Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which ultimately leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive, and the motive is the gap.
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The July 5, 2014 issue of NewScientist Magazine, contained this letter to the editors:
From Collin Parish
Forgive me if I fail to share your joy in response to “whistleblower” Edward Snowden’s exposure of the US National Security Agency’s surveillance techniques.
Of course we should be alert to the problem of overly intrusive government, but by far the more serious threat right now is that posed by organised terrorism.
As a result of Snowden’s disclosures, we are all in even greater danger than we were before his treacher. This is hardly a cause for rejoicing — or for awarding Pulitzer prizes.
Bessacarr, South Yorkshire, UK
I take issue with Mr. Parish’s central thesis, that foreign terrorism is a more serious threat than overly intrusive government.
I know of no nation that has been overthrown by terrorists. Terrorists may take many lives. And they may alter the lives of others (just as terrorist have required Americans to take off their shoes in airports). But there is zero possibility that foreign terrorists will overthrow the governments of the UK or America and replace them as our rulers.
Al qaeda will not take over Washington or London.
There is, however, absolute certainty that both governments seriously and adversely will impact the lives of their citizens, and in fact rule virtually everyone in negative ways.
I can make that claim, of course, because it’s already happening.
10 reasons the U.S. is no longer the land of the free
1. Assassination of U.S. citizens (President Obama has claimed the right to order the killing of any citizen considered a terrorist or an abettor of terrorism.)
2. Indefinite detention (the president has the authority to indefinitely detain citizens accused of terrorism.)
3. Arbitrary justice (The president now decides whether a person will receive a trial in the federal courts or in a military tribunal, a system that has been ridiculed around the world.)
4. Warrantless searches (The president may now order warrantless surveillance, including a new capability to force companies and organizations to turn over information on citizens’ finances, communications and associations.)
5. Secret evidence (The government now routinely uses secret evidence to detain individuals and employs secret evidence in federal and military courts.)
6. War crimes (Obama administration will not allow CIA employees to be investigated or prosecuted for waterboarding terrorism suspects. This gutted not just treaty obligations but the Nuremberg principles of international law.)
7. Secret court The government has increased its use of the secret Foreign Intelligence Surveillance Court, which has expanded its secret warrants to include individuals deemed to be aiding or abetting hostile foreign governments or organizations.)
8. Immunity from judicial review (The Obama administration has successfully pushed for immunity for companies that assist in warrantless surveillance of citizens, blocking the ability of citizens to challenge the violation of privacy.)
9. Continual monitoring of citizens (The Obama administration has successfully defended its claim that it can use GPS devices to monitor every move of targeted citizens without securing any court order or review.)
10. Extraordinary renditions (The government now has the ability to transfer both citizens and noncitizens to another country under a system known as extraordinary rendition, to torture suspects.)
Giving our already dictatorial government more information about our personal lives, merely gives them more ammunition with which to rule us, tax us, falsely imprison us, take our possessions, torture us and kill us.
Compared with governments, terrorists are a mere pinprick on a whale, in terms of adverse effect.
(I also take issue with Mr. Parish’s, “We should be alert to the problem . . . ” since this merely means, “Don’t do a damn thing about it.”)
Since far more people worldwide are killed and imprisoned by their own governments than by terrorists, am I suggesting anarchy or its advocate, the Tea Party?
No, because government is the only power having the ability to restrain rampant capitalism (the unrestrained greed of business, which caused the “Great Recession”) and street criminality.
What then can restrain rampant government? Voters and the likes of Edward Snowden, who can turn over government rocks and reveal to the voters the lice that hide beneath.
In summary, the government is a vicious guard dog that keeps away criminals, but is just as likely to turn on us.
Our protection actually is, not only as Mr. Parish claims, to “be alert to the problem,” but to be actively alert — to encourage and defend the Edward Snowdens of the world, so we know enough to cage the dog before it attacks.
Forget the government’s whining that in some never substantiated way, Mr. Snowden has put us in “greater danger.”
Even in the most unlikely event his revelations may have allowed a few or even a hundred terrorists to roam free, these terrorists would be nothing as compared with the freedom-cancelling effects of our government.
So what is our greatest danger? Our greatest danger is the Colin Parishes of the world — those naive believers who trust the government’s lies about whistle blowers, and who readily accept the destruction of our freedoms, in return for dubious protections against an overblown terrorist threat.
Our greatest danger comes from those who preach against our greatest salvation.
Rodger Malcolm Mitchell
Monetary Sovereignty====================================================================================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)
10. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)—–
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net ImportsTHE RECESSION CLOCK
Vertical gray bars mark recessions.
As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.
#MONETARYSOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Reason no. 11: Government involvement in marriage. Marriage and divorce laws are biased in favor of women and are extremely dangerous to men.
See:
http://dontmarry.wordpress.com
http://www.avoiceformen.com
http://www.angryharry.com/index.html
http://happybachelorsforum.com/index.php
http://www.singularity2050.com/2010/01/the-misandry-bubble.html
http://no-maam.blogspot.com
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When was your divorce?
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Obviously recently. My comment is offered in kindness and sympathy, not as a sarcastic jab. In most cases, divorce is extremely traumatic. It destroys and disfigures. It is like a severe physical injury whose pain comes in throbbing waves for years. Emotional recovery often takes many years, or even a lifetime. If children are involved, then the pain multiplies exponentially.
I don’t know who “Anon454” is, but I send my empathy to that individual.
BY THE WAY, “Anon454” writes, “Marriage and divorce laws are biased in favor of women and are extremely dangerous to men.”
That is true among the middle and lower classes. Children are awarded to the mother by default, and the man must pay child support or go to jail. However, among the very rich, it is women who usually get burned (believe it or not). The men can hire lawyers, private detectives, and whatever is needed to get their way. Occasionally a women take a rich guy “to the cleaners,” but those are the exceptions.
All I can say about marriage and relationships is the same thing that a referee usually tells boxers before they begin: “Protect yourself at all times.”
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I suppose it depends on how you define “serious threat”. I’m no fan of Obama, but as far as I know he has not killed any American citizens. I would have to say mass murder is more serious than mass email reading.
The quote from Parish didn’t say the terrorists are a threat to take over the governments of the US and UK, as they have done in Iran and Gaza, and are doing in Syria and Iraq. That’s a straw man of your invention.
And yet, of all the threats that we personally can do something about, you’re probably right that our own government is one of the worst, or at least most intrusive. You did mention the IRS targeting people on the basis of their politics, and turning over confidential personal information to other government agents who aren’t supposed to see it, for the purpose of imprisoning us, right?
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[1] “I’m no fan of Obama, but as far as I know he has not killed any American citizens.”
May I disagree? Obama kills American citizens at will, and he gloats about it. He confirmed that he targeted and murdered four American citizens in Yemen and Pakistan. Of course, they don’t count, since they had Muslim-sounding names (Anwar al-Aulaqi, Samir Khan, Jude Kenan Mohammed, and Abd al-Rahman Anwar al-Aulaqi). Not even the White House claims that Abdulrahman al-Awlaki was a member of al-Qaeda or any associated group believed to pose a threat to the United States. But Obama ordered him eliminated anyway.
Obama’s Director of National Intelligence, Adm. Dennis Blair, acknowledged in Congressional testimony that Obama reserves the “right” to assassinate US citizens.
No arrest, no trial, no nothing. Just flimsy accusations and killer drones.
The ACLU filed a lawsuit charging that Obama’s “right” to murder of US citizens without trial is unconstitutional. The lawsuit was thrown out by federal judge Rosemary M. Collyer.
Obama gets away with all this because most people are in denial. Most people think that Obama only murders people with Muslim-sounding names. But the line has been crossed.
[2] The claim is made that “terrorists” have “taken over” Iran and Gaza.
This depends on one’s personal definition of the word “terrorists.”
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[1] I stand corrected.
[2] I’ll go with the State Department list, or the UN list, if you prefer. Hamas is on both, they are the ruling party in Gaza and Iran is their financial supporter. They fire rockets at civilian populations.
I suppose if you want to include more subtle forms of aggression as “terrorism” then your list would include lots more organizations and countries.
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[1] If the US State Department were truthful, then the USA would be at the top of its list of terrorists.
[2] The rockets are not fired by Hamas, but by smaller groups such as Islamic Jihad, or the Al Aqsa Martyrs Brigade. I suspect that the Israelis arm and pay these smaller groups to shoot off their crude little rockets that that do very little damage, so the Israelis have an excuse to repeatedly carpet-bomb the walled concentration camp that is Gaza.
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Wow, hadn’t heard that one before. Is there evidence of that false flag operation?
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No. That’s why I said I suspect. This is an extremely sensitive issue for some people, but there are items that make me have questions…
[1] Hamas is the largest Islamic group in Gaza, but it is not the only group. The corporate media has never offered any proof that any member of Hamas has shot any rockets over the Gaza wall. There are no pictures or videos of any verified Hamas member shooting rockets. As far as I know, the Israelis have never grabbed a Palestinian and charged that specific individual with having shot rockets. There are pictures of individuals handling Qassam rockets, but the individuals are always masked, and their skin is always fully covered by military fatigues, and there is never anything in the pictures to identify the locale.
Hamas members know that each rocket brings massive Israeli retaliation. So it makes no sense for Hamas to shoot those things — but it makes perfect sense if they are false flags. The rockets (which some media outlets falsely call “missiles”) justify a bombardment that has so far killed 150, and wounded many more.
Some Israeli media outlets say it is not Hamas firing the rockets, but ISIS (which the USA is arming in Syria and opposing in Iraq). How ISIS members supposedly got into Gaza is not explained. An example is the Israel National News…
http://www.israelnationalnews.com/News/News.aspx/182767#.U8MR05tOWow
[2] Israel claims that the rockets are no longer the crude Qassam models, the biggest of which is six feet high, but Khaibar-1 models, which are 20 feet high, and have 375-pound warheads. The Khaibar-1 is made in Syria (how convenient), and is (supposedly) sent to Iran, which (supposedly) ships them to Sudan, which (supposedly) ships them to Egypt, which (supposedly) ships them to Israel. How do endless numbers of 20-foot-long rockets travel thousands of miles undetected, enter the walled border between Israel and Egypt, and then enter Gaza, which itself is completely sealed off behind a wall? Then the 20-foot-long rockets are (supposedly) carried 25 miles across Gaza (despite total aerial and satellite surveillance by the Israelis) and are (supposedly) shot from the northern Gaza strip. Nothing may enter the Gaza checkpoints without Israeli permission, and anyone who tries to enter is thoroughly searched. The water off the Gaza beach is patrolled 24/7, and no boat may move without Israeli permission.
As for tunnels, the Israelis themselves (and the Egyptian government) declare that they have sealed off all tunnels into Gaza.
So who is really shooting the rockets, and who is really supplying them? How many rockets are actually fired? Why are they only fired from Gaza, and not the West Bank? The Israelis say that Syria has only about 100 Khaibar rockets, while Hamas has an endless supply. The Israelis also say that Hamas has Chinese-made Grad rockets, plus Russian Katyusha rockets, plus WS-1E rockets of Chinese design, plus Fajr-5 rockets from Iran. Where is the proof of all this? Just because the media outlets make a claim is no proof that it’s true. Most people think it is “common sense” that the US government borrows all the money it creates.
[3] False flags are routine around the world. The USA and Israel are no exceptions.
[4] Corporate media outlets routinely lie. They talk about “rockets reigning down from Gaza,” but they only show Israeli “iron dome” rockets.
Often the media outlets show pictures of mass destruction in Gaza (caused by Israeli ordnance), while claiming that the pictures show Israel. The outlets become more brazen about this with each passing day. Here is just one example (ABC news) that was broadcast last Tuesday…
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And the reason Hamas goes along with this conspiracy is to give Israel an excuse to bomb Hamas. Right?
My secret source of information is Aesop.
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Aesop? So you believe in fables, such as the corporate media lies that I just exposed above. And you smugly dismiss my legitimate questions in the same manner that people smugly dismiss the facts of MS. That’s okay. As I said a while ago, there are many subjects that we will never agree on. Not remotely. Not ever. When it comes to those topics, we are in two different universes.
Therefore, with the exception of this one time, I always restrict my comments to the subjects that we do agree on. I will continue to do so. Apologies if I angered you.
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Calm down, You deny Hamas is firing rockets, but strangely, Hamas doesn’t deny it is firing rockets. Hmmm . . . .
Also strangely, Hamas seems to have no objection, power or desire to stop rockets from being fired from its territory. It can’t even find those thousands of rockets stored all over Gaza. How strange.
So really, “The corporate media has never offered any proof that any member of Hamas has shot any rockets over the Gaza wall” seems odd.
And this is equally odd: “Hamas members know that each rocket brings massive Israeli retaliation. So it makes no sense for Hamas to shoot those things — but it makes perfect sense “if they are false flags.”
So you’re saying all those rockets actually are fired by Israeli spies, to provide cover for Israeli bombing??? And Hamas goes along with the conspiracy???
Yikes!!
I do like your comments when they focus on economics, though.
There always will be lots and lots of crazy stuff invented about Israel, because, well, you know . . . Three Israel kids murdered and the world is silent. One Palestinian kid murdered and the world goes nuts.
Nothing has changed in 2,000 years.
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And I like your comments when they focus on economics. And several other topics as well. Beyond that, we live in two different universes. The Israeli thing is only one of many topics that we will never remotely agree on.
But that’s okay, since I consider Monetary Sovereignty to be too important to let peripheral disagreements interfere with the discussion. Therefore I never comment on any of those other topics, with the exception of this one time.
It’s funny that we agree so passionately about some things, and disagree with equal passion about other things. We should have a radio show together, focusing on economics and other topics is an offbeat, Laurel-and-Hardy fashion. Listeners would be kept off-balance, thinking, “I can’t decide whether these two clowns love each other, or want to kill each other.”
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Here are the answers. Any questions?
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Mr. Tobin seems to have a dog in this fight, but I believe him. Tunnels explain how the rockets get into Gaza.
But I do have a question: the stated goal of Hamas and the rest of the militant Islamists is the extinction of Israel, and their divine mission is the killing of all infidels. As long as they cling to those, is there any solution other than the complete destruction of one side or the other?
It’s not like Ireland, where the IRA was focused on equal rights, not complete destruction, and a peace was possible. Will Hamas ever settle for peaceful coexistence?
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“I know of no nation that has been overthrown by terrorists.”
The word “terrorist” is relative and malleable. For me, any right-wing coup anywhere, anytime, that is undertaken to widen the gap between the rich and the rest is perpetrated by terrorists. Any right-wing government that keeps civilians in a walled-up prison and mercilessly bombs them is a government of terrorists. All imperialistic wars of conquest are done by terrorists. When a SWAT team bursts through your door in the middle of the night, looking for non-existent drugs, that is terrorism. When a corporation shuts off water to tens of thousands of city residents, that is terrorism. Austerity is terrorism. Obama is a terrorist with drones that are murdering people all over the place.
WE are righteous. THEY are terrorists. We are the “good guys” and the “makers.” THEY are the “bad guys” and the “takers.” Any slave who questions my tyranny is a terrorist. If I seek to rob you, and you resist, then I call you a terrorist. And so on.
THAT SAID, I agree with Rodger that our greatest danger is people who use the word “terrorist” to promote their own interests at the expense of others.
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What do you think Kennedy was referring to right before he got taken out?
I bet it was not the “right wingers” that took him out, no. Wasn’t there a huge communist movement in the US at that time, and the communists were considered terrorists too.
Have you wondered why they are no longer considered the terrorists? Maybe it has to do with the fact that they took over the government? I bet it does.
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All those behaviors are evil, but terrorism does have a specific meaning. It is a tactic designed to inspire fear in the enemy, rather than to inflict military damage. It’s been used in war since forever. The current flavor is random killing of a relatively small number of civilians without warning, which inspires fear in the entire population, because if it happened to them it could happen to anyone. Intent is key.
Bombing of military targets, even of critical manufacturing infrastructure like power plants, and even when the target is near to civilian populations, is not terrorism. Bombing targeted at civilians rather than military targets is terrorism.
The SWAT team example is instructive. If they made an honest mistake, and went to the wrong address, it’s not terrorism. If they knew there were no drugs, but chose the target in order to inspire fear in the residents of the neighborhood, perhaps thinking to motivate the drug dealers to go elsewhere, that would be terrorism.
Terrorists are one of the enemies du jour, and it is common for many people to label their antagonists as terrorist, or racist, or sexist, or homophobe, without evidence, just in order to persuade others who disapprove of those activities or attitudes to side with them in their dispute. You can call the tail a leg, but the dog still has only 4 legs.
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Many thanks for your thoughts, but upon reading them, I still say that the difference between “war” and “terrorism” is always arbitrary, subjective, and self-serving.
[1] “Terrorism does have a specific meaning. It is a tactic designed to inspire fear in the enemy, rather than to inflict military damage.”
All armies seek to inspire fear in their enemies. Therefore, all armies are terrorists.
[2] “It’s been used in war since forever.”
Agreed. Therefore, terrorism is part of war. (I say there is no difference between terrorism and war.)
[3] “The current flavor is random killing of a relatively small number of civilians without warning, which inspires fear in the entire population, because if it happened to them it could happen to anyone. Intent is key.”
The USA does that with armed drones. Therefore, the USA a terrorist nation.
[4] “Bombing of military targets, even of critical manufacturing infrastructure like power plants, and even when the target is near to civilian populations, is not terrorism. Bombing targeted at civilians rather than military targets is terrorism.”
Deliberate targeting of civilians has always been routine in war. Consider the annihilation of Carthage. Or the burning of Atlanta. Or the attack on Dresden (which had no military facilities at all.) Or the siege of Leningrad. Or the fire-bombing and nuking of Japan. I could give endless examples. Again I say that the difference between “war” and “terrorism” is subjective and arbitrary.
[5] “The SWAT team example is instructive. If they made an honest mistake, and went to the wrong address, it’s not terrorism. If they knew there were no drugs, but chose the target in order to inspire fear in the residents of the neighborhood, perhaps thinking to motivate the drug dealers to go elsewhere, that would be terrorism.”
SWAT teams always seek to instill terror in their targets. Hence they are terrorists. Mistakes is irrelevant. By your definition, if a suicide bomber took out the wrong target, then the bomber would not be a terrorist.
[6] “Terrorists are one of the enemies du jour, and it is common for many people to label their antagonists as terrorist, or racist, or sexist, or homophobe, without evidence, just in order to persuade others who disapprove of those activities or attitudes to side with them in their dispute.”
Agreed. As I said, the difference between “war” and “terrorism” is always arbitrary, subjective, and self-serving.
WE are righteous. THEY are terrorists. So says every side.
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And a single act of terrorism doesn’t make one a terrorist, any more than a single act of telling a joke makes one a comedian. Terrorists practice terrorism as a way of life, whereas a traditional national army would use terrorism against enemy armies only as a secondary tactic, their primary goal being to directly reduce the enemy’s military capability.
Since it is not credible that the water company’s business model involves denying water to paying customers, or that their reason for shutting it off was to inspire fear, their act may be inhumane, but they would not be terrorists.
As for austerity, the motivation is completely the opposite. Those imposing austerity want the people to believe it is good for them, not harmful and not something to be feared. It’s not necessary to delve into what the austerians really believe the effect will be. Terror is the last thing they want the people to feel, because it would lead to their downfall.
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Apparently you never heard of Anwar al-Aulaqi.
As for the straw man, your comment doesn’t say what Parish really means. (Presumably, you have inside info on this.)
I agree that mass murder is more serious than mass Email reading. Does that indicate you do not object to the government reading all your Emails?
I don’t believe, as you do, that our government is “one of the worst” (At what? Again, you don’t say.) Actually, I suspect our government is less intrusive than most governments, but that’s like saying a wasp sting is less intrusive than a pit bull bite.
As you plainly could see, I didn’t mention the IRS specifically. There are many things I didn’t mention, specifically. What’s your point? Never mind.
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No, I wasn’t aware of Anwar. I amend my statement to “Americans on American soil”. I’m guessing he wasn’t in Yemen and Pakistan as a missionary, and Obama considered him an enemy combatant? Perhaps he should have been captured and repatriated for trial instead.
I know some administration officials initially claimed the right to attack Americans in America, but I think they backed off of that when challenged. Probably they meant to restrict their comments to extreme circumstances. We wouldn’t want the passengers on flight 93 to inquire about citizenship prior to attacking the people who had hijacked their airplane.
I have no inside information on what Parish meant, only what you quoted him saying. It seems clear to me, if there is some hidden meaning maybe you can explain it.
I said “of all the threats that we personally can do something about, you’re probably right that our own government is one of the worst”. That doesn’t say one of the worst governments, it says one of the worst threats. I was trying to agree with you.
“I agree that mass murder is more serious than mass Email reading. Does that indicate you do not object to the government reading all your Emails?”
Since you agree, consider your reaction if someone asked you if that means you don’t object to the government reading all your Emails. Doesn’t it sound silly when it is asked of you? It sounds silly when you ask it, too.
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I’m amazed.
A topic I can actually relate to.. Awesome work on this one Rodger.
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–What is our single greatest danger?
Perhaps, maybe:
“Top Secret” “For American Eyes Only”
The single greatest danger: “The power to issue our own money and to charge interest for financial gain , and to allow it to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government.”?
Why do economist NOT see it coming?
A rival power strong enough ultimately to overthrow all other forms of government.”
WARNING SIGNS-
http://online.wsj.com/articles/occ-report-warns-signs-of-credit-risk-building-in-banking-system-14037
Syndicated leveraged loan issuance reached a record high in 2013 as the search for yield in the low interest rate environment drove an increase in risk appetite across institutional investors such as collateralized loan obligations (CLO) and retail loan funds.
Ah, CLOs! They’re uncannily similar to subprime-mortgage-backed Collateralized Debt Obligations, the toxic waste that contributed to the financial crisis. But they’re backed by junk-rated corporate loans – for example, the “leveraged loans” that private equity firms use to strip-mine their portfolio companies. These overleveraged companies borrow even more money from banks. But instead of investing it in productive assets to create income with which to pay off the loan, they pay it out as a special dividend to the PE firms. It pushes the company deeper into the hole, lines the pockets of the PE firm, and saddles the bank with a dubious asset. The bank then packages these leveraged loans into a lovely CLO and unloads it to institutional investors and retail funds. A business that is booming at record levels, the OCC lamented.
M&A loans are part of the leveraged loan miracle. Last year, they “achieved the highest issuance volume since 2007” – just before the financial crisis brought down the house of cards. The average total-debt-to-EBITDA multiple for leveraged loans increased to 4.7X, the highest, you guess it, since 2007.
Hence the toxic mix: higher leverage, lower yields, riskier borrowers, and tighter credit spreads, nicely packaged in ever flimsier covenant protections for lenders, all to feed “investor demand for high-yield products” that “continued to surge.” A record $258 billion of these new covenant-lite loans are issued last year. Not just a record, but “nearly equal to the total cumulative amount issued from 1997 to 2012.”
That, the report explained, was “ample evidence of increasing credit risk in the leveraged loan market.” And the “quality of underwriting” was “a supervisory concern.”
…“We fear that, once the effects of monetary stimulus disappear in the US, the weakness of the economy due to income inequalities may suddenly be revealed.” Read…. Investment Bank: The End Of US Economic Growth
ADD DERIVATIVES-
[PDF] OCC’s Quarterly Report on Bank Trading and Derivatives …
… $175.8 trillion. In Q2, credit derivatives were $15.5 trillion, making total
derivatives $182.1 trillion. Graph 1 $Trillions Q1 Q2 …
http://www.occ.gov/news-issuances/news-releases/2008/nr-occ-2008-152a.pdf – 411k – 2013-11-24
[PDF] OCC’s Quarterly Report on Bank Trading and Derivatives …
NOW ADD CHINA-
China Bank acquires Plantersbank | ABS-CBN News
http://www.abs-cbnnews.com › Business
Sep 18, 2013 · China Bank and Plantersbank on Wednesday signed a memorandum of agreement for China Bank’s acquisition of more than two-thirds of Plantersbank’s …
China’s ICBC Moves – WSJ – The Wall Street Journal
online.wsj.com/news/articles/SB…
Jan 22, 2011 · Business China Bank Moves to Buy U.S. Branches ICBC Signs a Deal for Bank of East Asia’s Retail Outlets
Fed approves Chinese bank purchase of US bank – Yahoo News
news.yahoo.com/fed-approves-chinese-bank-purchase-us-bank…
May 09, 2012 · The Industrial and Commerce Bank, China’s largest bank with total assets of approximately $2.5 trillion, is 70.7 percent owned by the government of China.
First US approval for Chinese bank purchase – FT.com
http://www.ft.com › Companies › Financials
Industrial & Commercial Bank of China has gained US approval to purchase an…
Connect the dots…
Private For Profit Banks issue sovereign money via loans. As a result of their issuance (creating money at 30 or 40 times leverage) , the Fed has no choice but to honor that issuance or suffer a ‘systemic failure’
That is a collapse of the faith and credit of the dollar.
How will your children sleep, your grandchildren also knowing
CHINA will have that awesome power: to use their $5.5 trillion to earn $55 trillion by using the legislated privilege we have given to the private for profit banks-“The power to issue our own money and to charge interest for financial gain ?
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Off Topic: From CNBC this morning:
http://www.cnbc.com/id/101826777
Citigroup is paying $7B to settle the subprime mortgage probe. This is being touted as a huge win for the taxpayers. Readers of this blog know that it is a huge loss for the taxpayers, since the money is removed from the economy.
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Correct. The people love to read about corporations being fined, not realizing this removes money from the economy, and so, removes money from their pockets.
It’s all one segment of the BIG LIE.
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“Here’s a different point of view”
$7 billion is being spent by the PFPB, money they ‘earned’ as profits from their ‘money creation-loans’.
It is a redistribution: $7 billion not being distributed to the top 10%
(those who have gained 104% of all income growth since 1976) and in turn giving it up for distribution to the 90%.
The kick in the a.. is that they ‘Made TRILLIONS of dollars from the securitization of ‘these toxic assets. Trillions that the PFPB have already distributed to the top 10%. Money that the Fed had to make whole or we would have had a “systemic failure”. If the PFPB and Insurers did not make good (have the Fed QE the money; we would have lost ‘faith and trust in the monetary system. The hedge funds, pension funds all big money people losing trillions to the PFPB because ‘they guaranteed
the investment as well as ‘insured that investment against loss-
BUT they spent the money and could not honor their obligation.
Hell, they couldn’t even foreclosure since they transfer that right to the investors.
Subprime loans can not cause a ‘systemic failure’ they are self protected by foreclosure and loan modification. It is money created ‘out of thin air’ and needs only ‘keystocks’ to balance.
Tax (interest)that issuance (loans) and sell it for ‘real money’ before it is earned (if in trillions) that becomes a “flaw”.
The single greatest danger: “The power to issue our own money and to charge interest for financial gain , and to allow it to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government.”?
Why do economist NOT see it coming?
With the greatest respect and admiration , please, a profund reply.
Did Sheila Bair get it right?
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I agree with you both, but I am confident that the “fine” is window dressing for public consumption, and that Citigroup will use accounting and tax gimmicks to avoid or offset paying it.
Instead of fines payable to the federal government (which instantly destroys any and all fine monies paid) I would like to see a headline like this…
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$2.5B goes to homeowners struggling with mortgages and other problems from the GFC, so that doesn’t leave the economy.
Citibank is one of the top 2 or 3 poster boys for the 0.1%, along with GS and BofA. Taking money from them, even if it is destroyed, will shrink the gap. Isn’t that a good thing?
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Only if the people,/b> running Citibank were to pay the fine.
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I think the owners (also 0.1%ers) will pay, more directly, although bonuses will be affected, too, unless (as seems likely) these “one-time” charges aren’t counted against them.
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Their bonuses will indeed be affected. Their bonuses will increase. Most CEOs of big corporations are paid in shares and stock options. The same day that Citigroup announced its settlement, it released a quarterly earnings report that caused Citi stock to shoot up by 4 percent. Ergo, there was a 4 percent boost in executive compensation.
Incidentally, Citigroup CFO John Gerspach told analysts on a recent earnings call that Citigroup may not pay out the entire $2.5 billion which it has agreed to provide in “consumer relief.”
The bottom line is that banks don’t commit crimes. Bankers do. Until individual bankers go to jail, nothing will ever change.
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By the way, Citigroup was given $45 billion in government bailout funds from TARP, although the Congressional Oversight Panel found that adding up all the various bailout funds that Citigroup received brings the total to $476.2 billion in cash and guarantees. And that’s just one company.
Thus, the $7 billion settlement was about 1.5% of what Citi was given.
And the $7 billion becomes even more trivial when we factor in the extra profits the Citi received when it put that $476.2 billion to work.
How much profits? We don’t know, because the Dept. of Injustice did not require Citi to provide figures on how many hundreds of billions of dollars that Citi made, how many tens of billions investors lost from fraud, how many billions in bonuses were pocketed, which executives were involved, and what positions they now have with the company. (We do know that Treasury Secretary Jacob Lew was Citigroup’s Chief Operating Officer while the company was perpetrating its frauds.)
Citigroup was a conveyor belt for fraudulent securities throughout the world, and has now been handed yet another big bailout by the government, in the form of a sweetheart immunity deal.
And the beat goes on…
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http://www.usatoday.com/story/money/2014/07/14/citigroup-second-quarter-earnings/12617099/
“Citigroup reported second-quarter earnings of three cents per share Monday, as it agreed to a massive $7 billion settlement with the Justice Department. Excluding the settlement and other charges, Citi’s earnings would have been $1.24 per share.
Analysts were expecting $1.05 per share, excluding special charges.”
“Monday’s Citi deal does not “absolve” Citi or its employees from possible criminal charges, Holder said.”
The stock went up on the day of the earnings announcement because their business results were better than expected, not because of the settlement.
I think pigs will fly before Holder files any criminal charges. As has been pointed out, the current Treasury Secretary should be the first indictee.
It’s true Citi is still better off than they deserve to be, even after this $7B.
If executive compensation is based on the GAAP result of $.03 it will go down, not up.
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Golfer,
I wasn’t aware of the $2.5B, as it was not mentioned the article. If true, then it would be a good thing.
Citibank isn’t a person. Taking money from Citibank would only reduce the gap if it meant reducing the income of the wealthiest executives. That assumption cannot be made.
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http://www.usatoday.com/story/money/business/2014/07/14/justice-citi-7-billion-dollar-settlement/12616741/
It would come from shareholders, most directly – also part of the 0.1%, and including executives. And the loss of that cash or collateral would reduce the ability to pay the executives.
The point is that even if you destroyed all the wealth of the shareholders and executives, that would be a reduction in the gap. Isn’t that what this blog is all about, reducing the gap?
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Dick Cheney says screw highways and food stamps, defense spending is all that matters
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That article about Cheney says, “Cheney doesn’t give a damn about the people who make up the American military. He just wants giant pallets of cash for defense contractors and an American political culture geared toward war rather than the economic strength of the nation and its people.”
That’s correct.
Austerity (i.e. a widening of the gap between the rich and the rest) occurs in the military as everywhere else. Regular military personnel and veterans are increasingly screwed, while the big weapons makers are increasingly rewarded with oceans of money.
It’s the same in the UK, where the government demands more austerity from average people, while it just launched the HMS Queen Elizabeth, the biggest warship in British history. A sister ship is also being built, called the HMS Prince of Wales. So much for the UK government being “broke.”
Note that when Cheney was vice President, he said “deficits don’t matter.” Today he says we must have more and more austerity until the federal government has a monetary surplus.
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