Big Banks Manipulated $21 Trillion Dollar Market for Credit Default Swaps (and Every Other Market)

Derivatives Are Manipulated

Runaway derivatives – especially credit default swaps (CDS) – were one of the main causes of the 2008 financial crisis. Congress never fixed the problem, and actually made it worse.

The big banks have long manipulated derivatives … a $1,200 Trillion Dollar market.

Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed (see below) … through gamed self-reporting.

Reuters noted last week:

A Manhattan federal judge said on Thursday that investors may pursue a lawsuit accusing 12 major banks of violating antitrust law by fixing prices and restraining competition in the roughly $21 trillion market for credit default swaps.

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“The complaint provides a chronology of behavior that would probably not result from chance, coincidence, independent responses to common stimuli, or mere interdependence,” [Judge] Cote said.

The defendants include Bank of America Corp, Barclays Plc, BNP Paribas SA, Citigroup Inc , Credit Suisse Group AG, Deutsche Bank AG , Goldman Sachs Group Inc, HSBC Holdings Plc , JPMorgan Chase & Co, Morgan Stanley, Royal Bank of Scotland Group Plc and UBS AG.

Other defendants are the International Swaps and Derivatives Association and Markit Ltd, which provides credit derivative pricing services.

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U.S. and European regulators have probed potential anticompetitive activity in CDS. In July 2013, the European Commission accused many of the defendants of colluding to block new CDS exchanges from entering the market.

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“The financial crisis hardly explains the alleged secret meetings and coordinated actions,” the judge wrote. “Nor does it explain why ISDA and Markit simultaneously reversed course.”

In other words, the big banks are continuing to fix prices for CDS in secret meetings … and have torpedoed the more open and transparent CDS exchanges that Congress mandated.

As shown below, Wall Street has manipulated virtually every other market as well – both in the financial sector and the real economy – and broken virtually every law on the books.

Interest Rates Are Manipulated

Bloomberg reported in January:

Royal Bank of Scotland Group Plc was ordered to pay $50 million by a federal judge in Connecticut over claims that it rigged the London interbank offered rate.

RBS Securities Japan Ltd. in April pleaded guilty to wire frauda s part of a settlement of more than $600 million with U.S and U.K. regulators over Libor manipulation, according to court filings. U.S. District Judge Michael P. Shea in New Haventoday sentenced the Tokyo-based unit of RBS, Britain’s biggest publicly owned lender, to pay the agreed-upon fine, according to a Justice Department Justice Department.

Global investigations into banks’ attempts to manipulate the benchmarks for profit have led to fines and settlements for lenders including RBS, Barclays Plc, UBS AG and Rabobank Groep.

RBS was among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union last month for rigging interest rates linked to Libor. The combined fines for manipulating yen Libor and Euribor, the benchmark money-market rate for the euro, are the largest-ever EU cartel penalties.

Global fines for rate-rigging have reached $6 billion since June 2012 as authorities around the world probe whether traders worked together to fix Libor, meant to reflect the interest rate at which banks lend to each other, to benefit their own trading positions.

To put the Libor interest rate scandal in perspective:

  • Even though RBS and a handful of other banks have been fined for interest rate manipulation, Libor is still being manipulated. No wonder … the fines are pocket change – the cost of doing business – for the big banks

Currency Markets Are Rigged

Currency markets are massively rigged. And see this and this.

Energy Prices Manipulated

The U.S. Federal Energy Regulatory Commission says that JP Morgan has massively manipulated energy markets in California and the Midwest, obtaining tens of millions of dollars in overpayments from grid operators between September 2010 and June 2011.

Pulitzer prize-winning reporter David Cay Johnston noted in May that Wall Street is trying to launch Enron 2.0.

Oil Prices Are Manipulated

Oil prices are manipulated as well.

Gold and Silver Are Manipulated

Gold and silver prices are “fixed” in the same way as interest rates and derivatives – in daily conference calls by the powers-that-be.

Bloomberg reports:

It is the participating banks themselves that administer the gold and silver benchmarks.

So are prices being manipulated? Let’s take a look at the evidence. In his book “The Gold Cartel,” commodity analyst Dimitri Speck combines minute-by-minute data from most of 1993 through 2012 to show how gold prices move on an average day (see attached charts). He finds that the spot price of gold tends to drop sharply around the London evening fixing (10 a.m. New York time). A similar, if less pronounced, drop in price occurs around the London morning fixing. The same daily declines can be seen in silver prices from 1998 through 2012.

For both commodities there were, on average, no comparable price changes at any other time of the day. These patterns are consistent with manipulation in both markets.

Commodities Are Manipulated

The big banks and government agencies have been conspiring to manipulate commodities prices for decades.

The big banks are taking over important aspects of the physical economy, including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity.

And they are using these physical assets to massively manipulate commodities prices … scalping consumers of many billions of dollars each year. More from Matt Taibbi, FDL and Elizabeth Warren.

Everything Can Be Manipulated through High-Frequency Trading

Traders with high-tech computers can manipulate stocks, bonds, options, currencies and commodities. And see this.

Manipulating Numerous Markets In Myriad Ways

The big banks and other giants manipulate numerous markets in myriad ways, for example:

  • Engaging in mafia-style big-rigging fraud against local governments. See this, this and this
  • Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here
  • Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car
  • Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this
  • Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this
  • Bribing and bullying ratings agencies to inflate ratings on their risky investments

The Big Picture

The experts say that big banks will keep manipulating markets unless and until their executives are thrown in jail for fraud.

Why? Because the system is rigged to allow the big banks to commit continuous and massive fraud, and then to pay small fines as the “cost of doing business”. As Nobel prize winning economist Joseph Stiglitz noted years ago:

“The system is set so that even if you’re caught, the penalty is just a small number relative to what you walk home with.

The fine is just a cost of doing business. It’s like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.”

Experts also say that we have to prosecute fraud or else the economy won’t ever really stabilize.

But the government is doing the exact opposite. Indeed, the Justice Department has announced it will go easy on big banks, and always settles prosecutions for pennies on the dollar (a form of stealth bailout. It is also arguably one of the main causes of the double dip in housing.)

Indeed, the government doesn’t even force the banks to admit any guilt as part of their settlements.

Again Wall Street has manipulated virtually every other market as well – both in the financial sector and the real economy – and broken virtually every law on the books.

And they will keep on doing so until the Department of Justice grows a pair.

The criminality and blatant manipulation will grow and spread and metastasize – taking over and killing off more and more of the economy – until Wall Street executives are finally thrown in jail.

It’s that simple …

Posted in Business / Economics, Politics / World News | 7 Comments

Troops Slaughter Refugees Escaping Ukraine

Eric Zuesse

That YouTube, https://www.youtube.com/watch?v=sR7TyLJw8lo, shows what happened to a truck full of refugees heading into Russia after 28 August 2014, when “Kiev loses control of Novoazovsk, rebel troops advance in southeast Ukraine.”

This video, from Russian TV reporter Graham Phillips, was filmed on 2 September. It shows the burnt-out hulk of the corpse-encrusted truck. Many of the corpses are so badly incinerated that they’re barely even recognizable as being such; however, parts of human bodies are shown in the immediate surrounds; so, apparently, the truck was blown up and then went into flames, which is why the clearest-looking body-parts are in the vehicle’s immediate surrounds, instead of in the truck itself. Perhaps these people had been fleeing from Ukraine’s troops and caught and slaughtered by them; perhaps they had instead been mistakenly fired upon by the incoming fighters, who might have mistaken the truck as containing fleeing Ukrainian soldiers. The occupants of the truck apparently had no weapons: no guns or other such hardware are visible among the debris.

Unfortunately, the only information provided in English by the reporter, Phillips, is “Road from Lugansk to Novosvetlovka,” which would suggest that the truck was heading southward into Russia.

Unfortunately, there were no survivors to tell what happened.

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Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010,  and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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Preparing To Asset-strip Local Government? The Fed’s Bizarre New Rules

By Ellen Brown

In an inscrutable move that has alarmed state treasurers, the Federal Reserve, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, just changed the liquidity requirements for the nation’s largest banks. Municipal bonds, long considered safe liquid investments, have been eliminated from the list of high-quality liquid collateral. assets (HQLA). That means banks that are the largest holders of munis are liable to start dumping them in favor of the Treasuries and corporate bonds that do satisfy the requirement.

Muni bonds fund the nation’s critical infrastructure, and they are subject to the whims of the market: as demand goes down, interest rates must be raised to attract buyers. State and local governments could find themselves in the position of cash-strapped Eurozone states, subject to crippling interest rates. The starkest example is Greece, where rates went as high as 30% when investors feared the government’s insolvency. Sky-high interest rates, in turn, are the fast track to insolvency. Greece wound up stripped of its assets, which were privatized at fire sale prices in a futile attempt to keep up with the bills.

The first major hit to US municipal bonds occurred with the downgrade of two major monoline insurers in January 2008. The fault was with the insurers, but the taxpayers footed the bill.  The downgrade signaled a simultaneous downgrade of bonds from over 100,000 municipalities and institutions, totaling more than $500 billion. The Fed’s latest rule change could be the final nail in the municipal bond coffin, another misguided move by regulators that not only does not hit its mark but results in serious collateral damage to local governments – maybe serious enough to finally propel them into bankruptcy.

Why this unprecedented move by US regulators? It is not because municipal bonds are too risky, since corporate bonds with lower credit ratings are accepted under the new rules. Nor is it that the stricter standard is required by the Basel Committee on Banking Supervision (BCBS), the BIS-based global regulator agreed to by the G20 leaders in 2009. The Basel III Accords set by the BCBS are actually more lenient than the US rules and do not include these HQLA requirements. So what’s going on?

From the Inscrutable, Unaccountable Fed

The rule change was detailed by Pam Martens and Russ Martens in a September 4th article titled “The Fed Just Imposed Financial Austerity on the States.” They write that on September 3rd:

The Federal regulators adopted a new rule that requires the country’s largest banks – those with $250 billion or more in total assets – to hold an increased level of newly defined “high quality liquid assets” (HQLA) in order to meet a potential run on the bank during a credit crisis. In addition to U.S. Treasury securities and other instruments backed by the full faith and credit of the U.S. government (agency debt), the regulators have included some dubious instruments while shunning others with a higher safety profile.

Bizarrely, the Fed and its regulatory siblings included investment grade corporate bonds, the majority of which do not trade on an exchange, and more stunningly, stocks in the Russell 1000, as meeting the definition of high quality liquid assets, while excluding all municipal bonds – even general obligation municipal bonds from states with a far higher credit standing and safety profile than BBB-rated corporate bonds.

This, rightfully, has state treasurers in an uproar. The five largest Wall Street banks control the majority of deposits in the country. By disqualifying municipal bonds from the category of liquid assets, the biggest banks are likely to trim back their holdings in munis which could raise the cost or limit the ability for states, counties, cities and school districts to issue muni bonds to build schools, roads, bridges and other infrastructure needs. This is a particularly strange position for a Fed that is worried about subpar economic growth.

Not Sufficiently Liquid?

In a September 3rd press release, Federal Reserve Governor Daniel K. Tarullo stated that while “most state and municipal bonds are not sufficiently liquid to serve the purposes of HQLA in stressed periods . . . the liquidity of some state and municipal bonds is comparable to that of the very liquid corporate bonds that can qualify as HQLA.” [Cite] Criteria were being developed, he said, for considering these assets. But “it is important to get this final rule adopted now, so that the largest banks can begin to prepare for its implementation on January 1.” In the meantime, muni bonds are in limbo, and it appears that most will still not be accepted as HQLA.

The regulators consider stocks to be more liquid than muni bonds because they are readily traded on the stock market. But as the Martens’ note, stock markets can be quite inaccessible in a crisis. Quoting from the Fed’s own archives on the crash of 1987:

Market makers in the over-the-counter market were not obligated to maintain an orderly market and many withdrew from trading. Delays in processing trades resulted in investors receiving prices very different from what they expected. Many brokers did not answer their phones, leaving investors unable to reach them. Erratic price movements and quotes resulted in frequent lock-ups in the electronic trading system used in the over-the-counter market.

In any case, switching the banks’ holdings from muni bonds to corporate bonds or Treasuries is liable to have little effect in a crash. The stricter rules are supposed to be a defense against bank runs; but in a major derivatives bust and bail-in, the available collateral will go first to the derivatives claimants, through a massive concession to financial institutions in the Bankruptcy Reform Act of 2005. (See my earlier article here.) The FDIC and the depositors are both liable to be out of luck, no matter what form the collateral takes.

The Martens’ conclude:

That the Fed and its regulatory cohorts have to resort to this implausible plan – which crimps the ability of states and localities to raise essential funds to operate – in a strained effort to pretend that they’ve found a means of avoiding another massive bailout of Wall Street in a crisis, is just further proof that the only way to seriously deal with too-big-to-fail banks is to restore the Glass-Steagall Act and break up these complex creatures before they strike again.

Gordon Gekko Goes Muni?

The rule change may not have much effect in a crash, but where it will have a major effect is on the cost of credit, which will increase for municipal governments and decrease for corporate and financial institutions. The result will be to further shift power and financial resources from the public sector to the private sector.

Why would regulators dangerously jeopardize state and local government budgets in this way? Skeptical observers speculate that the intent is to Detroit-ize municipal governments, so that assets can be stripped as is being done in that imperiled city. The international bankers got away with asset-stripping Greece. Why not make the US itself a wholly-owned subsidiary of private banking interests?

If that seems far-fetched, consider what is happening with Argentina, which has been forced into bankruptcy by a US court to satisfy the exaggerated claims of certain hold-out vulture funds. IMF regulators have discussed establishing an international bankruptcy court that could strip a country such as Argentina of its assets, including prime sections of real estate, to pay off the nation’s creditors.

In the US, there is already a trend to force state and municipal governments into austerity measures, if not outright bankruptcy, in order to eliminate labor unions, pension obligations and social services. Bankruptcies can be involuntary, forced by the creditors who caused them. Detroit is the US model. Michigan’s Constitution protects pensions, so the emergency manager appointed by the governor could not unilaterally cut those funds. But in a municipal bankruptcy, a judge would decide the fate of city workers’ pensions, making it an attractive option for banking interests. The oligarchs have long had their eyes on the massive sums represented by the pension funds.

Public Banks to the Rescue?

Whatever the explanation for the Fed’s game-changing move, the vulnerability of state and local governments to unpredictable and unaccountable federal regulators is another strong argument in favor of forming publicly-owned banks. Why be under the thumb of an erratic privately-owned central bank manipulated by Wall Street megabanks now caught in multiple frauds?

Like Eurozone countries, US states cannot print their own currencies. But unlike Eurozone countries, they can borrow from their own public banks, which can create money as credit on their books just as private banks do.

At least, they could if they had their own banks. Only one state – North Dakota – has currently taken advantage of that option. North Dakota is also the only state to have escaped the 2008 credit crisis, sporting a budget surplus every year since then. It has the lowest unemployment rate in the country, the lowest default rate on credit card debt, and one of the lowest foreclosure rates.

True, North Dakota also has oil. But the 2008 crisis happened before oil and gas had made a significant impact on state revenues; and the state was posting a budget surplus all during that period. Other oil and gas states are not doing so well.

Globally, 40% of banks are publicly owned; and they are largely in the BRIC countries – Brazil, Russia, India and China. These countries also escaped the credit crisis largely unscathed.

If state and municipal governments want to protect themselves from the fate of Greece and Detroit, they would do well to follow North Dakota’s lead and form their own publicly-owned banks. And time is of the essence, if they hope to beat the rush before the first US Cyprus-style bail-in consumes the collateral that local governments are counting on to protect their multi-billions in deposits.

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Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her 200+ blog articles are at EllenBrown.com.

Posted in Business / Economics, Politics / World News | 2 Comments

Could the Alibaba Model Undo the Wal-Mart Model?

These are questions that arise as a consequence of the digitization of the global/local supply chain in the peer-to-peer model.

Longtime correspondent Bill M. reckoned I missed the longer-term story in my piece on the Alibaba IPO: namely, that the Alibaba Model of makers selling directly to buyers could undo the Wal-Mart Model of super-stores dependent on massive inventory. My essay The China Boom Story: Alibaba and the 40 Thieves addressed the China Boom rather than the Alibaba model, so let’s compare and contrast the Alibaba model and the Wal-Mart model.

We all know the Wal-Mart Model:squeeze suppliers until they’re gasping for air (“sure, you’re losing money on every unit you sell us, but you’ll make it up on volume”) and then transport all this stuff across the Pacific to a vast warehousing and shipping operation that must keep hundreds of sprawling (and costly) superstores stocked with hundreds of different items.

This model gained supremacy because it lowered costs to consumers by outsourcing the production of most of the inventory.Generally built outside of towns, the superstores thrived in an era of low gasoline costs and cheap credit, i.e. the past few decades.

Competition was held at bay by the sheer size of the superstores’ purchasing might: nobody ordering small lots could buy stuff at the same price as someone ordering a million units.

The Alibaba Model is a peer-to-peer system that enables makers/suppliers and buyers to link up supply and demand in real time. Let’s say I want 100 bicycle wheels of various sizes for my bicycle repair shop, to replace all the wheels stolen from unsecured bikes with quick-release hubs.

In the peer-to-peer market (the Alibaba Model), my bid for the 100 bicycle wheels is visible to a universe of makers/suppliers. Maybe some supplier has an overstock, or a manufacturer has piled up some extras or has a slack day to fill on the production line. There are any number of reasons why a maker/supplier might be able to get close to Wal-Mart’s price for a small batch order.

Depending on my own distribution network, the 100 wheels might not even be inventoried in a warehouse: the day they arrive, I might ship them to others who already ordered wheels from me–from individuals to institutions to other repair shops.

The digital overhead of the transaction is near-zero, and managing the logistical supply chain is low-cost as well. There is very little overhead compared to the vast hierarchy of corporate controls and management of the superstore model.

This enables both the maker and the buyer to offer better prices with higher margins than either could get in the Superstore Model. In essence, the profit and overhead skimmed by the Superstore Corporation can be split between buyer and seller.

The Alibaba Model is not limited to China. After reading Shenzhen trip report – visiting the world’s manufacturing ecosystem, Correspondent Mark G. observed: The injection mold making they discuss as a strength in Shenzhen is precisely what Phil Kerner teaches at hisThe Tool And Die Guy website. Resurrecting that supporting skill community ecology is why I regard such teaching materials from Kerner and Tubal Cain on Youtube as so vital: Index of Tubal Cain “Machine Shop Tips” videos on YouTube.

Toss in the ongoing revolution in affordable desktop 3-D fabrication machines, and it’s not too hard to discern the price advantages of the Superstore Model eroding fast, especially if consumers wise up that “low prices” are not low if the quality is so poor the product must soon be replaced.

How much would I pay to avoid the weeks-long shipping delay from Asia? Does that premium enable local shops to compete with Asian workshops, despite the lower wages paid in China, Vietnam, and other emerging economies?

How much would I pay to have the item I want delivered to me rather than have to drive miles to the Superstore? if I add up the maintenance costs, fuel and other expenses of operating my car, and the time wasted in traffic, standing in line, etc., how much cheaper is the Superstore price?

How much would I pay to direct my money went to a local worker/shop owner I know and trust rather than to some supplier in a distant city?

These are questions that arise as a consequence of the digitization of the global/local supply chain in the peer-to-peer model. Just as we have reached Peak Central Planning and Peak Central Banking, we may have reached Peak Centralization not just in government and finance but in the corporate-cartel model of “low quality at high margins.” 

If you have an outside-the-mainstream book-length idea that identifies the business trends of the future and you’re under 35 years of age, you might want to enter a book proposal inThe Bracken Bower Prize competition being sponsored by the Financial Times (FT.com). The winner will receive £15,000 and the winning proposal will also be published on FT.com. The deadline for entries is 5pm (BST) on September 30th 2014. 

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URGENT: BLOCK UKRAINE’S PRESIDENT POROSHENKO ADDRESS TO BOTH HOUSES OF CONGRESS!

Please personally rewrite for yourself and send an email letter like this to the press secretary of the Chairman of the Senate Foreign Relations Committee, Democratic Senator Robert Menendez, and viralize this urgent message:

 

 

From: Eric Zuesse

Date: September 8, 2014 10:32:42 PM EDT

To: adam_sharon@foreign.senate.gov

Subject: TO Senator Menendez

 

If Senator Menendez does not block this, I shall never again vote for nor support any Democrat for any office: Corker and the Republicans want war against Russia. If Democrats also do, this is a dictatorship, not a democracy. Poroshenko is overseeing an ethnic cleansing program against the residents of southeastern Ukraine. He should not be allowed to address Congress. The U.S. will not support nazism in any country.

Sincerely,

Eric Zuesse

http://www.huffingtonpost.com/eric-zuesse/

http://www.businessinsider.com/author/eric-zuesse

http://www.opednews.com/author/author85251.html

http://www.salon.com/writer/eric_zuesse/

http://www.washingtonsblog.com/?s=zuesse

http://www.globalresearch.ca/author/eric-zuesse

http://www.commondreams.org/author/eric-zuesse

http://www.alternet.org/authors/eric-zuesse

http://www.smirkingchimp.com/author/eric-zuesse

http://rinf.com/alt-news/author/eric-zuesse/

google: zuesse site:http://www.counterpunch.org

zuesse informationclearinghouse.info

http://www.nakedcapitalism.com/2013/01/eric-zuesse-understanding-president-obamas-strategy-to-force-cutting-social-security-medicare-and-medicaid.html

http://www.dailykos.com/blog/Eric Zuesse

 

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Decades of federal government ‘cost-plus’ contracts increase taxpayer costs 2, 3, 4+ times

guest blog by “Captains America” (bio below)

The biggest issue with federal government purchasing is the use of cost-plus contracts. This should be an issue that most people agree with regardless of their political leanings.

Cost-plus contracts are a way for government acquisition professionals to pass on research and development risks to the taxpayers. The acquisition professionals cause this risk to taxpayers through two different actions: 1. Writing poor system requirements and 2. Not contracting for the proper lab work, experimentation, and prototyping for new technologies. Essentially, programs are going forward for full funding without the proper engineering and scientific effort being conducted to refine new designs and catch unforeseen problems with new technologies. There are programs funded that contain requirements for technologies that don’t even exist in a proven prototype.

For some programs that are funded by Congress, there are several high risk technology requirements that are rolled into the same project, compounding risk to taxpayers. While the contractors experiment, fail, and experiment again to try and meet those requirements, the bills keep piling up.

The Space Based Infrared System (SBIRS) – High, which provides infrared sensors in space as part of the missile launch alert system, is an example of what happens when small scale sensor prototypes aren’t developed slowly in a laboratory research and development environment, and then introduced in stages (first as a small test sensor on an operational satellite and later as its own acquisition program for full-scale development). The program experienced massive cost overruns on the order of 400%; see Budget Busters:  The USA’s SBIRS – High Missile Warning Satellites.

Poor system requirements writing continues because in many cases acquisition professionals are just taking various inputs from organizations, consolidating the requirements, and pressing forward with a new program without understanding where to cut and shape requirements in order to bound risks. It’s an ignorance of what’s state-of-the-art practice in industry today versus what isn’t feasible to accomplish in the near-term.

The cost overruns and schedule slips include naval ships and aircraft. The Navy can’t even purchase small ships designed for coastal operations without having costs more than double; see Cost overruns have military facing ‘train wreck,’ McCain says.

Federal government acquisition professionals in most cases are also the last group you want managing new technology efforts. In most cases, they have never personally designed anything high-tech, never led lab experimentation, and never built a system prototype. In addition, they are motivated to create the most expensive and massive programs possible. It’s a contest in the government to try and secure as much of the overall budget pie as possible. Acquisition personnel are promoted based upon the dollar value of the contracts they manage.  The whole personnel system must be changed so that acquisition personnel show in their personnel file how they managed system requirements and system risk instead of rewarding them for managing large dollar value contracts.

There is no reason for federal government offices or their contractor teams to fear any action from Congress because they submitted completely flawed program costs and schedule when introducing a program to Congress. Government employees aren’t fired, and contractors are not blacklisted from contract competition if they fail to deliver on promises. Federal government project managers know the real hurdle is to get a project’s initial approval and funding by Congress. For example, there is a continuing expectation among NASA personnel that projects that fail to meet cost and schedule goals will receive additional funding; see Hubble Psychology Causing NASA Program Cost Overruns?

Congress is motivated to approve and fund these large-dollar-value, high risk programs. Contractors purposefully stage branch locations in key Congressional districts so that the big programs are approved. They are sold as jobs programs to Congressmen, despite the fact that we can create even more profitable jobs in this country if we do a better job of prototyping, research and development, and requirements management. Congressmen are rewarded for looking the other way during one schedule slip and cost overrun after another. Just do a review of which contractors contribute to their campaigns.

We must get Congress to force a change in federal government purchasing (also called acquisitions). For components, types of materials, sensors, software programs, etc. that are new and high risk to develop, a government Research and Development office should be the lead to work with industry and produce a lab prototype that is either small scale or full scale. A second stage prototyping may also be required for some high risk technologies in order to integrate a new component or material into an existing operational system in order to perform additional testing and evolution of the technology. This would allow scientists and engineers the time needed to gain the knowledge required to transform a high risk technology into a moderate risk technology. Congress must stop financing purchasing contracts for complete systems that include several high risk technologies.

The continuous waste of taxpayer dollars on poorly managed space and defense programs should not be allowed to continue. This is a decades-old story now and our do-nothing Congress still hasn’t moved to make prototyping and risk management a must for all federal government acquisitions.

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Bio: Captains America is the pen-name of two decorated US Air Force members. Both now work in the private sector with no ties to government. Expert testimony always has documented facts speak for themselves; Captains America embrace this professionalism.

 

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Russia Has Now Joined the Ukrainian Civil War, and Is Lying to Deny It

Eric Zuesse

The reports that Russia has ‘invaded’ ‘Ukraine’ were repeated for many months and were just lies from the Obama Administration and their agents at NATO, and from the Ukrainian Government that Obama had installed in February. But, now, finally, Russia actually has sent regular Russian conscript soldiers and military equipment into the formerly Ukrainian areas of the former Ukraine’s southeast, where, for months, the Obama-installed Ukrainian Government has been bombing and otherwise mass-murdering the residents, and destroying and outright stealing their property.

Russia is simply lying about their military operation against the continued reign, in that resistant region, of the Obama-installed Ukrainian Government, a government that’s widely hated there (and especially in Crimea, where the residents never wanted to be ruled from Kiev), and which region had voted overwhelmingly for the President, Viktor Yanukovych, whom Obama overthrew, which is the reason why Obama needs to get rid of these people now in order for his coup in Ukraine to be able to last beyond the current rulers there, whose only ‘legitimacy’ in their current posts is Obama’s having installed some of them, and the rest of them having been elected in an ‘election’ that was held only in the regions of Ukraine that had voted against Yanukovych in 2010, but which Ukrainian national regime nonetheless claims the sovereign right to continue ruling over the people whom it’s now bombing and robbing, trying to exterminate and to expel the rest of them into Russia.

A public debate on whether Putin is right to be doing this, in response to what Obama has been doing for months (and why he is doing it) in Ukraine, would be constructive. However, continued lying, both by the Obama regime, and by the Putin regime, will not be any more constructive in the future, than it has been in the past.

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Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010,  and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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The China Boom Story: Alibaba and the 40 Thieves

I suspect the Alibaba IPO may well prove to be the high water mark of the China Boom Story in more ways than one.

We all know the story of Ali Baba and the 40 Thieves. Poor woodcutter Ali Baba discovers the 40 Thieves’ secret cave where they stashed all their ill-gotten wealth. Various adventures follow, with the loyal slave girl being the heroine who repeatedly saves Ali Baba from death at the hands of the Thieves and their resourceful, cunning leader.

My favorite filmic depiction of the story is the 1934 film Chu Chin Chow starring Chinese-American actress Anna Mae Wong as the heroic slave girl. (Another Arabian Nights’ inspired fantasy also stars Wong as a loyal slave girl: the 1924 silent film The Thief of Bagdad with Douglas Fairbanks and Anna Mae Wong. Clearly, Hollywood’s favored role for Miss Wong was loyal “exotic” slave.)

On the current stage, the drama being played out is that of Chinese Internet company Alibaba, which is set to go public on the U.S. stock market next week in a staggering $21 billion IPO (initial public offering). Many market pundits expect the current rally in stocks to continue through next week, if for no other reason than to insure the investment banks dump all the Alibaba shares on a credulous public at full pop. Alibaba To Raise $21 Billion In Historic IPO.

The IPO share price of between $60 and $66 would peg Alibaba’s value around $160 billion.

Behind the rah-rah, Alibaba’s fair market value is problematic: What’s an accounting puzzle like Alibaba (really) worth? 
As the world’s largest e-commerce company prepares to go public, its murky financials don’t make it any easier for investors to figure out the company’s value.

In the bigger picture, the same can be said of the entire China Boom Story, which has supported the global expansion of trade, commodities and stocks for the past two decades: is it for real, or is it fundamentally an elaborate facade of carefully designed props, borrowed money and opaque accounting?

Let’s start by stipulating that the great wealth created by China has been generated by the hard work of its enormous workforce, many millions of whom have toiled back-breaking hours in mind-numbing factory jobs to better the prospects of their children, many of whom were left behind in the rural villages the parents left as migrant workers.

This story has been told in two documentaries: China Blue and Last Train Home.

The largely untold story of the China Boom is the vast thievery that has siphoned off much of the wealth into the hands of a crony-Communist Party-state few:

– peasants’ land stolen by local governments and their crony developers

– wages stolen from workers by unscrupulous factory owners and their thoroughly corrupt government cronies

– value stolen from consumers via the substitution of shoddy or even poisoned ingredients for the product being advertised (top Party officials get all their food from secret organic farms)

– product design and intellectual property stolen by copycat manufacturers who pirate everything under the sun without paying a yuan of royalties

– corrupt officials stealing from everyone via bribes, illicit partnerships, shares in land development deals, etc. etc. etc.

– last but not least, the European, American, Japanese and Korean corporations that are complicit in all these layers of officially sanctioned theft to lower the wholesale cost of their $40 jeans (retail) to $4 from $5 to maximize their gargantuan profits at the expense of the officially exploited. (Interesting how that reduction didn’t result in any corresponding reduction in the retail price.)

Few dare ask if the Alibaba IPO isn’t just the latest in an unending string of officially sanctioned thievery of the credulous or powerless. Is Alibaba worth $160 billion as advertised? Based on what earnings? By what accounting standards? How much of these net earnings will actually flow to shareholders?

Or is the Alibaba IPO just another snatch-and-grab by U.S. investment banksanxious to skim their share of the China Boom Story before the whole flimsy backstage set implodes in the collapse of shadow banking and shoddy real estate development?

I suspect the Alibaba IPO may well prove to be the high water mark of the China Boom Story in more ways than one: the apex of Wall Street’s greedy complicity in selling the fantasy, the apex of “China’s real estate bubble is not a bubble, and no, it will never pop,” and the apex of the wealth divide between the handful of thieves who are busy transferring their wealth out of China and the reach of those they ripped off, and the exploited mired in a polluted factory to the world that cannot possibly prosper without a permanently expanding real estate bubble and an equally permanent global expansion.

The Chinese thieves are busy stashing their ill-gotten wealth in the West. Perhaps it’s just a matter of time before the modern-day equivalent of loyal slaves arise to take back what was stolen from them. 

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Israel v. Palestine: Yet Another Gas War?

War in Gaza = War Over Natural Gas?

We noted in 2012 that the real reason for Israeli-Palestinian fighting in Gaza may be over Gaza’s huge natural gas reserves.

The following post by Julie Lévesque at Global Research provides insight into the issue.

Israel Steals Gaza’s Offshore Natural Gas: $15 Billion Deal with Jordan

_29571_Gaza_electricity

Photo: “Gaza electricity; ‘enemy of the (Jewish) state’” wrote the Middle East Online during the 2008-2009 Operation Cast Lead.

While Gazans suffer from daily power shutdowns, Israel is signing an important deal to sell gas to Jordan, gas which, researchers say, was stolen from Palestinians.

In addition to confiscating Palestine’s energy resources, Israel has destroyed Gaza’s only power station in its latest military offensive.

On July 29, 2014, RT reported:

Over a million people in Gaza could be without electricity after Israeli tank shells hit the fuel depot of the enclave’s only power station, causing it to shut down. Its director, Mohammed al-Sharif, said, “The power plant is finished.” (Gaza’s only power plant shut down by Israeli shelling, RT, July 29, 2014)

The Middle East Monitor reported September 4, 2014 that a Memorandum of Understanding ”is due to be signed between Israel and Jordan in the reservoir of Leviathan to export Israeli natural gas to Jordan during the next 15 years with a total value of $15 billion”. (Jordan to buy $15bn of Israeli gas, Middle East Monitor, September 4, 2014.)

Israel’s first natural gas export deal will also be signed by “the Leviathan field partner Noble Energy Inc. on behalf of itself and its partners Delek Group Ltd. units Avner Oil and Gas LP and Delek Drilling Limited Partnership and Ratio Oil Exploration (1992) LP.” (Leviathan partners signing $15b Jordanian gas dealGlobes, Israel business news, on September 3, 2014)

We may recall that in the wake of the Israeli bombing and invasion under Operation Cast Lead, “Palestinian gas fields were de facto confiscated by Israel in derogation of international law”:

A year following “Operation Cast Lead”,  Tel Aviv announced the discovery of  the Leviathan natural gas field in the Eastern Mediterranean “off the coast of Israel.”

At the time the gas field was: “ … the most prominent field ever found in the sub-explored area of the Levantine Basin, which covers about 83,000 square kilometres of the eastern Mediterranean region.”

Coupled with Tamar field, in the same location, discovered in 2009, the prospects are for an energy bonanza for Israel, for Houston, Texas based Noble Energy and partners Delek Drilling, Avner Oil Exploration and Ratio Oil Exploration. (Felicity Arbuthnot, Israel: Gas, Oil and Trouble in the Levant, Global Research, December 30, 2013)

The Gazan gas fields are part of the broader Levant assessment area. (Michel Chossudovsky, War and Natural Gas: The Israeli Invasion and Gaza’s Offshore Gas Fields, Global Research, January 8, 2009)

The Times of Israel said this first export deal “makes Israel chief energy supplier for [the] kingdom.” (Marissa Newman, Israel signs $15 billion gas deal with Jordan, The Times of Israel, September 3, 2014)

The Israeli business news outlet Globe reports that the U.S. State Department “assisted” both countries in signing the deal which gives Israel the capacity to “use its position to achieve strategic aims”:

The deal has been brought to fruition with the assistance of Israel Minister of Natural Infrastructures, Energy and Water Resources Silvan Shalom and the US State Department.

US Secretary of State John Kerry’s special envoy and coordinator for international energy affairs Amos Hochstein is in Jordan for the signing ceremony. Silvan Shalom will be required to approve the deal before contracts are finally signed.

This deal significantly changes the economic strategic relations between Israel and Jordan and makes Israel an energy producer and exporter that can use its position to achieve strategic aims. Discussions over Israeli gas exports have rumbled on in Israel for the past few years and ultimately it was decided that Israel can export 40% of its offshore natural gas reserves. (Leviathan partners signing $15b Jordanian gas dealGlobes, Israel business news, on September 3, 2014)

According to the Middle East Monitor, Jordan approved last month a recommendation “calling for supplying Jordan with natural gas from Palestinian water of the Gaza Marine”:

“The Jordanian cabinet approved, last month, the recommendation of the Committee on Economic Development, calling for supplying Jordan with natural gas from the gas field discovered in the Palestinian water of the Gaza Marine, after coordination with the Palestinian Authority.

The Palestinians own a stake in the Gaza Marine field, located 35 kilometres away from the coast of the Gaza Strip, which was discovered at the end of the 90s, nothing has been extracted from it yet.” (Middle East Monitor, op. cit.)

Will this deal between Israel and Jordan jeopardize this approval?

One thing is certain, this new deal making Israel the “chief energy supplier for the kingdom” and making Israel an important energy player able ”use its position to achieve strategic aims”, sheds a new light on the purported objectives of the relentless Israeli attacks against Gaza.

In 2007 a year before Operation Cast Lead in which Palestinian gas fields were confiscated, Israeli Defense minister and former Israeli Defence Force (IDF) chief of staff Moshe Ya’alon wrote that “Israel needs additional natural gas sources”. However, purchasing gas from Palestinians, he claimed, would be “tantamount to Israel’s bankrolling terror against itself” and that gas revenues cannot be “a key driver of an economically more viable Palestinian state”. His statement below clearly shows the links between Israel’s military operations and Palestine’s oil and gas reserves:

British Gas is supposed to be the crown jewel of the Palestinian economy, and provide part of the solution to Israel’s pressing energy needs. The British energy giant, now called the “BG Group,” and its local partners – the Palestinian Authority under Mahmoud Abbas and the private, Palestinian-owned Consolidated Contractors Company (CCC) – are currently involved in advanced negotiations to sell to Israel massive amounts of natural gas – reserves of nearly 1.4 trillion cubic feet – that BG first discovered in 2000 off the Gaza coast. The market value of the gas has been estimated at $4 billion. Therefore, sale of the gas to Israel would mean a billion-dollar windfall for the PA and, potentially, for the Palestinian people.

Unfortunately, British assessments, including those of former Prime Minister Tony Blair, that Gaza gas can be a key driver of an economically more viable Palestinian state, are misguided. Proceeds of a Palestinian gas sale to Israel would likely not trickle down to help an impoverished Palestinian public.

For Israel, the need for BG’s gas may have already taken a toll. It is possible that the prospect of an Israeli gas purchase may have played a role in influencing the Olmert cabinet to avoid ordering a major IDF ground operation in Gaza …

Clearly, Israel needs additional natural gas sources, while the Palestinian people sorely need new sources of revenue. However, with Gaza currently a radical Islamic stronghold, and the West Bank in danger of becoming the next one, Israel’s funneling a billion dollars into local or international bank accounts on behalf of the Palestinian Authority would be tantamount to Israel’s bankrolling terror against itself. Therefore, an urgent review is required of the far-reaching security implications of an Israeli decision to purchase Gaza gas. (Moshe Yaalon, Does the Prospective Purchase of British Gas from Gaza Threaten Israel’s National Security?, Jerusalem Center for Public Affairs, October 19, 2007)

What needs to be understood from that declaration is that Israel will not allow Palestinians to have a viable economy by exploiting their natural resources. The “terrorist threat” is just a pretext to maintain Palestine under military occupation and continue to steal its land and resources.

Independent researchers have indicated that these military operations as well as the illegal blockade of Gaza are in fact all about oil and gas:

What is now unfolding is the integration of these adjoining gas fields including those belonging to Palestine into the orbit of Israel. (see map below).

It should be noted that the entire Eastern Mediterranean coastline extending from Egypt’s Sinai to Syria constitutes an area encompassing large gas as well as oil reserves. (Chossudovsky, op. cit.)

For further information on the Palestinian offshore gaz fields, we suggest the following GR articles:

Posted in Business / Economics, Energy / Environment, Politics / World News | 1 Comment

Human failure to recognize, reject, and remember evil: essential topic for the 99.99%’s victory

Around 1969 as a young boy, I looked-up the definition of the word, evil. I found something like, “Preference and actions for one’s own material wealth over the well-being of others.”

I’ve always remembered that definition as the one that made the most sense. I’ve never found it again in more modern dictionaries.

In 2007, Stephen Zarlenga (Executive Director, AMI) asked my opinion: “Carl, do you think there’s some kind of ‘slave gene’ that explains people worshipping the very leaders crushing them?” I responded, “Maybe. There’s plenty of consideration that the ‘human animal’ has a fear-reflex and reptilian brain function attracted to hierarchies. We certainly find this fear and system-worship in our work for monetary reform.”

Today, considering our human condition, we observe:

  • A nexus of evil among “leading” families in government, money, and corporate media who provably lie for unlawful wars (here, here, here, here), rapacious economics (here, here, here, here), and who use corporate media to “cover” these crimes while speaking to us never above a pre-teen level.
  • Public inability to clearly recognize this evil, take action to stop it, and remember these acts define our “leaders.”
  • A growing number of Americans recognizing our Emperor’s New Clothes status, willingness to speak and act, and retention that our “leaders” really do seem to act for evil.

Political Ponerology is a book studying evil as a condition with recognizable characteristics; principally that evil people are psychopaths (and here): a veneer of socially-acceptable behavior thinly covering vicious actions.

Human beings have difficulty imaging such “Big Lie” evil from their “leaders” because ordinary people tend to psychologically project their own values of empathy onto their “leaders.” Those of us with more exposure to our “leaders” can help point to facts for regular Americans to recognize the evil right in front of their own eyes.

And the race continues between “leaders’” insatiable lust for power, control, and money versus the 99.99% who seek simple justice. When recognition grows, demand for arrests will also grow.

We will not have justice until these “leaders” are lawfully arrested to stop their war-murders (among ~100 crucial areas of crimes):

 

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NYT, Chrystia Freeland, on Ukraine: ‘This is not a civil war.’

Eric Zuesse

The New York Times  publishes many wildly false articles, and this will expose only one of them, as an example:

According to Christia Freeland, writing there, on September 5th, the conflict in which the Ukrainian Government has since May 9th been bombing the residents in southeastern Ukraine — which is the area that had declared its independence from Ukraine – this “is not a civil war.” Those residents had declared their independence; the Government then bombed them for months; but that’s “not a civil war.”

Freeland wrote, “This is not a civil war, nor is it [referring now to the violent February overthrow of the Ukrainian President, who had been overwhelmingly elected in 2010 by the votes from the residents of this region that’s now being bombed] a fascist coup. Eastern Ukrainians are not rising up against an oppressive regime in Kiev [despite that new Government's having condemned the people in the southeast and then bombed them incessantly]. … What makes the Ukrainian conflict consequential is that it is not a civil war. It is an annexation of territory, the invasion of one European country [Ukraine] by another [Russia].”

Are those statements of fact, or of mere opinion — which a reader can disagree with while not necessarily calling them “false”? Other than the clause “What makes the Ukrainian conflict consequential,” these allegations (i.e, that it “is not a civil war,” and that it is “the invasion of one European country by another,” and that the overthrow of Viktor Yanukovych was not “a fascist coup,” and that “eastern Ukrainians are not rising up against an oppressive regime in Kiev”) are all allegations of fact, but they are all false allegations, false ‘facts’; they are actually blatant falsehoods; and here is how and why it’s clear that is the case:

Chronologically, the first of those allegations is that the February 22nd overthrow of Yanukovych “was not a fascist coup.” However, as this proves, it was precisely that. And as the transcript of the phone conversation between two EU officials shown here documents, they recognized on February 25th that it had been precisely that. Furthermore, President Obama’s agent, Victoria Nuland, on February 4th, had already selected Arseniy Yatsenyuk, whom she affectionately referred to there as “Yats,” to run the country. And her U.S.-engineered coup in Ukraine didn’t occur until February 22nd, and it installed “Yats” to run the country. And, if the coup shown there isn’t a “fascist coup,” then what coup ever has been, and how could Freeland distinguish this one from that one? She ignores such questions, and leaves only a phrase “fascist coup” that’s thus devoid of any and all real-world reference.

What, then, about Freeland’s characterizing the cause of this conflict as having been “an annexation of territory, the invasion of one European country by another.” She is referring there to the March 16th, 2014, referendum of the voters in Crimea to secede from Ukraine. However, Gallup polled 500 Crimeans during May 16-30 in 2013, and found that only 15% considered themselves “Ukrainian.” 24% considered themselves “Crimean.” But 40% considered themselves “Russian.” The people there overwhelmingly wanted to secede from Ukraine – and, especially now, right after the President whom they had overwhelmingly voted for, Viktor Yanukovych, had been overthrown in an extremely bloody coup. But this article, which the editors of The New York Times saw fit to publish as part of “All the News That’s Fit to Print,” says that “the idea that Putin had not invaded Ukraine “might have been a reasonable theory [until] this summer, after the destruction of Malaysia Airlines Flight 17, [except that] Russia had already invaded and annexed part of Ukraine — Crimea.” However, that too is wildly false, because Russia instead took back this land, Crimea, which had been Russian land throughout the period 1783-1954, when the Soviet Union in 1954 transferred it to Ukraine to please the people in Kiev. The results of the 16 March 2014 referendum were clear for rejoining Russia (which they had never voluntarily left, in the first place). And, in the 2013 Gallup poll of Crimea, only 17% wanted to be part of the European Union. Furthermore, 68% of Crimeans were favorable to Russia, but only 6% were favorable to the U.S. Then, in April 2014, Gallup again polled Crimea, and, as I reported on July 2nd: “An April poll of Ukrainians, published in June by Gallup’s Broadcasting Board of Governors, found two shockingly opposite countries: one, in the northwest, where the view of the U.S. is favorable among more than 50% of the population; and the other, in the southeast, where the view of the U.S. is unfavorable among more than 70% of the population. Additionally, in the Crimean region — Ukraine’s farthest southeast area, which our President, Barack Obama, says that Russia forcibly seized when the people there voted overwhelmingly on 16 March 2014 to become part of Russia again (as they had been until 1954) — only 2.8% of the public there view the U.S. favorably; more than 97% of Crimeans do not.” So, during the intervening year, favorability toward America had plunged down to 2.8%, from its year-earlier 6%. Clearly, what Obama had done in Ukraine had antagonized the Crimeans. And, as if that weren’t enough, the 2014 poll provided yet more evidence: “The 500 people that were sampled in Crimea were asked ‘Please tell me if you agree or disagree: The results of the referendum on Crimea’s status [whether to rejoin Russia] reflect the views of most people here.’ 82.8% said ‘Agree.’ 6.7% said ‘Disagree.’”

In the hearts of the local residents, Crimea was still Russian territory, after an involuntary hiatus of 60 years; and so the Russian Government accepted them back again, into Russia — not “invaded and annexed part of Ukraine.”

Moreover, Freeland’s passing mention there of “the destruction of Malaysian Airlines Flight 17” fails to mention that Obama definitely caused that airliner to be downed; and, furthermore, that this civilian plane was intentionally shot down by a Ukrainian Government fighter jet; and that, moreover, the Ukrainian Government has veto-power over the release of the black-box investigation. Therefore, continued insinuations that Russia shot this plane down, or that the people who are defending their families in Southeastern Ukraine, against Ukrainian Government bombers, had shot that airliner down, can only be considered to be either lies or else flagrantly propagandistic fake ‘journalism,’ and no newspaper that publishes an article like that, can reasonably be trusted by readers, especially if that newspaper declines to publish articles that report truthfully on those matters, because the Times  does receive plenty of such truthful submissions (such as of some of the articles that have been linked to here) and rejects them all. Falsehoods like this are thus not “errors”; they are instead policy.

The reader here is cordially invited to click onto the link here for any allegation whose veracity appears dubious, especially because so many outrageously false articles have, indeed, been published about these matters (just as The New York Times  and many other ‘news’ media also did during the lead-up to our 2003 invasion of Iraq), and because the only way for any reader to be able to evaluate the evidence intelligently is to examine it for himself and always to click onto the link for any allegation that is at all dubious, and to check out how reliable is the evidence upon which that allegation is based. While the Times  article provided no links to evidence for any of its allegations, it quoted as a source the opinions of Sweden’s Foreign Minister Carl Bildt, such as, “’The principle of respecting existing borders was laid down as one of the key foundations of peace in our Europe,’ Mr. Bildt said. ‘And it has been adhered to up until March of this year.’” That article by Freeland failed to note, however, Bildt’s being also a secret U.S. Government agent. By contrast, the evidence that is linked to in my article here has been checked out by me to be far less prejudiced, far more reliable, than government agents, secret or not; and I have done my best to enable readers to verify this article by their merely clicking onto the link wherever an allegation seems to be at all questionable. That is the only way to assist readers to overcome the pervasive government and press propaganda; and, so, that is my standard practice.

Anyone who would like to see further evidence that power is now in the hands of profoundly corrupt individuals might be interested in a court case that was recently decided within the United States but that essentially rapes international justice and makes impossible any reasonable outcome in an international bankruptcy other than the brute force of the various parties involved. A U.S. court has, essentially, ruled that in international financial matters, might makes right. There is no basis for doubting the extremity of corruption in the United States Government. Furthermore: “US media, which report on landmark cases that are obvious Fraud upon the Courts, fail to disclose such facts to the public, even after getting notices, alerting them to the true facts.” So, the actual extent of U.S. corruption is being hidden from the public.

———-

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010,  and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

Posted in Business / Economics, Energy / Environment, General, Politics / World News, Science / Technology | Tagged , , , , , , , , , , , , , , , , , , , | 1 Comment

VIDEO: How Much Is A Trillion?

Chapter 12 of the Crash Course is now publicly available and ready for watching below.

One trillion is a big number. In this short video, we try to help you get a sense for just how big; but the reality is simply that the human brain can’t really suitably comprehend magnitudes this large.

Which is why we should be concerned that the US’ money supply has ballooned to over $12 trillion dollars over the past decade. And that its outstanding debts and liabilities are many multiples that amount.

We are living in an era where our leaders are making decisions at orders of magnitude that they simply can’t truly understand. And many politicians have less expertise in math, economics or business than most of you reading this. When they vote for the next trillion-dollar bailout, raise the debt level by another trillion, or pressure the Federal Reserve for another trillion-dollar stimulus program – they don’t have any real sense of what the implications will be. No one can.

We have reached the point where we’re operating in territory beyond our neural programming.

As a result, unintended consequences to our current policies are guaranteed.

For the best viewing experience, watch the above video in hi-definition (HD) and in expanded screen mode

Coming next Friday: Chapter 13: Debt

For those who simply don’t want to wait until the end of the year to view the entire new series, you can indulge your binge-watching craving by enrolling to PeakProsperity.com. The entire full new series, all 27 chapters of it, is available — now– to our enrolled users.

The full suite of chapters in this new Crash Course series can be found at www.peakprosperity.com/crashcourse

And for those who have yet to view it, be sure to watch the ‘Accelerated’ Crash Course — the under-1-hour condensation of the new 4.5-hour series. It’s a great vehicle for introducing new eyes to this material.

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Top Russia Expert: Ukraine Joining Nato Would Provoke Nuclear War

U.S and NATO Responsible for Ukraine Crisis … and West Has Agreed to Cover Up Details About Shoot Down of Malaysian Airlines Flight 17

Stephen Cohen is one of America’s top experts on Russia.  Cohen is professor emeritus of Russian studies and politics at New York University and Princeton University, and the author of a number of books on Russia and the Soviet Union.

Cohen says that the West is mainly to blame for the crisis in Ukraine:

This is a horrific, tragic, completely unnecessary war in eastern Ukraine. In my own judgment, we have contributed mightily to this tragedy. I would say that historians one day will look back and say that America has blood on its hands. Three thousand people have died, most of them civilians who couldn’t move quickly. That’s women with small children, older women. A million refugees.

Cohen joins other American experts on Russia – such as former U.S. ambassador to the Soviet Union, Jack Matlock – in this assessment.

Cohen also says that if Ukraine joins NATO, it will lead to nuclear war:

[Interviewer:] The possibility of Ukraine in NATO and what that means and what—

STEPHEN COHEN: Nuclear war.

[Interviewer:] Explain.

STEPHEN COHEN: Next question. I mean, it’s clear. It’s clear. First of all, by NATO’s own rules, Ukraine cannot join NATO, a country that does not control its own territory. In this case, Kiev controls less and less by the day. It’s lost Crimea. It’s losing the Donbas—I just described why—to the war. A country that does not control its own territory cannot join Ukraine [sic]. Those are the rules.

[Interviewer:] Cannot join—

STEPHEN COHEN: I mean, NATO. Secondly, you have to meet certain economic, political and military criteria to join NATO. Ukraine meets none of them. Thirdly, and most importantly, Ukraine is linked to Russia not only in terms of being Russia’s essential security zone, but it’s linked conjugally, so to speak, intermarriage. There are millions, if not tens of millions, of Russian and Ukrainians married together. Put it in NATO, and you’re going to put a barricade through millions of families. Russia will react militarily.

In fact, Russia is already reacting militarily, because look what they’re doing in Wales today. They’re going to create a so-called rapid deployment force of 4,000 fighters. What is 4,000 fighters? Fifteen thousand or less rebels in Ukraine are crushing a 50,000-member Ukrainian army. Four thousand against a million-man Russian army, it’s nonsense. The real reason for creating the so-called rapid deployment force is they say it needs infrastructure. And the infrastructure—that is, in plain language is military bases—need to be on Russia’s borders. And they’ve said where they’re going to put them: in the Baltic republic, Poland and Romania.

Now, why is this important? Because NATO has expanded for 20 years, but it’s been primarily a political expansion, bringing these countries of eastern Europe into our sphere of political influence; now it’s becoming a military expansion. So, within a short period of time, we will have a new—well, we have a new Cold War, but here’s the difference. The last Cold War, the military confrontation was in Berlin, far from Russia. Now it will be, if they go ahead with this NATO decision, right plunk on Russia’s borders. Russia will then leave the historic nuclear agreement that Reagan and Gorbachev signed in 1987 to abolish short-range nuclear missiles. It was the first time nuclear—a category of nuclear weapons had ever been abolished. Where are, by the way, the nuclear abolitionists today? Where is the grassroots movement, you know, FREEZE, SANE? Where have these people gone to? Because we’re looking at a new nuclear arms race. Russia moves these intermediate missiles now to protect its own borders, as the West comes toward Russia. And the tripwire for using these weapons is enormous.

One other thing. Russia has about, I think, 10,000 tactical nuclear weapons, sometimes called battlefield nuclear weapons. You use these for short distances. They can be fired; you don’t need an airplane or a missile to fly them. They can be fired from artillery. But they’re nuclear. They’re radioactive. They’ve never been used. Russia has about 10,000. We have about 500. Russia’s military doctrine clearly says that if Russia is threatened by overwhelming conventional forces, we will use tactical nuclear weapons. So when Obama boasts, as he has on two occasions, that our conventional weapons are vastly superior to Russia, he’s feeding into this argument by the Russian hawks that we have to get our tactical nuclear weapons ready.

Former Polish president – and famed anti-communist activist – Lech Walesa agrees that the U.S. and Nato’s arming of Ukraine could lead to a nuclear war

Cohen also notes that the West has entered into an agreement to cover-up what happened to Malaysian airlines flight 17, because Russia was not responsible:

Posted in Politics / World News | 13 Comments

The 2001 Anthrax Deception: A New Book from Graeme MacQueen

Professor Graeme MacQueen has written a new book on the 2001 anthrax letter attacks. These attacks were widely blamed on extremist Muslims and their backers and used to support the invasions of Afghanistan and Iraq. They were also used to justify and hasten the passage of the USA PATRIOT Act, which was being presented to Congress just as the first anthrax victim grew ill.

MacQueen has begun doing interviews about the book, which has received much advanced praise.

“Professor MacQueen provides yet another piece of the puzzle connecting the terrorist attacks of September 11, 2001 to the immediately following anthrax attacks of October 2001 that were indisputably conducted by Agents of the United States government.” – Francis A. Boyle, author of the U.S.domestic implementing legislation for the 1972 Biological Weapons Convention.

The website for the book can be found at this link.

http://www.claritypress.com/MacQueen.html

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US Corporate Espionage

Glenn Greenwald documented yesterday that, last August, the US government announced that it:

… does ***not*** engage in economic espionage in any domain, including cyber. [emphasis original]

Right after that, the US government was revealed to be, as Greenwald documents:

…spying on plainly financial targets such as the Brazilian oil giant Petrobraseconomic summitsinternational credit card and banking systems; the EU antitrust commissioner investigating Google, Microsoft, and Intel; and the International Monetary Fund and World Bank. In response, the U.S. modified its denial to acknowledge that it does engage in economic spying…

And about 13 years earlier, in the year 2000, William Blum documented:

Like a mammoth vacuum cleaner in the sky, the National Security Agency (NSA) sucks it all up … if it runs on electromagnetic energy, NSA is there … Twenty-four hours a day. Perhaps billions of messages sucked up each day. No one escapes. Not presidents, prime ministers, the UN Secretary-General, the pope, the Queen of England, embassies, transnational corporation CEOs, friend, foe, your Aunt Lena … if God has a phone, it’s being monitored … maybe your dog isn’t being tapped. The oceans will not protect you. American submarines have been attaching tapping pods to deep underwater cables for decades.

Under a system codenamed ECHELON, launched in the 1970s, the NSA and its junior partners in Britain, Australia, New Zealand, and Canada operate a network of massive, highly automated interception stations, covering the globe amongst them.

The list of specific targets [has included] Amnesty International and Christian Aid.

…the US has continued to expand ECHELON surveillance in Europe, partly because of heightened interest in commercial espionageto uncover industrial information that would provide American corporations with an advantage over foreign rivals.

German security experts discovered several years ago that ECHELON was engaged in heavy commercial spying in Europe. Victims included such German firms as the wind generator manufacturer Enercon. In 1998, Enercon developed what it thought was a secret invention, enabling it to generate electricity from wind power at a far cheaper rate than before. However, when the company tried to market its invention in the United States, it was confronted by its American rival, Kenetech, which announced that it had already patented a near-identical development. Kenetech then brought a court order against Enercon to ban the sale of its equipment in the US. In a rare public disclosure, an NSA employee, who refused to be named, agreed to appear in silhouette on German television to reveal how he had stolen Enercon’s secrets by tapping the telephone and computer link lines that ran between Enercon’s research laboratory and its production unit some 12 miles away. Detailed plans of the company’s invention were then passed on to Kenetech.

Corporate Espionage

Actual US Spy Satellite Logo

In 1994, Thomson S.A., located in Paris, and Airbus Industrie, based in Blagnac Cedex, France, also lost lucrative contracts, snatched away by American rivals aided by information covertly collected by NSA and CIA. The same agencies also eavesdropped on Japanese representatives during negotiations with the United States in 1995 over auto parts trade.

German industry has complained that it is in a particularly vulnerable position because the government forbids its security services from conducting similar industrial espionage. “German politicians still support the rather naive idea that political allies should not spy on each other’s businesses. The Americans and the British do not have such illusions,” said journalist Udo Ulfkotte, a specialist in European industrial espionage, in 1999.

That same year, Germany demanded that the United States recall three CIA operatives for their activities in Germany involving economic espionage. The news report stated that the Germans “have long been suspicious of the eavesdropping capabilities of the enormous U.S. radar and communications complex at Bad Aibling, near Munich”, which is in fact an NSA intercept station. “The Americans tell us it is used solely to monitor communications by potential enemies, but how can we be entirely sure that they are not picking up pieces of information that we think should remain completely secret?” asked a senior German official. Japanese officials most likely have been told a similar story by Washington about the more than a dozen signals intelligence bases which Japan has allowed to be located on its territory.

The United States has been trying to persuade European Union countries as well to allow it “back-door” access to encryption programs, claiming that this was to serve the needs of law-enforcement agencies. However, a report released by the European Parliament in May 1999 asserted that Washington’s plans for controlling encryption software in Europe had nothing to do with law enforcement and everything to do with US industrial espionage. The NSA has also dispatched FBI agents on break-in missions to snatch code books from foreign facilities in the United States, and CIA officers to recruit foreign communications clerks abroad and buy their code secrets, according to veteran intelligence officials.

The quote from the US government at the beginning, here, is an old fashioned technique (lying) where you tell people you are doing the opposite of what you’re actually doing, in secret, because what you are actually doing is illegal, immoral (in the US gov’s words), and exposes you as a criminal who only pretends to be against the things you are, in secret, actually doing yourself to a greater degree than anyone…  ever.  Being exposed may, in rare cases, even increase your chance of having to stop committing the crimes, whereas your goal is to keep committing them.

Let’s see if we can venture a guess as to why the US Government™ would conduct corporate espionage – illegal spying on behalf of private corporations – to allow them to cheat and avoid the harshness of the “free market” (in reality, corporations hate the idea of a free market, and they never stop trying to use state violence to negate it and make sure they don’t ever have to face market discipline).

Maybe the reason for state/corporate espionage has something to do with the recent findings of researchers in Cornell and Northwestern universities, who conducted the biggest study of the topic to date, and found:

…economic elites [in the USA] are estimated to have a quite substantial, highly significant, independent impact on policy.

Whereas:

…the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy

So, people who own corporations have the most influence over the state.  That seems to provide a pretty good explanation for why the state would be illegally spying on behalf of corporations…

It also meshes with what the son of a vice president of one of the major global oil/fossil fuel conglomerates recently told me, which is that his experiences have shown him that “It is basically impossible to tell where corporations end and government begins.”

Robert Barsocchini is an American investigative journalist and writer for the film industry.  Here is his blog.  Also see his free e-book, Whatever it Takes – Hillary Clinton’s Record of Support for War and other Depravities.  Click here to follow Robert and his UK-based colleague, Dean Robinson, on Twitter.

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