Wednesday, July 15, 2009
Head of $25 Billion Templeton Fund: Derivatives Will Cause Another Crisis
I have repeatedly warned that credit default swaps are not meaningfully being reigned in, and that the failure to do so will cause future problems.
Mark Mobius - executive chairman of the $25 billion dollar Templeton asset management fund - agrees:
A new financial crisis will develop from the failure to effectively regulate derivatives and the extra global liquidity from stimulus spending, Templeton Asset Management Ltd.’s Mark Mobius said.
“Political pressure from investment banks and all the people that make money in derivatives” will prevent adequate regulation, said Mobius, who oversees $25 billion as executive chairman of Templeton in Singapore. “Definitely we’re going to have another crisis coming down,” he said in a phone interview from Istanbul on July 13.
As the CIO of Bank Julius Baer notes, regulators aren't even trying to exert real control over derivatives:
“Banks have lobbied hard against any changes that would make them unable to take the kind of risks they took some time ago,” said Venkatraman Anantha-Nageswaran, global chief investment officer at Bank Julius Baer & Co. in Singapore. “Regulators are not winning the battle yet and I’m not sure if they are making a strong case yet for such changes.”
Yes, the U.S. DID Carry Out Foreign Assassinations . . . And STILL DOES
U.S. Government officials have claimed that foreign assassinations were never carried out.
However, in 2002, the New York Times wrote the following about the government's assassination program:
Initially, the agency used that authority to hunt for Qaeda leaders in Afghanistan. That authority was the basis for the C.I.A.'s attempts to find and kill or capture Mr. Bin laden and other Qaeda leaders during the war in Afghanistan...Pulitzer-prize winning journalist Seymour Hersh has repeatedly said that assassinations did, in fact, take place.In November, the C.I.A. killed a Qaeda leader in a remote region of Yemen. A pilotless Predator aircraft operated by the agency fired a Hellfire antitank missile at a car in which Qaed Salim Sinan al-Harethi, also known as Abu Ali, was riding. Mr. Harethi and five other people, including one suspected Qaeda operative with United States citizenship, were killed in the attack.
Mr. Harethi, a key Al Qaeda leader in Yemen who is suspected of helping to plan the bombing of the American destroyer Cole in 2000, is believed to have been on the list of Qaeda leaders that the C.I.A. had been authorized to kill. After the Predator operation in Yemen, American officials said Mr. Bush was not required to approve the mission before the attack, nor was he specifically consulted...
The list is updated periodically as the intelligence agency, in consultation with other counterterrorism agencies, adds new names or deletes those who are captured or killed, or when intelligence indicates the emergence of a new leader...
The development of the armed Predator drone has made it much easier for the C.I.A. to pursue and kill terrorists in ways that would almost certainly not have been tried in the past for fear of the potential for American casualties...
The more aggressive approach to counterterrorism is showing results.
George J. Tenet, the director of central intelligence, said in a speech last week that more than one-third of the top leadership of Al Qaeda identified before the war in Afghanistan had been killed or captured.
And the former number 2 man in the State Department - Col. Lawrence Wilkerson - confirms that assassinations did occur:
"What I suspect has happened is what began to happen while I was still in the government, and that was we’re killing the wrong people,” Wilkerson added. “And we’re killing the wrong people in the wrong countries. And the countries are finding out about it, or at least there was a suspicion that the countries might find out about it, and so it was shut down. That’s my strong suspicion.”...Indeed, veteran investigative reporter Jeremy Scahill points out that foreign assassinations are still continuing under Obama.
“After some hemming and hawing, which was Rumsfeld’s forte, he finally admitted that he had dispatched some of these teams,” Wilkerson explained. “I don’t think we ever knew the full range of his deployments.” Wilkerson believes the CIA became involved in the program of targeted assassinations later.
Tuesday, July 14, 2009
The Secret Program CAN'T Be Foreign Assassinations, Because Congress Was Briefed on that in 2001 and the New York Times Wrote About it in 2002
Government officials have claimed that the "secret program" CIA director Panetta recently disclosed to Congress involved foreign assassinations.
But on December 15, 2002, the New York Times published a story entitled "Bush Has Widened Authority of C.I.A. to Kill Terrorists".
As the Times pointed out:
The Times article makes clear that Congress was notified about the program sometime between September 11th and the date the article was published in December 2002.The Bush administration has prepared a list of terrorist leaders the Central Intelligence Agency is authorized to kill, if capture is impractical and civilian casualties can be minimized, senior military and intelligence officials said...
President Bush has provided written legal authority to the C.I.A. to hunt down and kill the terrorists without seeking further approval each time the agency is about to stage an operation...
Mr. Bush issued a presidential finding last year, after the Sept. 11 attacks on New York and Washington, providing the basic executive and legal authority for the C.I.A. to either kill or capture terrorist leaders...
The president has given broad authority to the C.I.A. to kill or capture operatives of Al Qaeda around the world, the officials said...
The administration must notify Congressional leaders of any covert action finding signed by the president. In the case of the presidential finding authorizing the use of lethal force against members of Al Qaeda, Congressional leaders have been notified as required, the officials said.
And as Citizens for Legitimate Government writes:
This can't be the 'secret program,' since the NYT published the 'secrets' in 2002.Therefore, the secret program must have involved something more than foreign assassinations, or something else entirely.
Inflation, Deflation and "Got You" Prices
A rule of thumb is that inflation doesn't become sticky until the unemployment rate dips below 5%...
"I see very little prospect of accelerating inflation" partly because of the employment outlook, said Mark Zandi, chief economist of Moody's Economy.com. "I don't think the risk shifts toward inflation until 2011, or even 2012."
Because even Obama and Larry Summers think that unemployment will probably rise (and see this), that argues against inflation happening any time soon.
Renowned economist Dr. Lacy Hunt is calling 15-20 years of deflation.
Ellen Brown, Tyler Durden and Mish all argue that the break down in the securitization markets ensures deflation.
And James Perry, Phil's Stock World, and Niels Jensen all give their own arguments about why deflation will rule for some time to come.
On the other hand, a lot of very smart people are predicting runaway inflation given the amount of money the feds are printing. For example, Marc Faber is 100% guaranteeing hyperinflation at some point, but thinks it might not happen for years or even decades.
"Got You" PricesYou know from experience that when you're in a national park, movie theater or some other contained place, prices are higher than elsewhere.
Basically, the stores in such places know you can't go somewhere else, so they can charge you what I call "got you" prices. In other words, you're a captive buyer, and they've "got you".
I've noticed the same thing with health care costs. My family's health care premiums increased 6% last year - on top of the 6% increase the year before.
This is "got you" prices. The health care industry knows that Americans are desperate for health care, and that if they raise prices, people will pay.
I've previously pointed out that inflation versus deflation is not necessarily an all-or-nothing proposition: we can have inflation in some asset classes and deflation in others.
So my current theory is that we will have deflation for some time in most asset classes, but inflation in the "got you" classes of basic necessities that everyone need - food, energy, and health care.
In a tough economy, companies that can squeeze broke consumers for more money will do so.
See this for more on the great inflation versus deflation debate.
“Nothing Will Change -- Nothing -- Until We Tear down the Sign [the Financial Elites Have] Placed on Government -- the One That Reads, ‘For Sale.’"
Veteran journalist and former LBJ speechwriter Bill Moyers has the quote of the day, from an excellent article on government and media corruption:
Nothing will change -- nothing -- until the money lenders are tossed out of the temple, the ATM's are wrested from the marble halls, and we tear down the sign they've placed on government -- the one that reads, "For Sale."For background, see this and this.
Monday, July 13, 2009
Did the Swine Flu Escape from a Lab?
National Public Radio notes that Professor John Oxford at St. Bart's and the Royal London Hospital says that the 1957 H1N1 pandemic probably started when it escaped from a lab:
"We reckon now, in retrospect, it was probably released accidentally from a laboratory, probably in northern China or just across the border in Russia, because everyone was experimenting with those viruses at the time in the lab." It was nothing malicious, Oxford believes, just some flu vaccine research that broke out of containment.Similarly, Bloomberg notes:
Some scientists have speculated that the 1977 Russian flu, the most recent global outbreak, began when a virus escaped from a laboratory.In 2005, scientists thawed out samples of the 1918 flu and tested it. A new study says that the current swine flu is very similar to the 1918 flu, and that people who lived through the 1918 epidemic have immunity to the current flu.
Leading flu expert Adrian Gibbs believes the current swine flu may have escaped from a lab.
It is also interesting that 2 of the 3 flu pandemics of the last century - the 1918 Spanish Flu and the 1976 swine flu scare - both started at military bases. Specifically, the 1918 flu started at Fort Riley, Kansas. The 1976 swine flu started - and never spread beyond - Fort Dix, New Jersey. It is unclear whether or not those bases conducted defensive biowarfare research.
Why Cheney Kept Everyone in the Dark About the Secret Program
Why did Cheney keep then-current CIA head Tenet and current CIA head Panetta, as well as Congress, in the dark about the secret counterterrorism program?
Because - as Seymour Hersh has previously explained - the lesson which Cheney learned from the Iran-Contra scandal was that too many people in the administration knew about it.
In other words, Cheney's take-home lesson from Iran-Contra was to keep even the intelligence and security agencies in the dark, except for those actually carrying out the operations, so that its representatives wouldn't later spill the beans when grilled under oath.
Cheney’s Secret “Unit Was So Secret That Even The Former CIA Director George Tenet Did Not Control Its Activities”
We know that the new director of the CIA, Leon Panetta, was kept in the dark for months about the secret counterterrorism program.
But Scotland's leading newspaper - the Scotsman - has a stunning new revelation:
The unit was so secret that even the former CIA director George Tenet did not control its activities, according to reports yesterday.
So even the the then-current head of the CIA was out of the loop.
Cheney staged a coup and took control of the reigns of government, cutting not only Congress - but also the appointed leaders of the CIA - out of the loop.Early to Bed, Er . . . Never Mind
We've all heard Ben Franklin's saying: "early to bed, early to rise, makes a man healthy, wealthy and wise".
It may not be true.
A new study published in the Journal Science says that late risers have more mental stamina and can outperform early birds.And when Southampton University's Catharine Gale and Christopher Martyn followed up a 1973 survey that had included data on sleeping habits, they found no evidence among the survivors that following Franklin’s advice was associated with any health, socioeconomic or cognitive advantage. If anything, night owls were wealthier than early risers.
Amusingly, President George Washington may have been right when he gave the following terse response to Franklin's "early to bed" advice:
"I don't see it."Postscript: Michael Rivero writes in response to this essay:
They are missing the context.
In Franklin's time, the vast majority of Americans were farmers. Even tradesmen had farms at their home to support their families.
Farming is very much tied in with the sunrise and sunset. Those who slept late neglected their crops and stock and suffered for it. Franklin's comment had little to do with the clock and everything to do with accepting personal responsibility.
Saturday, July 11, 2009
Why Isn't Cheney in Jail?
As I wrote yesterday about the CIA program that Panetta recently disclosed to Congress:As a former CIA agent says, the real question is who ordered the CIA to withhold the information from Congress . . .
We now know who ordered the cover-up.
In a nation of laws, Bush, Cheney - or whoever in the White House ordered the cover-up of the operation - would be prosecuted.
It was in fact Cheney.
According to the New York Times:The Central Intelligence Agency withheld information about a secret counterterrorism program from Congress for eight years on direct orders from former Vice President Dick Cheney, the agency’s director, Leon E. Panetta, has told the Senate and House intelligence committees...
The disclosure about Mr. Cheney’s role in the unidentified C.I.A. program comes a day after an inspector general’s report underscored the central role of the former vice president’s office in restricting to a small circle of officials knowledge of the National Security Agency’s program of eavesdropping without warrants, a degree of secrecy that the report concluded had hurt the effectiveness of the counterterrorism surveillance effort.
This is not the first time Cheney has broken the law.
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