March 19, 2008
Click away. ~ Lo
Day: March 19, 2008
Photos from March 18-19 in DC
Adam Kokesh Demands Impeachment in Washington, DC (video)
On March 19, 2008, in front of the White House, anti-war activist Adam Kokesh, of the IVAW, demanded the impeachment of President George W. Bush and V.P. Dick Cheney. He accused the duo of engaging in “criminal” conduct in violation of their respective oaths of office. He was joined at the spirited rally by fellow members and supporters of the IVAW, and other veteran groups as well. For background, see http://ivaw.org/index.html.
see
It’s March 19 and Blogswarm Day! Posts on Iraq War by Lo
Al Jazeera’s ‘The War In America’ (videos; Iraq)
Winter Soldiers tell their story + Winter Soldier then & now
Olbermann: Iraq War: Nothing to See Here + 5 Years Later + McCain Scrutiny + Worst
March 19, 2008
More at http://www.MaddowFans.com
5 Years Later
World’s Worst
Worse: MLB
Worser: Lynndie England
Worst: Sean Hannity
McCain Scrutiny
Keith speaks with Jonathan Alter.
You Say Dubai, I say Hello: At first, John McCain’s claim that Irahn was taking in members of al Qaeda in Iraq, training them, and then sending them back to Iraq… appeared to be a momentary misstatement… that he meant to say “extremists.” In our fourth story tonight, despite the fact that McCain himself said he was wrong… his campaign today issued a prepared statement, saying, quote, “Al Qaeda and Shia extremists–with support from external powers such as Irahn–are on the run but not defeated.”
Do-Over And Out
Keith speaks with Chick Todd.
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Anti-War protesters march through Mission District + photos (link)
by Matthai Kuruvila, Meredith May, Steve Rubenstein, Anastasia Ustinova sfgate.com
Wednesday, March 19, 2008
(03-19) 18:55 PDT SAN FRANCISCO – — Hundreds of anti-war protesters rallied today at San Francisco’s City Hall, condemning the Iraq war’s fifth anniversary and culminating a day’s worth of often contentious gatherings in the region.
“It’s been five years and we want to be out,” State Sen. Carole Migden said to the protesters gathered at City Hall. “And we want to bring the money home. We want to bring the troops home. We want to use that money for health care, affordable housing. And we want to spend it on young people at home.”
With each reference, the crowd roared in approval.
…
While defiant in tone, the Civic Center rally was in sharp contrast to protests earlier in the day which resulted in more than 140 people being arrested – most in front of Sen. Dianne Feinstein’s office.
Protesters briefly clashed with San Francisco police several times as officers tried to clear Market Street of hundreds of demonstrators.
One scuffle took place after about two dozen demonstrators staged a “die-in” at about 12:15 p.m. in front of Feinstein’s office at the intersection of Market and New Montgomery streets and were surrounded by 80 police officers in riot gear. After more than two hours of protests – and about 100 arrests – authorities finally cleared the intersection and reopened Market Street to traffic at 2:30 p.m.
…
Left-wing activist Daniel Ellsberg told the crowd, “The symbolism of people lying in death appears to symbolize the life and death seriousness as we enter the sixth year of this crime against the American people.” He soon sat down in the street and was himself arrested.
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Anti-War protesters march through Mission District
sfgate.com
Wednesday, March 19, 2008
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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Brown unveils civil defence plan + ‘Dads’ Army’ to protect against security threats
The Press Association
Mar 19, 2008
Members of the public will be able to join a new form of civil defence network to protect Britain against natural disasters and terrorism.
The organisations – likened to a new breed of “air raid precautions” or “ARP” wardens from the Second World War – will team up to build the country’s resilience in a catastrophe.
As part of a new National Security Strategy, Prime Minister Gordon Brown also revealed that the Government will publish for the first time a list of the risks faced by Britain, including possible numbers of fatalities in a range of disasters.
h/t: CLG
***
‘Dads’ Army’ to protect against security threats
By Christopher Hope
telegraph.co.uk
9:45pm GMT 19/03/2008
Gordon Brown wants tens of thousands of Britons to join a new Dads’ Army-style volunteer force to help the Government tackle threats to national security.
The Prime Minister also said ministers will also publish an annual risk register of the top threats facing Britain, from the Al Qaeda terror threat to floodingcyber crime.
The new force, called a new Civil Protection Network, will be based on the local Neighbourhood Watch schemes.
The Prime Minister said he wanted to see “improved resilience against emergencies” from floods to terrorist attacks.
This would take “not the old Cold War idea of civil defence but a new form of civil protection”.
People will be asked later this year if they want to join up to help defend Britain’s security and then be given training in how to deal with a number of threats.
Whitehall officials played down suggestions that the new force will be a new British Home Guard or ‘Dads’ Army’.
One official said it was more likely to be “a variation” of the ARP [air raid precaution wardens] who patrolled Britain’s streets during the Blitz.
and
h/t: CLG
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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Why Are Winter Soldiers Not News?
www.fair.org/
3/19/08
Action Alert
Dozens of veterans of the Iraq and Afghanistan wars gathered in Silver Spring, Maryland last weekend for the Winter Soldier: Iraq and Afghanistan hearings (3/13/08-3/16/08), where they offered harrowing testimony about atrocities they had witnessed or participated in directly. The BBC predicted that the event, organized by Iraq Veterans Against the War, “could be dominating the headlines around the world this week” (3/7/08). The hearings were covered as far afield as the U.K. (Guardian, 3/17/08), Australia (Australian Broadcasting Corporation, 3/14/08), Croatia (Javno, 3/16/08), and Iran (Press TV, 3/14/08). Yet there has been an almost complete media blackout on this historic news event in the U.S. corporate media.
Despite being noted in the New York Times‘ Paris-based International Herald Tribune (3/13/08), Winter Soldier has yet to be mentioned in the New York Times itself. No major U.S. newspaper has covered the hearings except as a story of local interest; the few stories major U.S. newspapers have published on the event have focused on the participation of local vets (Boston Globe, 3/16/08; Boston Herald, 3/16/08; Newsday, 3/16/08, Buffalo News, 3/16/08).
The Washington Post, too, published their account in the metro section (3/15/08). In contrast, the paper published an article about pro-war demonstrators protesting the Winter Soldier hearings in the A section (3/16/08), despite the fact that they were, according to the Post, “small in number.”
None of the major broadcast TV networks (ABC, NBC, CBS) have mentioned the hearings in their newscasts. PBS has been silent as well.
But for a couple of exceptions (Time, 3/15/08; NPR, 3/16/08), the hearings have been virtually ignored by all but the independent media (Democracy Now!, 3/14/08; 3/17–18/08; In These Times, 3/17/08; Alternet, 3/14/08) and military publications (Stars and Stripes, 3/15/08 and the four Military Times newsweeklies, 3/15/08, 3/17/08), in a pattern reminiscent of the near complete corporate media blackout on the first Winter Soldier hearings. FAIR founder Jeff Cohen (Huffington Post, 3/16/08) traces the beginning of his career as a media critic back to his experience of watching as “one of the rare mainstream camera crews showed up at Winter Soldier… and then abruptly packed up to leave in the middle of particularly gripping testimony.”
While the testimony of soldiers who had served multiple tours of duty was broadcast on Pacifica Radio‘s Democracy Now!, Free Speech TV, and the Real News network, the major broadcast networks and PBS instead devoted airtime to the pro-war assessments of Vice President Dick Cheney and Sen. John McCain, both of whom have only made brief visits to Iraq (NBC Nightly News, ABC World News, CBS Evening News, PBS NewsHour, all 3/17/08).
Given the common media rhetoric of “supporting the troops” (FAIR Action Alert, 3/26/03), to ignore these same troops when they speak out about the horrors of the war is unconscionable. On the fifth anniversary of the Iraq War, it is particularly important that the media reverse this silence, and include the voices of the vets who are speaking out about their experiences in Iraq and Afghanistan in national news coverage.
ACTION:
Contact the broadcast networks and ask them why they decided to ignore the Winter Soldiers hearings while carrying the less-informed observations on Iraq of John McCain and Dick Cheney.
CONTACT:
ABC World News
ABC World News contact web form
Phone: 212-456-7777
CBS Evening News
Email: evening@cbsnews.com
Phone: 212-975-3691
NBC Nightly News
Email: nightly@nbc.com
Phone: 212-664-4971
This work is licensed under a Creative Commons License.
see
It’s March 19 and Blogswarm Day! Posts on Iraq War by Lo
Winter Soldiers tell their story + Winter Soldier then & now
BBC Pictures of Tibetans killed in uprising in Ngawa, Amdho
Warning
.
This video may contain images depicting the reality and horror of war/violence and should only be viewed by a mature audience.
BBC shows pictures of the bodies of those who were shot and killed by the Chinese Military in Ngawa, Amdho uprising.
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ITN footage of Tibetan students protesting in Beijing
Tibetan monks lead protests against China + Tibet riots (vids)
Friendly Feudalism: The Tibet Myth by Dr. Michael Parenti (01.02.07)
War in Heaven – The Arms Race in Outer Space
by Jim Miles
Global Research, March 19, 2008
A review of Helen Caldicott and Craig Eisendrath’s book
In this short volume, Helen Caldicott and Craig Eisendrath provide a sharp and concise analysis of the American nuclear weapons industry and its many ramifications for society and the peoples of the world in general. While they see the big picture, they ably document the details of theory and practice of the (mostly) American push towards bigger and better (deadlier and more accurate) nuclear armaments that accompany the American push towards global dominance.
The work rises from a conference in 2005 titled “Full Spectrum Dominance” sponsored by Caldicott’s Nuclear Policy Research Institute, and the subsequent articles following that conference. The title, as most should recognize, is borrowed from the neocon military agenda of the same name, formulated in part by the many neocon members of the Bush administration, many successful holdovers from the Reagan administration. This work examines the current administration’s efforts towards a full militarization of outer space (more correctly ‘near’ space as is evident from the details provided in the text of what is useful and functional as well as imaginary and fantastical), their desire to control the world by global surveillance and space based military action, and to deny the use of outer space weapons systems to any other contender.
Starting with a short historical account of the developments leading to the full spectrum dominance stage, the authors discuss the advent of satellite technology – its role with national pride, its development as valid scientific instruments, finally moving into the realm of monitoring the agreements on nuclear tests as well as monitoring as advanced warning systems. The latter was and remains in part, a section of the mutually assured destruction regime that guarded against false starts in the earth based ICBM nuclear war scenarios.
The focus starts with the Outer Space Treaty of 1967 that while still operational and flawed in certain respects, “does lay down a body of international law covering a number of important issues and provides directions for avoiding an outer space arms race.” Unfortunately, current events – the Chinese and Americans displaying tit for tat abilities at destroying satellites with reasonably basic technology – tells that we are in the embryonic stages of an outer space arms race. I use the word embryonic guardedly yet authentically, as the gestation period has been long, and probably will remain long until any real successes are made, yet early attempts indicate the possibility of a space-dominated war. The United Nations, as the forum for the treaty of 1967, is currently “attempting” another treaty that addresses “the omissions in the treaty with a still more comprehensive treaty prohibiting all orbital weapons and providing verification procedures,” yet for eight years the U.S. veto has “prevented the Geneva based Conference on Disarmament from engaging in negotiating an international treaty prohibiting weapons in space.”
Along with the space surveillance capabilities of satellites, the U.S. has “perfected its technical capacities in weapons guidance”, (probably not a fully accurate statement with its absolute of perfection) while renewing the call for missile defence systems, none of which so far have been proven effective and are generally considered highly ineffective. Now the U.S. is turning to actually arming space itself, to destroy other countries’ satellites (and their possible space weapons as a response to U.S. initiatives) and to be able to apply immediate response to any militarily desired response on earth.
Caldicott and Eisendrath then present arguments about the peaceful uses of outer space, the two main ones being communication in general and the understanding of and reporting of weather in all its manifestations. Accompanying that is the purely scientific exploration of space and the increased knowledge of how our solar system works, providing us with, perhaps, some unknown future direct benefits as well as the current knowledge of humanity’s place within a significantly broader perspective. In conclusion they write, “As the Bush administration continues its retreat to an outdated and inappropriate Cold War mentality, and moves toward the weaponization of space as a unilateral venture, the entire use of space for peaceful purposes is threatened.”
The section on “Missile Defense” highlights several features of the new U.S. governance style that are of concern. First is the abrogation of the ABM treaty in 2001 by invoking the threat of terrorism, and the lack of Constitutional support for the withdrawal, and supported by the courts with a rather lame argument about “political questions” being left to the “political branches of the government.” Following this, the U.S. set up double standards, contradictory standards, when events in North Korea, Iran, and India are compared. Ultimately, though, it is China that is the target, with a rising economy, a strong military with some dozen or two ICBMs targeted on the U.S., and an increasing influence in the ‘developing’ world with all the attachments there with resources and markets.
From those arguments, the authors then discuss the actuality of the U.S. plans for “The Weaponization of Outer Space.” After a brief look at the money that transfers back and forth between corporations and government, the arguments for weaponization uses language that employs “rhetoric of complete dominance and hegemony, not multilateral cooperation or diplomacy.” These plans include weaponized satellites to launch attacks against other satellites or against ground targets. Accompanying this are the countermeasures that other countries would then take to match or counter the actions of the U.S. technology.
The end results are several, but mainly “it impoverishes the nation, and does little or nothing for U.S. security.” The scenario of space wars, if applied, would “sacrifice precious peaceful uses” to achieve “a nerve wracking state; space would be unstable, punctuated by challenges to U.S. dominance and a worldwide state of tension [terror for the average citizen].” The authors’ final statement of the chapter leaves me uncomfortable, either through bad wording, but also perhaps revealing another bias of U.S. exceptionalism, that “Now, when it has military supremacy, is the time to work out the agreements that will ensure its future.” Its future as what? Global hegemon? Militarized star wars scenarios are scary, but continuing military supremacy, and continuing political/financial supremacy are also scary, not quite so dramatic and direct, but in the long term, still quite devastating to millions of global citizens.
In “Alternatives to Weapons in Outer Space” the authors look at the problems associated with a “continuous undefined war on terror,” the gathering of power into an imperial presidency, and proceeds with laying out arguments and ideas that would lead to an international treaty on the de-weaponization of outer space. The conclusion is that “That tools for this effort are already in place….The United States must with urgency move away from its unilateral position, and join its co-habitants on this planet.” Certainly the tools are there, they always have been, but the statements coming from the presidential candidates only indicate that the same old plans will continue in effect under a new administration.
In a society as highly militarized as the U.S. supports, a change of direction will only come on the heels of some other catastrophe. Even that might not be enough, as the whole economic system of capitalism has long been symbiotic with the military support that guards the markets and resources required to fuel the wealth of the homeland. I would hope that Caldicott’s and Eisendrath’s call that it will happen if we demand it would be true, but more pessimistically, the dead weight of economic, military, political, and economic forces will not readily be turned astray without some final death throes inflicted either on the world, or the American populace (witness the current financial meltdown and the new political controls established by the war on terror)…or both.
Jim Miles is a Canadian educator and a regular contributor/columnist of opinion pieces and book reviews for The Palestine Chronicle. His interest in this topic stems originally from an environmental perspective, which encompasses the militarization and economic subjugation of the global community and its commodification by corporate governance and by the American government. Miles’ work is also presented globally through other alternative websites and news publications.
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.
For media inquiries: crgeditor@yahoo.com
© Copyright Jim Miles, Global Research, 2008
The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=8390
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Nuclear Madness – Interview with Dr. Helen Caldicott (must see video)
Iraq War as War Crime By Robert, Sam & Nat Parry
By Robert, Sam and Nat Parry
consortiumnews.com
March 18, 2008
Editor’s Note: The Iraq War – now ending its fifth bloody year – represents not only a human tragedy of enormous consequence and possibly the greatest strategic blunder in U.S. history but also a systemic failure of American political and journalistic institutions.
Mosaic News – 3/18/08: World News from the Middle East
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.
More: http://linktv.org/originalseries
“Iraqi Accordance Front Boycott National Reconciliation,” Al Jazeera TV, Qatar
“Iraq War May Cost 3 Trillion Dollars,” Dubai TV, UAE
“Interview With Tortured Iraqi Prisoner,” Al Arabiya TV, UAE
“Shabaan Trial Resumes,” Al-Iraqiya TV, Iraq
“High Security During Holiday,” IBA TV, Israel
“Iran Bypassing Sanctions,” Al Arabiya TV, UAE
“Prisoner Sami Al Haj,” Al Jazeera English, Qatar
Produced for Link TV by Jamal Dajani.
Vodpod videos no longer available. from www.youtube.com posted with vodpod
.
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Six Questions for Aram Roston – Author of ‘The Man Who Pushed America to War’
By Scott Horton
ICH
03/19/08 Harpers
This week we mark the fifth anniversary of the U.S. invasion of Iraq to topple the regime of Saddam Hussein. The perfect book for the week is NBC reporter Aram Roston’s deep probe into the life of Ahmad Chalabi and the role he played in making the case for an invasion of Iraq and in directing the early stages of the occupation, which by consensus is now viewed as disastrous. Roston has worked at NY1 News as a police reporter, as a correspondent at CNN, and most recently has been a producer for the investigative unit at the NBC Nightly News, where his work has been honored with two Emmys. He has published investigative stories in a number of major magazines.
The Fed is just an Extension of the Banking Establishment; The Bear bailout proves it
By Mike Whitney
03/19/08 “ICH”
One picture tells the whole story. It’s a photo of five grim looking men in gray suits staring ahead blankly like they were in the dock with Saddam awaiting sentencing. Every one of them looks downcast and dejected; shoulders rounded and jaws set. This is what desperation looks like, which is why the photo was kept off the front pages of our leading newspapers.
The group took no questions and, as far as the media was concerned, the meeting never happened. But it did happen; and it happened on Monday at the White House at 2PM. That’s when President Bush convened the Working Group on Financial Markets, also known as the Plunge Protection Team, to explain their strategy for dealing with deteriorating conditions in the financial markets. The details of the meeting remain unknown, but judging by the sudden (and irrational) recovery in the stock market yesterday; their plan must have succeeded.
The Plunge Protection Team is a panel that includes Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson, Securities and Exchange Commission Chairman Christopher Cox, and acting Commodity Futures Trading Commission head Walter Lukken. According to John Crudele of the New York Post, the Plunge Protection Team’s (PPT) objective is to redirect the stock market by “buying market averages in the futures market, thus stabilizing the market as a whole.” In the event of a terrorist attack or a natural disaster, the group’s activities could play an extremely positive role in saving the market from an unnecessary meltdown. However, direct intervention into supposedly “free markets” is less defensible when it is merely a matter of saving an over-leveraged banking system from its inevitable Day of Reckoning. And, yet, that appears to be the reason for the White House confab.
The psychology behind the PPT’s activities are explained in greater detail by Robert McHugh Ph.D. who provides a description of how it works in his essay “The Plunge Protection Team Indicator”:
“The PPT decides markets need intervention, a decline needs to be stopped, or the risks associated with political events that could be perceived by markets as highly negative and cause a decline, need to be prevented by a rally already in flight. To get that rally, the PPT’s key component — the Fed — lends money to surrogates who will take that fresh electronically printed cash and buy markets through some large unknown buyer’s account. That buying comes out of the blue at a time when short interest is high. The unexpected rally strikes blood, and fear overcomes those who were betting the market would drop. These shorts need to cover, need to buy the very stocks they had agreed to sell (without owning them) at today’s prices in anticipation they could buy them in the future at much lower prices and pocket the difference. Seeing those stocks rally above their committed selling price, the shorts are forced to buy — and buy they do. Thus, those most pessimistic about the equity market end up buying equities like mad, fueling the rally that the PPT started. Bingo, a huge turnaround rally is well underway, and sidelines money from Hedge Funds, Mutual funds and individuals’ rushes in to join in the buying madness for several days and weeks as the rally gathers a life of its own. (Robert McHugh Ph.D., “The Plunge Protection Team Indicator”)
The powers of the PPT are greatly exaggerated; eventually the liquidity they provide has to be drained from the system. The popular myth that the Fed simply creates as much money as it chooses and spreads it around wherever it likes; is pure rubbish. The Fed has very defined balance constraints. The system is not quite as rigged as many people imagine. According to Bloomberg News, the Fed has already depleted most of its arsenal:
“The Fed has committed as much as 60 percent of the $709 billion in Treasury securities on its balance sheet to providing liquidity and opened the door to more with yesterday’s decision to become a lender of last resort for the biggest Wall Street dealers.” (“Bernanke May Run Low on Ammunition for Loans, Rates”, Bloomberg)
The troubles in the credit markets and real estate are bigger than the Fed or the PPT; and they know it. The next step is massive government intervention; rate freezes, bailouts and fiscal stimulus. Big government is back; Reaganism has gone full-circle. That doesn’t mean that the PPT cannot have an important psychological affect in soothing jittery markets and stalling a system-wide collapse. It just means, that markets will eventually correct regardless of what anyone does. The sharp downturn in the financial markets is the result of unsustainable credit expansion that can’t be fixed by the parlor tricks of the PPT. The rate at which financial institutions are deleveraging and destroying capital will inevitably trigger an economic crisis equal to the Great Depression. What is needed is strong leadership and a re-commitment to transparency, rather than the “business as usual” deception of the public that keeps the balls in the air for another day or two.
“Sucker rallies”, like yesterday’s 400 point surge on Wall Street just obfuscate the systemic problems that need to be addressed before investor confidence is restored. Blogger Rick Ackerman summed it up succinctly in last night’s entry:
“These psychotic, 400-point rallies in the Dow do not augur renewed confidence. They are being driven almost entirely by short-covering, and even the otherwise clueless news anchors are starting to dismiss them as meaningless. One of these days, moments after the last surviving bear’s short position has been liquidated, stocks are going to fall so steeply that even the Plunge Protection Team will call for back-up. Then, the financial collapse that so many have been expecting will unfold in just a few days, with enough power to leave the global economy in ruins for a generation.” (Rik’s Piks Rick Ackerman)
Whether Ackerman’s dire predictions materialize or not, there’s no denying that the situation is getting worse by the day. In just the last week, two major financial institutions, Carlyle Capital and Bear Stearns, have either gone under or been bailed out wiping out tens of billions in market capitalization. These flameouts increase the rate of the deflation adding to the already-prodigious losses from housing foreclosures, delinquent credit card debt, defaulting car loans, and the accelerating deleveraging in the hedge fund industry. Fortress America has sprung a leak, and capital is escaping in a torrent.
“One thing is for certain, we’re in challenging times,” Mr. Bush opined on Monday after meeting with his top economic aides. “But we are on top of the situation”.
That’s comforting. Bush is all over it.
Yesterday’s 75 basis point rate cut by the Fed is a further sign of desperation. The Fed Funds rate is now 2 percentage points below the rate of inflation; a obvious attempt on Bernanke to reflate the equity bubble at the expense of the dollar. Is that why Wall Street was so happy; another savage blow to the currency?
The Fed’s statement was as bleak as any they have ever released sounding more like passages from the Book of the Dead than minutes of the Federal Open Market Committee:
“Recent information indicates that the outlook for economic activity has weakened further. Growth in consumer spending has slowed and labor markets have softened. Financial markets remain under considerable stress, and the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters.
Inflation has been elevated, and some indicators of inflation expectations have risen…… uncertainty about the inflation outlook has increased. It will be necessary to continue to monitor inflation developments carefully.
Today’s policy action..should help to promote moderate growth over time and to mitigate the risks to economic activity. However, downside risks to growth remain.”
Wall Street rallied on the cheery news.
Also, on Tuesday, the battered investment banks began posting first quarter earnings which were better than expected. Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. beat estimates which added to the giddiness at the NYSE. Unfortunately, a careful reading of the reports, shows that things are not as they seem. The jubilation is unwarranted; it’s just more smoke and mirrors.
“Lehman Brothers Holdings Inc. reported a 57% drop in fiscal first-quarter net income amid weakness in its fixed-income business, though results topped analysts’ expectations.” (Wall Street Journal)
The same was true of financial giant Goldman Sachs:
“Goldman Sachs Group Inc.’s fiscal first-quarter net income dropped 53% on $2 billion in losses on residential mortgages, credit products and investments …The biggest Wall Street investment bank by market value reported net income of $1.51 billion, or $3.23 a share, for the quarter ended Feb. 29, compared to $3.2 billion, or $6.67 a share, a year earlier….Results included $1 billion in losses on residential mortgage loans and securities, and nearly $1 billion in losses on credit products and investment losses …” (Wall Street Journal)
The bottom line is that both companies first quarter earnings dropped by more than a half in just one year alone while, at the same time, they booked heavy losses. Hardly a reason for celebration. The major investment banks remain on the critical list because of the billions of dollars of toxic debt they still carry on their balance sheets. Consider industry titan Goldman Sachs for example, which is sitting on a backlog of bad paper from the subprime/securitization debacle as well as an unknown amount of LBOs (Leveraged buyouts) and commercial real estate deals (CREs) that are heading south fast. Economic’s analyst, Mark Gongloff, has compiled some interesting figures in his article “Crunch Proves A Test of Faith For Street Strong”:
“All of the brokerage houses are highly leveraged, with a high ratio of assets to shareholders’ equity, a sign they have used debt heavily to build up positions in hope of greater returns. Morgan Stanley, which will report Wednesday, had a leverage ratio of 32.6-to-1 at the end of last year, nearly as high as Bear’s 32.8-to-1. Lehman was leveraged 30.7-to-1, and Merrill Lynch 27.8-to-1. And the would-be rock, Goldman? It was leveraged 26.2-to-1.”
Remember, Carlyle Capital was leveraged 32 to 1 ($22 billion equity) and went “poof” in a matter of days when it couldn’t scrape together a measly $400 million for a margin call. How vulnerable are these other maxed-out players now that the credit bubble has popped and the whole system is quickly unwinding?
Not very safe, at all. As Gongloff points out:
“Based in part on numbers reported at the end of Bear’s fourth quarter, estimated that Bear Stearns had $35 billion in liquid assets and borrowing capacity, enough to operate for 20 months. Turns out it had enough for three days.”
That’s right; three days and it was over. Why would anyone think it will be different with these other equally-exposed banks? These institutions are basically insolvent now. The Federal Reserve is making a big mistake by protecting them from the consequences of their speculative excesses. As hyper-inflated assets continue to lose altitude, and structured investments and arcane hedges against default begin to disintegrate; these wastrel institutions will be crushed by a stampede of panicking investors running for the exits. The flight to safety has already begun. Cash is king.
Look what has transpired just since Monday.
“Crude oil, copper and coffee led a decline in commodities that may be the biggest ever recorded on speculation that a U.S. recession will stall demand for raw materials.” (Bloomberg) Yes, all asset classes fall in a deflationary spiral even commodities which many people believe are a safe bet. Not so. In fact, even gold has begun to retreat as hedge funds and other market participants are forced to relinquish their positions.
In other news, Reuters reports:
“The yield on U.S. 3-month Treasury bills fell below 1 percent on Monday to levels not seen in 50 years prompted by intense safety bids for cash spurred by the ongoing global credit crunch…Investors were pulling money out of stocks and even the booming commodity market even after the Federal Reserve conducted a fresh round of measures over the weekend to alleviate the credit crisis.”
Again, the “flight to safety” as investors recognize the warning signs of deflation. This trend will further intensify even though the Fed will continue to cut rates and real earnings on Treasuries will go negative. In another report from Reuters:
“The Chicago Board Options Exchange Volatility Index or VIX on Monday surged to its highest level in nearly two months as a fire sale of Bear Stearns and an emergency Federal Reserve cut in the discount rate reignited credit fears.
“Fear is higher now than it has been in a long time. Option traders are loading up on index puts in the Standard & Poor’s 500 index.” The “Fear Gage, as it is called, is soaring to new heights as credit problems continue to mount and business begins to slow to a crawl.
And, perhaps most important of all: “The cost of borrowing in dollars overnight rose by the most in at least seven years after the Federal Reserve’s emergency cut in the discount interest rate stoked concern that credit losses are deepening….The London interbank offered rate, or Libor climbed 81 basis points to 3.86 percent, the British Bankers’ Association said today. It was the biggest increase since at least January 2001. The comparable pound rate rose 28 basis points to 5.59 percent, the largest gain since Dec. 31, 2007.” (Bloomberg)
This may sound like technical gibberish geared for market junkies, but it is critical to understanding the gravity of what is really going on. The Fed’s rate cuts are not affecting the lending between banks which is actually deteriorating quite rapidly. And, when banks don’t lend to each other (because they are worried about getting their money back) the wheels of capitalism grind to a halt. The banks are the essential conduit for providing credit to the broader economy, so there must be traffic between the major lending institutions. The banks are hoarding cash to cover losses on their steadily downgraded mortgage-backed assets and to shore up their skimpy capital reserves. As a result, consumer spending will slow, housing will continue to falter, business will contract and GDP will shrink.
“We know we’re in a sharp (decline), and there’s no doubt that the American people know that the economy has turned down sharply,” said Henry Paulson on NBC television on Sunday. “There’s turbulence in our capital markets and it’s been going on since August. We’re looking for ways to work our way through it.”
But Paulson is clearly out of his depth. He’s just not the man to deal with a crisis of this magnitude. His only interest is bailing out his friends in the banking industry. The interests of workers and consumers are just brushed aside. Has anyone from the Dept of the Treasury (or the Fed) suggested a bailout for the 14,000 Bear Stearns employees who lost not only their jobs but the entire retirement when the company was purchased by JP Morgan?
Of course, not. Because both Paulson and Bernanke take a class oriented approach to the problem that narrows their range of vision and limits their ability to pose viable remedies. They are unable to see the whole playing field. For example, Bernanke assumes that if he keeps cutting rates, he can reflate the equity bubble by reenergizing consumer spending. But that won’t happen. First of all, the banks are not passing on the savings to customers. And, second, the banks are only lending to applicants with a flawless credit history. In other words, the Fed’s cuts may be good for Bernanke and Paulson’s buddies, but they do nothing for either the consumer or the broader economy. Also, as Michael Hudson notes in his latest article “Save the Economy, Dismantle the Empire” (counterpunch.org) the banks are making no attempt to stimulate the economy, but simply turn a profit with capital borrowed from the Fed:
“This week the Fed tried to reverse the plunge in asset prices by flooding the banking system with $200 billion of credit. Banks were allowed to turn their bad mortgage loans and other loans over to the Federal Reserve at par value (rather at just 20% “mark to market” prices). The Fed’s cover story is that this infusion will enable the banks to resume lending to “get the economy moving again.” But the banks are using the money to bet against the dollar. They are borrowing from the Fed at a low interest rate, and buying foreign euro-denominated bonds yielding a higher interest rate–and in the process, making a currency gain as the euro rises against dollar-denominated assets. The Fed thus is subsidizing capital flight, exacerbating inflation by making the price of imports (headed by oil and other raw materials) more expensive. These commodities are not more expensive to European buyers, but only to buyers paying in depreciated dollars.”
The Fed’s strategy has even failed to lower mortgage rates which are pinned to the 30 year Treasury and which has actually gone up since Bernanke began slashing rates. This inability to pass on the Fed’s rate cuts to potential mortgage applicants ensures that the housing meltdown will continue unabated well into 2009 and, perhaps, 2010.
In the last few days, the Fed has provided $30 billion to buy up the least liquid speculative debts of a privately-owned business, Bear Stearns, which was leveraged at 32 to 1 and which will remain unsupervised by federal regulators. How does that address the underlying issues of the credit crunch? Are Bernanke and Paulson really trying to put the financial markets back on solid footing again or are they merely expressing their bank-centered cultural bias?
That question was answered in an article on Tuesday by the Wall Street Journal which offered this explanation of the real reasons behind the Bear bailout:
“That illusion was shattered Saturday morning, when Mr. Paulson was deluged by calls to his home from bank chief executives. They told him they worried the run on Bear would spread to other financial institutions. After several such calls, Mr. Paulson realized the Fed and Treasury had to get the J.P. Morgan deal done before the markets in Asia opened on late Sunday, New York time.
“It was just clear that this franchise was going to unravel if the deal wasn’t done by the end of the weekend,” Mr. Paulson said in an interview yesterday.’” (“The Week that Shook Wall Street”, Wall Street Journal)
Ah-ha! So all it took was a little nudge from his banking buddies to put Paulson over the top.
The Bear bailout was engineered to serve the needs of the banking establishment; nothing more. The Federal Reserve and the US Treasury are merely an extension of the financial industry. The Bear bailout proves it.
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see
Massive Debt Default by Mike Whitney
“Bernankerupted”: Bear Stearns Fire-sale sends Global Markets Plunging; Dollar Routed
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Iraq Foreign Minister Calls British Troops Back Into Basra By Liam Bailey
By Liam Bailey
featured writer
Dandelion Salad
The Bailey Mail
March 19, 2008
2008-03-18
Just six months after the small garrison of British troops withdrew from the centre of Basra to the heavily fortified base at the airport, largely because Basra ministers were spouting that their presence was making things worse, Iraqi foreign minister Hoshiyar Zebari said British troops are “doing nothing” to stop the havoc in Basra.
Zebari told channel 4 news that foreign troops should stay engaged to have any hope that the country could see stability after the “rivers of blood.”
The last 550 troops remaining in central Basra withdrew on September 3 last year, and the situation has been pretty calm in Basra ever since, but the situation has worsened lately. In Zebari’s words: “the militia, the organised crime, is actually making havoc in the city.”
Zebari was asked if British troops needed to re-engage in the city:
“In my view they do. They should not just sit there and do nothing. There are certain responsibilities, especially at least until the end of this year.”
In defence of the British forces, Iraq commanders and security forces will never be able to do the job until they are left to do the job, sometimes the best way of learning is to be flung in at the deep end. In my view British troops will be closely watching the situation, and will re-enter only when they are sure it is necessary — perhaps they have more faith in Iraqi forces than Zebari; they did train them after all.
When all is said and done, there is not a great deal British forces can do against the militia’s, unless they all come out at once for a conventional lined battle, in which case the British troops would win, when it comes to the unconventional, insurgent warfare, militia men hidden as part of the civilian population: British forces have no chance.
That type of war will not be a short one, certainly not over by the end of year, and best won over the long-term by the Iraqi forces themselves who should be better able to gather good intelligence on the militia members. But then it comes down to whether the Iraqi forces can be trusted, with mentions of militia loyalties within the forces, in which case it comes down to the only people who can help the Iraqi situation are the Iraqi’s themselves; by turning from their militia loyalties for the good of the country.
As for organised crime, it definitely cannot be stopped by British forces, who occupied Northern Ireland for decades and organised crime is still rife there. Organised crime is a problem around the world, and not beaten by military might, but by concentrated police campaigns against it, again a battle for the long haul.
Instead of aiming his furore at the British forces, Zebari should be concentrating on trying to make good on their claims that the British were making things worse. His call to bring British troops back in will be a sign of weakness to the Militia’s, a call to intensify action, and also a motion of no faith in the Iraqi security forces, which is sure to lower morale and make militia loyalties deepen.
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Kucinich: Ending the war. Rescuing our nation. (video)
On this, the 5th anniversary of the war against Iraq, Congressman Dennis Kucinich, the leading anti-war voice in the U.S. Congress, asks all citizens to engage in a renewed quest for peace and a national civic activism to ensure that candidates — from the Presidential race on down — understand that ending the war is crucial to rescuing our own nation.
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Dandelion Salad 