November 26, 2008
Nov. 24 (Bloomberg) -- The Criminal U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt Monday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.
The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program (TARP). Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.
When Congress approved TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while REFUSING TO DISCLOSE loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.
“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”
Too Big to Fail
Bloomberg News tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government’s rescue effort.
The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14.
William Poole, former president of the Federal Reserve Bank of St. Louis, said the two programs are unlikely to lose money. The bigger risk comes from rescuing companies perceived as “too big to fail,” he said.
The government committed $29 billion to help engineer the takeover in March of Bear Stearns Cos. by New York-based JPMorgan Chase & Co. and $122.8 billion in addition to TARP allocations to bail out New York-based American International Group Inc., once the world’s largest insurer.
Citigroup received $306 billion of government guarantees for troubled mortgages and toxic assets. The Treasury Department also will inject $20 billion into the bank after its stock fell 60 percent last week.
“No question there is some credit risk there,” Poole said.
Congressman Darrell Issa, a California Republican on the Oversight and Government Reform Committee, said risk is lurking in the programs that Poole thinks are safe.
“The thing that people don’t understand is it’s not how likely that the exposure becomes a reality, but what if it does?” Issa said. “There’s no transparency to it so who’s to say they’re right?”
The worst financial crisis in two generations has erased $23 trillion, or 38%, of the value of the world’s companies and brought down three of the biggest Wall Street firms.
at 1:43 AM
November 10, 2008
Prime Minister Gordon Brown today sets out a five-point plan to create a "stronger and more just" world order in the wake of the worst financial crisis since the Great Depression.
Mr Brown calls on fellow world leaders to use the current worldwide economic downturn as an opportunity to thoroughly reform international financial institutions and create a new "truly global society" with Britain, the US and Europe leading the way.
His call comes ahead of an emergency summit of world leaders and finance ministers from 20 major countries, the G20, in Washington next weekend.
Mr Brown says the DC meeting must establish a new Bretton Woods-style framework for the international financial system, featuring a reformed International Monetary Fund which will act as a global early-warning system for financial problems.
The original Bretton Woods agreements, signed in New Hampshire in 1944, established post-war international monetary protocols governing trade, banking and other financial relations among nations, including fixed exchange rates and the IMF.
Mr Brown's plan for strengthening the global economy involves recapitalisation of banks to permit the resumption of normal lending to households and businesses, better international co-ordination of fiscal and monetary policy and a new IMF fund to help failing economies and stop financial problems spreading between nations.
He also wants agreement on a world trade deal and reform of the international financial system based on principles of "transparency, integrity, responsibility, sound banking practice and global governance with co-ordination across borders".
As Britain moves into recession Mr Brown has staked his own leadership on finding a way out of the global crisis.
In a speech to City financiers at the annual Lord Mayor's banquet in London he says: "The British Government will begin a new Bretton Woods with a new IMF that offers, by its surveillance of every economy, an early warning system and a crisis prevention mechanism for the whole world.
"The alliance between the UK, US, and the EU, must provide leadership, not in order to make the rules ourselves, but to lead the global effort to build a stronger and more just international order.
"My message is that we must be internationalist not protectionist, interventionist not neutral, progressive not reactive and forward-looking not frozen by events. We can seize the moment and in doing so build a truly global society."
Mr Brown has already discussed IMF reforms with French Pres. Sarkozy and German Chanc. Merkel and has called on countries including China and the oil-rich Gulf States to fund the bulk of an increase in the IMF's bailout pot.
He believes that in electing Barack Obama, US voters have showed their belief in a "progressive" agenda of government intervention to help families and businesses through the current crisis.
He says: "Uniquely in this global age, it is now in our power to come together so that 2008 is remembered not just for the failure of a financial crash that engulfed the world but for the resilience and optimism with which we faced the storm, endured it and prevailed."
However, the head of the IMF played down expectations of a new Bretton Woods system ahead of the G20 summit.
Dominique Strauss-Kahn, the IMF's managing director, said: "Expectations should not be oversold. Things are not going to change overnight. Bretton Woods took two years to prepare. A lot of people are talking about Bretton Woods II. The words sound nice but we are not going to create a new international treaty."
The EU has called for an overhaul of the IMF with French Pres. Sarkozy, which holds the EU's rotating presidency, saying: "We want to change the rules of the game".
The US, however, has been more lukewarm on the possibility of radical change.
at 5:09 PM
November 04, 2008
USA to resume nuclear tests to save its Cold War stockpile from decline.
Bush henchman, US Defense Secretary Robert Gates sternly believes the United States needs to resume its nuclear tests. "The US needs to take steps to transform an ageing and very expensive complex of nuclear weapons from the Cold War era to a smaller and less costly enterprise that could meet the nation’s security needs for the future." Gates said.
He said the current nuclear stockpile has been re-engineered to extend its life span, but such extensions cannot continue indefinitely. Without a modernization program, Gates said, the long-term outlook for the arsenal is "bleak."
"No one has designed a new nuclear weapon in the United States since the 1980s, and no one has built a new one since the early 1990s," he said. "To be blunt," Gates said, "there is absolutely no way we can maintain a credible deterrent and reduce the number of weapons in our stockpile without resorting to TESTING OUR STOCKPILE or pursuing a modernization program."
The US National Nuclear Security Administration has lost a quarter of its personnel since the mid 1990s. Half of all US nuclear scientists are over 50 years of age, whereas young specialists have never been involved in the development of nuclear arms. In addition, the USA has not held a nuclear test since 1992.
"Currently, the United States is the only declared nuclear power that is neither modernizing its nuclear arsenal nor has the capability to produce a new nuclear warhead," Gates said.
Britain and France have programs to support their potentials, whereas China and Russia harbor ambitious plans to develop new weapons, he added.
Hypocrite, party of one.. The table is being set for more massive War Crimes by Murder Inc..
at 12:33 AM