Forum--Economic and Political Issues

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Comment by Carol Petersen on February 6, 2010 at 9:43pm

Who governs the world? Just for starters
http://www.bechtel.com/about_bechtel.html
and subsidiaries:Shell
REFINERY PROJECTS
CANADA Bechtel’s Canadian affiliate Bantrel has completed a three-year contract to engineer and construct a diesel desulphurization facility at Petro-Canada’s Edmonton, Alberta, refinery. The firm has recently begun work to add an upgrader to convert the Edmonton Refinery to a bitumen-based feedstock from Petro-Canada’s oil sands extraction sites and from other producers in Northern Alberta. Completion is expected in mid-2008.

KENTUCKY POWER PLANT
USA Bechtel has been awarded a contract to construct a 750-megawatt super-critical pulverized coal-fired power plant in Trimble County, Kentucky, for E.ON U.S. subsidiaries, Louisville Gas & Electric and Kentucky Utilities Co.; Indiana Municipal Power Agency; and Illinois Municipal Electric Agency. The $1.1 billion facility will be the cleanest, most-efficient coal-fired unit in Kentucky, according to the customer. Bechtel received a notice to proceed in June and will begin construction later this year. Completion is scheduled for 2010. Clean Coal right? Mountain top removal right?

Retired board of director for Bechtel George P. Shultz
http://en.wikipedia.org/wiki/George_P._Shultz retired board of director for Bechtel

http://louisdreyfus.com/about/overview.html

Comment by Sylvia Demarest on January 28, 2010 at 9:21am

Dear Friends and Council Members. I am in the process of setting up some computer training so that I can do a better job of posting and managing this council. I appreciate all the thoughtful comments. Phil and me are thinking through the best way to facilitate our discussions. Thank you for your patience.
Sylvia

Comment by Russell F Cowgill on January 27, 2010 at 11:41am

I have heard the reports of the US military turning away aircraft from Port-au-Prince which is difficult to understand since the US is capable of coordinating massive airlifts in military exercises. I helped coordinate Joint Readiness Exercises in the 80's as an Operations NCO in NATO. So it completely baffles me that after two weeks the aid is still being turned away. I am sure the US has improved their operations and coordination capabilities over the last 20 some years. That the French government has asked the UN to intervene is enough to cause me to question. Thank you Carol for posting this.

Comment by Carol Petersen on January 26, 2010 at 11:57pm

Haiti's Oil, Gold & Iridium Resources Explains the Post Earthquake Occupation/Invasion

http://redicecreations.com/article.php?id=9620

Comment by Carlin Favell on January 26, 2010 at 11:03pm

FROM URUBAMBA, SACRED VALLEY, PERU

Hello everybody. This is not my usual travelogue story. It is more like my reports from battlefronts I used to file when I covered the Balkans wars in the 1990s. Most of all, it is a request for urgent prayers for all of you who have been touched by the love of the Apus and the Holy Mountains in Peru. And even those of you who have never been to Peru can help with your heartfelt prayers. Here`s why and what you need to pray for...

Cusco and the surrounding area have been inundated by rains for weeks now. Yes, I know this may sound pretty incredible to those of you who were here in the last two years, and saw the brown hills around Cusco and Urubamba, and the receding snow lines in the mountains. Well, the rain prayers seem to have been answered in spades. This area went from feast to famine, from drought to floods.

The entire weekend we spent there it rained like I have never seen it before. We were drenched each time we went out. When we drove this morning from Cusco to the nearby Saqsaywaman, we saw the consequences. Landslides and rock slides were visible at almost every turn. Many houses have tumbled down the steep hills. Huge boulders rested in the middle of the road we were on. I took many pictures.

When we got to Saqsaywaman, I prayed for those of you who have asked me to, as well for the cessation of this deluge. Indeed, short drizzles turned to overcast skies, which cleared into bright sunshine by mid-afternoon. But the damage has been done. Water levels of all rivers and creeks are rising even if the rain has stopped for the moment.

On our way to Chinchero, in early afternoon, we saw at one point on this major road more than half a hill that had collapsed across the road into the valley below. The crews were still clearing the debris using heavy bulldozers and backhoes. Only one lane was open to two-way traffic. At Chinchero, several rows of ancient Inca supporting walls were reinforced by wooden beams, hoping to prevent them from crumbling under the weight soggy soil.

When we approached the bridge over Urubamba this afternoon on the way to our hotel there, we saw extensive flooding upriver from the bridge. Entire neighborhoods were flooded to the rooftops and treetops. The pretty monastery Ricoletto (sic), in which we stayed for shamanic dialogues in 2008, is under water. The road to Pisaq is partially submerged in water near the bridge. Landslides have closed the train service to Machu Picchu and washed down parts of the road from Agua Caliente to Machu Picchu. We had bought tickets to go there tomorrow. Obviously, that`s not goint to happen. The major bridge across Urubamba river near Pisaq, one of the two main links to Cusco, is being washed down as I write this. It has been closed all day as its supports had started shifting this morning. And so on... you get the picture.

This evening, two high level Inca shamans and I prayed for rain to stop and the rivers to recede. I ask you to do the same. If you decide to do it, please put all your heart and soul into the prayers. I know that the Apus will hear you if you do it that way. Today, I received a confirmation that my benefector Apu Huaskaran had heard my prayers all the way from Hawaii, even though I had no immediate acknowledgement of it. So your prayers CAN make a difference to the poor people in the Sacred Valley of the Inca whose lives and livelihoods are now being threatened by these floods.

Thank you for listening. God bless. Have a good night.

This is Bob Djurdjevic reporting from Urubamba, Peru.

P.S. I know... there is another lesson we can learn from all this. We have to be careful what we pray for. For, it may come true. Such as all those prayers for rain in the last few years. The floods are a reminder for all of us to try live our lives in humility, integrity and elegance,`´ as Apu Huaskaran counselled us (visiting shamans) in July 2008. And not assume that we understand the full consequences of everything we ask for.

--
Bob Djurdjevic
Haiku, Maui, Hawaii
Cell: +1-602-703-2111

Personal: www.yinyangbob.com; Annex Research, Inc.-Business: www.djurdjevic.com;
Geopolitical: www.truthinmedia.org;

Comment by Carol Petersen on January 25, 2010 at 10:52pm

Comment by Carol Petersen on January 20, 2010 at 6:33pm

Dear Relatives,
Anyone noticing the blue spiral and the red spiral? Is there a connection? Why do I feel the weather was manipulated? Can you feel the difference between a cloud seeded rain storm and a naturally occurring one?
http://rense.com/general89/hait.htm

Comment by Carol Petersen on January 24, 2010 at 10:55pm

Iceland could be leading the way, an example for the rest of us on how to pull out of the corporate world bank/debt system. Go Iceland!

http://www.redicecreations.com/radio/2010/01jan/RIR-100124.php

Listening time what's happening in Iceland how they are fighting back!

http://www.voltairenet.org/article163488.html#article163488

Comment by Phil Lane Jr. on January 22, 2010 at 10:56pm

Another Zinger from Sylvia for those who are willing to dig and think DEEP!

This is from Tom Iacono's blog "The Mess That Greenspan Made" please note the books he recommends and the conclusions he reached from reading those books.
The points are similar to what I have argued here. The depression came after a couple of decades of easy money and credit that resulted in an explosion of dedt and financial speculation resulting is substantial overcapacity. The odd thing is that; not only is this rarely mentioned , we also don't seem to have learned the lessons of this past history--no economist talks about this history nor did any economist warn during the huge debt buildup and financial deregulation of the last 30 years that we were building the foundation of anouther crash and depression--least of all the so called expert on the depression our current Fed chair--Ben Bernanke. Finally, Iacono sets out how Roosevelt mostly continued policies that had been put in place by Hoover but did better because of WHEN he became President ie the worst was past. Looking at it from this perspective we can see that, unless the worst is past--which I doubt, Obama could end up being the next Hoover and maybe the Democrats the next Republicans due solely to the timing of Obama's election. I doubt this result only because the Republicans are even more incompetent than the Democrats and will probably totally screw up any opportunity they are given unless they radically change their ideology and funding base. Please realize that the beautiful equations that noe-classical economists are so proud of do not take into consideration debt levels or leverage in determining future economic events. Muey stupido!!!!!

A few thoughts on the Great Depression
THURSDAY, JANUARY 21, 2010
In the weeks ahead, there should be at least another item or two here on the subject of the Great Depression as I've taken to re-reading a couple of very important books on the topic after not having touched them for years.

Today, it seemed like a good idea to share a few thoughts.

Anyone with a similar interest is encouraged to have a look at these two works as they seem to cover all the essentials - the 1920s run-up to the late-1929 stock market crash and then the Great Depression in the 1930s.

Both were written decades ago, having been updated a number of times since, and there appear to be a slew of more recent offering on the subject over at Amazon, though I've not looked into any of the newer ones. Some time ago, I selected these two as being the best of the bunch:

Murray Rothbard - The Great Depression
Robert McElvaine - The Great Depression: America 1929-1941

(Note: You can read Rothbard's book online at Mises here(.pdf).)

Anyone who may also happen to crack these two open would be well advised to repeat the process that I'm about two-thirds of the way through now - start with McElvaine's book and read until you reach 1931, then switch to Rothbard's that covers the period from the early 1920s up until 1931, then switch back to McElvaine for the years after 1931.

Since McElvaine's account is more focused on the political and social details it provides a good setup for Rothbard's book that deals more with financial markets and monetary policy. In this way, you'll get the full treatment in what is mostly chronological order.

Anyway, a few thoughts that are worth sharing at this juncture:

1. The 1920s and the last 15-20 years have some shocking similarities

In reading about the 1920s, there are striking similarities between that period and the last 15 or 20 years regarding productivity gains, credit expansion, and the rise of the consumer culture - what should be looked back upon now as seminal developments that were predecessors to both the 1929 crash and the one in 2008.

Back in the 1920s, it was advances in electricity, automobiles, home appliances, and farming equipment that produced radical changes in the economy, changes that were misconstrued by the central bank as being a "green light" to err on the side of monetary policy that was "too easy".

The rapid expansion in consumer credit was another attribute that the two periods shared as the 1920s marked the first decade in which advertising became commonplace in American culture. Consumers were prodded to "buy now and pay later" for any number of new products that came with the technological advances of the time such as radios, refrigerators, washing machines, and - most importantly - automobiles.

In many ways, the changes that resulted from the widespread use of autos in the 1920s were like the changes that came from the widespread use of computers in recent decades.

This was the first economy-wide instance of credit-enabled pulling of consumer demand forward, a case of creating (what was believed to be at the time) a new era of prosperity that ultimately proved to be fleeting, as appears to be the case today.

2. The Fed's role in sowing the seeds of destruction is under-appreciated

While the Federal Reserve isn't credited with doing all that much from the time that it was founded in 1913 until after World War I, that changed in a big way in the 1920s. As recounted in great detail by Rothbard, continuous "inflationary" policies by Chairman Benjamin Strong from the early-1920s up until about 1928 played a key role in the crash.

Money and credit were simply allowed to expand too quickly - faster than ever before with the exception of periods when the nation was at war - and, when masked by productivity gains that kept consumer prices from rising, this "stimulated" other parts of the economy to inflate asset bubbles of one sort or another, like real estate in Florida or stocks in New York. Another major reason for the inflationary policies of the U.S. central bank in the 1920s was that it was helping Great Britain to get back onto the gold standard in the aftermath of the first world war.

It shouldn't come as too big of a surprise that a focus on stable consumer prices rather than the growth of money supply and credit first became popular amongst economists during this decade. Of course, to anyone looking back at the era now, the results are seen to be both unsurprising and disastrous, but, what is even more astonishing today is that most economists still view the Great Depression as almost materializing out of thin air with the October 1929 stock market crash. You'll hear a few comment on ill-advised tightening by the Fed in 1928 and early-1929, but it was the expansion that ran from 1923 to 1927 that did the real damage.

3. The role of Roosevelt continues to be misunderstood

In the nation's collective conscience, Herbert Hoover continues to be the primary culprit for the severity of the depression from 1929 to 1932 and Franklin Delano Roosevelt is often times seen as a White Knight who came in to save the day in 1933. In reading the history as told by both McElvaine and Rothbard, with few exceptions, FDR policies were simply a continuation of those that were put into place by Hoover, however, the results were much better from 1933 on for a number of reasons, the most important being that the depression had already had three years to "run its course".

It was Herbert Hoover, not FDR, that broke the mold of what had been a Laissez-fare approach by government in regards to the economy, a dramatic change from the Coolidge years when the president is said to have made little use of his office yet, to this day, is credited with fostering "Coolidge Prosperity" for most the decade.

The combination of central bank policies in the 1920s and an over-active engineer in Herbert Hoover were what fostered and prolonged, respectively, the worst economic period in American history and, while Roosevelt was much more effective in restoring confidence than his predecessor, the most important part of history was made before his arrival.

To this day, it striking to me that perhaps the greatest lessons of the Great Depression have still not yet been learned.

Comment by Phil Lane Jr. on January 22, 2010 at 10:52pm

This is directly from Sister Sylvia, the best inside source, by far, that I know!!!!!!!!

So this is how John Paulson and other billionaires "made" $5+ b--he (they) stole it with the help of certain Wall Street banks especially Goldman Sachs--who also made a killing. Read this carefully--the people who got robbed should sue the bastards and the banks that cooperated with his scam--but they probably can't thanks to changes in the securities laws that make even egregious cases like this hard to prove. So if you were robbed--that was the intent. The fraud inherent in this is staggering in it's implications. Basically, once Paulson had requested the creation of CDO's he could short it created the need to generate poor quality debt that would fail. Once entities like Goldman put out the word that they would by debt from any debtor who could fog a mirror the economic incentive was overwhelming. Then, the creators of these CDO apparently gave Paulson a say in what debt to include!!!! Shouldn't this be illegal????

Categorized | Featured Stories, The Deep Capture Campaign, The Mitchell Report

John Paulson’s “Greatest Trade Ever” — Something of a Scam
Posted on 20 January 2010 by Mark Mitchell

Tags: ABX index, collateralized debt obligations, credit default swaps, David Fiderer, Huffington Post, John Paulson, Markit Group, naked short selling, short selling

By now, everybody knows that the market for collateralized debt obligations was riddled with fraud in the lead-up to the financial crisis. What is less known is the fact that hedge fund managers helped create and inflate the market for these toxic securities specifically so that they could bet against them and profit from the inevitable collapse.

An example of a particularly sordid scheme, orchestrated by hedge fund billionaire John Paulson, was discovered some time ago by David Fiderer, a blogger for the Huffington Post. The information in Fiderer’s blog is rather incriminating, and, of course, the mainstream media is not on the case, so I think it bears repeating.

In a close reading of Wall Street Journal Gregory Zuckerman’s book, “The Greatest Trade Ever”, an otherwise starry-eyed account of Paulson’s bets against the mortgage market, Fiderer discovered this nugget:

“Paulson and [partner Paolo Pellegrini] were eager to find ways to expand their wager against risky mortgages. Accumulating it in the market sometimes proved to be a slow process. So they made appointments with bankers at Bear Stearns, Deutsche Bank, Goldman Sachs, and other banks to ask if they would create CDOs that Paulson & Co. could essentially bet against.”

As Fiderer explains, Paulson asked the banks to create those CDOs “so that they could be sold to some suckers at close to par. That way, Paulson’s hedge fund could approach some other sucker who would sell an insurance policy, or credit default swap, on the newly minted CDOs. Bear, Deutsche and Goldman knew perfectly well what Paulson’s motivation was. He made no secret of his belief that the CDOs subordinate claims on the mortgage collateral were close to worthless. By the time others have figured out the fatal flaws in these securities which had been ignored by the rating agencies, Paulson could collect up to $5 billion.

“Paulson not only initiated these transactions, he also specified the terms he wanted, identifying which mortgages would be stuffed into the CDOs, and how the CDOs should be structured. Within the overall framework set by Paulson’s team, banks and investors were allowed to do some minor tweaking.”

It is not clear which banks ultimately participated in Paulson’s scam, but Fiderer quotes Bear Stearns trader Scott Eichel as saying that his bank refused. “It didn’t pass the ethics standards;” Eichel said, “it was a reputation issue and it didn’t pass our moral compass. We didn’t think we could sell deals that someone was shorting on the other side.” Bear Stearns’ moral compass was usually pointed towards the darker regions, but perhaps this is why Paulson subsequently became one of the more eager short sellers of Bear Stearns’ stock.

Fiderer continues: “Prior to 2006, there were not many opportunities for naked short selling on subprime securitizations. But in January of that year, investment banks launched a new product, which enabled Paulson to place those bets on a large scale. The ABX index, a sort of Dow Jones Average of subprime mortgage securities, facilitated benchmarking the price of credit default swaps.”

In fact, it was a black box company called the Markit Group that created the ABX index. The banks were minor shareholders in Markit Group and provided data. I have noted in a previous blog that the Markit Group is a dubious outfit to say the least, and there is good reason to suspect that the direction of the ABX index was influenced by hedge fund managers and their allies at the big banks. I do not have evidence that Paulson was one of those hedge funds, but authorities ought to be asking questions.

Fiderer goes on to suggest that bad loans to homeowners were a significant cause of the financial crisis. Certainly, some mortgage lenders were unscrupulous, and there was a certain amount of predatory lending. Moreover, it is true that house prices were far too high and bound to tip over. But this was not the direct cause of the monumental crash in the market for mortgage securities, nor the subsequent collapse of Bear Stearns, Lehman Brothers, and the American economy.

At the time that the mortgage securities markets began to go south in 2007, defaults on subprime loans had increased only slightly month-to-month, and were in fact considerably lower than in earlier years. In the second quarter of 2007, for example, only 7.7 percent of subprime loans were 30 days past due, slightly up from 6.76 percent in the second quarter of 2006, but considerably lower than the 9.9 percent in the second quarter of 2001.

The problem lied not in the loans themselves, but in the fact that the loans had been packaged (apparently, to a large extent, at the behest of John Paulson and perhaps other bearish billionaires) into fraudulent securities that were traded and probably manipulated by a select number of hedge funds and large banks. In a somewhat similar scheme, hedge funds often pump up the stock of public companies before initiating short selling attacks aimed at demolishing those same companies.

The economy was brought to its knees by a few powerful and eminently dirty players on Wall Street, not by poor people who had the temerity to buy themselves houses.

Comment by Kristin Amber Dawn Maire Hill on January 22, 2010 at 8:48pm

Oh my gosh Syvia I never knew those new light bulbs have merucury in them how creepy thank you for shareing that !

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