Bloomberg reports a surprise move from Germany:
“Germany will temporarily ban naked short selling and naked credit-default swaps of euro-area government bonds at midnight after politicians blamed the practice for exacerbating the European debt crisis. Continue reading
“Dr. Copper” seems to be telling us something:
“Copper dropped sharply Monday as the general sour mood about Europe and the global economic rebound was heightened by news of rising copper inventories.
Copper for July delivery lost 20 cents, or 6.5%, to $2.93 a pound on Comex. That’s the lowest price for a most-active contract since early February.
The LME reported Monday a rise in copper stocks in South Korea, the first in that country since January, applying further pressure on prices, analysts at Commerzbank said in a report.”
“The bottom line is that we can expect real wages to stagnate for several years, as a predictable reflection of slack capacity in the labor market. While credit concerns will be helpful in augmenting the demand for U.S. government liabilities as a default-(food poisoning)-free alternative to other assets, there is a continued prospect for significant price inflation beginning in the second half of this decade. With the ECB surrendering monetary discipline for the sake of short-term expedience, that prospect has become even more hostile. Continue reading
From Giordano Bruno at Neithcorp Press:
“Goldman’s involvement in the Greek snafu is assuredly not isolated. Goldman deals with many countries and has likely pulled the same scam everywhere. But why would a large international bank deliberately sabotage the economies of the countries it does business with? Would this not ruin the banks as well in the long run? Not if you consider the possibility that Goldman is destabilizing countries deliberately to help the IMF… Continue reading
A thought occurred to me late at night. Do you remember these stories from the Iraq war?
WASHINGTON (CNN) –For the second time in a week, U.S. troops have discovered what appears to be a cache of gold bars hidden in a truck, which could be worth just less than a quarter of a billion dollars, according to a Pentagon official. Continue reading
Update: Here’s Chris Cook’s radio interview of me on University of Victoria Radio, May 10, 2010.
I’m in the last third. As it was, we didn’t talk much about the crisis, except a bit at the end. We talked mostly about how libertarians suddenly became too dangerous to be allowed across the border.
ORIGINAL POST:
I’ll be talking with Chris Cook of The Peace and Earth Justice website and University of Victoria Gorilla radio show about the financial crisis and the call for regulation; also, about Canada’s increasing unfriendliness to free speech on political matters.
A Preview of the Program:
GR 05-50 101.9 FM 104.3 Cable ‘cfuv.uvic.ca
Monday May 10, 2010
5:00:00 3:00 Welcome to GR, etc. Gordon Campbell’s Liberal party has promised it will enact the Harmonized Sales Tax, or HST come hell or high water; and he may get plenty of both. To call the opposition to the tax popular in B.C. merely scratches the surface of the deep dissatisfaction felt in Canada’s westernmost province. After watching nearly a decade of service cuts, and relentless tax relief to corporations and the wealthiest of British Columbia’s citizens, more tax rises for the working class is about as welcome here as as communicable disease. Resistance to the proposed HST has organized, and petitions currently making the rounds in every voting jurisdiction are piling up signatures, hoping to reach a level that will force the government to back down. Brad Slade is a long-time labor activist and he’s the Regional Organizer for the South Island and the Islands with Fight The HST. Brad Slade in the first half.
And; what lies behind the recent economic meltdown in the United States?
Years of deregulation on high-flying financiers and the introduction of increasingly exotic investment vehicles created a bubble economy whose collapse now threatens the entire global economy, but who is to blame? Lila Rajiva is a journalist and author, whose book titles include: ‘The Language of Empire: Abu Ghraib and the American Media,‘ and ‘Mobs, Messiahs, and Markets’, co-written with Bill Bonner. Her articles are available on the internet at CounterPunch, Dissident Voice, and Lew Rockwell.com, and in mainstream sources such as The Washington Post and The Hindu.
Lila Rajiva and the politics behind financial calamity in the second half.
And; Victoria Street Newz publisher and CFUV broadcaster, Janine Bandcroft will be here at the bottom of the hour to bring us up to speed on the view from Victoria’s burgeoning street society. But first, Brad Slade and B.C.’s tax revolt in the making.
5:03:00 21:00 Discussion w/ Brad Slade
“Welcome back to the show, Brad; it’s been a few months since your last visit here; what’s the latest on the Fight the HST front?”
5:24:00 1:00 Cart(s)
5:25:00 10:00 Janine Bandcroft
5:35:00 3:00 Music
5:38:00 21:00 Discussion w/ Lila Rajiva
Welcome back to GR, etc.
Just what lies behind the recent economic meltdown in the United States? Years of deregulation on high-flying financiers and the introduction of increasingly exotic investment vehicles created a bubble economy whose collapse now threatens the entire global economy, but who is to blame?
Lila Rajiva is a journalist and author, whose book titles include: ‘The Language of Empire: Abu Ghraib and the American Media,‘ and ‘Mobs, Messiahs, and Markets’, co-written with Bill Bonner. Her articles are available on the internet at CounterPunch, Dissident Voice, and Lew Rockwell.com, and in mainstream sources such as The Washington Post and The Hindu.
“Welcome back to the program, Lila; we initially planned to discuss an economics forum that took place in Vancouver over the weekend. What is that forum about, and why were you not in attendance?”
A bill sponsored by Ron Paul and Alan Grayson to thoroughly audit the Fed, passed the House. However in a brazen move that ought to offend the sensibilities of every citizen, the Fed is lobbying Senate members to water down the bill so that it is meaningless. Continue reading
One of the scams that the rich use the government for in order to stop less wealthy people from getting richer is to promote the lie that, since venture capital is “riskier” than investing in public securities on the NYSE (another lie), individuals with less than a certain minimum net worth should not be allowed to invest in these “riskier” VC investments. Continue reading
The report I’ve posted below illustrates why most regulatory efforts are completely counterproductive.
By the time enough bureaucrats are convinced there’s a problem, by the time enough of the public has been educated…or miseducated about it..so there’s enough public pressure to call for hearings, by the time the SEC and the DOJ have been able to gather enough evidence to cobble together charges, the swindles move onto some other part of the system, the crooks cover over their tracks, reinvent themselves, put old wine in new bottles and new wine in old, and, in general, outpace the local flatfoots about 100-1, so that they’re nearly always playing catch-up and dissecting history, rather than actually safeguarding the public from the current perils of the market.
Goldman Sachs is the outrage du jour. But much of the really bad stuff Goldman’s been involved in over several decades has nothing to do with the technicality on which it’s being grilled now, a deal that’s no different from hundreds done on Wall Street by every other bank. Meanwhile, what about the dirty laundry of the hedge-funds, of private equity, of sovereign wealth funds – to take just the private sector? And what of the government’s own culpability in financial wrong-doing? And worse yet, its blunders in financial “right-doing”? Don’t count on the SEC to look at all that.
That’s the intrinsic problem of a statist solution…it’s always a day late and a dollar short.
Thus the LA Times reports on where the action is in the financial world, as evidenced in the glee of some participants at the Milken Institute’s Global Conference [that’s Michael Milken, former convicted junk bond financier turned philanthropist and alleged master mind of global market manipulation}:
“Unemployment is high and the housing market remains weak. But in Beverly Hills on Tuesday, private equity players could hardly be more upbeat.
A panel of private equity fund managers at the Milken Institute’s annual Global Conference celebrated the comeback of highly leveraged deals — which had ground almost to a halt during the financial crisis.
“What a difference a year makes,” enthused Leon Black, head of Apollo Management in New York.
Black and the other buyout honchos attributed the return of debt-financed acquisitions to the recovery in the credit markets and the overall economy.
“The high-yield market is probably better today than it ever has been,” said Scott Sperling, co-president of Thomas H. Lee Partners in Boston, referring to the junk bonds that finance many private equity transactions.
A new problem faces private equity investors now: The prices of target companies have shot up faster than fund managers have been able to scoop up bargains.
“A lot of the low-hanging fruit, frankly, is gone,” Black said. “The snapback has been unbelievably dramatic.”
Not surprisingly, the managers bemoaned what Black termed the “populist wave” helping to fuel the Obama administration’s effort to boost oversight of the financial industry.
“You’re seeing some wacky regulation, which makes running our business a lot more difficult,” said Ted Virtue, chief executive of MidOcean Partners, which buys midsize companies.
Still, the private equity business has largely escaped the scrutiny aimed at other areas of Wall Street. “I’m glad I’m not Goldman Sachs today,” Black said with a wide smile.”
From William Engdhal, “The Secret Financial Network Behind George Soros,” 1996 (Executive Intelligence Review):
[Note I: I mentioned Engdahl’s piece about Soros and Rothschild earlier, with the disclaimer that EIR is a Larouche outfit often labeled conspiracist and anti-Semitic, but nonetheless acknowledged to have produced good research. This piece, as I found it on the net, is not extensively sourced, which is why I’ve not previously linked it. However, having recently found old newspaper articles substantiating at least a part of the material, I’m going ahead and posting it.
Note II: Soros has a variety of interesting business associations. He has ties with Jim Rogers, through the Quantum Fund, which Rogers left to form his own group; with Rees-Mogg, the British journalist and Agora associate/writer; and with James Goldsmith, the Anglo-French financier, who was at one time Rees-Mogg’s primary financial backer. But, Goldsmith, a speculator and corporate raider in the 1980s, was vehemently opposed to GATT and the drive to globalize in teh 1990s, which seems to rather complicate the economic hit-man narrative. Rogers’ pronouncements, as much as I’ve followed them, often directly contradict Soros’ public statements.
Thus, in my opinion, while there could well be collusion at work among some (or even all) of these entities, from the record, at least, the situation is much muddier. For instance, if you look at what Goldsmith has to say about globalization in the 1990s, he is anti-agribusiness, anti-nuclear power, and anti-GATT. That diverges sharply from Engdahl’s general premise, which is best exemplified in the shock-doctrine advocated by Soros in Russia, via economist Jeffrey Sachs (the best account of which is by journalist Ann Williamson, who testified on the matter to Congress).
The truth is, many people advocate many kinds of things from ideology. That ideology is often shared by their business associates, since people with shared ideologies usually end up working in the same place. That doesn’t automatically mean they are all working hand-in-glove, or even know each other more than superficially. Even the joint ownership of a fund or corporation, unless it is over a long period of time, does not have to imply that the owners are all in agreement with each other’s financial goals. That said, there are suggestive connections noted in this piece that are relevant both to the debt crisis in Europe and to the ongoing manipulation of the markets, which is why I want to link the piece, despite the problems with it that I’ve noted.
Here’s an excerpt relevant to the situation in Poland:
“Poland: In late 1989, Soros organized a secret meeting between the “reform” communist government of Prime Minister Mieczyslaw Rakowski and the leaders of the then-illegal Solidarnosc trade union organization. According to well-informed Polish sources, at that 1989 meeting, Soros unveiled his “plan” for Poland: The communists must let Solidarnosc take over the government, so as to gain the confidence of the population. Then, said Soros, the state must act to bankrupt its own industrial and agricultural enterprises, using astronomical interest rates, withholding state credits, and burdening firms with unpayable debt. Once this were done, Soros promised that he would encourage his wealthy international business friends to come into Poland, as prospective buyers of the privatized state enterprises. A recent example of this privatization plan is the case of the large steel facility Huta Warsawa. According to steel experts, this modern complex would cost $3-4 billion for a western company to build new. Several months ago, the Polish government agreed to assume the debts of Huta Warsawa, and to sell the debt-free enterprise to a Milan company, Lucchini, for $30 million!.
Soros recruited his friend, Harvard University economist Jeffery Sachs, who had previously advised the Bolivian government in economic policy, leading to the takeover of that nation’s economy by the cocaine trade. To further his plan in Poland, Soros set up one of his numerous foundations, the Stefan Batory Foundation, the official sponsor of Sach’s work in Poland in 1989-90.
Soros boasts, “I established close personal contact with Walesa’s chief adviser, Bronislaw Geremek. I was also received by [President Gen Wojciech] Jaruzelski, the head of State, to obtain his blessing for my foundation.” He worked closely with the eminence gris of Polish shock therapy, Witold Trzeciakowski, a shadow adviser to Finance Minister Leszek Balcerowicz. Soros also cultivated relations with Balcerowicz, the man who would first impose Sach’s shock therapy on Poland. Soros says when Walesa was elected President, that “largely because of western pressure, Walesa retained Balcerowicz as minister.” Balcerowicz imposed a freeze on wages while industry was to be bankrupted by a cutoff of state credits. Industrial output fell by more than 30% over two years.
Soros admits he knew in advance that his shock therapy would cause huge unemployment, closing of factories, and social unrest. For this reason, he insisted that Solidarnosc be brought into the government, to help deal with the unrest. Through the Batory Foundation, Soros coopted key media opinion makers such as Adam Michnik, and through cooperation with the U.S. Embassy in Warsaw, imposed a media censorship favorable to Soros’s shock therapy, and hostile to all critics.
Russia and the Community of Independent States (CIS): Soros headed a delegation to Russia, where he had worked together with Raisa Gorbachova since the late 1980s, to establish the Cultural Initiative Foundation. As with his other “charitable foundations,” this was a tax-free vehicle for Soros and his influential Western friends to enter the top policymaking levels of the country, and for tiny sums of scarce hard currency, buy up important political and intellectual figures. After a false start under Mikhail Gorbachov in 1988-91, Soros shifted to the new Yeltsin circle. It was Soros who introduced Jeffery Sachs and shock therapy into Russia, in late 1991. Soros describes his effort: “I started mobilizing a group of economists to take to the Soviet Union (July 1990). Professor Jeffery Sachs, with whom I had worked in Poland, was ready and eager to participate. He suggested a number of other participants: Romano Prodi from Italy; David Finch, a retired official from the IMF [International Monetary Fund]. I wanted to include Stanley Fischer and Jacob Frenkel, heads of research of the World Bank and IMF, respectively; Larry Summers from Harvard and Michael Bruno of the Central Bank of Israel.”
Since Jan. 2, 1992, shock therapy has introduced chaos and hyperinflation into Russia. Irreplaceable groups from advanced scientific research institutes have fled in pursuit of jobs in the West. Yegor Gaidar and the Yeltsin government imposed draconian cuts in state spending to industry and agriculture, even though the entire economy was state-owned. A goal of a zero deficit budget within three months was announced. Credit to industry was ended, and enterprises piled up astronomical debts, as inflation of the ruble went out of control.
The friends of Soros lost no time in capitalizing on this situation. Marc Rich began buying Russian aluminum at absurdly cheap prices, with his hard currency. Rich then dumped the aluminum onto western industrial markets last year, causing a 30% collapse in the price of the metal, as western industry had no way to compete. There was such an outflow of aluminum last year from Russia, that there were shortages of aluminum for Russian fish canneries. At the same time, Rich reportedly moved in to secure export control over the supply of most West Siberian crude oil to western markets. Rich’s companies have been under investigation for fraud in Russia, according to a report in the Wall Street Journal of May 13, 1993.
Another Soros silent partner who has moved in to exploit the chaos in the former Soviet Union, is Shaul Eisenberg. Eisenberg, reportedly with a letter of introduction from then-European Bank chief Jacques Attali, managed to secure an exclusive concession for textiles and other trade in Uzbekistan. When Uzbek officials confirmed defrauding of the government by Eisenberg, his concessions were summarily abrogated. The incident has reportedly caused a major loss for Israeli Mossad strategic interests throughout the Central Asian republics.
Soros has extensive influence in Hungary. When nationalist opposition parliamentarian Istvan Csurka tried to protest what was being done to ruin the Hungarian economy, under the policies of Soros and friends, Csurka was labeled an “anti-Semite,” and in June 1993, he was forced out of the governing Democratic Forum, as a result of pressure from Soros-linked circles in Hungary and abroad, including Soros’s close friend, U.S. Rep. Tom Lantos.”