Submitted by Mike Krieger
Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show. The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046…The flow of federal dollars in and around the nation’s capital helped the region weather the economic slump better than most areas and is contributing to its recovery. The unemployment rate in the Washington metro area in August was 6.1 percent, compared with 10 percent in San Jose, according to Labor Department figures. Nationally, joblessness was 9.1 percent in September for a third straight month. “The region did experience a shorter, shallower recession than San Jose,” said Sara Kline, a Washington analyst at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The federal government stepped in to take efforts to dampen the recession. It was focused to some extent in the D.C. area as well, given the presence of federal workers there and contractors. That insulated it from more of a downturn.”
– Bloomberg article from yesterday http://www.bloomberg.com/news/2011-10-19/beltway-earnings-make-u-s-capit…
As a result of an amendment by Sen. Bernie Sanders to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Government Accountability Office completed its second audit of the Federal Reserve. This report focuses on the enormous conflicts of interest that existed at the Federal Reserve during the financial crisis.
Here is what the GAO found:
– The affiliations of the Federal Reserve’s board of directors with financial firms continue to pose “reputational risks” to the Federal Reserve System.
– The policy of the Federal Reserve to give members of the banking industry the power to both elect and serve on the Federal Reserve’s board of directors creates “an appearance of a conflict of interest.”
– The GAO identified 18 former and current members of the Federal Reserve’s board affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis including General Electric, JP Morgan Chase, and Lehman Brothers.
– There are no restrictions on directors of the Federal Reserve Board from communicating concerns about their respective banks to the staff of the Federal Reserve.
– Many of the Federal Reserve’s board of directors own stock or work directly for banks that are supervised and regulated by the Federal Reserve. These board members oversee the Federal Reserve’s operations including salary and personnel decisions.
– Under current regulations, Fed directors who are employed by the banking industry or own stock in financial institutions can participate in decisions involving how much interest to charge to financial institutions receiving Fed loans; and the approval or disapproval of Federal Reserve credit to healthy banks and banks in “hazardous” condition.
– The Federal Reserve does not publicly disclose its conflict of interest regulations or when it grants waivers to its conflict of interest regulations.
– 21 members of the Federal Reserve’s board of directors were involved in making personnel decisions in the division of supervision and regulation at the Fed.
– The Sanders Report on the GAO Audit on Major Conflicts of Interest at the Federal Reserve.
You MUST READ THIS.
Rogue Government Traders
Everything that is happening around the world right now reminds me of the movie “Rogue Trader.” In case you haven’t seen it, it is the 1999 film where Ewan McGregor plays the role of Nick Leeson, the Barings Bank trader whose trades gone bad brought down Barings Bank, the oldest merchant bank in London at the time. The reason why this story is so compelling and why I recommend everyone go watch it is because it demonstrates what can happen when a small loss or mistake is ignored and then covered up in a futile attempt to get back to where you were. In this case, Nick Leeson started losing money trading futures in Singapore and rather than cutting his losses he kept trading more and bigger. Pretty quickly, the losses became so enormous he knew he would be forced to close them out if someone noticed and he might even be fired. So what did he do? He decided to transfer the losses to a hidden account. The 88888 account. He figured he would hide the losses there and then close the hidden account when he got back to even. He never got back to even and Barings went bankrupt.
Any of this sound familiar? Yes of course it does. Unfortunately for all of us, the story of Barings bank and Nick Leeson is merely happening on a global scale. However, rather than one trader making bad bets what we are dealing with is a gigantic credit bubble ponzi scheme created by TBTF banks, or as Bill Black more appropriately refers to them, Systemically Dangerous Institutions (SDIs) that now needs to be covered up. This ponzi first started unraveling back in 2008 and rather than deal with it the best we could, global “leaders” decided to bail them out with taxpayer money and guarantees. What did we get for this act of kindness? A dead economy, monstrous unemployment, 15% of Americans on food stamps and a frightening reality that shows Americans are having a much harder time than the Chinese putting food on the table. See this article http://www.shtfplan.com/headline-news/startling-survey-americans-are-str… Meanwhile, what did the banksters get? They consolidated even more power over their Washington D.C. puppets because now establishment politicians are “in” the doubled down Nick Leeson bet with Wall Street and of course they got record bonuses and no one was prosecuted.
So here is the world as I see it at the moment. You have a gigantic credit/derivatives ponzi scheme created by SDIs that cannot be settled or unwound without a lot of pain. The banks know this but of course they don’t tell the serfs. They did tell the governments this back in 2008, but with the caveat that if the politicians saved them they would save the economy and be considered heroes. Given the financial ignorance, stupidity and massive egos floating around that cesspool called Washington D.C. they fell for it line hook line and sinker. Well, nothing improved except for bank bonuses and now people are unsurprisingly out in the streets all over America. Now what?
Well since the politicians are now “in the bet” with the banksters they are just doubling down and doubling down on past mistakes and making things worse and worse. Except this time they won’t just blow up an old bank. They will blow up the entire planet. I mean did you see what Bank of America just did? They purposely moved their derivatives in with the FDIC insured deposits subsidiary and away from the Merrill unit. The FDIC is apparently not into this but the FED thinks it is a good idea. They are purposely putting a nuclear bomb in bed with customer deposits so they have a gun to the head of everyone again. Aren’t you glad we bailed them out? Read this http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-o… and this http://www.nakedcapitalism.com/2011/10/bank-of-america-deathwatch-moves-….
No Solution Announced in Europe. Why?
One of the most hilarious and disturbing things that has dominated market related news lately is the lack of any “solution” in Europe but rather commentary/rumors every other day about some master plan that is to be unveiled any moment. Of course nothing is ever unveiled and then they say oh it will be “next week.” It’s always next week. Just like every bankrupt country on the planet is supposedly going to have miraculous budget surpluses in 2020. They are lying folks. No solution has been announced in Europe because there is no solution. I think it is actually pretty simple. The extent of the debt problem is so enormous when you include Italy (which you need to do as yields reach back up to 6% on the 10 year bond and people are getting violent in the streets) that any “solution” would have to be so huge and involve a lot of new money/credit creation in the Eurozone that it would pass the buck entirely to Germany and lead to extremely high inflation in the Eurozone. This is why Germany rightly has not agreed to the bazooka approach that France and Tiny Timmy Geithner is trying to shove down their throats. While things may not be great in Germany, I don’t think they want a situation where their people have a harder time eating than the Chinese. That is what Americans have gotten as a reward for pulling out the bazooka in 2008 and bailing out the criminals at the government-ward banks.
Here is the other problem with the whole thing. Germany seems to be pushing for greater private sector write downs on Greek debt. The number floating around is 50%. While this is the responsible thing to do it isn’t really workable as a “solution.” Why? Because why would ANY other nation ever perform austerity and agree to pay their debt burden after that? They just saw that all you have to do is cheat and riot and the EU will give in because they will to do anything to save their precious little Euro project. So if Greece gets away with not honoring its debts no nation will ever honor them and then you will either see the biggest chain reaction of debt default in human history or the biggest money printing episode since Zimbabwe. This is completely binary and there are no good outcomes. That is why nothing has been announced. I still think the chance of Germany pulling itself out has a much higher probability than people realize. To see some of the friction between Germany and France read this quick piece from yesterday http://www.cnn.com/2011/10/18/business/france-euro-summit/.
Life in a Looted United States of America
Let this message serve as a warning to Germany. If you follow the path to mutually assured destruction with the rest of Europe you will end up with what we have here in America. In a post looted America, the landscape is dominated by criminal oligarchs running around spouting lies via the media to the ignorant sheep. You see states like Louisiana apparently banning cash for certain transactions. You see Washington D.C., home of nothing productive or creative but rather a nest of immoral parasites take over as the highest household income from San Jose, home of companies like Apple and Cisco. You have the only good news from our Nobel Peace Prize winner President this year being the murder of two people. Osama Bin Laden (which I believe was a totally fake story) and now today Gadhafi. Wow, America really is number 1.
This is how a nation descends from one of productivity and innovation to ruthless, corrupt feudalism in a very short period of time. My message for Americans follows up from my email of two weeks ago. The reason the liberal mainstream corporate media demonized the Tea Party is because it threatens the status quo. The reason the conservative corporate mainstream media demonizes Occupy Wall Street is because it threatens the status quo. These are textbook divide and conquer strategies being used on the American people. Do not fall for it. Yesterday I read a really interesting gallup poll that stated: “Not surprisingly, Americans who consider themselves supporters of the Occupy Wall Street movement (26% of all Americans) are more likely to blame Wall Street than the federal government for the nation’s economic problems. Supporters of the Tea Party movement (22% of Americans) are overwhelmingly likely to blame the government.” What is most compelling to me is that 26%+22% = 48% so basically almost a majority. All we need to do is teach people that Washington D.C. and Wall Street are now the same corrupt entity. They are one gigantic rogue trader sucking the lifeblood out of America. If we can unite these forces, which I can say with certainty agree on the important issues, we can put an end to the status quo and free ourselves of this bondage.
Peace and wisdom,
Sent with MobileRSS for iPhone