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MSNBC Political Analyst and Air America Radio host Rachel Maddow joins Keith Olbermann to discuss the truce between John McCain and prominent right wingers. Aired 2/21/08.
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World’s Worst
Worse: Richard Perle
Worser: Bill’O
Worst: Karl Rove
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February 21, 2008
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VT, OH, TX & RI 03.04.08 Primary Results (early results)
Keith Olbermann Hillary vs Obama Debate Recap Quickie
Olbermann: Scandal In The Wind + The Nexus Of Politics & Terror + Post-Debate Special
On our man Obama the plagiarist & the media teeny weenie by Michael
Just When You Think The Media Couldn’t Get Any Worse… By Dave Lindorff
February 21, 2008
MSNBC Keith Olbermann
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Hillary Clinton vs Barack Obama Texas Debate
Olbermann: Scandal In The Wind + The Nexus Of Politics & Terror + Post-Debate Special
MAS Media Foundation Presents “A Land Called Paradise.”
In December 2007, over 2,000 American Muslims were asked what they wished they could say to the world. This is what they said.
Unofficial music video for Kareem Salama’s “A Land Called Paradise.”
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by Richard Backus
Atlantic Free Press
Thursday, 21 February 2008
The current outsourcing and downsizing of manufacturing in the U.S. will eventually lead to fascism if past history is a dependable predictor of the future. A decrease in the contribution of a country’s manufacture to its trade balance will lead to large trade deficits causing a drop in the value of a country’s currency. When this occurs, an accompanying decrease in the living standard of its citizens will result in political unrest leading to the establishment of a political state under the control of a powerful ruling class. The U.S. is currently in experiencing the beginning stage of this process.
Post-war Germany is a good example of what occurs under these conditions. The German people’s reparations payments to the victorious Allies after World War I were unsustainable and eventually led to an unwillingness of the working classes to continue their manufacture. The proceeds of almost all their production had been going to foreigners. This discontent and “revolt” of the industrial working classes led to an essential halt in manufacturing. Without production, there were no consumption items available for purchase by foreigners or industries in which to invest. The Reich’s mark went into free-fall and hyper-inflation destroyed the wealth of the middle class.
With a poverty-stricken populace and massive unemployment, the scene was set in Germany for someone who had the will and ability to take control and reestablish prosperity. The public was rightfully interested in a return to prosperity and was unfortunately ready to accept whatever means were necessary to attain it.
The U.S. is now approaching the end of the first phase of this process, the ruination of the American working classes by the giveaway of manufacturing to foreign workers. The dollar is just beginning what will be a drastic fall in value. The middle classes will be impoverished by this process causing a political reaction. This will lead to the need for the imprisonment of ever-more citizens and an ever-increasing level of security forces both public and private. The people will demand a more socialistic government and the establishment elites in the U.S. will be frightened into the use of more severe methods of controlling the public, eventually using brute force and intimidation against their own citizens.
A familiar quote by Huey Long predicted that “When fascism comes to America it will be wrapped in the American flag”. You can’t get there from here with a socialist government. Fascism can only be established under a democratic form of government by a gradual erosion of rule of law and respect for the rights of the citizens. The Patriot Act and Department of Homeland Security may very well be necessary but will need to be carefully monitored in the future.
In the event that these and similar legislative acts are not carefully controlled, and our production continues to move overseas, there will be no turning back. The establishment will be forced to seize more forceful control of the populace and will ultimately be unable to give it up. Well-paid police forces, both public and private, will be readily available to support them. For all practical purposes, there will be full-blown fascism in the U.S. Unless the public takes the responsibility and has the courage to forced a correction in the direction our economy, we will see fascism in our lifetimes. It will be the inheritance of our children.
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Older blogs: Fascism
The End of America? Naomi Wolf Thinks It Could Happen By Don Hazen
Interview: Naomi Wolf: The End of America (must see video) + Bush on Blackwater USA
Notes on the News-Making Naomis by Glitzqueen (aka The Other Katherine Harris) (fascism)
Fascist America, in 10 easy steps by Naomi Wolf
The Colbert Report: 10 Easy Steps to Fascism By Manila Ryce (video link)
Warning
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This video may contain images depicting the reality and horror of war and should only be viewed by a mature audience.
“US Will Not Build Military Command in Africa,” Al Jazeera TV, Qatar
“Palestinian Official Wants to Follow Kosovo Example,” Al Arabiya TV, UAE
“PA to Allow Foreigners Buy Land in West Bank,” Al Aqsa, Gaza
“Saudi Arabia Warns Citizens from Travelling to Lebanon,” Dubai TV, UAE
“Iran is Not Stealing Iraqi Oil,” Al-Iraqiya TV, Iraq
“A New Era in Pakistan,” Al Jazeera English, Qatar
Produced for Link TV by Jamal Dajani.
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George Bush Visits Africa to Promote the US Africa Command by Prof. Horace Campbell
AFRICOM – the big secret in the USA by Bryan Hunt (2/21/2007)
By Margaret Kimberley
After Downing Street
Black Agenda Report
Feb 21, 2008
Among people who call themselves “progressives,” it is common to hear George W. Bush derided as an idiot, a fool, an incompetent. In reality, “Bush is clearly the most successful president in modern history,” having stolen two elections, wrecked the Constitution and pursued wars with no end in sight – all with absolute impunity. The Democrats’ pitiful weaknesses are Bush’s strengths, the reason he prevails. Unless he is impeached, Bush’s legacy will last long beyond his term in office, since “a Democratic president will not undo what Bush has wrought” – not Obama, not Clinton. “The lack of movement politics and dependence on the hapless Democratic party have made the Bush winning streak possible and guarantee that it will continue after he leaves office.” Bush is triumphant. The “opposition” has failed.
by Paul Brandon and C Stephen Frost and David Halpin, Christopher Burns-Cox
Global Research, February 21, 2008
Was BBC Andrew Gilligan’s Original Source a Senior Member of Her Majesty’s Government?
The importance of identifying Andrew Gilligan’s “original” source (for his infamous BBC Radio 4 Today programme story on the sexing up of the September 2002 dossier, which was later used to justify the UK’s, and thereby the US’s, illegal invasion of Iraq) is not immediately obvious, but we think, after painstaking research, cannot be over-emphasised.
Suffice to say that the BBC eventually did what the UK Government had wanted them to do all along i.e. name Kelly as their source (the Government seemed determined to make Kelly the source from the moment that Kelly came forward and admitted to the Ministry of Defence that he had talked to Gilligan).
It seems highly likely to us that Kelly was indeed the fall guy, that he was indeed set up, as was suggested to him at the Foreign Affairs Committee when he gave his evidence on 15 July 2003.
On Sunday 20 July 2003, only two days after Kelly’s body had been found, the BBC surprised many people by breaking confidentiality (which one could reasonably argue was even more important to observe after death) and volunteering that Kelly was their “principal” source (when Kelly could no longer answer back). Most people took this to mean that Kelly was the ONLY source, when he clearly was not, indeed he was almost certainly not even the “principal” or “main” source. Crucially, the BBC did nothing to correct the almost universal misapprehension caused by their statement.
Thus the BBC (wittingly or unwittingly) assisted the Government in halting the search for the “real” source (or sources), and, in the context of Mr Toad’s references (see below) to “civil war within the Cabinet of HMG (Her Majesty’s Government)” and “USG’s (United States’s Government’s) plans to help HMG make up its mind with regard to Iraq’s WMD”, and the connection betwen the two, it is surely not difficult to appreciate the importance of halting that search (for the “real” source of Gilligan’s story).
Considerable suspicions have surrounded many aspects of the death of Dr David Kelly in July 2003, including the alleged manner of the death, its subsequent investigation, and the coverage of the whole affair in the mainstream media. Claims of murder by Liberal Democrat MP Norman Baker have continued to fuel speculation of foul play. Yet, in the light of these persisting suspicions, little attention has been paid to what could be the most important question of all: if David Kelly was not the only source for Andrew Gilligan’s “sexed-up” story, as he was not, who was the original source?
On Sunday, 20 July 2003, two days after David Kelly was found dead in the woods, Richard Sambrook, Director of BBC News, named Kelly in a statement as the “principal source for both Andrew Gilligan’s report and for Susan Watts’s reports on Newsnight on 2 and 4 June”.[1] Sambrook chose one word carefully, the word “principal”. Subsequent reports described the BBC as admitting Kelly was the “main source”.[2] “Principal” means first or foremost, or “main”. “Principal”, or “main”, certainly does not mean the one and only source. Unfortunately, this is how the wider world came to understand the Sambrook/BBC statement.
Did Gilligan use Kelly to corroborate information from another source?
Sambrook’s evidence to the Hutton Inquiry clearly suggests the possibility of another source. Gilligan’s infamous Radio 4 report is described in an internal report as resulting “from two separate but related information sources”.[3] Sambrook goes on to describe the other source as more general, and as “a background of concerns”.[4] The fact that he talks about other sources or “concerns” in the context of Gilligan’s story is important. It is surely not unreasonable to consider that out of the “background of concerns” a prime and headline-grabbing piece of information was given to Gilligan, before he had spoken to Kelly, perhaps from a disgruntled person connected with the compilation of the September 2002 dossier. At the Hutton Inquiry, Sambrook also spoke of “unattributable briefings from members of the security services” to a number of journalists at the BBC who were “expressing some unease at the way Intelligence had been presented in public”.[5]
Did a prime piece of information come Gilligan’s way through these channels? Did Gilligan take this original source and corroborate it during his conversation with Kelly on 22 May 2003? Kelly came forward voluntarily and always claimed he did not recognise some elements of Gilligan’s story. Kelly was also sure he was not the “main source” of the story, and shortly before Kelly’s death, after Kelly had given his evidence to the Foreign Affairs Committee (FAC), that committee publicly concluded that Dr Kelly was not the “main source”.
Gilligan’s e-mail to Greg Simpson MP
One of the more mysterious and under-reported parts of the David Kelly affair concerns an e-mail sent by Andrew Gilligan to the Liberal Democrat MP, Greg Simpson. It was sent on 14 July 2003, on the eve of Kelly’s televised appearance before the Foreign Affairs Committee.[6]
The subject heading of the e-mail reads “David Kelly – pls onpass David Chidgey'”. David Chidgey was also a Liberal Democrat MP, and, more importantly, a member of the Foreign Affairs Committee charged with questioning Kelly. In one part of the e-mail, Gilligan refers to “my colleague Susan Watts” having spoken with Kelly, clearly indicating that the BBC were exchanging information internally. Towards the end of the e-mail, Gilligan poses the question: “Is Kelly our source?” and answers his own question with: “we are not ruling anyone in or out as the source”, and: “I had many conversations with people inside and outside the Intelligence community about the issue of Iraqi WMD and the dossier. We suspect the MOD of playing games to try to eliminate names.”
The existence of the e-mail came close to being exposed three days later, on 17 July 2003, during Gilligan’s oral evidence to the Foreign Affairs Committee:
Mr Chidgey: That is good. Thank you. I wonder if you can help me clear up something in the way that Dr Kelly responded to some questions from me. You are, of course, aware that he has spoken to other BBC journalists, in particular Sue Watts, I think.
Mr Gilligan: Sorry?
Mr Chidgey: You are aware that he spoke to…
Mr Gilligan: I am not aware of anything about Dr Kelly’s dealings with other journalists, how could I be?[7]
At this point, Chidgey could have told the world about the e-mail, and that Gilligan was indeed “aware” of “dealings with other journalists”, thereby providing the committee with a new line of inquiry. Chidgey declined to pursue.
Gilligan later apologised to the Hutton Inquiry for sending the e-mail. More questions need to be asked about this e-mail (along with Gilligan’s oral evidence to the FAC), as it contains leads that suggest Gilligan had an original source BEFORE he approached Kelly.
“I have tried to persuade my source to go on the record, for obvious career reasons he is unable to … “
At the FAC hearing on 17 July 2003 Gilligan makes some extraordinary and again under-reported remarks:
Gilligan I would respectfully submit to the Committee that anonymous source journalism does have its value and although I have tried to persuade my source to go on the record, for obvious career reasons he is unable to, and I must respect that confidence.
Sir John Stanley: The fact you have just said that is clearly absolute confirmation from you that your source is not Dr Kelly.
Gilligan: I simply cannot add anything at all to the evidence I gave about my source.[8]
Why was Committee member Sir John Stanley so sure that the BBC’s source was not Dr Kelly? Because, two days earlier Kelly had gone on the record, in the fall glare of the television cameras and the wider world. So, who was the “anonymous source” who was “unable to go on the record”?
The other sources …
In Gilligan’s e-mail to Simpson, he says the source is someone “closely involved in compiling the document until a late stage”.[9] Previously, he had said that the source was “one of the senior officials in charge of drawing up the dossier”.[10] The mainstream version of events says this is David Kelly. The evidence appears to show beyond doubt that Kelly was around at a late stage, and involved in some discussions about the dossier. However there were others around at a late stage, perhaps up to seven or eight. Perhaps one of them spoke with Gilligan?
According to the BBC Conspiracy Files Dr Kelly timeline (online), on 19 September 2002, five days before the September dossier was published, “Dr Kelly takes part in an hour-long DIS meeting reviewing the draft of the dossier, in the Old War Office. Dr Brian Jones chairs the meeting with another seven or eight people present. Four pages of detailed comments were made. Entitled: “Iraqi Weapons of Mass Destruction Dossier – Comments on Revised Draft (15 Sept 2002)”.[11]
“Mr A”, revealed in Norman Baker’s book as Rod Godfrey, a chemical weapons expert, later told the Hutton Inquiry about 12 comments which were made by Dr Kelly. The DIS drafting suggestions were passed on to the JIO Intelligence staff. None of those suggestions mentioned the 45 minute claim.[12]
Gilligan said he spoke to sources “inside and outside the Intelligence community” and the source was “closely involved in compiling the document until a late stage”.[13] Perhaps, one of those ‘seven or eight’, mentioned by Dr Brian Jones, provided Gilligan with some information? Perhaps one of them had a grudge against the Government, did not approve of the “sexing-up” of the dossier?
At 14.58 on 25 September 2002, Mr A sent an e-mail to David Kelly pointing to a mistake relating to the al-Qaeda plant: “Another example supporting our view that you and I should have been more involved in this than the spin merchants of this administration. No doubt you will have more to tell me as a result of your antics today. Let’s hope it turns into tomorrow’s chip wrappers …”[14]
Mr Toad: “This from my friends on the river bank …”
Andrew Gilligan may have received some prime information from a source inside or outside the Intelligence services, and Dr Kelly was used to corroborate it. Any research into the mysterious death of Dr David Kelly entails encountering many sources of information. One particularly plausible scenario was described by a “Mr Toad” in his one and only post on the Guardian Talk forum website. We reprint the post below and in full. We do not consider Mr Toad’s version to be definitive, but we do conclude that it provides leads worth exploring. It outlines a version of events which could be argued was unravelling before our eyes in July 2003, but was stopped by the death of Dr David Kelly.
Mr. Toad posts on the Guardian Talk forum on 30 December 2003:
“This from my friends on the river bank:
Hutton is a jigsaw puzzle. And like all the best puzzles there was a piece missing. Some people have found the missing piece, but they keep trying to put it in upside-down.
1998 – Mai Pederson attached to Kelly as UNSCOM translator.
1998 – UNSCOM out of Iraq
1998 – Tom Mangold presents Panorama documentary revealing extensive infiltration of UNSCOM by national security services.
1998+ Pederson / Kelly relationship remains close
2000-2003 MoD becomes suspicious of Kelly’s relationship with Pederson. Begins moving Kelly towards the door marked ‘exit’, but does it quietly so as not to alarm Kelly or his friends overseas. No grading increase, retirement age reduced from 65 to 60, moved to PR role with no access to classified information.
May 2003 Gilligan interviews senior member of HMG, who makes the Campbell 45 minute claim ‘off the record’. Gilligan cannot run the story without a creditable source, so is pointed to Kelly as ‘unattributable’ MoD source. Gilligan goes to Kelly, tells him he knows the 45 minute claim is fictitious and plays the ‘name game’, then goes home and writes up his piece overnight using info from source 1 effectively attributed to Kelly. Kelly is baffled by Gilligan’s interview, but once Gilligan’s piece goes out he realises he has been set up. He writes to MoD to admit the unauthorised interview but denies he is the original source of Gilligan’s information. Kelly is called to meeting with line managers and told that orders from on high dictate that he will be the ‘fall guy’ or will lose his pension and find his relationship with Pederson plastered across the front page of the Telegraph and tv news. What Kelly did not realise was that this was a bluff. MoD were well aware of Pederson’s actual role and would never have allowed the name to come out in this way at the time. Kelly does as he’s told and goes before the parliamentary committee and ISC. This should be the end of it, except that Kelly broods on it and decides he will take steps to clear his name. Unfortunately, to do this he has to admit to the Pederson relationship. throughout the whole saga Kelly has been in close touch with Pederson, who has been reporting back to her masters. On July 17th Kelly tells Pederson he is going to leave his wife and going to the press to clear his name. Pederson reports immediately to her managers, the alarm bells go off in Washington as they believe she is about to be ‘outed’ and it’s ‘goodnight Vienna’.
Here’s why:
The CIA did to Kelly what they did to everyone, lied to him about Iraq’s WMD. The difference is that they thought Kelly’s position as MoD bio-weapons expert would allow him to influence the policy of HMG. Here’s how it was done: Pederson was a US airforce translator working from Arabic to English. After the removal of UNSCOM from Iraq in 1998, evidence of WMD capability came from satellites and smuggled documents. These would land first on the desk of Ms Pederson and her colleagues for translation, before passing to the scientists for analysis, who then advised USG. In the case of Pederson, however, the documents did not come from Iraq, but from the CIA. Pederson ‘leaked’ fake intelligence to Kelly over an extended period, which she claimed came from smuggled Iraqi documents indicating the existence of WMD.
By 2003, Kelly was completely convinced not only of the existence of WMD in Iraq, but also believed he knew what they were and where they were. However, when Kelly attempted to go to Iraq (post invasion) to locate them, he found his was mysteriously barred. On a first occasion his official visa proved worthless and he was turned back at Kuwait. On a second occasion he found himself confined to an airbase for the duration of his stay on security grounds.There may be some evidence that shortly before his death, Kelly became aware of the nature of Pederson’s information.
In preparation for his next planned visit to Iraq Kelly appears to have shared informaton from Pederson with Gabriele Kraatz-Wadsack, a German army weapons inspector and biological weapons expert. It appears from her reply, however, that she was less than convinced as to the veracity of the information, as made clear by the ‘concerns’ she expressed. In short, Kelly’s death was the result of two conspiracies colliding. The first being the civil war within the cabinet of HMG, which nearly resulted in the exposure of the second, USG’s plans to help HMG make up its mind with regard to Iraq’s WMD.Ultimately, it wasn’t murder or suicide, but a series of unfortunate accidents. Trouble with this jigsaw puzzle is, once you put it together, you realise it’s just a part of a much bigger puzzle.”[15]
NOTES
[1] http://news.bbc.co.uk/1/hi/uk_politics/3081529.stm
[2] http://news.bbc.co.uk/onthisday/hi/dates/stories/july/20/newsid_3798000/3798761.stm
and http://www.abc.net.au/am/content/2003/s906298.htm
[3] 112, 13 at http://www.the-hutton-inquiry.org.uk/content/transcripts/hearing-trans07.htm
[4] 113, 9 at http://www.the-hutton-inquiry.org.uk/content/transcripts/hearing-trans07.htm
[5] 112, 25 at http://www.the-hutton-inquiry.org.uk/content/transcripts/hearing-trans07.htm
[6] Andrew Gilligan e-mail to the Liberal Democrat MP, Greg Simpson http://image.guardian.co.uk/sys-files/Politics/documents/2003/08/20/gilligan_chidgey.pdf
and http://image.guardian.co.uk/sys-files/Politics/documents/2003/08/22/GUfac_6_0003.pdf
[7] Q228, http://www.publications.parliament.uk/pa/cm200203/cmselect/cmfaff/uc1025-ii/uc102502.htm
[8] Q342, http://www.publications.parliament.uk/pa/cm200203/cmselect/cmfaff/uc1025-ii/uc102502.htm
[9] See note 6
[10] http://news.bbc.co.uk/1/hi/uk_politics/3090681.stm
full text of defence correspondent Andrew Gilligan’s original report on BBC Radio 4’s Today programme from 29 May, 2003.
[11] 19 September 2002 – http://news.bbc.co.uk/1/hi/programmes/conspiracy_files/6380231.stm
[12] See note 11
[13] See note 6
[14] 25 Septemeber 2002 – http://news.bbc.co.uk/1/hi/programmes/conspiracy_files/6380231.stm
[15] Mr Toad transcript taken from http://xymphora.blogspot.com/2004/01/david-kelly.html
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see
MP says Kelly’s 2003 death not suicide By Michael Holden
Blair ‘knew Iraq had no WMD’ By David Cracknell
Media Disinformation regarding the Death of David Kelly by Xymphora
Weapons Expert Dr David Kelly was Murdered by Norman Baker
Did two hired assassins snatch weapons inspector David Kelly? by Norman Baker
By David Jackson and Jason Grotto
ICH
21/02/08 “Chicago Tribune”
ROCK ISLAND, Ill.
From prostitutes to Super bowl tickets, a federal probe reveals how contractors in Iraq cheated the U.S.
Inside the stout federal courthouse of this Mississippi River town, the dirty secrets of Iraq war profiteering keep pouring out.
Hundreds of pages of recently unsealed court records detail how kickbacks shaped the war’s largest troop support contract months before the first wave of U.S. soldiers plunged their boots into Iraqi sand.
The graft continued well beyond the 2004 congressional hearings that first called attention to it. And the massive fraud endangered the health of American soldiers even as it lined contractors’ pockets, records show.
Copyright © 2008, Chicago Tribune
Police are using tear gas to disperse crowds of rioting people who have been attacking embassies in Belgrade. The closed U.S. embassy building has been set on fire. The Turkish, Croatian and Bosnian legations have also come under attack. More than 30 people have been injured.
Added: February 21, 2008
By Mike Whitney
02/21/08 “ICH”
“Facts do not cease to exist because they are ignored”. — Aldous Huxley
The credit storm which began in July when two Bear Stearns hedge funds were forced to liquidate, has continued to intensify and roil the markets. Last week the noose tightened around auction-rate securities,a little-known part of the market that requires short-term funding to set rates for long-term municipal bonds. The $330 billion ARS market has dried up overnight pushing up rates as high as 20% on some bonds—a new benchmark for short term debt. Auction-rate securities are now headed for extinction just like the other previously-vital parts of the structured finance paradigm. The $2 trillion market for collateralized debt obligations (CDOs), the multi-trillion dollar mortgage-backed securities market (MBSs) and the $1.3 asset-backed commercial paper (ABCP) market have all shut down draining a small ocean of capital from the financial system and pushing many of the banks and hedge funds closer to default.
The price of insuring corporate bonds has skyrocketed in the last few weeks making it more difficult for businesses to get the funding they need to expand or continue present operations. Much of this has to do with the growing uncertainty about the reliability of credit default swaps, a $45 trillion dollar market which remains virtually unregulated. Credit-default swaps are a type of financial instrument that are used to speculate on a company’s ability to repay debt. They pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower fails to adhere to its debt agreements. When the price of CDSs increases, it means that there is greater doubt about the quality of the bond. Prices are presently soaring because the entire structured finance market—and anything connected to it—is under withering attack from the meltdown in subprime mortgages. As foreclosures continue to rise, the securities that were fashioned from subprime loans will continue to unwind destroying trillions of dollars of virtual-capital in the secondary market.
It all sounds more complicated than it really is. Imagine a 200 ft. conveyor belt with two burly workers and a mountain-sized pile of money on one end, and a towering bonfire on the other. Every time a home goes into foreclosure; the two workers stack the money that was lost on the transaction—plus all of the cash that was leveraged on the home via “securitization” and derivatives—-onto the conveyor-belt where it is fed into the fire. That is precisely what is happening right now and the amount of capital that is being consumed by the flames far exceeds the Fed’s paltry increases to the money supply or Bush’s projected $168 billion “surplus package”. Capital is being sucked out of the system faster than it can be replaced which is apparent by the sudden cramping in the financial system and a more generalized slowdown in consumer spending.
According to a recent Bloomberg article:
“A year ago $20 million would have gotten Luminent Mortgage Capital Inc. access to $640 million in loans to buy top-rated mortgage-backed securities. Now that much cash gets the firm no more than $80 million. …(Only) 6 lenders are offering 5 times leverage, while a year ago, 20 banks extended 33 times.”
The banks are not providing anywhere near as much money for leveraged investments as they did just last year. And, when credit shrinks on a national scale–as it is—so does the economy. It’ a simple formula; less money means less economic activity, less growth, fewer jobs, tighter budgets, more pain.
Bloomberg continues:
“Wall Street firms, reeling from $146 billion in losses on their debt holdings, are fueling a credit crisis by clamping down on lending to investors and hedge funds that use borrowed money to buy securities. By pulling back, (the banks) are contributing to reduced demand and lower prices throughout the fixed-income world.”
The banks are in no position to be extravagant because they’re already saddled with $400 billion in MBSs and CDOs—as well as another $170 billion in private equity deals—for which there is currently no market. They’ve had to dramatically cut back on their lending because they either don’t have the resources or are facing bankruptcy in the near future.
An article which appeared on the front page of the Financial Times last week, illustrates how hard-pressed the banks really are:
“US banks have been quietly borrowing massive amounts of money from the Federal Reserve…$50 billion in one month”.
The Fed’s new Term Auction Facility “allows the banks to borrow money against all sort of dodgy collateral,” says Christopher Wood, analyst at CLSA. “The banks are increasingly giving the Fed the garbage collateral nobody else wants to take … [this] suggests a perilous condition for America’s banking system.”
The move has sparked unease among some analysts about the stress developing in opaque corners of the US banking system and the banks’ growing reliance on indirect forms of government support.” (“US Banks borrow $50 billion via New Fed Facility”, Financial Times)
(The story appeared no where in the US media)
At the same time the banks are getting backdoor injections of liquidity from the Fed; banking giant Citigroup has been trying to off-load some of its branches so it can cover its structured investment losses. It all looks rather desperate, but scouring the planet for capital to shore up flagging balance sheets is turning out to be a full-time job for many of America’s largest investment banks. It is the only way they can stay one step ahead of the hangman.
In the last few days, gold has spiked to $950, a new high, while oil futures passed the $100 per barrel mark. The battered greenback has already taken a beating, and yet, Fed chairman Bernanke is signaling that there are more rate cuts to come. The prospect of a global run on the dollar has never been greater. Still, Bernanke will do whatever he can to resuscitate the faltering banking system, even if he destroys the currency in the process. Unfortunately, interest rates alone won’t cut it. The banks need capital; and fast. Meanwhile, the waning dollar has sent food and energy prices soaring which is leaving consumers without the discretionary income they need for anything beyond the basic necessities. As a result, retail sales are down and employers are forced to lay off workers to reduce their spending. This is all part of the self-reinforcing negative-feedback loop that begins with falling home prices and then rumbles through the broader economy. There is no chance that the economy will rebound until housing prices stabilize and the rate of foreclosures returns to normal. But that could be a long way off. With housing inventory at historic highs and mortgage applications at new lows, the economy could keep somersaulting down the stairwell for a full two years or more. Only then, will we hit rock-bottom.
The country is now headed into a deep and protracted recession. Low interest credit and financial innovation have paralyzed the credit markets while inflating a monstrous equity bubble that is wreaking havoc with the world’s financial system. The new market architecture, “structured finance” has collapsed from the stress of falling asset-values and rising defaults. Many of the banks are technically insolvent already, hopelessly mired in their own red ink. Public confidence in the nations’ financial institutions has never been lower. Monetary policy and deregulation have failed. The system is self-destructing.
Now that the credit crunch has rendered the markets dysfunctional, spokesmen for the investor class are speaking out and confirming what many have suspected from the very beginning; that the present troubles originated at the Federal Reserve and, ultimately, they are the ones who are responsible for the meltdown. In an article in the Wall Street Journal this week, Harvard economics professor and former Council of Economic Advisers under President Reagan, Martin Feldstein, made this revealing admission:
“There is plenty of blame to go around for the current situation. The Federal Reserve bears much of the responsibility, because of its failure to provide the appropriate supervisory oversight for the major money center banks. The Fed’s banking examiners have complete access to all of the financial transactions of the banks that they supervise, and should have the technical expertise to evaluate the risks that those banks are taking. Because these banks provide credit to the nonbank financial institutions, the Fed can also indirectly examine what those other institutions are doing.
The Fed’s bank examinations are supposed to assess the adequacy of each bank’s capital and the quality of its assets. The Fed declared that the banks had adequate capital because it gave far too little weight to their massive off balance-sheet positions—the structured investment vehicles (SIVs), conduits and credit line obligations—that the banks have now been forced to bring onto their balance sheets. Examiners also overstated the quality of the banks’ assets, failing to allow for the potential bursting of the house price bubble. The implication of this for Fed supervision policy is clear. The way out of the current crisis is not.”
How odd? So, when all else fails; tell the truth?
But Feldstein is right; the Fed refused to perform its oversight duties because its friends in the banking industry were raking in obscene profits selling sketchy, subprime junk to gullible investors around the world. They knew about the “massive off balance-sheet positions” which allowed the banks’ to create mortgage-backed securities and CDOs without sufficient capital reserves. They knew it all; every last bit of it, which simply proves that the Federal Reserve is an organization which serves the exclusive interests of the banking establishment and their corporate brethren in the financial industry.
Surprised?
The upcoming global recession/depression will give us plenty of time to mull over the ruinous effects of Fed policy and to devise a plan for abolishing the Federal Reserve once and for all. That is, if they don’t destroy us first.
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http://www.infowars.com/
Alex interviews Dennis Kucinich, Democratic member of the United States House of Representatives. Alex also covers the news and takes your
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Kucinich to Investigate 9/11 Insider Trading
BuzzFlash Interviews Dennis Kucinich
Dennis Kucinich: Prayer for America (video)
Contribute to Kucinich for Congress
U.S. Suggests, Without Proof, Stock Adviser Knew of 9/11 (2002)
February 21, 2008 BBC World
More on U.K. Extraordinary Rendition Flights from Parliament
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Pamela Hess
Raw Story
AP News
Feb 21, 2008 14:00 EST
CIA Confirms That Secret Flights Carrying Terror Suspects Refueled in British Territory
CIA Director Michael Hayden acknowledged Thursday that two rendition flights carrying terror suspects refueled on British territory, despite repeated U.S. assurances that none of the secret flights since the Sept. 11 attacks had used British airspace or soil.Hayden told agency employees that information previously provided to the British “turned out to be wrong.”
The spy agency reviewed rendition records late last year and discovered that in 2002 the CIA had in fact refueled two separate planes, each carrying a terror suspect, on Diego Garcia, a British island territory in the Indian Ocean.
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. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
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A possible Guantanamo on UK soil + More probes into Diego Garcia ‘rendition’ (videos)
More: h/t: CLG:
Britain regrets that U.S. “torture flights” landed on British territory 22 Feb 2008 British Foreign Secretary David Miliband admitted on Thursday that two U.S. “torture flights” did land on British territory in 2002, contrary to previous reports. Miliband told the House of Commons that he was “very sorry indeed” to have to say previous denials made in “good faith” were now having to be corrected.
Miliband admits US rendition flights stopped on UK soil 21 Feb 2008 Britain acknowledged today for the first time that US planes on “extraordinary rendition” flights stopped on British soil twice. The admission came from the foreign secretary, David Miliband, who apologised to MPs for incorrect information given by his predecessor, Jack Straw, and the former prime minister Tony Blair.
British airport used for US rendition flights 21 Feb 2008 A British overseas base was used for American “torture” flights the Government has been forced to admit, despite categorical denials of British involvement from both Tony Blair and Jack Straw. David Miliband, the Foreign Secretary, was forced to apologise to MPs and Gordon Brown said he shared the “disappointment with what has happened.”
David Miliband’s statement –Full text of the foreign secretary’s statement to the House of Commons on US rendition flights 21 Feb 2008
by Chris Ames
Global Research, February 21, 2008
New Statesman
A scribbled reference to Israel in the margin of a withheld draft of the Iraq dossier is revealed. Chris Ames who has doggedly pursued the government on the issue responds
The Guardian has today revealed the contents of the margin note that the Information Tribunal allowed to be removed when ordering the Foreign Office to publish the John Williams draft of the Iraq dossier.
It reveals that a senior government official or minister suggested at the time of the dossier (September 2002) that Israel had brazenly flouted the UN’s authority in pursuit of weapons of mass destruction. A reference to Israel in the margins of the Williams draft is linked to an assertion in the text that Iraq is unique in this respect. It is clear that the author of the reference thought that the same charge might be levelled against Israel.
The Guardian has obtained a copy of the witness statement given to the Tribunal by Neil Wigan, Head of the Foreign Office’s Arab, Israel and North Africa Group. He told the Tribunal:
“I interpret this note to indicate that the person who wrote it believes that Israel has flouted the United Nations authority in a manner similar to that of the Iraqi regime of Saddam Hussein.”
Wigan asserted that the comment would ‘seriously damage Britain’s bilateral relationship with Israel’. He stated that Israel would believe that the FCO had compared it with Saddam Hussein’s regime and that this would confirm its view that elements of the FCO are prejudiced against it.
I attended the Tribunal hearing in December and was aware that Wigan was giving evidence in secret. When the Tribunal issued its decision last month it ordered that the note should be removed from the document, which was finally published on Monday. It also kept secret its reason for doing so, although it stated that it related to the exemption under Section 27 of the Freedom of Information Act, that publication would damage international relations.
When Jack Straw, then Foreign Secretary, originally blocked my 2005 FOI request for the Williams draft, he made no mention of this exemption, relying instead on the Section 36 exemption relating to government confidentiality.
The Foreign Office has refused to say who wrote the marginal note, saying that it does not comment on leaked documents. It is clear from documents on the Hutton Inquiry website that Straw was one of a small number of people within the Foreign Office who followed the drafting of the dossier at this time. He almost certainly saw the Williams draft, which the FCO described as ‘advice to ministers’.
Labour MP Lynne Jones said: “The Government’s timid refusal to make an accurate reference to Israel’s flouting of UN authority over its WMD shows their lack of objectivity on breaches of international law, which damages our Country’s moral authority.
“The reticence over this issue is mirrored by the unwillingness to push for enforcement of human rights provisions of the EU-Israel Association Agreement.”
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© Copyright Chris Ames, New Statesman, 2008
The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=8143
see
How the British Labour Government used the Law to keep Criticism of Israel Secret
by Richard Norton-Taylor
Global Research, February 21, 2008
Guardian
The full extent of government anxiety about the state of British-Israel relations can be exposed for the first time today in a secret document seen by the Guardian.
The document reveals how the Foreign and Commonwealth Office (FCO) successfully fought to keep secret any mention of Israel contained on the first draft of the controversial, now discredited Iraq weapons dossier. At the heart of it was nervousness at the top of government about any mention of Israel’s nuclear arsenal in an official paper accusing Iraq of flouting the UN’s authority on weapons of mass destruction.
The dossier was made public this week, but the FCO succeeded before a tribunal in having the handwritten mention of Israel kept secret.
The FCO never argued that the information would damage national security. The Guardian has seen the full text and a witness statement from a senior FCO official, who argued behind closed doors that any public mention of the candid reference would seriously damage UK/Israeli relations. In the statement, he reveals that in the past five years there have been 10 substantial incidents and 20 more minor ones relating to Israeli concerns about attitudes to their government within Whitehall.
The Information Tribunal, which adjudicates on disputes involving the Freedom of Information Act, agreed to remove the single reference to Israel when it ordered the release of the draft of the Iraqi weapons dossier written by John Williams, the FCO’s chief information officer at the time.
Along with unfavourable references to the US and Japan, the reference to Israel was written in the margin by someone commenting on the opening paragraph of the Williams draft. It was written against the claim that “no other country [apart from Iraq] has flouted the United Nations’ authority so brazenly in pursuit of weapons of mass destruction”.
In statement to the tribunal, Neil Wigan, head of the FCO’s Arab, Israel and North Africa Group, said he did not know who had referred to Israel in the margin. He went on: “I interpret this note to indicate that the person who wrote it believes that Israel has flouted the United Nations’ authority in a manner similar to that of the Iraqi regime of Saddam Hussein.”
Its disclosure would seriously damage the UK’s relations with Israel, Wigan said. The comparison with Saddam and the “implied accusation of a breach of the UN’s authority by Israel are potentially very serious”. It was “inevitable” that relations between the UK and Israel would suffer if the marginal note were allowed to enter the public domain, he added.
Wigan observed: “Unfortunately, there is perception already in Israel that parts of the FCO [Foreign and Commonwealth Office] are prejudiced against the country”. The note on the Williams draft dossier “would therefore confirm this pre-existing suspicion and would increase the damage”.
Writing in October last year, he noted that “criticism of Israel received a huge amount of media coverage”. The margin comment mentioning Israel would thus be given a “high profile”. Harming relations with Israel would undermine the FCO’s ability to prevent and resolve conflict “through a strong international system”. In addition, there was “an important national interest in relation to counter-terrorism”, Wigan said.
The FCO insisted on the removal of the reference to Israel after it lost a long battle to suppress the draft dossier, which was drawn up in early September 2002. It originally argued that the name of the author needed to be protected. It then said the contents of the draft dossier should be suppressed to protect the need for officials to give frank advice. The Williams document was finally released by the FCO last week, three years after it was first requested by Chris Ames, an independent researcher, who pursued his campaign in the New Statesman magazine.
Richard Thomas, the Information Commissioner, said last year that it was in the public interest that the document should be released in its entirety. The FO appealed against his ruling and took it to the Information Tribunal.
The FCO had no objections to references to other countries in the margin of the Williams document. Alongside the claim that no other country apart from Iraq had twice launched wars of aggression against neighbours, the unknown FCO official writes: “Germany?” and ” US: Cuba, Guatemala, Mexico”. Against a reference to the use of chemical weapons, the official has written: “Japan in China?”
Claims in the Williams draft are similar to those in the final government Iraqi weapons dossier published in late September 2002. The Information Tribunal ordered the release of the draft, without reference to Israel, observing that it may have played a bigger role in influencing the final dossier than previously supposed. The government tried to distance itself from the Williams draft.
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.
For media inquiries: crgeditor@yahoo.com
© Copyright Richard Norton-Taylor, The Guardian, 2008
The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=8142
Dandelion Salad 