August 15, 2007
From: heathr234
The LA Times reports that the Patraeus Report which was supposed to be delivered to Congress by him will instead be written by the White House. Craig Crawford weighs in.
August 15, 2007
From: CSPANJUNKIEdotORG
AUGUST 15, 2007 KEITH OLBERMANN
August 15, 2007
From: heathr234
And the winner is…Melanie Morgan!!
Sorry the videos are no longer available. ~ DS
Updated: Mar 17, 2008 added another video.
August 15, 2007
From: clyde1952
The theory is that our world is actually somebody else’s universe on their own super personal computer playing a game or perhaps we are their hobby. Keith Olbermann and guest explain.
***
Updated: Mar 17, 2008
TWENTY PERCENT! CHANCE WE ARE ALL JUST A VIRTUAL SIMULATION!
***
Our Lives, Controlled From Some Guy’s Couch
Until I talked to Nick Bostrom, a philosopher at Oxford University, it never occurred to me that our universe might be somebody else’s hobby. I hadn’t imagined that the omniscient, omnipotent creator of the heavens and earth could be an advanced version of a guy who spends his weekends building model railroads or overseeing video-game worlds like the Sims.
But now it seems quite possible. In fact, if you accept a pretty reasonable assumption of Dr. Bostrom’s, it is almost a mathematical certainty that we are living in someone else’s computer simulation.
This simulation would be similar to the one in “The Matrix,” in which most humans don’t realize that their lives and their world are just illusions created in their brains while their bodies are suspended in vats of liquid. But in Dr. Bostrom’s notion of reality, you wouldn’t even have a body made of flesh. Your brain would exist only as a network of computer circuits.
[…]
By Kasia Anderson
Truthdig
Aug 11, 2007
A year ago, Hillary Clinton said she “would certainly take nuclear weapons off the table” when it came to confronting Iran about its expanding nuclear program. That comment contrasts conspicuously with her more recent statement, on Aug. 2, in response to fellow Democratic presidential candidate Barack Obama’s similar statement that nuclear weapons were “not on the table” for him in a hypothetical discussion about targeting terrorists in Pakistan and Afghanistan. “Presidents should be careful at all times in discussing the use and nonuse of nuclear weapons,” Clinton countered later that same day. “Presidents since the Cold War have used nuclear deterrents to keep the peace, and I don’t believe any president should make blanket statements with the regard to use or nonuse of nuclear weapons.”
Warning
This video contains images depicting the reality and horror of war and should only be viewed by a mature audience.
August 15, 2007
From: linktv
Selected Episode
Aug. 14, 2007
For more episodes and other Link TV programs:
http://www.linktv.org/originalseries
“Taliban Free Two Korean Hostages,” Jordan TV, Jordan
“Britain’s Foreign Policy to Diverge from America’s,” Al Jazeera TV, Qatar
“US Launches Operation Phantom Strike,” Al Arabiya TV, UAE
“Iraqi Security Forces Receive Hi-tech Detecting Devices,” Al-Iraqiya TV, Iraq
“Iran & Algeria Lay Ground Work for Islamic Economic Union,” Al-Alam TV, Iran
“A Look at the Executive Forces of Hamas,” Dubai TV, UAE
“Exclusive Interview with Sudanese Rebel Leader,” Al Jazeera English, Qatar
By Andrew Gumbel in Los Angeles
Published: 15 August 2007
The US already kills more of its prisoners than almost any other country. Now the White House plans to cut the right of appeal of death row inmates…
The Bush administration is preparing to speed up the executions of criminals who are on death row across the United States, in effect, cutting out several layers of appeals in the federal courts so that prisoners can be “fast-tracked” to their deaths.
With less than 18 months to go to secure a presidential legacy, President Bush has turned to an issue he has specialised in since approving a record number of executions while Governor of Texas.
The US Attorney General, Alberto Gonzales – Mr Bush’s top legal adviser during the spree of executions in Texas in the 1990s – is putting finishing touches to regulations, inspired by recent anti-terrorism legislation, that would allow states to turn to the Justice Department, instead of the federal courts, as a key arbiter in deciding whether prisoners live or die.
The US is already among the top six countries worldwide in terms of the numbers of its own citizens that it puts to death. Fifty-two Americans were executed last year and thousands await their fate on death row.
In some instances, prisoners would have significantly less time to file federal appeals, and the appeals courts significantly less time to respond. On the question of whether defendants received adequate representation at trial – a key issue in many cases, especially in southern states with no formal public defender system – the Attorney General would be the sole decision-maker.
Since Mr Gonzales is a prosecutor, not a judge, and since he has a track record of favouring death in almost every capital case brought before him, the regulations would, in effect, remove a crucial safety net for prisoners who feel they have been wrongly convicted.
…
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August 15, 2007
From: current
In the recent Democratic Presidential Debate CNN decided to mix things up a bit by asking people to ask the candidates questions by uploading videos to YouTube. Not wanting to be left out, the SuperNews team decided to mix things up even more by selecting a few videos for the candidates themselves.
see:
Republicans: Too “Important” for YouTube Debate? (video)
TPMtv Highlight Reel: The CNN/YouTube Dem Debate (video)
Dandelion Salad
Dandelion Salad
by Gareth Porter
Global Research, August 15, 2007
IPS
When a top U.S. commander in Iraq reported last week that attacks by Shiite militias with links to Iran had risen to 73 percent of all July attacks that had killed or wounded U.S. forces in Baghdad, he claimed it was because of an effort by Iran to oust the United States from Iraq, referring to “intelligence reports” of a “surge” in Iranian assistance.
But the obvious reason for the rise in Shiite-related U.S. casualties, — ignored in U.S. media coverage of Lt. General Raymond Odierno’s charge — is that the Mahdi Army of Moqtada al-Sadr was defending itself against a rising tempo of attacks by U.S. forces at the same time attacks by al-Qaeda forces had fallen.
In his press briefing on Aug. 5, Odierno, the second-ranking U.S. commander in Iraq, blamed the rise in the proportion of U.S. casualties attributable to Shiite militias on Iran “surging their support to these groups based on the September report” — a reference to the much-anticipated report by General David Petraeus on the U.S.’s own surge strategy.
Odierno claimed intelligence reports supported his contention of an Iranian effort to influence public perceptions of the surge strategy. “They’re sending more money in, they’re training more individuals and they’re sending more weapons in.”
He repeated the charge in an interview with Michael R. Gordon of the New York Times published on its front page Aug. 8 under the headline, “U.S. Says Iran-Supplied Bomb Is Killing More Troops in Iraq.” In that interview, he declared of Iran, “I think they want to influence the decision potentially coming up in September.”
What Odierno framed in terms of an Iranian policy, however, can be explained much more simply by the fact that the U.S. military mounted more operations on Moqtada al-Sadr’s Mahdi Army during the spring and summer.
The U.S. command has not provided any statistics on the targets of its operations in recent months, but news reports on those operations reveal a pattern of rising U.S. attacks on Mahdi Army personnel since March 2007.
Between Apr. 26 and Jun. 30, the U.S. command in Baghdad announced dozens of military operations in Baghdad — the vast majority in Sadr City — solely for the purpose of capturing or killing Shiites belonging to what were called “secret cells” — a term used to describe Mahdi Army units alleged to be supported by Iran.
In July the Mahdi Army resisted these raids in many cases. On Jul. 9, for example, U.S. troops cordoned off an area in Sadr City and began searching for members of what the U.S. command called a “criminal militia” accused of planting roadside bombs. According to the official military press release, the U.S. troops were “engaged by rocket-propelled grenades and small arms fire from numerous locations.”
In short, the rise in deaths of U.S. troops in Baghdad in July reflected the increased pace of U.S. operations against the Mahdi Army and the Mahdi Army’s military response.
Odierno conceded as much in the same press conference: “Because of the effect we’ve had on al-Qaeda in Iraq and the success against them and the Sunni insurgency,” he said, “we are focusing very much more on the special groups of the Jaish al-Mahdi [Mahdi Army] here in Baghdad.”
The major briefing by the U.S. command on alleged Iranian support for Iraqi Shiite militias in recent weeks appears to contradict Odierno’s claim that intelligence showed increased Iranian assistance to those militias. Brig. Gen. Kevin Bergner told reporters on Aug. 2 — after a “surge” in Iranian assistance had allegedly taken place — that the rate of training of militia groups in Iran had remained stable for a long time.
The transcript of the briefing also shows that Bergner did not claim any recent increase in financial assistance to the Mahdi Army.
Odierno’s reference to “sending more weapons in” continued the practice of the George W. Bush administration to claim that Iranian officials actually ship weapons to Shiite militias in Iraq, despite the fact that no evidence of such a role has been found after four years of trying.
Odierno told the New York Times that explosively formed penetrators (EFPs) accounted for one-third of combat deaths suffered by “U.S.-led forces” — including Iraqi and British forces — in July. But he said nothing about the proportion of total U.S. troops killed or wounded by them.
The Bush administration continues to assert that EFPs are provided by the Iranian government, despite numerous discoveries by U.S. forces of workshops manufacturing such devices in Iraq.
Odierno’s charges are the latest addition to an ongoing Bush administration narrative about developments in Iraq that treats all Shiite activity outside the Iraqi government as reflecting Iranian policy.
Its central theme of an Iranian policy to drive the U.S. out of Iraq by killing U.S. troops, first introduced in January, has branched out into several sub-themes, one of which is that Sadr has lost control over the Mahdi Army. The U.S. command has been claiming it has broken up into “rogue units” — also called “special groups” or “secret cells”. Those “rogue units” in turn are said to have become instruments of Iranian policy.
Although the Mahdi Army operates on a highly decentralised basis, and some units have been involved in sectarian activities that Sadr did not approve, the U.S. military has never produced evidence that a significant number of units are no longer loyal to Sadr.
The “rogue units” line has been used to suggest that those units that were loyal to Sadr were cooperating with the United States and to justify U.S. attacks on the Mahdi Army both in Baghdad and in Southern Iraq.
Gen. Petraeus claimed publicly that Sadr had agreed in talks with Iraq’s Prime Minister Nouri al-Maliki to the deployment of U.S. troops to Baghdad’s Sadr City district in return for assurances that searches and raids would be conducted in a “respectable manner”.
Sadr’s spokesman in parliament said, however, that the understanding had been that Iraqi forces would conduct searches and that U.S. troops would intervene only if they faced resistance. The spokesman said U.S. troops had violated the understanding.
At first, Sadr’s troops stayed off the streets and did not resist U.S. troops. But in March Sadr’s office denounced the U.S. troop deployment in Sadr City and called on people to take to the streets in protest. And a Shiite cleric loyal to Sadr exhorted followers at Friday prayers not to cooperate with the U.S. occupation of Sadr City.
On Apr. 8, Sadr issued a statement urged the Iraqi army and police to stop cooperating with the United States and told his guerrilla fighters to concentrate on pushing U.S. forces out of the country.
Thus it requires no Iranian hand to explain the escalation of the conflict between the Mahdi Army and the U.S. military that accounts for the changing pattern of U.S. casualties in Baghdad.
Gareth Porter is an historian and national security policy analyst. His latest book, “Perils of Dominance: Imbalance of Power and the Road to War in Vietnam“, was published in June 2005.
© 2007 Inter Press Service
Global Research Articles by Gareth Porter
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Dandelion Salad
by Robert Block
Global Research, August 15, 2007
FAS.org
The Wall St. Journal
The U.S.’s top intelligence official has greatly expanded the range of federal and local authorities who can get access to information from the nation’s vast network of spy satellites in the U.S.
The decision, made three months ago by Director of National Intelligence Michael McConnell, places for the first time some of the U.S.’s most powerful intelligence-gathering tools at the disposal of domestic security officials. The move was authorized in a May 25 memo sent to Homeland Security Secretary Michael Chertoff asking his department to facilitate access to the spy network on behalf of civilian agencies and law enforcement.
Until now, only a handful of federal civilian agencies, such as the National Aeronautics and Space Administration and the U.S. Geological Survey, have had access to the most basic spy-satellite imagery, and only for the purpose of scientific and environmental study.
According to officials, one of the department’s first objectives will be to use the network to enhance border security, determine how best to secure critical infrastructure and help emergency responders after natural disasters. Sometime next year, officials will examine how the satellites can aid federal and local law-enforcement agencies, covering both criminal and civil law. The department is still working on determining how it will engage law enforcement officials and what kind of support it will give them.
Access to the high-tech surveillance tools would, for the first time, allow Homeland Security and law-enforcement officials to see real-time, high-resolution images and data, which would allow them, for example, to identify smuggler staging areas, a gang safehouse, or possibly even a building being used by would-be terrorists to manufacture chemical weapons.
Overseas — the traditional realm of spy satellites — the system was used to monitor tank movements during the Cold War. Today, it’s used to monitor suspected terrorist hideouts, smuggling routes for weapons in Iraq, nuclear tests and the movement of nuclear materials, as well as to make detailed maps for U.S. soldiers on the ground in Afghanistan and Iraq.
Plans to provide DHS with significantly expanded access have been on the drawing board for over two years. The idea was first talked about as a possibility by the Central Intelligence Agency after 9/11 as a way to help better secure the country. “It is an idea whose time has arrived,” says Charles Allen, the DHS’s chief intelligence officer, who will be in charge of the new program. DHS officials say the program has been granted a budget by Congress and has the approval of the relevant committees in both chambers.
Wiretap Legislation
Coming on the back of legislation that upgraded the administration’s ability to wiretap terrorist suspects without warrants, the development is likely to heat up debate about the balance between civil liberties and national security.
Access to the satellite surveillance will be controlled by a new Homeland Security branch — the National Applications Office — which will be up and running in October. Homeland Security officials say the new office will build on the efforts of its predecessor, the Civil Applications Committee. Under the direction of the Geological Survey, the Civil Applications Committee vets requests from civilian agencies wanting spy data for environmental or scientific study. The Geological Survey has been one of the biggest domestic users of spy-satellite information, to make topographic maps.
Unlike electronic eavesdropping, which is subject to legislative and some judicial control, this use of spy satellites is largely uncharted territory. Although the courts have permitted warrantless aerial searches of private property by law-enforcement aircraft, there are no cases involving the use of satellite technology.
In recent years, some military experts have questioned whether domestic use of such satellites would violate the Posse Comitatus Act. The act bars the military from engaging in law-enforcement activity inside the U.S., and the satellites were predominantly built for and owned by the Defense Department.
According to Pentagon officials, the government has in the past been able to supply information from spy satellites to federal law-enforcement agencies, but that was done on a case-by-case basis and only with special permission from the president.
Even the architects of the current move are unclear about the legal boundaries. A 2005 study commissioned by the U.S. intelligence community, which recommended granting access to the spy satellites for Homeland Security, noted: “There is little if any policy, guidance or procedures regarding the collection, exploitation and dissemination of domestic MASINT.” MASINT stands for Measurement and Signatures Intelligence, a particular kind of information collected by spy satellites which would for the first time become available to civilian agencies.
According to defense experts, MASINT uses radar, lasers, infrared, electromagnetic data and other technologies to see through cloud cover, forest canopies and even concrete to create images or gather data.
Tracking Weapons
The spy satellites are considered by military experts to be more penetrating than civilian ones: They not only take color, as well as black-and-white photos, but can also use different parts of the light spectrum to track human activities, including, for example, traces left by chemical weapons or heat generated by people in a building.
Mr. Allen, the DHS intelligence chief, said the satellites have the ability to take a “multidimensional” look at ports and critical infrastructure from space to identify vulnerabilities. “There are certain technical abilities that will assist on land borders…to try to identify areas where narcotraficantes or alien smugglers may be moving dangerous people or materials,” he said.
The full capabilities of these systems are unknown outside the intelligence community, because they are among the most closely held secrets in government.
Some civil-liberties activists worry that without proper oversight, only those inside the National Application Office will know what is being monitored from space.
“You are talking about enormous power,” said Gregory Nojeim, senior counsel and director of the Project on Freedom, Security and Technology for the Center for Democracy and Technology, a nonprofit group advocating privacy rights in the digital age. “Not only is the surveillance they are contemplating intrusive and omnipresent, it’s also invisible. And that’s what makes this so dangerous.”
Mr. Allen, the DHS intelligence chief, says the department is cognizant of the civil-rights and privacy concerns, which is why he plans to take time before providing law-enforcement agencies with access to the data. He says DHS will have a team of lawyers to review requests for access or use of the systems.
“This all has to be vetted through a legal process,” he says. “We have to get this right because we don’t want civil-rights and civil-liberties advocates to have concerns that this is being misused in ways which were not intended.”
DHS’s Mr. Allen says that while he can’t talk about the program’s capabilities in detail, there is a tendency to overestimate its powers. For instance, satellites in orbit are constantly moving and can’t settle over an area for long periods of time. The platforms also don’t show people in detail. “Contrary to what some people believe you cannot see if somebody needs a haircut from space,” he says.
James Devine, a senior adviser to the director of the Geological Survey, who is chairman of the committee now overseeing satellite-access requests, said traditional users of the spy-satellite data in the scientific community are concerned that their needs will be marginalized in favor of security concerns. Mr. Devine said DHS has promised him that won’t be the case, and also has promised to include a geological official on a new interagency executive oversight committee that will monitor the activities of the National Applications Office.
Mr. Devine says officials who vetted requests for the scientific community also are worried about the civil-liberties implications when DHS takes over the program. “We took very seriously our mission and made sure that there was no chance of inappropriate usage of the material,” Mr. Devine says. He says he hopes oversight of the new DHS program will be “rigorous,” but that he doesn’t know what would happen in cases of complaints about misuse.
–Andy Pasztor contributed to this article.
Write to Robert Block at bobby.block@wsj.com3
Copyright The Wall Street Journal, 2007
Increased Domestic Role for Intelligence Foreseen
by
Federation of American Scientists Blogspot
Spy satellites and other classified intelligence technologies are poised to play a greater role in domestic homeland security and law enforcement missions, challenging long-standing legal and policy barriers against their domestic use.
The Wall Street Journal reported today that the Director of National Intelligence recently authorized access to intelligence satellite products by officials of the Department of Homeland Security to help support border security. See “U.S. to Expand Domestic Use of Spy Satellites” by Robert Block, Wall Street Journal, August 15, p.1.
A comprehensive 2005 government study (pdf) of the use of intelligence capabilities for domestic applications concluded that “significant change is needed in policy regimes regulating domestic use of IC [intelligence community] capabilities” in order to permit their full exploitation.
“The use of IC capabilities for domestic purposes should be… based on the premise that most uses of IC capabilities are lawful rather than treating any use as an exception to the rule requiring a case-by-case adjudication,” the study said.
“There is an urgent need for a top-down, Executive Branch review of all laws and policies affecting use of intelligence capabilities for domestic purposes,” the report said.
In particular, the 1981 Executive Order 12333 which governs intelligence activities “should be amended to permit as unfettered an operational environment for the collection, exploitation and dissemination [of domestic intelligence data] as is reasonably possible,” the report recommended.
The authors acknowledged that such “unfettered” operation would require increased oversight, but they suggested that it could be satisfactorily accomplished by the Privacy and Civil Liberties Oversight Board. The Board has been a minor, not notably influential player in recent intelligence policy disputes.
The report acknowledged in passing a problematic 2001 U.S. Supreme Court ruling in the case Kyllo v. United States, which concluded that the use of infrared sensors to scan a private residence for heat lamps used in marijuana cultivation constituted an unlawful warrantless search. The ruling appears to be significantly at odds with the new domestic intelligence thrust.
“This decision has placed in question the continued viability of past settled practice of the IC within the domestic domain,” the study delicately observed.
Nevertheless, “to date we are not aware of any clear authoritative guidance issued on the impact, if any, of this decision.”
The 2005 study was first reported by the Wall Street Journal today. A copy of the unclassified study, which was “produced solely for the use of the United States Government,” was obtained by Secrecy News. See “Civil Applications Committee (CAC) Blue Ribbon Study,” Independent Study Group Final Report, September 2005.
Intelligence support to domestic environmental monitoring and emergency response has been conducted since the 1970s under the supervision of the little-known interagency Civil Appplications Committee. See this 2001 fact sheet describing the history and mission of the Committee.
http://www.fas.org/blog/secrecy/2007/08/increased_domestic_role_for_in.html
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The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author’s copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: crgeditor@yahoo.com
www.globalresearch.ca contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.
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© Copyright , FAS.org, 2007
The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=6555
by Jonathan Cook
Global Research, August 15, 2007
The Guardian
Iran is the new Nazi Germany and its president, Mahmoud Ahmadinejad, the new Hitler. Or so Israeli officials have been declaring for months as they and their American allies try to persuade the doubters in Washington that an attack on Tehran is essential. And if the latest media reports are to be trusted, it looks like they may again be winning the battle for hearts and minds: vice-president Dick Cheney is said to be diverting the White House back on track to launch a military strike.
by Stephen Lendman
Global Research, August 15, 2007
These days, financial/market punditry seems to follow two opposite lines of thinking. It ranges from the predominant view that world economies are growing and sound, problems in them minor and fixable, and current volatility (aka turmoil) is corrective, normal and a healthy reassessing and repricing of risk. Contrarians, on the other hand, believe the sky is falling. Most often, extreme views like these turn out wrong and are best avoided. Things are never that simple and hindsight usually proves only Cassandra was good at forecasting although calling market tops and bottoms wasn’t her specialty.
Amidst all the commentary and sorting out of market Sturm und Drang these days, some financial world figures stand head and shoulders above the rest for their wisdom, level-headednessness and believability. One in particular is Jeremy Grantham, called by some the philosopher king of Wall Street even though he’s based to the northeast in Boston. In 1977, he co-founded Grantham, Mayo and Van Otterloo, now known as GMO. In his Quarterly Letters to clients, he assesses current market conditions and usually takes a longer view as well. His commentaries are detailed, scholarly, sober and clear.
The Vanguard Group of mutual funds founder John Bogle calls Grantham “one of the top two or three individuals in this business (and) If there’s anybody in this whole business who calls a spade a spade (that person is) Jeremy Grantham.” A metaphor for his wisdom, attitude and investing style sits aside his office desk. It’s a huge 9th century stone Buddha signifying “everything in moderation” and one of Grantham’s core beliefs that all markets eventually revert to their mean values from their highs and lows.
Based on his company’s exhaustive research, there are “no exceptions ever.” Bubbles come and go, but, in time, they all settle back in same place. As Grantham puts it: “We know one principal truth at GMO and that is that we live in a mean-reverting world in investing. (Our research) has shown….that all bubbles….eventually break (and our definition of a bubble is a) 2 standard deviation event – the kind of moves that occur about every 40 years.” Grantham mentions four stock market ones in particular that stand out – the US in 1929, US again in 1965 – 72, 1989 in Japan (in land and stocks) and the still ongoing greatest ever US 2000 bubble yet to come back to its mean.
Grantham is known in the trade as a value investor. That means buying financial assets at less than their intrinsic value or what famed investor/Columbia University professor Benjamin Graham (1894 – 1976) called a “margin of safety.” Warren Buffett today calls it “finding an outstanding company (or any financial asset) at a sensible price” as opposed to a bargain that may turn out bogus or a booby trap. Grantham correctly called the equity bubble in the late 1990s and believes the 2000 – 2003 bear market is secular, long-term, and unlikely to end before 2010 despite a continuing four year cyclical bull run reprieve from 2003 to the present. Only in the fullness of time will he, and the rest of us, know if he’s right.
Earlier in the year, Grantham toured the world for six weeks, returned worried, and wrote about it in his April Quarterly Letter titled “It’s Everywhere, In Everything: The First Truly Global Bubble.” It’s “bubble time,” he observed “from Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure, and the junkiest bonds to mundane blue chips.” All the necessary conditions are in place – “fundamental economic conditions” look excellent; central bank supplied liquidity is plentiful and cheap; and there’s so much around, it’s easy to leverage. Since around mid-July or so, the latter condition no longer is true or perceived to be by investors turned cautious and in some cases even panicky.
Grantham explains human behavior causes bubbles when positive market conditions unleash “animal spirits” to capitalize on opportunities that get carried to extremes when there’s enough cheap credit around as fuel. Even in the best of times, that’s a recipe for trouble with success feeding on itself. It signals by leveraging up, the better investors can do until the music stops as it always does, and the longer and louder it’s been playing, the severer the subsequent headache.
No one knows for sure when big trouble’s coming next or how bad it’ll be when it arrives. Up to early summer, it was smooth sailing and easy profits, but Grantham says what he sees today is unprecedented: “everyone, everywhere (in all asset classes) is reinforcing one another.” Across the world you hear it confirmed that “they don’t make any more land (and) with these growth rates and low interest rates, equity markets must keep rising (and) private equity (plus merger mania, huge stock buy-backs and plenty of central bank supplied fuel) will continue to drive the markets.”
It’s become self-reinforcing and the results are “predictable and consistent.” The three major asset classes – real estate, stocks and bonds – are “expensive compared with (their) replacement cost where it can be calculated.” Equally worrisome, risk premiums “reached a historic low everywhere” until just weeks ago.
Grantham’s conclusion is these are all warning signs spelling eventual trouble because as noted above “Every bubble has always burst (with no exceptions, ever).” When the 2000 bubble deflation resumes, “it will be across all countries and all assets, with the probable exception of high grade bonds.” In addition, risk premiums will widen (and now are) forcing companies to pay higher financing costs for borrowed funds that will depress investor confidence and reduce economic activity.
No one knows how deep or protracted a decline will be, but Grantham stresses it’s coming because the current global bubble is unprecedented. “No similar global event (of this magnitude ever) occurred before.” Now that’s pretty scary stuff to chew on because economic troubles bite everyone and most of all those most vulnerable and least able to weather the storm. That includes ordinary working people with little or nothing invested.
During the current bull run, Grantham was troubled as early as January, 2004 when he advised clients that “The outlook for 2004 is not bad, but the (stock) market is very overpriced and all predictors look bad for the next year and the year after.” As things turned out, he was wrong, or perhaps with future hindsight just way early in his judgment. He was troubled again at year end 2005 when he told investors to “prepare for a decline in the performance of equities and other risk assets in 2006.” Once more, his call was either early or wrong as the past 18 months saw considerable strength until just recently.
His January, 2007 Quarterly Letter assessed what happened saying “Against all odds, Goldilocks tiptoed through the perils of the first (2005) and second (2006) year of the Presidential Cycle….it (2006) was the rarest of rare birds – a perfect year.” As a result, “risk taking also prospered” because of low global inflation, no financial crises anywhere, low interest rates, and “very very” available credit. As things turned out, “this was almost certainly the best year in the entire history of finance for the selling of high credit risks at low premiums.”
One extreme measure of it was the quadrupling of so-called securitized Collateralized Debt Obligation (CDO) instruments (packages of risky and other debt) to around $2.5 trillion facilitated by the so-called “expanded ‘carry trade’ of borrowing in cheap (low interest) Japanese and Swiss currencies.”
Downsides often accompany opportunities, and Grantham explained conditions going into 2007 in breathtaking terms. “Goldilocks global conditions, especially cheap and easy credit, have caused the broadest overpricing of financial assets – equities, real estate, and fixed income – ever recorded.” However, he stressed, “Just because risk taking is off the charts does not mean it can’t keep going for another year” or longer.
The end of a Goldilocks economy was clearly on the minds of people Grantham met on his world tour. Everywhere he travelled he was asked “What is the catalyst for a (market) break” when none was then visible or imminent? He answered citing these vulnerabilities: rising inflation (that’s greater than reported) constraining central bank support for a weakening economy, pointing to the US as an example. This, in turn, will slow economic activity and reduce profit margins that are still way above global norms but will come down.
Then there’s the housing decline a Center for Economic Policy Research (CEPR) report shows is the result of overbuilding and home prices rocketing 70% in value since 1995 adjusted for inflation. It “created $8 trillion in housing bubble wealth” and an unprecedented oversupply of unsold homes and “vacant ownership units.” CEPR believes the coming housing bubble correction “is likely to throw the economy into a recession and quite possibly a very severe (one).”
It notes housing construction has to decline, and revaluing $8 trillion in housing wealth excess will reduce consumption and bring saving rates “back to more normal levels.” Consumers need all they can get because, at today’s elevated prices, the average potential home buyer can’t afford one, and, as one analyst observed, lenders are relearning how to say “no.”
Current economic conditions worry PIMCO’s Bill Gross as well. PIMCO is a 36 year old firm and “one of the largest specialty fixed income managers in the world.” Gross is one its founders and serves as managing director and chief investment officer. In his July Investment Outlook, he said people are “looking for contagion in all the wrong places.” The Bear Stearns and other hedge fund losses are “now primarily history (and) can be papered over with 100 cents on the dollar marks.” The real problem lies in “those millions and millions of homes….not going anywhere….except for their mortgages….going up, up, and up….and so are delinquencies and defaults.”
He cites a recent Bank of America estimate that about $500 billion of adjustable rate mortgages (ARMs) will be reset in 2007, another $700 billion in 2008, and a large proportion of them are subprimes. He noted 7% of these loans are now in default, and the “percentage will grow and grow like a weed in your backyard tomato patch.” This will affect real money in the hundreds of billions of dollars of “toxic waste” that will spill over into reduced consumption, less new home construction, and even AAA-asset backed commercial paper “feel(ing) the cooling Arctic winds of a liquidity constriction.”
In Gross’ view, the sky isn’t falling, and “there is no hint yet of a true ‘crisis’ – these developments” may, in fact, have a salutary effect with “easy credit becoming less easy (and) excessive liquidity returning to more rational levels.” Gross still sees strong global growth ahead, but as a bond fund manager, he’s paid to worry.
In his report, Grantham is worried, too, and notes the housing decline affects prices, credit growth and consumption when subprime and other loan rates are reset higher with a considerable amount coming this year and even more ahead as just noted. In addition, and most significantly, he says rising inflation and widening risk premiums lower “the feasible leverage in private equity deals and place many deals that can be done today (meaning last spring) out of reach, which, in turn, has dire effects on the current stock market (and economy).”
In his current July client Letter, Grantham conceded “no areas of this unprecedented global bubble had yet gone hyperbolic like the internet and tech stocks did in 1999 (until now):” The “candidate” is “the growth rate of leveraged loans. At (a hugely speculative) $545 billion for the first half of this year, it is running 60% up on last year” that’s about the same size gain dot.com and tech stocks made year over year in 1999 with painful consequences not far behind for investors owning them.
Grantham’s July commentary mentioned one other likely market headwind after the 2008 election. It’s the expected fallout from “piling on” moves of “more wealth to the wealthy by shifting more of the tax load to sales and income taxes of average taxpayers and away from the capital gains and dividend taxes of the wealthy.” It means “ordinary working stiffs are not doing particularly well….and are getting antsy” enough to worry politicians to raise taxes on the most well-off.
Grantham expects them to come in higher taxes on capital gains, dividends and top-end ordinary income rates as well as redefining what income is. That will mean more of it will be taxed to reduce the gross disparity between what rich and ordinary folks now pay, and not a moment too soon for those championing fairness, not special privilege. If this happens, however, it “will not be good for the animal spirits of investors” who represent the most important bubble-sustaining input.
Grantham sums up his current thinking with what he calls a “torture(d) analogy.” He compares the global financial system to a giant suspension bridge. “Thousands of bolts hold it together. Today a few of them have fractures and one or two seem to have failed completely. The bridge, however, with typical redundancy built in (unlike the Minnesota one that collapsed), can (easily) take a few failed bolts, perhaps quite a few….This global financial structure is far too large and has far too many interlocking pieces for weakening US house prices and a few subprime issues to bring it down.”
What is worrisome is whether or when we reach a “broad-based level of financial metal fatigue” causing simultaneous multiple bolt failures “with ultimately disastrous consequences.” What’s also scary is the global financial structure is heavily “faith based, held together by unprecedented amounts of animal spirits” moving in the same positive direction. If the faith wanes, it’s then “every man for himself” and look out below.
Also worrisome, but so far contained, is growing subprime mortgage trouble. Until a month ago, equity markets were totally unaffected and may bounce back from their current sell-off. Grantham isn’t panicking but shows concern about flat to declining home prices, a high inventory of unsold homes likely moving higher, and mortgage “honeymoon rate” reset increases up to 2.5 points coming soon for holders “already stretched.” We’re told, he says, that even the subprime market is “contained,” but we have to wonder if “the container, in this case, will turn out to be Pandora’s.”
Then there’s a slowing economy, inflation concerns, high oil and other industrial commodity prices and now agricultural ones as well “boosted by ethanol production” pressuring consumers. “So two of the three great asset classes (now all three) are having the wobblies in some of their components” – real estate and low grade debt (and since mid-July equities and other type debt instruments as well), “especially real-estate related but increasingly including corporate loans and private equity funding….”
Grantham may have written this commentary before the the July-mid-August equity market sell-off. However, based on his prior (and long-standing) comments, his current analysis probably still holds true: “stocks (will likely) make it through this third (and traditionally strongest) year of the Presidential (four year market) Cycle.” The third year in the Cycle “has never declined materially and should be considered the bane of short sellers (and equity market naysayers) everywhere.”
In sum, Grantham says, “a few more bolts in the bridge may fail, but in the end you have to bet the bridge will hold, supported by amazing animal spirits.” At least that’s true up to October when the fourth year of the Cycle begins. Then, the “odds of failure rise” but won’t likely become high until October, 2008 with a new administration and Congress soon to take power. Grantham then gets blunt stating “based on history” (and tax increases he expects), that’s the most likely time for a bear market, and he’s betting on one that could be nasty.
He concludes saying he’s been trying to come up with a simple way to explain “how serious the situation is for the overstretched, overleveraged financial system.” He does it this way: “In 5 years I expect….at least one major bank (broadly defined) to have failed and up to half the hedge funds and a substantial percentage of the private equity firms in existence today (to have) simply ceased to exist.”
He continues saying he’s been too bearish at times in the past 12 years but his language “has almost never been this dire.” His feeling is that today we’re “watching a very slow motion train wreck” beyond the point of stopping so watch out ahead. It’s a good idea to be cautious and prepare. If he’s right and economic conditions deteriorate enough, everyone will be affected through job and income losses along with investors losing big from speculative and other investments. All financial bubbles end. Sadly, even those not participating in them get burned, especially those most vulnerable and least able to ride out the storm that could be mean, nasty and long.
Engineering the Coming Wreck
Back in October, 2002, Grantham took aim at a financial icon Wall Street and the financial press practically defied when he chaired the Federal Reserve from August, 1987 to end of January, 2006. It didn’t matter to them (and still doesn’t) that he engineered the largest ever stock market bubble and bust in history through incompetence, timidity, dereliction of duty or a combination of all three. In their eyes, Alan Greenspan was above reproach. He could do no wrong, and here’s why. His policies made it possible for wealthy and powerful investors to cash in big as long as the party lasted, and then get plenty of advance warning when to exit.
Most ordinary investors, on the other hand, were caught flat-footed based on advice from market pundit fraudsters with Mr. Greenspan most deceptive and influential of all. In January, 2000, just weeks short of the market peak, he claimed “the American economy was experiencing a once-in-a-century acceleration of innovation, which propelled forward productivity, output, corporate profits and stock prices at a pace not seen in generations, if ever.”
Grantham’s reply to this outburst: “Phew!” He might have also drawn an analogy to famed Yale University economics professor Irving Fisher’s comments just before the 1929 stock market crash. He claimed economic fundamentals in the country were strong, the stock market was undervalued, and an unending period of prosperity lay ahead. It just took over a decade to arrive and plenty of pain to go around before it did.
Grantham spared Fisher, but bashed Greenspan saying: “The internet (highlighted by the dot.com bubble), which had ‘pushed back the fog of uncertainty’ for corporations, was his particular pet.” It’s hard to believe now Greenspan actually said: “Lofty equity prices have reduced the cost of capital. The result has been a veritable explosion of spending on high-tech equipment….And I see nothing to suggest that these opportunities will peter out anytime soon….Indeed many argue that the pace of innovation will continue to quicken….to exploit the still largely untapped potential for e-commerce, especially the business-to-business arena.”
One week later, the Nasdaq peaked at 5048 and fell to a low of 1114 on October 9, 2002 losing 78% of its value. The broadly based S&P 500 stock index merely dropped from its March 24, 2000 high of 1527 to an October 9, 2002 bottom at 777 for a loss of 49%. Mr. Greenspan was nowhere in sight but was busy reengineering phase two of the bubble with a tsunami of easy money. His successor now continues the same policy despite his high-sounding Fedspeak concerns for inflation and a stable economy. Call it more Fedbaloney pointing to the obvious eventual consequences ahead. The Fed-built credit bubble and other excesses are unwinding. Before it’s over, they’ll be plenty of pain to go around and another culpable Fed Chairman claiming no responsibility and being able to get away with it.
Grantham was clearly upset in October, 2002 and made his views known to investors. His commentary was titled “Feet of Clay – Alan Greenspan’s Contribution to the Great American Equity Bubble.” He started out with a Fed Chairman’s job description saying “In its earlier years, the Fed’s emphasis seems to have been on economic activity….By the nineties, the heavy emphasis (shifted) to inflation control.” Both objectives are “critical to stability,” because the Fed’s “underlying job” is to maintain “general economic stability,” not fuel bubbles. “Nothing threatens (that stability) more than the deflating of a major stock market bubble.” It’s the Fed’s job to spot and moderate them in time and be willing “to bear the (political) consequences” for its actions. Alan Greenspan failed on all counts.
“Did he see the (largest in US history) bubble coming,” Grantham asked? He provided generous amounts of liquidity fueling it, and when things began getting out of hand, all he did was suggest “irrational exuberance” might have “unduly escalated asset values” in a December, 1996 speech. He did nothing to curb it then or thereafter whereas he could have raised interest rates, margin requirements and added a lot more jawboning persuasion to cool an overheated market and restore stability.
Grantham was clear and emphatic: “Had Greenspan been prepared to use all the tools available and shown his determination, it almost certainly would have worked” enough to prevent the market plunge after March, 2000. Not only did he fail to act, but he then denied all responsibility for what Grantham called “the Greenspan fiasco….he has overtaken my efforts with his breathtakingly shameless and complete denial of responsibility….he seems to have believed….this new era nonsense (at its) March 2000 (peak more completely) than anyone else….the title of ‘most credulous’ (and Fed Chairman) belong to the same man.” By his concocted “logic,” he’d have “fail(ed) a Finance 101 final.”
Even worse, Greenspan “had the knowledge, experience, and belief and failed to act.” Yet, to this day he’s gotten away with it. He’s still extolled in lofty terms, practically elevated to the ranks of sainthood, and is now retired to new “green” pastures of lucrative book deals and speaking engagements (at $100,000 fees) where his every word is still taken as market gospel. In addition, Greenspan Associates began operating in May with his lawyer, Robert Barnett, saying “virtually every major investment-banking firm” in the world is eager to hire him for his rainmaking connections. Better those than his advice best avoided.
The Greenspan legacy got Grantham to conclude: “You can indeed ‘fool most of the people all of the time.’ ‘Most of the people’ this time probably included Her Majesty who (days earlier on September 26) knighted (Sir Alan) for his global services. My secret hope though is that she justified it by having had a good short position for the last 3 years.” Or “short” of that, been tipped off in time to bail out at the top and let her subjects take the pain.
Engineering the Coming Wreck – Part II
Other than rampaging armies on the move, no institution anywhere has more power than central banks. And no central bank has more of it than the US Federal Reserve unless it’s the secretive, unaccountable Bank of International Settlements (BIS) founded in 1930 and based in Basle, Switzerland. The BIS is central banker to its member banks (a sort of financial boss of bosses) that includes the Federal Reserve.
Some savvy financial experts believe the world’s ruling elites control this bank of banks and intend using it to establish a global borderless financial world controlled by them. It’s no hairbrained conclusion with the European Union in place, talk of a similar one in Africa, and a North American Security and Prosperity Partnership arrangement coming to a head that will create a borderless continent headquartered in Washington and likely will aim next to link with the EU for greater global control.
So what’s important about the Fed, and why should we care? Despite common belief, the Federal Reserve is not a government agency. It’s a privately owned for profit cartel of powerful banks (including Wall Street ones) protected by law, even though the Federal Reserve Act of 1913 violates the US Constitution. It’s Article I, Section 8 states “The Congress shall have Power To coin Money (and) regulate the Value thereof…” In 1935, the Supreme Court ruled only Congress has this power and cannot constitutionally delegate it to another group or body, and that includes private for profit bankers running the Fed.
Simply put, commercial banks in charge of printing and controlling the nation’s money supply constitutes criminal fraud. It’s the reason the Federal Reserve was designed to look like a government agency when, in fact, it isn’t. Being headquartered in Washington in the stately mausoleum-looking Eccles building is just part of the clever subterfuge.
But it’s even worse than that. By establishing the Federal Reserve, Congress and President Woodrow Wilson privatized the nation’s money creation system relinquishing the most important power governments have that got famed banker Baron MA Rothschild once to say: “Give me control over a nation’s currency and I care not who makes its laws.”
Ever since US private bankers got it, they’ve been empowered to print money in any amount, control its supply and price, and benefit hugely by loaning it out for profit. That includes making government pay interest on its own money it wouldn’t have to do by printing its own. This amounts to no less that government sanctioning the right to counterfeit the national currency for private gain with the Fed and private bankers being world class pirates masquerading as guardians of the public interest.
It’s no exaggeration to call this the all-time, greatest ever financial scam, still ongoing, and totally beyond the reach of public or any other type scrutiny. If there were any, it would be learned this institution was created as a scheme to transfer wealth from ordinary people to giant banks and Wall Street. It’s worked like a charm, and few people are the wiser.
But there’s more still to the story, and it keeps getting uglier. Supposedly, the Federal Reserve was established to stabilize the economy; smooth out the business cycle; maintain a steady, healthy rate of sustainable growth; create price stability and control inflation; and work for the betterment of everyone. So let’s grade it on its performance.
Since 1913, we had economic crashes in 1921, and the major one in 1929 followed by The Great Depression lasting until the outbreak of WW II. Post-war, we then had recessions in 1953, 1957, 1969, 1975, 1981, 1990, 2001, and we’re likely heading for future major trouble resulting from past Fed policy abuses under Alan Greenspan and his successor, Ben Bernanke, carrying on in the same fashion. We also had a serious inflation problem beginning in the 1960s that became crisis-level severe in the 1970s and early 80s. In addition, in the wake of reckless financial market deregulation in the 1980s and lack of government oversight (with the Fed’s blessing), we had a major financial crisis causing more bank failures than ever before or since in our history.
Further still, under the Fed, we’ve had –
— soaring consumer debt;
— record high federal budget and current account deficits;
— an off-the-charts national debt, far higher than the fictitious reported number;
— a high and rising level of personal bankruptcies and mortgage loan delinquencies and defaults;
— an enormous government debt service obligation we’re taxed to pay for;
— the systematic loss of manufacturing and other high-paying jobs to low-wage countries;
— a secular declining economy, 84% service-based, and mostly comprised of low-wage, low or no-benefit, non-unionized jobs;
— an unprecedented wealth gap disparity;
— growing rates of poverty in the richest country in the world;
— a decline of essential social services; and
— a lawless nation devoted to militarism and imperial conquest with the Federal Reserve complicit in supplying all the funds needed to fuel it, and all the while caring not for the public interest it’s supposed to serve.
This type record adds up to a clear conclusion. Above all else, the Federal Reserve failed to accomplish what it’s supposed to do revealing instead what’s really going on. The Fed doesn’t serve the public interest. It abuses it because that’s how bankers and all corporate predators make money. In the world of finance, ordinary people lose out because giant banks and Wall Street are allowed to pull off the grandest of grand thefts, their thievery continues unabated, and the stakes keep rising.
Some astute financial observers now believe current excesses and resulting turmoil were caused by the intentional engineering of the US housing bubble with the Fed in on the scheme. Insiders made loads of easy money in the process and now stand to cash in big buying troubled assets for a fraction of their value the way they always do in the wake of market meltdowns. It’s called “vulture” investing with shrewd buyers profiting hugely in good and bad times that are all good for them.
One analyst calls the subprime mortgage turbulence a global bank run with potential huge yet to emerge consequences. Writer Danny Schechter has another view in his article titled: “Subprime Or Subcrime? Time to Investigate and Prosecute,” and he makes a strong case. He calls the subprime credit squeeze a “sub-crime ponzi scheme (causing) millions of people (to lose) their homes because of criminal and fraudulent tactics used by financial institutions (posing) as respectable players in a highly rigged casino-like market system.” There’s nothing free and open about it.
The problem is deep, structural and aided by stripped away regulatory protections giving predatory lenders and Wall Street schemers free reign to target unsuspecting victims. Part of Schechter’s fix is calling for a “jailout,” not a “bailout,” but with friends in high places, don’t bet on it beyond a small fry or two. It’s sad and disturbing because this type behavior is part of the American “ethic” to scheme, defraud and prey on the innocent knowing big players nearly always get away with it, and under George Bush, it’s practically guaranteed.
With a clear field ahead and friends in high places, the “Masters of the Universe” are now heading for their perfect kind of buying opportunity if Jeremy Grantham and other worriers are right. Manipulation aside, Grantham’s persuasive evidence suggests we’re watching an unstoppable “very slow motion train wreck” likely to be pretty ugly on “impact.” By his reckoning, it’s probably too late to undue the enormous damage done no one will escape from. His advice is that to be forewarned is forearmed to prepare as best as possible although for most people it’s practically impossible.
It’s a good time to think of the ancient Chinese proverb, that’s, in fact, a curse and not of Chinese origin, but it sounds good saying it is: “May you live in interesting times.” Whoever coined the phrase intended it to be ironic and “interesting” meant dangerous, turbulent or uncertain. That, indeed, is true now but to what degree we’ll only know in the fullness of time.
Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.
Also visit his blog site at www.sjlendman.blogspot.com and listen to The Steve Lendman News and Information Hour on www.TheMicroEffect.com Saturdays at noon US central time and now archived for easy listening.
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Written by Chris Floyd
Empire Burlesque
Wednesday, 15 August 2007
(UPDATED BELOW.)
Well, John the Baptist after torturing a thief
Looks up at his hero the Commander-in-Chief
Saying, “Tell me great hero, but please make it brief
Is there a hole for me to get sick in?”
The Commander-in-Chief answers him while chasing a fly
Saying, “Death to all those who would whimper and cry”
And dropping a bar bell he points to the sky
Saying, “The sun’s not yellow it’s chicken”
— Bob Dylan
“Beat, beat, beat, and beat again.”
— Joseph Stalin
Scott Horton has just put up an important, hard-hitting post: Bush and the Art of Breaking Human Beings. Horton amplifies the harrowing details of the Bush Administration’s Stalinist persecution of U.S. citizen Jose Padilla, reported yesterday by the Christian Science Monitor’s Warren Richey. You should read the whole piece right away, but this passage that Horton quotes from Jack Balkin puts the case in its larger — and most chilling — perspective. Says Balkin:
It’s important to remember that the Bush Administration did everything it could to deny Padilla even the basic right of habeas corpus. It argued that courts had no power to second guess the President’s determination that Padilla was an enemy of the United States and could be held in solitary confinement indefinitely. It argued that no one had the right to contact Padilla and that no one had the right to know what the government was doing to him. It argued that courts should defer to the President’s views about who was dangerous and who was not—that once the President declared a person an enemy, that person had all the process that was due them and courts should respect that determination.
It argued, in short, that the President always knows best. If the President had his way, the government, on the basis of information that never had to be tested before any neutral magistrate, could pluck any citizen off the streets, throw them in a military prison, and proceed to drive them insane.
Those are the powers that the Bush Administration sought. I will not mince words: They are the powers of a dictator in an authoritarian regime. They are the powers of the old Soviet Union, of the military junta in Argentina during the time of the disappeared.
We are all Jose Padilla now.
**
I’ve been writing about Bush’s seizure of arbitrary powers since November 2001, when I first took note of the universal license to kill that he had granted himself:
The Washington Post reports this week that George W. Bush has signed an executive order giving himself the right to issue death warrants for any individual he deems a terrorist or terrorist supporter. These people will be killed in secret by the CIA, without any pretense of due process, without defense or appeal…
Bush’s license to kill leaves the meaning of “terrorist” and “terrorist supporter” deliberately vague. The definition is entirely up to the president: there is no legislative oversight, no judicial review, no public scrutiny. If he wants you dead, he can have you killed. It’s as simple as that.
This official acceptance of the principle of extra-judicial murder degrades the American government to the level of moral savagery. It is the same “principle” underlying all terrorist activity: a threat to a group’s interests is arbitrarily defined by its leaders, who then act arbitrarily, lawlessly, to eliminate the threat…It is the principle of evildoers, men of blood, murderers and beasts. And it is now a guiding light of the “civilized” world.
All of this was enshrined in “law” by Congress last fall, when it passed the “Military Commissions Act” — an “enabling act” for tyranny that the new, Democratic-led Congress has not bothered to repeal. As I noted at the time:
It was a dark hour indeed last Thursday when the United States Senate voted to end the constitutional republic and transform the country into a “Leader-State,” giving the president and his agents the power to capture, torture and imprison forever anyone – American citizens included – whom they arbitrarily decide is an “enemy combatant.” This also includes those who merely give “terrorism” some kind of “support,” defined so vaguely that many experts say it could encompass legal advice, innocent gifts to charities or even political opposition to US government policy within its draconian strictures.
All of this is bad enough – a sickening and cowardly surrender of liberty not seen in a major Western democracy since the Enabling Act passed by the German Reichstag in March 1933. But it is by no means the full extent of our degradation. In reality, the darkness is deeper, and more foul, than most people imagine. For in addition to the dictatorial powers of seizure and torment given by Congress on Thursday to George W. Bush – powers he had already seized and exercised for five years anyway, even without this fig leaf of sham legality – there is a far more sinister imperial right that Bush has claimed – and used – openly, without any demur or debate from Congress at all: ordering the “extrajudicial killing” of anyone on earth that he and his deputies decide – arbitrarily, without charges, court hearing, formal evidence, or appeal – is an “enemy combatant.”
That’s right; from the earliest days of the Terror War – September 17, 2001, to be exact – Bush has claimed the peremptory power of life and death over the entire world. If he says you’re an enemy of America, you are. If he wants to imprison you and torture you, he can. And if he decides you should die, he’ll kill you. This is not hyperbole, liberal paranoia, or “conspiracy theory”: it’s simply a fact, reported by the mainstream media, attested by senior administration figures, recorded in official government documents – and boasted about by the president himself, in front of Congress and a national television audience.
And although the Republic-snuffing act just passed by Congress does not directly address Bush’s royal prerogative of murder, it nonetheless strengthens it and enshrines it in law. For the measure sets forth clearly that the designation of an “enemy combatant” is left solely to the executive branch; neither Congress nor the courts have any say in the matter. When this new law is coupled with the existing “Executive Orders” authorizing “lethal force” against arbitrarily designated “enemy combatants,” it becomes, quite literally, a license to kill – with the seal of Congressional approval….
The first officially confirmed use of this power was the killing of an American citizen, along with several foreign nationals, by a CIA drone missile in Yemen on November 3, 2002. A similar strike occurred on December 4, 2005, when a CIA missile destroyed a house and purportedly killed Abu Hamza Rabia, a suspected al-Qaeda figure. But the only bodies found at the site were those of two children, the houseowner’s son and nephew, Reuters reports. The grieving father denied any connection to terrorism. An earlier CIA strike on another house missed Rabia but killed his wife and children, Pakistani officials reported.
However, there is simply no way of knowing at this point how many people have been killed by American agents operating outside all judicial process. Most of the assassinations are carried out in secret: quietly, professionally. As a Pentagon document uncovered by the New Yorker in December 2002 revealed, the death squads must be “small and agile,” and “able to operate clandestinely, using a full range of official and non-official cover arrangements to … enter countries surreptitiously.”
What’s more, there are strong indications that the Bush administration has outsourced some of the contracts to outside operators. In the original Post story about the assassinations – in those first heady weeks after 9/11, when administration officials were much more open about “going to the dark side,” as Cheney boasted on national television – Bush insiders told the paper that “it is also possible that the instrument of targeted killings will be foreign agents, the CIA’s term for nonemployees who act on its behalf.”
…
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see:
US terror interrogation went too far, experts say By Warren Richey (Jose Padilla)
August 15, 2007
From: Kucinich2008
St. John’s Well Child & Family Center
Camera crew:
Paul Ferrazzi and Tim McHughMonday, August 13th, 2007
see:
by Joseph L. Elkhorne
08/15/07 “ICH”
About last October I started taking note of suspicious clues surrounding the American housing bubble. None of these that I saw were in the mainstream media. Rather, it was like working a jigsaw puzzle: looking at miscellaneous comments in alternative sources, finding “this piece with goes with that”, and so on. Now, after reading countless hundreds of articles on the housing bubble, and comparing it to the leadup to the Great Depression, which my parents and I lived through, I still find the MSM lacking.
Here’s why:
The mainstream media went along for some time with a “What, me worry?” attitude. And even when Henry Paulson said on July 21 that “we were about at the bottom of the housing slope” MSM parroted that ‘wisdom’. Whistling in a graveyard, more like. Since the shakiness of the market, however, there are any number of commentaries about problems. Many of them are still in the recent past: it’s about the sub-prime sector. Ha!
In point of fact, the bubble is well past that point. The rot has spread to Alt-A loans, and now a significant percentage of prime loans, and even jumbos. Now, the seeds of this potential disaster were planted in 1970 by the Department of Housing and Urban Development.
Asset Securitization is the name of the game.
From the Comptroller of the Currency Administrator of National Banks, 1997, “Asset Securitization Controller’s Handbook”:
“Asset securitization is the structured process whereby interests in loans and other receivables are packaged, underwritten, and sold in the form of “asset-backed” securities.”
‘In the day’, when someone bought a house, a bank usually supplied the loan and held the mortgage. After World War Two, demand outpaced supply and investment banking hit on the plan of developing mortgage pools. This was a way to spread risk over a range of securities and seemed like a good idea at the time.
HUD’s Government National Mortgage Association (GNMA or Ginnie Mae) issued securities collateralized by a portfolio of mortgage loans.
Later, auto loans became part of such security schemes. And then credit card debt. By 2004, Asset Securitization had grown into an 800-pound financial albatross: credit card-backed securities, 21%, home-equity backed, 25%, auto backed, 13%, collateralized debt obligations (CDOs),15%. Also, student loans, 6%, equipment leases, 4%, manufactured housing, 2%, small business loans and aircraft leases.
And then the housing boom took off.
“Asset securitization is the structured process whereby interests in loans and other receivables are packaged, underwritten, and sold in the form of “asset-backed” securities.”
The problem is, the true value of those assets.
With easy credit courtesy of the Federal Reserve System, low interest rates on loans, and new homes being built at an increasing pace, issuing loans took on a more creative aspect. ‘Interest only’, the amusingly labelled ‘covenant-lite’ (a.k.a. liar’s loan), the ubiquitous sub-prime loan, all became standard.
As the market hotted up, not only banks were providing blue-sky loans but even construction companies. “Come buy our home and we’ll give you the money to do so!”
Prices continued to rise and speculation became rife. Hey, if you’re flipping burgers and you see a chance to grab the brass ring of the American Dream, why not? Buy for little or nothing, ride the rising market and sell for a handsome profit. The ‘greed is good’ attitude flourished and already lax standards became even more so.
A sub-prime loan has the highest risk factor, due to the fact that those getting such loans were already assessed as a credit risk. But who cares if they default later, so long as you, the loan issuer, can sell that mortgage on.
The Alt-A class of loan is intermediate, a marginal problem for many people. And a prime loan is issued to, usually, someone with an excellent credit rating. The problem with the latter is that all is well, until the borrower loses a job. The usual quick fix is to try to refinance, why not, with excellent credit rating to that point, shouldn’t be a problem? Wrong!
For example, woman buys a house in 1998, up to date on mortgage payments, maybe even ahead. Job gone. Innocently, she goes to bank to discuss the problem. Nothing to do with them. They’ve sold that mortgage on. And many others.
Now, she and her lawyer are trying to find out WHO does hold the mortgage. No one knows, it’s been passed through many hands.
Or, another case: couple receives a foreclosure notice, sure, they’re in arrears. Only the paperwork comes from some outfit that cannot even prove they own the mortgage. Crazy stuff.
Yeah, it’s easy for some people not in strife to look at the housing bubble crisis casually and say, foolish, naive and greedy people, let them rot. But isn’t the root of the problem those who initiate questionable loans? And it’s not only ‘liar’s loans’ but construction companies into corruption and fraud. Falsifying loan applications, or doing a ‘bait and switch’.
And then we get back to the aspect of ‘asset’.
What started out from a reputable bank as a prime loan is leveraged. Same principle as fractional reserve banking. Loan money that doesn’t exist and create a debt plus interest to be returned. And sell that mortgage on so your fingers don’t get burnt.
Then the mortgage broker takes a bunch of these and passes them on. Because the risk is spread, allegedly, the value is reckoned at maybe 10:1 and ultimately, a hedge fund has many of these ‘assets’ in the kitty. All well and good while the bubble continues to inflate. But when the merry-go-round stops rotating and then starts to run in reverse, it’s oops time.
For some. One of the Gordon Gecko-like Wall St. heroes sucked $1.6 billion out of this Ponzi scheme as his reward.
Meanwhile, hard working Americans invest in pension funds, building a good future retirement. Except … the fund managers are heavily into hedge funds and sure-thing stocks. Uh huh. Probably enterprises run by more “smartest guys in the room”.
The housing downturn has hit suppliers: hardware, Home Depot, insulation, Owens Corning, USG, largest manufacturer of drywall in the U.S. Their prices are down, production has been cut by 18% and they’ve laid off 1,100 workers in the past year. More to come. None of this was hard to predict.
At the beginning of the year, the pool of new homes for sale in California was a three-week total. Now, it’s one year.
Ohio and Michigan fare ever worse, due to plant closings. There are whole subdivisions looking like ghost towns. Texas and Florida also lead the pack of problem areas. Even so, three major highrise condo projects continue to go up in Miami. But who will buy?
Even the affluent are seeing hard times, comparatively. Now, you wouldn’t think any couple anticipating buying an $850,000 home in Washington DC would have a financial problem. But the recent ‘correction’ in the stock market brought on a rise in interest rate of the jumbo loans. Overnight, their buying power dropped by 10% so it is time for second thoughts. Jumbo loans have no guarantee protection, so even low-risk is now not so low.
And it’s not only individuals in all walks of life — the big boys are feeling the pinch. Citicorp, Bear Stearns, Goldman Sachs and more — imagine finding you’ve underwritten billions of dollars of corporate loans, only to find no one wants the bonds you expected to sell!
And if the domestic economy weren’t shaky enough, Paulson is asking for a new cap on the national debt, $9 trillion isn’t enough. And our glorious leader plans billions of dollars of arms ‘sales’ to several questionable regimes. As well, Mexico’s Calderon now needs help on the ‘war on drugs’ which will probably cost the U.S. five hundred million.
But let’s leave that for another time. A final visual of the housing market here.
Residential mortgage backed securities. Note the government guarantees 48.6% of these. Only a small percentage of the $3 trillion+ is at risk but …
Here’s the big picture as of July: Chart
which linked from this site:
Btw, in two examples of ‘how to lie with statistics’ … one clue was the Fed dropping the M3 last year, ‘the money supply’. And dropping energy and food from the inflation figures, with those two items showing 25% and 33% increase respectively. Uh huh.
And when the Dow drops 387 in one debacle of trading and at the same time, the price of gold falls? What’s going on?! So there appear to be lots of cracks in the economic edifice. But why should we worry about threatening the Chinese, who own $1.3 trillion of our debt? Never mind Japan and India who have A significant stakes as well.
“Don’t worry, be happy.”
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. This material is distributed without profit.
By Paul Craig Roberts
08/15/07 “ICH“
“No American President can stand up to Israel.”
These words came from feisty Admiral Thomas Moorer, Chief of Naval Operations (1967-1970) and Chairman of the Joint Chiefs of Staff (1970-1974). Moorer was, perhaps, the last independent-minded American military leader.
Admiral Moorer knew what he was talking about. On June 8, 1967, Israel attacked the American intelligence ship, USS Liberty, killing 34 American sailors and wounding 173. The Israelis even strafed the life rafts, machine-gunning the American sailors leaving the stricken ship.
Apparently, the USS Liberty had picked up Israeli communications that revealed Israel’s responsibility for the Seven Day War. Even today, history books and the majority of Americans blame the conflict on the Arabs.
The United States Navy knew the truth, but the President of the United States took Israel’s side against the American military and ordered the United States Navy to shut its mouth. President Lyndon Johnson said it was all just a mistake. Later in life, Admiral Moorer formed a commission and presented the unvarnished truth to Americans. http://www.ussliberty.org/moorerfindings.htm [see also http://www.usslibertyinquiry.com/] and [http://www.counterpunch.org/weir06232007.html] and [http://www.signonsandiego.com/]
The power of the Israel Lobby over American foreign policy is considerable. In March 2006, two distinguished American scholars, John Mearsheimer and Stephen Walt, expressed concern in the London Review of Books [http://www.lrb.co.uk/v28/n06/mear01_.html ] that the power of the Israel Lobby was bending US foreign policy in directions that serve neither US nor Israeli interests. The two experts were hoping to start a debate that might rescue the US and Israel from unsuccessful policies of coercion that are intensifying Muslim hatred of Israel and America. The Israel lobby was opposed to any such reassessment, and attempted to close it off with epithets: “Jew-baiter,” “anti-semitic,” and even “anti-American.” Today Israeli citizens who oppose Zionist plans for greater Israel are denounced as “anti-Semites.”
Many Americans are unaware of the influence of the Israel lobby. Instead they think of the US as “the world’s sole superpower,” a macho new Roman Empire whose orders are obeyed without question or the insolent nonentity is “bombed back to the stone age.” [ http://www.timesonline.co.uk/] Many Americans are convinced that military coercion serves our interest. They cite Libya, Serbia, Afghanistan, Iraq, and now they are ready to bring Iran and Pakistan to heel with bombs.
This arrogance results in the murder of tens of thousands, perhaps hundreds of thousands, of men, women and children, a fate that many Americans seem to believe is appropriate for countries that do not accept US hegemony.
Coercion is what American foreign policy has become. Macho superpatriots love it. Many of these superpatriots derive vicarious pleasure from their delusions that America is “kicking those sand niggers’ asses.”
This is the America of the Bush Regime. If some of these superpatriots had their way every “unpatriotic, terrorist supporter” who dares to criticize the war against “the Islamofacists” would be sent to Gitmo, if not shot on the spot.
These Bush supporters have morphed the Republican Party into the Brownshirt Party. They cannot wait to attack Iran, preferably with nuclear weapons. Impatient for Armageddon, some are so full of hubris and self-righteousness that they actually believe that their support for evil means they will be “wafted up to heaven.” [see Rapture Ready: The Christians United for Israel Tour (video)]
It has come as a crippling blow to Democrats that “their” political party is comfortable with Bush’s America, and will do nothing to stop the Bush regime’s aggression against the Iraqi people or to prevent the Bush regime’s attack on Iran.
The Democrats could easily impeach both Bush and Cheney in the House, as impeachment only requires a majority vote. They could not convict in the Senate without Republican support, as conviction requires ratification by two-thirds of Senators present. Nevertheless, a House vote for impeachment would take the wind out of the sails of war, save countless lives and perhaps even save humanity from nuclear holocaust.
Various rationales or excuses have been constructed for the Democrats’ complicity in aggression that does not serve America. Perhaps the most popular rationale is that the Democrats are letting the Republicans have all the rope they want with which to produce such a high disapproval rating that the Democrats will sweep the 2008 election.
It is doubtful that the Democrats would assume that men as cunning as Karl Rove and Dick Cheney do not understand the electoral consequences of a low public approval rating and are walking blindly into an electoral wipeout. Rove’s departure does not mean that no strategy is in place.
So what does explain the complicity of the Democratic Party in a policy that the American public, and especially Democratic constituencies, reject? Perhaps a clue is offered from the Minneapolis-St. Paul Star Tribune news report (August 1, 2007) that Democratic Congressman Keith Ellison will spend a week in Israel on “a privately funded trip sponsored by the American Israel Education Federation. The AIEF–the charitable arm of the American Israel Public Affairs Committee (AIPAC)–is sending 19 members of Congress to meet with Israeli leaders. The group, made up mostly of freshman Democrats, has plans to meet with Israeli Prime Minister Ehud Olmert and [puppet] Palestinian President Mahmoud Abbas. The senior Democratic member on the trip is House Majority Leader Steny Hoyer, who has gone three times. . . . The trip to Israel is Ellison’s second as a congressman.”
According to the Star-Tribune, a Republican group, which includes Rep. Michele Bachmann (R, Minn), led by Rep. Eric Cantor (R, Va) is already in Israel. According to news reports, another 40 are following these two groups during the August recess, and “by the time the year is out every single member of Congress will have made their rounds in Israel.” This claim is probably overstated, but it does show careful Israeli management of US policy in the Middle East.
Elsewhere on earth and especially among Muslims, the suspicion is rife that the reason the war against Iraq cannot end, and the reason Iran and Syria must be attacked, is that the US must destroy all Muslim opposition to Israel’s theft of Palestine, turning an entire people into refugees driven from their homes and from the lands on which they have lived for many centuries. Americans might think that they are merely grabbing control over oil, keeping it out of the hands of terrorists, but that is not the way the rest of the world views the conflict.
Jimmy Carter was the last American president who stood up to Israel and demanded that US diplomacy be, at least officially if not in practice, even-handed in its approach to Israel and Palestine. Since Carter’s presidency, even-handedness has slowly drained from US policy in the Middle East. The neoconservative Bush/Cheney regime has abandoned even the pretense of even-handedness.
This is unfortunate, because military coercion has proven to be unsuccessful. Exhausted from the conflict, the US military, according to former Secretary of State and former Chairman of the Joint Chiefs of Staff, Colin Powell, is “nearly broken.” Demoralized elite West Point graduates are leaving the army at the fastest clip in 30 years. [http://observer.guardian.co.uk/] Desertions are rapidly rising. A friend, a US Marine officer who served in combat in Vietnam, recently wrote to me that his son’s Marine unit, currently training for its third deployment to Iraq in September, is short 12-16 men in every platoon and expects to be hit with more AWOLs prior to deployment.
Instead of re-evaluating a failed policy, Bush’s “war tsar,” General Douglas Lute, has called for the reinstitution of the draft. Gen. Lute doesn’t see why Americans should not be returned to military servitude in order to save the Bush administration the embarrassment of having to correct a mistaken Middle East policy that commits the US to more aggression and to debilitating long-term military conflict in the Middle East.
It is difficult to see how this policy serves any interest other than the very narrow one of the armaments industry. Apparently, nothing can be done to change this disastrous policy until the Israel Lobby comes to the realization that Israel’s interest is not being served by the current policy of military coercion.
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. This material is distributed without profit.
see:
The Israel Lobby and US Foreign Policy by John J. Mearsheimer and Stephen M. Walt
Rapture Ready: The Christians United for Israel Tour (video)
Dandelion Salad 
