10 Jan 2013

Next Big Bailout: 5 Big Banks Threaten Chain Reaction says IMF

WealthCycles: Is the global economy on the cusp of another super-bank meltdown that would pull the world down in a domino-chain crash similar to—or worse than—2008? According to the International Monetary Fund, not only does the risk exist, it could be triggered by the collapse of the same genus of exotic derivatives that took us down last time.
The global derivatives markets in the post Lehman period… are unstable and they can bring about catastrophic failure,” according to a new IMF paper. The author summarizes why the derivatives market still has the entire system a breath away from yet another crisis:
Quite simply, a threat of failure to any of the systemically important financial institutions (SIFIs) is an immediate threat to the others.
The network topology where the very high percentage of exposures is concentrated among a few highly interconnected banks [JP Morgan, Bank of America] implies that they will stand and fall together....
Structurally, as will be seen, the interconnected hubs often suffer self-annihilation and thereby [not] spread[ing] contagion to the extremities—a matter of considerable significance [when considering] saving a species from epidemics.
What should immediately be noticed here is that the International Monetary Fund (IMF) author considers the “self-annihilation”...

Greek Unemployment Soars To New Record, 56.6% Of 15-24 Year Olds Without Job

Tyler Durden's picture Judging by ongoing momentum moves in various European stock and bond market indicators, one could be left with the impression that something in the continent is actually improving. And while hope of improvement is certainly be high, the reality is vastly different as confirmed by the just released Greek unemployment data, which saw the broad unemployment rate soar to a fresh record high of 26.8% in October (24.1% males, 30.4% females - that's nearly one in three), up from a pre-revision 26.0% in September, and up from 19.7% a year ago, the youth (15-24 age group) unemployment rising again to a new all time high of 56.6% (up from 56.4%), and the ratio of those employed (3.68MM) to unemployed (1.34MM) plunging to a record low 2.75x. At this rate it may well hit 1.00x quite soon. But even sooner, perhaps in a few months, the total number of inactive workers (3.34MM) will surpass all those who are working. In short, the Greek collapse is just getting worse and worse.

NWO Centralization: 'US' urge 'Stay for our sake' 'Britain' to remain in 'EU'

British Prime Minister Cameron listens as U.S. President Obama speaks. (Reuters / Eddie Keogh)
RT: Amid growing concerns that the UK may drop out of the EU, the Obama (aka Obama the Baby Bomber) administration has publicly stated that it is in US interests to see Britain as part of the bloc. Many see the move as interference in the national debate.
The comments from Washington come days before British Prime Minister David Cameron is set to deliver a speech in which he is expected to promise to hold a referendum over Britain’s place in the 27-member bloc.
Philip Gordon, assistant secretary for European Affairs at the State Department, warned that there would be consequences for Britain if it quits the union or plays lesser role in it.
"We welcome an outward-looking European Union with Britain in it. We benefit when the EU is unified, speaking with a single voice, and focused on our shared interests around the world and in Europe. We want to see a strong British voice in that European Union. That is in the American interest," he said during a visit to London on Wednesday.
Washington officials have made similar warnings in private in recent weeks, but this marked the first time a named senior member of Obama’s government has spoken on the record about the risks posed by Britain’s EU-membership debate. (If we debate, we will realize it is not in our best interests to stay. If we stay it would result in less independent voices speaking out against the horror of US wars around the world, less chances of divergence from the 'New World Order' monetary ponzi scheme, which suits the mandate of the US puppet administration)
Cameron (our "Stop Bankster Bashing!" puppet) has been largely in favor of the UK staying within the EU

Bums & Bloodsuckers "from a parallel universe" - Max Keiser with Satyajit Das

Max Keiser and Stacy Herbert discuss austerity sandwiches and fraud multipliers in the City of London. In the second half of the show, Max Keiser talks to Satyajit Das, author of Extreme Money, about MMT or Modern Money Tricks and about whether or not the people of Europe will ever rise up and stop the never ending bailout of banker crimes. Source

Postponement, Draghi, And Accounting - Mark J. Grant

The last year in the financial markets may be defined by several words which include “postponement, Draghi and accounting.” These are the underpinnings of what occurred in the last twelve months and they are the bedrock for what is likely to take place in 2013. We begin the New Year from where the old one left off and the future will be defined by how the utilization of these three words gets enacted.

I do not like to make things complicated. In fact, I try my very best to make things simple. During my career on Wall Street I have been confronted numerous times with economists, much to my chagrin, who try to make things more complicated in an effort to prove their vast intelligence I would guess but, in the end, most institutional investors, very bright people themselves, are alienated by this exercise as I am. If you can understand where you are standing and what is going on around you then the next steps are not that complicated and the winning strategy of last year is often the losing strategy of the next which is why it is so critically important to gauge your current surroundings correctly.


The world has done everything humanly possible to put off any tough financial decisions and that is especially true in Europe and in America.

Lojack: US Judge orders student to wear ‘Mark of the Beast’ ID badge

Student body ID cards with RFID-embedded chips (Image from Northside Independent School District)
RT: A federal judge has ruled that a 15-year-old Texas girl must wear an identification badge to her high school for monitoring purposes or else face suspension.
US District Judge Orlando Garcia decided with a Tuesday ruling that John Jay High School student Andrea Hernandez has only two choices: be tracked from classroom-to-classroom or go somewhere else.
Hernandez, backed by the support of her parents and civil liberties groups alike, says she shouldn’t have to a wear an ID badge to school, particularly the kind that’s embedded with RFID chips to track the movements of students. San Antonio’s Northside Independent School District made those devices mandatory in the fall in order to more accurately track attendance figures, but Hernandez objects because she says it’s the equivalent to walking the halls with the Mark of the Beast.”

EUROBLOWN: Could little Cyprus cost Merkel the German election?

How odd it would be if Cyprus was the straw 
that broke Merkel’s electoral back
The Slog: Suddeutsche Zeitung is reporting this morning that the SPD may block a Cyprus bailout on the grounds that it refuses to support tax dumping and money laundering. SPD chief Sigmar Gabriel is quoted as saying that the SPD could not approve a package for the Cypriot banks on the basis of current information available. If Angela Merkel were seeking SPD support (which she will need to get the package through the Bundestag), she will have to come up with good reasons, he said….a scenario he clearly considers implausible.
As the Greens have the same reservations about Cypriot banks, a Bundestag majority is not guaranteed. The article also quotes a German CSU MEP, who demanded a guarantee that the money goes to help the citizens of Cyprus, and not the oligarchs of Russia. The paper quotes government sources as saying that Merkel will only accept a package unless Nicosia accepts radical reforms (but did not say what that meant in practice). Cyprus has asked for a package of €17.5bn, of which €12bn is earmarked for the banking sector. The timetable is for the package to be approved by the eurogroup on February 10th.
There is of course a great deal of geopolitics involved in the Cyprus issue, concerning Turkey, Greece, Israel, the US, Russia, rare earth minerals and of course not forgetting oil.

Russian “Black Money” Threatens To Boot Cyprus Out Of The Eurozone

By Wolf Richter: German Bailout Chancellor Angela Merkel, who is trying to avoid any tumult ahead of the elections later this year, has a new headache. Cyprus, the fifth of 17 Eurozone countries to ask for a bailout, might default and exit the Eurozone under her watch. Using taxpayer money or the ECB’s freshly printed trillions to bail out the corrupt Greek elite or stockholders, bondholders, and counterparties of decomposing banks, or even privileged speculators, is one thing, but bailing out Russian “black money” is, politically at least, quite another.
Cyprus is in horrid shape. Particularly its banks. Their €152 billion in “assets” are 8.5 times the country’s GDP of €17.8 billion. “Assets” in quotation marks because some have dissipated and because €23 billion in loans, or 27% of the banks’ entire credit portfolio, are nonperforming. That’s 127% of GDP! And then there are the Russian-owned “black-money” accounts.
A “secret” report by the German version of the CIA, the Bundesnachrichtendienst (BND) was leaked last November, revealing that any bailout of Cyprus would benefit rich Russians and their €26 billion in “black money” that they deposited in the now collapsing banks. The report accuses Cyprus of creating ideal conditions for large-scale money laundering, including handing out Cypriot passports to Russian oligarchs, giving them the option to settle in the EU. Much of this laundered money then reverses direction, turning minuscule Cyprus into Russia’s largest foreign investor [read...  The Bailout of Russian “Black Money” in Cyprus].

Is American Justice Dead? YES!

David Galland: Every nation-state has a body of laws woven into the fabric of society. As Peruvian economist Hernando de Soto has commented on extensively, the stronger the rule of law, the stronger the economy.
And by "stronger" laws, I mean laws that are impervious to tampering for personal or political gains. The connection between a sound judiciary and economic health is readily comprehensible, except maybe to a politician… businesses and individuals are far more likely to invest capital in a country with understandable laws that are impartially and universally enforced than if the opposite condition exists.
That's because the lack of a consistent body of law breeds uncertainty and adds a huge element of risk for entrepreneurs. That is the case here in Argentina, where hardly a week goes by without La Presidenta and her meddlesome comrades cooking up some new hurdle for businesses to overcome.
Which brings me back to the matter at hand – American justice on a slippery slope.
Few recent cases make the contention clearer than the announcement last week by the US Justice Department that it had settled its case against HSBC for acting as the bag men for Colombian and Mexican drug cartels. The fine, $1.9 billion, amounts to about five weeks of revenue for the bank.
And that was pretty much it.
Matt Taibbi of Rolling Stone magazine, who can run hot or cold when it comes to reporting, in my opinion, nails his column on the verdict, which you can read here.
The basic setup is that for years, at the highest levels of HSBC, the bank worked hand in glove with the drug cartels to launder their money.

Lawmakers around the USA proposing legislation to restrict drone use

By Madison Ruppert: Many Americans are likely unaware of the fact that drones are already being used in the United States. Indeed, drones are used by the military, data from which is shared with law enforcement, by at least one National Guard unit and the Department of Homeland Security (DHS) is slated to join the club as well.
Now lawmakers across the United States are attempting to put limits on the use of drones domestically in an apparent attempt to push back against this sweeping trend.
One bill, HB 1616, introduced in Virginia by Del. C. Todd Gilbert, would provide “that no state agency or organization having jurisdiction over criminal law enforcement or regulatory violations, including but not limited to the Department of State Police nor any department of law enforcement of any city, county or town, shall procure a public unmanned aircraft system (drone aircraft) without the approval of the General Assembly or the local governing body, respectively.”
In North Dakota, Republican state Rep. Rick Becker has introduced legislation in an attempt to make sure drone use by police is not abused.
“It’s a new technology that has really amazing capabilities and can be used in excellent ways for our communities. I don’t want to say that drones can’t be used,” Becker said, according to the Washington Times. But with the new technology there are also issues, primarily privacy issues, which can come into play.”

US Sheriff’s deputies claim HIPAA violation, charge man with two misdemeanors for filming them in public

By Madison Ruppert: In a strange case, Andrew Henderson from Minnesota was charged with two misdemeanors after he filmed two Ramsey County sheriff’s deputies in public. The most unusual aspect of the case is that one deputy said he violated the federal Health Insurance Portability and Accountability Act (HIPAA) in the process.
Getting arrested for filming police is hardly surprising these days, especially when people are brutally beaten for exercising their right to film police carry out their public duties in a public space.
Indeed, the cases have become so numerous that it has become somewhat expected at this point. This particular case, however, also involves alleged evidence tampering on the part of police, which is also disturbingly common when police brutality is filmed.
In this case, Henderson was filming deputies frisk a man with a bloody face outside his apartment building in Little Canada after which paramedics loaded the unknown man into an ambulance
“Police are in a position where they have a certain power that should be watched by the citizens,” Henderson said. If he lived in New York City, he would probably be labeled a “professional agitator” for this type of activity.
The best way to watch them is to film them and hold them accountable for their actions,” Henderson added.

Moscow, Beijing reconnect as reset with US fizzles

RT: Russia and China, which share many of the same international concerns, are looking to fortify their strategic partnership.
Russia's President Vladimir Putin (L) shakes hands with China's Premier Wen Jiabao (AFP Photo/Takuro Yabe)­At a time when the neighboring countries are beginning to feel the heat of the US military, it seems only natural that Moscow and Beijing are beginning to plant the seeds of a long-term strategic relationship.
Xi Jinping, the secretary-general of the Chinese Communist Party, underlined his country’s commitment to a Russian partnership when he noted that he and President Vladimir Putin "came to the unanimous conclusion” that a comprehensive strategic partnershipbetween Moscow and Beijing remains the top priority of their foreign policy."
The comments were made on Tuesday during a visit to Beijing by Russian Security Council Secretary Nikolay Patrushev, who is participating in the eighth round of Russian-Chinese consultations on strategic security.
Xi Jingping, 59, who was sworn as the highest-ranking Communist official in November, echoed the sentiments of the Russian president, who noted at his recent Q&A session with international media that Russo-Chinese relations have become one of the most important factors in the (realm of) international affairs."