Economy Rigging 1

BSK log, 31.10.10 October 31, 2010

Filed under: Uncategorized — bashstreetkidjailbreak @ 2:32 pm

MAIN ITEM: Gene Kerrigan: The State wagons form a perfect circle – Gene Kerrigan, Columnists – Independent.ie

By Kerrigan in Sunday independent, a bulletin point dismantling of the Insider / elites agenda in controlling Irelands economy.

#conversation being conductd almost exclusively among ppl who will hardly b touched by recession.’ ~kerrigan

#The excuse is that “there is no alternative”, but there is. It would require an aggressive response that is beyond the imagining of the establishment. They literally cannot envisage a response that does not preserve the structural inequalities they enjoy. Or one that might require an aggressive response to those they supinely venerate, in the EU and the bond markets

#It is not in the interests of the money markets that a country that owes them money should go bankrupt — but that’s the risk the establishment is taking. And it’s why the cost of Irish Government borrowing keeps rising

#The supposed cure for the State deficit is killing the real economy

#Mr Lenihan’s banking strategy turned a real but manageable problem — the State deficit — into a severe and worsening crisis. A State deficit can almost always be managed — it rests on something recoverable — an economy, a workforce, a market. But that economy has been saddled with the insane bank bailout costs. And what the Farmleigh farce revealed was that it remains saddled with the continuing cost of the massive salaries and obscene privileges of the golden circles and their servants.

ITEM 1;

BY IRISH EXAMINER ~ FORCED CLOSURE OF THE *CENTER OF PUBLIC INQUIRY* : Ireland’s property crash could have been avoided | Irish News | IrishCentral

ITEM 2:

BY FT ~ IRELAND GOV AND ANGLO PRESS ON BONDHOLDERS

Over the course of the financial crisis, the Irish government’s policy towards the banks has swung from deftness to debility. Its push for a showdown with junior bondholders in Anglo Irish Bank shows Dublin is on the offensive again.

Not before time, it has dawned on the government that the Irish people should not spare Anglo’s creditors the cost of the foolish eagerness with which they funded the bank’s real estate punts. After burning €29bn of taxpayer money Dublin has found the gumption to let Anglo pick a fight with investors one rank up from the already-wiped-out private shareholders.

This shows a degree of diabolical genius that had so far eluded this government. The plan is to pit junior creditors against each other the better to wrestle them into submission. They may swap subordinated debt for government-guaranteed paper at 20 per cent of par value (5 per cent for undated debt) but only if bondholders as a class agree to write untendered bonds down to just one cent in €1,000. Those who decline the offer, which comes in just under market value, risk that 75 per cent of their co-creditors approve the writedown, leaving hold-outs stripped to the bone.

Affected bondholders cry foul, but the terror tactic looks within the bounds of the law. Necessary to make it work, however, is Dublin’s new-found determination to enforce haircuts through mooted resolution legislation if the “voluntary” burden-sharing disappoints.

This is why, regrettably, we are unlikely to see similar “liability management” for senior debt. Ireland’s leaders remain convinced they cannot force a haircut on senior bank creditors any more than on depositors or holders of Irish sovereign debt. They are mistaken.

Senior debt ranks equal to deposits under insolvency rules. But a government can selectively bail out depositors of an insolvent bank in exchange for their pari passu claims on its estate, as the UK did with Icesave depositors. The equivalence of private and sovereign debt is a creature of Dublin’s imagination – though increasingly one of its making: the government has far too promiscuously expanded its legal guarantees of bank liabilities.

Markets are still uncertain how much of the Irish banking sector’s bloated balance sheets the government intends to stand behind – but they know it cannot stand behind it all. Speeding up promised legislation on special resolution authority would delimit Dublin’s contingent liabilities once and for all. It should do so – to safeguard its own creditworthiness and to show that indentured taxpayers can be freed.

 

BSK log, 30.10.10 October 30, 2010

Filed under: Uncategorized — bashstreetkidjailbreak @ 1:37 pm

ITEM 1:

BY THE INDEPENDENT ~ ROBERT FISK : Robert Fisk: The shaming of America – Robert Fisk, Commentators – The Independent

ITEM 2:

BY IRISH INDEPENDENT ~ KEVIN MYERS : Kevin Myers: So many questions, so little time . . . or common sense – Kevin Myers, Columnists – Independent.ie

ITEM 3:

LINKS :

# GOLDMANSACHS ROLE IN AIG : Goldman Sachs Had Bigger Role in AIG – WSJ.com

#US INJECTING BILLIONS INTO EUROPE BANKS : http://www.huffingtonpost.com/2009/03/17/us-injecting-billions-int_n_175454.html

#REVOLUTION OF THE ELITES : Global War and Dying Democracy: The Revolution of the Elites

#DARKSIDE OF DUBAI : The dark side of Dubai – Johann Hari, Commentators – The Independent

#KNOWLEDGE CONSUMER : Jose Antonio Vargas: Anatomy (and Meaning) of the “Did You Know?” Video Series (VIDEOS, PHOTOS)

#KONDRATIEFF WAVE : Kondratieff Wave

#CRIME OF OUR TIME ~ DANNY SCHECHTER : The Crime of Our Time: Was the Economic Collapse “Indeed, Criminal?”

#FRACTIONAL RESERVE BANKING : Case Against the Fed and Fractional Reserve Lending – International Business Times –

#Web of Debt – BIG BROTHER IN BASEL: BIS FINANCIAL STABILITY BOARD UNDERMINES NATIONAL SOVEREIGNTY#BIS UNDERMINING SOVEREIGNTY :

#FREEDOM DESTRUCTION US CONSTITUTION : Freedom’s Destruction through Constitutional Deconstruction – Tenth Amendment Center

#OLIGARCHS ESCAPE PLAN : Michael Hudson: The Oligarchs’ Escape Plan

#MORGAN STANLEY AND OIL : TransMontaigne Partners | About

#THE NEW GREAT GAME : The New Great Game. Blood and Oil in Central Asia – by Lutz C. Kleveman

#EU PAY FOR PROPAGANDA : Is this how the EU got a Yes to Lisbon from the Irish? – Mail Online – Euroseptic: Mary Ellen Synon in Brussels

#EURO GAME THEORY FT : FT.com / UK – Greek spotlight on a flawed project

The late Eddie Georgeonce remarked to me that the euro project, which was launched in 1999, came 10 years too early. He was wrong. It was 20 or 30 years too early or perhaps should not have been launched at all. The former governor of the Bank of England was far too strict a constitutionalist to pronounce in public on the issue of British membership but there was little doubt where he stood. For a long time the euro project seemed to be doing well and confounding the sceptics. But with the emergence of the Greek problem the weaknesses of the project are there for all to see.

It is no secret that the German government and business establishment were also dubious about what they saw as a French-led project. What decided the matter for Helmut Kohl, the then German chancellor, was his belief in a federal Europe. He originally hoped that monetary union would be coupled with a political union. But, when he realised that was not to be, he still hoped that the monetary union would itself lead to a political one.

The economic weaknesses could not, however, be hidden for ever. Economists had argued for ages about what they called an optimal currency area; and the magic word “convergence” was often used. The convergence that matters is that of domestic costs. The mistake I made was to suppose that monetary union might itself be a sufficient influence for that convergence.

A country with its own currency has two safety valves, which Greece and others that may be in a similar position lack. First, it can issue its own money; so it can pursue a fiscal policy attuned to domestic needs, without being dependent on the international bond market. Second, and most important, it has the safety valve of currency devaluation. Both these safeguards can be abused; and instead of full employment without inflation a country can end up with inflation without full employment. But it can learn from its mistakes; and it can act without provoking an international crisis. Within a functioning monetary union, however, an individual member has no more control over its macroeconomic policy than the state of Ohio over that of the US.

Meanwhile, we are witnessing a game of bluff and counterbluff between Greece and its eurozone partners. Greece holds more bargaining cards than generally realised. There is a widespread and justified fear that the exit of Greece – which in contrast to Ohio always has this option – would mark the start of the fragmentation of the eurozone. If the Greek authorities play their cards well they have no need to accept financial terms deeply damaging to their economy. They have no need to accept the kind of terms that the International Monetary Fund imposed on Asian countries in the late 1990s and which left such a bad taste that they built up their foreign exchange reserves to avoid such humiliation again.

There are several available options. The first is what Americans call cold turkey. After having negotiated down the European Union’s demands for fiscal “slash and burn” as far as it can, Athens can grin and bear it.

At the other extreme, Greece could leave, or be ejected from, the eurozone. In spite of all the complications, such as renegotiating financial instruments denominated in euros, it could be done. People forget that one of the oldest currency unions in history, that between the UK and Ireland, was brought to an abrupt end when Ireland abandoned sterling – first for the European exchange rate mechanism and then for the euro. Nevertheless, one should hesitate before urging purely destructive courses. A Greek exit would turn the spotlight on other countries – Portugal, Italy and Spain – and eventually on the euro project itself. It is one thing to regard the project as a mistake and another to provoke a messy disintegration.

I am attracted to Professor Martin Feldstein’s idea (Financial Times, February 17) of a temporary euro exit for Greece followed by re-entry at 20 or 30 per cent below the present level. But if that occurred there might not be a euro to rejoin. So it is a last resort. There is an alternative to try first, which might be called an internal devaluation. When Margaret Thatcher was struggling to wean her colleagues from pay and price controls she at one stage considered a compromise: a temporary wage freeze – in an emergency – after which normal negotiating procedures would be restored. In the case of Greece today it would have to be not just a freeze, but a negotiated reduction in nominal wages. Such a course would cut against Greece’s fiercely independent habits and traditions. But surprises can always occur.

Finally, an offbeat idea which is not an alternative to the others, but can run alongside. Countries in the Middle Ages often operated with two or more currencies: an international one such as the ducat or florin, and local currencies with more restricted use. Could not such a local currency, whether or not called the drachma, emerge in this way with or without the sanction of the Greek government? It would surely be better than being crucified by the international financiers.

 

BSK log, 25.10.10 October 25, 2010

Filed under: Uncategorized — bashstreetkidjailbreak @ 4:02 pm

MAIN ITEM:

BY SUNDAY TRIBUNE – NAMA BONDS NOT MAKING THE SWAP : Banks unable to tap markets as Nama bonds are frozen out

International investors decide state-backed securities do not meet their internal standards
Jon Ihle

Irish banks are unable to raise money in the open market using Nama bonds because international banks have decided that the state-backed securities do not meet their internal requirements to allow them accept the bonds for cash, according to market sources.

The freeze-out has forced the Irish banks to use European Central Bank (ECB) emergency funding mechanisms, where rates have been higher than open market prices until recent weeks, the sources said. The higher cost of funds will ultimately feed through to more expensive loans for customers.

The problems with the bonds have emerged because private market participants are free to set their own standards for repurchase agreements, or repos, where securities are pledged for cash. Those standards have been raised exponentially for peripheral EU countries in light of the current financial crisis.

The term sheet for the Nama senior notes, more than €12bn of which the agency issued by 1 September in exchange for impaired property loans, says they must be “potentially eligible as collateral for Eurosystem operations”.

Nama has spent tens of millions of euro on legal advice and consultancy fees since the agency was established last year and

and a spokesman for Nama confirmed there was no documentation issue with the bonds for meeting ECB rules.

“ECB regulations require them to be readily marketable liquid assets,” he said. “They would not be listed if they did not reach certain criteria. Whether they are used [in the open market] is an issue for the banks and whether other investors want to engage is up to them.”

The upshot is that international investors have decided to shun the securities. It comes as Irish banks are facing other difficulties pledging bonds issued by Irish institutions in so-called tri-party agreements, sources said. That means third parties are generally refusing Irish securities whatever the issuer, even though guaranteed banks essentially represent sovereign risk.

“The banks had been repo’ing lots of in-market bonds but that craic has ended,” said one Dublin bond analyst.

Last week Bloomberg reported finance minister Brian Lenihan may seek to extend the bank guarantee beyond its 31 December deadline.

The lack of appetite in the markets for Irish debt issue and other funding deals has forced Irish banks to rely even more heavily on the ECB recently.

ANNEXED COMMENTS :

#1 ANON commented, on October 24, 2010 at 8:44 p.m.:

Nama bonds are sovereign bonds which the open market is now shunning? It appears, our bankruptcy has just been ratcheted up a few notches!

Bank insolvency has become state insolvency. Mr. Lenihan and the DoF should have thought of that when economics, Nobel Laureate, Mr Joseph Stiglitz. remarked, after being told by RTE’s Mark Little “what out government are doing is they are setting up a bad bank called NAMA and they are going to “buy” all the toxic loans from the banks” Stiglitz’s spontaneous remark …. “Oh! That is criminal”. Did anybody take a blind bit of notice! They pooh poohed it. “Only game in town, only game in town, blah, blah!

#2 jack commented, on October 24, 2010 at 11:32 p.m.:Lenders have also upped our loans costs because they see Ireland as a cowboy state where the crooks who bankrupted the system and now threaten the Euro system are not being charged with serious crimes.
The word in Europe is that the politicians are protecting the crooks and ultimately risking the stability of the euro zone by not renaging on the stupid guarantees and by prosecuting the crooks responsible, at all levels, to the full extent of the law.
ITEM 1:

BY IRISH TIMES ~ BREAKDOWN ON IRELANDS STATES BOOKKEEPING BASIC UNITS : Too late now to burn Anglo’s bondholders – The Irish Times – Mon, Oct 25, 2010
Reneging on this issue would completely shatter all confidence in the commitments given to the other Irish banks, says one bond investor, writes DAMIAN CHUNILAL

THE ANGLO Irish debacle has given rise to the view that bank bondholders should be called upon to share the burden of the Irish taxpayer and absorb losses, particularly in the case of Anglo Irish.

While this view has obvious political attractions, its broad application would be extremely dangerous for Ireland, ignoring the harsh lessons that should have been learned by all after the Lehman failure.

Ireland is an open economy with relatively small domestic capital markets. Under normal market conditions, Ireland and its banks rely on overseas investors for a substantial part of their funding.

It is estimated that less than 20 per cent of Irish sovereign debt is held domestically. Ireland also has a highly concentrated financial system that has been allowed to grow to a very large size when compared to the size of the domestic economy.

Hence, preserving international investor confidence in Ireland’s banks and its financial system is of the utmost importance if Ireland and its banks wish to continue to access the international capital markets in the future.

As we have seen from the Lehman failure, when confidence in a single, systemically important financial institution is lost, such a loss of confidence spreads very rapidly and endangers the whole system.

Permitting a systemically important institution such as Lehman to fail and forcing bondholders to take losses led to a wholly rational fear among financial market participants that no systemically important US financial institution would be protected.

This greatly contributed to the magnitude and extent of the “run on the bank” and the freezing of all credit markets that then ensued. The consequences of allowing Lehman to fail and allowing bondholders to take losses was a much deeper economic downturn than would have been the case had the bondholders not been allowed to “burn”.

In the case of Ireland, allowing a major bank to fail and burning the bondholders would have catastrophic consequences for Ireland’s financial system and for the sovereign state.

That is why Ireland acted so promptly to protect confidence in its financial system after the Lehman failure, and guaranteed the obligations of those institutions that were deemed to be systemically critical. In fact, Ireland’s actions with respect to creditors preceded and were subsequently adopted by the UK and other countries.

Ireland should be commended in acting as quickly as it did to prevent a catastrophic systemic collapse of its financial system which would have made today’s problems, as serious as they are, a shadow of what they otherwise would have been. However, in putting in place the framework of systemic support, Ireland took several decisions based upon what was known at that time that have had major, longer term and possibly unintended consequences.

Importantly, in providing support to its banks, Ireland, rightly or wrongly, deemed all of its major banks to be systemically critical and thus eligible for State support.

Having done this, bondholders of all banks were led to assume they would not be forced to bear losses unless this was contractually permitted by the terms of the instruments they held, and that the legal framework of the time would be respected and upheld. Many investors made subsequent investment decisions based upon these two factors.

Whether Anglo’s bondholders should have been included within this framework is another issue. But the fact is that they were. By including Anglo Irish within the support package upfront and covering bondholders under that support package, rather than attempting to draw the line between Anglo and other banks, or between Anglo’s depositors and its other creditors, the stakes were raised.

It will now be very difficult to attempt to renege upon this commitment and burn the bondholders in Anglo, or in any other bank covered by the systemic support, except where contractually permitted.

If the Irish Government breaks its commitments to support Anglo senior bondholders, or retroactively changes the law with respect to its other creditors, why would investors believe its similar commitments given to Allied Irish Bank, Bank of Ireland or indeed with respect to the sovereign state itself?

The consequence of allowing Anglo Irish to “burn” its senior bondholders now – having explicitly promised not to – would be that the credibility of the entire support package would be placed at risk.

No one would believe the commitments given to the other Irish banks. Neither Ireland nor its banks would then be able to satisfy its borrowing requirements from private capital markets. This would be catastrophic.

In the bigger picture, Ireland has acted with commendable clarity of purpose thus far in formulating a strategy to address the current banking sector problems. It has sought to prevent a repeat of a Lehman-style crisis of confidence by guaranteeing the liquidity of the Irish financial system and putting in place measures to restore the banking system’s solvency.

Many parts of this support package have been copied subsequently by other countries. However, the task has arguably been made harder by some of the specific tactical decisions taken, one of which was the decision that Anglo Irish was systemically critical and that its senior creditors thus needed to be supported.

Whether Anglo was systemically critical and whether its senior creditors needed to be supported is beyond the scope of this article, but having defined it as being so, and having stated that its senior creditors will be supported, it would be extremely risky to now burn these bondholders. Doing so would risk threatening the entire recovery plan.

Damian Chunilal is managing director of the Hong Kong-based investment firm Ocean Capital Management. He has invested in Irish bank bonds in the past. The firm holds no investment in Anglo bonds



 

BSK log, 24.10.10 October 24, 2010

Filed under: Uncategorized — bashstreetkidjailbreak @ 12:18 pm

MAIN ITEM:

BY SUNDAY INDEPENDENT  – QUIT EUROPE JOIN US : Soden: Let’s quit EU and join US – National News, Frontpage – Independent.ie and FREDERICK FORSYTH ON SODENS ASSERTION : Frederick Forsyth: Rise up, reclaim your country – Analysis, Opinion – Independent.ie

ITEM1:

BY LUDWIG VON MISES INSTITUTE ~ POLITICALLY IMPOSSIBLE ~ W.H.HUTT : Politically Impossible? — Mises Economics Blog

Should economists curb their rhetoric and prescriptions based on “political realities”? Should anyone attempt to conceal the truth about state intervention for fear of not fitting into the existing political culture?

Many people answer yes to both questions, on grounds that taking a hard-core position in favor of freedom threatens to make one “irrelevant” or discredit the message.

W.H. Hutt is one of the few economists who addressed these strategic questions directly. As one of the most eminent economists of the 20th century, and a colleague and friend of Mises’s, he was very qualified to do so. The result is this monograph, which, though long out of print, ought to be considered a classic of economic literature.

He makes the point that the political culture, the culture of public opinion, is no less than the dominant strains of thought and convictions held by the common person. And how are those convictions shaped? They are shaped by the ideas and opinions asserted and argued by intellectual leaders. Particularly on economic questions, it is the economists who shape economic opinion.

If economists are constantly pulling back from stating their convictions, relentlessly withholding their true views, predictably kowtowing to political leaders, public opinion will not change and policy will not change. Professor Hutt regards this tendency as irresponsible. Economists should never excuse their own silence on grounds that their prescription is politically impossible. On the contrary, the more economists tell the truth, the more politically possible freedom becomes.

Hutt applies his point in a wide range of areas: labor unions, inflation and monetary economics, social security, the welfare state, and fiscal planning. In each case, he shows how a forthright telling of the truth is the only way to advance sound economics in the political world. In his view, the principled position is the most practical position too!

Hutt also provides a sweeping and erudite look at the history of thought to see how economists in the past have dealt with the vast gulf that separates economic wisdom from public opinion.

“The virtue in the democratic process is that the masses have the power to change rulers in a peaceful manner so that rule in the interests of a few is prevented,” writes Hutt. “The vice is that, because the masses have not learned how to discern rulers who will legislate for their advantage, governments are today engaged in dissipating their people’s heritage. But if I seem to be disparaging the electoral wisdom of ‘the masses’, I am in effect criticizing the people who create mass opinion, both from within and outside the political arena. It is the persuadable among the editors, the columnists, the television and radio commentators, the academics, the clergy and the teachers generally who must be won over.”

 

BSK log, 23.10.10 October 23, 2010

Filed under: Uncategorized — bashstreetkidjailbreak @ 6:47 pm

ITEM :

BY WILLS

There is an underlying free enterprise system generating the wealth and a boil.

One can tinker around with multiplier effects and liquidity irrigation lateral thinking and brainstorm into reality what exactly.

What is it the article is concluding is the sourced outcome here.

A rebound economy? What for! Why?

The economy and its boil will still be there putting all wealth generation under threat like what has just happened.

Is this not obvious at this point.

The clockwork on which the economy ticks is cuckoo.

Inbuilt PONZI dynamics Simple Planet: The Limits to Complexity

 

BSK log, 21.10.10 October 21, 2010

Filed under: Uncategorized — bashstreetkidjailbreak @ 5:45 pm

MAIN ITEM:

INBUILT PONZI DYNAMICS

BY PEAKCOMPLEXITY – ‘COMPLEXITY’ IN SYSTEMS THE ACHILLES HEEL : Simple Planet: The Limits to Complexity

More generally, there is an insatiable lust for maintaining complexity in our modern systems of economic exchange and social organization. Of course, this critique is not true of everyone in the mainstream camps described above, but I find it telling that we rarely (almost never) hear the word “complexity” or phrase “peak” anything mentioned in their bitter debates.

Complexity Analogized

One of the most familiar complex systems to Americans is our country’s inter-connected network of highways, which allow the interstate travel of goods and capital (humans included). This flow mainly passes through large urban centers that act as hubs for the rest of the network. We could have built these highways and then left drivers to their own decisions on how to use them, but it became clear that completely unregulated networks of travel imposed unacceptable safety/economic risks for our society. In fact, the potential risks and instabilities of such a system were so large that it may have completely broken down before it led to any significant gains. Instead, we resorted to licensing procedures and various vehicle and highway regulations. ..///// goto link for more

AN EXAMPLE OF AUTHORITIES BALANCING COMPLEXITIES IN THE SYSTEM IN ORDER TO KEEP IT STANDING ~ BY THE TELEGRAPH / PRITCHARD – PICK YOUR POISON, CURRENCY WARS : Currency wars are necessary if all else fails – Telegraph

BY ANON – COMMENT ON ARTICLE ABOVE

complexity as one of the fundamental drivers in inequality of wealth and therefore application of laws.

Finance = borrowing against future labor = borrowing against future energy = increasing complexity. To ensure increasing financial activity, the legal system has to promote “efficiency” and economic growth, so that’s how it becomes structured by central institutions. Old laws that were meant to promote stability/fairness/equality are repealed, modified or simply ignored and not enforced.

To enforce these laws means to sacrifice economic growth and increased complexity, and although I absolutely think this should be done, the elites are obviously not willing to do so. Fortunately, it is not really up to them anymore… natural forces win out over the idealistic desires of human beings every time.’

ITEM 1:

BY ZERO HEDGE  –  THE QUESTION IS WHETHER OUR ECONOMY IS GOVERNED BY ANY KIND OF RULE OF LAW : Krugman: “The Question Is Whether Our Economy Is Governed By Any Kind Of Rule Of Law” | zero hedge

ITEM 2:

BY OFTWOMINDS – PRIVATE BANKING TAKEOVER OF USA GOVERNANCE THROUGH THE MORTGAGE BACKED SECURITIES PYRAMID SCAM : charles hugh smith-The Coming Collapse of the Real Estate Market

The Coming Collapse of the Real Estate Market (October 14, 2010)
The system for financing mortgages and regulating that financing has failed, completely and utterly. The mortgage and real estate markets are now in collapse.

Yesterday I wrote about how positive feedback loops lead to collapse. Welcome to the U.S. housing and mortgage markets. As I have documented here numerous times, the entire U.S. mortgage market has already been socialized: 99% of all mortgages are backed by the three FFFs–Fannie, Freddie and FHA–and the Federal Reserve has purchased a staggering $1.2 trillion in mortgage-backed assets in the past year or so to maintain the illusion that there is a market for mortgage-backed securities.

There is, but only because the mortgages are backed by the Federal Government and propped up by the Federal Reserve.

The mortgage market is completely dependent on government guarantees and quasi-Government purchases of securitized mortgages. If the mortgage market were truly socialized, then the Central State would own the banks which originate, service and own the mortgages.

But then the private owners and managers of the “too big to fail” banks would not be reaping hundreds of billions in profits and bonuses. And since the banking industry has effectively captured the processes of governance (that is, Congress and the various regulatory agencies), then what we have is a system of private ownership of the revenue and profits generated by the mortgage industry and public absorption of the risks and losses.

Could anything be sweeter for the big banks? No.

The incestuous nature of the system is breathtaking. The Fed creates the credit which enables the mortgages, the Treasury guarantees the mortgages via Fannie, Freddie and FHA, the Fed buys the mortgages ($1.3 trillion in mortgages are on their balance sheet) and the private banks collect the fees and profits.

One of the core tenets of the Survival+ critique is the State/Financial Plutocracy partnership. There are many examples of this partnership (crony capitalism in which the State is the “enforcer” which collects the national income and distributes it to its private-sector cronies), but perhaps none so blatant and pure as the mortgage/banking sector.

But now the entire legal basis for that privatized-profits, socialized losses system has dissolved. The foreclosure scandal is not just a “scandal” in which various frauds were brought to light; it is the failure of the entire system of originating mortgages that props up the entire real estate market.

ITEM 4:

BY THE TELEGRAPH / PRITCHARD – PICK YOUR POISON, CURRENCY WARS : Currency wars are necessary if all else fails – Telegraph


 

BSk log, 20.10.10 October 20, 2010

Filed under: Uncategorized — bashstreetkidjailbreak @ 11:26 am

MAIN ITEM:

Reading this article below one could be but forgiven in thinking that Ireland is now in the middle of some type of currency war afoot between the dollar / sterling / euro.

BY FT – ANGLO LIST OF BONDHOLDERS : FT Alphaville » AIBaiting

The British political blogger has unearthed a purported copy of Anglo Irish’s foreign bondholders as of October 15 — quite a feat given Ireland’s finance minister Brian Lenihan once said he was unable to do the same.

Appearing on the Fawkes list — SEB Asset Management, Pioneer Investments Kapitalanlagegesellschaft, WW Asset Management GmbH and — shock! — Goldman Sachs, along with BNP Paribas, AllianceBernstein, Credit Suisse and so on.

Along with the list, comes this question from Fawkes:

Between them they hold Anglo-Irish bonds with a face-value of €4,034,756,880. Shouldn’t they take the hit rather than future generations of Irish taxpayers? Capitalism is a system of profit and loss, they took the risk of investing in Anglo-Irish Bank. Is the Irish government under pressure from the European Central Bank in Frankfurt to protect German investors?

Meanwhile, Zero Hedge is frothing at the mouth that Goldman is included on the list. Outrage hinges on whether or not one considers Anglo Irish to be a systemically important institution — Guido and Zero Hedge think not, others of course, think yes.

We think a slightly better question is why Allied Irish Banks — that other beleaguered AIB acronym — was able to pass the CEBS-administered European banking stress tests.

These were conducted over the course of the spring, with results published in July showing Allied Irish passing with flying colours. That was just two months before the Irish government unveiled a new capital injection of €3bn.

Anyway, we bring it up because on Sunday, someone has asked it:

(Breakingnews.ie) A Labour MEP is to write to the EU Competition Commissioner to find out why the Commission gave Allied Irish Bank the all clear in July only for the bank to require billions earlier this month. Alan Kelly has said Europe’s failure to anticipate the development is very worrying. Mr Kelly said: “The fact that AIB passed the stress test raises many questions.”

CEBS, you got some ’splainin’ to do.

TWEETBOX :

#You want growth put the rents down.

#Growth is been strangled by POnzi property prices.

#We are supporting the banks which are stopping property prices dropping to real market value which is killing growth.

#Banks are sucking the life out of the economy like giant vampire squid and killing growth stone dead.

#The markets…… growth…….. keeping the banks alive……. its fake capitalism.

#Hundreds of Leprechauns and one pot of gold.

#The scramble to secure the biggest slice of the pot of gold / pie

#Not if one returned A45 to the people and made money issuance sovereign.

#The private bankers unleashed credit into the pockets of property maniacs to blow up a POnzi property bubble to make a mint.

#The problem in the banks is the bankers can provide money out of thin air to their buddies and crony networks.

#there was no growth in ANGLO it was a pyramid scheme for Jaybus sakes.

#The insiders are not interested in *credit/money* circulation which threatens their power base.

#The insiders are irrigating the liquidity in the system to fit in with their vested interests going forward.

# Anon – In the end, ‘we’ (IRL) can’t pay 4 this. We are broke! So German taxpayers will have to pay if they want the € to survive

#Anon -There’s no point of keeping anything, inc low corpo tax, if our households are slaves to the banks debt, is there?

#Anon – As a free marketeer, I don’t care 1 way or the other what happens with bondholders or banks. Taxpayers must not be held liable.

#Anon – Have a bonfire of insolvent banks. Let bondholders chips land where they may: if they take over the banks – green light to them

#Anon – No bank can enter IRL right now, cause Gov is subsidizing with our money incumbent corpses! Market was destroyed by Brian&Brian

#Anon – € can only be strengthened if we have proper monetary policies & functional markets. € is becoming a sad joke absent these.

#Anon – Let bondholders take whatever residual value of banks remains after wind up! If that’s paper clips in office – happy returns.

#Anon – Basic, core building block of economy & society is a household – people – we are destroying lives & futures to serve the false deity of banking sector, bondholders, and a number of EU pet projects. Can any1 truly believe that this is going to lead us (EU) anywhere other than to the proverbial scrapheap of history? Well, Chinese, Russians, Americans, Brazilians, APEC – the ROW – don’t. They are writing Europe off as ‘going nowhere fast’ continent. It’s sad, but true. Our policies are destroying the future of Europe

ITEM 1:

BY ANON – COMMENT ON IRELAND:

Other countries with a more rudimentary, and directly obvious approach to the application of resources are moving forward. Ireland with it’s centralized, convulated, expensive, cronyism-riddled, everybody on the take, silly process of “big” planning is going into reverse.

ITEM 2:

BY WILLS – COMMENT ON DMcW’s SITE

The *emerging economies* and the developed economies are they working for each other across the spectrum of trade in a symbiotic way.

One can only but conclude that they are not.

The controlling interests of all countries converge at BASEL and a financial hegemony. And the allocation of wealth produced from countries rich in resources flows upwards into the insiders bank accounts, whether they hold an emerging economy passport or not.

Serfdom class of emerging economies remain in a type of bondage which hides the tyranny they live under.

South American countries in the final analysis their economies slave under a rigged market place on the global scene which is dominated and controlled by Imperial power with its roots going back into the midsts of time.

ITEM 3:

BY ANON – A RIGGED SYSTEM IN ACTION

While Chile is hailed as a economic success story, it has to be highlighted that income distribution shows rather high inequalities.

Bolivia has the highest inequality in the region, followed by Haiti, Brazil, Ecuador, and Chile, which is tied in fifth place with Colombia, Guatemala, Honduras, Panama and Paraguay.

So I would like to add something to David’s article from a different angle. – My personal perspective is that the entire system is inherently flawed, hence any copy and paste job implements the very same systemic errors on foreign soils. This is deliberate, and is how the system is kept alive. –

In Chile’s 17 million population, 39% of national income goes to 10% or people. If you look at the other end of the spectrum, the poorest 10% receive about 1.5% of national income.

Of course, income inequality is only one aspect, others such as education, health care, culture and ethnic and gender inequalities do matter in that context.

Take education for example, on average, Chilean families contribute 83.9 percent of the cost of their children’s higher education, with the state paying for the rest. The proportion paid by parents is the highest among the 36 countries studied. In Finland, families contribute only 4.5 percent of the cost of tertiary education.

Chile’s society is fragmented by inequality and as such is doomed to continue spending significant amounts on police force and gated communities.

It is striking to see what Chile and Ireland have in common in two areas.

1. Low Income sectors have next to zero bargaining power
2. The people became depoliticized

Precisely these factor s legitimize status quo and prevent structural change.

Chile as well as ireland are elitist driven societies.

In contrast to Ireland however, in Chile this dimension is being addressed by the campaign ‘Bicentennial Citizenship: Creating More Democracy’ which was kick started this September by ACCIÓN.

Inequality is a hydra with many faces, but certainly structure of work is the main force that promotes severe inequalities in societies, legitimizing elitist power and policies.

The trend in our society is calling for a second labour market, a slave labour market where the unemployed will work for a token, to receive state assistance because work is not there. Of course, this concept has no roots in Irish genius, but is nothing but a cheap copy and paste of German 1-Euro Jobs and Hartz 4 policies, creating such slave labour markets since years. Once people are trapped in this, most of them will never again make it to the first labour market.

Chile’s society shows another phenomenon that I would compare with Ireland’s situation, the society is imploding as anger is turned inwards, the outcome is impossible to predict, as fragmented and depoliticized their citizens are.

In July 2010, The catholic bishops conference proposed all crimes against humanity, inflicted by the Pinochet regime from 1973-1990 to be pardoned for prisoners over 70, women inmates with dependent children, and prisoners who are terminally ill, as long as they have shown good behavior.

During Pinochet’s terror regime, approx 30,000 people were tortured. 65 people of the regime are imprisoned in circumstances that offer special privileges.

The former head of the Joint Command, retired general Enrique Ruiz Bunge, faced four sentences for murder, but has been released, and retired general Sergio Arellano Stark, sentenced for leading the ‘caravan of death’ — a special army mission that summarily executed leftist political leaders arrested around the country after the 1973 coup is at home, being cared for by his son.

Unsurprisingly, victims disproportionately bear the cost of reconciliation. Equally unsurprising is that Piñera is amongst the richest people in Chile.

While the mainstream media showed the rescue operations of miners, what has been kept entirely off the radar, was the hunger strike of indigenous Mapuche people, demonstrating against new laws that allow the regime to treat them as terrorist, laws that Piñera will rectify.

Chile was americas laboratory for free market policies under Pinochet.

Harvard economist Ricardo Hausmann: “Chile is like California without Silicon Valley and without Hollywood The reason for that he see’s in the limitations of Chile’s business class, which tends to be a closed, conservative circle.

ITEM 4:

BY IRISH TIMES – JAMES ELLROY INTERVIEW : Between a tragedy and a thriller – The Irish Times – Wed, Oct 20, 2010

‘So I know that whatever I can conceive, I can execute. That was was my biggest revelation, and the expression of my enormous ambition: the desire to create large-scale art. Finally, to create richer, deeper, emotionally resonant fiction, I need periods of rest and contemplation.’ – ELLROY

“That is distracting. I like solitude. I like to be alone. I like to be with God, and I like to pray. I contemplate meaning. If I let my thoughts scattergun out in odd directions, ideas will come to me.” Ellroy is on a continual quest to “become more conscious”, to take risks, to cut across genres: “I have looked deeper and deeper within myself. I try to write more profound books, to view the world more consciously.” The fact that Ellroy is a Christian – a Lutheran, who attends church regularly – may come as a surprise to those familiar with his raunchy slang, but it’s not a topic he likes to dwell on. “I am a Christian and my faith is key to my view of the the world. It is the sustaining fire that gets me through.” Beyond that, the subject is off limits.