World Financial Crisis (and fallout) Part 5

Account Holders of Liquidated Venezuelan Bank to Receive Nearly All their Funds

By Steven Mather - Venezuelanalysis.com

Caracas, Venezuela, June 25, 2010 (venezuelanalysis.com)-- The Venezuelan government released the deposits of nearly all Banco Federal’s account holders today only 11 days after the banks operations were suspended for failing to comply with banking regulations.

On June 14, Banco Federal was closed and all its accounts were frozen after its owners ignored several government warnings that they must increase the bank’s reserves in order to guarantee deposits.

The bank held only BsF920 million in reserve for BsF3.5 billion of deposits.

According to the Superintendent of Banks and other Financial Institutions (Sudeban), Humberto Ortega Diaz, such a ratio risked a bank run which could have had a domino effect on the stability of the whole banking system.

Banco Federal had also failed in its legal obligation to ensure its financial resources were allocated towards developing the productive economy of the country and was suspected of involvement in illegal currency trading....

http://venezuelanalysis.com/news/5455

Is Advice from the IMF Better than Advice from a Drunk in the Street?
By Dean Baker

Source: Guardian Unlimited
Thursday, July 01, 2010

That is the question that people around the world should be asking as the International Monetary Fund dishes out its prescription for austerity. The IMF program calls for cutbacks in government support for health care, pensions and a wide range of other public services. It also calls for weakening labor market regulations that provide workers with job security.

These recommendations are being given in a context where the world economy is suffering from a massive shortfall of demand. In other words, tens of millions of people are unemployed right now because there is not enough spending to keep them employed. The IMF's program is almost certain to reduce spending further leading to even larger shortfalls in demand and more unemployment.

But, the IMF says that we should trust them. The question we should all be asking is "why?".....

http://www.zcommunications.org/is-advice-from-the-imf-better-than-advice...

Schwarzenegger orders minimum wage for state workers

The Schwarzenegger administration today ordered State Controller John Chiang [6] to reduce state worker pay for July to the federal minimum allowed by law -- $7.25 an hour for most state workers.

Ouch. This is just until there's agreement on the state budget but still, it can't be a happy day if you work for the State of California.

It's not just PIIGS any more:

"Greece by Lake Michigan"

I missed that wonderful little NYTimes story, F-P.    Wonder if the voters of all these debt-laden states that followed Illinois' formula are beginning to understand their role in the Conservatives' operational plan to replace state social institutions with private? (that's really not creating too large a plot theory either, eh?  Steve's hell-bent on the same thing.  But will the average masses awaken - or be awakened - to what's up?)

Sticking the Public with the Bill for the Bankers' Crisis
By Naomi Klein - June 28th, 2010
Published in The Globe and Mail

My city feels like a crime scene and the criminals are all melting into the night, fleeing the scene. No, I’m not talking about the kids in black who smashed windows and burned cop cars on Saturday.

I’m talking about the heads of state who, on Sunday night, smashed social safety nets and burned good jobs in the middle of a recession. Faced with the effects of a crisis created by the world’s wealthiest and most privileged strata, they decided to stick the poorest and most vulnerable people in their countries with the bill.

How else can we interpret the G20’s final communiqué, which includes not even a measly tax on banks or financial transactions, yet instructs governments to slash their deficits in half by 2013. This is a huge and shocking cut, and we should be very clear who will pay the price: students who will see their public educations further deteriorate as their fees go up; pensioners who will lose hard-earned benefits; public-sector workers whose jobs will be eliminated. And the list goes on. These types of cuts have already begun in many G20 countries including Canada, and they are about to get a lot worse. For instance, reducing the projected 2010 deficit in the U.S. by half, in the absence of a sizeable tax increase, would mean a whopping $780-billion cut....

http://www.naomiklein.org/articles/2010/06/sticking-public-bill-bankers-...

Austerity for workers, tax cuts for business—Europe’s class policy
8 July 2010

A new report by the statistical office of the European Union, Eurostat, reveals that in the wake of the most serious economic crisis since the 1930s, European governments are continuing to cut corporate taxes while increasing the tax burden on the working population.

Eurostat reports that European governments cut the average rate of corporate taxation across the continent from its 2009 level of 23.5 percent to a new record low of 23.2 percent. The reduction continues a trend which spans many years and has resulted in a major shift in tax policy.

This is but one expression of the ruthless class policy being pursued by governments across Europe and internationally—whether nominally “left” or conservative—to make the working class pay for the crisis of the capitalist system. The result is ever greater levels of social inequality, as wealth is funnelled from the bottom to the top....

http://www.wsws.org/articles/2010/jul2010/pers-j08.shtml

Greece's best option is an orderly default

It is time to recognise that Greece is not just suffering from a liquidity crisis; it is facing an insolvency crisis too. Rating agencies have started to downgrade its public debt to junk level, while spreads on Greek sovereign bonds last week spiked to new highs. The €110-billion bail-out agreed by the European Union and the International Monetary Fund in May only delays the inevitable default and risks making it disorderly when it comes. Instead, an orderly restructuring of Greece’s public debt is needed now.

In 13 Bankers, Johnson, a former chief economist for the International Monetary Fund, and co-author
James Kwak cite historical precedents and offer financial analysis to conclude that a second financial shock is inevitable unless the financial and political stranglehold held on Washington by the nation’s biggest banks is broken.

A nice talk about how banks that have grown too large continue to pose an unacceptable risk of systemic failure.

How to Tame Financial Speculators
Asian Countries Regulate Speculative Capital Flows

by Kavaljit Singh

Just days before the G20 summit in Toronto, South Korea and Indonesia  announced several policy measures to regulate potentially destabilising capital flows which could pose a threat to their economies and financial systems.

The policy measures announced by South Korea and Indonesia assume greater significance because both countries are members of the G20. In 2010, South Korea chairs the G20.

South Korea Imposes Comprehensive Currency Controls

On 13 June 2010, South Korea announced it would be imposing currency controls which are much wider in scope than foreign exchange liquidity controls announced earlier in 2009. The policy measures have three major components:

First, there are new restrictions on currency derivatives trades, including non-deliverable currency forwards, cross-currency swaps and forwards. New ceilings have been imposed on domestic banks and branches of foreign banks dealing with foreign exchange (forex) forwards and derivatives. For Korean banks, there will be a limit on currency forwards and derivatives positions at 50% of their equity capital. For foreign banks, the ceilings will be set at 250% of their equity capital, against the current level of around 300%....

http://www.globalresearch.ca/index.php?context=va&aid=20079

Capitalist tried Keynes ideas. Taht lasted untill the 1960s. Then they tried Friedman's ideas. That lasted until 2008. Now they are just having G20 meetings that agree on nothing and spending $1 billion on security.

I have asimple solution for the capitalsits. One world country and one world currency.

Really bad idea.

Europe is having problems because they have a shared currency.

OTOH I am inferring that you want a world wide socialist command economy.  Good luck getting that.

After reading the news paper, I've come to the realization that commoners like myself are not supposed to think about these things. Democratizing money and banking is out of the question and should be left to the elite who are educated and most capable to manage the nation's finance and credit,  because as they say, it's very complicated and should be left to those who are well read and bred. Meanwgile us working class slobs should simply trust and obey, because it's the only way. We'd better watch out. There may be dogs about, Excuse us Mr newz writer while we follow you and the rest of your bleeting sheep into the valley of bright knives and cold storage where we should be sliced into lamb cutlets and made to hang on high hooks. Babblers in this thread think dangerous thoughts.

PuffingtonHost sees a booming Canada drawing Americans:

http://www.huffingtonpost.com/2010/07/09/need-a-job-try-canada-whe_n_640555.html

Cut Social Security. Ditch the deduction for interest on home mortgages. Tax gasoline.

The United States recently opened itself to the most intense scrutiny yet by the International Monetary Fund, and on Thursday was offered a bitter pill when the agency criticized some well-defended aspects of American culture -- cheap fuel, subsidized housing, and a government retirement check. [19]

Those last two ideas can go right away into the Good Idea But Not Going To Happen bin, where they can join the idea they didn't even bother to mention, cutting defence spending.

Russian Spies Get Quick "Justice" While Wall Street Criminals Remain at Large With Few Prosecutions 1500 Bankers went to Jail After the S&L Crisis. Almost None Today

Waltzing at the Doomsday Ball

http://www.counterpunch.org/bageant07092010.html

"Capitalism is dead but we still dance with the corpse.."

The US is on the Edge of a Growing Deflationary Sinkhole

http://www.straightstocks.com/market-commentary/the-u-s-is-at-the-edge-o...

"The US is trapped. Caught between rising expenditures and the need to borrow more, outstanding US debt is incapbable of ever being repaid and should the credit rating of the US ever reflect its actual state, sovereign default, not devaluation would be the result.."

US Stocks Plunge

http://www.wsws.org/articles/2010/jul2010/econ-j17.shtml [23]

"Friday capped off a week of ominous economic data.."

The 'Berlin Club' German Plan to Put Europe on Rations

http://www.wsws.org/articles/2010/jul2010/pers-j17.shtml [24]

"A contingency plan is being drawn up by the German government for stricken countries unable to pay their debts to European banks..."

hold on to your hats it's going to be a bumpy ride..

The Globe started its series on Broken Europe with Spain:

In economic terms, Spain’s simultaneous property-bubble collapse and debt crisis mean the country will face years of adjustment to a lower living standard and a less generous government. Given the country’s comparatively strong underlying economy, it does not face a Greek-style lender panic, but it will likely be more than a decade before its economy returns to its previous levels.

The new Europe

In human terms, it means millions of Europeans who had been given a foothold in the middle-class world of property ownership, secure employment and university education have now been plunged into lives of rented rooms, paltry minimum-wage jobs and dependency on an increasingly feeble state. Many face huge burdens of debt.

http://www.theglobeandmail.com/news/world/spains-unemployment-devastates...

The “Berlin Club”: Germany plans to put Europe on rations
17 July 2010

A contingency plan is being drawn up by the German government for stricken countries unable to pay their debts to European banks. The plan being discussed by a small cabal of political leaders and finance experts in Berlin would effectively strip governments of the ability to determine broad areas of economic and budget policy.

According to a recent report in Der Spiegel, a group of experts numbering fewer than a dozen are drawing up a document at the request of German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble. The deliberations on the new plan are being kept as low key as possible in order not to frighten money markets.

In May, Germany agreed with other European governments and the IMF to set up an unprecedented rescue fund of €750 billion (US$945 billion) to be used to refinance the debts of those eurozone countries facing repayment difficulties. The German chancellor is now concerned that the new plan being worked out in Berlin could be regarded as a vote of no confidence in the European bailout package. The euro fell on Monday when news of the plan was leaked.

http://www.wsws.org/articles/2010/jul2010/pers-j17.shtml

The “Berlin Club”: Germany plans to put Europe on rations
17 July 2010

Quote:
A number of important conclusions should be drawn from the plans being prepared in Berlin.

Nearly three years after the finance crisis broke out, it is now entering a new and potentially even more explosive stage. On July 23, the results of stress tests on 91 European banks will be published. Although the tests have been drawn up to disguise as much as they uncover, some financial analysts are predicting that the statistics could reveal major problems in 10 to 20 banks. In this event, further additional billions will be required to bail out these banks and buy up their toxic assets.

Plagued by worries that the eurozone rescue package is insufficient to bail out both ailing European banks and stricken economies, the German government is now drawing up its own radical contingency plan for Europe.

The proposals for a Berlin Club will also only exacerbate national antagonisms across the continent. As Der Spiegel notes: “Countries immediately or potentially threatened by insolvency, like Greece, Portugal and Spain, will be up in arms against the proposals from Berlin. Why should they agree to rules that would make it easier for the remaining euro countries to deny them aid in an emergency?”.....

http://www.wsws.org/articles/2010/jul2010/pers-j17.shtml

Reforming the International Financial System

http://www.voltairenet.org/article166214.html

"Below is an overview of the international financial institutions reform plan which has been released by the UN Department of Social and Economic Affairs. The document, drafted by the Group of Experts, mirrors exactly the wishes of the world ruling class.

Its driving principle is the creation of a new world reserve currency under IMF surveillance and a system of global economic governance that would supervise the economic policies of individual nation-states.."

Chavez Praises Banco de Venezuela Growth on the First Anniversary of its Nationalisation

By Steven Mather

Caracas, July 19, 2010 (venezuelanalysis.com)-- Venezuelan President Hugo Chavez declared the performance of the nationalized Banco de Venezuela unprecedented, one year after it passed formally into public hands.

At an event last Thursday to commemorate the first anniversary of the nationalization, Chavez proclaimed, “I don’t know if there has been any experience like it before in Venezuela of such growth. That means a lot of things. This throws out all of that information that is emitted from the laboratories of psychological warfare that global capitalism has set up in Venezuela … that manipulate and put fear in the minds of Venezuelans.”

He revealed an increase in deposits of 50.1% at the bank that make it the top performer in the country. “Today, the Bank of Venezuela is in first place out of all the banks in the country. When it was nationalized, and made the property of the nation, it was third place with Bs. 25.7 billion. Now it is in first place, with Bs. 38.6 billion in deposits.”.....

http://venezuelanalysis.com/news/5505

China Calls Our Bluff

http://www.globalresearch.ca/index.php?context=va&aid=20252

"the US is insolvent and faces bankruptcy as a pure debtor nation..."

Some rich people have suffered as a result - not the bankers, mind you, but other people such as this resort operator who has had to give up his very own Versailles.

The housing boom in Florida certainly fueled it share of excess. Our new favorite: David Siegel’s Versailles, an unfinished 90,000-square-foot home in the Orlando area that boasts 13 bedrooms, 23 full bathrooms, a 6,000-square-foot master suite (with plans in place for a bed on a rotating platform), a banquet kitchen plus 10 satellite kitchens, a 20-car garage, three pools, a two-story wine cellar and a grand hall with a 30-foot stained glass dome.

And that guy worked hard for every penny he made.

IMF Blueprint For a Global Currency

http://www.blacklistednews.com/news-9999-0-13-13--.html

"yes really"

Serious cuts are happening in public services in the US at the state and local level. Three such stories here - a state closing schools every Friday, a suburb killing public transit entirely, and a town that turned off a third of its street lights.

..use the military to impose austerity measures in europe is spreading beyond greece.


Spanish government prepares to use military against air traffic controllers
By Paul Stuart
10 August 2010

Air traffic controllers at the state-run Aeropuertos Españoles y Navegación Aérea (AENA) have voted 98 percent in favour of industrial action against a ferocious assault by the Spanish Socialist Workers’ Party (PSOE) government of Prime Minister José Luis Zapatero.

However, even before the ballot, the air traffic controllers union (USCA) is seeking to restrict the struggle in advance to a series of token strikes and provide AENA with a 10-day advance notice of dates.

In February the government imposed by decree a 40 percent wage cut on the controllers. According to reports it is now imposing an increase in yearly hours’ commitment from 1,000 to 1,600 and, despite rising levels of illness, a reduction in rest periods.

Recently, government officials accused controllers on sick leave of organising an illegal strike. Development Minister José Blanco threatened to fire the staff, off sick from work due to severe stress and exhaustion, who refused to return to work after he ordered fresh drumhead medical exams. Blanco threatened, “If claims are false then they are breaking the law, which means we can take legal action that may result in them losing their jobs”. According to USCA, workers with serious medical conditions are being pressured, some on tranquilizers, back to work with transport organised by AENA.....

http://www.wsws.org/articles/2010/aug2010/spai-a10.shtml

Fed to monetize US debt to stem deflation

More than anything, the announcement was a signal to the markets that the Fed was concerned about the pace of the recovery, and had shifted from its more optimistic assessment earlier this year, that economic growth was sufficiently strong to begin thinking about how to gradually return to normal monetary policy.

For now, the Fed is saying, normal is a ways off. “Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months,” the Fed said in a statement.

"In its announcement, the Fed also left unchanged its benchmark short-term interest rate - the federal funds rate, the rate at which banks borrow from one another overnight - at zero to 0.25 percent, its level since December 2008. And it maintained that the rate would remain "exceptionally low" for "an extended period," the language it has been using since March 2009."

Which means that the loonie is about to rise again and really, really help our export industries.

George don't you mean...? Er? Ya!

The Greek austerity plan has results like you might expect.

The feast of the Assumption of Mary on Aug. 15 is the high point of summer in the Greek Orthodox world. Here in one of the country's many churches, believers pray to the Virgin for mercy, with many of them falling to their knees.

The newspaper Ta Nea has recommended that the Greek government adopt the very same approach -- the country's leaders have to hope that Mary comes up with a miracle to save Greece from a serious crisis, the paper writes. Without divine intervention, the newspaper suggested, it will be a difficult autumn for the Mediterranean state. [40]

Chinese miracle a cautionary tale

http://www.sltrib.com/sltrib/opinion/50132326-82/china-chinese-percent-e...

In the mid 1980s, the US economy was recovering from another ideologically induced recession, This was when the US pleaded with Japan to please commit economic suicide in 1985 by signing the Plaza Accord to allow the Yen to rise against the dollar, which ultimately made Japanese exports more expensive and US exports more competitive. Japan has always been a pliant colony of the US since WW II. Will  the CPC in Beijing be as compliant? For some reason I don't think so. Dyer is flapping his gums.

A change of drugs for a bear market

A review of drug-test data compiled by drug testing firm Sterling Infosystems Inc., shows that cocaine is losing its favor among investment professionals. What drug is their choice? Marijuana.

Greg Palast Confronts The Generalissimo of Globalization GRTV

WTO puts the heavy on developing countries to open their borders to Financial Weapons of Mass Destruction (FWMD).

Death By Globalism: Economists haven’t a Clue 
by Dr. Paul Craig Roberts

Apparently US fiscal stimulus is stimulating job creation in China and India but not at home.

YOu can tinker with capitalism until your hands bleed. Nothing can change the inevitable.

This Year, US Public Debt Could Reach Endgame

http://www.asianews.it/news-en/This-year,-US-public-debt-could-reach-end...

"Federal Reserve Chairman Bernanke issues the warning. Asian nations China and India first, are no longer willing to purchase securities issued by the US Treasury, which this year has about US$ TWO TRILLION short term debt to refinance. Beijing is buying gold instead...The bankruptcy of the United States is now certain.."

I don't believe that is a real quote from Bernanke.  He's a central banker. People with money pay attention to what they say.  The are therefor very careful about what they say.  If Bernanke really said that all hell would be breaking loose right now.

If the US government is going to have trouble borrowing it will be reflected in long term interest rates.  Which are very low right now.

Well then why don't you simply follow the link provided and ascertain for yourself exactly what he did say...?

http://www.washingtontimes.com/news/2010/feb/25/bernanke-delivers-warnin...

"The bankruptcy of the United States is now certain.."

Clearly, just the sort of statement Bernanke would make...on his deathbed.

Some countries are trying to tame finance capital:

Financial Transaction Tax feasible, says report
The Leading Group for Innovative Financing for Development, an inter-governmental organization gathering 55 member states, released a report on 16 July announcing the feasibility of taxing financial transactions. The report, commissioned by 12 of the group's member states, was conducted by a team of international financial experts and focuses on foreign exchange transactions. The report finds that as currency transactions between banks are processed via high-security international systems, which collect a per transaction fee on interbank exchange, it would be relatively easy to implement a foreign exchange tax into the system. The report calculates that introducing a small tax of 0.005% would generate USD$33 billion per year, which could be used to finance development activities such as poverty reduction and sustainable development.

A foreign exchange tax, or Tobin Tax (see JUST THE FACTS), is just one of the many possible financial transaction taxes supported by the Halifax Initiative. The Halifax Initiative welcomes the report and calls on the government to introduce this tax as a first step in implementing a general international financial transaction tax. It also calls for further discussion on the issue at the next G20 in Seoul, South Korea in November.

* The report was commissioned by the governments of Germany, UK, Japan, France, Belgium, Korea, Norway, Senegal, Brazil, Spain, Austria and Chile.

Read the report: The leading Group Report: Globalizing Solidarity: the Case for Financial Levies
 http://www.leadinggroup.org/IMG/pdf_Financement_innovants_web_def.pdf [52]

Read more about this on page 4: Just the Facts: Robin or Tobin? Financial Transaction Taxes explained!

That quote is attributed to Porter Stansberry

Bailing out the Fraudsters instead of Saving America’s Economic Base [54] Is the Economy as Broke as Lehman Was? The Angelides Committee Sidesteps the Mortgage Fraud Issue

by Prof. Michael Hudson

That guy knows everything. EVERY thing!

Labour Day 2010: Austerity, Public Services and the Labour Movement

http://www.socialistproject.ca/bullet/412.php#continue

"For workers across Canada, and indeed everywhere, a radical response will be needed.."

Today, Acting as President of The United States of America, Barack Obama, announced a spending program of $50b on the Three Rs: Roads, Runways, and Rail. This latest stimulating package, the Act. Pres. said, would create construction jobs immediately, and  then many, many more jobs in, presumably, traffic control.

The AP's program is tried and true Keynesianism whereby a government becomes the consumer of last resort. As an economic prescriptive it did wonders following the second whirl of war. The idea is that government spends on infrastructure hiring construction workers, mostly men, who will get married, buy a home, a car, new appliances, furry dice, and then pay for many years more keeping all maintained. And then vacation every year at fictional kingdoms or at endless lines of McDonald restaurants separated by shiny new infrastructure.

That worked, then, because when the Joe Jackhammer would buy a car and washing machine, both were made by other Americans in other American cities. And that American factory would hire more Americans to meet the new demand of Joe (there are few Janes) Jackhammers all over the country. The problem today, of course, is that Joe Jackhammer's car and washing machine, and just about everything else he will buy, will come from overseas. When he calls to inquire if the washing machine warranty covers mixing concrete, he will be as likely to be connected to an operator in Bombay as in Flint, Michigan as even the much heralded "knowledge economy" has been off-shored, dontcha know.

Unfortunately though, that really doesn't matter. Because  Joe Jackhammer is, in most likelihood, all jacked up on debt and so any income he does get will probably go to the bank and collection agents rather than the Wal-Mart mainlining cheap Chinese labour.

Likewise, that doesn't matter either. Because even if Jack was debt free and Westinghovel actually had a factory in Wisconsin, the empire is reduced to striking oil and other minerals in the most unlikely and furthest reaches of a world already wrung of all she can give in service to the Cult of Plastic. Meanwhile, in the process of bludgeoning out whatever minerals and fuels may still linger, what remains of habitat, wilderness, and uncontaminated lakes will be fed through the wood chipper of Western Capitalism to ensure that no CEO need go without a bonus.

A financial crisis seems so quaint. We are facing a more existential crisis. One that threatens our way of life, national economies and nation states. The madness that is beginning to infect the body politic is only the first symptom of a far more sinister disease. But fascism can no more distill energy and matter from the angry mob than can the zombie of global capitalism cease devouring living flesh.  So even the rise of Palin the Impaler and her Army of the Damned Stupid will be short lived. Her powers as Maverick Sorceress will be betrayed to be as bereft as her vocabulary. Not even she can conjure surplus from scarcity (and a surplus of madness, cruelty, and blood don't count). And from there, it is all downhill.

But fear not my Babblerites. We have done well. We continue to do well. We have fuel to waste entertaining ourselves. We have many, many cheap labourers to go through, one at a time, before our iPads and iPhones must rise in price incrementally. We have lakes to destroy and sitcoms to watch and an endless array of distractions to keep our attention glued to the perfecting of the culture of self. I rock. I really, really do. Ta ta, bambinos.

They practice socialism for the rich while preaching free markets for everyone else. Laissez-faire capitalism died in 1929, RIP.

Please limit your posts to 140 characters. I didn't read anything after "spending program." Ta.

(Great post, btw.)

599 woids over 7 paragraphs and 45 lines.  He should be keel-hauled!! (Yeah, great post though. We're glad to have read it. ALL OF It!)

That was a marvelously up-to-date overview on things, WingNut.  

More depth, please.

Global Collapse of the Fiat Money System

http://www.globalresearch.ca/index.php?context=va&aid=20853

"There will be a financial tsunami (round two) the likes of which the world has never seen. Global banks will collapse. Be ready."

we'll see...

Young Adults Shying Away From Stock Market

Gee, I wonder why.

What do you call 50,000 laid-off bankers?

Up to 50,000 employees with ties to the U.S. securities industry could lose their jobs in 2011, according to analyst Meredith Whitney. Should she be right, the job losses could total 5 to 10 per cent of the entire industry.

Ms. Whitney made the claim in a report called “Coal in Stockings and Pink Slips for New Year's.” 

IMF fears "social explosion" from world jobs crisis

The IMF said there may be a link between rising inequality within Western economies and deflating demand.

No? Really?! 

Come omn doug I never took you for that cynical ...you don't think that IMF presciption that matches a lot of modern docs(always the same) had something to do with this. I have been laughing about this for a long time. We have been in recession for 5 years in Windsor. Everyone is counting on someone else to pay their employees wnough to keep the economy afloat, all the while they cut pay benefits and hours.

Externalization only works as long as other do the heavy lifting. For a long time it was government that kept it afloat, but because the IMF has said privatize and derugulate everything, there are no longer even good government jobs, or at least not nearly enough to make up for the huge shortfall and lack of pay being pushed into the downward spiral of the private sector.

I will be honest I am rooting they prescribe more of the same. I know we are patient but we MUST have a break point when things are terrible for so many that we take back everything and actually remember what the elite did when we gave them every excuse to be honest and upright people and the choose at every oportunity to do the opposite. Just maybe we the plebs will have a less unjust society and remember what has come before, and not repeat.

Though given the last 4 years I have my doubts.

Basil III: The GLobal Banks At the Edge of the Precipice

http://www.globalresearch.ca/index.php?context=va&aid=21099

"The Global Too Big to Fail Banks are so precarious that literally anything can trigger a collapse in the coming months.."

Toxic assets were never so cute.

Toxie, Planet Money's pet toxic asset [68], died this week. She was killed by one of the worst housing busts in U.S. history.

Toxic assets — bundles of mortgages that Wall Street sliced up and sold to investors — were at the center of the financial crisis.  When the housing market tanked, no one wanted to own them.  That's when we bought one.

Wrecking the American Dream - by Stephen Lendman

http://sjlendman.blogspot.com/2010/10/wrecking-american-dream.html

"Long planned, the current economic storm erupted violently in late 2007. It wasn't by accident. It was engineered years back, so financial racketeers could profit from wrecking global economies

years ago my sister said that things will not change until there is 30% unemployment.. So I'm waiting for that to happen.

Currency War: Another Phase in the Capitalist Breakdown

http://www.wsws.org/articles/2010/oct2010/pers-o09.shtml

"The semi-annual meeting of the international Monetary Fund and the World Bank which convenes in Washington today is marked by the most serious breakdown in global economic relations since the trade wars and competitiive devaluations that characterized the Great Depression and the 1930s.

As their economies continue to stagnate and the risks of futher global financial turbulence increase, the major powers, spearheaded by the United States, are waging an increasingly open economic war against China, demanding that its currency, the renminbi (the yuan) rise significantly..

At present the conflict takes an economic form. But other, even more deadly consequences are certain to follow.."

Not gonna happen, not even broadly defined.  There are solutions within the current structure.

The Financial Crisis Continues to Take its Toll: Obama's Burden - by Danny Schecter

http://www.globalresearch.ca/index.php?context=va&aid=21369

"The only claim this crew could make about achievement is that they averted something worse from happening. This may be correct, but proving a negative is difficult and doesn't play well with voters who are not well versed in the reasons for the financial crisis. A 'jobless recovery' is no recovery at all. They are right now considering a new bailout being urged by the International Monetary Fund"

It's not a crisis for everyone, of course.

Mukesh Ambani is having a few friends round to celebrate moving into his new Mumbai pad. But as the home has 27 storeys, soars to 173 metres and is worth an estimated £630m, it will be a housewarming like no other.

The building – named Antilia, after a mythical island – will be home to Ambani, the richest man in India and the fourth richest in the world, plus his wife and their three children. It contains a health club with a gym and dance studio, at least one swimming pool, a ballroom, guestrooms, a variety of lounges and a 50-seater cinema. [76]

Global Economic Crisis: Towards a Worldwide Process of Geopolitical Dislocation

http://www.globalresearch.ca/index.php?context=va&aid=21481

"In this issue, our team introduces the annual 'country risk' update in the light of the crisis..."

Recipe for economic disaster a la 2008-ongoing (based on 1929, with refinements..):

Give commercial banks the power to create the nation's money supply - at interest, of course - what's the use of creating money out of thin air if you can't charge interest on it?

Cut corporate taxes so the government income is too low to support programs that the people have established in better times.

When government income is insufficient, borrow money from the commercial banks - using the national bank is somehow anti-something, much better to allow the commercial banks to create the money, and then borrow it from them - at commercial rates of interest, of course.

Meanwhile, deregulate the banks completely, and let them go on binges of creating speculative money to artificially inflate the price of various commodities - bubbles which will, of course, as bubbles always have, crash. When the crash is particularly impressive, and the banks take a bit of a beating - bail em out. Nobody will notice that the "bailout" actually involves letting the private banks create a big whack of money out of thin air (since governments have, of course, sworn off creating their own money as any sane soveriegn country would do) - and then borrow that money from them, again at commercial rates of interest - and give it to them for the bailout.

Eventually, after a particularly spectacular crash based on utterly nonsensical amounts of money-debt-creation for speculative ventures, and the equally spectacular bailout based on letting private banks create money, borrowing it from them at commercial interest and giving it all back to them - economists and international financial institutions can start scolding the government about the large debt, and demanding that it get rid of any few remnants of spending directed towards the citizenry at large. (beyond, of course, buying neat new stuff for the police forces to protect the bankers from the eventual wrath of the citizenry as they start to become aware of the vast fraud that has been perpetrated upon them ...)

Laugh, as the saying goes, all the way to the bank.

This is not a story by Lewis Carroll - this is what is happening. Although I certainly feel as if the thin line between this world and Aliceland is becoming unhinged.

 A Mad Hatter's teaparty, as it were. But the bromides offered after the party do not seem to have a large takeup.  Could it be that they are being offered to folks in Disneyland who aren't about to read Carroll.  Or anything?   

[pedantry]

Actually, the saying is "Crying all the way to the bank," but somehow it morphed into laughing, which makes no sense.

[/pedantry]

It makes sense if you happen to own large amounts of Google.

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. [82]

Google’s income shifting -- involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” -- helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries. [82]

9 Stories the Press is Underreporting -- Fraud, Fraud and More Fraud

http://www.huffingtonpost.com/2010/10/20/nine-stories-the-media-is_n_769...

"...the mainstream still by and large hasn't connected the dots. What we are seeing all around us are the continued effects of a vast criminal enterprise that has never been brought to account, employing a process that, as University of Texas economist James Galbraith explains, involved the equivalent of counterfeiting, laundering and fencing.."

French Fury in the EU Cage

http://www.counterpunch.org/johnstone10212010.html

"The French are at it again - out on strike, blocking transport, raising hell in the streets, and all that merely because the government wants to raise the retirement age from 60 to 62, Them must be crazy.

That I suppose, is the way the current mass movement in France is seen - or at least shown - in much of the world, and above all in the Anglo-Saxon world...

A propaganda simplification of a very complex issue.."

Small Banks in the US are Collapsing 
Regulators close 7 more banks, a total of 139 US banks closed down in 2010

Small time banksters not big enough for handouts from US taxpayers or get out of jail free cards.

It's not just relatively big-spending states like California that are having budget problems:

Texas faces a budget crisis of truly daunting proportions, with lawmakers likely to cut sacrosanct programs such as education for the first time in memory and to lay off hundreds if not thousands of state workers and public university employees.

Texas' GOP leaders, their eyes on the Nov. 2 election, have played down the problem's size, even as the hole in the next two-year cycle has grown in recent weeks to as much as $24 billion to $25 billion. That's about 25 percent of current spending [87].

Why the IMF Meetings Failed And the Coming Capital Controls

Capital controls. Capitalists won't like it much. Currency wars and protectionism coming soon.

Debts that can not be repaid won't be. It's finished. Bankrupt.

"Le laissez-faire, c'est fini." - Sarkozy to western world bankers in 2008

UK puts half of its remaining public forests up for sale

The environment secretaryCaroline Spelman [90] is expected to soon spell out plans to raise as much as £5bn from the sale. (Control of the commission's assets in the other regions has been devolved.) If confirmed, it would amount to the largest change of land ownership since the second world war and could, some claim, see previously protected woodlands make way for golf courses, housing developments and a wave of new Center Parcs [91]-style resorts.

The news has been met with near-universal disgust and shock. Caroline Lucas, the Green party MP [92], described it as an "unforgivable act of environmental vandalism". The Labour party said it feared developers would "cherry-pick the most profitable land", while the Woodland Trust [93]said the planting of much-needed new native woodland could be jeopardised if the revenue from the sales, as looks highly likely, does not directly benefit the commission. By yesterday, more than 10,000 people had signed an online petition urging the government not to proceed with the sale.

US Federal Reserve Stokes Global Currency War

http://www.wsws.org/articles/2010/nov2010/pers-n05.shtml

"The Federal Reserve Board's announcement Wednesday of a second round of 'quantitative easing' - the printing of billons of US dollars - is an aggressive and unilateralist move - widely and legitimately perceived by America's economic rivals as a hostile act.."

Hey, the Markets are happy.  And perhaps the more prescient could suggest what else the Feds could have done?   What does Krugman say?

US 'Quantitive Easing' is Fracturing the Global Economy  -  by  Prof Michael Hudson

http://www.globalresearch.ca/index.php?context=va&aid=21716

"the financial crooks have been placed in charge - and they are using their power over government to promote their own predatory gains, having discarded US public regulatory agencies and the criminal justice system to create a new kind of centrally planned economy in the hands of the banks.

If Quantative Easing is to help US banks earn their way out of negative equity, by definition their gain must be at the expense of foreigners. This is what makes QE II a form of financial aggression.."

The Biggest Threat to America - Its Bankruptcy

http://original.antiwar.com/justin/2010/11/04/the-biggest-threat-to-amer... [97]

"Our economic terror alert, if such a thing existed, ought to be at the brightest red, because what we're facing is the biggest threat to our national security ever: I'm talking about the spiraling national debt and the ongoing destruction of the dollar...

Think of war as just another 'stimulus package'"

Quantitative easing, the printing of money, is going to destroy the US economy. The Bank of Canada is doing the same, by the way. They're scared (the central banks).. they're shitting bricks actually. Be prepared for revolution. It's coming. Be ready with the answer because people will be grasping for solutions.

US Dollar Printing is Huge Risk: China

http://www.reuters.com/article/idUSTRE6A311B20101104

"Unbridled printing of dollars is the biggest risk to the global economy, an adviser to the Chinese central bank said in comments published on Thursday, a day after the Federal Reserve unveiled a new round of monetary easing. 'China must set up a firewall from external shocks,' Xia Bin said...'As long as the world exercises no restraint in issuing global currencies such as the dollar - and this is not easy - then the occurence of another crisis is inevitable, as quite a few wise Westerners lament,' he said

That's an interesting article. Xia from the Chinese central bank launched a missle over the bow of the "mature economies":

"We must keep a clear mind. We must not lead the world in financial regulation, nor simply follow the deeds of mature economies. We must think 'what is good for us'," he said.

Wow. When the Chinese real estate and investment bubble implodes things will get very ugly.

What does a Libertarian, going by the name "I want Liberty", like all those others on the right, hope for from revolution? A RETURN to something...but what?  :) 

Expect Next Phase of Market Crash and a Large One for that Matter

http://www.countercurrents.org/alexander051110.htm

"business as usual is not an option and the current form of capitalism is a Ponzi scheme..

Spending more will only dig us into an even deeper hole, and will not prevent the deflation that is coming...

It is better to let the house of cards fall and begin rebuilding once the toxic debt has been defaulted upon.."

"let the house of cards fall"

What a crock of shit. Do you or your source appreciate what that would mean for the people they profess to speak for, NDPP?

Just for once...let's hear where you stand on the cockamamy crap that you dig up.

 It's as valid a point of view as more 'Quantatative Easing'. The current form of capitalism ISN'T a Ponzi scheme? This expert has a background and experience equal to others which get posted here -  certainly meets the test of a read and a think about it. You have your reaction. Others will have theirs. I think that she can't do worst than the corrupt for hire economic hucksters whose prognostications and advice to the powerful eminences got us into this toxic financial necrosis in the first place and who continue to suggest more looting and theft as a way not to make things work but to keep things working..

Like all those "others on the right"?!  The same right that demands a big war machine, big deficits, corporate welfare, a clamp down on individual liberties, secret police and invasion of privacy?  I find the right entirely offensive.  My statement was not a hope for revolution, it's just that life in the west for the average unsuspecting citizen is going to change when the Chinese economic bubbles bursts and does a reset (like it has in Europe and the U.S.).  And when that happens, people will look for those with solutions.

By the way, for a laugh, check this out:

http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

Zimbabwe's a very extreme case, but perhaps a few of the items are in our future: high inflation (maybe hyperinflation), wage & price controls, limits on bank withdrawals (25c per day LOL), the decimation of people's savings, land and property confiscation and the violation of just about every principle that defines civil society.

That inflation rate is mind boggling.  I've never heard of the term "google" being used in its numeric sense very often.

Lang had a pundit on, last evening, who stated that he believed countries were going to have to go back to a gold standard, as the collapse of the world's paper currency was on the horizon. Mainly because of the USA's over printing of money and huge deficit. A new Bretton Woods, action basically  was being advocated.

His comments were interesting to me on several levels given the USA has the most gold in reserve and can be seen to have created the mess we are in. How fortunate they have the largest reserves, eh!

Meanwhile Canada has 140 million dollars worth only, as apparently Stevie sold it all off.

Given this news and the sky rocketing prices of gold, in respect to the gold stores at Fish Lake, I do not feel hopeful any longer that they are going to keep their hands off of it.

US Declares Financial War on the World - Economist Michael Hudson

http://rt.com/politics/us-financial-war-currency/

"The US is going to China and saying 'we want you to commit economic suicide just like Japan did. We want you to follow the same way: we want you to revalue your currency; we want you to squeeze your companies, we want you to go bankrupt so we can make our profit at your expense,' says Hudson. The American plan to devalue the dollar would flood the global economy wtih money that would be used to buy out everything of value in local markets.."

Amped Status: QE2 -The Federal Reserve's ' Economic Nuclear Bomb' (and vid)

http://ampedstatus.com/we-need-a-rally-to-restore-the-rule-of-law-andor-... [109]

"The looting of the US economy that has occurred over the past 2 years is unprecedented in American history. You don't have trillions of dollars looted from the economy and go on living business as usual. Most Americans have only a vague understanding of the collapse that we have been set up for. If you think the past 2 years were bad, and obviously they were, they were just a warm up to what is coming.."

G20 Summit Dominated by Spectre of Currency, Trade Wars

http://www.wsws.org/articles/2010/nov2010/econ-n11.shtml

"German Finance Minister Wolfgang Schauble told Der Spiegel that the Fed's [Q2] decision  was 'undermining the credibility of US financial policy.' He declared the US 'growth model', which he said was based on 'borrowed money', inflating its financial sector and neglecting its small and mid-sized industrial companies' to be in 'deep crisis'.

Accusing the US of hypocrisy, he said 'it's inconsistent for the Americans to accuse the Chinese of manipulating exchange rates and then to artificially depress the dollar exchange rate by printing money...

A leading Chinese newspaper warns that the US actions were a form of currency manipulation that could lead to a new round of currency wars and even global economic collapse.."

Music please....

      I'm Feeling quite uneasy, about this Quantitative Easing;

       Mister Barack Obama, do you know its me you're squeezing?

good one NS!

Erin Go Bust  - by Mike Whitney

http://www.informationclearinghouse.info/article26799.htm

"Ireland is on its way to default.."

Swingers' clubs feel the chill of the recession:

At the Carousel Couples Club in midtown, swingers and those curious about the lifestyle sat on sleek black couches beneath big-screen TVs with muted sex scenes. Some DDeviousDelights's Fall Fantasy Party attendees stepped behind sheer curtains and onto private nooks' mattresses. But the party remained relatively tame. 

A couple lingering near the bar explained that the sluggish economy has thinned out local swinging parties, saying, "If you want to save money, you can stay home and get laid for free." 
[115]

"Activate your imagination, envision what the social result of this kind of "thinking" would bring about: "Spending more will only dig us into an even deeper hole, and will not prevent the deflation that is coming... It is better to let the house of cards fall and begin rebuilding once the toxic debt has been defaulted upon.."

Begin rebuilding what? What would be left? Can you picture the condition of the people who you have sentenced to the abyss ? This is encouraging the stuff of the 1930s, authoritarians playing dice with millions, utterly insensitive drool. The complete and utter divorce of economic activity from the real world."

No takers? Just pronouncements from some comfortable middle-class dick about removing all stimulus from a nearly flat economy? Let the "house of cards fall" and all the little folks with it...and invite the right to fill the gap (because the liberal dicks with such cozy ideas, certainly won't be there to pick up the pieces themselves). 

The Economy is NOT Coming Back (the reasons it shouldn't)   - by Gilles d'Aymery

http://www.swans.com/library/art16/ga290.html

"In short, to return to business as usual will lead to collective suicide.."

The Coming Sell-Out to the Super Rich and What It Means to the Rest of Us  - by Michael Hudson

http://www.informationclearinghouse.info/article26827.htm [118]

"It is time for Democrats to ask themselves how strongly they are willing to oppose an administration that looks like Bush-Cheney III..."

Some jobs are being created - for people who take calls from foreclosed-on homeowners:

This enormous white building, nestled among the hills about 40 miles north of Los Angeles, used to be a warehouse for Bugle Boy jeans. Today, it contains a sea of beige cubicles that seem to stretch on forever.

Inside the complex, 4,000 employees of Bank of America face a daily tide of desperation and misery. [120]

The bust part of the business cycle is now fully underway, and government intervention is only going to make it last longer and go much deeper.  Basic economics can't be avoided.  The risk is that the global bureaucrats, in devaluing their currencies, will utterly destroy their economies.

Earlier this month, I offended a number of readers with a columnsuggesting that if you want to see rapacious income inequality, you no longer need to visit a banana republic. You can just look around.

My point was that the wealthiest plutocrats now actually control a greater share of the pie in the United States than in historically unstable countries like Nicaragua, Venezuela and Guyana. But readers protested that this was glib and unfair, and after reviewing the evidence I regretfully confess that they have a point. [123]

That’s right: I may have wronged the banana republics. [123]

You see, some Latin Americans were indignant at what they saw as an invidious and hurtful comparison. The truth is that Latin America has matured and become more equal in recent decades, even as the distribution in the United States has become steadily more unequal. [123]

A good way to round out this thread. 

And this too -

IMF arrives to take over Ireland 

For a decade the country rode a seemingly never-ending boom, fuelling prosperity that previous generations could scarcely have dreamed of. Today reality kicked in. The 12 men and women from the International Monetary Fund, in suits and sensible coats, arrived in Dublin to clear up the mess.