the government rig the stock market in times of dire emergency. . . . He didn’t use the word ‘rig’ but that’s what he meant. Proposed as an op-ed in the Wall Street Journal, it’s a seminal argument that says when a crisis occurs on Wall Street ‘instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thus stabilizing the market as a whole.’”⁴

The PPT was to be the Roman circus of the twenty-first century, distracting the masses with pretensions of prosperity. Instead of fixing the problem in the economy, the PPT could just “fix” the investment casino. Crudele continued:

“Over the next few years . . . whenever the stock market was in trouble someone seemed to ride to the rescue. . . . Often it appeared to be Goldman Sachs, which just happens to be where Paulson and former Clinton Treasury Secretary Robert Rubin worked.”

For obvious reasons, the mechanism by which the PPT has ridden to the rescue is not detailed on the Fed’s website; but some analysts think they know. An antitrust group called GATA (the Gold Anti-Trust Action Committee) has been tracking the PPT’s moves for many years. Michael Bolser of GATA concluded in 2004 that PPT money is being funneled through the Fed’s “primary dealers,” a group of favored Wall Street brokerage firms and investment banks. The device used is a form of loan called a “repurchase agreement” or “repo,” which is a contract for the sale and future repurchase of Treasury securities. Bolser explained:

“It may sound odd, but the Fed occasionally gives money [‘permanent’ repos] to its primary dealers (a list of about thirty financial houses, Merrill Lynch, Morgan Stanley, etc). They never have to pay this free money back; thus the primary dealers will pretty much do whatever the Fed asks if they want to stay in the primary dealers ‘club.’

“The exact mechanism of repo use to support the DOW is simple. The primary dealers get repos in the morning issuance . . . and then buy DOW index futures (a market that is far smaller than the open DOW trading volume). These futures prices then drive the DOW itself because the larger population of investors think the ‘insider’ futures buyers have access to special information and are ‘ahead’ of the market. Of course they don’t have special information . . . only special money in the form of repos.”⁵

With Paulson’s new $700 billion credit card, the PPT obviously has access to much more money than in 2004 – enough money, no doubt, to buy large blocks of some key stocks. Those purchases, in turn, would trigger the program traders’ computers, which follow like robots according to pre-set formulae. Although thousands of stocks are publicly traded, only 30 stocks compose the Dow, making this trend-setting index fairly easy to manipulate.

While the Dow is being propped up by the PPT through massive buying, the gold market is held down by massive short selling, since gold is considered a key indicator of inflation. If the gold price were to soar, the Fed would have to increase interest rates to tighten the money supply, collapsing the housing bubble and forcing the government to raise inflation-adjusted payments for Social Security.

Most traders who see this manipulation going on don’t complain, because they think the Fed is rigging the market to their advantage; but unwary investors are being induced to place risky bets on a nag on its last legs. The people become complacent and accept bad leadership, bad policies and bad laws, because they think things are still “working” for them economically. Worse, there are insiders to this scheme who must find it difficult to resist the temptation to capitalize on their favored positions. As Chuck Augustin observed in a June 2006 article titled “Plunge Protection or Enormous Hidden Tax Revenues”:

“Today the markets are, without doubt, manipulated on a daily basis by the PPT. Government controlled ‘front companies’ such as Goldman-Sachs, JP Morgan and many others collect incredible revenues through market manipulation. Much of this money is probably returned to government coffers, however, enormous sums of money are undoubtedly skimmed by participating companies and individuals.

“The operation is similar to the Mafia-controlled gambling operations in Las Vegas during the 50’s and 60’s but much more effective and beneficial to all involved. Unlike the Mafia, the PPT has enormous advantages. The operation is immune to investigation or prosecution, there [are] unlimited funds available through the Treasury and Federal Reserve, it has the ultimate insider trading advantages, and it fully incorporates the spin and disinformation of government controlled media to sway markets in the desired direction. . . . Any investor can imagine the riches they could obtain if they knew what direction stocks, commodities and currencies would move in a single day, especially if they could obtain unlimited funds with which to invest! . . . [T]he PPT not only cheats investors out of trillions of dollars, it also eliminates competition that refuses to be ‘bought’ through mergers. Very soon now, only global companies and corporations owned and controlled by the [financial] elite will exist.”⁶

A research firm reporting on the unexpectedly high quarterly profits of Goldman Sachs in March 2004 wrote cynically:

“[W]ho does Goldman have to thank for the latest outsized quarterly earnings? Its ‘partner’ in charge of financing the proprietary trading operation — Alan Greenspan.”⁷

Henry Paulson headed Goldman Sachs before he succeeded to Treasury Secretary in June 2006, following in the footsteps of Robert Rubin, who headed that major investment bank before he was appointed Treasury Secretary in 1995, just in time for Goldman and other investment banks to capitalize on the drastic devaluation of the Mexican peso. An October 2006 article in the conservative American Spectator complained that the U.S. Treasury was being turned into “Goldman Sachs South.”⁸

In his October 28, 2008 letter, United Steelworkers president Gerard wrote to Henry Paulson:

“The recipients of the first wave of gift-giving include Goldman Sachs. It has been widely reported that you have surrounded yourself with former Goldman employees as well as individuals from other Wall Street firms. Yet it has never been revealed whether in fact you and they have fully divested yourselves of your Wall Street holdings. Doesn’t it seem just a wee-bit of a conflict of interest for those setting the price of the investment to be either so directly linked to the firms receiving the investments or, even worse, direct beneficiaries of the decision to overpay with taxpayer money? . . .

“Out in the real economy, we need our government to invest in creating sustainable shared prosperity – not play Santa Claus to the scoundrels who have laid waste to the American Dream.”

Where is the public outrage? As the fog of the election lifts from our plundered nation, we wait to see.

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and Forbidden Medicine. Her websites are www.webofdebt.com and www.ellenbrown.com.

¹ Michael Bolser, “Cartel Capitulation Watch,” LeMetropoleCafe.com (April 18,   2004).

² William Greider, “Paulson’s Swindle Revealed,” The Nation (October 29, 2008), citing “USW Raises Questions about Treasury’s $125 Billion Investment in Financial Firms,” Market Watch (October 28, 2008).

³ Executive Order 12631 of March 18, 1988, 53 FR, 3 CFR, 1988 Comp., page 559.

⁴ John Crudele, “George Let Plunge Slip,” New York Post (June 27, 2006).

⁵ Michael Bolser, “Enough Is Enough,” Midas, LeMetropoleCafe.com (January 26, 2004). See his chart site at http://www.pbase.com/gmbolser/interventional_analysis.

⁶ Chuck Augustin, “Plunge Protection or Enormous Hidden Tax Revenues,” LeMetropoleCafe.com (June 30, 2006).

⁷ The John Brimelow Report, “Goldman Sach’s ‘Partner’,” Midas, LeMetropoleCafe.com (March 24, 2004), quoting Bianco Research report.

⁸ The Prowler, “Raid on the Treasury,” The American Spectator (October 12, 2006).

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More from the Front Lines of the Financial Crisis by Stephen Lendman

The End of Prosperity – The Worst Is Yet to Come by Stephen Lendman

The Economy Sucks and or Collapse

Is Redistribution Really All That Bad? Obama’s Little Red Book By Mike Whitney

Dandelion Salad

By Mike Whitney
November 03, 2008 “Information Clearinghouse“

Redistribution is never an issue when the money is flowing upwards. It’s only when working people are poised to get a few scraps that all hell breaks loose. That’s when self-styled “mavericks” and their political cadres spring into action and unleash their vitriol at anyone who challenges the failed “trickle-down” dogma of the investor class. When Barak Obama naively pointed out the need to “spread the wealth” the media descended on him like a pack of feral hounds. The gaffe was followed by weeks of derision and vicious attacks. McCain branded him a the “Redistributionist-in-Chief” while his rabid friends on wingnut radio invoked the musty specter of Karl Marx.

What a load of malarkey. Neither McCain nor his media pals mention how the nation’s wealth has already been “redistributed” via unfunded tax cuts for the rich, gluttonous $634 billion Pentagon budgets, or trillion dollar bailouts for Wall Street sharpies. That’s why the national debt has skyrocketed to $11.3 trillion and the country is on the brink of default. It has nothing to do with the proposed extension of unemployment benefits for the victims of the financial crisis or the prospect of $300 billion in additional stimulus to revive the moribund economy. The Bush administration would never hand out stimulus checks unless it had a gun to its head. But, the fact is, their plan to shift the nation’s wealth to the richest 1 percent of the population has been such a glorious success, that consumer spending has seen its sharpest decline in history. Demand has collapsed. And, even though the Federal Reserve has dropped the Fed Funds rate to 1 percent, has flooded the financial system with liquidity, (Federal Reserve Credit jumped $69.6bn to a record $1.873 TN, with a historic 7-wk increase of $985bn!) and is providing a backstop for money markets, commercial paper, insurance companies, investment banks, real estate, and dodgy mortgage-backed securities; consumers are continuing to lose ground because of falling home equity, exploding personal debt, and growing job losses. The Fed’s liquidity-injections are not getting to the people who need it most–the workers– so the economy is tanking. It’s that simple.

So what should be done?

Whoever becomes the next president will have to rethink traditional views on redistribution. It’s not a dirty word. The only way to stop the bleeding and save the country from economic ruin is by enacting an aggressive program to rebuild the middle class. Stimulus checks and government-funded infrastructure programs simply ignore the more deeply-rooted systemic and ideological problems. What’s really needed is a reversal of 3 decades of Reaganism and an admission that that flawed “supply side” market-based doctrine has thrust the country towards financial annihilation. Market fundamentalism has increased the share of national wealth among the richest 1 percent to the highest point since the Gilded Age. “The wealthiest 1 percent of Americans held more than half the nation’s direct holdings of publicly traded stocks in 2004 according to the Federal Reserve”. (Wall Street Journal) Those figures have ballooned since 2004 and created the same kind of economic polarization that exists in third world countries. A recent report by the Organization for Economic Cooperation and Development (OECD) showed that “The United States has the highest inequality and poverty rates in the 30-country organization after Mexico and Turkey, and the gap has increased rapidly since 2000…In the United States, the richest 10 percent earn an average of $93,000, the highest level in the group. The poorest 10 percent earn an average of $5,800 – about 20 percent lower than the OECD average.” Neoliberalism in America has triumphed; the middle class is busted!

Between Hope and Reality – An Open Letter to Barack Obama By Ralph Nader

Dandelion Salad

By Ralph Nader
ICH
Nov 3, 2008

Ralph Nader after the speech

Originally uploaded by Lorri37

Dear Senator Obama:

In your nearly two-year presidential campaign, the words “hope and change,” “change and hope” have been your trademark declarations. Yet there is an asymmetry between those objectives and your political character that succumbs to contrary centers of power that want not “hope and change” but the continuation of the power-entrenched status quo.

Far more than Senator McCain, you have received enormous, unprecedented contributions from corporate interests, Wall Street interests and, most interestingly, big corporate law firm attorneys. Never before has a Democratic nominee for President achieved this supremacy over his Republican counterpart. Why, apart from your unconditional vote for the $700 billion Wall Street bailout, are these large corporate interests investing so much in Senator Obama? Could it be that in your state Senate record, your U.S. Senate record and your presidential campaign record (favoring nuclear power, coal plants, offshore oil drilling, corporate subsidies including the 1872 Mining Act and avoiding any comprehensive program to crack down on the corporate crime wave and the bloated, wasteful military budget, for example) you have shown that you are their man?

To advance change and hope, the presidential persona requires character, courage, integrity– not expediency, accommodation and short-range opportunism. Take, for example, your transformation from an articulate defender of Palestinian rights in Chicago before your run for the U.S. Senate to an acolyte, a dittoman for the hard-line AIPAC lobby, which bolsters the militaristic oppression, occupation, blockage, colonization and land-water seizures over the years of the Palestinian peoples and their shrunken territories in the West Bank and Gaza. Eric Alterman summarized numerous polls in a December 2007 issue of The Nation magazine showing that AIPAC policies are opposed by a majority of Jewish-Americans.

You know quite well that only when the U.S. Government supports the Israeli and Palestinian peace movements, that years ago worked out a detailed two-state solution (which is supported by a majority of Israelis and Palestinians), will there be a chance for a peaceful resolution of this 60-year plus conflict. Yet you align yourself with the hard-liners, so much so that in your infamous, demeaning speech to the AIPAC convention right after you gained the nomination of the Democratic Party, you supported an “undivided Jerusalem,” and opposed negotiations with Hamas– the elected government in Gaza. Once again, you ignored the will of the Israeli people who, in a March 1, 2008 poll by the respected newspaper Haaretz, showed that 64% of Israelis favored “direct negotiations with Hamas.” Siding with the AIPAC hard-liners is what one of the many leading Palestinians advocating dialogue and peace with the Israeli people was describing when he wrote “Anti-semitism today is the persecution of Palestinian society by the Israeli state.”

During your visit to Israel this summer, you scheduled a mere 45 minutes of your time for Palestinians with no news conference, and no visit to Palestinian refugee camps that would have focused the media on the brutalization of the Palestinians. Your trip supported the illegal, cruel blockade of Gaza in defiance of international law and the United Nations charter. You focused on southern Israeli casualties which during the past year have totaled one civilian casualty to every 400 Palestinian casualties on the Gaza side. Instead of a statesmanship that decried all violence and its replacement with acceptance of the Arab League’s 2002 proposal to permit a viable Palestinian state within the 1967 borders in return for full economic and diplomatic relations between Arab countries and Israel, you played the role of a cheap politician, leaving the area and Palestinians with the feeling of much shock and little awe.

David Levy, a former Israeli peace negotiator, described your trip succinctly: “There was almost a willful display of indifference to the fact that there are two narratives here. This could serve him well as a candidate, but not as a President.”

Palestinian American commentator, Ali Abunimah, noted that Obama did not utter a single criticism of Israel, “of its relentless settlement and wall construction, of the closures that make life unlivable for millions of Palestinians. …Even the Bush administration recently criticized Israeli’s use of cluster bombs against Lebanese civilians [see http://www.atfl.org for elaboration]. But Obama defended Israeli’s assault on Lebanon as an exercise of its ‘legitimate right to defend itself.’”

In numerous columns Gideon Levy, writing in Haaretz, strongly criticized the Israeli government’s assault on civilians in Gaza, including attacks on “the heart of a crowded refugee camp… with horrible bloodshed” in early 2008.

Israeli writer and peace advocate– Uri Avnery– described Obama’s appearance before AIPAC as one that “broke all records for obsequiousness and fawning, adding that Obama “is prepared to sacrifice the most basic American interests. After all, the US has a vital interest in achieving an Israeli-Palestinian peace that will allow it to find ways to the hearts of the Arab masses from Iraq to Morocco. Obama has harmed his image in the Muslim world and mortgaged his future– if and when he is elected president.,” he said, adding, “Of one thing I am certain: Obama’s declarations at the AIPAC conference are very, very bad for peace. And what is bad for peace is bad for Israel, bad for the world and bad for the Palestinian people.”

A further illustration of your deficiency of character is the way you turned your back on the Muslim-Americans in this country. You refused to send surrogates to speak to voters at their events. Having visited numerous churches and synagogues, you refused to visit a single Mosque in America. Even George W. Bush visited the Grand Mosque in Washington D.C. after 9/11 to express proper sentiments of tolerance before a frightened major religious group of innocents.

Although the New York Times published a major article on June 24, 2008 titled “Muslim Voters Detect a Snub from Obama” (by Andrea Elliott), citing examples of your aversion to these Americans who come from all walks of life, who serve in the armed forces and who work to live the American dream. Three days earlier the International Herald Tribune published an article by Roger Cohen titled “Why Obama Should Visit a Mosque.” None of these comments and reports change your political bigotry against Muslim-Americans– even though your father was a Muslim from Kenya.

Perhaps nothing illustrated your utter lack of political courage or even the mildest version of this trait than your surrendering to demands of the hard-liners to prohibit former president Jimmy Carter from speaking at the Democratic National Convention. This is a tradition for former presidents and one accorded in prime time to Bill Clinton this year.

Here was a President who negotiated peace between Israel and Egypt, but his recent book pressing the dominant Israeli superpower to avoid Apartheid of the Palestinians and make peace was all that it took to sideline him. Instead of an important address to the nation by Jimmy Carter on this critical international problem, he was relegated to a stroll across the stage to “tumultuous applause,” following a showing of a film about the Carter Center’s post-Katrina work. Shame on you, Barack Obama!

But then your shameful behavior has extended to many other areas of American life. (See the factual analysis by my running mate, Matt Gonzalez, on http://www.votenader.org). You have turned your back on the 100-million poor Americans composed of poor whites, African-Americans, and Latinos. You always mention helping the “middle class” but you omit, repeatedly, mention of the “poor” in America.

Should you be elected President, it must be more than an unprecedented upward career move following a brilliantly unprincipled campaign that spoke “change” yet demonstrated actual obeisance to the concentration power of the “corporate supremacists.” It must be about shifting the power from the few to the many. It must be a White House presided over by a black man who does not turn his back on the downtrodden here and abroad but challenges the forces of greed, dictatorial control of labor, consumers and taxpayers, and the militarization of foreign policy. It must be a White House that is transforming of American politics– opening it up to the public funding of elections (through voluntary approaches)– and allowing smaller candidates to have a chance to be heard on debates and in the fullness of their now restricted civil liberties. Call it a competitive democracy.

Your presidential campaign again and again has demonstrated cowardly stands. “Hope” some say springs eternal.” But not when “reality” consumes it daily.

Sincerely,
Ralph Nader

November 3, 2008

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California voters are free to vote their conscience! Here’s why.. + Revolution

Obama: Change You Can Believe In–Not, Part 4

Barack Obama And Faith-Based Voting By Daniel Cioper

Special Announcement: 2008 is Just the Beginning

The Racism of McCain…and Obama…and the Media By Jeremy R. Hammond

The Obama Nuts + $700 Billion Art + 3rd Party Climb

Change Big Donors Can Believe In By Amy Goodman

Ralph Nader Posts & Videos

McCain-John

Palin-Sarah

Obama-Barack

Biden-Joe

Indonesia + Petraeus plans more border raids + Syria + Ireland

compiled by Cem Ertür
featured writer
Dandelion Salad
3 November 2008

Westerners warned over travel to Indonesia ahead of Bali executions

By Thomas Bell, South East Asia Correspondent
Last Updated: 9:26AM GMT 03 Nov 2008
Daily Telegraph, 3 November 2008

British, Australian and US citizens have been warned about travelling to Indonesia as the country prepares to execute three men responsible for the 2002 Bali bombings.

Amid fears of revenge attacks, Australia has advised its citizens against all travel to the south-east Asian country.

In London, the Foreign Office said that British citizens should exercise caution and be villigent for political protests or any sign of violence.

The United States warned its citizens to “maintain a low profile”.

[...]

http://www.telegraph.co.uk/

***

General David Petraeus plans more border raids

The Sunday Times
November 2, 2008

General David Petraeus, who took over last week as the new head of Central Command with responsibility for America’s wars in Afghanistan and Iraq, is a fervent adherent of the newly expanded American strategy of self-defence.

[...]

via General David Petraeus plans more border raids – Times Online

***

Iraqi city calls for US raids on Syria

By Damien McElroy in Mosul
Last Updated: 8:48AM GMT 03 Nov 2008

The US must launch a widespread offensive against Syria to have any hope of taking control of al-Qaeda’s last bastion in Iraq, it has been claimed.

Officials in Iraq’s third largest city, Mosul, have warned the terrorists will not be defeated until the border is secured.

Iraq has deployed extra troops, including two brigades of the paramilitary National Police, into the battle for the northern Sunni Arab city, but the effort has been handicapped by widespread infiltration of the security forces by terrorist sympathisers.

Dureid Kashmula, the provincial governor, said: “One of the reasons that al-Qaeda is so strong here when security is improving across Iraq is that the terrorists can come across the border.

[...]

via Iraqi city calls for US raids on Syria – Telegraph (plus video)

***

Questions raised over Syrian complicity in US raid

by Marie Colvin and Uzi Mahnaimi
The Sunday Times
November 2, 2008

Video: Syrian minister criticises US raid

Syria has denounced a US strike on its territory but sources say Damascus secretly backed the raid

The 38-year-old farmer was watering his maize in the scrubby vastness of eastern Syria when four Black Hawk helicopters swooped in low over the palm trees, heading from the border with Iraq formed by the Euphrates River.

It was late afternoon. The light was fading and the chill of the desert winter night was setting in. The helicopters, following their leader in a disciplined arc, hovered just above the one-storey concrete and mud homes of the village of Sukariyeh before the attack began.

[...]

via Questions raised over Syrian complicity in US raid – Times Online

***

Syria talks meant to pressure Iran

by Herb Keinon, Jerusalem Post, 2 November 2008

Prime Minister Ehud Olmert’s intention to push forward indirect talks with Syria three months before the country goes to the polls is motivated by a desire to keep the heat on Iran, Western diplomatic sources said Sunday.

According to the sources, the Turkish-mediated indirect talks between Syria and Israel have caused a degree of concern in Teheran, with the Iranian leaders not completely sure about which direction Damascus was headed.

Israel has made clear that any peace agreement with Syria would necessitate a dramatic downgrading of Syria’s currently very close ties with Iran.

“Inertia in the Israeli-Syrian talks helps Iran,” the sources said. “The indirect talks help isolate Iran.”

[...]

http://www.jpost.com

***

Barzani: Kurdistan will allow US bases

Press TV
Sun, 02 Nov 2008 18:03:56 GMT

Iraq’s Kurdistan region says it will provide the US with military bases if Baghdad refuses to sign a security deal with Washington.

“All attempts are going on right now to sign the pact, but if the pact is not signed and if the US asks to keep their troops in Kurdistan, I think the parliament, the people and government of Kurdistan will welcome this warmly,” Massud Barzani, the president of the local government of Iraq’s Kurdistan was quoted by a local newspaper as saying on Sunday.

[...]

via Press TV – Barzani: Kurdistan will allow US bases

***

Brown claims victory over Gulf financial plan

By James Tapsfield, PA
Sunday, 2 November 2008

Gordon Brown claimed victory today in his bid to get Gulf states to pump more money into struggling economies.

After talks in Saudi Arabia, the Prime Minister said he believed the kingdom and other oil-rich countries would agree to up their contribution to the IMF.

Mr Brown has insisted that the fund’s emergency reserves need to be expanded by hundreds of billions of dollars.

There are fears that its current level of 250bn dollars (£156bn) will not be enough to help states threatened by the global economic downturn. Iceland, Hungary and Ukraine have already been allocated some 30bn dollars (£18.6bn), with Pakistan expected to follow suit by requesting aid.

[...]

via Brown claims victory over Gulf financial plan – UK Politics, UK – The Independent

***

Thousands March to Show No! Welcome 4 State mUrDeRers!

by Youth 4 Truth – Ógra Shinn Féin
Indymedia Ireland
Sunday November 02, 2008 16:32

Thousands of people turned out to the Sinn Fein rally/march today (Sun 2 Nov) which opposed the ‘home coming’ parade by the notorious RIR regiment of the British Army.

There was a large Ógra Shinn Féin presence on the day, with young republicans travelling from across Ireland.

The rally/march was calling for an end to the ongoing illegal occupations in Ireland, Iraq, and Afghanistan and also to demand the truth for the hundreds of families who have been bereaved through the official British state policy of collusion and state murder. The UDR/RIR themselves where part and parcel of the murder machine.

[...]

via Thousands March to Show No! Welcome 4 State mUrDeRers! – Indymedia Ireland (plus photos)

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What was the real motive of the raid in Syria? + Ron Paul: Obama & McCain AGREE with Bush

Kucinich Questions the Timing of the Syrian Attack

Chamber of Commerce hopes to avoid Employee Free Choice Act

TheRealNews

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November 3, 2008
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Chamber of Commerce hopes to avoid Employee Free Choice Act

Electing a pro-business Senate may ensure the bill’s failure

Washington DC – Nov 3 – The U.S. Chamber of Commerce has spent more than $30 million to attempt getting Republican Senators elected in key states. Ensuring a Republican majority in the Senate would mean potential blockage of the Employee Free Choice Act, a bill that gives workers additional rights with respect to unions.

The bill, introduced in Congress in 2007, won a majority in the House and the Senate but still was not introduced. When the pro-labour bill reached the Senate it was met by Republican filibustering. AFL-CIO director of organizing Stewart Acuff says the pro-business lobbyists are ready to fight the bill again.

“Corporate America is throwing everything they can at this bill,” Acuff said. “They spent $30 million this year and they’ll spend $100-$200 million next year. They’re doing everything they can to stop it.”

Acuff notes the importance of such a bill for workers, stating that the Employee Free Choice Act would allow employees to decide how they indicate their support, or non-support, of the union. UNITE HERE general president Bruce Raynor agrees and says it is time for America to allow these rights.

“It gives workers, for the first time in America, the real right to a union,” he said. “This system is done all over the world . . . we want to restore worker’s rights to organize.”

Raynor notes the historical importance of unions as a reason that America should support this bill being passed and enacted.

“Jobs such as manufacturing ones were not invented as middle class jobs,” Raynor said. “It was unions organizing those factories . . . converting them from poor poverty level wages to middle class wages.”

Moreover, Acuff notes the need for such a bill, since workers currently experience intimidation at the organizing level.

“More than 20,000 per year are retaliated against for exercising union rights,” Acuff said. “The problem with the process is it’s full of intimidation and retaliation.”

Watch the full story on The Real News Network: http://therealnews.com

Senior Corporate Executives Warned to Leave N.Y. on 9/11: Source

By Jeremy R. Hammond
featured writer
Dandelion Salad
Foreign Policy Journal
November 3, 2008

Crossposted on Foreign Policy Journal

Foreign Policy Journal has learned that senior executives of a major U.S. international corporation may have been warned to leave New York on September 11, 2001.

According to an inside source, one of the senior executives of the corporation told him beforehand that “something big” was going to occur and so other corporate executives would be travelling out of New York.

The source, who spoke to the Journal on the condition of anonymity, worked at a European branch of the media giant Warner Bros. He served as the number two under the managing director of that office, a man with whom he had developed a close personal friendship. His boss was also friends with one of the senior executives at the head office in Los Angeles. According to the source, he had been told by his director that the executive in L.A. had formerly worked for the CIA and still kept in touch with the agency.

It is not an uncommon practice for the CIA to recruit business executives, particularly individuals who do a lot of international travelling and might be able to use their business contacts to gather information.

The CIA is also known to have recruited journalists and media executives. According to Carl Bernstein, the former Washington Post reporter who worked with Bob Woodward breaking open the Watergate story during the Nixon administration, executives who lent their cooperation to the CIA included Henry Luce of Time Inc., founder of Time and Life magazines. C.D. Jackson, a Time Inc. vice-president and publisher of Life magazine until his death in 1964, approved arrangements to provide the CIA with cover under Time-Life, according to an article Bernstein wrote for Rolling Stone magazine in 1977.

More from the Front Lines of the Financial Crisis by Stephen Lendman

Dandelion Salad

by Stephen Lendman
Global Research, November 3, 2008

In its latest economic outlook, Merrill Lynch economists “worry about inflation, or more precisely,” a lack of it. From crashing global equity markets, falling commodity prices, rising unemployment, stagnant wages, over-indebted households, declining production, the continuing housing crisis, and more. All pointing to several future quarters of negative growth. Showing that Fed chairman Bernanke will face “his greatest fear: deflation.” An analysis of the coincident to lagging indicators signals “deep recession.”

In his October 24, commentary, Merrill’s North American economist David Rosenberg sees “economic data deteriorating in a very serious way (and says) we are witnessing unprecedented stuff happen:”

– the two-year housing recession “is still far from over” with new lows in a number of key readings;

– it’s “morphed into a capex recession, industrial production” had its worst decline in 34 years;

– consumer confidence showed record declines;

– retail sales keep falling; evidence is that auto and chain store sales will show four straight down months; it’s happened only four other times since 1947, so “we’re living through a 1-in-200 event;”

– based on CPI data, prices are falling; at a rapid pace also seen only four other times since 1947;

– GDP will decline at 2% annual rate in Q 4; 4% in Q 1 2009 and 3.3% in Q 2.

Conclusion: “This recession is unlike any seen in the last five decades.” Typically caused by inflation, inventory cycles or aggressive Fed tightening. “This is a balance sheet recession deeply rooted in asset liquidation and debt repayment, and would seem to have more in common with pre-WW I cycles.”

Going back to 1855, “a typical recession lasts 18 months.” It’s no assurance this one won’t be longer. Rosenberg thinks it started in January and believes will end “within a month of the National Bureau of Economic Research (NBER) making the call.” It defines recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” Some say that occurs when economic growth is negative for two or more consecutive quarters.

The signs are evident and growing, yet NBER is usually late making its call. It may hold off until housing shows signs of stabilizing. For some analysts, it’s the core economic problem, and as long as it keeps eroding no end of recession is in sight. The latest data aren’t encouraging:

– Case-Shiller’s 10 and 20-city composite indexes set new record declines of 17.7% and 16.6% respectively; year-over-year dropping for 20 consecutive months; Case-Shiller predicts a peak to trough 28.6% drop in its 10-city composite index; it also sees up to 50% declines in some areas;

– nominal house prices down 20% from their 2006 peak; according to the Center for Economic Policy Research (CEPR), this implies a 27% real decline; a loss of $5 trillion in housing wealth, and 60% of the bubble deflated so more is yet to come; at least another 10 – 15% to return to trend levels; another question is “whether markets will overshoot on the downside;” a very distinct possibility;

– on October 29, CEPR reported record high ownership vacancies according to Census Bureau data at 2.8%; for rental units at 9.9%, slightly below the peak first quarter 10.1% level; CEPR predicts a fully deflated housing bubble by mid-2009 but added a caveat; “With the employment picture turning bleaker and the plunge in the stock market,” housing is certain to be even more negative in coming months; “the tens of millions of workers….fearful about their future job prospects will be very reluctant to buy a new home;” compounded by trillions of lost personal wealth (from home and stock market losses) will make households “much more cautious in all their expenditures;”

– the Office of Federal Housing Enterprise Oversight (OFHEO) index fell .6% in its latest July reading and is down 5.3% on a year-over-year basis; its sharpest decline ever;

– Fitch expects home prices to fall another 10% in the next 18 months and will decline by an average 25% in real terms over the next five years; beginning from the second quarter 2008; they’re now back to early 2004 levels and heading lower;

– the PMI Group predicts home price declines will double to a national average of 20% by next year with lower values in areas experiencing the sharpest increases;

– economist Paul Krugman cites his “preferred metric;” the ratio of housing prices to rental rates; it shows the former got way overvalued; will retrace and result in about a 25% home valuation decline;

– Goldman Sachs forecasts a 15% home price decline with no recession and 30% with one; and

– The Economist sees “no end in sight….to America’s housing bust as prices continue to fall fast.”

On October 28, economist Nouriel Roubini was even more alarming on housing citing “The recessionary macro effect of the worst US housing bust ever.” He reported the view of a “senior professional in one of the (world’s) largest financial institutions” who emailed him “privately and confidentially.” As early as a year ago, he predicted “the worst housing recession in US history” and described “a bust process” in four phases:

(1) “rising mortgage defaults, home prices start falling, sale volumes fall, housing starts and permits decline;” it’s been happening and we’re beginning phase two;

(2) “home-builders’ bankruptcies, housing starts and permits crash, substantial layoffs in construction and real estate-related fields (mortgage brokers, mortgage lenders, etc.);”

(3) “substantial price declines in major metro areas, large rise in defaults of prime but low-equity mortgages;”

(4) “large-scale government intervention to help households going bankrupt;” a political phenomenon so its timing and nature can’t be reliably forecast.

He cites clear phase two evidence already:

– countless smaller builder and subcontractor bankruptcies;

– Levitt Corp. home-building unit getting loan default notices;

– national home builder Tousa with $1 billion in senior notes and subordinated debt hired law firm Akin Gump Strauss Hauer Feld as a precaution in case of bankruptcy; and

– Neumann Homes and Enterprise Construction file for bankruptcy.

Roubini agrees with his emailer “with one caveat.” He believes we’re past the beginning of phase two; most of its aspects have occurred, and we’re heading into phase three or close to it; he cites sharply falling home prices; rising defaults in prime and near prime mortgages; also some prime and near prime lenders in trouble; we’re also getting close to phase four as “over a dozen proposals to rescue 2 million plus households on the way to default and foreclosure are now being debated in Washington.” Debate is one thing. Meaningful action another and likely a ways off at best. Possibly once a new president is in office for something substantial if it comes at all.

Rubini’s emailer followed up with another. That consensus now “admits” what it denied last year. The reality of a severe housing downturn. In price action and foreclosures. The worst since the 1930s. But they’re still behind the curve by acknowledging “only minor macro effects.” He called it extraordinary that a decline this severe is being taken dismissively. “Perhaps the most astonishing aspect of this event is the refusal to recognize the possible dimensions, the impact of what is coming.” It’s “delusional” to believe that the “biggest housing recession in US history will not have severe macro effect. Most of the consensus (according to Bloomberg earlier)” was for 1.8% fourth quarter growth. It then predicted a Q 4 slow growth bottom with “economic growth recover(ing) in soft landing territory (2.5%).”

On what basis, he asks? “Mostly wishful thinking (because of) the economic and financial shocks leading to falling demand (and a worsening housing bust); anemic capex spending; slowdown in commercial real estate demand; sharp private consumption slowdown and weak supply (from weakening ISM – Institute of Supply Management;” falling employment; a glut of new and existing homes; weak auto sales; consumer durables; “a capacity overhang;” and excess inventory); these factors will persist well into the new year.

The latest Q 3 GDP report hints at what’s coming. A minus .3% with personal consumption (PCE) dropping 3.1%. The first decline since 1991 and largest drop since falling 8.6% in 1980. Residential construction also fell at a 19.1% annual rate. Its 11th straight quarter drop.  It now represents 3.3% of GDP. Its lowest level since 1982. Non-residential investment fell 1% and will likely fall further in Q 4. A quarter likely to be much weaker than Q 3 as most private activity is slowing. Only government spending remains strong.

On October 31, still another disturbing report. Bloomberg reported that the “US Chicago Purchasers Index (the Institute for Supply Management-Chicago, ISM) Falls by Most on Record.” To 37.8 down from 56.7 in September, and its lowest reading since the 2001 recession. A clear indication of a deepening downturn. Readings below 50 signal contraction.

Another Shoe to Drop: Credit Cards

Even The New York Times published a rare ahead-of-the-curve October 28 admission. In an Eric Dash article headlined: “Consumers Feel the Next Crisis: Credit Cards.” As they’re squeezed by an “eroding economy.” An “already beleaguered banking industry” is threatened as lenders are sharply curtailing credit card offers and “sky-high credit lines.” Even creditworthy consumers are affected because of growing amounts of bad loan losses. An estimated $21 billion in the first half of 2008.

With layoffs increasing, analysts forecast at least another $55 billion in the next 18 months. Around 5.5% of outstanding debt now and may “surpass the 7.9% level reached after the technology bubble burst in 2001.” As a result, lenders like American Express, Bank of America, MasterCard and Visa are “tightening standards (and) culling their portfolios of the riskiest customers.” Credit lines are being reduced as well, and lenders are avoiding over-indebted consumers. Treading carefully in housing ravaged areas and with customers employed by troubled industries.

It’s impacting already strapped households. With lower credit scores. Higher rates for those rated creditworthy. Less willingness to allow high balances. Less availability of loans with many needing them shut out. “The depth of the financial crisis has shocked a credit-hooked nation into rethinking its habits. Many families once content to buy now and pay later are eager to trim their reliance on credit cards….At the same time,” lenders are retrenching with one CEO saying “If you’re not fearful, you’re crazy.”

It’s seen in mail solicitations slowing to a trickle. “Credit card issuers have realized their market is shrinking and that there is no room for extra credit cards, so they have to scale back,” according to Mintel analyst Lisa Hronek. “People are completely maxed out with mortgages, home equity lines and credit card debt.”

It’s hitting hard on both ends. Rising losses and shrinking profits for issuers. Less credit availability for consumers already strapped and cutting back of necessity. At a time the only bull market is in bailouts. Amidst towering debt levels. Soaring defaults. Wobbly global economies. Some cratering. America teetering. Confidence shattered, and everyone wondering what’s next.

First the Banks. Next “the Coming Insurance Meltdown”

According to analyst Mike Larson of Weiss Research. AIG was just the beginning. Falsely called an “anomaly (and that) the rest of the insurance industry is doing just fine.” Larson and Weiss disagree and identified “46 insurers with $500 million or more in assets that are at an elevated risk of failure.” It’s seen in their share prices. Down 80 – 90% for some because the largest US and Bermuda-based insurers have lost $98 billion year-to-date, and they have more in unrealized losses.

A Possible Goeotterdaemmerung?

On October 28, from the Financial Times forum in a Peterson Institute for International Economics Anders Aslund article titled: “It can be worse than the Great Depression.” A possibility, not a prediction. Because of “the worst global asset bubble and financial panic” since that time. Because lessons learned then haven’t prevented new mistakes, and unlike in the 1920s, “CNBC and Bloomberg can spread worldwide panic instantly.” Old blunders may not be repeated, but “new policies (may be) even worse.”

Anders laid out a “then” and “now” comparison:

– Then: exchange rates over-zealously defended; Now: floating exchange rates could cause a trade panic;

– Then: the money supply shrank dramatically; Now: monetary expansion and budget deficits are dangerously excessive; currency collapses may result; the fundamentals don’t justify the current dollar surge;

– Then: nations didn’t go bankrupt; some may today; some major ones; Italy, for example, had over 100% of GDP in public debt before the crisis; it risks major state bankruptcies; America was unmentioned, but the rapidly mounting public debt and money supply growth alone pose immense risks, including default and future hyperinflation;

– Then: subprime loans existed at modest levels, but that era didn’t have “non-transparent collateralized debt obligations;” Now: derivatives “created the mother of all bubbles; the deeper the financial system, the harder we may fall;”

– Then: the Great Depression “largely emanated from two countries, the US and Germany; Now: “never before has the world seen such a monstrous and truly global bubble;”

– Then: financial institutions engaged in minimal overleveraging; Now: it’s mirror opposite; “never have big financial institutions been as overleveraged as Fannie Mae and Freddie Mac or the former US investment banks, not to mention the hedge funds;”

– Then: protectionism froze global trade; Now: frozen finances in countries like Iceland, Ukraine and possibly others have temporarily left them outside the world financial system;”

– Then: the dollar and gold “were unchallenged sources of value;” Now: the dollar is neither stable nor the uncontested world currency;

– Then: policymakers made mistakes but “stood for principles;” Now: “George Bush is assembling (Group 20 leaders) for a photo opportunity in Washington on November 15;” failure to come up with meaningful corrective policies “could unleash untold (global) financial panic;” and

– Then: the 1920s lacked television and the internet for fast information dissemination; Now: information and decisions move instantly; often with no transparency; the combination is potentially harmful.

The Global Europe Anticipation Bulletin (GEAB), LEAP/E2020′s Disturbing Prediction

In its October 15 28th edition. About a “global systemic crisis.” An alert because its researchers believe that before summer 2009 “the US government will be insolvent (and will) default and be prevented to pay its creditors (holders of US Treasury Bonds, of Fannie May and Freddy Mac shares, etc.).” It envisions “the setting up of a new Dollar to remedy the problem of default and of induced massive drain from the US.” It gives five reasons for its prediction:

– the current US dollar surge is temporary; the result of world stock market collapses;

– the Euro has become “a credible ‘safe haven;’ ” an alternative to the dollar;

– the out-of-control US public debt;

– the collapsing US economy; and

– future “strong inflation or hyper-inflation;” by 2009.

GEAB states: “the whole planet has become aware that a global systemic crisis is unfolding, characterised by the collapse of the US financial system and its contagion to the rest of the world.” As a result, “a growing number of global players are beginning to act on their own.” In their own self-interest. Because US policies are ineffective. The crisis is very serious and “far more important, in terms of impact and outcome, than” in 1929. With the US economy weaker now than then. Because of unmanageable public debt. Reckless consumer borrowing and spending. Enormous current account and budget deficits. A hollowed out industrial base, and a highly inflated dollar.

With that in mind, it’s up to “vigilant” citizens and “clear-sighted” leaders to assure that America won’t “drive the planet into a disaster.” It will take divergent policies. What’s “good for the rest of the world will not be good for the US.” America defaulting will be partly from “this decoupling of decision-making….” A new dollar will be “imposed.” And “one morning (in) summer 2009….after a long week-end or bank holiday,” Americans will discover that their “US T-Bonds and Dollars are only worth 10 per cent of their value….”

A Jesse’s Cafe Americain commentary suggests something similar. That in 2009, “the US will be forced to selectively default and devalue its debt.” Because of its extraordinary financial needs. A $2 trillion annual deficit. It will take a terrible toll on Treasuries. Forcing a significant drop by 2011. We’re approaching “the apogee of the Treasury bubble, with the credit bubble” already broken.

Once market deleveraging subsides, “the dollar and Treasuries will drop, perhaps with momentum, as the rest of the world realizes that the US has no choice but to default.” Unless foreign sources (for a while at least) keep buying American debt despite the risk. Offer debt forgiveness. The dollar is devalued short of default. Taxes raised substantially, and debt instruments pay higher interest rates. Even then, these measures may fall short and prove ineffective.

America way exceeded its debt service ability from real cash flows. A turnaround will require a “severe devaluation and selective default.” For GEAB down to 10 cents on the dollar. Following on its March 2008 prediction that by yearend “a formidable debacle will affect pension funds (worldwide) endangering the entire system of capital-based pensions.” Their revenues  collapsing “at the very moment when they should be making their first large series of payments to pensioners.” A disturbing picture in the current climate that may reveal other unexpected hazards in the coming months.

On October 28, Bloomberg reported on the Treasury’s “unprecedented” 2009 financing needs. To fund a growing budget deficit and raise hundreds of extra billions to contain the current financial crisis. To assure guarantees the government committed for. Almost $6 trillion alone for Fannie and Freddie debt and mortgage securities. With continued growing demands as other obligations arise. Plus over $1 trillion annually for national defense with all expenditure categories included. An impossible burden Bloomberg didn’t mention. A deepening dilemma as the financial crisis grinds toward more unsettling realities.

What Euro Pacific Capital’s Peter Schiff writes about in his 2007 book “Crash Proof: How to Profit from the Coming Economic Collapse.” What he adds to in commentaries on his web site: europac.net. His latest on October 31 titled “The Tales Get Taller.” Debunking mainstream explanations for recent dollar strength. A currency he’s very bearish on. Because of our extreme profligacy. Decades of borrowing trillions we can’t repay. How we blew it on consumption and by letting our industrial base erode.

Our problems are now too big to contain. A possible bankruptcy is ahead. “The main lesson our creditors will learn from this crisis is not to lend American consumers any more money. Once the lending stops, our ‘cart before the horse’ borrow to spend economy will crumble. While the rest of the world absorbs their losses and moves on, we will be digging our way out of the rubble for years to come. Earthquakes are caused by the fundamental shifts of tectonic plates beneath the Earth’s surface. A similar move is underway in the global economy.”

America’s salad days are over, he believes. We’ve gone from a nation of savers, investors and producers to one of borrowers, consumers and gamblers. Official government statistics lie. They conceal hidden truths. America’s house of cards is crumbling. It won’t be pretty when it collapses. His advice is get out of the dollar. Get your money out of the country while you can, and gold is one of his recommendations.

Gold is on Paul Amery’s mind as well in his Prudent Bear.com October 31 commentary titled “The Credit Crisis Endgame.” He sees it likely becoming “a bloody standoff between investors and governments (on a) market for government bonds” battlefield.

He reviewed the unfolding credit crunch stages:

– its beginning with liquidity drying up in “esoteric, structured-finance securities, linked to riskier types of mortgages;”

– it then spread “to more mainstream mortgage bonds, structured finance in general, and other types of debt;”

– by early summer 2008, it hit many non-financial companies having trouble refinancing loans;

– by late summer, it affected sovereign states; mostly ones with high current account deficits like Iceland, Hungary and Ukraine;

– it points globally to a spreading ailment affecting major economies and their bond markets.

The US for example. While nominal Treasury bond yields declined (10 year T-bonds at 4% October 31), their credit risk component has been increasing since last year. Credit specialists CMA DataVision shows the 10 year credit default swap (CDS) spread rose steadily. From 1.6 basis points in July 2007; to 16 basis points in March 2008; to 30 basis points in September; and to over 40 basis points on October 27. In other words, insuring against a US government bond default rose 25-fold in the past 15 months. The same is true for Britain and Germany.

Some observers find this astonishing. How could America or other major states default on their debt? It would be “the equivalent of a (financial market) nuclear explosion” smashing global economies with it.

Further, the dollar is the world’s reserve currency. The Fed can create unlimited amounts of them, so any default would likely be through inflation and devaluation, some argue.

Maybe not, according to University of Maryland’s Carmen Reinhart and Harvard’s Kenneth Rogoff in their April 2008 paper: “The Forgotten History of Domestic Debt.” They explained that throughout history debt defaults have been more common than realized. They’re the rule, not the exception, in times of severe economic stress.

Again America for example. Budget and national debt levels have exploded. Bailout amounts will increase them and cause enormous strains. Morgan Stanley  forecasts a sharply rising 2009 fiscal deficit. Besides the escalating national debt, to more than double the previous 1983 record. As a percent of GDP, it’s expected to be around 70% in 2009. The tip of the iceberg, some say, compared to the private debt to GDP ratio. At an unprecedented 300%, according to University of Western Sydney economist Steve Keen.

He saw the storm coming before most others. He’s also very skeptical about the rescue plan and compares it to King Canute’s effort against the tide. Given the enormity of the problem, he sees the possibility of the debt pyramid crashing from a violent and uncontrollable chain of defaults, taking the government bond market down with it.

Strains in the US Treasury market are already evident in spite of their historically low yields. Recent auctions have had poor bid-to-cover ratios and long “tails” indicate weak demand. Secondary market delivery failures are also at record levels. Another sign of poor liquidity. If the worst of all possible worlds happens – a US debt default – the consequences will be “cataclysmic for the financial economy.” The entire system will be bankrupt.

Where to hide if it happens? Amery suggests a few safe havens. The “ultimate” one being in precious metals. Think gold. Understand also that the $725/ounce October 31 spot price reflects market manipulation (over the short term) to drive it down from its March 2008 high above $1000. As one analyst puts it: I’ll “give you three good reasons why gold is (underperforming). First: manipulation. Second: rampant manipulation. Third: incessant, nonstop, unabated, fiendish manipulation.”

He also believes the process is only temporary and won’t stop the metal’s eventual rise. Given the current crisis and its likely duration, it won’t surprise experts to see its price above $1000 again before it ends.

A Final Comment

In spite of trillions of asset losses. American and global households hardest hit. Wobbly world economies getting weaker. The virtual certainty of a deep and protracted recession, and the likelihood of no robust recovery when it ends.

Despite all this and Wall Street’s worst year in decades, it’s celebrating like it always does. With big bonuses. In the many billions of dollars. According to Bloomberg, Merrill Lynch plans $6.7 billion. Goldman Sachs about $6.85 billion and Morgan Stanley about $6.44 billion.

Bloomberg noted that Goldman, Morgan Stanley, Merrill, Lehman Bros. and Bear Stearns paid their employees “a cumulative $145 billion in bonuses from 2003 through 2007,” or more than the Philippines’ GDP. In 2007, the firms paid out a record $39 billion. In a year when three of them posted their worst quarterly losses ever and their shareholders lost over $80 billion. Two of them no longer exist. Another went into forced liquidation. Their combined 2008 losses should way exceed last year when they’re reported.

Yet there’s plenty of money for bonuses. Courtesy of ESSA/TARP. For executive pay and dividends as well. At a time all these companies are insolvent. Their survival dependent on federal handouts. US taxpayers are on the hook for them as their consumption declines. According to the Commerce Department at the fastest rate in 28 years. Because they don’t get big bonuses. Are maxed out on credit and haven’t the money to spend.

But the Fed and US Treasury do and plan to dispense more of it. To other takers lining up. Sovereign nations. Insurance companies. GM and Chrysler perhaps for their reported merger. Dependent on government cash to complete it. Any other company as well deemed worth saving. Big campaign contributors with friends in high places. What beleaguered homeowners don’t have.

Floated proposals to help them appear meager at best. For a fraction of the millions in trouble with inadequate suggested funding amounts. A suggested $40 billion for 20 million or more homeowners facing foreclosure. With more at issue as well, according to The New York Times. Giving qualified borrowers a few grace years. Perhaps three. For lower mortgage payments that won’t reduce their principal balance. It would only provide temporary relief and delay today’s problem for a later time. When households may be no better off than now, yet face higher ARM reset obligations.

What’s needed, but not proposed, is a 1930s type Home Owners’ Loan Corporation (HOLC) plan that refinanced homes at affordable rates and prevented foreclosures. One on a grand scale as part of an enlightened New Deal agenda.

In lieu of “trickle down” to fraudsters, “trickle up” for beleaguered households. An idea so far with no traction for a new administration to consider. The one now in charge has no “imminent” plan, according to White House spokesperson, Dana Perino. On October 30, she added only that “If we find one that we think strikes the right notes….then we would move forward and announce it.” Ones so far advanced are for Wall Street. Main street apparently can wait.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM – 1PM US Central time for cutting-edge discussions with distinguished guests on world and national topics. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10773
© Copyright Stephen Lendman, Global Research, 2008

The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=10794

see

The End of Prosperity – The Worst Is Yet to Come by Stephen Lendman

Wall Street’s Trojan Horse by Michel Chossudovsky

The World Tires of Dollar Hegemony By Paul Craig Roberts

Richard C. Cook’s latest book, We Hold These Truths now available

Special Report: War or Peace? The World After the 2008 U.S. Presidential Election By Richard C. Cook

The Economy Sucks and or Collapse

The End of Prosperity – The Worst Is Yet to Come by Stephen Lendman

Dandelion Salad

by Stephen Lendman
Global Research, October 31, 2008

From too much of a good thing. From the 1980s and 1990s excesses. From the longest ever US bull market. Heavily manipulated to keep it levitating. From August 1982 to January 2000. An illusory reprieve from October 2002 to October 2007. Fluctuations aside, all lost in the past 12 months. The wages of sin are now due, and payment is being painfully extracted. From all nations globally. Affecting ordinary people the most who had nothing to do with creating booms and busts. They got little on the upside but are paying dearly for the down.

Even “free-market” champions are unnerved. Arthur Laffer for one in his October 27 Wall Street Journal op-ed headlined: “The Age of Prosperity Is Over.” He states that “This administration and Congress will be remembered like Herbert Hoover,” but not for the right reasons. He continued: “what this administration and Congress have done will be viewed in much the same light as what Herbert Hoover did in the years 1929 through 1932. Whenever people make decisions when they are panicked, the consequences are rarely pretty. We are now witnessing the end of prosperity.”

Readers will remember Laffer from the Reagan era. The “supply side trickle down” guru. More popularly called “Reaganomics.” GHW Bush’s “voodoo economics.” The faux theory that tax cuts for the rich grow the economy and benefit everyone. By encouraging well-off recipients to earn more money. For more tax revenue. For the greater good of everyone.

What Reagan’s budget director, David Stockman, called a “Trojan Horse.” To con Congress into accepting “Republican orthodoxy (and pave the way for) the greed level, the level of opportunism, (to get) out of control.” From tax cuts for the rich. Loopholes for special interests. Tax increases on low and middle-income households. Taking from the many for the few. What Laffer and others championed and still do. Along with believing markets work best so let them. Government is the problem, not the solution.

The results weren’t encouraging. Macroeconomic growth for sure until it ended. The rich got much richer. The top 1%. Another 9% to some extent. Not the rest, however. Their well-being either stagnated or declined and now are in free-fall. Their savings and futures erased by rampant deleveraging. Market manipulation. Massive fraud. Leaving millions of households in trouble. With the worst likely yet to come. All Laffer can do is resurrect Hoover. The real villains are present and among us. Some active. Others not. Their venom corrosive and harmful. Hurting economies and people everywhere.

From boom now bust. Rampant speculation and fraud. In most asset classes. Especially equities, housing, commercial real estate, commodities, currencies, and huge leveraged debt for levitation.

As a consequence, world economies are reeling and leaders scrambling to contain them. With the most ambitious/outrageous rescue plans ever. Likely mindful, or they should be, that all their grand schemes can’t undue nearly three decades of excess. The most extreme financial sins. The age of levitation is over. As financial expert and investor safety advocate Martin Weiss puts it:

Here’s the “inescapable reality – Now that the global debt bubble has burst, all the world’s leaders and all their radical new measures can’t” contain, let alone undue, all the damage. They can’t “turn back the clock or reverse decades” of excess and greed. “They cannot repeal the law of gravity or prevent investors from selling. Even as they sweep piles of bad debts under the carpet with bailouts and buyouts, mountains of new debts will go bad – another flood of mortgages that can’t be paid, a new raft of credit cards falling behind, an avalanche of companies defaulting on their bonds.”

No matter how many billions they throw at the problem, “trillions more in wealth will be wiped out in market declines. For a while longer, our leaders may try to play their last cards in a herculean effort to stop the fall.” They may commit good money to save bad. “Inject more money into bankrupt banks, broken brokerage firms, endangered insurers and any company they deem essential to the economy.”

It won’t work. “It will be a blood transfusion with a failing heartbeat.” Soon enough they’d better learn that “it’s impossible to save the entire world.” The right choice is to “accept the (inevitable) decline, manage it proactively,” and avoid the perilous alternative. An “open floodgate (of) climatic selling. A crash producing “the final phase of the decline.” Erasing “anywhere from 50% to 90% of (stocks, corporate bonds, real estate, foreign currencies and commodities valuations) in a matter of months or even weeks.”

“As many as one-fourth (of S & P 500 companies) could go bankrupt.” The entire index “flip(ing) from the black to the red.” Around 20% of US workers could lose their jobs. The standard of living of American households seriously harmed. The potential for big trouble ahead is real and growing. The effect on world economies serious and spreading.

Weiss called the Fed’s latest rate cut a “DUD,” and said the big news was “the Fed’s latest cockamamie effort to save the world.” With $120 billion to Brazil, South Korea, Singapore and Mexico ($30 billion each). Besides committed IMF funds for Hungary ($25.5 billion), Ukraine ($16.5 billion), and Iceland ($2.5 billion) and a new $100 billion Short-Term Liquidity Facility offering short-term loans.

It’s an illusion to think Bernanke can play “Santa Claus, the Pied Piper and the Fairy Godmother all in one act.” In fact, he’s “desperate” and resorting to “the most radical measures of all time. Playing his last cards.” Knowing that if he fails, “it’s game over. Taking huge risks – that his rescue-the-whole-world schemes will backfire in the form of falling confidence in the US government as a whole.” Besides there’s no way make banks lend. Consumers borrow. Continue to spend. Have the means to do it. Reverse decades of excess or repeal the law of gravity to keep markets levitating.

On October 28, more evidence of what he’s up against from the Washington Post. In an article headlined: “Downturn Clobbers Public Pension Funds.” According to staff writer Peter Whoriskey, they’re being ravaged across the country, “with many state and local governments (losing) more than 20% of their retirements pools.” Even worse because they were inadequately funded before the crisis, according to the Government Accountability Office. And the 20% figure is conservative given the severity of the October selloff.

According to Chicago-based Northern Trust Investment Risk and Analytical Services’ William Frieske, “We expect this (will) be the worst year we’ve seen since we’ve been tracking the funds.” They service 27 million people. Supported by taxpayer money, investment returns and employee contributions. The bear market “played havoc on” actuarial calculations to ensure enough is available for future retirees. Because about 60% of fund assets are in common stocks, according to the National Association of State Retirement Administrators.

What’s ahead depends on economic prospects. Whether markets will continue to contract. How deep and for how long. When recovery will occur. Will it be sustainable, and is there enough time to make up the shortfall for retirees expecting their pensions. After the Dow bottomed in 1932, it took a generation to recoup losses. What investors hope won’t repeat today.

Much will given the raft of bad news:

– spreading layoffs across the country; on October 29, The New York Times reporting their painful impact in New York; spreading “well beyond Wall Street;” expected to “drive up the city’s unemployment rate and strain the state’s unemployment insurance fund;” hitting everywhere, including service firms; professional ones – law firms, banks, other financial services, publishers, tourism, besides tens of thousands on Wall Street;

– official unemployment heading for the high single digits; the true number far higher and growing; real pain is being felt as a result;

– the worst housing crisis since the 1930s; continued record home price declines, according to the S&P Case-Shiller Index; 16.6% in its latest (20 major metropolitan areas) reading; compounded by a glut of unsold homes;

– in an October 28 news release, the Center for Economic and Policy Research (CEPR) reported grim findings; a comparison of ownership vs. rental costs “points to negative equity accruals in many markets over the next 4 years” even as prices keep falling; many homeowners won’t ever accrue equity with many going under water; in the most inflated markets, homeownership costs outpace rents by as much as 300% placing enormous stress on household income, especially for middle and lower-income families;

– declining production; autos especially hard hit; Chrysler sacking 25% of its salaried force; GM suspending employee benefits; all three auto makers closing or idling plants; steel affected as a result; 17 of the nation’s 29 blast furnaces shut down; other industries also under stress;

– economists lowering their GDP forecasts; many saying we’re well into recession; fourth quarter results will be the worst since the severe 1981 – 82 one, and 2009 also looks even bleaker; third quarter ones out show an annualized .3% decline; most disturbing a minus 3.1% PCE (personal consumption expenditure) reading, the first drop since 1991; private investment also shrunk 1.9%;

– against this backdrop, little relief is being proposed; where it’s most needed; so beleaguered homeowners can keep their properties; to struggling households to stimulate demand; not for toxic assets or to fund giant bank acquisitions; what Alan Nasser reported in his article titled “The Bailout Lie Exposed;” that big banks won’t lend out their windfall; that New York Times economics reporter Joe Nocera confirmed from an employee-only recording of a JP Morgan Chase conference he secured; that the bank will use bailout funds for acquisitions; leveraged buyouts; with public money; for assets at fire sale prices; courtesy of US taxpayers; for further consolidation; a multi-generational tradition; to crush competition and grow monopolies; with both presidential candidates on board; assuring reduced social spending and no return to enlightened New Deal policies when they’re most needed.

In Times of Crisis, Bring Out the Heavy Artillery

It’s a common tactic and the one used in 1929. Following Black Thursday (October 24), Black Monday (October 28) and Black Tuesday (October 29). Popularly called the Great Crash of 1929. After which the publication Variety headlined: “Wall Street Lays an Egg.” A much larger one than at first realized but serious enough for the establishment to get John D. Rockefeller to state (on Black Tuesday):

“Believing that fundamental conditions of the country are sound and that there is nothing in the business situation to warrant the destruction of values that has taken place on the exchanges during the past week, my son and I have for some days been purchasing sound common stocks.” Fast forward to the present. History is again repeating. At another crisis time. No garden variety one. The most serious since the 1930s. With investor and public confidence severely shaken. Enough for a repeat of Rockefeller’s bravado.

Dire enough to get Warren Buffett to do what he rarely if ever does. Pen an op-ed. On October 16 in The New York Times. To sound like John D. and say in spite of gloom and doom, he’s “buying American stocks.” To affirm his faith in “the long-term prosperity of the nation’s many sound companies.” To predict “most major companies will be setting new profit records 5, 10 and 20 years from now.” At age 78, he may not be around to confront critics if he’s wrong.

On October 27, the Wall Street Journal took aim at him. A very uncharacteristic gesture toward a large (and successful) investor. Let alone the most famous individual one and one of the richest. “Even the Oracle Didn’t Time It Perfectly” headlined the Journal. His class A Berkshire Hathaway shares have taken a hit like most others year to date, but that’s a side issue for the Journal.

It’s troubled because “the Oracle of Omaha failed to see how bad the market was going to get.” And he’s even exposed to credit default swaps (CDSs). Increased his position to $8.8 billion from mid-2006 – mid-2008. Already took a $490 million loss in the first quarter. Another $136 million in the second, and likely much more unreported so far for the third and beyond.

These positions show he “was relatively comfortable about the prospects for US corporations and global stocks at a time when (other observers) were predicting a bust.” Maybe it’s “time for the Oracle to get a new crystal ball.”

Warnings from Abroad

Overseas comments differ greatly from more optimistic ones here. Germany’s finance minister, Peer Steinbruck, for example. On October 26, the Financial Times reported his fears about global financial markets collapsing. At least through 2009. He said: “The danger of a collapse is far from over. Any attempt to give the all clear would be wrong.”

His government committed $635 billion to rescue troubled banks. A “financial market stabilization fund.” With most of it in credit guarantees and a smaller portion to recapitalize banks and buy toxic assets. But unlike the Paulson plan, Germany won’t compel banks to take it and many so far haven’t. For fear investors will punish them for admitting they’re in trouble and also over concerns that conditions imposed are too stringent. Steinbruck is working through this and said banks eschewing state aid are “irresponsible.”

Leaders in Europe fear the financial crisis will tip the continent into serious recession. And cause a currency meltdown in the East. Across former Soviet bloc nations. Testing currency pegs “on the fringes of Europe’s monetary union in a traumatic upheaval” reminiscent of the 1992 Exchange Rate Mechanism collapse. Bank of New York strategist Neil Mellor called it “the biggest currency crisis the world has ever seen.”

On October 26, Ambrose Evans-Pritchard wrote about it in the UK Telegraph. He cites what experts fear. A “chain reaction within the eurozone itself.” A surge in capital flight from Austria. The latest Bank of International Settlements data aren’t encouraging. They show Western European banks in trouble. With the most exposure “to the emerging market bubble, now bursting with spectacular effect.”

The amount involved is huge. Around three-fourths of “the total $4.7 trillion in cross-border bank loans to Eastern Europe, Latin America and emerging Asia.” Much greater than America’s subprime lending. Iceland was at the leading edge of the problem. Hungary and other states may follow. In a Paul Krugman New York Times op-ed, he discussed currency crises and said he “never anticipated anything like what’s happening now.”

He cited Morgan Stanley’s chief currency strategist Stephen Jen (his former student) saying since Lehman’s demise, we’ve seen world emerging market currency crises. “So far, the US financial sector has been (at) the epicentre of the global crisis. I fear that a hard landing in EM assets and economies (unfolding in Europe) will become the second epicentre in the coming months, with very damaging feedback effects on the developed world.”

Already Austria, Hungary, Ukraine, Serbia, Belarus “queuing up for” IMF rescue packages. Jumping from the frying pan into the fire unless they can arrange no-strings loans. Given the gravity of the crisis and danger of its contagion, maybe so or at least escape the worst type IMF demands. They’ve swallowed enough neoliberalism already. It exacerbates their dire condition.

Europe is now reeling under stress. Heavily pressured by emerging market debt. The Eastern bloc borrowed heavily in dollars, euros and Swiss francs. Some in Hungary and Latvia in Yen. An unpublished 2006 IMF report warned about their most dangerous excesses in the world. Nothing was done to curb them, and finally its authors “had their moment of vindication as Eastern Europe went haywire.” It hit Hungary, Romania and put Russia “in the eye of the storm, despite its energy wealth. The cost of insuring Russian sovereign debt (through CDSs) surged to 1200 basis points last week.” More than Iceland “before Gotterdammerung struck Reykjavik.”

With oil prices plunging, markets no longer believe that Russian state spending is viable, and the fear is that peripheral contagion will invade the eurozone’s core. Yield spreads between German and Italian 10-year bonds are being watched. “They reached a post-EMU (European Economic and Monetary Union)” high of 93 in late October. No one knows the “snapping point” but it’s feared that anything above 100 is cause for alarm.

BNP Paribas’ chief currency strategist Hans Redeker cites “an imminent danger that East Europe’s currency pegs will be smashed unless EU authorities wake up to the full gravity of the threat, and that in turn will trigger a dangerous crisis for EMU itself.”

“The system is paralyzed,” he said, “and starting to look like Black Wednesday 1992.” He fears a very deflationary effect across Western Europe. One “almost guaranteed” to implode the euroland money supply. As for UK banks, they’re lightly exposed to the former Soviet bloc. But not to emerging Asia. In the amount of $329 billion. Almost as much and America and Japan combined. Evan-Pritchard concludes with a sobering note for his UK readers. “Whether you realise it or not, your pension fund is sunk in Vietnamese bonds and loans to Indian steel magnates.” Like for many other investments, that money’s safety is far from secure.

Neither is Britain according to a Mail online October 27 article headlined: The country “may need 0% interest rate to avoid a depression, leading economist warns.” He’s Charles Goodhart. A founding member of the Bank of England’s Monetary Policy Committee (MPC). Now a professor emeritus of banking and finance at the London School of Economics.

He told Channel 4′s Dispatches program: “Interest rates will go down from now, by how far and how fast nobody knows. They could go to zero” like in Japan. And may have to. Yet other experts warn that at this stage big cuts are “too little, too late” because the country already faces a long severe recession.

On October 29, more confirmation from a UK Independent article headlined: “Repossessions soar by 70 per cent as joblessness rises.” From new Financial Services Authority figures. Some 11,054 second quarter foreclosures. Up from under 6500 last year. Numbers expected to keep rising, and new Land Registry data revealed continuing house price declines. Around 8% in the past 12 months.

A gloomy picture, according to Howard Archer. Global Insight’s chief UK economist. In his view, “The fundamentals continue to be largely stacked against the housing market, and it seems odds-on that prices will fall considerably further.” Especially given “accelerating unemployment set to pick up significantly….recession (and) wages (held) down.” Add to this a 167% rise in calls to the housing charity Shelter helpline. Its chief executive, Adam Sampson, said: “These figures are not only shocking and worse than expected, they highlight the crippling severity of the credit crunch on ordinary homeowners.” It’s hit Britain especially hard, but economic woes are little different throughout the continent.

In Japan as well after the benchmark Nikkei index hit a 26 year low and a scant 18% of its 1989 high. Despite a few days of rebound, it made front page (October 28) Wall Street Journal news in an article headlined: “Crisis Deals New Blow to Japan” in a feature story about the nation’s largest bank. Mitsubishi UFJ Financial Group. On October 27, it said it would raise $10.7 billion in new capital. The result of its own vulnerabilities and Japan’s economic turmoil. According to Kristine Li of Tokyo’s KBC Securities: Mitsubishi’s announcement was a “big blow” to investors’ confidence. Its share price reflected it. Plunging 15% on October 27. Other banks hit as well. Major ones. They, too, need more capital and will have to raise it from investors.

Some in Tokyo believe the country can do little to reverse the downward trend. According to Credit Suisse’s Toyko-based chief equity strategist, Shinichi Ichikawa, “The Japanese government alone can’t fix” the nation’s export woes or the deepening global crisis. “The factors hurting the market are beyond Japan’s control.”

The Financial Times paints a similar picture. The Nikkei down 53% through late October and has “the dubious honour of having been the worst performing leading developed country market last year.” The current crisis hit Japan in several ways. Its banking and financial sectors “in spite of having relatively less exposure to toxic assets.” Nonetheless, investors worry about their underlying strength or lack of it.

Japan is heavily export dependent. For most of its economic growth and health. It’s hurt by a surging Yen. At a 13 year high against the dollar. In addition, hedge funds and foreign investors are bailing out. The way they’re doing everywhere, but it’s hurting Japan more than most because it relies so heavily on outside capital.

So does China in the form of foreign investment that doesn’t affect how it manages its banks. At least in what they can invest in non-Chinese securities. Very little and why the government is spending nothing to bail them out. There’s no need because they own scant amounts of toxic assets and use their own to fuel internal growth. What China needs badly for its large and growing population.

It’s not insulated from the global crisis and will feel it in slower growth. Still expected to be impressively high although certain to drop from its 9.9% in the first nine months of 2008. Down from 12% last year. Amidst a deepening global slump. It’s helped by strong domestic demand and its exports. Up an impressive 21.5% over last year. Heavily to Asia to make up for slumping Western demand.

It’s affected China’s toy manufacturers. China’s customs agency reported that 52.7% of them shut down in the first seven months of 2008. Mass layoffs resulted. Other industries are also affected. Textiles, shoes, clothing, home appliances and electronics because of slumping Western markets. Millions of workers are at risk and why China announced an economic stimulus plan to keep growth as high as possible. A targeted minimum 8%. If achieved will be impressive by any standard.

A potential glimmer of light amidst a dismal global outlook with China determined to keep it that way although there’s no assurance it can. The reason its stock market slumped like most others. However, it may rebound sooner given the government’s commitment to big infrastructure spending increases. With its “embarrassment of riches” according to The Economist. Growing “at a staggering rate” says its Intelligence Unit. Its huge $1.75 trillion in foreign currency reserves. Likely to top $2 trillion by yearend. That can be used for roads, airports, nuclear power plants, hydro power stations, and more. To create new jobs for laid off workers. As many as possible. What America should do to stimulate growth. Not commit billions for corporate acquisitions. Bailouts that won’t work. That will harm the economy, not heal it. The reason even in today’s climate China’s star is rising. In the US, it’s growing dim.

The Worst Is Yet to Come

According to economist Nouriel Roubini. Called Dr. Doom for his gloomy views that today command worldwide respect. Opinions once dismissed now widely sought. He believes recession began in early 2008. Will last throughout 2009. Will be severe and painful with GDP contracting 4 – 5%. On October 29, he told Bloomberg: “We’re entering a vicious circle where economies are spinning down, financial markets are spinning lower, and policy makers in my view – and that’s my biggest fear – have lost control of what’s going on in the financial markets.”

In London in late October he predicted that hundreds of hedge funds will close down and given the extent of panic selling markets may have to suspend trading. Perhaps for a week or more before resuming. In September, Russia’s stock exchanges shut down after their steepest ever one day fall. They did again in late October after falling nearly as much. Perhaps Wall Street is next. Maybe Europe.

If the latest (October 28 reported) consumer confidence report is an indication, it may happen sooner, not later. It was dismal by any standard. From the Conference Board. An all-time low and far below expectations. Surveyed economists forecast a reading of 52. It came in woefully short at 38 from an upwardly revised 61.4 September figure. Results were “significantly more pessimistic” on future business prospects and jobs. It signals trouble if translated into spending that, in turn, means lower profits and share prices already crushed over the past 12 months. With no end of pain in sight.

Yet markets remain volatile because of heavy insider manipulation for big profits up or down. The “not-so-invisible hand” working its magic. Killing the “free-market” according to author Ellen Brown. Making it hazardous for ordinary investors to risk anything in this climate. Casino capitalism with the odds heavily favoring the house. Getting Brown to quote a talk show commentator saying: “I’m fully diversified; some under the mattress; some under the floor boards; and some in the backyard.” Better that than lose everything.

Because world economies are “at a breaking point” according to Roubini. “Essentially in free fall (and near) sheer panic.” Played out in markets that reflect future expectations. Despite relief rallies, very much pointing down and signaling no end of crisis in sight. It got Roubini to state:

“Every time there has been a severe crisis in the last six months, people have said this is the catastrophic event that signals the bottom.” Every time so far they were wrong. “They said it after Bear Stearns, after Fannie and Freddie, after AIG, and after” the $700 billion bailout plan. “Each time they have called the bottom, and the bottom has not been reached.”

Despite everything world governments throw at their problems, Roubini thinks investors no longer trust them or believe they’ll do the right things. For good reason. Because so far they haven’t and what they’re now doing is mostly woefully misdirected and inadequate. “Even using the nuclear option of guaranteeing everything, providing unlimited liquidity, nationalising the banks, making clear that nobody of importance is going to fail, even that has not helped.” Economic fundamentals no longer apply. “We are reaching a breaking point frankly.”

From his Hong Kong base, long-time investment advisor and fund manager Marc Faber publishes the “Gloom Boom and Doom” report. On how he views economic and financial prospects and investment opportunities worldwide. Given today’s climate, he’s more than ever in demand and shows up often in the financial press and on business channels like Bloomberg and CNBC. But not with good cheer.

He thinks that government interventions may be partially responsible for world market selloffs. Not least because in the current climate guaranteeing bank deposits leaves investors with no incentive to take risks. And other measures have been counterproductive as well. “They have increased volatility. It’s impossible to forecast market movements when you have interventions.”

Downward readjustments of company book values may be next in his view as happened in previous bear markets. That revealed overstated estimates. “If the global economy slows down as much as I think,” he said, “then a lot of book values will have to be adjusted downward quite substantially.” And rate cuts will create their own headache. “I think first we’ll have a bout of deflation that will actually be quite substantial, but then the budget deficits will go through the roof and the Fed will print even more money (so that) later on we’ll have very high inflation.”

Morgan Stanley (“perennial bear”) economist and chairman of the company’s Asia operations Stephen Roach was extremely critical of Fed policy in an October 27 Financial Times op-ed titled: “Add ‘financial stability’ to the Fed’s mandate.” He called “the era of excess as much about policy blunders and regulatory negligence as about mistakes by financial institutions.” We need a new system and new role for the Fed in his judgment. Explicitly to reference “financial stability.”

Something critically needed for a “post-bubble, crisis-torn US economy.” To make the Fed “tougher in its neglected regulatory oversight capacity.” To counter “bubble denialists (like) Alan Greenspan.” To mandate Fed policy “err on the side of caution.” To expose the “fatal mistake” in trusting “ideology” over “objective metrics. Like all crises, this one is a wake-up call. The Fed made policy blunders of historic proportions that must be avoided in the future.”

However, dealing with today’s crisis requires an even bigger international rescue according to Roubini. And whatever’s done, America faces “year(s) of economic stagnation.” After a deep protracted downturn. If as true as he forecasts, it signals the end of prosperity. A new age of austerity and world economies in extreme disrepair and needing an alternative model in lieu of a clearly failed one. Hugely corrupted as well.

Will world leaders seize the challenge and act? Only if mass outrage demands it and even then change at best may be minimalist and short-lived. If history is a guide. What better time to prove history wrong. If not now, when? If not by us, who? If not soon, maybe never. If that’s not incentive enough, what is?

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on Republic Broadcasting.org Mondays from 11AM – 1PM for cutting-edge discussions with distinguished guests on world and national topics. All programs are archived for easy listening.

http://www.globalresearch.ca/index.php?context=va&aid=10685

© Copyright Stephen Lendman, Global Research, 2008

The url address of this article is: www.globalresearch.ca/index.php?context=viewArticle&code=LEN20081031&articleId=10771

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Wall Street’s Trojan Horse by Michel Chossudovsky

The World Tires of Dollar Hegemony By Paul Craig Roberts

Richard C. Cook’s latest book, We Hold These Truths now available

Special Report: War or Peace? The World After the 2008 U.S. Presidential Election By Richard C. Cook

The Economy Sucks and or Collapse

Only Nader Is Right on the Issues By Chris Hedges + Nader on Guantanamo Bay

by Chris Hedges
Featured Writer
Dandelion Salad
Truthdig
Nov 3, 2008

Image by Dandelion Salad via Flickr

Tomorrow I will go to a polling station in Princeton, N.J., and vote for Ralph Nader. I know the tired arguments against a Nader vote. He can’t win. A vote for Nader is a vote for McCain. He threw the election to George W. Bush in 2000. He is an egomaniac.

There is little disagreement among liberals and progressives about the Nader and Obama campaign issues. Nader would win among us in a landslide if this was based on issues. Sen. Barack Obama’s vote to renew the Patriot Act, his votes to continue to fund the Iraq war, his backing of the FISA Reform Act, his craven courting of the Israeli lobby, his support of the death penalty, his refusal to champion universal, single-payer not-for-profit health care for all Americans, his call to increase troop levels and expand the war in Afghanistan, his failure to call for a reduction in the bloated and wasteful defense spending and his lobbying for the huge taxpayer swindle known as the bailout are repugnant to most of us on the left. Nader stands on the other side of all those issues.

Cindy Sheehan “debates” Nancy Pelosi at KQED + Hey, Hey, Nancy (music video)

Updated: added a music video

Cindy Sheehan for Congress

Cindy Sheehan
Dandelion Salad
featured writer
Cindy Sheehan for Congress

cindyforcongress

Having refused to be a guest on KQED´s public affairs program Forum because she was not allowed equal time, America´s leading peace activist Cindy Sheehan audaciously called in to the program this morning to get a chance to address House Speaker Nancy Pelosi. Upon stating that Nancy Pelosi has ducked her responsibility of meeting with her San Francisco constituents since 2006, the impatient program host, Michael Krasny, interrupted Cindy to prod her to ask the question his call screeners had agreed to. In all, Cindy Sheehan was granted less than 40 seconds to speak, and was not allowed to respond to Nancy Pelosi´s answer. Cindy Sheehan is running against Nancy Pelosi for California´s District 8 Congressional Seat in the U.S. House of Representatives. Written by Robert Livingston. Check out KQED radio show here http://www.indybay.org/newsitems/2008…

more about “Cindy Sheehan “debaes” Nancy Pelosi a…“, posted with vodpod

.

***

Updated

Hey, Hey, Nancy

TomSongs

more about “Hey, Hey, Nancy“, posted with vodpod

.

I don’t live in San Francisco
But I sure love that sourdough
And I don’t vote in San Francisco
But there’s one thing we all should know
That if we want to take this country back
Nancy Pelosi’s gotta go

Hey, Hey, Nancy
I sure hope Cindy kicks your ass
Yes I do
I said hey, hey, Nancy
Youre bushco’s favorite snake in the grass
Yes you are
Hey, Hey, Nancy
I sure hope Cindy kicks your ass
Yes I do

Have you read our Constitution
Or do you even give a damn
No, No
Youre blocking george’s prosecution
Makes you complicit in the scam
Yes it does
The only proper retribution
Is when we hear your jail door slam

Hey, Hey, Nancy
I sure hope Cindy kicks your ass
Yes I do
I said hey, hey, Nancy
Youre bushco’s favorite snake in the grass
Yes you are
Hey, Hey, Nancy
I sure hope Cindy kicks your ass

Now everybody

Singing Hey, Hey, Nancy
We sure hope Cindy kicks your ass
Yes we do
Singing Hey, Hey, Nancy
Youre bushco’s favorite snake in the grass
You know you are
Hey, Hey, Nancy
We sure hope Cindy kicks your ass

h/t: http://www.tomsongs.com/

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The Party’s Over? by Cindy Sheehan

Peace Activist Cindy Sheehan Seeks to Unseat Nancy Pelosi for Betraying the Constitution by Jennifer Fenton

Sheehan-Cindy

Our Joe Bageant discusses the election and poor whites

Sent to me by Jason Miller from Thomas Paine’s Corner. Thanks, Jason.

Nov. 3, 2008

more about “Our Joe Bageant discusses the election and poor whites (2008)“, posted with vodpod

THE AMERICAN NEWS PROJECT (ANP) traveled to Winchester, Virginia to get Joe Bageant on video, talking about his book Deer Hunting with Jesus, the upcoming election, corporate control of damn near everything, and why poor people without medical insurance are opposed to expanded access to health care. On its web site introduction, the American News Project described Joe’s book as “one of the most prescient pieces of analysis about American politics and culture in this election year.” The seven-minute video closes with 20 seconds of Joe picking his mandolin and singing. – Ken Smith

EDITORS’ NOTE: JOE BAGEANT was one of the earliest contributing writers to join and support Cyrano’s Journal Online, and since that day he has become not only a valued colleague and comrade in our work toward a better educated citizenry, but a personal friend in the truest sense of the word. His piercing intellect, unwavering loyalty to the idea of authentic democracy, genuine modesty, and intimate knowledge of a hard to understand (and often maligned) sector of American society makes him a person to listen to for anyone seriously devoted to the notion of real change in America. His success and increasing recognition in many venues thanks to the masterful Deer Hunting is something more than well deserved. It’s one of those rare cases of justice delayed but not denied. —PG

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Voter Suppression Voting Rights

The Economy Sucks and or Collapse

Ralph Nader Posts & Videos

McCain-John

Palin-Sarah

Obama-Barack

Biden-Joe

Vote for Change? Atrocity-Linked US Officials Advising Dem, GOP Pres Frontrunners (videos)

Dandelion Salad

Updated: Just bumping this up, in case you missed it the first time it was published. ~ DS

Originally posted Jan 4, 2008

Democracy Now!
Jan 3, 2008

Vote for Change? Atrocity-Linked U.S. Officials Advising Democratic, GOP Presidential Frontrunners

Independent journalist Allan Nairn and American Conservative correspondent Kelley Beaucar Vlahos discuss a little-addressed facet of the 2008 campaign: many of the top advisers to leading presidential candidates are ex-U.S. officials involved in atrocities around the world. [includes rush transcript]

Real Video Stream

Real Audio Stream

MP3 Download

More…

Guests:

Allan Nairn, Independent journalist. Runs the web-blog “News and Comment.” http://newsc.blogspot.com

Kelley Beaucar Vlahos, Freelance journalist in Washington. Her article on presidential advisers titled “War Whisperers” appeared in the American Conservative.

transcript

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