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The victory of Conservatives in UK general elections has sparked hot debates among experts about the democratic nature of its political system and economic prospect.
One of the main points which is repeated in most debates is that the austerity measures would continue in the next five years.
“Obviously we had a 5 year coalition government where at least some of the extreme right-wing policies of the conservative party was controlled and managed by the Lib Dems. What we are likely to see is that the austerity measures now are taking a full speed,” London-based commentator Shabbir Razvi told Press TV.
He blamed the Conservatives politicians for not briefing the nations over the budgets allocated for various fields saying:” What we have is that austerity measures will continue unabated and really what this reflects is that Britain is very much a democracy, or a form of democracy, which can be bought by money.”
According to Razvi, at the end of last year, the electoral commission found that Tories received the largest amount of donations at 8 billion, the bulk of which came from financial associates in banks, different industries and business.
The analyst said the Tories are now going to follow the agenda of big corporations, big businesses saying what big corporations want is to create a sort of jargon and euphemistically it is called to create a competitive environment.
“What the multinational corporations want is that vast majority of the people in the UK to be working at a very minimum wage so that the corporations make bigger and bigger profits and at the same time cuts and the privatization of the national health service, cuts and the privatization of the police service, the fire service, and so on,” he noted.
He then referred to the relatively low turnout in the general elections saying out of the 45 million people who were eligible for vote, only 30 million voted.
“That means the largest party that didn’t participate in the elections was the non-voters and the conservative party only got 35 percent of the popular vote, he said.
Razvi slammed the form of democracy in the UK saying that it appears that the form of democracy that is being practiced in the UK, the mother of all democracies, is not really quite democratic as it is run by big businesses, big media tycoons, and the rich and the wealthy.
The movement to break away from Wall Street and form publicly-owned banks continues to gain momentum. But enthusiasts are deterred by claims that a state-owned bank would violate constitutional prohibitions against “lending the credit of the state.”
California’s constitution is typical. It states in Section 17: “The State shall not in any manner loan its credit, nor shall it subscribe to, or be interested in the stock of any company, association, or corporation . . . .”
The language sounds prohibitive, but what does it mean? Hundreds of state and local government entities extend the credit of the state. State agencies make student loans, small business loans, and farm loans. State infrastructure banks explicitly leverage the credit of the state. Legally, state and local governments are extending their credit to private banks every time they deposit their revenues in those banks. When money is deposited, it becomes the property of the bank by law. The depositor becomes a creditor with an IOU or promise to be repaid. The state or local government has thus lent its money to the bank.
How can these blatant extensions of the state’s credit be reconciled with the constitutional prohibitions against the practice?
North Dakota’s constitution has particularly strong language. Article 10, Section 18, provides:
The state, any county or city may make internal improvements and may engage in any industry, enterprise or business, not prohibited by article XX of the constitution, but neither the state nor any political subdivision thereof shall otherwise loan or give its credit or make donations to or in aid of any individual, association or corporation except for reasonable support of the poor, nor subscribe to or become the owner of capital stock in any association or corporation.
Yet this prohibition has not prevented the state from establishing its own bank. Currently the nation’s only state-owned depository bank, the Bank of North Dakota has been a stellar success and has been going strong ever since 1919. In Green vs. Frazier, 253 U.S. 233 (1920), the US Supreme Court upheld the bank’s constitutionality against a Fourteenth Amendment challenge and deferred to the state court on the state constitutional issues, which had been decided in the state’s favor.
In the nineteenth century, Mississippi, Arkansas, Florida, Kentucky, and Indiana all had their own state-owned banks. Some were extremely successful (Indiana had a monopoly state-owned bank). These banks, too, withstood constitutional challenge at the US Supreme Court level.
Were the prohibitions against “lending the credit of the state” simply ignored in these cases? Or might that language have meant something else?
The Constitutional Ban on “Bills of Credit”: Colonial Paper Money
Constitutional provisions against lending the state’s credit go back to the mid-nineteenth century. California’s is in its original constitution, dated 1849. There was then no national currency, and the National Bank Act had not yet been passed.
Several decades earlier, the states had been colonies that issued their own currencies in the form of paper scrip. Typically called “bills of credit”, these paper bills literally involved the extension of the colony’s credit. They were credit vouchers used by the colony to pay for goods and services, which were good in trade for an equivalent sum in goods or services in the marketplace.
Prior to the constitutional convention in the summer of 1787, the colonies exercised their own sovereign power over monetary matters, including issuing their own paper money. After the collapse of the Continental currency during the Revolutionary War, largely due to counterfeiting by the British, the framers were so afraid of paper money that they expressly took that power away from the colonies-turned-states, and they failed to expressly give it even to the federal government. Article I, Section 10, of the U.S. Constitution provides:
No State shall . . . coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; . . . .
Congress was given the power “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.” But language authorizing Congress to “emit Bills of Credit” was struck out after much debate.
The Supreme Court ruled in the Legal Tender Cases after the Civil War that the power to coin money implied the power to print money under the Necessary and Proper Clause, legitimizing the Greenbacks issued by President Lincoln. But in 1850, no state government had the power to extend its own credit in the form of bills of credit or paper money, and whether the federal government had that power was a subject of debate.
However, the expanding economy needed a source of freely-expandable currency and credit, and when local governments could not provide it, private banks filled the void. They issued their own “bank notes” equal to many times their gold holdings, effectively running their own private printing presses.
Was that constitutional? No. The Constitution nowhere gives private banks the power to create the national money supply – and today, private banks are where virtually all of our circulating money supply comes from. Congress ostensibly delegated its authority to issue money to the Federal Reserve in 1913; but it did not delegate that authority to private banks, which have only recently admitted that they do not lend their depositors’ money but actually create new money on their books when they make loans. In the Bank of England’s latest Quarterly Bulletin, it states:
Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.
This broad exercise of the money power by private banks is nowhere to be found in our federal or state constitutions, but courts have managed to get around that wrinkle. In Constitutional Law in the United States, Emlin McClain summarizes the case law like this:
A state cannot, even for the purpose of borrowing money, exercise the sovereign power of emitting paper currency (Craig v. Missouri). But this prohibition does not interfere with the power of a state to authorize banks to issue bank notes in the form of due-bills or of similar character, intended to pass as currency on the faith and credit of the bank itself, and not of the state which authorizes their issuance.
The anomalous result is that state-chartered banks are able to issue credit that passes as currency, while state governments are not. But so the cases hold, and they apply to public banks as well as private banks.
Public Banks Held Constitutional
John Thom Holdsworth wrote in Money and Banking (1937) that in the mid-nineteenth century, “several of the states established banks owned entirely or in part by the state. There was some question as to the right of these state institutions to issue circulating notes, but the Supreme Court held that such notes were not ‘bills of credit’ within the meaning of the constitutional prohibition.”
In Briscoe v. Bank of Kentucky, 36 U.S. 257 (1837), the Court observed that the charter of the challenged Kentucky state bank contained “no pledge of the faith of the state for the notes issued by the institution. The capital only was liable; and the bank was suable, and could sue.” The Court “upheld the issuance of circulating notes by a state-chartered bank even when the Bank’s stock, funds, and profits belonged to the state, and where the officers and directors were appointed by the state legislature.”
The Court narrowly defined the sort of “bill of credit” prohibited by Article 1, Section 10, as a note issued by the state, on the faith of the state, designed to circulate as money. Since the notes in question were redeemable by the bank and not by the state itself, they were not “bills of credit” for constitutional purposes. The Court found that the notes were backed by the resources of the bank rather than the credit of the state. Moreover, the bank could sue and be sued separate from the state.
These cases are still good law. A state bank – or city bank or county bank – is not in violation of state constitutional prohibitions against lending the credit of the state.
Other Ways to Avoid Constitutional Challenge
In light of those Supreme Court cases, it hardly seems necessary for a city to become a chartered city before establishing its own publicly-owned bank; but that is another way to circumvent this debate. The California Constitution gives cities the power to become charter cities; and while General Law Cities are bound by the state constitution, cities organized under a charter have broad autonomy. They can bypass large swaths of state law, including asserting their independence from the state’s supposed restrictions on lending.
For county-owned banks, the case is not as clear. In California, Government Code 23005 forbids counties from giving their “credit to or in aid of any person or corporation. An indebtedness or liability incurred contrary to this chapter is void.” But the US Supreme Court rulings validating state banks should be equally applicable to county banks; and in any case, enabling legislation can be crafted to allow public banks at any level of government.
There is another way to bypass this whole legal debate: by pursuing the initiative and referendum process pioneered in California. It allows state laws to be proposed directly by the public, and the state’s Constitution to be amended either by public petition (the “initiative”) or by the legislature with a proposed constitutional amendment to the electorate (the “referendum”). In California, the initiative is done by writing a proposed constitutional amendment or statute as a petition, which is submitted to the Attorney General along with a modest submission fee. The petition must be signed by registered voters amounting to 8% (for a constitutional amendment) or 5% (for a statute) of the number of people who voted in the most recent election for governor.
Before sufficient signatures could be collected, a widespread educational campaign would need to be mounted; but just informing the public on this little-understood subject could be worth the effort. Recall the words of Henry Ford:
It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
When enough people understand that private banks rather than governments create our money supply, imposing interest and fees that constitute an enormous unnecessary drain on the economy and the people, we might wake up to a new day in banking, finance, and the return of local economic sovereignty.
Ellen Brown is an attorney, founder of the Public Banking Institute, and a candidate for California State Treasurer running on a state bank platform. She is the author of twelve books, including the best-selling Web of Debt and her latest book, The Public Bank Solution, which explores successful public banking models historically and globally.
Filed under: Ellen Brown Articles/Commentary
761. Oct. 6-9, speaker, Praxis Peace Institute conference, THE ECONOMICS OF SUSTAINABILITY-Emerging Models for a Healthy Planet, Cowell Theater, Fort Mason, San Francisco
760. July 29-Aug. 5. Moving Beyond Capitalism conference, San Miguel de Allende, Mexico
759. July 9, speaker, 2014 Annual Conference of the Council of Georgist Organizations, Inc., Radisson Newport Beach Hotel, near the Orange County John Wayne Airport, 9:15 a.m. PT
758. May 26, interview, Wealth DNA Radio Show, Blog Talk Radio, wealthdna.us, noon EST
757. May 10, United We Stand Festival, Pauley Pavilion, UCLA,
756. May 1, interview with Stephen Lendman, The Progressive Newshour, 9 a.m. PDT
755. April 29, moderator, Great Minds #66 with Nomi Prins, Los Angeles, CA., 7 pm PT
754. April 23, Ellen interviews Nomi Prins on It's Our Money. Listen to archive here.
753. April 21, interview with Robert Stark and Jeff Crow, Valley Talk Live, centralvalleytalk.com, Fresno, 4:30 PT
752. April 17, interview Dr. Rima Truth Reports, with Dr. Rima Laibow, 10 pm EST
751. April 17, interview with Greg Hunter, USAWatchdog.com, 11:30 EST
750. April 8, It's Our Money with Ellen Brown, interiews Kevin Zeese and Margaret Flowers. Listen to archive here.
749. April 8, interview with Alan Butler, Butler on Business, Liberty Express Radio, 11:30 AM EDT
748. April 3, interview with Stephen Lendman, The Progressive Newshour, 9 a.m. PDT
747. April 3, interview with James Banks, KGNU radio, Boulder, CO, 5 p.m. PT
746. April 2, interview, WHDTWorldNews, Nextnewsnetwork.com, 10:30 a. m. PDT
745. March 26, 1 pm PDT, It’s Our Money with Ellen Brown. Ellen interviews Prof. ROBERT HOCKETT--fascinating background material for understanding the banks' role in the foreclosure mess and the eminent domain solution. Listen to the archive here.
744. March 24, interview with Kevin Zeese JD and Margaret Flowers MD, Clearing the FOG on We Act Radio, 1480 AM Washington, DC, 8 a.m. PDT
743. March 23rd, "Banking for the People—Not for Wall Street," Agenda for a Prophetic Faith Lecture Series, Claremont United Methodist Church, 211 W. Foothill Blvd., Claremont, CA 91711, http://www.claremontumc.org/, 7 pm PT
742. Apr. 13, Interview with Chris Moore, KDKA Pittsburgh, 5 pm EST
741. March 18, 2 pm, Democratic Club, Friendly Valley Conference Room, Newhall, CA.
740. March 13, interview with Fred Smart, American Underground Network, 8 pm, CDT
739. March 12, 12 pm PDT, It's Our Money radio show with Ellen Brown, featuring Prof. TIM CANOVA on the Federal Reserve. Listen to archive here.
738. March 4, interview with Tom Kiely, INN World Report, 4:30 PST
737. Feb. 23, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST
736. Feb 20, interview with Bill Deller, 3CR radio, Melbourne, Australia, 3 pm, PST
735. Feb. 17, interview, Strike Debt Bay Area, KPFA, Berkeley, 2 pm (?) PST
734. Feb16, interview with Gary Dubin, The Foreclosure Hour (http://www.foreclosurehour.com/the-host.html), 5 pm PST
733. Feb. 11, interview with Clint Richardson, RBN 5 pm PST
732. Feb 9, interview with Stephen Golden, DEFENDING THE AMERICAN DREAM, KABC Los Angeles, 6 am, PST Listen to the archive here.
731. Feb. 6, interview, Move to Amend Reports, http://www.blogtalkradio.com/movetoamend, 5 pm PST
730. Feb. 5, interview with Sinclair Noe, Financial Review, MoneyRadio.com, 9:30 am PST
729. January 30, interview, Kerry Lutz - Financial Survival Network, 12 pm EST
728. January 30, interview with Tom Kiely, INN World Report, 4:30 PST
727. January 29, interview on Latin Waves, 8 pm PST
726. January 28, Green Party Shadow Cabinet response to State of the Union Speech. http://www.livestream.com/greenpartyus 6 pm PST
725. January 26, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST. Listen here.
724. January 23, interview, The Tim Dahaney Show, 12 noon PST. Listen here.
723. January 22, interview with Utrice Leid, "Leid Stories,", PRN.FM, 1 pm EST
722. January 21, interview, Independent Underground Radio LIVE, 9:15 PST. Listen here.
721. January 12, Open Forum with Green Party candidates Luis Rodriguez, Laura Wells and Ellen Brown, hosted by LULAC (League of United Latin American Citizens) 11277 GARDEN GROVE BLVD., Garden Grove, CA. 2-4 pm
719. January 8, interview, The Tim Dahaney Show, 12 noon PST. Listen here. (It's the one labelled "Take the Fed Reserve Public.")
718. Jan 7, interview, The Burt Cohen Show, 12 noon ET
717. Dec. 30, interview, Stuart Vener Tells It Like It Is, see http://stuartvener.com for stations, 11:30 am EST
716. Dec. 26, interview Dr. Rima Truth Reports, with Dr. Rima Laibow and Ralph Fucetola, 10 pm EST
715. Dec. 21, interview, KPRO Radio San Francisco, 9:30 am PST
714. Dec. 18, interview, The Power Hour with Joyce Riley, 8 a.m. CT
713. Dec. 18, interview, Unwrapped Radio, WRFG, http://www.tuneinradio.com/, 12:40 EST
712. Dec. 15, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST, listen here.
711. Dec. 15, presentation, A Public Bank for Mendocino, at the Crown Hall in Mendocino, Ca., 7 pm
710. Dec. 15, presentation, Why We Need to Own Our Own Bank, Mendocino Environmental Center
106 West Standley, Ukiah, CA 95482, 2 pm
709. Dec. 14, presentation, Why We Need to Own Our Own Bank, Little Lake Grange, Willits, Ca. 7 pm
708. Dec. 13, interview on All About Money, KZYX radio, 9 a.m. PST
707. Dec. 13, interview, Radio Islam, WCEV 1450 AM, 12:05 pm, CST
706. Dec. 12, appearance with Doug McKenty, "The Shift," Mendocino TV, 4:30 pm PST
705. Dec. 11, interview on WHDT World News, http://NNN.is/on-WHDT, 5:30 and 11:00 pm EST. Watch the archive here.
704. Dec. 11, interview, WORT Community Radio, Madison, Wisconsin, 6:10 a.m. PST
703. Dec. 11, interview with Sinclair Noe, Financial Review, MoneyRadio.com, 10:30 PST
702. Dec. 9, UnWrapped Radio, Atlanta, 1 pm PST.
701. Dec. 9, GOHarrison, KPFK Los Angeles, 3:30 pm PST.
700. Dec. 9, interview, Air Cascadia show, KBOO radio, Portland, 10 am PST
699. Dec. 5, interview, WHDT World News TV, 2 pm PST
698. Dec. 4, interview with David Swanson, talknationradio, 7pm PST
697. Dec. 4, interview with Rob Kall, The Rob Kall Bottom-Up Radio Show, 1360 AM, 7:30 pm EST
696. Dec. 3, interview with Kim Greenhouse, It's Rainmaking Time, listen here.
695. Dec. 2, interview with Val Muchowski, Women's Voices, KZYX, 7 p.m. PST
694. Nov. 29, interview with Gregg Hunter, USAWatchdog.com, 11:30 PST
693. Nov. 16, interview This is Hell! radio show, WNUR 89.3 fm, thisishell.com/live, 11.20 a.m. EST. Listen to archive here
692. Nov. 15, interview with George Berry, The Financial News Network Show, truthfrequencyradio.com, 1 pm PST
691. Nov. 14, interview with Stanley Montieth, The Doctor Stan Show, Radio Liberty, 4 pm PSTf
690. Nov. 14, interview with Neil Foster, Reality Bytes show, Awake Radio (UK), Shazziz Radio (US), 8 pm UK time.
689. Nov. 13, interview with Bonnie Faulkner, KPFA, Los Angeles. Listen to archive here.
688. Nov. 12, interview with Tom Kiely, INN World Report, 4:30 PST
687. Nov. 11, interview, Between the Lines News Magazine, WPKN radio, Bridgeport, CT, 9 p.m. ET. Listen to archive here
686. Nov. 10, skype participant, forum at the Putrajaya International Islamic Arts and Cultural Festival, "Global Economic and Monetary Crisis: What Needs to be Done?" Putrajaya, Malaysia, 11 a.m. MYT, 7 pm, Nov. 9 PST
685. Nov. 3, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST
684. Oct. 31, interview with Voice of Russia radio, American edition, 2:30 pm, CET (Central Europe Time.) Listen to archive here.
683. Oct. 23, interview with Daniel Estulin on RT tv
682. Oct. 16, interview with Per Fereng, KBOO radio, Portland, 11 am PST
681. Oct. 15, presentation, "The Public Banking Forum in Ireland," 7-9 PM, Hudson Bay Hotel, Athlone, Ireland.
680. Oct. 14, presentation, Cork, Ireland
679. Oct. 12, presentation, "The Public Banking Forum in Ireland," 2-4 PM, Springfield Hotel in Leixlip, County Kildare, Ireland. Information on these three events here.
678. October 4, interview with Bill Deller, 3CR radio, Melbourne, Australia, 2:30 pm, PST
677. Oct. 3, interview with Joyce Riley, the Power Hour. Listen to archive here.
676. Oct. 1, interview with Tom Kiely, INN World Report 7:30 EST
675. Sept. 29, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST
674. Sept. 27, interviw with Kevin Barrett, AmericanFreedomRadio.com, NoLiesRadio.org:
http://TruthJihadRadio.blogspot.com, 2 pm PST
673. Sept. 19, interview, The Gary Null Show, 9:30 a.m. Pacific
672. Sept. 19, Interview on the Global Research News Hour with Michael Welch--check site for time and archive.
671. Sept. 18, interview with David Sierralupe, Occupy Radio, KWVA, 88.1 FM, Eugene
670. Sept. 15, interview with Niall Bradley, Sott Talk Radio, sott.net, 2 p.m. EST
669. Sept. 14, interview FDLBookSalon, firedoglake.com, 5pm EST
668. Sept. 10, "Turning Hard Times into Good Times" with Jay Taylor, VoiceAmerica, 12:30 pm PST. Listen to archive here.
667. Sept. 9, interview with Ken MacDermotRoe and Del LaPietro, In Context Report, 9 am PST. Listen to archive here.
666. Sept 7, interview with Valerie Kirkgaard, WakingUpInAmerica.com, 6 am, PST. Listen here.
665. Sept. 6, Interview with Al Korelin, The Korelin Economics Report, 12:30 pm PST
664. Sept. 5, discussion of how to bring public banking to Colorado on "It's the Economy, Stupid," KGNU, Boulder, 5 p.m. PST
663. Sept. 5, interview with Patrick Timpone, oneradionetwork.com, 8 a.m. PST
662. Sept. 3, interview (along with Elliott Spitzer?), "Turning Hard Times into Good Times" with Jay Taylor, VoiceAmerica, 1 pm PST Listen to archive here.
661. Sept. 3, interview with Jeanette LaFeve, The People Speak, 6 pm PST
660. Aug. 25, Stephen Lendman, Progressive Radio News Hour, 10 am, PDT
659. Aug. 22, interview with Christopher Greene, AMTV Radio, simulcast in audio/video over GoogleHangouts and American Freedom Radio, 1 p.m. PST
658. Aug. 22, interview, TheAndyCaldwellShow.com,
CalChronicle.com, 3 pm PST
657. Aug. 21, interview with Merry and Burl Hall, blogtalkradio.com/envision-this, 5 pm PST
656. Aug. 21, interview with Lori Lundin, America's Radio News Network, 10:30 a.m. ET.
655. Aug. 16, interview with Sinclair Noe, Moneyradio.com, 4 pm PST
654. Aug. 15, interview with Justine Underhill, Prime Interest, Russia Today TV, 1:30 pm PST
653. Aug 14, interview with Jim Goddard, This Week in Money, 4 pm, PST. Listen to archive here, starting at minute 32.
652. Aug. 14, interview with Mary Glenney, WMNF 88.5, 10 a.m. PST
651. Aug. 14, interview with Chuck Morse, irnusaradio.com, 8 am, PST
650. Aug. 13, interview with Thomas Taplin, Dukascopy TV, Switzerland, 9 am PST
649. Aug 7-11, Madison Democracy conference, https://democracyconvention.org/
648. Aug. 6, radio interview, INN World Report with Tom Kiely, http://feeds.feedburner.com/INNWorldReportRadio 4:30 PST
647. Aug 5, interview with Arnie Arnesen, 94.7 fm, Concord, NH, 9 am PST
646. Aug 3, interview with Diane Horn, Mind Over Matter show, KEXP radio, 90.3 FM, Seattle, 7:00 a.m. PST
645. July 31, interview with Mike Beevers, KFCF Fresno, 4:30 pm PST
644. July 28, Stephen Lendman, Progressive Radio News Hour, 10 am, PDT
643. July 2, interview with Charlie McGrath, Wide Awake News, 6-7 pm PDT.
642. July 2, interview with Arnie Arnesen, 94.7 fm, Concord, NH, 12:30 EST.
641. June 30, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PDT. Listen to archive here.
640. June 24, interview on RT tv re student debt, 10:30 am PST
639. June 17, interview on The Andy Caldwell Show, 3:30 pm PST
638. June 16, interview with Jason Erb, 5 pm Pacific
637. June 13, interview with Paul Sanford, "Time 4 Hemp-LIVE," http://www.AmericanFreedomRadio.com, 10 am, PST
636. June 6 presentation with Jamie Brown at the Mt. Diablo Peace and Justice Center in Walnut Creek. Info at Favors.org, 7 to 9 pm
635. June 1, interview with Kris Welch, KPFA Los Angeles, 10 am PST
634. May 28, interview with Malihe Razazan, "Your Call" radio, KALW, San Francisco, 10 am PST.
633. May 26, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PDT
632. May 23 interview with Simit Patel, InformedTrades.com (youtube) 3:30 pm PST
631. May 22, Thousand Oaks, 3 expert panel, "A Parachute For the Fiscal Cliff," University Village 2-4 pm
630. May 22, interview with Jack Rasmus, 11 am PST. Enjoy the interview here.
629. May 22, Guns and Butter show, KPFA, http://www.kpfa.org/archive/id/91790
628. May 14, interview with Charlie McGrath, Wide Awake News, 6-7 pm PDT.
627. May 13, live appearance on RTTV, 3 pm PST Watch it here.
626. May 8, interview with Valli Sharpe-Geisler, Silicon Valley Voice, KKUP, 3 pm PST
625. May 8, interview, the Meria Heller Show, 11 am PST
624. May 4, interview, Latin Waves with Sylvia Richardson, 10 am PST
623. April 30, Jay Taylor, VoiceAmerica, 1 pm PST
622. April 29, interview with Rob Kall, Bottom Up Radio, 9 am Pacific
Listen to archive here.
621. April 28, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PDT
620. April 25, interview, the the Dr. Katherine Albrecht Show, 5 pm EDT
619. April 17, interview with Mike Harris, rense.com, 1 pm PDT
618. April 16th, speaker, Valley Democrats United (Democratic Party of San Fernando Valley), Van Nuys, Ca. 7-9pm
617. April 13, interview with Darren Weeks, Govern America, noon Eastern, listen here
616. April 9, interview with Charlie McGrath, Wide Awake News, 6-7 pm PDT.
615. April 6, phone conference, Justice Party, http://www.justicepartyusa.org/public_banking_conference_call, 9 a.m.
614. April 5, interview, Butler on Business, 11 a.m. EDT
613. April 3, interview with Michael Welch, Global Research News Hour, 8:30 a.m. PDT
612. April 2, interview with Jay Taylor, VoiceAmerica, 12:30 PDT. Listen here.
611. April 1, interview with Brannon Howse, www.worldviewradio.com, 11 a.m. PDT
610. April 1, interview with Scott Harris, Counterpoint,
WPKN Radio, 8:30 pm, ET Listen to archive here.
609. April 1, interview with Margaret Flowers and Kevin Zeese. Watch and listen to archive here, starting at minute 50. Articles based on the interview are at Truthout.org.
608. March 31, interview with Jason Erb, Exposing Faux Capitalism, Oracle Broadcasting, 11 a.m. Pacific
607. March 31, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PDT Listen to the archive here.
606. March 29, interview, The Gary Null Show, 9:30 a.m. Pacific
605. March 28, interview with Stan Monteith, radioliberty.com, 9 pm PDT
604. March 28, radio interview, INN World Report with Tom Kiely, http://feeds.feedburner.com/INNWorldReportRadio 4:30 PDT
603. March 27, interview with Charlie McGrath, Wide Awake News, 6-7 pm PdT.
602. March 27, interview with Jack Rasmus on PRN, 11 a.m. PDT
601. March 25, interview on the Richard Kaffenberger show, KTOX, Needles, CA. 3:15 PDT
600. March 22, newly available archived radio interview, Mandelman Matters. Listen here.
599. March 22, interview with James Fetzer, The People Speak Radio, 5-7 pm PDT
598. March 22, interview , Our Times With Craig Barnes, KSFR radio, Santa Fe, 10 a.m. MST
597. March 12, interview, Crisis of Reality with Doug Newberry, oraclebroadcasting.com, 1pm EST.
596. March 11, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PST
595. March 9, Interview with Sylvia Richardson, Latin Waves, CJSF 90.1FM, 9:30 am PST
594. March 6, interview with Charlie McGrath, wideawakenews.com, 6pm PST. Watch and listen here.
593. March 3, interview with Lateef Kareem Bey, Fix Your Mortgage Mess, 4 pm PST
592. March 2, Interview with Stuart Richardson, Latin Waves, CJSF 90.1FM, 11 am PST
591. Feb. 27, interview with Jim Banks, KGNU, Boulder, 12 pm PST
590. Feb 27, interview with Sinclair Noe, Financial Review, 10 am PST
589. Feb. 25, interview, Crisis of Reality with Doug Newberry, oraclebroadcasting.com, 1pm EST.
588. Feb. 6, Interview with Phil Mackesy, This Week in Money, TalkDigitalNetwork.com, 11 am PST. Listen to the archive here: http://talkdigitalnetwork.com/2013/02/this-week-in-money-70/
587. Feb. 4, interview with Ken Rose, What Now radio show, KOWS RADIO OCCIDENTAL 107.3 FM, 11 am PST.
586. Jan. 31, interview with Tom Kiely, INN World Radio Report, 5:00 pm PST
585. Jan. 27, interview with Stephen Lendman, progressive radio
network, 10 am PST
584. Jan. 23, interview on KPFK, 8pm PST
583. Jan. 22, interview, Crisis of Reality with Doug Newberry, oraclebroadcasting.com, 1pm EST.
582. Jan. 3, interview with Mary Glenney, WMNF 88.5, Tampa, 3 pm EST
581. Jan. 2, interview, The Bev Smith Show, thebevsmithshow.net, 5 pm PST
--- 2012 ---
580. Dec. 27, video interview with Charlie McGrath, Wide Awake News, listen and watch here.
579. Dec. 24, October talk at First Unitarian Church in Portland aired on KBOO radio, http://kboo.fm/, 8:00 am PST
578. Dec. 24, interview with Ron Daniels, the WWRL Morning Show with Mark Riley, wwrl1600.com, 5:05 am PST
577. Dec. 21, interview with Andy Caldwell, TheAndyCaldwellShow.com, KZSB AM1290 Santa Barbara / Ventura and KUHL AM1440 Santa Maria / San Luis Obispo, 3:30 pm PST
576. Dec. 20, interview with Fred Smart, aunetwork.tv, 9 pm EST
575. Dec. 19, interview, Crisis of Reality with Doug Newberry, oraclebroadcasting.com, 1pm EST. Listen here.
574. Dec. 19, interview with Dr. Jack Rasmus, Alternative Visions, Progressive Radio Network, 2 pm EST
573. Dec. 17, The Bev Smith Show, thebevsmithshow.net, 4 pm PST
572. Dec. 15, interview with Stephen Lendman, progressive radio network, 10 am PST. Listen here.
571. Dec. 14, interview with Craig Barnes, Our Times With Craig Barnes, KSFR radio, 9 am PST Listen to the archive here.
570. December 9th, speaker, Mayo Arts Center (10 Mayo Street) in Portland, ME
569. Dec. 7, Vermont's New Economy conference, Vermont College of the Find Arts, Montpelier, VT, 9 am to 4 pm and reception at 4:30. $25
www.global-community.org/neweconomy to register
568. Dec. 5, speaker, Pennsylvania Public Bank Project's Forum on Public Banking, at the David Library of the American Revolution, Washington Crossing, PA, 7pm
567. Nov. 26-27, 3rd Annual World Conference on Riba, Kuala Lumpur, Malaysia
566. Nov. 22, presentation before Royal Scottish Academy -- "A Public Bank for Scotland" (here), Riddle's Court, 322 Lawnmarket, Edinburgh EH1 2PG Scotland, 6 pm
565. Nov 8, Healthy Money Summit, speaking with Hazel Henderson at 1-2 pm PST, information here.
564. Sunday, Oct. 28, Keynote Speaker; The Buck Starts Here, 2:00pm, sponsored by the Kairos Occasional Speakers Series & OFOR, Kairos Milwaukie UCC, Milwaukie, OR.
563. Saturday, Oct. 27, Keynote Speaker; OFOR Saturday Symposium: The Buck Starts Here, 10am - 3pm, Molalla, OR
562. Friday-Sunday, Oct. 26-28, Keynote Speaker; Oregon Fellowship of Reconciliation Fall Retreat - The Buck Starts Here, Camp Adams, Molalla, OR, Friday, 5pm- Sunday 12 noon
561. Friday, October 26, Invited Commentator; screening of “HEIST” (new documentary about the roots of the American economic crisis), sponsored by First Unitarian Church of Portland's Economic Justice Action Groups, Alliance for Democracy, KBOO, Move to Amend, 7:00pm, First Unitarian Church, Portland, OR
560. (Oct. 25-28, Bioneers Conference, Portland, OR)
Oct. 25, Keynote Speaker; sponsored by Portland Fellowship of Reconciliation (PFOR) and the First Unitarian Church of Portland's Economic Justice and Peace Action Groups, 7:00-8:30pm, First Unitarian Church, Portland, OR
559. Oct. 24, interview with Per Fagereng, KBOO radio, Portland, 9 am PST
558. Oct. 24, KPFA "Guns and Butter" interview. Listen to archived show here.
557. Oct. 21, speaker at BBQed Oysters and Beer Fundraiser Party for PBI, San Rafael, CA, 4 pm PST
556. Oct. 14, Live Gaiam tv interview appearance. Watch it here free at 7pm EST.
555. Oct. 12, interview with Matt Rothschild of The Progressive, 10 a.m. Central time
554. October 11-14, speaker, Economic Democracy Collaborative, Madison, Wisconsin
553. Oct. 11, radio interview with Norm Stockwell, WORT, 12 pm CST
552. Oct. 9, interview with Kevin Barrett, No Lies Radio, listen to archive here.
551. Oct. 8, interview, "Mountain Hours Revolution Radio" with Wayne Walton, on RBN, 12-1 pm PST
550. Oct. 7, interview with Lloyd D'Aguilar, "Looking Back Looking Forward", http://lookingbacklookingforward.com/, 2 pm EST
549. Sept. 26, interview with Douglas Newberry, markettoolbox.tv, 1pm EST. Listen here.
548. Sept. 25, interview with Dr. Stanley Montieth, radioliberty.com, 3pm PST
547. Sept. 24, interview with Charlie McGrath, Wide Awake News, 6-7 pm PST.
546. Sept. 22, interview with Stephen Lendman, progressive radio network, 10 am PST
545. Sept. 17 interview along with Hazel Henderson, National Teach In for Occupy Wall Street, http://www.livestream.com/owshdtv 5pm EST
544. Sept. 10, interview with Thomas Taplin, Dukascopy TV (Switzerland), 7 am PST Watch and listen here
543. Sept. 7, interview with Mike Harris, republicbroadcasting.org, 6 am PST
542. Sept. 6, interview with Douglas Newberry, markettoolbox.tv, 1pm EST. Listen here.
540. Aug 26, interview with Stephen Lendman, progressive radio network, listen to archive here.
539. August 21, interview with Charlie McGrath, wideawakenews.com. Listen to archive here.
538. Aug 20, interview with Kim Greenhouse, It's Rainmaking Time, listen here.
537. Aug 16, interview with Mike Harris, republicbroadcasting.org, 6 am PST
536. Aug. 14, interview, TheAndyCaldwellshow.com, 4:30pm PST
535. August 13, interview with American Free Press, 1 pm PST
534. July 24, interview along with Victoria Grant, The People Speak, 6pm, PST
533. July 24, interview with Kevin Barrett, NoLiesRadio.org, 9 am PST
532. July 23, interview with Charlie McGrath, wideawakenews.com, 6 pm PST
531. July 22, interview with Dave Hodges, The Common Sense Show, 7 pm PST
530. July 22, interview with Stephen Lendman, progressive radio network, 10 am PST. Listen to archive here.
529. July 19, interview with Mike Beevers, KFCF Fresno, 4:30 pm PST
528. July 10-12, Speaker, Conference on Social Transformation, Faculty of Economics, Split University, Split Croatia
527. July 10, video interview with Max Keiser, the Keiser Report, on the ESM. Watch it here.
526. July 7, Interview with Phil Mackesy, This Week in Money, TalkDigitalNetwork.com, 3 pm PST
525. July 6, video interview with Dr. Mercola, see it here.
524. June 23, Interview with Al Korelin, The Korelin Economics Report, 1 pm PST. Listen to archive here.
523. June 21, interview with Tom Kiely, INN World Radio Report, 4:30 pm PST
522. June 21, interview on the Gary Null Show, 9:20 am PST
521. June 18, interview with Ken Rose, What Now radio show, KOWS RADIO OCCIDENTAL 107.3 FM, 1 pm PST. Listen to archive here.
520. June 17, interview with Bill Resnick, KBOO radio, 9 am PST
519. June 16 interview with Stephen Lendman, progressive radio network, 10 am PST. Listen to archive here.
518. June 9, interview with Sylvia Richardson, Latin Waves, 9:45 am PST. Listen to archive here.
517. June 5, interview, Truth Quest With Melodee, KHEN radio, 7pm PST
516. June 2, interview about Web of Debt, Our Common Ground,http://www.blogtalkradio.com/OCG, 7pm PST
515. June 1, interview with Robert Stark, The Stark Truth listen here.
514. Newly available video of interview on "Moral Politics" -- see it here
513. May 30, interview, The Tim Dahaney Show, ll am PST
512. May 28, interview with Pedro Gatos, "Bringing Light into Darkness", KOOP.ORG, 6 pm CST
511. May 24, interview, Make It Plain With Mark Thompson, SiriusXM Satellite Radio, 2pm PST
510. May 20, interview, Women's View Radio, blogtalkradio.com, 10 am Central Time. Listen here.
509. May 13, interview, www.Blogtalkradio.com/fixyourmortgagemess, 4:15 pm PST
508. May 12, interview with Stephen Lendman, progressive radio network, 10 am PST Listen here.
507. May 9, seminar, Re-imagining Money and Credit, Art bldg. rm 103, El Camino college, Torrance, Ca. 5-7:30 pm
506. May 8, interview with Mike Harris, republicbroadcasting.org, 9 am EST
505. May 7, radio discussion on "The Myth of Austerity", Connect the Dots, KPFK Los Angeles, 7 am PST. Listen here.
504. May 4, interview The Unsolicited Opinion, republicbroadcasting.org, 8 am PST
503. April 27-28, speaker, Public Banking Institute Conference, Friends Center, Philadelphia. Listen here.
502. April 25, speaker Global Teach-In (globalteachin.com), 12 noon EST
501. April 17, Interview with Leo Steel, http://www.blogtalkradio.com/lasteelshoworg, 8:30 pm EST. Listen here.. 31 minutes in.
500. April 14, interview with Stephen Lendman, progressive radio network, 10 am PST
499. April 14, interview with Al Korelin, The Korelin Economics Report
498. April 10th-12th Speaker at Claremont Conference, “Creating Money in a Finite World” Claremont, CA . See video here.
497. April 5, interview , This Week In Money with Phil Mackesy (howestreet.com) 12:30 PST. Listen to the archive here.
496. April 3, speaker at COMER with Paul Hellyer, "Escape From the Web of Debt," Toronto, 7:30 pm
495. March 27, speaker on "Why are we so Broke? New ways to look at the Finances of our State and City," League of Women Voters luncheon, San Diego, 12 noon
494.5 March 24, radio interview, Mandelman Matters. Listen here.
494. March 17, speaker via skype, SCADS conference, London
493. March 15, interview with Per Fagereng, Fight the Empire, KBOO radio, 9:30 am PST
492. March 15, speaker, San Rafael City Hall 6 pm
491. March 13, speaker at Sergio Lub's house, Walnut Creek, info at Favors.org, 6pm
490. March 11, speaker, TedxNewWallStreet. See it here.
489. March 10, interview with Stephen Lendman, progressive radio network, 10 am PST
488. March 6, interview with Melinda Pillsbury-Foster, http://radio.rumormillnews.com/podcast/, 11 am PST
487. Feb. 25, interview with Martin Andelman, http://www.mandelman.ml-implode.com, 9:30 am PST
486. Feb. 25, interview, This Week In Money with Phil Mackesy (howestreet.com), 3 pm PST
485. Feb. 25, interview on CIVL Radio, Latin Waves, How Greece Could Take Down Wall Street, 11:30am PST
484. Feb 23, interview with Thomas Kiely, INN World Report Radio, 7:30 pm EST
483. Feb. 17, featured speaker, Public Banking in America weekly call, 9 am PST
482. Feb. 11, interview with Stephen Lendman, progressive radio network, 10 am PST
481. Feb. 8, interview with Mike Beevers, KFCF Fresno, 4:30 pm PST
480. Feb. 7, interview with Kevin Barrett, NoLiesRadio.org, 9 am PST; listen to archive here
479. Feb. 6, participant, Occupiers and Wells Fargo Executives Gather to Discuss the American Foreclosure Crisis, The Center of Nonprofit Management at California Endowment Building 1000 N. Alameda, Los Angeles, meeting 3 pm and press conference 5:30 pm
478. Feb. 2, interview with Tom Kiely, INN World Report Radio, 7:30 pm EST
477. Feb. 2, interview with Patrick Timpone, oneradionetwork.com, naturalnewsradio.com. Listen to archive here
476. Jan. 31, interview, Liberty Coins and Precious Metals, 9 am PST
475. Jan. 27, interview KPFA, Project Censored, 8:30 am PST
474. Jan. 27, FILMS4CHANGE-INSIDEJOB, panel speaker, Edye Second Space, Santa Monica Performing Arts Center, 7:30 pm
473. Jan 22, interview with Dave Hodges, The Common Sense Show, 7:30 pm PST. Listen live here.
472. Jan. 20, interview with Mike Harris, The Republic Broadcasting Network, 7 am PST
471. Jan. 16, interview with Rob Lorei, WMNF fm, Tampa, 2 pm PST
470. Jan. 14, interview with Stephen Lendman, progressive radio network, 10 am PST
469. Jan. 11, interview with Jeff Rense, rense.com, 8pm PST
Western Looting Of Ukraine Has Begun Paul Craig Roberts It is now apparent that the “Maiden protests” in Kiev were in actuality a Washington organized coup against the elected democratic government. The purpose of the coup is to put NATO…
The post Western Looting Of Ukraine Has Begun — Paul Craig Roberts appeared first on PaulCraigRoberts.org.
“But let’s acknowledge something… The policies of Yanukovych were authoritarian and oppressive, and it’s natural that people will respond forcibly against oppressive and authoritarian policies. People were finally fed up with the restrictions as well as the massive corruption. … One side was brutal, slaughtering scores of people. The other was merely seizing buildings… You talk about a new election was scheduled for 2015. We all knew Yanukovic was preparing to steal that election.”
“I think you have trouble understanding there is a repressive government inUkraine. There is not a repressive government in
…. Your problem is that you are a newscaster in a country that is undemocratic and you therefore do not want to see democracy in a country on your doorstep” Washington
“You have to say you live in a democratic country. Just like in the Soviet era journalists had to say that. It was not true then and it’s not true now.”
Washington Orchestrated Protests Are Destabilizing Ukraine Paul Craig Roberts The protests in the western Ukraine are organized by the CIA, the US State Department, and by Washington- and EU-financed Non-Governmental Organizations (NGOs) that work in conjunction with the CIA and…
The post Washington Orchestrated Protests Are Destabilizing Ukraine appeared first on PaulCraigRoberts.org.
Washington Destabilizes Ukraine Only Washington Knows Best Paul Craig Roberts The control freaks in Washington think that only the decisions that Washington makes and imposes on other sovereign countries are democratic. No other country on earth is capable of making…
What would you do if you logged in to your bank account one day and it showed that you had a zero balance and that your bank had absolutely no record that you ever had any money in your account at all? What would you do if hackers shut down all online banking and all [...]
What’s Causing the Unprecedented Weirdness In West Coast Ocean Life? NBC Nightly News reports that a mass die-off of starfish up and down the West Coast of North America is puzzling scientists: Brian Williams, anchor: Environmental officials in California say … Continue reading →
Mass Die-Off of West Coast Sealife: Fukushima Radiation … Or Something Else? was originally published on Washington's Blog
“[The Odds of] Longer Term Chronic Effects, Cancer Or Genetic Effects … Cannot Be Said To Be Zero” It is very difficult to obtain accurate information on the dangers from Fukushima radiation to residents of the West Coast of North … Continue reading →
What Is The ACTUAL Risk for Pacific Coast Residents from Fukushima Radiation? was originally published on Washington's Blog
|Photo by Birmingham News Room|
People need to go to food banks for a whole range of different reasons including redundancy or not having enough hours of work, illness, debt, unexpectedly large bills, etc. The biggest reason, however, Nigel made clear, were changes to, and problems with, the welfare system. The Bestwood & Bulwell foodbank collects information about the people it helps and 40 per cent of all people come as a result of problems with the welfare system. People having their benefits withdrawn or cut by job centres often have no alternative than to go to a food bank in order to feed themselves and their families.
|Photo by Byzantine_K|
A state of emergency has been declared in Ukrainian capital, Kiev, on Saturday as the city is paralyzed by heavy snowfall and blizzard totally abnormal for March.
"Due to the deterioration of weather conditions [heavy snowfall, blizzards, snow-banks] a state of emergency is declared in the capital," the statement by the Kiev State Administration said.
The situation in the city is so dire that Ukrainian President Viktor Yanukovich has signed a special decree urging all government agencies to provide maximum assistance to victims of the snowstorm.
The military is also involved in rescuing the city from its snowbound condition as 550 servicemen are deployed to the capital to aid the community services.
The government has created a crisis center to tackle the snowfalls, which is being personally overseen by Ukrainian Prime Minister Nikolay Azarov.
“In these difficult conditions, the government calls on everybody to show orderliness, self-restraint, cooperativeness, humanity and, if possible, to join the clean-up efforts in the aftermath of the bad weather, to help each other in tough situations," the government’s statement said.
According to the city authorities, over 50 millimeters of snow fell in Kiev in just one day, which is more than the entire monthly norm of 47 millimeters.
Community services are ordered to work around the clock, with priority given to cleaning the approaches to the Metro stations and subway stairs, as well entrances to hospitals and grocery stores.
Besides 253 snow-cleaning vehicles, five armored fighting vehicles are being used to tow stranded cars, with 270 trucks, 540 cars, 83 buses and 15 trolleybuses already removed from snow banks.
Dozens of flights in Kiev’s biggest airport, Boryspil, are delayed or cancelled, with the city’s second aerial port, Zhuliany, halting operations altogether.
Meanwhile, bloggers report that some of the city’s residents managed to find joy in the tempest as some daredevils was seen snowboarding in the streets.
The weather conditions remain difficult in other parts of Ukraine as well, which led to electricity shortages in almost 400 settlements in the Kiev, Vinnytsia and Poltava Regions.
The highway services are fighting with snow 24/7 in the north of the country, while the southern regions are suffering from heavy rains.
The snow front is moving eastward and is expected to hit Moscow on Saturday evening or Sunday, lasting until almost the end of March. A gale warning is announced in Russia's capital and the Moscow Region.
The synoptic service say that the current March may become the coldest in Moscow in the last 33 years as they forecast temperatures of around minus 9 or 10 degrees Celsius, which is around nine degrees below average.
Heavy snowfalls are already in full swing in Russia’s Tula and Lipetsk Regions, with snow-clearing vehicles taking to the streets, while the city of Kursk, the administrative center of Kursk Region, which borders Ukraine, was forced to declare the state of emergency, like Kiev.
Subzero temperatures and snow mixed with rain are causing problems to residents of continental Europe and the British Isles as well, where the current March became the coldest in 50 years.
Russia’s national football team was to play a 2014 World Cup qualifier against Northern Ireland in Belfast on Friday. The match was initially rescheduled to Saturday, but subsequently canceled, with stadium employees failing to remove the ice crust from the pitch.
A Safe and a Shotgun or Publicly-owned Banks? The Battle of Cyprus
Posted on Mar 22, 2013
|loop_oh (CC BY-ND 2.0)|
By Ellen Brown, Web of Debt
This article first appeared at Web of Debt.
“If these worries become really serious, . . . [s]mall savers will take their money out of banks and resort to household safes and a shotgun.”
—Martin Hutchinson on the attempted EU raid on private deposits in Cyprus banks
The deposit confiscation scheme has long been in the making. US depositors could be next . . . .
On Tuesday, March 19, the national legislature of Cyprus overwhelmingly rejected a proposed levy on bank deposits as a condition for a European bailout. Reuters called it “a stunning setback for the 17-nation currency bloc,” but it was a stunning victory for democracy. As Reuters quoted one 65-year-old pensioner, “The voice of the people was heard.”
The EU had warned that it would withhold €10 billion in bailout loans, and the European Central Bank (ECB) had threatened to end emergency lending assistance for distressed Cypriot banks, unless depositors – including small savers – shared the cost of the rescue. In the deal rejected by the legislature, a one-time levy on depositors would be required in return for a bailout of the banking system. Deposits below €100,000 would be subject to a 6.75% levy or “haircut”, while those over €100,000 would have been subject to a 9.99% “fine.”The move was bold, but the battle isn’t over yet. The EU has now given Cyprus until Monday to raise the billions of euros it needs to clinch an international bailout or face the threatened collapse of its financial system and likely exit from the euro currency zone.
The Long-planned Confiscation Scheme
The deal pushed by the “troika” – the EU, ECB and IMF – has been characterized as a one-off event devised as an emergency measure in this one extreme case. But the confiscation plan has long been in the making, and it isn’t limited to Cyprus.
In a September 2011 article in the Bulletin of the Reserve Bank of New Zealand titled “A Primer on Open Bank Resolution,” Kevin Hoskin and Ian Woolford discussed a very similar haircut plan that had been in the works, they said, since the 1997 Asian financial crisis. The article referenced recommendations made in 2010 and 2011 by the Basel Committee of the Bank for International Settlements, the “central bankers’ central bank” in Switzerland.
The purpose of the plan, called the Open Bank Resolution (OBR), is to deal with bank failures when they have become so expensive that governments are no longer willing to bail out the lenders. The authors wrote that the primary objectives of OBR are to:
• ensure that, as far as possible, any losses are ultimately borne by the bank’s shareholders and creditors . . . .
The spectrum of “creditors” is defined to include depositors:
At one end of the spectrum, there are large international financial institutions that invest in debt issued by the bank (commonly referred to as wholesale funding). At the other end of the spectrum, are customers with cheque and savings accounts and term deposits.
Most people would be surprised to learn that they are legally considered “creditors” of their banks rather than customers who have trusted the bank with their money for safekeeping, but that seems to be the case. According to Wikipedia:
In most legal systems, . . . the funds deposited are no longer the property of the customer. The funds become the property of the bank, and the customer in turn receives an asset called a deposit account (a checking or savings account). That deposit account is a liability of the bank on the bank’s books and on its balance sheet. Because the bank is authorized by law to make loans up to a multiple of its reserves, the bank’s reserves on hand to satisfy payment of deposit liabilities amounts to only a fraction of the total which the bank is obligated to pay in satisfaction of its demand deposits.
The bank gets the money. The depositor becomes only a creditor with an IOU. The bank is not required to keep the deposits available for withdrawal but can lend them out, keeping only a “fraction” on reserve, following accepted fractional reserve banking principles. When too many creditors come for their money at once, the result can be a run on the banks and bank failure.
The New Zealand OBR said the creditors had all enjoyed a return on their investments and had freely accepted the risk, but most people would be surprised to learn that too. What return do you get from a bank on a deposit account these days? And isn’t your deposit protected against risk by FDIC deposit insurance?
Not anymore, apparently. As Martin Hutchinson observed in Money Morning, “if governments can just seize deposits by means of a ‘tax’ then deposit insurance is worth absolutely zippo.”
New and Improved Comments
The EU proposals to strict new caps on bankers’ bonuses put thousands of British jobs at risk.
The European Union’s (EU) proposals to strict new caps on bankers’ bonuses will put thousands of British jobs at risk, a senior minister has warned.
Business and Enterprise minister Michael Fallon, who is in close ties with British Chancellor George Osborne, said the government will fight for more flexibility on the EU bank bonus cap at Brussels’ meetings this week as the move could threaten thousands of jobs in the country.
“The threat is not to the well paid banker, the threat is to the hundreds of thousands of ordinary banking jobs in Britain if these big international banks are forced to relocate,” Fallon said.
“We are not giving up on this, we are still fighting for more flexibility and we’ll be doing that at the Ecofin meeting this week.”
Earlier last week, London Mayor Boris Johnson warned that Brussels’s bank bonus cap will push banking business away from the City of London and towards Zurich, Singapore and New York.
British Prime Minister David Cameron also raised concerns over the EU proposals, saying that the new rules must allow international banks to keep “competing and succeeding while being located in the UK”.
Britain’s Trades Union Congress (TUC), however, accused the government of taking the bankers’ side ahead of ordinary people who have been made to pay the price of bankers’ folly.
Bloomberg noted last year that 77% of JP Morgan’s net income comes from government subsidies.
Bloomberg reported yesterday:
What if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?
Lately, economists have tried to pin down exactly how much the subsidy lowers big banks’ borrowing costs. In one relatively thorough effort, two researchers — Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz — put the number at about 0.8 percentage point. The discount applies to all their liabilities, including bonds and customer deposits.
Small as it might sound, 0.8 percentage point makes a big difference. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of$83 billion a year. To put the figure in perspective, it’s tantamount to the government giving the banks about 3 cents of every tax dollar collected.
The top five banks — JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. – – account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits (see tables for data on individual banks). In other words, the banks occupying the commanding heights of the U.S. financial industry — with almost $9 trillion in assets, more than half the size of the U.S. economy — would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.
The money hasn’t just gone to the banks shareholders … It has also gone to line the pockets of bank management:
- Bailout money is being used to subsidize companies run by horrible business men, allowing the bankers to receive fat bonuses, to redecorate their offices, and to buy gold toilets and prostitutes
Economist Steve Keen says:
“This is the biggest transfer of wealth in history”, as the giant banks have handed their toxic debts from fraudulent activities to the countries and their people.
Nobel economist Joseph Stiglitz said in 2009 that Geithner’s toxic asset plan “amounts to robbery of the American people”.
Breaking up the big banks would stabilize the economy … and dramatically increase Main Street’s access to credit.
But the government has chosen the banks over the little guy … dooming both:
The big banks were all insolvent during the 1980s.
The bailouts were certainly rammed down our throats under false pretenses.
But here’s the more important point. Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy, when they were not. They were insolvent.
Tim Geithner falsely stated that the banks passed some time of an objective stress test but they did not. They were insolvent.
Both the creditors and the debtors were mortally wounded by the 2008 financial crisis. The big banks wouldn’t have survived without trillions in handouts, guarantees, loans, idiot-proof profits courtesy of the government.
So the government chose sides. The creditors were wiped out, just like a lot of Main Street was wiped out. In one sense, the government chose who would live (the giant banks and other bailed out and favored companies) and who would die (the other 99%).
But in fact, the big banks were no longer creditors after the 2008 crash. Specifically, the big banks which held the mortgages and the loans were wiped out.
The government moved the arms and legs of the big banks to pretend they were still alive … and have been doing so ever since. But they were no longer going concerns after they went bust.
The government pumped blood back in these dead banks and turned them into zombies. They will never come back to life in a real sense … they are still zombies, 3 years later.
The big zombie banks can never come back to life, and – by trying to save them – the government is bleeding out the little guy.
By choosing the big banks over the little guy, the government is dooming both.
Remember, the Federal Reserve has paid banks high interest rates to stash money (their “excess reserves”) with the Fed for the express purpose of preventing loans to Main Street.
And the Fed plans to throw more money at the banks when the Federal Reserve starts to tighten. As FTreports:
US Federal Reserve officials fear a backlash from paying billions of dollars tocommercial banks when the time comes to raise interest rates.
The growth of the Fed’s balance sheet means it could pay $50bn-$75bn a year in interest on bank reserves at the same time as it makes losses and has to stop sending money to the Treasury.
In an interview with the Financial Times, James Bullard, president of the St Louis Fed, said: “If you think of the profitability of the biggest banks, if you’re going to talk about paying them something of the order of $50bn – well that’s more than the entire profits of the largest banks.”
At the moment it only pays 0.25 per cent interest on those reserves. But according to its exit strategy, published in June 2011, the Fed plans to raise interest rates before it sells assets. Interest of 2 per cent on $2.5tn of reserves would run to $50bn a year.
The eventual tightening could lead to substantial amounts being transferred to commercial banks from the Fed, given the amounts of cash they have parked there. Wells Fargo has $97.1bn sitting at the Fed, the largest amount of any bank, ahead of JPMorgan Chase at $88.6bn and Goldman Sachs at $58.7bn, according to an FT analysis of SNL data.
Foreign banks also have a striking amount of cash at the Fed, potentially aggravating the Fed’s PR problem. Analysts at Stone & McCarthy noted recently that there had been a steep increase in foreign banks placing reserves at the Fed and suggested that “US banks may have distaste for the opportunistic arbitrage”, between lower market rates and the interest on reserves, whereas overseas institutions “might not feel encumbered in the same fashion”.
And while this post focuses on bailouts and subsidies to big American banks, a large percentage of the bailouts went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing. More here and here.
A North Korean soldier walks along the banks of Yalu River, near the North Korean town of Sinuiju, opposite the Chinese border city of Dandong February 12, 2013. (Reuters)
Foreign Minister Sergey Lavrov said Pyongyang’s brazen nuclear test deserves a strong reaction from the UN Security Council.
The nuclear test conducted by North Korea on Tuesday “demonstrates that the North Korean leadership has again ignored international law and disregarded the UN Security Council's resolutions, all of which deserves condemnation and an appropriate reaction,” Lavrov said at a press conference in South Africa.
The UN Security Council is expected to convene “within hours” to discuss the matter, the minister said.
Lavrov conveyed the message that Moscow is disappointed that Pyongyang chose to discard Russia's concerns over the nuclear tests despite “good neighborly relations” between the two countries.
At the same time, however, Lavrov, warned against any "military muscle-building" policy in the Korean Peninsula.
Instead, Pyongyang must give up its nuclear-weapons program and re-join the Treaty on the Non-proliferation of Nuclear Weapons.
"International law is the counterbalance to the military scenario," Lavrov emphasized. "We have been proposing that a system of measures be developed in Northeast Asia to ensure security for all countries of the region on the basis of the current multilateral obligations.”
The Russian diplomat said the ultimate goal should be to turn the Korean Peninsula into a “nuclear free zone.”
In order to achieve these ends, Russia will continue to work jointly with all participants in the six-nation process, which involves Russia, China, Japan, the United States and North and South Korea.
Earlier, the Russian Foreign Ministry said Moscow is urging North Korea to heed the demands of the UN Security Council and cease all illegal nuclear testing.
"We insist that the DPRK…strictly comply with every directive of the UN Security Council, abandon its missile and nuclear programs and return to the NPT and IAEA guarantee regime," read the ministry statement.
By cooperating with the international security organization, “North Korea may break free from its international isolation and gain access to international cooperation in various areas, among them the peaceful application of atomic energy and space,” it said.
"We are confident that this path meets the interests of North Korea," the ministry emphasized.
Gold is little changed today in pound, euro and dollar terms after the Bank of England and the ECB kept interest rates at record low levels. Ultra loose monetary policies continue.
The ECB kept interest rates at 0.75% and the BOE kept interest rates at 0.5% the lowest level since 1694. The BOE pledged to maintain their ‘stimulus’ or money printing or debt monetisation programmes.
This morning the Japanese yen fell to new record lows against gold on the TOCOM at over 157 million yen per ounce.
Ultra loose monetary policies are set to continue which is bullish for the precious metals.
Mario Draghi’s news conference begins at 1330 GMT and the ECB President could set the course for the single currency. If Draghi’s speech warns about the recent rise in the euro then the euro may fall against the dollar and gold.
Gold's range bound trading between $1,650/oz and $1,700/oz since December continues.
Physical gold volumes have been quite low in recent days with very few new buyers coming into the market. More clients have been selling than buying in recent days. But the more aware and risk averse money continues to add to their allocations.
The mix is quite unusual as normally there is a clear bias towards clients selling or buying. On recent years, during gold’s bull market the bias has been towards buying.
Recent technical action has been poor and the short term trend is down and this allied to perceptions that the global economic situation has improved slightly is leading to the preponderance of sellers.
Sellers have also be emboldened by recent bold pronouncements of the end of gold’s bull market – by many of the same banks who never predicted the bull market or advised their clients to own gold in the first place.
Many of the banks, now predicting gold’s bull market will end in 2013, never predicted gold’s bull market in the first place. Most were bearish on gold in the early to mid years of the bull market and most only became bullish quite recently.
Very few have been consistent and very few have been bullish on gold in the long term.
It is also worth noting that most of them do not understand gold and continue to see it as a trade.
Many of these banks' primary focus is short term profit, often trading profits, and therefore they do not understand the long term, passive diversification benefits of gold in a portfolio or as financial insurance.
It is also not profitable for them to advise a buy and hold diversification strategy as more prudent advisers have been advising in recent years.
While sentiment towards gold remains poor after recent weakness, the smart money is focused on the fundamentals and is positioning itself for higher gold prices in the medium term. Soros, Gross, Faber, Rogers, Paulson and other respected investors who predicted the crisis have large allocations which they continue to hold.
Investors need to be patient, fade out the day to day noise from banks and hedge funds and focus on gold’s value rather than its price movements – particularly in the short term.
It remains important to focus on the long term diversification benefits of having an allocation to gold, silver, platinum and palladium.
Gold edges up before ECB meets, PGMs near 17-mth highs - Reuters
Gold Rises in Asia, Near-Term Outlook Weak; Precious Metals Lower – The Wall Street Journal
China's 2012 gold output up 12% - Paper - Reuters
Gold vending machine in Florida may be first of many – The Palm Beach Post
'Europe's A Fragile Bubble', Citi's Buiter Warns Of Unrealistic Complacency – Zero Hedge
Does China Still Love Gold? – Market Oracle
Video: Horror Bankers Attack – Max Keiser
Video: Goldsmiths put the nation's coins through their paces – The Telegraph
For breaking news and commentary on financial markets and gold, follow us on Twitter.
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Reuters / Jessica Rinaldi
The US government is reportedly considering requesting details from banks of foreigners holding accounts in America. The news follows US demands for details of foreign nationals’ accounts abroad.
Labeled ‘part of a crackdown on tax evasion’, the US will potentially have access to the details of millions of foreign customers who hold accounts with America-based branches, according to Reuters. The move is expected to face strong resistance from the banking industry.
Wealthy foreigners and financial institutions that bank in the US could have their account details given to the US government. The Obama administration is expected to make the request of Congress in a forthcoming Whitehouse budget proposal.
The Foreign Account Tax Compliance Act (FATCA) already requires overseas financial companies to identify their American customers to the Internal Revenue Service.
In January this year, Switzerland’s oldest bank, Wegelin & Co., was forced to close after the US imposed a $22 million fine on the institution, alongside restitution of $20 million to the IRS, and a $15.8 million fee. The bank was accused of allowing American nationals to hide their earnings after US judge gave the Internal Revenue Service (IRS) permission to obtain data on the bank from Swiss financial institution UBS. On January 5th, a Manhattan federal court ruled the information on Wegelin & Co’s former clients could be demanded by the US.
It’s highly possible that the new proposal will be part of a move to aid negotiations with foreign financial agencies. Reuters published part of a letter written last October by Mark Mazur, Treasury Assistant Secretary for Tax Policy, saying that the government aimed “to pursue equivalent levels of reciprocal automatic exchange in the future.” America is requesting data from foreign sources even now, and some are resisting its pressure. If successful, it is likely further fines will be imposed.
Bilateral agreements mean that four countries have already started sharing information on the finances of their US residents – the United Kingdom, Denmark, Ireland and Mexico. The US is negotiating with another 50 countries.
Many have been unable to meet the US’s requirements as they would come into direct conflict with local privacy laws.
Some countries, including France, Germany and China have been delaying the sharing of information, as they consider it one-sided and unreasonable that they are expected to share details of the US accounts of French, German and Chinese nationals abroad. However, the US has already progressed in their negotiations with the three.
Reuters said that although China appears reluctant to comply, the country is in ‘behind the scenes’ discussions.
FATCA requires financial institutions (non-US banks and investment funds) to inform the IRS about accounts held by those from the US with balances of more than $50,000. They face economic restrictions should they fail to provide data. FATCA was set into motion in 2010, and will come into play towards the end of 2013.
The IRS held an ‘offshore amnesty’ in October 2011, which offered the opportunity for people with money in offshore bank accounts to come forward, before the IRS found them through data sharing.
Switzerland is following the UK and signed a FATCA deal with the US in December 2012, which is due to come into play in January 2014. Switzerland attracts many rich foreigners and has already been subject to US action.
“The United States is committed to a policy of transparency and equivalence, where appropriate, in furtherance of international cooperation to combat offshore tax evasion,” said a Treasury spokesman.
Swiss Federal Data Protection and Information Commissioner (FDPIC) stated in 2012 that the model for the agreement raised numerous privacy and data protection concerns. FDPIC’s 19th annual report called the agreement effectively an ‘automatic exchange of information,’ adding “We are very critical of this law that has been imposed unilaterally by the United States.”
On January 18th, the European commission also warned the Swiss over its tax practices, saying that if the country did not agree to an automatic exchange of information, it would be ‘blacklisted’, and sanctions could be imposed.
Europe has now officially become the Schrodinger continent, demanding both sides of the economic coin so to speak, and is stuck between the proverbial rock and hard place (or "a cake and eating it"). On one hand it wants to telegraph its financial system is getting stronger, and doesn't need trillions in implicit and explicit ECB backstops, on the other it needs a liquidity buffer against an economy that, especially in the periphary, is rapidly deteriorating (Spanish bad debt just hit a new all time high while Italian bad loans rose by 16.7% in one year as more and more assets become impaired). On one hand it wants a strong currency to avoid any doubt that there is redenomination risk, on the other it desperately needs a weak currency to spur exports out of the Eurozone (as Spain showed when the EUR plunged in 2012, however that weak currency is now a distant memory and it is now seriously weighing on exports). On the one hand Europe wants to show its banks have solidarity with one another and will support each other, on the other those banks that are in a stronger position can't wait to shed the stigma of being associated with the weak banks (in this case by accepting LTRO bailouts).
It is the latest that is the most glaring dichotomy because as reported earlier, while some 278 banks, or about half of the original LTRO participants, voluntarily paid back some €137 billion to the ECB, it is none other than Moody's warning that European banks, especially those in the periphery, will need much more cash.
Banks in Spain, Italy, Ireland and Britain need to set aside much more money to cover potentially bad loans, credit ratings agency Moody's said on Thursday, meaning European taxpayers may again be tapped for cash.
European banks have already raised hundreds of billions of euros to cover possible losses from loans that soured in property and financial market crises. Much of the funding has come from governments.
"We believe that many banks, in particular in Spain, Italy, Ireland, and the UK, require material amounts of additional provisions to fully clean up their balance sheets," Moody's said in its global banking outlook for 2013.
"Some banks have in recent years delayed full recognition of embedded loan losses, partly by restructuring loans," the report added. "This strategy of buying time (often tolerated by regulators) limits a bank's capacity for new lending and poses risks for creditors of European banks."
Moody's did not say how much extra money banks would need.
In this case Moody's is spot on, and what Europe certainly does not need, is giving the impression that the ECB is implicitly tightening, which is how the market is interpreting today's action and Nomura has already raising its forecast for total H1 LTRO repayment to €350 billion. Recall from Deutsche Bank:
However the market will likely continue to have some focus on the fact that the ECB balance sheet is likely to be steadily shrinking for a period at a time when the Fed is effectively increasing its by $85bn/month and where Japan is seen by many to be set to notably increase its interventions. So while the repayments are not a big deal in themselves the contrast between the ECB and many other central banks means that the Euro is probably biased to appreciate for the foreseeable future. This might provide an unwelcome headwind for growth in Europe later in the year. Despite the promise of the OMT, Europe is in danger as being seen as the least active in the near-term in the currency war skirmishes that are focusing investors minds at the moment. Maybe actions elsewhere and a higher Euro will eventually lead to the ECB balance sheet expanding again after some market stress but this is further down the road.
So what just happened in Europe? Well, remember when Jean Claude Trichet hiked rates in the middle of 2011 to, that's right, prove that Europe is fixed (and when inflation was rampant - everyone remember what happened next.
As for Europe's banks needing cash - they sure do, maybe not right now in this latest momentary monetary lull, but soon once it becomes clear that nothing has changed and that simply injecting even more liquidity into the market does nothing for actual capital quality, we will all be backt so quare one.
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On January 22, 2012, French presidential candidate François Hollande shook up the banks: “It has no name, no face, no party, it will never be candidate, it will therefore never be elected, yet it governs: that enemy is the world of finance,” he said. It “freed itself from all rules” and “took control of the economy, of society, and even our lives.” He’d fight it, he said, and promised some tough reforms.
But as the private sector in France sank deeper into an economic and fiscal quagmire, his words, designed to endear him to the left wing of his Socialist Party, were swept under the rug. And you’d think that since becoming President of France, he has been tutored by JPMorgan Chase CEO Jamie Dimon.
A year later, Dimon had some choice words himself, while at the World Economic Forum in Davos, Switzerland, where bankers, business leaders, politicians, and whoever was able to get in were hobnobbing for the better of the world.
Dimon lashed out at regulators and their feeble, slow, and confused efforts to rein in the banking industry so that it wouldn’t shove the world into another crisis. They were “trying to do too much, too fast,” he said. He defended inscrutable megabanks with their meaningless financial statements. “Businesses can be opaque,” he said. “They’re complex.” A word that in a financial crisis excuses everything, even massive bailouts that will haunt generations to come. “You don’t know how aircraft engines work, either,” he mollified us, based on the logic that we still get on a plane and fly across the Pacific.
And so the CEO of America’s largest TBTF bank, recipient of the Fed’s bailout trillions, praised the Fed because “they saved the system.” Indeed, they not only saved the system that had shoved the world into the financial crisis, but they also bailed out and enriched those who were, and still are, integral part of it—who now, according to Dallas Fed President Richard Fisher, “believe themselves to be exempt from the processes of bankruptcy and creative destruction” [for more on Fisher’s feisty fight against TBTF, read.... How Big Is ”BIG?”].
This is the world Hollande declared war on, back in the day. But now, France is sinking into a new crisis, and this time it’s the already diminutive private sector that is gasping for air and shedding jobs—and moving overseas, along with the rich and not-so-rich for whom the fiscal and rhetorical climate has become too hostile.
Not a day passes without another confirmation or a new indication. Today, the statistical agency Insee released its monthly Business Climate Index, which, after a soupçon of an uptick, has deteriorated again in the categories of Industry, Wholesale, Construction, and Retail. Only Service saw an improvement. The index, at 86.75, is down from 87.02 in December, and below where it was in October 2009, during the financial crisis.
Given this scenario, what happened to Hollande’s “enemy” and the reforms to rein it in? It’s not that he didn’t try—though there simply isn’t much appetite around the world for confronting the banks. For example, even the highly anticipated Basle III liquidity rules that were supposed to make global banks more stable and another financial meltdown less likely, well... A couple of weeks ago, after years of negotiations and intensive lobbying by the banks, the rules were finalized. In watered-down form. And implementation was delayed until 2019. A huge win for the banks.
Nevertheless, Hollande’s vow to separate the banks’ retail operations from their speculative activities coagulated into a proposal for a law that was presented to parliament last December. The government prided itself that it was the first in the EU to put banking reform on the table. Four years after the financial crisis. As Dimon said: “trying to do too much, too fast.” The proposal, of course, came with such huge concession to the banks that effectively not much will change.
And his vow to impose a tax on financial transactions? It has also turned into a proposal, and the EU just issued its blessing for the tax. The 11 countries, including France and Germany, that are considering such a tax are now free to impose it. Against a wall of opposition from the banks. Nothing will happen in Germany before the election later this year. But in France, which is dying for additional revenues, the tax might pick up momentum.
These days, tangled up in a real war in Mali, Hollande no longer declares war on the financial world. In fact, he already has the first taxpayer-funded bank bailouts under his belt, including the €7 billion bailout of Banque PSA Finance. He’d “saved the system,” Dimon would say, because when push comes to shove, citizens and taxpayers, and their kids, are the ones who pay, not bank investors. And it doesn’t matter who is president.
France’s economic foundations are cracking. Unemployment is rising incessantly. The private sector is comatose. Car sales sank 13.9% in 2012, from a lousy 2011; sales by its native automakers plunged even more. Now home sales are grinding to a halt. And the finger-pointing has already started. Read.... The Next Shoe To Drop In France.
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A new PBS Frontline report examines outrageous steps Obama's administration took to protect Wall St. Wall Street from prosecutions.
January 23, 2013 |
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PBS' Frontline program on Tuesday night broadcast a new one-hour report on one of the greatest and most shameful failings of the Obama administration: the lack of even a single arrest or prosecution of any senior Wall Street banker for the systemic fraud that precipitated the 2008 financial crisis: a crisis from which millions of people around the world are still suffering. What this program particularly demonstrated was that the Obama justice department, in particular the Chief of its Criminal Division, Lanny Breuer, never even tried to hold the high-level criminals accountable.
What Obama justice officials did instead is exactly what they did in the face of high-level Bush era crimes of torture and warrantless eavesdropping: namely, acted to protect the most powerful factions in the society in the face of overwhelming evidence of serious criminality. Indeed, financial elites were not only vested with impunity for their fraud, but thrived as a result of it, even as ordinary Americans continue to suffer the effects of that crisis.
Worst of all, Obama justice officials both shielded and feted these Wall Street oligarchs (who, just by the way, overwhelmingly supported Obama's 2008 presidential campaign) as they simultaneously prosecuted and imprisoned powerless Americans for far more trivial transgressions. As Harvard law professor Larry Lessig put it two weeks ago when expressing anger over the DOJ's persecution of Aaron Swartz: "we live in a world where the architects of the financial crisis regularly dine at the White House." (Indeed, as "The Untouchables" put it: while no senior Wall Street executives have been prosecuted, "many small mortgage brokers, loan appraisers and even home buyers" have been).
As I documented at length in my 2011 book on America's two-tiered justice system, With Liberty and Justice for Some, the evidence that felonies were committed by Wall Street is overwhelming. That evidence directly negates the primary excuse by Breuer (previously offered by Obama himself) that the bad acts of Wall Street were not criminal.
Numerous documents prove that executives at leading banks, credit agencies, and mortgage brokers were falsely touting assets as sound that knew were junk: the very definition of fraud. As former Wall Street analyst Yves Smith wrote in her book ECONned: "What went on at Lehman and AIG, as well as the chicanery in the CDO [collateralized debt obligation] business, by any sensible standard is criminal." Even lifelong Wall Street defender Alan Greenspan, the former Federal Reserve Chair, said in Congressional testimony that "a lot of that stuff was just plain fraud."
A New York Times editorial in August explained that the DOJ's excuse for failing to prosecute Wall Street executives - that it was too hard to obtain convictions - "has always defied common sense - and all the more so now that a fuller picture is emerging of the range of banks' reckless and lawless activities, including interest-rate rigging, money laundering, securities fraud and excessive speculation." The Frontline program interviewed former prosecutors, Senate staffers and regulators who unequivocally said the same: it is inconceivable that the DOJ could not have successfully prosecuted at least some high-level Wall Street executives - had they tried.
What's most remarkable about all of this is not even Wall Street had the audacity to expect the generosity of largesse they ended up receiving. "The Untouchables" begins by recounting the massive financial devastation the 2008 crisis wrought - "the economy was in ruins and bankers were being blamed" - and recounts:
"In 2009, Wall Street bankers were on the defensive, worried they could be held criminally liable for fraud. With a new administration, bankers and their attorneys expected investigations and at least some prosecutions."
Europe's nations may seem deeply divided, but on Britain's membership of the EU, opinion is united. Europe's Foreign Ministers have lined up to call the UK's potential departure a "disaster".
The speech led the front pages of newspaper websites from France and Germany to Sweden, with many containing dire political warnings that European leaders are losing patiences with Britain's desire to "cherry-pick" the terms of a European relationship.
El País and El Mundo, the two biggest newspapers in Spain, both opened their online editions with Cameron's referendum announcement.
Spain's Minister of Foreign Affairs, José Manuel García-Margallo, said this was “awful news” for the UK, who would get “isolated in a world dominated by regional integration”.
Prime Minister David Cameron makes a speech on Europe
“To think in an United Kingdom competing alone in a world with the US, China, India or Brazil is really not understanding our times”, said the minister on a radio interview.
“I believe the British have played a dangerous game by feeding euroscepticism and Cameron now feels obliged to convene a referendum”, added García-Margallo.
The Foreign Minister believes that, might the UK leave the EU, it will “be a heavy blow” for its local and financial industry, that would become “little banks of insular scope”. He recognised, nevertheless, that it would not be good for the EU either.
France's Le Monde opened its report claiming Cameron had "finally yielded to the Eurosceptics".
The paper's Florentin Collomp remarked: "Many close to the Prime Minister, including Education Secretary Michael Gove are already bragging that they have no qualms about leaving the Union if London does not get succeed in imposing its vision of a Europe à la carte.
"But this poker game stakes on the tolerance of its allies, which already seems to be reaching its limit."
Before the speech, France's Foreign Minister Laurent Fabius, said his country would "roll out the red carpet for British businessmen" if Britain leaves the EU.
Spain's Mininster of Foreign Affairs and Cooperation Jose Manuel Garcia Margallo
On German radio, European Parliament President Martin Schulz attacked Cameron, saying he was not offering constructive criticism.
"David Cameron wants the EU be reduced to the single market, but he doesn't want, for example, for us to combine our skills to tackle climate change."
PM Cameron's speech was more about domestic politics than European reality, more to Eurosceptic parts of Tory party than UK's partners.
Former German Foreign Minister Joschka Fischer told Süddeutsche Zeitung that an EU exit would be a "veritable disaster" for the UK.
Italy's Foreign Minister Franco Frattini also tweeted his hope that the UK does not leave the EU.
Sweden's tabloid Aftonbladet reported that a British exit would be "to Britain, Europe and Sweden's disadvantage. For Swedish part, we would lose an important partner in the EU, we are close to the UK on many issues, and it would be unfortunate for the Swedish political interests. The EU as a whole is losing a strong and important State.
"As the UK is one of the three heavy-weight countries in the EU, the whole Union hit hard by an exit.
"With Britain outside the EU would be a weaker Europe. It brings economic strength, military reach and credibility in international politics."
Related on HuffPost:
UK financial services companies have decided to cut a further 18,000 jobs over the next three months.
Britain’s financial services companies have decided to cut a further 18,000 jobs over the next three months, bringing the total loss of positions in the sector to around 132,000.
According to a report by the Confederation of Business Industry (CBI) and PricewaterhouseCoopers, Britain’s financial services companies will cut a further 18,000 jobs over the next three months.
This comes as banks; insurers, asset managers and other finance firms cut 25,000 jobs in the final quarter of 2012, with banking in the UK experiencing the deepest drop, the survey of 94 companies revealed.
The CBI said the latest cuts will mean that 132,000 jobs have been lost in the finance sector since the start of the downturn in 2008, when it employed around 1 million people.
Data from the Financial Services Authority suggests the number of frontline workers in the City of London has tumbled to the lowest level since 2004.
Moreover, a combination of Europe's debt crisis, fresh financial regulations and a still lacklustre recovery in the US have made it harder for banks to return to the level of profits they enjoyed before the financial crisis.
Most Britons will be able to pay for items using their mobile phone next year.
Banks and financial institutions representing 90% of current accounts have agreed to launch the UK's first industry-wide mobile payment service in spring 2014.
Using a process similar to texting, people will be able to sign up to send and receive payments using their own number.
It will be done without the need to disclose their bank account details.
The Payments Council , the industry body that is leading the project, said using mobiles to buy goods and services, as well as send money to friends and family, would become a mainstream option due to the popularity of the plan among banks.
Eight financial institutions have already committed themselves to offering the service, and discussions are under way for others to join.
The council pointed out that while there are existing ways to pay using a mobile, the project is the first to have the potential to link every bank account in the country with a mobile number.
Chief executive Adrian Kamellard said: "This new service will offer a simple, secure way to split a bill for dinner, receive money from a friend or pay a tradesman without needing to remember or share account details."
Before the service launches, the financial institutions involved will invite customers to register via their online banking service, mobile app or other approved method.
The Payments Council said more details about the industry-wide registration process and the precise launch date would be announced later.
More than 5,000 consumers took part in Payments Council research, which revealed the service is likely to prove most popular with smartphone users, who accounted for 67% of those surveyed.
One in three smartphone users said they were either "definitely" or "extremely likely" to sign up to the new service when it launches.
A view of the Russian central bank at night in Moscow.(Reuters / Denis Sinyakov)
Russian key lenders are to get advice from the Russian Central Bank (CBR) on how to create ‘emergency plans’ in case of a banking crisis. CBR wants to make sure lenders will have enough reserves and planning to tackle a crisis without State aid.
This week CBR will produce its recommendations for banks on how to make up a plan for financial recovery, should a crisis situation emerge, Vedomosti daily reports. Having looked at their crises in the past, the banks will need to assess a possible downturn of assets, as well as of live money, then calculate the aftermath of the worst case scenario and understand which of its resources it’s going to use, according to Mikhail Sukhov, deputy head of CBR.
In 2008 when the crisis first hit Russian banking it was mainly State money that helped the country’s lenders remain afloat, says S&P analyst Sergey Voronenko. It spent then about $46.7bn in rescue funds, according to the World Bank estimates.
The list of lenders addressed by the CBR should include 30 of Russia’s biggest banks, with the recommendation to make up such emergency plans remaining so far a matter of choice, according to Mikhail Sukhov, deputy head of CBR, talking to the paper. “…this will be a kind of a test for banks for responsibility -whether they’ll follow the recommendations or not”, he said.
The next step would include amendments to existing legislation that’ll force certain banks to make such plans, with the exact names of “systematically important” institutions being now under consideration, Sukhov explained.
The move by the CBR isn’t something new for many Russian banks, as most of them have been making up such stress – tests for internal use for a while. The requirement by Russia’s key banking regulator shouldn’t be much trouble for large and medium banks, says S&P analyst Sergey Voronenko.
Now “it’s important to stimulate banks to use those [recommendations] in their daily operations,” commented Ekaterina Trofimova, the first Vice President at Gazprombank.
Basel III – a new set of global banking standards scheduled to come into force in Russia this year – should become another stimulus for the country’s lenders to rely on its own funds rather than State support. One of the key Basel III requirements is tighter rules for a banks’ own capital.
Stress testing has become the usual practice for major world economies after the ongoing crisis emerged. Big international lenders now need to follow stricter rules, or so-called lifetime testaments. In the US, the 19 major banks such as J.P. Morgan, Citigroup, Goldman Sachs Group, Morgan Stanley and Bank of America provide roadmaps on how to handle three different economic scenarios from mild to severely adverse. That’s in case of not only a domestic downturn but also a global economic turmoil. The biggest British banks are also set to produce such “testaments”, with the European Central Bank discussing an option for such a measure.
Such an approach of better self – sufficiency by banks was approved by G20 members in November 2011.
Taxpayers are paying billions of dollars for a swindle pulled off by the world’s biggest banks, using a form of derivative called interest-rate swaps; and the Federal Deposit Insurance Corporation has now joined a chorus of litigants suing over it. According to an SEIU report:
Derivatives . . . have turned into a windfall for banks and a nightmare for taxpayers. . . . While banks are still collecting fixed rates of 3 to 6 percent, they are now regularly paying public entities as little as a tenth of one percent on the outstanding bonds, with rates expected to remain low in the future. Over the life of the deals, banks are now projected to collect billions more than they pay state and local governments – an outcome which amounts to a second bailout for banks, this one paid directly out of state and local budgets.
It is not just that local governments, universities and pension funds made a bad bet on these swaps. The game itself was rigged, as explained below. The FDIC is now suing in civil court for damages and punitive damages, a lead that other injured local governments and agencies would be well-advised to follow. But they need to hurry, because time on the statute of limitations is running out.
The Largest Cartel in World History
On March 14, 2014, the FDIC filed suit for LIBOR-rigging against sixteen of the world’s largest banks – including the three largest US banks (JPMorgan Chase, Bank of America, and Citigroup), the three largest UK banks, the largest German bank, the largest Japanese bank, and several of the largest Swiss banks. Bill Black, professor of law and economics and a former bank fraud investigator, calls them “the largest cartel in world history, by at least three and probably four orders of magnitude.”
LIBOR (the London Interbank Offering Rate) is the benchmark rate by which banks themselves can borrow. It is a crucial rate involved in hundreds of trillions of dollars in derivative trades, and it is set by these sixteen megabanks privately and in secret.
Interest rate swaps are now a $426 trillion business. That’s trillion with a “t” – about seven times the gross domestic product of all the countries in the world combined. According to the Office of the Comptroller of the Currency, in 2012 US banks held $183.7 trillion in interest-rate contracts, with only four firms representing 93% of total derivative holdings; and three of the four were JPMorgan Chase, Citigroup, and Bank of America, the US banks being sued by the FDIC over manipulation of LIBOR.