May 1, 2012

Paul Vs Paul Post-Mortem

http://www.zerohedge.com/news/paul-vs-paul-post-mortem

By way of post-mortem of this afternoon's epic Paul vs Paul cage-match, we reflect on the various headlines the two gentlemen made during the event and in the context of the credibility with which one of the gentlemen discusses his ability to manage the world and the 'ease' with which he and his henchmen can control inflation (and that an unmanaged economy is subject to 'extreme volatility'), we remind readers of the post-WWII years and the extreme swings in purchasing power that their so-called managed economy created - a period which Krugman explicitly pointed out as golden years for the post-depressionary period.

Summarizing the words and thoughts of a megalomaniacal Keynesian dream-maker is hard but the following effluent effusive comments via Bloomberg will provide the much-needed color on this afternoon's Bloomberg TV appearance:

•*KRUGMAN SAYS FED SHOULD ACCEPT HIGHER RATE OF INFLATION
•*KRUGMAN: FED SHOULD KEEP RATES LOW UNTIL "WELL PAST" 2014
•*KRUGMAN SAYS INFLATION EASIER TO CONTROL THAN DEFLATION
•*KRUGMAN SAYS U.S. WOULD BE BETTER OFF WITH 4% INFLATION RATE
•*KRUGMAN: CONTINUED MASS UNEMPLOYMENT "RECKLESS". NOT INFLATION
•*KRUGMAN SAYS U.S. ECONOMY IS "PERSISTENTLY DEPRESSED"
•*KRUGMAN SEES "MASSIVE FAILURE" OF SYSTEM WITH 8% JOBLESS RATE
•*KRUGMAN SAYS "NO REASON TO PANIC" OVER U.S. DEBT NOW
•*KRUGMAN SAYS U.S. DEBT NOT "ANYWHERE CLOSE TO A RED LINE"
•*KRUGMAN SAYS SLASHING SPENDING MAKES DEBT PROBLEM WORSE
•*KRUGMAN SAYS UNMANAGED ECONOMY SUBJECT TO "EXTREME VOLATILITY"

US CPI in the 1940s...Zee Stabilitee



And from the more open-minded of the two 'Pauls' - it appears his statements lie somewhere in the credible (and not at all psychotic and narcissistic) regions of the mind:

•*RON PAUL SAYS GOVERNMENTS AREN'T SUPPOSED TO RUN THE ECONOMY
•*RON PAUL SAYS `THE PEOPLE' ARE SUPPOSED TO RUN THE ECONOMY
•*RON PAUL: FED HAS DESTROYED 98% OF DOLLAR'S VALUE SINCE 1913
•*RON PAUL SAYS FED SHOULDN'T HAVE A MONOPOLY OF CURRENCY
and while he does note that:

•*PAUL SAYS FED IS LENDER OF LAST RESORT FOR POLITICIANS
he also adds more pragmatically that

•*RON PAUL SAYS WOULD BE "CHAOTIC" TO END THE FED RIGHT AWAY



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USA has at least $120 Trillion In Total Debt (when off-budget debt such as Fannie Mae, Freddie Mac, Off-Shored derivative accounts held by the Fed and unfunded mandates such as fully actualized Social Security and Medicare debt is taken into account)


http://thesantosrepublic.com/2011/06/usa-deficit-120-trillion-new-debt-to-the-unborn/

May 1, 2012

Krugman, Diocletian & Neofeudalism

http://azizonomics.com/2012/05/01/krugman-diocletian-neofeudalism/

The entire economics world is abuzz about the intriguing smackdown between Paul Krugman and Ron Paul on Bloomberg. The Guardian summarises: http://www.guardian.co.uk/world/us-news-blog/2012/apr/30/paul-krugman-ron-paul-economics?newsfeed=true



I find it quite disappointing that there has not been more discussion in the media of the idea — something Ron Paul alluded to — that most of the problems we face today are extensions of the market’s failure to liquidate in 2008. Bailouts and interventionism has left the system (and many of the companies within it) a zombified http://azizonomics.com/2011/11/15/zombie-economics/ wreck. Why are we talking about residual debt overhang? Most of it would have been razed in 2008 had the market been allowed to liquidate. Worse, when you bail out economic failures — and as far as I’m concerned, everyone who would have been wiped out by the shadow banking collapse is an economic failure — you obliterate the market mechanism. Should it really be any surprise that money isn’t flowing to where it’s needed?

A whole host of previously illiquid zombie banks, corporations and shadow banks are holding onto trillions of dollars as a liquidity buffer. So instead of being used to finance useful and productive endeavours, the money is just sitting there. This is reflected in the levels of excess reserves banks are holding (presently at an all-time high), as well as the velocity of money, which is at a postwar low:



Krugman’s view that introducing more money into the economy and scaring hoarders into spending more is not guaranteed to achieve any boost in productivity.

As I wrote last month: http://azizonomics.com/2012/04/28/krugman-inflation-target/



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May 1, 2012

Keiser Report: Vicious Circle of Bankster Huddles (ft. Matt Taibbi) (E277)

In this episode, Max Keiser and co-host, Stacy Herbert discuss huddles and cuddles with the Goombahs of Wall Street and the technical violations that cannot be called by name.

In the second half of the show Max talks to Rolling Stone journalist, Matt Taibbi, about the Wall Street mafia, their small and big time rackets and the process of writing these crime stories for a wide audience.

May 1, 2012

Sickening! RBS chief's very own Versailles: opens his gardens to the public who bailed out his bank

http://www.dailymail.co.uk/news/article-2137090/Inside-RBS-chiefs-Versailles-Hester-opens-gardens-public-bailed-bank.html

He has received at least £35million since joining the beleaguered Royal Bank of Scotland in 2008. But while the taxpayer-owned bank continues to record hefty losses, Stephen Hester’s personal spending on his lavish 350-acre estate continues unabated. And yesterday some of those taxpayers who helped bail out his bank got to see exactly how the chief executive is spending his riches.

Mr Hester invited the public to see the manicured grounds of his £7million home, which would not look out of place at the Palace of Versailles. He has hired some of the best landscape gardeners in the country to turn Broughton Grange into ‘one of the most significant private contemporary gardens in Britain’, in the words of one expert. In rolling hills outside Banbury in Oxfordshire, the country pile boasts an outdoor heated swimming pool, two tennis courts and two horse paddocks. However, the real jewels of the estate are the huge variety of spectacular gardens which are tended by a team of eight landscaping experts all year round.

The rare chance to tour his estate, advertised through the Royal Horticultural Society, comes three months after Mr Hester, 51, was condemned over his £963,000 bank bonus. He finally waived his right to it after a huge public outcry. Days later RBS recorded its fourth year of losses since its £45.5billion bail-out by the taxpayer in 2008. It posted losses of £2billion – but still paid out £785million in bonuses to staff. Visitors to Mr Hester’s estate were carefully vetted by staff at The Lodge by the main gate – the £6 entrance fee goes to charity – before being sent down a long tree-lined drive to the main house. Since being used as a farmhouse in the 17th century, a number of buildings have been added to create a quadrangle where dogs and ducks are allowed to roam.

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May 1, 2012

Bill Black (put over 1000 S&Ler's in jail)-System's So Flawed That Fraud's Mathematically Guaranteed

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it."

- Frederic Bastiat

http://www.chrismartenson.com/blog/bill-black-our-system-so-flawed-fraud-mathematically-guaranteed/74785


Bill Black is a former bank regulator who played a central role in prosecuting the corruption responsible for the S&L crisis of the late 1980s. He is one of America's top experts on financial fraud. And he laments that the US has descended into a type of crony capitalism that makes continued fraud a virtual certainty - while increasingly neutering the safeguards intended to prevent and punish such abuse. In this extensive interview, Bill explains why financial fraud is the most damaging type of fraud and also the hardest to prosecute. He also details how, through crony capitalism, it has become much more prevalent in our markets and political system.

A warning: there's much revealed in this interview to make your blood boil. For example: the Office of Thrift Supervision. In the aftermath of the S&L crisis, this office brought 3,000 administration enforcements actions (a.k.a. lawsuits) against identified perpetrators. In a number of cases, they clawed back the funds and profits that the convicted parties had fraudulently obtained. Flash forward to the 2008 credit crisis, in which just the related household sector losses alone were over 70x greater than those seen during the entire S&L debacle. So how many criminal referrals did the same agency, the Office of Thrift Supervision, make?

Zero.


Similar dismal action was taken by such other financial regulators as the Office of the Comptroller of the Currency, the Federal reserve and the FDIC. Where is the accountability?, you may be asking. Or perhaps, how did we allow things to get this bad? To find out, click the play button below to listen to Part I of Chris' interview with Bill Black.



or

https://s3.amazonaws.com/cm-us-standard/audio/bill-black-2012-04-27-part1.mp3 (right click, save as)

Fraud is both a civil wrong and a crime and it's when I get you to trust me and then I betray your trust in order to steal from you. As a result, there’s no more effective acid against trust than fraud and, in particular, elite fraud, which causes people to no longer trust folks, economies break down, families break down, political systems break down and such if you don’t have that kind of trust. So that’s what fraud is. But what my work focuses on is: what kind of frauds are the most devastating? And it turns out that the most kind of problems that we’re seeing, systemic problems and such, arise when we have, what we call in criminology, control fraud. And control fraud simply means when you have a seemingly legitimate entity and the person who controls it uses it as a weapon to defraud others. And so in the financial sphere the weapon of choice is accounting and the losses from these kinds of control frauds exceed the financial losses from all other forms of property crime combined. So for example, in the current crisis, as with the prior ones, if you’re a lender there’s an easy recipe for maximizing fake accounting income. And it goes like this. You need four ingredients:


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more at top link

May 1, 2012

Jon "Teflon Don" Corzine and his Posse Roam Free ahead of new MF Global Hearing

It's been almost 6 months since MF Global surprised it's customers with its Halloween, surprise bankruptcy filing.
Since then, the official line from sources close to the investigation is that the "case has gone cold." But has the case really gone cold, or are those who are in charge of the investigation, the regulators and the trustees, simply spraying teflon on every potentially sticky piece of evidence that could lead to criminal prosecutions and ultimately to the recovery of stolen customer money?

We wish that MF Global were just a one-off affair - a bad apple if you will. Unfortunately, it is just another milestone in the history of criminality that has swept through the financial services industry like some sort of medieval plague - the black death for capital formation.

It seems that the only time people are held accountable anymore is when they commit crimes that affect the super-rich. Bernie Madoff is a prime example. How long did it take for the media and the courts to hang the man accused of running the largest ponzi scheme in history? Not long at all. Madoff is securely behind bars, but Jon "Teflon Don" Corzine is busy ordering caramel frappuccinos at the local starbucks, bothered only by the low din of discontent emanating from the blogosphere and from show's like Capital Account.

What a nuisance we must be to the new Goodfella's of Wall Street. And what a nuisance our guest, Mark Melin, who has been hot on the MF Global trail must be as well. He is joining us today to give us an update on the "cold case" that is MF Global.

May 1, 2012

The Québec Student Strike: From ‘Maple Spring’ to Summer Rebellion?

http://andrewgavinmarshall.com/2012/04/30/the-quebec-student-strike-from-maple-spring-to-summer-rebellion/

Tuition Hikes, Student Strikes, Police Batons, and Teargas Bombs


The "red square" symbol of the Québec student movement

In Montréal, where I live, and across the Canadian province of Québec, there is a growing and expanding student movement which emerged as a strike in February against the provincial government’s plan to increase the cost of university tuition by $325 per year for the next five years, for a total of $1,625. The students have been seeking and demanding a halt to the tuition hike in order to keep higher education accessible, a concept that the province of Québec alone has held onto with greater strength than any other province in Canada. The government continues to dismiss and deride the students, meeting their protests with batons, teargas bombs, and mass arrests. The universities in Québec are complicit with the government in their repression of students and the struggle for basic democratic rights, bringing in private security firms to patrol and harass students in the schools. While the university administrations claim they are ‘neutral’ on the issue of tuition hikes, privately, the boards of governors are made up of bankers and business executives who lobby the government to increase tuition. After all, in April of 2007 – five years ago – Toronto-Dominion Bank (TD Bank Group), one of Canada’s ‘big five’ banks which dominate the economy, released a “plan for prosperity” for the province of Quebec, which recommended, among other things, raising the cost of tuition: “by raising tuition fees but focusing on increased financial assistance for those in need, post secondary education (PSE) institutions will be better-positioned to prosper and provide world-class education and research.”[1]

The movement is becoming more radicalized, more activated, and is consistently met with more state repression. Almost daily, it seems, there are protests all over the city, drawing in other social organizers and activists in solidarity. The little red square patch – the symbol of the Québec student strike – is adorned across the province of Québec and the city of Montréal and on the jackets and bags of a large percentage of its residents. The city and the province, it seems, are at the forefront of a youth-driven social struggle, a growing and rumbling resistance movement. As the issues spread from tuition hikes to a more broad conception of social justice, the movement has the potential to grow both within and far beyond Québec. If the situation continues as it has until present, already the longest student strike in Québec’s history, with increased activism and accelerated state repression, it is not inconceivable to imagine a growing student-led social rebellion by the end of the summer. As the economic situation in Canada – and indeed, the world – continues to get worse for the people of the world (as opposed to the corporations and banks, who are doing very well!), the momentum behind the current student movement has the potential to spill across Québec’s borders into the rest of Canada, with some people referring to this as the beginnings of the ‘Québec Spring,’ or the ‘Maple Spring.’

Emotions are running high in Québec, and increasingly, the government and the Canadian media are presenting the protesters as violent and destructive, and framing the debate in a misleading context, presenting the students as whining about “entitlements.” The rest of Canada is especially fed a line of intellectual excrement, repeating the same invalid and misleading arguments ad nauseum. This article seeks to present the issues of the strike, and the actions of protesters and the government into a wider context, so that other young Canadians (and youth around the world) may understand what is truly taking place, what is truly being struggled for, what the government and media are doing to stop it, the absurdity of the arguments against the students, and the need for this movement to spread beyond this province, to let this truly be the dawn of the ‘Maple Spring.’

Entitlements and Social Justice: Putting the Protests in Context

The most commonly spewed argument against the student protests – and for the tuition increases – emanating from the ‘stenographers of power’ (the media) and others, is that the students are complaining about their supposed ‘right’ to entitlements for cheap education. Québec has the cheapest university tuition in Canada (for residents of the province), and even with the tuition increases, it will still remain among the cheapest nation-wide. Thus, claims the media, there is no rational basis for the complaints and strike. The argument is, however, based upon the fallacious argument that, “the rest of Canada does it, so why not Québec?” In Québec’s history, however, the claim that “the rest of Canada does it” has never been an argument that has won the sympathy of residents of Canada’s French-speaking province. This argument, however, goes beyond a cultural difference between Québec and English-speaking Canada. The most basic problem with this line of thinking is that what is taking place in the rest of Canada is something to aspire to, that because the rest of Canada has higher tuition costs, this is not something to struggle against. When placed in context, we are left with the conclusion that the rest of Canada should be following the example of the students in Québec, not the other way around. So let’s break down the numbers.

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This is Part 6 of the series, “Class War and the College Crisis.”

Part 1: The “Crisis of Democracy” and the Attack on Education http://andrewgavinmarshall.com/2012/04/02/class-war-and-the-college-crisis-the-crisis-of-democracy-and-the-attack-on-education/

Part 2: The Purpose of Education: Social Uplift or Social Control? http://andrewgavinmarshall.com/2012/04/08/the-purpose-of-education-social-uplift-or-social-control/

Part 3: Of Prophets, Power, and the Purpose of Intellectuals http://andrewgavinmarshall.com/2012/04/13/571/

Part 4: Student Strikes, Debt Domination, and Class War in Canada http://andrewgavinmarshall.com/2012/04/17/student-strikes-debt-domination-and-class-war-in-canada-class-war-and-the-college-crisis-part-4/

Part 5: Canada’s Economic Collapse and Social Crisis http://andrewgavinmarshall.com/2012/04/24/canadas-economic-collapse-and-social-crisis-class-war-and-the-college-crisis-part-5/



http://freeeducationmontreal.org/

April 29, 2012

Money As Debt - Parts 1, 2, and 3 (animated films by Canadian Paul Grignon about the banking system)

http://www.moneyasdebt.net/

Where does Money Come From?

The simple answer to the title question is DEBT. Whether paper cash or numbers on a computer screen, all money (except coins) is “evidence of debt”.What is "cash” and where does it come from? Cash can be the familiar paper stuff, or it can be credit at the national central bank which banks use to settle accounts between banks. “Credit cash” at the central bank is always convertible to “paper cash” upon demand. So, where does cash come from? Is it just printed by the government as we are shown on TV? NO. Cash is created out of thin air by the central bank of the country (which is often privately owned). The central bank can just have it printed for the cost of printing, by the government or privately. The central bank then uses this cash it creates out of thin air to buy interest-bearing public debt in the form of government bonds.

Government debt is perpetual and thus interest paid on it is perpetual. Therefore a good definition of cash might be: evidence of public debt on which taxpayers will be paying interest forever. So what is credit? Everything else that isn’t cash. Take for example your bank account. Your bank account tells you how much cash the bank OWES you if you demand it. It isn’t cash itself. All those numbers in bank accounts are just “promises to pay cash”, nothing more than IOUs created by banks. However, we typically think of these bank IOUs, or “checkbook money” as “money”. Little wonder. This checkbook money, especially in electronic form, is much more convenient and secure than paper money. Therefore we can transact all of our business with these promises to pay cash instead of cash itself.

So… are there more promises to pay cash than there is cash to fulfill them? You bet. That is because banks usually make what they call “LOANS” by promising, rather than providing, cash. With a base of “cash” usually much less than 8% of the total they will “loan”, banks create their so-called "loans" as “promises”. How? It is astonishingly simple. You, the so-called borrower, sign a document that promises to pay the bank X amount of money over time plus interest on the outstanding balance. Your promise is backed by the collateral you agree to forfeit and the effort you will expend to earn the money. Your promise to the bank is an ASSET to the bank. To balance its books, the bank creates a matching LIABILITY. The bank promises the borrower X amount of “cash” on demand.

The “loan money” that the bank puts in the borrower’s account is not “cash”. It is an IOU. It need never be cash unless the borrower demands cash. And, because we accept these IOUs as money itself, and do almost all of our business trading these convenient and secure IOUs instead of inconvenient and risky cash, banks can safely issue many more IOU’s than there is cash to back them up. Perhaps the simplest and most "magical" feature of this system is "net" transactions. Only the net differences of transactions between banks need to be paid in cash. In theory, if all the banks are getting as much bank credit coming in as is being withdrawn, all the IOUs balance each other out at the end of the day leaving a net difference of zero. No cash required at all, from anyone! In practice, banks are competing. Winners can demand losers pay in cash. But that amount is still only a small proportion of the whole amount of credit issued.

The exception to all this is coins. They don't begin as debt. The government Mint stamps them and the government sells them at face value to the banks, no returns. But coins are an insignificantly small part of today's money supply. The significant thing about coins is that most people’s understanding of money has not yet developed much beyond the idea of coins, simple POSITIVE tokens of value. They fail to see how we have been ensnared by a money system based on NEGATIVE shackles of debt. The current system pretends to be “money” but is, in truth, a financial black hole sucking us all in to seemingly inescapable control by our so-called “creditors. The truth we need to see is that WE are the real creditors, because it is WE who produce the real value in the world, not the banks.


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April 29, 2012

Occupy the SEC takes on Big Banks and the London Whale

"K Street" is the symbol of Washington lobbying, and, according to the Center for Responsive Politics Wall Street (combined with insurance and real estate) comes in third as an industry for biggest spender. One of the recent efforts has been influencing Volcker Rule regulations, which are supposed to stop federally-insured banks from proprietary trading, or making big bets for the house that can put the whole firm at risk. But members of Occupy the SEC, a group of volunteers and many who worked on Wall Street, have been coming to Washington to present a different message to regulators than the bulge bracket banks. They have concerns over loopholes that would allow banks to get around the rule. They were in Washington briefing congressional staffers on the rule. Since we spoke to members last its been clarified that banks have until 2014 to comply with the new rule and we also learned about the London Whale's massive proprietary-trade-esque bets. We catch up with members of the group to get an update.

April 28, 2012

Regina Tasca is a “rogue cop” – and God bless her for it.

http://freedominourtime.blogspot.se/2012/04/officer-regina-tasca-goes-rogue.html




Tasca is in the middle of disciplinary hearings that may result in her termination from the Bogota, New Jersey Police Department. She stands accused of “bizarre and outlandish” behavior in two incidents a year ago during which she revealed herself to be “A danger to other police officers.” Her first supposed offense -- which wasn't mentioned until after the second -- was a failure to assist another officer who was “attacked” by a drunken woman who was roughly half his weight and barely five feet tall. Her second was was to intervene when a police officer from another jurisdiction viciously assaulted an emotionally troubled young man who was not suspected of a crime.

“I consider myself a peace officer,” Tasca told Pro Libertate. “My thing is to help make sure that people are safe, and that they don’t have a reason to fear the police – that we treat them like human beings. The incident that started all of this was one in which I intervened to prevent excessive force against a kid who was the subject of a medical call, not a criminal suspect."

On April 29, 2011, Tasca was on patrol when she got a call for medical assistance. Former Bogota Council Member Tara Sharp, concerned about the erratic behavior of her 22-year-old son Kyle, called the police to take him to the hospital for a psychological evaluation. Requesting police intervention, particularly in cases of this kind, is never a good idea. Sharp was exceptionally fortunate that Officer Tasca was the first to respond: She has years of experience as an EMT and had just completed specialized training on situations involving psychologically disturbed people.

Once on the scene, Tasca acted quickly to calm down the distraught young man. “When the call came, I heard that a couple of officers from Ridgefield Park were coming to provide backup, which I thought was OK, Tasca related to Pro Libertate. “Kyle had been shouting and swearing when I got there, but I got him calmed down.” The young man’s mood changed abruptly when he saw the other officers arrive. “He noticed them and asked me, `Why is there another police officer here from another town?’ Then he said that he was leaving, and he moved maybe two or three steps when one of the Ridgefield officers jumped him.”

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