STOCK MARKET WATCH -- Tuesday, 14 July 2015 -- Happy Bastille Day!

[Tansy_Gold]

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SMW for 13 July 2015

AT THE CLOSING BELL ON 13 July 2015
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts







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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]

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1. Oooh! Nasty cartoon!

Is he really going there? I thought he was just an all-around jerk.

On Edit: see next post...it just popped up in my back files...serendipity!

[Demeter]

2. Conservative Southern Values Revived: How a Brutal Strain of American Aristocrats Have Come to Rule

http://www.informationclearinghouse.info/article31740.htm

America didn't used to be run like an old Southern slave plantation, but we're headed that way now. How did that happen?

By Sara Robinson--June 29, 2012 -

It's been said that the rich are different than you and me. What most Americans don't know is that they're also quite different from each other, and that which faction is currently running the show ultimately makes a vast difference in the kind of country we are. Right now, a lot of our problems stem directly from the fact that the wrong sort has finally gotten the upper hand; a particularly brutal and anti-democratic strain of American aristocrat that the other elites have mostly managed to keep away from the levers of power since the Revolution. Worse: this bunch has set a very ugly tone that's corrupted how people with power and money behave in every corner of our culture. Here's what happened, and how it happened, and what it means for America now.

North versus South: Two Definitions of Liberty

Michael Lind first called out the existence of this conflict in his 2006 book, Made In Texas: George W. Bush and the Southern Takeover of American Politics. He argued that much of American history has been characterized by a struggle between two historical factions among the American elite -- and that the election of George W. Bush was a definitive sign that the wrong side was winning.

For most of our history, American economics, culture and politics have been dominated by a New England-based Yankee aristocracy that was rooted in Puritan communitarian values, educated at the Ivies and marinated in an ethic of noblesse oblige (the conviction that those who possess wealth and power are morally bound to use it for the betterment of society). While they've done their share of damage to the notion of democracy in the name of profit (as all financial elites inevitably do), this group has, for the most part, tempered its predatory instincts with a code that valued mass education and human rights; held up public service as both a duty and an honor; and imbued them with the belief that once you made your nut, you had a moral duty to do something positive with it for the betterment of mankind. Your own legacy depended on this. Among the presidents, this strain gave us both Roosevelts, Woodrow Wilson, John F. Kennedy, and Poppy Bush -- nerdy, wonky intellectuals who, for all their faults, at least took the business of good government seriously. Among financial elites, Bill Gates and Warren Buffet still both partake strongly of this traditional view of wealth as power to be used for good. Even if we don't like their specific choices, the core impulse to improve the world is a good one -- and one that's been conspicuously absent in other aristocratic cultures.

Which brings us to that other great historical American nobility -- the plantation aristocracy of the lowland South, which has been notable throughout its 400-year history for its utter lack of civic interest, its hostility to the very ideas of democracy and human rights, its love of hierarchy, its fear of technology and progress, its reliance on brutality and violence to maintain “order,” and its outright celebration of inequality as an order divinely ordained by God. As described by Colin Woodard in American Nations: The Eleven Rival Regional Cultures of North America, the elites of the Deep South are descended mainly from the owners of sugar, rum and cotton plantations from Barbados -- the younger sons of the British nobility who'd farmed up the Caribbean islands, and then came ashore to the southern coasts seeking more land. Woodward described the culture they created in the crescent stretching from Charleston, SC around to New Orleans this way:

It was a near-carbon copy of the West Indian slave state these Barbadians had left behind, a place notorious even then for its inhumanity....From the outset, Deep Southern culture was based on radical disparities in wealth and power, with a tiny elite commanding total obedience and enforcing it with state-sponsored terror. Its expansionist ambitions would put it on a collision course with its Yankee rivals, triggering military, social, and political conflicts that continue to plague the United States to this day.

David Hackett Fischer, whose Albion's Seed: Four British Folkways In America informs both Lind's and Woodard's work, described just how deeply undemocratic the Southern aristocracy was, and still is. He documents how these elites have always feared and opposed universal literacy, public schools and libraries, and a free press. (Lind adds that they have historically been profoundly anti-technology as well, far preferring solutions that involve finding more serfs and throwing them at a problem whenever possible. Why buy a bulldozer when 150 convicts on a chain gang can grade your road instead?) Unlike the Puritan elites, who wore their wealth modestly and dedicated themselves to the common good, Southern elites sank their money into ostentatious homes and clothing and the pursuit of pleasure -- including lavish parties, games of fortune, predatory sexual conquests, and blood sports involving ritualized animal abuse spectacles. But perhaps the most destructive piece of the Southern elites' worldview is the extremely anti-democratic way it defined the very idea of liberty.

In Yankee Puritan culture, both liberty and authority resided mostly with the community, and not so much with individuals. Communities had both the freedom and the duty to govern themselves as they wished (through town meetings and so on), to invest in their collective good, and to favor or punish individuals whose behavior enhanced or threatened the whole (historically, through community rewards such as elevation to positions of public authority and trust; or community punishments like shaming, shunning or banishing). Individuals were expected to balance their personal needs and desires against the greater good of the collective -- and, occasionally, to make sacrifices for the betterment of everyone. (This is why the Puritan wealthy tended to dutifully pay their taxes, tithe in their churches and donate generously to create hospitals, parks and universities.) In return, the community had a solemn and inescapable moral duty to care for its sick, educate its young and provide for its needy -- the kind of support that maximizes each person's liberty to live in dignity and achieve his or her potential. A Yankee community that failed to provide such support brought shame upon itself. To this day, our progressive politics are deeply informed by this Puritan view of ordered liberty.

In the old South, on the other hand, the degree of liberty you enjoyed was a direct function of your God-given place in the social hierarchy. The higher your status, the more authority you had, and the more "liberty" you could exercise -- which meant, in practical terms, that you had the right to take more "liberties" with the lives, rights and property of other people. Like an English lord unfettered from the Magna Carta, nobody had the authority to tell a Southern gentleman what to do with resources under his control. In this model, that's what liberty is. If you don't have the freedom to rape, beat, torture, kill, enslave, or exploit your underlings (including your wife and children) with impunity -- or abuse the land, or enforce rules on others that you will never have to answer to yourself -- then you can't really call yourself a free man. When a Southern conservative talks about "losing his liberty," the loss of this absolute domination over the people and property under his control -- and, worse, the loss of status and the resulting risk of being held accountable for laws that he was once exempt from -- is what he's really talking about. In this view, freedom is a zero-sum game. Anything that gives more freedom and rights to lower-status people can't help but put serious limits on the freedom of the upper classes to use those people as they please. It cannot be any other way. So they find Yankee-style rights expansions absolutely intolerable, to the point where they're willing to fight and die to preserve their divine right to rule.

Once we understand the two different definitions of "liberty" at work here, a lot of other things suddenly make much more sense. We can understand the traditional Southern antipathy to education, progress, public investment, unionization, equal opportunity, and civil rights. The fervent belief among these elites that they should completely escape any legal or social accountability for any harm they cause. Their obsessive attention to where they fall in the status hierarchies. And, most of all -- the unremitting and unapologetic brutality with which they've defended these "liberties" across the length of their history. When Southerners quote Patrick Henry -- "Give me liberty or give me death" -- what they're really demanding is the unquestioned, unrestrained right to turn their fellow citizens into supplicants and subjects. The Yankee elites have always known this -- and feared what would happen if that kind of aristocracy took control of the country. And that tension between these two very different views of what it means to be "elite" has inflected our history for over 400 years.

The Battle Between the Elites

Since shortly after the Revolution, the Yankee elites have worked hard to keep the upper hand on America's culture, economy and politics -- and much of our success as a nation rests on their success at keeping plantation culture sequestered in the South, and its scions largely away from the levers of power. If we have to have an elite -- and there's never been a society as complex as ours that didn't have some kind of upper class maintaining social order -- we're far better off in the hands of one that's essentially meritocratic, civic-minded and generally believes that it will do better when everybody else does better, too. The Civil War was, at its core, a military battle between these two elites for the soul of the country. It pitted the more communalist, democratic and industrialized Northern vision of the American future against the hierarchical, aristocratic, agrarian Southern one. Though the Union won the war, the fundamental conflict at its root still hasn't been resolved to this day. (The current conservative culture war is the Civil War still being re-fought by other means.) After the war, the rise of Northern industrialists and the dominance of Northern universities and media ensured that subsequent generations of the American power elite continued to subscribe to the Northern worldview -- even when the individual leaders came from other parts of the country.

Ironically, though: it was that old Yankee commitment to national betterment that ultimately gave the Southern aristocracy its big chance to break out and go national. According to Lind, it was easy for the Northeast to hold onto cultural, political and economic power as long as all the country's major banks, businesses, universities, and industries were headquartered there. But the New Deal -- and, especially, the post-war interstate highways, dams, power grids, and other infrastructure investments that gave rise to the Sun Belt -- fatally loosened the Yankees' stranglehold on national power. The gleaming new cities of the South and West shifted the American population centers westward, unleashing new political and economic forces with real power to challenge the Yankee consensus. And because a vast number of these westward migrants came out of the South, the elites that rose along with these cities tended to hew to the old Southern code, and either tacitly or openly resist the moral imperatives of the Yankee canon. The soaring postwar fortunes of cities like Los Angeles, Las Vegas, Phoenix, Houston, Dallas, and Atlanta fed that ancient Barbadian slaveholder model of power with plenty of room and resources to launch a fresh and unexpected 20th-century revival.

According to historian Darren Dochuk, the author of From Bible Belt to Sunbelt: Plain-Folk Religion, Grassroots Politics, and the Rise of Evangelical Conservatism, these post-war Southerners and Westerners drew their power from the new wealth provided by the defense, energy, real estate, and other economic booms in their regions. They also had a profound evangelical conviction, brought with them out of the South, that God wanted them to take America back from the Yankee liberals -- a conviction that expressed itself simultaneously in both the formation of the vast post-war evangelical churches (which were major disseminators of Southern culture around the country); and in their takeover of the GOP, starting with Barry Goldwater's campaign in 1964 and culminating with Ronald Reagan's election in 1980. They countered Yankee hegemony by building their own universities, grooming their own leaders and creating their own media. By the 1990s, they were staging the RINO hunts that drove the last Republican moderates (almost all of them Yankees, by either geography or cultural background) and the meritocratic order they represented to total extinction within the GOP. A decade later, the Tea Party became the voice of the unleashed id of the old Southern order, bringing it forward into the 21st century with its full measure of selfishness, racism, superstition, and brutality intact.

Plantation America

From its origins in the fever swamps of the lowland south, the worldview of the old Southern aristocracy can now be found nationwide. Buttressed by the arguments of Ayn Rand -- who updated the ancient slaveholder ethic for the modern age -- it has been exported to every corner of the culture, infected most of our other elite communities and killed off all but the very last vestiges of noblesse oblige. It's not an overstatement to say that we're now living in Plantation America. As Lind points out: to the horror of his Yankee father, George W. Bush proceeded to run the country exactly like Woodard's description of a Barbadian slavelord. And Barack Obama has done almost nothing to roll this victory back. We're now living in an America where rampant inequality is accepted, and even celebrated.

Torture and extrajudicial killing have been reinstated, with no due process required.

The wealthy and powerful are free to abuse employees, break laws, destroy the commons, and crash the economy -- without ever being held to account.

The rich flaunt their ostentatious wealth without even the pretense of humility, modesty, generosity, or gratitude.

The military -- always a Southern-dominated institution -- sucks down 60% of our federal discretionary spending, and is undergoing a rapid evangelical takeover as well.

Our police are being given paramilitary training and powers that are completely out of line with their duty to serve and protect, but much more in keeping with a mission to subdue and suppress. Even liberal cities like Seattle are now home to the kind of local justice that used to be the hallmark of small-town Alabama sheriffs.

Segregation is increasing everywhere. The rights of women and people of color are under assault. Violence against leaders who agitate for progressive change is up. Racist organizations are undergoing a renaissance nationwide.

We are withdrawing government investments in public education, libraries, infrastructure, health care, and technological innovation -- in many areas, to the point where we are falling behind the standards that prevail in every other developed country.

Elites who dare to argue for increased investment in the common good, and believe that we should lay the groundwork for a better future, are regarded as not just silly and soft-headed, but also inviting underclass revolt. The Yankees thought that government's job was to better the lot of the lower classes. The Southern aristocrats know that its real purpose is to deprive them of all possible means of rising up against their betters.

The rich are different now because the elites who spent four centuries sucking the South dry and turning it into an economic and political backwater have now vanquished the more forward-thinking, democratic Northern elites. Their attitudes towards freedom, authority, community, government, and the social contract aren't just confined to the country clubs of the Gulf Coast; they can now be found on the ground from Hollywood and Silicon Valley to Wall Street. And because of that quiet coup, the entire US is now turning into the global equivalent of a Deep South state. As long as America runs according to the rules of Southern politics, economics and culture, we're no longer free citizens exercising our rights to life, liberty and the pursuit of happiness as we've always understood them. Instead, we're being treated like serfs on Massa's plantation -- and increasingly, we're being granted our liberties only at Massa's pleasure. Welcome to Plantation America.


Sara Robinson, MS, APF is a social futurist and the editor of AlterNet's Vision page. Follow her on Twitter, or subscribe to AlterNet's Vision newsletter for weekly updates.

[Demeter]

6. The State, the Deep State, and the Wall Street Overworld By Peter Dale Scott

http://www.japanfocus.org/-Peter_Dale-Scott/4090?utm_source=March+10%2C+2014&utm_campaign=China%27s+Connectivity+Revolution&utm_medium=email

In the last decade it has become more and more obvious that we have in America today what the journalists Dana Priest and William Arkin have called

two governments: the one its citizens were familiar with, operated more or less in the open: the other a parallel top secret government whose parts had mushroomed in less than a decade into a gigantic, sprawling universe of its own, visible to only a carefully vetted cadre – and its entirety…visible only to God.1

And in 2013, particularly after the military return to power in Egypt, more and more authors referred to this second level as America’s “deep state.”2 Here for example is the Republican analyst Mike Lofgren:

There is the visible government situated around the Mall in Washington, and then there is another, more shadowy, more indefinable government that is not explained in Civics 101 or observable to tourists at the White House or the Capitol. The former is traditional Washington partisan politics: the tip of the iceberg that a public watching C-SPAN sees daily and which is theoretically controllable via elections. The subsurface part of the iceberg I shall call the Deep State, which operates according to its own compass heading regardless of who is formally in power.3

At the end of 2013 a New York Times Op-Ed noted this trend, and even offered a definition of the term that will work for the purposes of this essay:

DEEP STATE n. A hard-to-perceive level of government or super-control that exists regardless of elections and that may thwart popular movements or radical change. Some have said that Egypt is being manipulated by its deep state.4

The political activities of the deep state are the chief source and milieu of what I have elsewhere called “deep politics:” “all those political practices and arrangements, deliberate or not, which are usually repressed rather than acknowledged.”5

Others, like Tom Hayden, call the deep state a “state within the state,” and suggest it may be responsible for the failure of the Obama administration to follow the policy guidelines of the president’s speeches:

We have seen evidence of a “state within the state” before, going back as far as the CIA’s operations against Cuba. In Obama’s time, the president correctly named the 2009 coup in Honduras a “coup”, and then seemed powerless to prevent it.6

This development of a two-level or dual state has been paralleled by two other dualities: the increasing resolution of American society into two classes – the “one percent” and the “ninety-nine percent” – and the bifurcation of the U.S. economy into two aspects: the domestic, still subject to some governmental regulation and taxation, and the international, relatively free from governmental controls.7 All three developments have affected and intensified each other – particularly since the Reagan Revolution of 1980, which saw American inequality of wealth cease to diminish and begin to increase.8 Thus for example we shall see how Wall Street – the incarnation of the “one percent” – played a significant role in increasing the deep state after World War Two, and how three decades later the deep state played a significant role in realigning America for the Reagan Revolution...


The Deep State, The Shadow Government and the Wall Street Overworld

The “deep state” was defined by the UK newsletter On Religion as “the embedded anti-democratic power structures within a government, something very few democracies can claim to be free from.”10 The term originated in Turkey in 1996, to refer to U.S.-backed elements, primarily in the intelligence services and military, who had repeatedly used violence to interfere with and realign Turkey’s democratic political process. Sometimes the definition is restricted to elements within the government (or “a state-within-the state”), but more often in Turkey the term is expanded, for historical reasons, to include “members of the Turkish underworld.”11 In this essay I shall use “deep state” in the larger sense, to include both the second level of secret government inside Washington and those outsiders powerful enough, in either the underworld or overworld, to give it direction. In short I shall equate the term “deep state” with what in 1993 I termed a “deep political system:” “ one which habitually resorts to decision-making and enforcement procedures outside as well as inside those publicly sanctioned by law and society.”12

Like myself, Lofgren suggests an ambiguous symbiosis between two aspects of the American deep state:

1) the Beltway agencies of the shadow government, like the CIA and NSA, which have been instituted by the public state and now overshadow it, and

2) the much older power of Wall Street, referring to the powerful banks and law firms located there.

In their words,

It is not too much to say that Wall Street may be the ultimate owner of the Deep State and its strategies, if for no other reason than that it has the money to reward government operatives with a second career that is lucrative beyond the dreams of avarice – certainly beyond the dreams of a salaried government employee.13

I shall argue that in the 1950s Wall Street was a dominating complex. It included not just banks and oil firms but also the oil majors whose cartel arrangements were successfully defended against the U.S. Government by the Wall Street law firm Sullivan and Cromwell, home to the Dulles brothers. This larger complex is what I mean by the Wall Street overworld.

The Long History of the Wall Street Overworld

Lofgren’s inclusion of Wall Street is in keeping with Franklin Roosevelt’s observation in 1933 to his friend Col. E.M. House that “The real truth … is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson.”14

FDR’s insight is well illustrated by the efficiency with which a group of Wall Street bankers (including Nelson Rockefeller’s grandfather Nelson Aldrich and Paul Warburg) were able in a highly secret meeting in 1910 to establish the Federal Reserve System – a system which in effect reserved oversight of the nation’s currency supply and of all America’s banks in the not impartial hands of its largest.15 The political clout of the quasi-governmental Federal Reserve Board (where the federal Treasury is represented but does not dominate) was clearly demonstrated in 2008, when Fed leadership secured instant support from the successive administrations of a Texan Republican president, followed by a Midwest Democratic one, for public money to rescue the reckless management of Wall Street banks: banks Too Big To Fail, and of course far Too Big To Jail, but not Too Big To Bail.16

Wall Street and the Launching of the CIA

Top-level Treasury officials, CIA officers, and Wall Street bankers and lawyers think alike because of the “revolving door” by which they pass easily from private to public service and back. In 1946 General Vandenberg, as Director of Central Intelligence (DCI), recruited Allen Dulles, then a Republican lawyer at Sullivan and Cromwell in New York, “to draft proposals for the shape and organization of what was to become the Central Intelligence Agency in 1947.” Dulles promptly formed an advisory group of six men, all but one of whom were Wall Street investment bankers or lawyers.17 Dulles and two of the six (William H. Jackson and Frank Wisner) later joined the agency, where Dulles proceeded to orchestrate policies, such as the overthrow of the Arbenz regime in Guatemala, that he had previously discussed in New York at the Council on Foreign Relations.18

There seems to be little difference in Allen Dulles’s influence whether he was a Wall Street lawyer or a CIA director. Although he did not formally join the CIA until November 1950, he was in Berlin before the start of the 1948 Berlin Blockade, “supervising the unleashing of anti-Soviet propaganda across Europe.”19 In the early summer of 1948 he set up the American Committee for a United Europe (ACUE), in support of what became by the early 1950s “the largest CIA operation in Western Europe.”20

The Deep State and Funds for CIA Covert Operations

Wall Street was also the inspiration for what eventually became the CIA’s first covert operation: the use of “over $10 million in captured Axis funds to influence the Italian election of 1948.”21 (The fundraising had begun at the wealthy Brook Club in New York; but Allen Dulles, still a Wall Street lawyer, persuaded Washington, which at first had preferred a private funding campaign, to authorize the operation through the National Security Council and the CIA.)22

Dulles’s friend Frank Wisner then left Wall Street to oversee an enlarged covert operations program through the newly created Office of Policy Co-ordination (OPC). Dulles, still a lawyer, campaigned successfully to reconstruct Western Europe through what became known as the Marshall Plan.23 Together with George Kennan and James Forrestal, Dulles also “helped devise a secret codicil to the Marshall Plan that gave the CIA the capability to conduct political warfare. It let the agency skim millions of dollars from the plan.”24

This created one of the earlier occasions when the CIA, directly or indirectly, recruited local assets involved in drug trafficking. AFL member Irving Brown, the assistant of AFL official Jay Lovestone (a CIA asset), was implicated in drug smuggling activities in Europe, at the same time that he used funds diverted from the Marshall Plan to establish

a “compatible left” labor union in Marseilles with Pierre Ferri-Pisani. On behalf of Brown and the CIA, Ferri-Pisani (a drug smuggler connected with Marseilles crime lord Antoine Guerini), hired goons to shellack striking Communist dock workers.25

An analogous funding source for the CIA developed in the Far East: the so-called

“M-Fund,” a secret fund of money of enormous size that has existed in Japan in 1991 for more than forty years. The Fund was established by the United States in the immediate postwar era for essentially the same reasons that later gave rise to the Marshall Plan of assistance by the U.S. to Western Europe, including the Federal Republic of Germany….. The M-Fund was used not only for the building of a democratic political system in Japan but, in addition, for all of the purposes for which Marshall Plan funds were used in Europe.26

IT GOES ON FOR PAGES--FASCINATING AND APPALLING. SEE LINK FOR THE REST


Peter Dale Scott, a former Canadian diplomat and English Professor at the University of California, Berkeley, is the author of Drugs Oil and War, The Road to 9/11, and The War Conspiracy: JFK, 9/11, and the Deep Politics of War. His most recent book is American War Machine: Deep Politics, the CIA Global Drug Connection and the Road to Afghanistan. His website, which contains a wealth of his writings, is here.

Notes

1 Dana Priest and William Arkin, Top Secret America: The Rise of the New American Security State (New York: Little Brown, 2011), 52.

2 E.g. Marc Ambinder and D.G. Grady, Deep State: Inside the Government Secrecy Industry (New York: Wiley, 2013); cf. John Tirman, “The Quiet Coup: No, Not Egypt. Here,” HuffingtonPost, July 9, 2013: “Now we know: the United States of America is partially governed by a deep state, undemocratic, secret, aligned with intelligence agencies, spying on friend and foe, lawless in almost every respect.”

3 Mike Lofgren, “ A Shadow Government Controls America,” Reader Supported News, February 22, 2014.

4 Grant Barrett, “A Wordnado of Words in 2013,” New York Times, December 21, 2013.

5 Peter Dale Scott, Deep politics and the death of JFK (Berkeley: University of California Press, 1998), 7.

6 “Tom Hayden discussing the crisis in Venezuela,” Tikkun, February 25, 2014.

7 To take a single telling example, six of Sam Walton’s heirs are now reportedly wealthier than the bottom 30% of Americans, or 94.5 million people (Tim Worstall, “Six Waltons Have More Wealth Than the Bottom 30% of Americans,” Forbes, December 14, 2011). Cf. the devastating picture of a disintegrating America in George Packer, The Unwinding: An Inner History of the New America (New York: Farrar, Straus and Giroux, 2013).

8 See Kevin Phillips, The politics of rich and poor: wealth and the American electorate in the Reagan aftermath (New York: HarperCollins, 1991). Cf. John T. Stinson, The Reagan Legacy (Bloomington, IN: iUniverse, 2009), 146; Timothy Noah, The great divergence: America’s growing inequality crisis and what we can do about it (New York: Bloomsbury, 2012).

9 For the impact of railroads on expanded social awareness, see Benedict Anderson, Imagined communities: reflections on the origin and spread of nationalism (London: Verso, 1991).

10 “What is the Deep State?” On Religion [2013].

11 Gareth Jenkins, “Susurluk and the Legacy of Turkey’s Dirty War,” Terrorism Monitor, May 1, 2008; quoted in Peter Dale Scott, “9/11, Deep State Violence and the Hope of Internet Politics,” Global Research, June 11, 2008. For the Susurluk incident, see also Scott, American War Machine, 19-20, etc.

12 Scott, Deep Politics and the Death of JFK, xi-xii.

13 Lofgren, “ A Shadow Government Controls America.”

14 Quoted in Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America, 1.

15 Forbes magazine founder Bertie Charles Forbes wrote six years later: “Picture a party of the nation’s greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily riding hundred[s] of miles South, embarking on a mysterious launch, sneaking onto an island [the appropriately named Jekyll Island] deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned, lest the servants learn the identity and disclose to the world this strangest, most secret expedition in the history of American finance. I am not romancing; I am giving to the world, for the first time, the real story of how the famous Aldrich currency report, the foundation of our new currency system, was written (B.C. Forbes, Leslie’s Weekly, October 19, 1916; in T. Cushing Daniel, Real money versus false money-bank credits; the most important factor in civilization and least understood by the people. Washington, D.C., The Monetary educational bureau, 1924], 169; cf. B.C. Forbes, Men who are making America [New York: Forbes Publishing Co., 1922], 398; cf. G. Edward Griffin, The Creature from Jekyll Island: A Second Look at the Federal Reserve [Westlake Village, CA: American Media, 1994]). Paul Warburg later wrote that “Though eighteen years have since gone by, I do not feel free to give a description of this most interesting conference, concerning which Senator Aldrich pledged all participants to secrecy” (Paul Warburg, The Federal Reserve System: Its Origin and Growth [New York, Macmillan, 1930], ZZ).

16 Congress was persuaded to provide perfunctory support of the bailout, under an alleged mysterious threat of martial law. See Peter Dale Scott, “Martial Law, the Financial Bailout, and War,” Global Research, January 8, 2009; reprinted in Michel Chossudovsky and Andrew Gavin Marshall, eds., The Global Economic Crisis: The Great Depression of the XXI Century (Montreal, Global Research Publishers. Centre for Research on Globalization, 2010), 219-40; Llewellyn H. Rockwell, Jr., “Sen. Inhofe: [Henry] Paulsen [Secretary of the Treasury and former Chief Executive Officer of Goldman Sachs] Threatened Martial Law To Pass Bailout,” LewRockwell.com, November 20, 2008.

17 Richard Helms with William Hood A look over my shoulder: a life in the Central Intelligence Agency (New York: Random House, 2003), 82-83. Cf. Scott, American War Machine, 26-28.

18 Laurence H Shoup and William Minter, Imperial brain trust: the Council on Foreign Relations and United States foreign policy (New York: Monthly Review Press, 1977).

19 Gordon Thomas, Secret Wars: One Hundred Years of British Intelligence Inside MI5 and MI6 (New York: Thomas Dunne Books/ St. Martin’s Press, 2009), 98. This may have occurred during Dulles’s visit to Europe in the spring of 1947 (James Srodes, Dulles: Master of Spies [Washington: Henry Regnery, 1999], 392).

20 Richard Aldrich, The Hidden Hand: Britain, America, and Cold War secret intelligence (Woodstock, NY: Overlook Press, 2001), 343. Dulles also chaired the executive committee of the companion National Committee for a Free Europe (behind the Iron Curtain), whose legal affairs were handled by Sullivan and Cromwell (Wilson D. Miscamble, George F. Kennan and the Making of American Foreign Policy, 1947-1950 (Princeton, NJ: Princeton University Press, 1992), 204.

21 Amy B. Zegart, Flawed by Design: The Evolution of the CIA, JCS, and NSC (Stanford: Stanford UP, 1999), 189; citing Christopher Andrew, For the President’s Eyes Only (New York: HarperCollins, 1995), 172; see also Church Committee, Final Report, Book 4, 28-29.

22 David Wise and Thomas B. Ross, The Espionage Establishment (New York: Random House, 1967), 166; Scott, Road to 9/11, 13.

23 “In January 1946 Dulles outlined in some detail a reconstruction plan that is one of the earliest notions of what would, a year later, be known as the Marshall Plan” (Srodes, Allen Dulles: Master of Spies, 374).

24 Tim Weiner, Legacy of ashes: the history of the CIA (New York: Doubleday, 2007), 28.

25 Douglas Valentine, “The French Connection Revisited: The CIA, Irving Brown, and Drug Smuggling as Political Warfare,” Covert Action.

26 Norbert Schlei, “Japan’s ‘M-Fund’ Memorandum, January 7, 1991,“ JPRI [Japan Policy Research Institute] Working Paper No. 11: July 1995: “Incident to the revision of the Security Treaty [in 1960], Vice President Nixon agreed to turn over exclusive control of the M-Fund to Japan. It has been alleged that this action by Nixon was part of a corrupt political bargain, whereby it was agreed that if Japan would assist him to become President of the United States, Nixon would agree to release control of the Fund to Japan and, if he became President, would return Okinawa to Japan.”

ONLY 75 MORE FOOTNOTES AT LINK!

[Hotler]

22. The proof of a shadow government. n/t

[Demeter]

3. I Have Risked My Life, To Tell You The Truth By Edward Snowden

http://www.informationclearinghouse.info/article37879.htm

In January 2014, the Civil Liberties (LIBE) Committee of the European Parliament voted to invite Edward Snowden to testify to the long running inquiry on electronic mass surveillance. Snowden’s testimony has now been published. Unlike Snowden’s previous brief statement to the inquiry, this new evidence includes answers to specific questions posed by members of the LIBE Committee.

In his evidence, Snowden reiterates that he is limiting his comments to topics that have already been reported on. He also repeats hs “willingness to provide testimony to the United States Congress, should they decide to consider the issue of unconstitutional mass surveillance.”


SNOWDEN: I would like to thank the European Parliament for the invitation to provide testimony for your inquiry into the Electronic Mass Surveillance of EU Citizens. The suspicionless surveillance programs of the NSA, GCHQ, and so many others that we learned about over the last year endanger a number of basic rights which, in aggregate, constitute the foundation of liberal societies.

The first principle any inquiry must take into account is that despite extraordinary political pressure to do so, no western government has been able to present evidence showing that such programs are necessary. In the United States, the heads of our spying services once claimed that 54 terrorist attacks had been stopped by mass surveillance, but two independent White House reviews with access to the classified evidence on which this claim was founded concluded it was untrue, as did a Federal Court.

Looking at the US government's reports here is valuable. The most recent of these investigations, performed by the White House's Privacy and Civil Liberties Oversight Board, determined that the mass surveillance program investigated was not only ineffective – they found it had never stopped even a single imminent terrorist attack – but that it had no basis in law. In less diplomatic language, they discovered the United States was operating an unlawful mass surveillance program, and the greatest success the program had ever produced was discovering a taxi driver in the United States transferring $8,500 dollars to Somalia in 2007.

After noting that even this unimpressive success – uncovering evidence of a single unlawful bank transfer – would have been achieved without bulk collection, the Board recommended that the unlawful mass surveillance program be ended. Unfortunately, we know from press reports that this program is still operating today.

I believe that suspicionless surveillance not only fails to make us safe, but it actually makes us less safe. By squandering precious, limited resources on "collecting it all," we end up with more analysts trying to make sense of harmless political dissent and fewer investigators running down real leads. I believe investing in mass surveillance at the expense of traditional, proven methods can cost lives, and history has shown my concerns are justified.

Despite the extraordinary intrusions of the NSA and EU national governments into private communications world-wide, Umar Farouk Abdulmutallab, the "Underwear Bomber," was allowed to board an airplane traveling from Europe to the United States in 2009. The 290 persons on board were not saved by mass surveillance, but by his own incompetence, when he failed to detonate the device. While even Mutallab's own father warned the US government he was dangerous in November 2009, our resources were tied up monitoring online games and tapping German ministers. That extraordinary tip-off didn't get Mutallab a dedicated US investigator. All we gave him was a US visa.

Nor did the US government's comprehensive monitoring of Americans at home stop the Boston Bombers. Despite the Russians specifically warning us about Tamerlan Tsarnaev, the FBI couldn't do more than a cursory investigation – although they did plenty of worthless computer-based searching – and failed to discover the plot. 264 people were injured, and 3 died. The resources that could have paid for a real investigation had been spent on monitoring the call records of everyone in America.

This should not have happened. I worked for the United States' Central Intelligence Agency. The National Security Agency. The Defense Intelligence Agency. I love my country, and I believe that spying serves a vital purpose and must continue. And I have risked my life, my family, and my freedom to tell you the truth.

The NSA granted me the authority to monitor communications world-wide using its mass surveillance systems, including within the United States. I have personally targeted individuals using these systems under both the President of the United States' Executive Order 12333 and the US Congress' FAA 702. I know the good and the bad of these systems, and what they can and cannot do, and I am telling you that without getting out of my chair, I could have read the private communications of any member of this committee, as well as any ordinary citizen. I swear under penalty of perjury that this is true.

These are not the capabilities in which free societies invest. Mass surveillance violates our rights, risks our safety, and threatens our way of life.

If even the US government, after determining mass surveillance is unlawful and unnecessary, continues to operate to engage in mass surveillance, we have a problem. I consider the United States Government to be generally responsible, and I hope you will agree with me. Accordingly, this begs the question many legislative bodies implicated in mass surveillance have sought to avoid: if even the US is willing to knowingly violate the rights of billions of innocents – and I say billions without exaggeration – for nothing more substantial than a "potential" intelligence advantage that has never materialized, what are other governments going to do?

Whether we like it or not, the international norms of tomorrow are being constructed today, right now, by the work of bodies like this committee. If liberal states decide that the convenience of spies is more valuable than the rights of their citizens, the inevitable result will be states that are both less liberal and less safe. Thank you.

I will now respond to the submitted questions. Please bear in mind that I will not be disclosing new information about surveillance programs: I will be limiting my testimony to information regarding what responsible media organizations have entered into the public domain. For the record, I also repeat my willingness to provide testimony to the United States Congress, should they decide to consider the issue of unconstitutional mass surveillance.

CONTINUES AT LINK--QUESTIONS PERTAINING TO INDIVIDUAL NATIONS AND US SPYING ON THEM

[Demeter]

4. Decades Later, No Justice for Kent State Killings By Laurel Krause

On May 4, 1970, members of the Ohio National Guard fired between 61 and 67 shots into a crowd of unarmed anti-war protestors at Kent State University in Ohio, killing four students and wounding nine others. My 19-year-old sister, Allison Krause, was one of four students shot to death by the Ohio National Guard in the parking lot of her university campus as she protested the Vietnam War. I was 15 years old at the time.

It has been 44 years, and the U.S. government still refuses to admit that it participated in the killing of four young students at Kent State. There has not been a credible, independent, impartial investigation into Kent State. No group or individual has been held accountable. In 2010, after undeniable forensic evidence emerged pointing to direct U.S. government involvement in the killings, Emily Kunstler and I founded the Kent State Truth Tribunal (KSTT). Our hope was to finally receive a full account of the tragic events and to see that the victims and their families receive redress. In 2012, the U.S. Department of Justice refused to reopen the case, claiming there were “insurmountable legal and evidentiary barriers."

...The right to assemble and protest is a cherished American value and is a universal human right. But the United States – and so many other proclaimed democracies around the world – repeatedly and shamelessly commits gross violations of this human right. We were recently reminded of extensive U.S. government surveillance of anti-war activists in the 1960s, but sadly, such dangerous activity isn’t a thing of the distant past. As recently as 2011, with the start of the “Occupy” movement, protestors were labeled “domestic terrorists,” surveilled by the FBI, and arrested in massive numbers for nonviolent demonstrations and assemblies.

The Kent State precedent has cast a shadow over our democracy for over 40 years. If Kent State remains a glaring example of government impunity, it sends a message that protestors can be killed by the state for expressing their political beliefs. This lack of accountability and hostility towards peaceful expression flies in the face not only of our Constitution, but also our international human rights commitments...


Laurel Krause, Co-founder and Director of the Kent State Truth Tribunal

MORE AT LINK

[Demeter]

5. 35 countries where the U.S. has supported fascists, drug lords and terrorists

http://www.salon.com/2014/03/08/35_countries_the_u_s_has_backed_international_crime_partner/

READ IT AND WEEP

IT PROBABLY DOESN'T COVER THEM ALL, EITHER.

[Demeter]

7. What If Money Was No Object?

[Demeter]

8. Who Wins From The Greek Deal? European Politicians And Maybe Some Greeks

NO, I DON'T THINK ANYONE WINS FROM THAT FUBAR DEAL--THE BIGGEST LOSS WILL BE THE BREAKUP OF THE EUROZONE.

http://www.forbes.com/sites/billconerly/2015/07/13/who-wins-from-the-greek-deal-european-politicians-and-maybe-some-greeks/

The Greek deal announced today is good for Europe’s political leaders, and it might possibly be good for many of the Greek people. The rest of us will be pretty unaffected, except that we’ll pay the costs of future financial crises caused by irresponsibility and bailouts. (The Greek deal is summarized by Jeremy Bogaisky. SEE POST IN REPLY)

European political leaders needed a way to save face. Three years ago they half bailed out the banks that had made loans to Greece. The banks accepted a 50 percent haircut, but got the Eurozone countries and the IMF to pay the banks cash in exchange for the bad debts. Having bought bonds of dubious quality, the political leaders would have been terribly embarrassed by an explicit default. It is far better to strike a deal that makes a solution appear to have been achieved. I say “appear to have been reached” because it is not at all certain that Greece will be able to meet the new loan repayment schedule.

Some of the restructuring demands, such as labor market liberalization and privatizing more assets, may help the Greek economy. The labor market changes, though, are prone to foot-dragging by the Greeks. Higher taxes are also imposed, and of course they don’t help economic growth. There’s also a €30 billion economic stimulus package, but such spending usually has little impact on the economy. Greek pensioners will take a hit. If the new package keeps the Greek banks in business, that will help all residents.

Unfortunately, the new agreement does not solve Greece’s problem of being less productive than other European countries (in terms of output per hour worked), nor its problem of having generous social benefits with substantial protection from competition for much of the economy. In the end, the moribund Greek economy is a problem that the Greeks themselves must solve. This deal gives Greece the breathing room needed to enact substantive economic reforms, but I find it unlikely that they’ll actually do so. They will probably do enough to meet the terms of the deal, though even that is uncertain. The Greek Parliament has to act quickly to meet the deal’s requirements.

The new agreement reinforces the precedent that big banks which make bad loans will be bailed out, at least partially. When those banks make good loans, though, they will reap the full benefit. Such policy makes further bad loans highly likely, leading to more crises in the future.

Businesses that sell into Greece should still be wary of their exposure. A Grexit is still possible. I would not trust that any euros owed me by a Greek company would actually be paid in euros. Cash in advance should be the watchword...

MORE THEORIZING AT LINK

[Demeter]

9. Marathon EU Negotiations Yield Agreement On Path Forward For Greece

http://www.forbes.com/sites/jeremybogaisky/2015/07/13/greece-bailout-talks/

After negotiating with euro zone leaders through the night, Greek Prime Minister Alexis Tsipras was forced to agree Monday morning to what amounts to an act of contrition: As a precondition to open talks on a fresh round of aid for the nearly bankrupt country, the Greek Parliament will first have to pass a long list of economic reforms to reestablish trust with its creditors — and fast. By Wednesday, Greek lawmakers are expected to enact legislation to broaden the tax base and streamline the VAT to increase revenue; improve the long-term sustainability of its pension system; establish “quasi-automatic” spending cuts in the case that primary surplus targets are missed; and make the country’s statistics agency fully legally independent, according to a final statement from the summit.

After 17 hours of negotiations, Tsipras won some concessions to one of the more Draconian of German conditions – the transfer of 50 billion euros worth of state assets to a trust fund of sorts. Tsipras was unable to negotiate a lower amount, but in a press conference Monday morning, Eurogroup President Jeroen Dijsselbloem said that the fund would be based in Greece, rather than out of the country, as Germany had demanded. The privatization of the assets will cover the “approximately 25 billion euros” that will be needed to recapitalize Greek banks, Dijsselbloem said, while of the remaining 50% of the proceeds, half will go to pay down debt and the other half will be available to the Greek government to invest in the country. Germany in particular has pushed for a ramp up the privatization of state assets, which Greece had committed to as a condition for previous bailout assistance but had stalled on since the leftist Syriza party came to power.

Tsipras reportedly failed in one of his other last attempts at resistance: to bar the IMF from an oversight role in any forthcoming new assistance. German Chancellor Angela Merkel did soften her stance in one key area: she indicated at a press conference Monday morning that she would consider extending the maturity of Greek loans, though not a reduction of the principal owed. The IMF has campaigned for comprehensive debt relief, including a haircut for creditors, but Germany has resisted, arguing that debt forgiveness is against EU rules.

Greece’s economy has contracted a stunning 23.6% since 2008, amid the global financial crisis and harsh austerity measures taken as a condition for 240 billion euros in bailout assistance. Now Greece requires an additional 82 billion to 86 billion euros in aid over the next three years, according to an estimate prepared over the weekend by euro zone finance ministers. The country’s banks, closed since June 29, have faced a slow drain of money via capped daily withdrawals from ATMs; to remain solvent they desperately need an increase in emergency funding from the European Central Bank.

Dijsselbloem said that euro zone finance ministers would quickly start discussions on bridge financing for Greece to cover its financial needs until a new bailout package could be finalized. The country is on the hook to make a 3.9 billion euro bond payment to the ECB on July 20. In the course of the weekend’s marathon negotiations, Germany had proposed that Greece exit the currency union for five years, but French President Francois Hollande would hear nothing of it. “There is no such thing as temporary Grexit, there is only a Grexit or no Grexit,” he said Sunday. “There is Greece in the euro zone or Greece not in the euro zone. But in that case it’s Europe that retreats and no longer progresses and I don’t want that.”

Greece has a debt-to-GDP ratio of 175%, second worst among developed nations to Japan’s 230% level. As the euro group’s demands leaked out to the public, they met with an angry reaction from many Greeks and international opponents of the austerity program it has been forced to undertake, with the hashtag #ThisIsACoup trending strongly on Twitter. “This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief,” wrote the Nobel laureate economist Paul Krugman on his blog. The crash program would go much further than the reform package that the Greek Parliament approved Saturday at its creditors’ demands in an abrupt about-face after Greeks had resoundingly rejected the measures in a ‘No’ referendum vote two Sundays ago.

Germany and its allies, chiefly Finland and eastern European countries, have resisted granting additional aid to Greece, angered by its failure to live up to the terms of previous agreements, and worried that over-generosity would encourage other highly indebted EU members like Spain and Portugal to dig in their heels to demand better deals.

Tsipras’ acceptance of demands that run completely counter to the anti-austerity platform that brought Syriza to power threatens to splinter his party, In the short run, the prime minister will now need to cobble together support from opposition lawmakers to pass the required measures; after that the odds seem high that he will have to call early elections, exacerbating the turmoil the country is facing.

[Demeter]

10. U.S. stock futures down, euro firms as Greek deal gets cautious nod

http://www.reuters.com/article/2015/07/13/us-markets-global-idUSKCN0PN2PD20150713?feedType=RSS&feedName=businessNews

U.S. stock futures edged lower on Tuesday and the euro firmed as investors cautiously waited to see if Greece's conditional bailout agreement would bring to an end that country's debt crisis....Tsipras will face a showdown with members of his own party later on Tuesday, over the agreement under which Greece can get a possible 86 billion euros ($95 billion) over three years if it can satisfy its European partners that it is meeting their conditions.

U.S. stock futures edged lower, with S&P 500 mini futures ESc1 down about 0.1 percent from late U.S. levels, after Wall Street jumped on hopes for the Greece deal. All three major stock indexes ended up more than 1 percent, in what some strategists described as a relief rally.

But some said doubts would remain until the proposal is actually accepted. "Investors did not like that a Grexit is still on the table if Parliament votes no," managing director at BK Asset Management, said in a note to clients. "The risk is far less now than a week ago but the fact that it is not eliminated puts pressure on the euro."

A LITTLE MORE

[Demeter]

11. Greek PM Tsipras faces party revolt over bailout deal

ONE WOULD HOPE SO!

http://www.reuters.com/article/2015/07/14/us-eurozone-greece-idUSKBN0P40EO20150714?feedType=RSS&feedName=businessNews

Greece's leftwing Prime Minister Alexis Tsipras faces a showdown with rebels in his own party on Tuesday furious at his capitulation to German demands for one of the most sweeping austerity packages ever demanded of a euro zone government. Just hours after a deal that saw Greece surrender much of its sovereignty to outside supervision in return for agreeing to talks on an 86 billion euro bailout, doubts were already emerging about whether Tsipras would be able to hold his government together.

The terms imposed by international lenders led by Germany in all-night talks at an emergency summit obliged Tsipras to abandon promises of ending austerity. Instead he must pass legislation to cut pensions, increase value added tax, clamp down on collective bargaining agreements and put in place quasi-automatic spending constraints. In addition, he must set 50 billion euros of public sector assets aside to be sold off under the supervision of foreign lenders and get the whole package through parliament by Wednesday.

Tsipras himself, elected five months ago to end five years of suffocating austerity, said he had "fought a tough battle" and "averted the plan for financial strangulation". But to get the accord through parliament by Wednesday's deadline, he will have to rely on votes from pro-European opposition parties, raising big questions over the future of his government and opening the prospect of snap elections.

Leftwing rebels in the ruling Syriza party, and his junior coalition partner, the right-wing Independent Greeks party, indicated they would not tear up election pledges that brought them to power in January. "We cannot agree to that," Independent Greeks leader Panos Kammenos told reporters after meeting Tsipras. "In a parliamentary democracy, there are rules and we uphold them."

A meeting of the Syriza parliamentary group on Tuesday morning could see Energy Minister Panagiotis Lafazanis and Deputy Labor Minister Dimistris Stratoulis sacked over their opposition to the bailout. There may also be a battle over parliament speaker Zoe Constantinopoulou, an uncompromising leftwinger who also defied Tsipras over the bailout and who could create serious procedural obstacles for the package.,,

ALL THIS OVER A MAYBE-WE-WILL, MAYBE-WE-WON'T NON-DEAL FROM GERMANY...

I'M TREATING IT AS THEATRE, BECAUSE IF I THOUGHT THEY WERE SERIOUS, IF I THOUGHT OF ALL THE ORDINARY PEOPLE THE EUROCRATS HURT OVER 5 YEARS, I'D HAVE TO GO TO WAR.

[Demeter]

15. ECB's Greek bank support buys lawmakers short time on aid deal

http://www.reuters.com/article/2015/07/13/us-eurozone-greece-ecb-idUSKCN0PN1KY20150713

The European Central Bank's decision to support Greece's shuttered banks by keeping its emergency funding line open gives the country's lawmakers a few days to seal reforms for an aid deal to keep it in the euro. However, the lawmakers are under pressure to act fast as the ECB, facing resistance from Germany, would be unlikely to extend the funding line next week if Greece misses a debt repayment due to the ECB on July 20.

The lawmakers' support for tough reforms, agreed by leftist Prime Minister Alexis Tsipras on Monday after all-night talks, is crucial for starting the next phase of negotiations on a tentative aid deal, that will potentially unlock funds to help Greece make the roughly 3.5 billion euros ($3.87 billion) ECB debt repayment. Missing that payment would likely force the ECB to turn off the 89 billion euro Emergency Liquidity Assistance that it agreed to extend again on Monday.

"The Greek parliament is being asked to surrender unconditionally," said one euro zone central bank official, suggesting that the ECB could change tack on emergency funding if action did not come soon.

"If they don't deliver by Wednesday, it's going to be tough."

The ECB is expected to gather again on Wednesday evening in Frankfurt to discuss whether to extend the line again, sources said. The 89 billion euro line is enough to keep the banks afloat but only barely. Without that funding, the banks would collapse immediately, dragging Greece further into chaos, a possibility if Greece misses Monday's repayment.

In Germany, where pressure has been building to cut off the funding, the Bundesbank does not want the line to continue beyond July 20 if the ECB repayment is missed, a person familiar with its thinking said. Continuing to provide funds if Greece were to default on money it owes the ECB would appear to breach central bank rules that say it must not provide direct financing to states. The Bundesbank is determined that this not happen.

In any case, the 89 billion euros line is not enough to resume business as usual or lift the strict rationing of cash. Officials at Greek banks are counting on the ECB to increase the funding line to free up liquidity to allow the banks to start to function again. While the ECB is expected to cut the funding line altogether next week if the repayment is missed, it is unclear whether the ECB would reward Greece for fast-tracked reforms with an increase in the size of the funding line.

"Not providing any liquidity at all would seem extreme," one Greek banker said.

"There should be a move from the ECB to keep the banking system going for the next few days, so a bit of liquidity is likely."

Extra money might require a guarantee from euro zone countries to underpin the collateral Greek banks give for the funding, something they last did in 2012.

CAPITAL CONTROLS TO STAY

Volker Wieland, one of the 'wise men' who advise the German government on economic policy, said an increase was possible but even if there was one, money controls would stay.

"It gives them the opportunity to keep up the emergency liquidity assistance," he said. "They can maintain it, they can even increase it slightly but the Greek government can certainly not lift capital controls."

Even with an increase in liquidity, capital controls would only be lifted gradually, another official said.

"You don't want to create room for a bank run that would create a bigger mess," the central bank source said.

Sorting out the banks, starved of cash after months of crisis and economic uncertainty, is essential to getting the Greek economy back on its feet. The Eurogroup of finance ministers estimated that any new bailout program for Athens would require up to 25 billion euros to recapitalize its banks.

One of the preconditions imposed on Greece for a deal is that it signs into law European rules that would put euro zone authorities at the ECB and in Brussels, rather than Athens, in charge of identifying and closing or breaking up sick banks.

This in turn could lead to a shake-up of the sector that could see some banks close, with losses pushed onto bondholders and possibly even large depositors. In such circumstances, there would be little that Athens could do to prevent this.

One European official had told Reuters that the number of big banks in the country could be reduced from four - National Bank, Piraeus, Eurobank and Alpha - to as little as two.

Greek bankers say that reducing the number of lenders would raise competition issues.

[Demeter]

16. Tsipras Faces Mutiny After Capitulating to Demands

JUST SAY NO!---NANCY REAGAN

http://www.bloomberg.com/news/articles/2015-07-13/tsipras-faces-syriza-mutiny-after-capitulating-to-demands

Prime Minister Alexis Tsipras returned to face a mutiny within his coalition after he surrendered to European demands for action to qualify for as much as 86 billion euros ($95 billion) of aid Greece needs to stay in the euro.

With two factions in his government already saying they won’t support the deal, Tsipras met with his closest aides as he tries to stop the revolt from spreading before a vote in parliament Wednesday. Creditors’ demands include an overhaul of sales tax, a broadening of the tax base and a clampdown on pension costs.

Tsipras would “have to change his administration and clear out hardliners and radicals from his party,” as well as rely on opposition support to pass the necessary measures, said Eurasia Group analysts Mujtaba Rahman and Federico Santi. “But it is a tough call to determine how Tsipras will go about doing this.”

MORE

[Demeter]

17. Greek Bailout Rests on Asset Sale Plan That Already Failed

http://www.bloomberg.com/news/articles/2015-07-13/greek-bailout-rests-on-asset-sale-plan-that-s-already-failed

Greece’s last-ditch bailout requires the country to sell 50 billion euros ($55 billion) of assets, an ambition it hasn’t come close to achieving under previous restructuring plans.

The government of then-Prime Minister George Papandreou in 2011 set the same financial goal, which it sought to achieve by hawking airports, seaports, and beachside real estate. Since then, such deals have yielded just 3.5 billion euros, according to the state privatization authority.

Making the asset-sale math work as the economy contracts will be difficult for Greek Prime Minister Alexis Tsipras, who on Monday bowed to demands from European creditors in exchange for a bailout of as much as 86 billion euros that will keep his nation in the euro zone. Half the money from asset disposals is earmarked to pay off emergency loans for teetering Greek banks. They need cash to rebuild their capital buffers and, without it, may no longer be able to operate.

“Fifty billion euros is a very unrealistic target,” said Diego Iscaro, an economist at research firm IHS Inc. “Asset prices have been badly hit by the economic depression and we do not expect them to significantly recover any time soon.”

MORE

[Demeter]

12. Lehman Bros trustee seeks another distribution to creditors

http://finance.yahoo.com/news/lehman-bros-trustee-seeks-another-182701564.html

A trustee for the bankrupt investment bank Lehman Brothers Inc. is seeking court approval to make another distribution, totaling $1.89 billion, to unsecured creditors in the case.

Lehman's bankruptcy in September of 2008 signaled the start of the global financial crisis and was a major catalyst of the financial meltdown. It was the largest bankruptcy in U.S. history, with Lehman listing $639 billion in assets at the time.

Unsecured creditors are normally among the last to get paid in a bankruptcy case, and they often receive only a percentage of the total amount owed if anything. A spokesman for Trustee James W. Giddens said unsecured general creditors in this case might include former employees, pension funds or banks, among other parties.

Total payments to unsecured general creditors will add up to about $7.8 billion if the bankruptcy court approves this third distribution. Two previous payments have already been made, and the third will bring the total paid to about 35 percent of what is owed.

Secured and priority creditors were first in line for distributions. Counting those claims, total distribution to creditors in the case would surpass $8 billion with the latest allocation to unsecured creditors.

"The wind down of the estate continues in earnest, and we will continue to resolve outstanding issues so that all remaining available assets can be fully distributed," Giddens said in a statement.

Aside from creditors, customers have received more than $106 billion, an amount that fully satisfies 111,000 claims.

[Demeter]

13. Emancipation!

[Demeter]

14. U.S. watchdogs urge review of Treasury market rules after Oct. 15 price swings

http://www.reuters.com/article/2015/07/13/treasuries-regulators-liquidity-idUSL2N0ZT0T620150713

The rules for the Treasury market should be reviewed, U.S. regulators said on Monday, as they released a much-anticipated first study into wild price swings on Oct. 15 in that market, an event many have blamed on overly tight regulation. The data showed no single cause for one of the biggest price jumps since 1998 on a day when there were no significant policy announcements, the five regulatory agencies said. The Treasury Department, the Federal Reserve Board and the Federal Reserve Bank of New York, the Securities and Exchange Commission and the Commodity Futures Trading Commission contributed to the report.

Market participants have blamed a tight new regulatory regime for Wall Street banks, introduced after the 2007-09 financial crisis, for a dearth of liquidity in the bond market where the banks play a dominant role. The banks can no longer hold sufficient inventory of the securities to match buyers and sellers, they say.

On Oct. 15, the 10-year Treasury yield traded in a range of around 36 basis points, more than four standard deviations above normal and the largest swing since August 2011. The 10-year's futures volume was the second highest on record.

While top regulators, such as Fed Governors Dan Tarullo and Treasury Secretary Jack Lew, have acknowledged that the matter was worth looking into, they have stopped short of blaming the 2010 Dodd-Frank law as the sole cause for the big gyrations. The only notable news on Oct. 15 was U.S. retail sales data, but the price reaction was much larger than could have been expected, given there were few surprises, the report said.

Monday's report looked in detail at the role of high-frequency traders, which have taken much of the blame for similar events in the stock market. One conclusion was that these firms stayed in the market on Oct. 15 to provide liquidity. "They ... continued to provide liquidity to the cash and futures order books, though at much reduced levels," the report said. "Bank-dealers ... provided less liquidity in the order books by widening their spreads and withdrawing for brief periods from the offer side of the book." Nevertheless, the report suggested looking into whether some of these automated trading firms operating in the Treasury market should be required to register. Another recommendation was to develop best practices for market conduct, related to voice and automated trading.


OF COURSE, IT COULDN'T BE A COLLUSION--LIKE EVERYTHING ELSE HAS BEEN--NOW COULD IT?

[Demeter]

18. China May Tip World Into Recession: Morgan Stanley

THE RECESSION STARTED WITHOUT CHINA...IT'S MERELY THE LAST VICTIM

http://www.bloomberg.com/news/articles/2015-07-13/china-may-tip-world-into-recession-morgan-stanley-s-sharma-says

Forget about all the shoes, toys and other exports. China may soon have another thing to offer the world: a recession.

That is the prediction from Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, who says a continuation of China’s slowdown in the next years may drag global economic growth below 2 percent, a threshold he views as equivalent to a world recession. It would be the first global slump over the past 50 years without the U.S. contracting.

“The next global recession will be made by China,” Sharma, who manages more than $25 billion, said in an interview at Bloomberg’s headquarters in New York. “Over the next couple of years, China is likely to be the biggest source of vulnerability for the global economy.”

While China’s growth is slowing, the country’s influence has increased as it became the world’s second-largest economy. China accounted for 38 percent of the global growth last year, up from 23 percent in 2010, according to Morgan Stanley. It’s the world’s largest importer of copper, aluminum and cotton, and the biggest trading partner for countries from Brazil to South Africa.

The International Monetary Fund last week cut its forecast for global growth this year to 3.3 percent, down from an estimate of 3.5 percent in April, citing weakness in the U.S. While the Washington-based lender left its projection on China unchanged at 6.8 percent, the slowest since 1990, it said “greater difficulties” in the country’s transition to a new growth model poses a risk to the global recovery.

MORE HAND-WAVING AT LINK

[Demeter]

19. Einhorn Says Europe Letting Greece Collapse to Stop Populism

http://www.bloomberg.com/news/articles/2015-07-13/einhorn-says-europe-allowing-greece-collapse-to-fight-populists

David Einhorn, founder of Greenlight Capital, said Europe’s leaders are prepared to let Greece fail to discourage other countries from electing populists.

“Europe is unwilling to allow Syriza a face-saving compromise, even if that means Greece collapses and the rest of Europe suffers,” Einhorn wrote in a letter to investors on Monday obtained by Bloomberg....

“Syriza has capitulated by proposing a deal which leaves Greece with even more austerity than when negotiations began and no actual debt forgiveness,” Einhorn wrote. “This might not be enough, as the grand goal of the European negotiators appears to be to discourage other countries from electing populists.”

HEDGE FUNDS REVOLTING...

[mother earth]

26. It's not going away, it grows...

bwa-ha-hah!!!

[Demeter]

20. Deutsche Bank Inquiry Deepens as New York Seeks Moscow Memos

http://www.bloomberg.com/news/articles/2015-07-13/deutsche-bank-inquiry-deepens-as-new-york-seeks-moscow-memos

New York’s banking regulator has asked Deutsche Bank AG for e-mails, memos, client lists and other details as part of an effort to survey how broadly a set of suspicious trades extended beyond the bank’s Moscow office, according to a person briefed on the matter.

The formal request for information, which was sent last week, the person said, marks a deepening of the New York State Department of Financial Services’ probe into Deutsche Bank’s activities in Russia. The DFS has been looking into whether people at the bank’s Moscow operation conducted trades that would help Russian clients skirt economic sanctions, the person said.

Bloomberg News reported June 5 that DFS was looking at unusual trading activity at the bank’s Russian unit.

The New York regulator asked the bank to provide a complete list of the employees involved in the suspicious trading, as well as the identities of the counterparties involved, and whether those counterparties were subject to U.S. sanctions...MORE

[mother earth]

27. These banksters need to be rounded up to face trial, they are criminal entities wreaking global

havoc. A day of reckoning is begging to be had...

[Demeter]

21. Inflation Is Hitting Japanese Households Hard

ABE GOT WHAT HE WANTED--TOO BAD THE NATION HAS TO SUFFER FROM HIS INFLATION JONES

http://www.bloomberg.com/news/articles/2015-07-13/careful-what-you-wish-for-abe-s-inflation-hits-japan-s-households

Prime Minister Shinzo Abe came to power vowing to drag Japan out of deflation and stagnation. His logic was that rising prices would drive higher salaries and increased consumption. More than two years on, prices are rising, but wages adjusted for inflation have sunk to the lowest since at least 1990....



DOESN'T TAKE A DEGREE IN ECONOMICS TO KNOW THAT WAS NOT GOING TO WORK

[Hotler]

23. What happened to the ........

"Print Friendly" button for articles on the internet? Only a few articles have it these days and it sure would be nice to print something to share with others without all the ads and crap along the borders.

[DemReadingDU]

25. Been missing for awhile

It is annoying. I suppose, one could copy and paste the article in a word document, and add the link, but that takes time that most of us do not have nowadays.

Probably a conspiracy to keep the masses from becoming too knowledgeable. Besides, gotta have those ads to buy more stuff.

[DemReadingDU]

24. U.S. retail sales unexpectedly weak in June

7/14/15 U.S. retail sales unexpectedly weak in June

U.S. retail sales unexpectedly fell in June as households cut back on purchases of automobiles and a range of other goods, which could raise concerns the economy was slowing again.

The Commerce Department said on Tuesday retail sales slipped 0.3 percent last month, the weakest reading since February. May's retail sales were revised down to show them rising 1.0 percent instead of the previously reported 1.2 percent jump.

Economists polled by Reuters had forecast retail sales rising 0.2 percent last month.

Retail sales excluding automobiles, gasoline, building materials and food services dipped 0.1 percent after an unrevised 0.7 percent increase in May.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

more...
http://www.reuters.com/article/2015/07/14/us-usa-economy-retail-idUSKCN0PO1HY20150714?

[Demeter]

28. "Nobody Could Have Predicted..." Kindasleazy Rice