Global Articles on what is going on...posted daily

[sandi66]

CFTC Chairman Gensler Comments On Passage Of Wall Street Reform And Consumer Protection Act
15/07/10

Commodity Futures Trading Commission Chairman Gary Gensler today commented on the Senate passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The House of Representatives previously passed the bill, which now heads to the President’s desk.

Chairman Gensler said:

“The Wall Street reform bill passed today is historic and comprehensive. Over-the-counter derivatives dealers will – for the first time – be subject to robust oversight for their derivatives activities. Standardized derivatives will be required to trade on open platforms and be submitted for clearing to central counterparties. This will greatly improve transparency and lower risk in the marketplace. I look forward to the President signing this crucial legislation. The CFTC stands ready to implement the Dodd-Frank Act to best protect the American public.”

[sandi66]

Rust Discovered On Bank Of Russia Issued 999 Gold Coins

by Tyler Durden
07/16/2010 20:32

Here's a head scratcher: as everyone knows from elementary chemistry courses, gold is the most inert metal in the world - it does not rust, nor corrode. Yet this is precisely what Russian commercial precious metal trading company, International Reserve Payment System, discovered on thousands of (allegedly) 999 gold coins "St George" (pictured insert) issued by the Central Russian Bank.
The serendipitous discovery occurred after various clients of the company had requested that their gold be stored not in a safe, but in a far more secure place: "buried under an oak tree." As the website of IRPS president German Sterligoff notes: once buried, "the coins began to oxidize under the influence of moisture." And hence the headscratcher: nowhere in history (that we know of) does 999, and even 925 gold, oxidize, rust, stain, spot or form patinas, under any conditions. Furthermore, as IRPS discovered, Sberbank of Russia released an internal memorandum ordering the purchase of the defective coins with the spotted appearance. Sterligoff concludes: "It should be noted that the weight and density of the rusty coins coincide with the characteristics of gold that would be expected after after conventional testing methods would reveal. We think that the experts will be interesting to determine the nature of this phenomenon." So just how "real" is 999 gold after all, either in Russia or anywhere else?

As a consequence of this discovery, IRPS decided to "rid itself of all stocks, bought up earlier from the Central Bank on behalf of investors. Investment coins "St. George The Conqueror", as well as other gold coins of the Bank of Russia, are now excluded from the company's operations until all circumstances in the case are determined." Additional, as disclosed in the interview below for Here and Now show on TVRainRu, the Russian Central Bank would buy back the coins at a price of 9,300 rubles, despite prevailing prices for the bullion at well over 10,000.
"?? ? ". . ??.
(translated into English means "Here and Now". Gold. Channel RAIN. The video is also in Russian)
www.youtube.com/watch?v=XXURMfIq2rQ
As Zero Hedge has pointed out previously, the Central Bank of Russia has been one of the biggest purchasers of gold in 2010, having bought gold every single month. It would be embarrassing if it were discovered that not only is the bank diluting the gold content once received with oxidizable materials, but subsequently passing it off for 999 proof precious metal.
And if this is happening in Russia, one wonder what trickery other Central Banks, with a far lower amount of gold in their vaults, resort to...

www.zerohedge.com/article/rust-discovered-bank-russia-issued-999-gold-coins

[sandi66]

Bank Failures:

The FDIC is busy this evening. The DIF total so far this evening is $334.8 million dollars.

7/16/2010 ... SC ...Bluffton ...Woodlands Bank $115.0 million dollar DIF hit.
7/16/2010 ...SC ... Spartanburg ...First National Bank of the South $74.9 million dollar DIF hit.
7/16/2010 ... FL ...Miami ...Metro Bank of Dade County $67.6 million dollar DIF hit.
7/16/2010 ...FL ...Aventura ... Turnberry Bank $34.4 million dollar DIF hit.
7/16/2010 ... FL ... Clewiston ... Olde Cypress Community Bank $31.5 million dollar DIF hit.
7/16/2010 ...MI ... Hastings ... Mainstreet Savings Bank, FSB $11.4 million dollar DIF hit.



Six bank failures bring 2010 tally to 96

6:41p ET July 16, 2010 (MarketWatch)

SAN FRANCISCO (MarketWatch) -- Five more bank failures brought the total tally for the year to 96, according to the Federal Deposit Insurance Corp. on Friday.

Commercial Bank of Alma, Mich., will assume all of the deposits of Mainstreet Savings Bank, FSB, in Hastings, Mich;

and CenterState Bank of Winter Haven, Fla., will assume all of the deposits of Olde Cypress Community Bank of Clewiston, Fla.

Also, NAFH National Bank of Miami will assume deposits for Miami's Metro Bank of Dade County;

Turnberry Bank of Aventura, Fla.;

and First National Bank of the South in Spartanburg, S.C.

Earlier in the day, regulators closed Woodlands Bank in Bluffton, S.C., with Bank of the Ozarks of Little Rock, Ark., assuming all its deposits.

The total charge to the deposit-insurance fund for the five banks is $334.8 million.

research.tdameritrade.com/public/markets/news/story.asp?dockey=4018-BFFAE5A3377B405B9338BCFB86523E3D-14S42CC5VE3KQD37TTG2Q8VU0H

[sandi66]

Agreement between Allawi, Sadr could change political process – source
July 19, 2010 - 08:33:02
BAGHDAD / Aswat al-Iraq: An agreement between the head of the Al-Iraqiya Alliance, Ayad Allawi, and the head of the Sadr Movement, Sayyid Muqtada al-Sadr, could change the ongoing political process in Iraq, said Jamal al-Bateekh, a member of the Al-Iraqiya.

“A meeting between Allawi and Sadr in Syria comes to accelerate the process of forming a new Iraqi government,” al-Bateekh told Aswat al-Iraq news agency on Monday.

Al-Bateekh noted that the meeting so far has not come up with anything new, but he commented that he is confident it would result in something positive.

MH (P)/SR


en.aswataliraq.info/?p=134633


ty nalmann

[sandi66]

Curious Déjà Vu: Explosions & Oil Spill in China

Submitted by asiablues on 07/18/2010 18:24 -0500


Mexico
Wen Jiabao

Just when BP finally seems to have got a handle on the Macondo well with the successful containment cap, multiple explosions and oil spill are taking place--halfway around the globe--in China.

Chinese CCTV reported that six explosions hit two oil pipelines in northeastern Dalian's Xingang Harbor (see map) on the evening of July 16, while a 300,000 ton foreign oil tanker was being unloaded.

Over 2,000 fire fighters, along with 219 fire trucks were mobilized for the rescue mission. The subsequent blaze had burned for 15 hours before finally being extinguished on Saturday morning. So far, no casualties were reported.

The oil spill had contaminated about 19 square miles (50 square kilometers) off the coast of Liaoning province. A government official was quoted saying it was unclear how much oil had leaked from the pipelines.

However, on July 17 evening, nearly 20 vessels started performing oil contamination removal process, according to Epoch Times . Over-5-million-tons of foam and 20-tons of dry powder fire extinguishers were used, which China National Radio indicated could have some environmental impact.


China National Petroleum Corp. (CNPC), the country's largest oil company, is the owner of both pipelines. China Daily reports that CNPC indicated on its website that the oil had stopped leaking after a valve was closed. It said the oil spill has been "fenced off and contained."

The BP Gulf of Mexico disaster has elevated all oil related incidents to immediate top priority status by global governments. In China's case, this has aroused the attention of President Hu Jintao and Premier Wen Jiabao, with Vice Premier Zhang Dejiang rushing to the site Friday night to direct operations.

Dalian is the only ice-free port in northeast China with important commercial and strategic interest throughout the history of China. WSJ says the pipelines were links between ships and oil tanks on land. CNPC has 20 storage tanks that can hold 1.85 million cubic meters of oil in a special tax zone at the port.

So, the explosion and fire could have easily been another disaster had it not been contained and extinguished in a timely manner. Meanwhile, an official investigation team has been established, but the cause of the pipeline explosions is yet to be determined.

Nevertheless, judging from the strategic importance related to Dalian and the CNPC oil pipelines; one could not help but wonder about this curious oil spill déjà vu.


www.zerohedge.com/article/curious-d%C3%A9j%C3%A0-vu-explosions-oil-spill-china



ty joye

[sandi66]

Monday, July 19, 2010

China Bank Regulator Signs MOU With Indonesia Central Bank On Supervision

BEIJING -(Dow Jones)- China's banking regulator said Monday it signed a memorandum of understanding with Indonesia's central bank to strengthen cooperation on the supervision of the financial sector, including the exchange of information.

The China Banking Regulatory Commission said in a statement it has now signed MOUs or cooperation agreements with financial supervisory bodies from 39 countries and regions, including the U.S., the United Kingdom and Australia.

Such agreements will help uncover problems in financial institutions set up by China and other countries at an early stage so that regulators can take action in time, the CBRC said.

www.foxbusiness.com/story/markets/industries/finance/china-bank-regulator-signs-mou-indonesia-central-bank-supervision/

ty gigi

[sandi66]

19 July 2010 - 16H46

Allawi, Sadr hold talks in Damascus
Former Iraqi Prime Minister Iyad Allawi arrives at a press conference in Damascus. Allawi and radical Shiite cleric Moqtada Sadr have met for talks in Syria's capital Damascus. AFP - Two figures at the centre of efforts to form a new Iraqi government, former premier Iyad Allawi and radical Shiite cleric Moqtada Sadr, met in Syria's capital on Monday, an AFP photographer said.

President Bashar al-Assad too held talks with Allawi, who has been embroiled in months of haggling over the formation of a new Iraqi government, two days after the Syrian leader met separately with Sadr.

Assad reiterated "Syria's support for any inter-Iraqi accord (on a government) which conserves the unity of Iraq, its Arab identity and its sovereignty," Syria's official news agency SANA reported.

Allawi, who is vying for the post of prime minister with the incumbent, Nuri al-Maliki, in turn thanked Syria for playing host to hundreds of thousands of Iraqi refugees and its support for efforts to restore stability in Iraq.

Efforts to form a new government, more than four months after a March 7 election in Iraq, also figured in the talks in Damascus last Saturday between Assad and Sadr.

The bloc of anti-US cleric Sadr, who lives in self-imposed exile in Iran, gained 39 seats in Iraq's new 325-strong parliament, against 91 for Allawi and 89 for Maliki -- both also Shiites.

On Monday, Turkish Foreign Minister Ahmet Davutoglu was also headed for Damascus to meet Assad for talks covering Iraq, their common neighbour.

www.france24.com/en/20100719-allawi-sadr-hold-talks-damascus

[sandi66]

Union Hires Nonunion Pickets/wsj.com

... more links on this copied below


... "It is bizarre," the union's hiring of nonunion picketers.


online.wsj.com/article/SB10001424052748704288204575362763101099660.html


To Protest Hiring of Nonunion Help, Union Hires Nonunion Pickets

Jobless Recruits Get Minimum Wage 'To March Around and Sound Off'

JULY 16, 2010



By JENNIFER LEVITZ
WASHINGTON—Billy Raye, a 51-year-old unemployed bike courier, is looking for work.

Fortunately for him, the Mid-Atlantic Regional Council of Carpenters is seeking paid demonstrators to march and chant in its current picket line outside the McPherson Building, an office complex here where the council says work is being done with nonunion labor.

"For a lot of our members, it's really difficult to have them come out, either because of parking or something else," explains Vincente Garcia, a union representative who is supervising the picketing.

So instead, the union hires unemployed people at the minimum wage—$8.25 an hour—to walk picket lines. Mr. Raye says he's grateful for the work, even though he's not sure why he's doing it. "I could care less," he says.

"I am being paid to march around and sound off."

Protest organizers and advocacy groups are reaping an unexpected benefit from continued high joblessness. With the national unemployment rate currently at 9.5%, an "endless supply" of the out-of-work, as well as retirees seeking extra income, are lining up to be paid demonstrators, says George Eisner, the union's director of organization. Extra feet help the union staff about 150 picket lines in the District of Columbia and Baltimore each day.

Online postings recruit paid activists for everything from stopping offshore drilling to defending the Constitution.

In California, one group is offering to pay $10 and up per hour to activists to hold signs in demonstrations against foam cups and plastic bags.

In Bellevue, Wash., the Faith and Freedom Network plans to hire activists for about $10 an hour next month to promote statewide candidates with Judeo-Christian values for the fall elections, says Gary Randall, the group's president. Recruits will knock on doors and will be dispatched in large groups, hoping to draw media attention, he says.

Pierce Hutchings, a Chicago businessman and baseball fan, staffed a rally at Wrigley Field on the Cubs opening day in April by posting an ad on Craigslist offering $25 of his own money to anyone willing to show up.

The cause? To protest plans to erect a big Toyota advertising sign in left field. The sign drew criticism from many Chicago residents and merchants who said it would impede their rooftop views of games. About 50 people showed up, put on yellow "No Sign @ Wrigley" T-shirts supplied by Mr. Hutchings, and urged passersby to call their local elected officials. The sign was put up anyway.

While the money offers some relief for the unemployed, plugging a cause, even one that seems worthy, can be dispiriting.

"I told one guy today that I was fighting global poverty, and he looked me in the eye and said, 'I don't care,'" says Stephen Borlik, a new college graduate posted outside a D.C. subway stop recently as a $13-per-hour street fundraiser for CARE, the antipoverty nonprofit organization in Atlanta.

Mr. Borlik moved here in May after graduating from Central Michigan University in Mount Pleasant. He is living with his brother while looking for a job. "It can be extremely frustrating sending out résumé after résumé and getting no response. It almost makes you not want to do anything."

To keep his job at CARE, Mr. Borlik says, he must hit a weekly quota of new donors giving a minimum of $20. A CARE spokeswoman says "team members" in the organization's "Face-to-Face" fund-raising program have a goal of two new donors per day.

In Atlanta, Timothy Baker, a 40-year-old unemployed warehouse worker, says his money-making strategy has been to walk picket lines for $8.50 an hour for the Southeastern Carpenters Regional Council. "It's something to do until you find something better."

While many big unions, including the International Brotherhood of Electrical Workers, frown on using nonmembers in picket lines, "we're not at all ashamed," says Jimmy Gibbs, director of special projects for the Southeastern Council. "We're helping people who are in a difficult situation."

ty joye

[sandi66]

60 votes in place, Dems ready to extend jobs money

Jul 19, 9:36 PM (ET)

WASHINGTON (AP) - With a new face and a 60th vote for breaking a Republican filibuster, Senate Democrats are preparing to restore jobless checks for 2.5 million people whose benefits ran out during a congressional standoff over deficit spending. President Barack Obama says, "It's time to do what's right."

But first, Obama and his Democratic allies are pressing for maximum political advantage, blaming Republicans for an impasse that halted unemployment checks averaging $309 a week for those whose eligibility had expired.

Obama launched a fresh salvo on Monday, demanding that the Senate act on the legislation - after a vote already had been scheduled for Tuesday - and blasting Republicans for the holdup.

"The same people who didn't have any problem spending hundreds of billions of dollars on tax breaks for the wealthiest Americans are now saying we shouldn't offer relief to middle-class Americans," Obama said.

Republicans say they do favor the benefits but are insisting that they be paid for with spending cuts elsewhere in the government's $3.7 trillion budget. After initially feeling heat when a lone GOP senator, Jim Bunning of Kentucky, briefly blocked a benefits extension back in February, the GOP has grown increasingly comfortable in opposing the legislation.

"What the president isn't telling the American people is that many of us in the Senate are fighting to make sure our children and grandchildren aren't buried under a mountain of debt," said Sen. Orrin Hatch, R-Utah. "If we are going to extend unemployment benefits, then let's do it without adding to our record debt."

Tuesday's Senate voting - with Democratic newcomer Carte Goodwin of West Virginia being sworn in just in time to cast the 60th vote to break a GOP filibuster - will cap a battle of more than four months that's featured bad blood and a shift in sentiment among key Republicans.

Though the economy is said to be slowly recovering, the jobless rate remains painfully high at 9.5 percent. And Obama, putting a human face on those hard times, brought three unemployed people to the Rose Garden with him on Monday.

An increasing number of people, however, have been out of work for so long that they have exhausted their eligibility for benefits, which ends at 99 weeks in most states. This measure won't help them.

In Bellevue, Wash., for example, unemployment benefits ran out last week for 63-year-old Sherry Blum. She's been job hunting since August 2008. Already behind on her mortgage, the loss of her weekly benefits means she will have to sell her town house.

"Unemployment (benefits) helped me stay just above water," she said. Blum plans to sell her town house, with its $1,600 monthly mortgage, and move into a small apartment. But with the housing market still ailing, that could take time. Three other homeowners in her development have taken their homes off the market recently after failing to sell them.

"Hopefully my house will sell before it goes into foreclosure," she said.

The Senate is likely to pass the current measure late Tuesday. The House is expected to clear it for Obama's signature as soon as Wednesday.

Two Republicans, Olympia Snowe and Susan Collins of Maine, are expected to vote with the Democrats Tuesday, as they did at the end of June. The measure stalled then because the death of Robert Byrd, D-W.Va., and the participation in the filibuster of Nebraska Democrat Ben Nelson left the party one short of the 60 votes needed.

With Goodwin, the Senate breakdown is 57 Democrats, 41 Republicans and two independents who normally vote with the Democrats.

Some 2.5 million people have seen their weekly checks interrupted since an earlier extension of the jobless aid program expired June 2. States are responsible for the first 26 weeks of benefits, but the federal government stepped in last year to fully fund up to 73 additional weeks of benefits under the terms of last year's economic stimulus bill.

There are now 14.6 million unemployed people in the U.S., and more than 9.2 million of them are collecting some form of jobless insurance, including 4.9 million - more than half - receiving the federal extensions.

The impasse hasn't affected the 4.3 million or so who have been collecting their first six months of state-paid benefits; but someone whose state benefits have run since June 2 hasn't been eligible for the next 20 weeks worth of benefits while others in the program can't qualify for three additional "tiers" of benefits after that.

People who lost their benefits because of Congress' inaction will be able to receive them retroactively. But that could prove cumbersome as people flood state offices to re-apply for benefits and as states grapple with questions such as requirements that jobless people detail the steps they're taking to find work.

The providing of additional weeks of jobless benefits in the midst of bad times has been regarded as routine, and the latest cycle of additional benefits began in 2008, the last year of George W. Bush's administration. But with conservative voters and tea party activists up in arms about the deficit, conservative Republicans have adopted a harder line that has three times caused interruptions of jobless benefits and other programs.

"For a long time, there has been a tradition under both Democratic and Republican presidents to offer relief to the unemployed," Obama said. "That was certainly the case under my predecessor, when Republicans several times voted to extend emergency unemployment benefits."

Democrats note that the GOP is far more concerned about the $33 billion impact of the jobless benefits on the deficit than the far larger cost of extending Bush-era tax cuts.

But Democrats share some of the blame for the holdup. For most of the debate, Democrats paired the jobless benefits extension with a variety of unfinished congressional business such as expired tax breaks, help for doctors facing a cut in their Medicare payments and help for cash-starved state governments.

Those Democratic add-ons have delayed passage of the measure and were directly responsible for a successful GOP filibuster in mid-June. After a stripped-down bill was introduced, Snowe and Collins rallied behind the measure.

apnews.myway.com/article/20100720/D9H2FR7G1.html

[sandi66]

www.guardian.co.uk/business/2010/jul/18/goldman-sachs-europe-sovereign-bond-sales?intcmp=239


Europe freezes out Goldman Sachs


Shocked by past deals with Italy and Greece, governments are excluding the Wall Street bank from sovereign bond sales



Sunday 18 July 2010







Protestors jeer Goldman Sachs chairman Lloyd Blankfein as he prepares to face US Senators over the banking crisis. Photograph: Jim Young/REUTERS


European governments are turning their backs on Goldman Sachs, the all-conquering investment bank that has suffered a series of blows to its reputation, capped by the biggest ever fine imposed on a Wall Street firm.

According to data from Dealogic, Greece, Spain, France and Italy have all denied the bank a lead role in their recent sovereign bond sales.


Last Thursday, Goldman agreed to pay a $550m fine to settle US regulators' claims that the bank misled investors in a mortgage-backed security. Goldman admitted that its marketing materials were incomplete, because they failed to state that the same third party that helped choose the assets had taken a bet against them.

But governments have also been shocked at the emergence of past transactions between Goldman and Greece and Italy, where products the bank helped to sell aided both in hiding government debt. Greece, which used Goldman in a bond sale this year, is practically at war with the bank. A sharp contrast with the situation months before, when Goldman bankers dined with the prime minister in a private meeting overlooking the Acropolis. The relationship broke down, though, after news leaked earlier this year that Goldman was about to strike a bond sale deal with China's sovereign fund – which never materialised.

Spain, which used Goldman among its top 10 bookrunners last year, has not done so in 2010, while Italy has not given the bank a leading role since 2007.

France has not used Goldman in any lead position over the past three years, and it seems doubtful that it will do so in the near future. "French people would riot in the streets if we chose Goldman," said a person familiar with the French treasury.

The French government has said it will only use banks that cap management and traders' bonuses. This year, Goldman limited the pay and bonus compensation to its London partners at £1m, though other bankers and traders can receive much more, provided they are not partners. Goldman has also been criticised of for taking short positions, or betting on a price fall, against some European sovereign bonds – after taking part in a bond sale, a person involved in sovereign debt sales said.

The bank says it has presence in the European sovereign bank market and that it has recently participated in deals in Britain, Portugal and Belgium.

Countries such as Spain and France have also shied away from Goldman because their traditionally conservative treasury departments prefer to steer clear of risky investments. The French treasury, for instance, only issues debt in euros, staying away, like Spain, from the complex foreign exchange or swap deals that brought trouble to Greece and Italy. "The Spanish treasury can't justify in parliament why, if things go wrong, they have a multimillion-euro position in Indian rupees, for example," a sovereign bond banker said.

Governments also stick to plain-vanilla deals, with little complexity, in order to keep their prized AAA rating, reducing their borrowing costs as much as possible, a source familiar with the French Tresor said.

IKB, the failed bank bailed out by the German government, recently considered suing Goldman because of its exposure to the structured products sold by the US bank. Following the settlement between Goldman and the SEC, the US securities regulator, last week, IKB said the German lender was "reviewing the settlement documents".

Germany has only made one syndicated bond sale in the last three years, in 2009, when it appointed Deutsche Bank, Citibank, HSBC and BofA-Merrill Lynch as lead managers.

www.guardian.co.uk/business/2010/jul/18/goldman-sachs-europe-sovereign-bond-sales?intcmp=239


ty joye

[sandi66]

MP of Dawlat al-Qanoon warns of UN intervention

July 20, 2010 - 08:19:02

BAGHDAD / Aswat al-Iraq: A lawmaker from the Dawlat al-Qanoon Alliance on Tuesday warned that the United Nations (UN) might intervene to redo the elections in Iraq in case of excessive delays in forming the new Iraqi government.

“Iraq is still under UN mandate, and one of the proposed solutions is to redo the elections,” Lamaker Bahaa Jamal al-Din told Aswat al-Iraq news agency.

He noted that Iraqi politicians who did not win the election want to achieve this result by insisting on their demands.

“If the election results are to be redone, then Iraq will go through a dark tunnel because of political leaders who do not care about the itnerests of the Iraqi people, but only their personal benefits,” Jamal al-Din stressed.

MH (P)/SR

en.aswataliraq.info/?p=134680

[sandi66]

SEC looking to hire 800 people

July 19, 2010

NEW YORK (CNNMoney.com) -- The Securities and Exchange Commission will need to hire about 800 new people to carry out the agency's new responsibilities created by financial reform legislation, the head of the regulatory agency plans to tell lawmakers Tuesday.

SEC Chairwoman Mary Schapiro will testify before the House Financial Services committee Tuesday morning, discussing oversight of the agency and future challenges under the financial reform law President Obama plans to sign this week.

Email Print CommentThe new law would significantly ramp up the size of the SEC, which regulates financial markets.

In doing so, the reform bill makes several changes to the SEC's funding structure -- the full cost of which has yet to be decided, Schapiro plans to say, according to her prepared remarks.


money.cnn.com/2010/07/19/news/economy/SEC_to_hire_800/index.htm


ty George

[sandi66]

Senate Bill S510 Makes it Illegal to Grow, Share, Trade or Sell Homegrown Food
By Steve Green

July 19, 2010


S 510, the Food Safety Modernization Act of 2010, may be the most dangerous bill in the history of the US.



It is to our food what the bailout was to our economy, only we can live without money.



“If accepted would preclude the public’s right to grow, own, trade, transport, share, feed and eat each and every food that nature makes. It will become the most offensive authority against the cultivation, trade and consumption of food and agricultural products of one’s choice. It will be unconstitutional and contrary to natural law or, if you like, the will of God.” It is similar to what India faced with imposition of the salt tax during British rule, only S 510 extends control over all food in the US, violating the fundamental human right to food." ~ Dr. Shiv Chopra, Canada Health whistleblower.



Monsanto says it has no interest in the bill and would not benefit from it, but Monsanto’s Michael Taylor who gave us rBGH and unregulated genetically modified (GM) organisms, appears to have designed it and is waiting as an appointed Food Czar to the FDA (a position unapproved by Congress) to administer the agency it would create — without judicial review — if it passes.

S 510 would give Monsanto unlimited power over all US seed, food supplements, food AND FARMING.



History



In the 1990s, Bill Clinton introduced HACCP (Hazardous Analysis Critical Control Points) purportedly to deal with contamination in the meat industry. Clinton’s HACCP delighted the offending corporate (World Trade Organization “WTO”) meat packers since it allowed them to inspect themselves, eliminated thousands of local food processors (with no history of contamination), and centralized meat into their control. Monsanto promoted HACCP.



In 2008, Hillary Clinton, urged a powerful centralized food safety agency as part of her campaign for president. Her advisor was Mark Penn, CEO of Burson Marsteller*, a giant PR firm representing Monsanto. Clinton lost, but Clinton friends such as Rosa DeLauro, whose husband’s firm lists Monsanto as a progressive client and globalization as an area of expertise, introduced early versions of S 510.



S 510 fails on moral, social, economic, political, constitutional, and human survival grounds.



1. It puts all US food and all US farms under Homeland Security and the Department of Defense, in the event of contamination or an ill-defined emergency. It resembles the Kissinger Plan.



2. It would end US sovereignty over its own food supply by insisting on compliance with the WTO, thus threatening national security. It would end the Uruguay Round Agreement Act of 1994, which put US sovereignty and US law under perfect protection. Instead, S 510 says:



COMPLIANCE WITH INTERNATIONAL AGREEMENTS.

Nothing in this Act (or an amendment made by this Act) shall be construed in a manner inconsistent with the agreement establishing the World Trade Organization or any other treaty or international agreement to which the United States is a party.



3. It would allow the government, under Maritime Law, to define the introduction of any food into commerce (even direct sales between individuals) as smuggling into “the United States.” Since under that law, the US is a corporate entity and not a location, “entry of food into the US” covers food produced anywhere within the land mass of this country and “entering into” it by virtue of being produced.



4. It imposes Codex Alimentarius on the US, a global system of control over food. It allows the United Nations (UN), World Health Organization (WHO), UN Food and Agriculture Organization (FAO), and the WTO to take control of every food on earth and remove access to natural food supplements. Its bizarre history and its expected impact in limiting access to adequate nutrition (while mandating GM food, GM animals, pesticides, hormones, irradiation of food, etc.) threatens all safe and organic food and health itself, since the world knows now it needs vitamins to survive, not just to treat illnesses.



5. It would remove the right to clean, store and thus own seed in the US, putting control of seeds in the hands of Monsanto and other multinationals, threatening US security. See Seeds – How to criminalize them, for more details.



6. It includes NAIS, an animal traceability program that threatens all small farmers and ranchers raising animals. The UN is participating through the WHO, FAO, WTO, and World Organisation for Animal Health (OIE) in allowing mass slaughter of even heritage breeds of animals and without proof of disease. Biodiversity in farm animals is being wiped out to substitute genetically engineered animals on which corporations hold patents. Animal diseases can be falsely declared. S 510 includes the Centers for Disease Control (CDC), despite its corrupt involvement in the H1N1 scandal, which is now said to have been concocted by the corporations.



7. It extends a failed and destructive HACCP to all food, thus threatening to do to all local food production and farming what HACCP did to meat production – put it in corporate hands and worsen food safety.



8. It deconstructs what is left of the American economy. It takes agriculture and food, which are the cornerstone of all economies, out of the hands of the citizenry, and puts them under the total control of multinational corporations influencing the UN, WHO, FAO and WTO, with HHS, and CDC, acting as agents, with Homeland Security as the enforcer. The chance to rebuild the economy based on farming, ranching, gardens, food production, natural health, and all the jobs, tools and connected occupations would be eliminated.



9. It would allow the government to mandate antibiotics, hormones, slaughterhouse waste, pesticides and GMOs. This would industrialize every farm in the US, eliminate local organic farming, greatly increase global warming from increased use of oil-based products and long-distance delivery of foods, and make food even more unsafe. The five items listed — the Five Pillars of Food Safety — are precisely the items in the food supply which are the primary source of its danger.



10. It uses food crimes as the entry into police state power and control. The bill postpones defining all the regulations to be imposed; postpones defining crimes to be punished, postpones defining penalties to be applied. It removes fundamental constitutional protections from all citizens in the country, making them subject to a corporate tribunal with unlimited power and penalties, and without judicial review.



It is (similar to C-6 in Canada) the end of Rule of Law in the US.



Senator Richard Durbin (D-IL) is the sponsor of this bill.



The bill's co-sponsors are:


Lamar Alexander [R-TN]
Jeff Bingaman [D-NM]
Richard Burr [R-NC]
Roland Burris [D-IL]
Saxby Chambliss [R-GA]
Christopher Dodd [D-CT]
Michael Enzi [R-WY]
Kirsten Gillibrand [D-NY]
Judd Gregg [R-NH]
Thomas Harkin [D-IA]
Orrin Hatch [R-UT]
John Isakson [R-GA]
Edward Kennedy [D-MA]
Amy Klobuchar [D-MN]
Ben Nelson [D-NE]
Tom Udall [D-NM]
David Vitter [R-LA]



Write these senators today and tell them to revoke their support of Senate Bill 510!


For further information, watch these videos:



Food Laws – Forcing people to globalize?



Corporate Rule ?



Reclaiming Economies?





www.treeoflife.nu/gabriel-cousens-m-d/activism-outreach/bill-510/


ty joye


S. 510: FDA Food Safety Modernization Act

111th CongressThis is a bill in the U.S. Congress originating in the Senate ("S."). A bill must be passed by both the Senate and House and then be signed by the President before it becomes law.

Bill numbers restart from 1 every two years. Each two-year cycle is called a session of Congress. This bill was created in the 111th Congress, in 2009-2010.

The titles of bills are written by the bill's sponsor and are a part of the legislation itself. GovTrack does not editorialize bill summaries.

2009-2010

www.govtrack.us/congress/bill.xpd?bill=s111-510&tab=related


ty ubetcha

[sandi66]

BP, Lockerbie cloud Cameron's White House visit
By Stephen Collinson (AFP) – 37 minutes ago

WASHINGTON — Prime Minister David Cameron's first White House talks Tuesday were at risk of being overshadowed by a row over the freed Lockerbie bomber and the political fallout of the BP oil spill.

Cameron also went into his first meeting with President Barack Obama in Washington since taking office in May, fiercely defending US and British strategy in the Afghan war, amid skepticism about NATO withdrawal plans.

Obama was rolling out the full White House treatment for Cameron, with Oval Office talks, a working lunch and an East Room press conference, after being accused of dealing brusquely with former PM Gordon Brown last year.

Cameron had hoped to use the talks to redefine the US-British relationship, which was in lockstep under leaders like George W. Bush and Tony Blair, but seemed awkward at times between Obama and Brown.

"The US-UK relationship is simple: It's strong because it delivers for both of us," Cameron wrote in the Wall Street Journal on Tuesday.

"The alliance is not sustained by our historical ties or blind loyalty. This is a partnership of choice that serves our national interests."

But in the run-up to Tuesday's talks, Cameron was forced to tackle a string of political brush fires -- none of which were caused by his government, but which threatened to tarnish the tone of his visit.

Downing Street announced that Cameron had changed his mind and would see four US senators furious about the Scottish government's release of convicted Lockerbie bomber, cancer-stricken Libyan Abdelbaset Ali Mohmet al-Megrahi.

Cameron has said the release of Megrahi on compassionate grounds by the devolved government in Scotland, which has a separate legal system to England and Wales, was a mistake.

But the senators are demanding transparency, having seized on reports -- denied by BP and the government -- that the firm pushed for Megrahi's release to safeguard a lucrative oil exploration deal with Libya.

Megrahi is the only person convicted of the 1988 bombing of a US Pan Am jumbo jet over the Scottish town of Lockerbie in which 270 people were killed. He was freed from jail last year, but is still alive.

"I agree that the decision to release al-Megrahi was wrong. I said it was wrong at the time ... I just happen to think it was profoundly misguided," Cameron told the NPR News show "Morning Edition" on Tuesday.

"He was convicted of the biggest mass murder in British history, and in my view, he should've died in jail."

The White House said before Cameron arrived that it did not believe that its showdown with British-based BP over the Gulf of Mexico oil spill would detract from the Cameron-Obama talks.

But the energy giant is high on the list of public enemies in the United States, following America's worst environmental disaster.

Various Obama aides and politicians have referred to the firm by its old name of "British Petroleum," stoking nationalistic feelings, though the president has rarely, if ever done so.

"Of course, BP has got to do everything necessary to cap the oil well, to cleanup the spill, to pay compensation," Cameron told NPR, echoing the Obama administration's line.

"I've met with BP, I know they want to do that, and they will do that."

Cameron has also called, however, for BP to be kept solvent despite multi-billion dollar costs, in the knowledge that its stock is the backbone of many British pension funds.

The leaders were also certain to discuss strategy in Afghanistan, after the international community earlier endorsed sweeping Afghan government plans to take responsibility for security by 2014.

Both the US and British governments, under rising political pressure from an increasingly unpopular war, have insisted that plans to withdraw western combat troops from Afghanistan are realistic.

Obama, who mandated a surge of US forces last year, has said he wants to start bringing home at least some troops in July 2011. Cameron wants British combat troops home within five years.

But critics have expressed doubts that the newly trained Afghan army will be in any shape to keep the peace by 2014.

"I think it is realistic," Cameron insisted on NPR.

"Remember, 2014 is four years away, so there's quite a lot of time to train up that Afghan army, and that, to me, is the most important thing.

"In the end, we're not in Afghanistan to create the perfect democracy or the perfect, society," he said, adding that the mission was to stop the return of terrorist training camps to the country.

www.google.com/hostednews/afp/article/ALeqM5hn7Tfinz1oDli_igSHJhRK0rClKQ

[sandi66]

Syria Plays Key Role to Break Stalemate in Iraq



Ayad Allawi Meets Muqtada al-Sadr in Damascus, July 19, 2010

Commentary by MEMRI Staff

In a move likely to enhance his stature, Syrian President Bashar al-Assad invited the young radical cleric Muqtada al-Sadr and Ayad Allawi, the leader of al-Iraqiya which gained the largest number of seats in the March 7 Iraqi parliamentary elections, to meet with him in Damascus individually and with each other, under Syrian auspices.

Al-Sadr, who is attending a religious seminary in Qom, has repeatedly declared that he would not discuss the formation of an Iraqi government except on Iraqi soil. Clearly, Assad must have been very persuasive to ask him to do exactly that in Damascus.

The Purpose of the Damascus Meetings

The ostensible purpose of the numerous meetings held in Damascus was to break the stalemate, which has lasted for more than four months, and to expedite the formation of a new government. The real reason, supported by Saudi Arabia, Iran, Turkey and Egypt, is to replace Nouri al-Maliki as Iraqi prime minister with a compromise candidate acceptable to these parties. The name often mentioned is that of Dr. Adel Abd Al-Mahdi, the outgoing vice president of Iraq. The one person who has vehemently opposed Abd Al-Mahdi is Muqtada al-Sadr. It now appears that following his meetings with Assad and Allawi, al-Sadr may have agreed to change his mind if indeed Abd Al-Mahdi is the candidate of choice.

Assad's Code Words

In his meetings with both al-Sadr and Allawi, Assad reiterated his commitment to Iraq's "Arabism and unity." These are two code words. The Arabism of Iraq means that Iraq is part of the Arab world which necessarily puts Iran at a distance. Another way of putting it: Iraq is an Arab not a Shi'a country. "Unity" has to do with keeping Kurdish aspirations for autonomy, or even independence, under lock and key.

Allawi and al-Sadr Meet

Following a two-hour meeting with al-Sadr, Ayad Allawi told the media that his meeting was one of "the most positive and productive meetings and will contribute to the wellbeing of the Iraqi people." Al-Sadr, speaking separately, made a significant reference to "some concessions" by al-Iraqiya that would lead to a speedy formation of a new government. The "concessions" was interpreted by Iraqi commentators that Allawi will not insist on becoming prime minister provided the "constitutional and electoral rights" of al-Iraqiya are preserved, meaning that it should be called upon by the president to form the new government. Al-Sadr may have also received a commitment from Allawi that no Ba'thist will be restored to a position of power. Al-Sadr said: "It is not possible for me to deal with the Ba'thists until and unless they forget Saddam Hussein and his history."

When al-Sadr was asked about the assassination attempt against him by Allawi while he was serving as prime minister in 2004, al-Sadr replied: "We forget all our differences for the sake of Iraq…"

The Reason for Choosing Damascus as the Venue for Meetings

There is one last point worth mentioning as to the reason for holding the meetings in Damascus and not in Tehran. Speaking for al-Iraqiya, Ahmad al-Duleimi said: "There was an agreement that the meeting [between Allawi and al-Sadr] would take place in Tehran, but to avoid creating sensitivity with neighboring Turkey, which is a Muslim neighbor of Iran, we have welcomed the meetings in Damascus." It is also a matter of official record that a delegation representing al-Maliki's al-Dawa Party spent four days in Iran, but al-Sadr refused to meet with it.

The Major Loser

If all goes according to plan, there will be one major loser, and that is Nouri al-Maliki, who remains entrenched in the post of prime minister but rejected by everyone except elements of his own "State of Law." However, given the checkered history of Iraq, today's loser could be tomorrow's winner. Everything remains fluid until a new government is sworn in.

Sources: Alsumarianews.com, July 19, 2010; Al-Zaman, Iraq; Al-Sharq al-Awsat, Al-Hayat, London; Al-Thawra, Syria, July 20, 2010




Posted at: 2010-07-20

www.thememriblog.org/blog_personal/en/28696.htm

[sandi66]

July 20, 2010 - 3:54 PM

SEC chairman says agency has revamped; ready to write rules for new financial overhaul

WASHINGTON (AP) - The head of the Securities and Exchange Commission said Tuesday that the agency has been revamped and has stepped up enforcement since the financial crisis. Agency officials are also ready to write new rules for companies affected by the sweeping legislation that is about to become law, she told House lawmakers.

SEC Chairman Mary Schapiro appeared at a House subcommittee hearing, in her first public testimony since passage of the financial overhaul legislation that gives the agency new powers. Her comments also came after the agency agreed to let Wall Street giant Goldman Sachs Group Inc. pay $550 million to settle civil fraud charges.

Lawmakers voiced approval for changes Schapiro has made at the SEC in response to the agency's failure to detect the massive Madoff fraud and other schemes. Some Republicans, however, chafed at the expanded authority the SEC will gain over hedge funds, derivatives and other areas.

It "increases the threat that the SEC will create more uncertainty in our capital markets through the exercise of new powers to reform practices which in no way contributed to the financial crisis," said Rep. Spencer Bachus, R-Ala.

Rep. Edward Royce, R-Calif., said "time will tell whether real reform can come from within" the SEC.

President Barack Obama is signing the legislation into law on Wednesday.

The SEC is charged with writing nearly 100 new rules. Schapiro said "we will be very sensitive" in crafting the rules, taking into account for example that oversight and inspection of small hedge funds and other investment businesses should differ from that for large entities that could pose a risk to the financial system.

Also under the legislation, Schapiro will be a member of the new Financial Stability Oversight Council, a powerful assembly of regulators headed by the Treasury secretary to keep watch over the entire system.

Schapiro said the SEC has made fundamental changes, strengthening enforcement efforts and taking measures to protect investors in the wake of the financial crisis and past agency failures.

"We brought in new leaders across the agency. We streamlined our procedures. We worked to reform the ways we operate. We began modernizing our systems," she said.

Rep. Paul Kanjorski, D-Pa., chairman of the Financial Services subcommittee, said Schapiro "has pursued an ambitious, results-oriented agenda aimed at protecting investors and restoring market confidence."

It was Schapiro's first public appearance since the $550 million settlement announced Thursday with finance powerhouse Goldman Sachs. The deal, the largest settlement with a Wall Street firm in SEC history, involved allegations that the firm misled buyers of mortgage-related investments.

www.canadianbusiness.com/markets/market_news/article.jsp?content=D9H2VTOO0

[sandi66]

Patterson pushes proactive measures
By Gale Courey Toensing

Story Published: Jul 19, 2010

(Story Updated: Jul 16, 2010 )

MOBILE, Ala. – As the United South and Eastern Tribes celebrates its 40th anniversary, the inter-tribal organization is posing some important questions about the federal government’s trust responsibility and the government-to-government relationship between the U.S. and the country’s indigenous nations.

“Every single issue Indian country faces centers around the federal government’s trust responsibility,” USET President Brian Patterson said following the nonprofit organization’s mid-year conference in Mobile, Ala. in June.

“So as USET moves forward in continuing the vision of our four founding tribes – the vision of strength in unity – the first thing we’re looking to determine is: What is the vision of implementing the federal government’s trust responsibility to the tribes? It’s a question I ask of Interior Department Secretary Ken Salazar and I think it’s a question Indian country needs to advance on all levels.

“And the second part to that question is even more fundamental, and that is: Who determines what the trust responsibility is in developing the government-to-government relationship with the tribes?”

Clearly, a relationship involves two parties and Patterson believes the nations need to take a more proactive role in defining and shaping the federal government’s trust responsibility and the government-to-government relationship.

“The tribes need to be proactive in defining what the trust relationship is and presenting that vision to the government and those dialogues need to take place at the highest levels within the administration. For tribes to wait for the federal government to move this conversation forward is ludicrous,” Patterson said.

“We need to be more involved in federal policy-making that affects the tribes. How does the federal government involve itself in all major decisions affecting the tribes? How does it balance its trust obligation with the tribes with state interests and state rights? We’ve done a lot in the recent past to expand our role in assuring that our tribal voice is heard in Washington on federal Indian law matters, but we still have outstanding issues. I think that’s the continuous fight and that’s where it needs to be centered.”

USET passed 24 resolutions at its mid-year conference and almost all of them relate directly to the federal government’s trust responsibility, Patterson said.

At the top of the agenda is the urgent need for a legislative “Carcieri fix” to correct a ruling by the U.S. Supreme Court last year that the 1934 Indian Reorganization Act restricts the Interior Department secretary to take land into trust only for tribes “under federal jurisdiction” in 1934.

“This is an issue that affects every tribe in Indian country, some directly, some indirectly. And all tribes need to be alarmed about how this decision has emboldened and empowered the states,” Patterson said.

He pointed to the Cape Wind project – a proposal to build an offshore industrial wind factory in Nantucket Sound, an area sacred to the Wampanoag tribes. The project was opposed by the tribes, environmental groups, local towns, airports and boating authorities, and also by USET in a formal letter to Interior Secretary Ken Salazar, but several states supported it and Salazar approved it.

“As we deal with concerns such as Cape Wind and Interior’s green lighting of that offshore wind project, which would disrupt an area of great sacred significance for several of our member tribes, we need to develop and have dialogue with those responsible for implementing the trust relationship in Indian country,” Patterson said.

USET passed a resolution seeking a reversal of Salazar’s approval of Cape Wind, and has also written in support of a speedy resolution of the Cobell settlement. All three issues – Carcieri, Cape Wind and Cobell – are “tied to the federal government’s failed trust responsibility,” he said.

The disastrous BP oil rig blowout in April gave rise to a USET resolution urging the U.S. Coast Guard – the lead agency for oil clean-up efforts – to “fully comply with their legal responsibilities to initiate consultation directly on a government-to-government basis with Indian tribes in all stages of the National Historic Preservation Act Section 106.”

The BP oil spill affects the whole cycle of creation, Patterson noted.

“USET tribes in the Mobile, Ala. area are in the shadow of the BP oil spill. It’s a tragic time for the communities, including our own Native American communities who live in the Gulf Coast area. The spill highlights the need for the federal government to play an appropriate regulatory role that ensures that businesses act responsibly without overburdening them. It’s a tough balance to achieve. Our prayers are with the Gulf Coast communities.”

Another resolution involved the appointment of representatives to the BIA/Tribal Budget Advisory Council, a forum where tribal representatives from each of the 12 BIA regions come together to discuss funding for the tribes and to assist in formulating the annual BIA budget.

In this area, too, Patterson is urging more proactive
involvement.

“We’re at a disadvantage because we don’t have a relationship with the Office of Management and Budget so the process is flawed from the beginning and Indian country is left again in a responsive mode instead of being in an advocacy position. We really need to elevate beyond the current process.”

Another resolution urges the Interior secretary to fulfill his trust responsibility by supporting secretarial procedures for tribes’ gaming efforts when states refuse to negotiate in good faith on Class III gaming compacts.

All of the resolutions are posted on USET’s Web site at www.usetinc.org under “Resources.”

Patterson said the mid-year conference was “very dynamic,” but more work needs to be done.

“I think we have a little window of opportunity to forward some of these issues that have brought hardships to Indian country and have prohibited Indian country from advancing, but tribes need to be engaged and we need to hold ourselves accountable to the process.”

www.indiancountrytoday.com/national/Patterson-pushes-proactive-measures-98604634.html

[sandi66]

Top Secret America: Counter-terrorism apparatus is hidden, lacks oversight
Top Secret America, intelligence gathering by the government, has grown so unwieldy and expensive that no one really knows what it costs and how many are involved.

The US Department of Homeland Security seal: Top Secret America, intelligence gathering by the government, has grown so unwieldy and expensive that no one really knows what it costs and how many are involved.

AFP/Newscom/File

July 20, 2010

WASHINGTON
Since the terror attacks of Sept. 11, 2001 in the U.S., top-secret intelligence gathering by the government has grown so unwieldy and expensive that no one really knows what it costs and how many people are involved, The Washington Post reported Monday.

A two-year investigation by the newspaper uncovered what it termed a "Top Secret America" that's mostly hidden from public view and largely lacking in oversight.

In its first installment of a series of reports, the Post said there are now more than 1,200 government organizations and more than 1,900 private companies working on counterterrorism, homeland security and intelligence in some 10,000 locations across the U.S.

Some 854,000 people — or nearly 1 1/2 times the number of people who live in Washington — have top-secret security clearance, the paper said.

Col. Dave Lapan, a Pentagon spokesman, said Monday the issue of redundancy within the intelligence community is a "well known" problem.

"We've been fighting two wars since 9-11 and a lot of that growth in the intelligence community has come as a result of needed increases in intelligence collection and those types of activities to support two wars," Lapan said.

Defense Secretary Robert Gates previously had ordered the services and defense agencies to find cost savings in the years to come. Lapan said the military's intelligence programs, including its reliance on contractors, was expected to be part of that sweeping review.

Gates told the Post that he doesn't believe the massive bureaucracy of government and private intelligence has grown too large to manage, but that it is sometimes hard to get precise information.

"Nine years after 9/11, it makes sense to sort of take a look at this and say, 'OK, we've built tremendous capability, but do we have more than we need?" he said.

The head of the CIA, Leon Panetta, said he knows that with the growing budget deficits the level of spending on intelligence will likely be reduced and he is at work on a five-year plan for the agency.

The White House had been anticipating the Post report and said before it was published that the Obama administration came into office aware of the problems and is trying to fix them.

The administration also released a memo from the Office of the Director of National Intelligence listing what it called eight "myths" and intended as a point-by-point answer to the charges the Post series was expected to raise.

Among them was that contractors represent the bulk of the intelligence work force. The memo put the number at 28 percent, or less than a third.

The memo said that 70 percent of the intelligence budget is spent on "contracts, not contractors."

"Those contracts cover major acquisitions such as satellites and computer systems, as well as commercial activities such as rent, food service, and facilities maintenance and security," the memo said.

The Post said its investigation also found that:

—In the area around Washington, 33 building complexes — totaling some 17 million square feet (1.6 million sq. meters) of space — for top-secret intelligence work are under construction or have been built since 9/11.

—Many intelligence agencies are doing the same work, wasting money and resources on redundancy.

—So many intelligence reports are published each year that many are routinely ignored.

"There has been so much growth since 9/11 that getting your arms around that — not just for the DNI, but for any individual, for the director of the CIA, for the secretary of defense — is a challenge," Gates told the Post.

www.csmonitor.com/From-the-news-wires/2010/0720/Top-Secret-America-Counter-terrorism-apparatus-is-hidden-lacks-oversight

[sandi66]

Wall Street Reform:

The President commended those in Congress who brought home final passage of Wall Street Reform, now watch the signing live at 11:30 here at WhiteHouse.gov.

Subscribe.The White House Blog

The Top 10 Things You May Not Know About the Wall Street Reform and Consumer Protection Act

Posted by Jen Psaki on July 21, 2010 at 06:00 AM EDT

Here are 10 aspects of the Wall Street Reform and Consumer Protection Act you may not know about -- the online attention-deficit version.

1.Stronger protections for consumers against unfair credit card practices like rate hikes for existing credit card balances.

2.Mortgage brokers will be prohibited from making higher commissions by selling mortgages they know consumers can’t afford.

3.Free annual credit scores so people can stay on top of their finances.

4.No more taxpayer-funded bailouts. If a company can’t make it, it will have to liquidate.

5.Greater input by company shareholders over how much a CEO gets paid. And companies’ compensation boards are now required to be truly independent.

6.Brokers who offer investment advice will have to act in the best interests of their customers, not their own financial interests.

7.Financial firms won't be allowed to grow so large that if one fails, it will affect the entire financial system.

8.There will be one agency whose sole job is to make sure that consumers get the protections they deserve and to set clear rules to hold banks, mortgage companies, payday lenders, and credit card lenders accountable.

9.Businesses can't be charged extra fees for debit card “swipe fees” that exceed the cost of processing transactions.

10.You can learn plenty more here at WhiteHouse,gov or at financialstability.gov

www.whitehouse.gov/blog/2010/07/21/top-10-things-you-may-not-know-about-wall-street-reform-and-consumer-protection-act

[sandi66]

Kurdish delegation heads for Washington
July 22, 2010 - 09:10:21
ARBIL / Aswat al-Iraq: A delegation from Iraq’s Kurdistan region will head for Washington on Thursday to meet with American officials to discuss the formation of the new government, a presidential source said.

“The delegation will be led by Chief of Staff of the Kurdish President, Fouad Hussein, with the participation of a senior Kurdish officials,” the source told Aswat al-Iraq news agency.

“The week-long visit will witness meetings with Congressmen and senior American officials,” he added.

SH (P)/SR

en.aswataliraq.info/?p=134764

[sandi66]

Basra governor takes up economic cooperation with British delegation
July 23, 2010 - 02:22:06
BASRA / Aswat al-Iraq: Basra Governor Shaltagh Abboud al-Mayyah discussed with Baroness Emma Nicholson of Winterbourne means to further economic cooperation between the two sides, according to a press release by the province’s information department on Friday.

“The meeting with Baroness Nicholson, the founder and president of the AMAR international charitable foundation, and her accompanying delegation dealt with ways to boost economic and investment cooperation between Iraq and the United Kingdom,” read the release as received by Aswat al-Iraq news agency.

AMAR works to create and to sustain professional services in medicine, public health, education and basic need provision within refugee and other communities living under stress in war zones or in areas of civil disorder and disruption.

Nicholson said her current visit to Basra will envisage a tour of major hospitals in the city so as to rehabilitate them to be able to serve the city’s poor people who need surgeries as a result of crushing wars and radiations caused by these wars.

The oil-rich port city of Basra, Iraq’s only outlet to waterways, lies 590 km south of the Iraqi capital Baghdad.

AmR (P)

en.aswataliraq.info/?p=134804

[sandi66]

Obama calls Iraqi leaders to speed up forming new government
July 23, 2010 - 09:35:56
BAGHDAD / Aswat al-Iraq: U.S. President Barack Obama on Thursday welcomed the report presented by General Ray Odierno in which asserts that security incidents across Iraq remain at the lowest level, calling on Iraqi leaders to speed up forming the new government, according to a statement of the White House.

“Obama met with Commander of U.S. forces in Iraq Ray Odierno and Ambassador Chris Hill in the White House, discussing development in Iraq and the drawdown of U.S. forces there,” said the statement received by Aswat al-Iraq news agency.

According to the White House, Hill and Odierno provided Obama with an update on the status of Iraqi negotiations to form a new government, the security situation on the ground, and the drawdown of U.S. forces leading up to the end of combat mission at the end of August.

Odierno reported that security incidents across Iraq remain at the lowest level since the United States has kept records, and the U.S. forces are ahead of schedule in executing the planned drawdown to 50,000 troops by the end of August.

The U.S. forces last year pulled out of Iraqi cities and are working to formally end combat operations by Sept. 1 this year, cutting the U.S. military force from just under 90,000 to 50,000. A full withdrawal is also in sight at the end of 2011.

Odierno on Wednesday said the main challenges left for Iraq’s independence are political unity and financial solvency. Iraq’s political blocs are still discussing the formation of a new government, months after the March 7 elections.

During the meeting on Thursday, Obama said it is time for Iraq’ s leaders to form a government without delay.

In a sign of impatience with Iraq’s prolonged negotiations to form a government, Vice President Joe Biden on Thursday called Iraqi political leaders, urging them to form “without delay” a government. He spoke with Iraqi Prime Minister and State of Law leader Nouri al-Maliki and with former prime minister and al-Iraqiya leader Iyad Allawi.

SH (S)

en.aswataliraq.info/?p=134794

[sandi66]

Biden discusses government formation with Allawi, Maliki
July 23, 2010 - 08:10:37
BAGHDAD / Aswat al-Iraq: U.S. Vice President Joe Biden called on Iraqi politicians to form a comprehensive government, according to a statement of his office.

This came during two phone calls with Prime Minister Nouri al-Maliki and Head of al-Iraqiya List Iyad Allawi.

“He discussed with the two officials the latest political developments in Iraq,” the statement added.

Biden reiterated his call to form a comprehensive government, expressing support to the current efforts exerted by the Iraqi leaders to form the government.

“I don’t want to debate history here, but I never called for a partition,” Biden had said. “I called for a central government with considerable autonomy in the regions.”

Biden, who was assigned to follow up the Iraqi file, had visited Iraq earlier this month, to revive the political process in the country.

SH (P)

en.aswataliraq.info/?p=134789

[sandi66]

Federal Report Faults Banks on Huge Bonuses

Published: Friday, 23 Jul 2010 | 9:50 AM ET


By: Eric Dash

The New York Times


With the financial system on the verge of collapse in late 2008, a group of troubled banks doled out more than $2 billion in bonuses and other payments to their highest earners. Now, the federal authority on banker pay says that nearly 80 percent of that sum was unmerited.


AP
Kenneth R. Feinberg, the Treasury Department's special appointee for executive compensation.
--------------------------------------------------------------------------------

In a report to be released on Friday, Kenneth R. Feinberg, the Obama administration’s special master for executive compensation, is expected to name 17 financial companies that made questionable payouts totaling $1.58 billion immediately after accepting billions of dollars of taxpayer aid, according to two government officials with knowledge of his findings who requested anonymity because of the sensitivity of the report.

The group includes Wall Street giants like Goldman Sachs [GS 146.18 -0.37 (-0.25%) ], JPMorgan Chase [JPM 39.48 0.13 (+0.33%) ] and the American International Group [AIG 36.58 0.09 (+0.25%) ] as well as small lenders like Boston Private Financial Holdings [BPFH 6.89 0.04 (+0.58%) ]. Mr. Feinberg’s report points to companies that he says paid eye-popping amounts or used haphazard criteria for awarding bonuses, the people with knowledge of his findings said, and he has singled out Citigroup [C 4.0125 -0.0775 (-1.89%) ] as the biggest offender.

Even so, Mr. Feinberg has very limited power to reclaim any money. He can use his status as President Obama’s point man on pay to jawbone the companies into reimbursing the government, but he has no legal authority to claw back excessive payouts.

Mr. Feinberg’s political leverage has been weakened by the banks’ speedy repayment of their bailout funds. Eleven of the 17 companies that received criticism in the report have repaid the government with interest, so they have no outstanding obligations to reimburse. (Also see: Pay Czar Will Seek Stricter Clawbacks From TARP Firms)

As a result, Mr. Feinberg will merely propose that the banks voluntarily adopt a “brake provision” that would allow their boards to nullify or alter any bonus payouts or employment contracts in the event of a future financial crisis. All 17 companies have told Mr. Feinberg that they will consider adopting the provision, though none has committed to do so.

Mr. Feinberg is expected to call the payouts ill advised but not unlawful or contrary to the public interest, the people with knowledge of his report said.

On Wall Street, meanwhile, profits and pay have already rebounded. Goldman Sachs is on pace to hand out an average of $544,000 per worker in salary and bonuses, though many could earn several times that amount. JPMorgan Chase’s investment bank is on track to pay its workers, on average, about $425,000, while the average Morgan Stanley [MS 26.95 0.16 (+0.6%) ] employee could collect about $260,000.

If the second half of 2010 plays out like the first half, Wall Street bonuses will be paid out at about the same level as last year and similar to 2007 levels, when the crisis had just started to unfold.

“It’s healthier than I would have ever expected a year ago,” said Alan Johnson, a longtime compensation consultant who specializes in financial services.

Mr. Feinberg was named last month as the independent administrator for claims tied to the BP oil spill, making it likely that the release of his findings on the financial firms will be his final act as the overseer of banker pay.

The review, mandated by the 2009 economic stimulus bill, broadened the scope of Mr. Feinberg’s duties to include examining the pay packages of top earners at 419 companies that accepted bailout funds. However, it did not give him the power to demand changes to the compensation arrangements, as he did in each of the last two years at seven companies that received multiple bailouts.

Mr. Feinberg spent five months reviewing compensation paid to each company’s 25 highest earners between October 2008, when the first bailouts were dispensed, and February 2009, when the stimulus bill took effect. He narrowed his scrutiny to about 600 executives at 17 banks, with payouts totaling $2.03 billion.

Mr. Feinberg’s criteria for identifying the worst offenders were large payouts, in aggregate or to specific individuals; overly generous exit packages; or a failure to provide clear performance criteria or other rationale for extra pay.

Mr. Feinberg then approached each of the 17 companies with his proposed remedy during conference calls over the last two weeks. The 11 companies that have fully repaid their bailout money are American Express [AXP 43.54 0.35 (+0.81%) ], Bank of America [BAC 13.59 -0.07 (-0.51%) ], Bank of New York Mellon [BK 25.33 -0.37 (-1.44%) ], Boston Private, Capital One Financial [COF 40.07 -2.01 (-4.78%) ], Goldman Sachs, JPMorgan, Morgan Stanley, PNC Financial [PNC 60.38 0.60 (+1%) ], US Bancorp [USB 23.6903 0.0303 (+0.13%) ] and Wells Fargo [WFC 27.17 -0.22 (-0.8%) ].

The six companies that have not fully repaid their bailout funds are A.I.G, Citigroup, the CIT Group [CIT 37.42 0.22 (+0.59%) ], M&T Bank [MTB 89.02 2.34 (+2.7%) ], Regions Financial [RF 6.655 0.055 (+0.83%) ] and SunTrust Banks [STI 24.81 0.23 (+0.94%) ].

Among the banks that have not fully repaid the government, Citigroup was identified by Mr. Feinberg as having the most egregious compensation packages during the bailout period, according to officials with knowledge of his report. The bank handed out several hundred million dollars in pay in 2008 as it struggled to stay afloat.

Roughly two-thirds of the outsize payouts were from bonuses awarded to Andrew Hall and another trader who were part of the bank’s Phibro energy trading unit. Citigroup sold that business to Occidental Petroleum last fall, under pressure from Mr. Feinberg, after the disclosure that Mr. Hall had received a $100 million payout.

Mr. Feinberg is not expected to name individual executives who received the highest awards.

His review is among several compensation initiatives scrutinizing banker pay. In June, the Federal Reserve ordered about two dozen of the biggest banks to address several pay practices that, even after the crisis, it said encouraged excessive risk-taking.

European banking regulators introduced tough new standards for bonus payments earlier this month. And the Federal Deposit Insurance Corporation is developing a plan that would partly tie bank insurance premiums to the perceived risk of their executive pay packages. That proposal could be reviewed by the agency’s board as early as next month.

www.cnbc.com/id/38378867

[sandi66]

Seven European Banks Fail Stress Tests

Published: Friday, 23 Jul 2010 | 12:19 PM ET

Seven out of the 91 banks tested in the European Union's stress tests failed, Committee of European Banking Supervisors (CEBS) said Friday.



Failures in European bank stress tests were concentrated in Spain, with several savings banks failing according to data released by various national authorities across the European Union Friday.

Only one government-owned bank in Germany failed the stress tests, while French top banks, Portuguese Italian, Finnish and Swedish top banks all passed.

The German bank is nationalized Hypo Real Estate bank, and officials said because the bank's special situation, it should have not been included in the tests.

Greece's ATEBANK also failed.

The Committee of European Banking Supervisors (CEBS) said the tests were tougher than the ones carried out in the US last year, because its adverse scenario is so severe that it is a once-in-20- years possibility, while the US one was considered a one-in-seven-years possibility.

www.cnbc.com/id/38380917

[sandi66]

JULY 23, 2010, 12:56 P.M. ET

Fire Alarm Was Partially Disabled on Oil Rig, Electrician Says

The fire-alarm system aboard the Deepwater Horizon was partially disabled on the night the drilling rig caught fire, the chief electrician aboard testified Friday at a hearing outside New Orleans.

"The general alarm was inhibited," said Michael Williams, an employee of Transocean Ltd., which owned the rig. He explained that the system that automatically sounded a general alarm had been disabled because rig managers "did not want people woken up at 3 a.m. with false alarms."

A fiery well blowout killed 11 workers on April 20th shortly before 10 p.m. and led to the sinking of the rig, which triggered the biggest offshore oil spill in U.S. history.

Mr. Williams, who filed a lawsuit against Transocean in federal court in New Orleans on April 29, said he raised concerns about the alarm to his supervisors. He appeared Friday at a hearing in Kenner, La., which is being conducted by the U.S. Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement.

Transocean didn't respond to a request for comment.

Mr. Williams also said the system was a "wreck" when he started working on the rig in 2009, with many faulty detectors. He tried to repair it, he said, but faced problems with malfunctioning equipment.

His account comes at the end of a week of testimony before the federal investigative panel that has raised numerous questions about the status of the drilling rig itself—a giant maritime vessel capable of drilling wells while floating atop two-mile-deep water.

Before this week, much of the public scrutiny has focused on the conduct of BP PLC, which owned the oil well. But Transocean, the Swiss-based owner and operator of dozens of deep-water rigs, has seen its decisions questioned as well.

The fire-alarm issue could hurt it as the company faces lawsuits, including from the widows of the workers who died, legal experts said. Turning off the fire-alarm system is a very easy-to-understand decision that could hurt Transocean, even if it isn't clear that anyone would have been saved if a general alarm had sounded.

"It seems to me this is a serious problem for them," said Richard Nagareda, a professor at Vanderbilt University Law School. "Anytime the plaintiff can pinpoint something that could have been done, they can tap into this idea that if something bad had happened, it must have been preventable."

Mr. Williams also described a continuing problem with the drilling controls. The computer system that monitored drilling operations crashed routinely, sometimes freezing up, he said.

"We were limping along," he said. Requests had been made to replace the whole system, he said, but computer-system compatibility was being worked out.

He described a rig that was in need of a long stay in dry-dock to overhaul and replace numerous systems. Mr. Williams said that while repairs were slow to happen, he felt like a growing portion of his time was consumed by paperwork documenting issues.

"We were starting to feel more like secretaries than maintenance men," he said.

online.wsj.com/article/SB10001424052748703294904575385160342490350.html?mod=googlenews_wsj

[sandi66]

Policy Nsarrabiei: The government will be formed at the beginning of the month of Ramadan
23/07/2010 11:26 23/07/2010 11:26



Baghdad, July 23 (Akaniwz) - According to a member of the Sadrist movement led by Muqtada al-Sadr on Friday, easing the process of forming a government is on the verge of completion, indicating that the first days of Ramadan will witness the process of forming the government.

"Nassar al-Rubaie told the Kurdistan News (Akaniw) The "breakthrough of forming a government is soon and the start of Ramadan will witness the birth of the next government," .. pointing out that "the Sadrists held yesterday a meeting with the negotiating team for the Iraqi list, with a check for the ongoing negotiations between the parties ".

He pointed out that "any internationalization of the Iraqi problem Aomouncb Prime Minister means a reduction of the Iraqi sovereignty to the highest ceremonial position in government."

He added that "if there is no adherence to the parties to the vision and interpretation and reading of the Constitution and uphold Bmarchaa of the negotiations ended and the government was formed," in reference to a coalition of state law.

And between-Rubaie said "the result of this adherence is means the continuation of the negotiations for resolving this matter and to find solutions lead the formation of the government."

For his part, said the Shabak representative in the House of Representatives for nostalgia Qadu (Akaniwz) said, "there is still clung to all parties and hardening of positions and no elasticity of any party to extend the common rules and convergence of views between the political parties to form the next Iraqi government."

He Qadu that "lack of agreement on certain personality to lead the Iraqi government is one of the main obstacles to be faced during entry to the second meeting of the House of Representatives to choose the President and the House of Representatives."

And saw the Iraqi political arena is a multiplicity of differences and the differences between the political blocs after the parliamentary elections which took place on the seventh of last March, there is disagreement about the interpretation of the constitutional article concerning eligibility cluster responsible for the formation of the government, and there is conflict over the candidate blocks for the post of prime minister , then the dispute within the bloc one of candidates for the position, as well as regional conflict of wills in that file.

The question being debated among the winners in the elections on the text of the constitutional entitlement Cluster winning the formation of the government, Iraqi constitution in accordance with Article 76 on the eligibility of the parliamentary majority of the formation of the government, while insisting coalition Iraqi (91 seats) that the text refers to the list of winning elections at the time of the rule of law is a coalition (89 seats) that the text means any farm that may arise as a result of a merger or alliance winning any of the blocks after the election.

23/7/2010 (Akaniwz j) u 07/23/2010

translate.google.com/translate?hl=en&ie=UTF-8&sl=ar&tl=en&u=http://www.aknews.com/ar/aknews/4/166724/&rurl=translate.google.ca

[sandi66]

Allawi could form government in three days

July 23, 2010 2:07 PM

BAGHDAD, July 23 (UPI) -- Former Iraqi interim Prime Minister Iyad Allawi could form a government in three days if his rivals cooperated, a political adviser said.

Allawi led his Iraqiya slate to a narrow victory in March 7 elections for the Council of Representatives, though he failed to secured the 163-seat majority needed to form a government
alone.

Lawmakers have been unable to reach a settlement on key positions in a new government, including the post of prime minister. Political disputes have left Baghdad in the hands of a caretaker government since the elections.

Hani Ashur, an adviser to Iraqiya, told the National Iraqi News Agency that the secular slate could form a government within three days if rivals recognized "constitutional merits."

"Iraqiya will give the other blocs the opportunity to nominate their best candidates to fill in key posts according to integrity and competency principles to involve all political entities away from partisan or sectarian effects," he added.

Allawi maintains he has the right to form a new government first under the terms of Iraqi law.

Allawi met earlier this week with anti-American cleric Moqtada Sadr, who scored nearly 10 percent of the parliamentary seats through his Sadrist party. Those talks were described as "fruitful," but details of the meeting in Damascus were few.

Talks with Iraqi Prime Minister Nouri al-Maliki failed to produce any concrete settlement.

www.upi.com/Top_News/Special/2010/07/23/Allawi-could-form-government-in-three-days/UPI-62331279908466/

[sandi66]

JULY 22, 2010, 11:57 A.M. ET

FOCUS: Judgment Day For European Banks Arrives Friday

The European Union will unveil the results of its broadest and most detailed survey yet into the soundness of its banking system Friday, hoping to relieve the pressure on it from persistent market fears about the continent's debt burden.

Analysts say the test results should restore at least some confidence both in the health of the EU's largest banks, and in the bloc's institutional capacity to respond to such problems. Europe's currency union has at times threatened to fall apart under the pressure of its debts this year.

In the best case, the results could quicken the cleanup of particularly problematic banks in Spain, Germany, Greece and Ireland, breaking a vicious circle of vanishing liquidity and higher funding costs, both for the banks and the companies and households that depend on them.

At the other end of the scale is the risk that the results make the current problems worse, by not providing enough information, or avoiding difficult questions about exposure to potential losses. That could intensify the vicious circle rather than break it.

The Committee of European Banking Supervisors will start the proceedings at 1600 GMT, publishing an aggregated overview of the tests' results on 91 systemically important banks in 20 different countries inside and outside of the euro area. Within an hour, national banking regulators aim to publish bank-by-bank breakdowns of the results.

Information that has leaked so far from the process suggests that banks will have to show that they can sustain a 6% ratio of Tier 1 capital to assets, even in the case of a renewed recession over the next 18 months, and even if compounded by another burst of acute volatility in government bond markets.

The "adverse scenario" in the test assumes that overall economic growth in the EU in 2010 and 2011 turns out three percentage points lower than the European Commission currently projects. The EU's executive body forecasts 1% growth this year and 1.75% in 2011. Michala Marcussen, head of global economics at Societe Generale in Paris, said these metrics make the tests broadly comparable to those the U.S. imposed upon its banks last year.

However, the process has been dogged from the start by concerns that regulators would engineer a favorable outcome to the tests by not asking the question that most worries financial markets: what would happen if a European government defaulted? The tests themselves don't force banks to answer this question, asking them only how much would be the notional loss on their bond holdings if markets turned as nasty as, or even nastier than, they did in early May.

"We all know that Ireland and Greece should really default and restructure some of the bank and sovereign debts respectively," said Peter Boone, head of the Effective Intervention think-tank in London. "Reasonable stress tests should include those defaults, but these tests don't."

Boone argued that market attention should instead focus less on the rubber stamp of "pass" or "fail" than on the ability and willingness of the authorities to support key institutions once the test results are known.

EU finance ministers agreed two weeks ago that banks that are found to need extra capital should first look to the markets to raise it. If that isn't possible, their governments should look to inject new capital into them, and if a government itself can't access the markets to pay for that, then it may apply--in principle--to the EU's new Financial Stability Facility for the necessary funds, albeit under strict conditions that would make it unattractive in most cases.

On paper, EU countries still have plenty of resources to fill any capital holes that are exposed. The European Commission estimates that more than EUR260 billion in approved national recapitalization programs was still unused at the end of March.

Specifically, the Spanish bank rescue fund FROB still has the authority to raise EUR87 billion for recapitalizations, while Germany's Soffin has more than EUR50 billion at its disposal to help clean up problems at the country's regional, state-owned lenders, or Landesbanken.

The Spanish banking sector's results will be subject to particularly intense scrutiny, because it is here that market concerns over undisclosed losses--notably arising from the country's exploded real estate bubble--have focused.

Ultimately, the key measure of the exercise's success will be the degree to which they help those banks to regain access to the money market, and free themselves from the life-support mechanism of the European Central Bank's unlimited liquidity regime. EU banks somehow have to refinance more than EUR1.5 trillion in debts by the end of 2012 and desperately need to regain the market's favor.

Recent data from the Bank for International Settlements show that the world pulled a combined $191 billion from Spain, Portugal, Ireland, Greece and Italy in the first quarter, a generalized flight that analysts say took little account of the difference between good and bad credits within that region.

online.wsj.com/article/BT-CO-20100722-713335.html

[sandi66]

RBA) Some Longer-run Consequences of the Financial Crisis
Reserve Bank of Australia (RBA), Reserve Bank of Australia (RBA)

Published 07/23/2010 - 10:06 a.m. EST

Thank you for coming along today in support of The Anika Foundation’s work supporting research into adolescent depression. This is the fifth such occasion and it is very gratifying indeed to see such a strong response from the financial community. I want also to record my thanks to the Australian Business Economists for their support and to Macquarie Bank for their sponsorship of today’s event.

My subject is the consequences of the financial crisis. We are all aware of the immediate and short-term impacts the crisis had on the international financial system and the world economy. I won’t repeat them.

The initial phase of the recovery has been underway for over a year now. Global GDP started rising in mid 2009. When all the figures are in we will probably find that it rose by close to 5 per cent over the year to June 2010, though the pace has been uneven between regions and with some of the leading Asian economies seeking to slow down to a more sustainable pace, and European nations tightening fiscal policy, there is a bit more uncertainty just now about prospects for 2011. The bulk of financial institutions most affected by the crisis have returned to profit, while estimates of the total losses to be absorbed from the whole episode have tended to decline somewhat lately (though they are still very large). Financial market dislocation has gradually eased, albeit with sporadic episodes of renewed doubts and instability.

But what of the longer-run consequences of the crisis? I want to offer some remarks under three headings, though with no claim this is an exhaustive list. These remarks are about the general international situation, not Australia in particular, unless otherwise noted.
Fiscal Issues

The first lasting consequence is the fiscal burden taken on by countries at the centre of, or close to, the crisis. There are three components to this.

First, some governments took on bank ownership in order to ensure the replenishment of capital that had been too thin to start with and that was depleted by the losses on securities and loans. Table 1 shows public capital injections to the financial sector for several key economies. The amounts in mainland Europe could quite possibly grow soon as a result of the forthcoming stress tests. Note that this is not necessarily a permanent burden since, if carried out successfully, the ownership stake can be sold again in due course. In fact about 70 per cent of the funds invested by the United States in banks have been repaid, and the US Government expects to make an overall profit from these capital injections.2 Nonetheless for a period of time governments are carrying a little more debt than otherwise as a result of the provision of support to the banking system.

Second, the depth of the downturn saw recourse to discretionary fiscal packages. As the table shows, while there was a lot of national variation, for some countries this spending was quite significant relative to the normal pace of annual growth in GDP. To the extent that the packages had measures that increased spending for a finite period but not permanently, the result is a rise in debt of a finite magnitude, but not an ever-escalating path of debt.

But it is the third factor – namely the magnitude of the downturn itself and the initial slowness of recovery – that is having by far the biggest effect on debt ratios. According to the IMF, for the group of advanced economies in the G-20, the ratio of public debt to GDP will rise by almost 40 percentage points from its 2008 level by 2015. Fiscal stimulus and financial support packages will account for about 12 percentage points of this. Close to 20 percentage points are accounted for by the effects of the recessions and sluggish recoveries. Another 7 percentage points comes from the unfavourable dynamics of economic growth rates being so much lower than interest rates for a couple of years.

Now it is somewhat inaccurate to attribute the economic downturn effects entirely to the financial crisis because there would probably have been some sort of slowdown even without a crisis. There will always be a business cycle, after all, and deficits and debt rise when downturns occur. As a comparison, the rise in the debt ratio of the G7 from 2000 to 2005 associated with the previous cyclical downturn – which was not an especially deep one – was around 12 percentage points.

Nonetheless the recent downturn was a bad one in many countries, and that is because it was associated with a financial crisis. For this reason, together with the other factors I have already mentioned, the major countries generally are going to have significantly higher public debt relative to GDP after the crisis than before, and the debt ratios will continue to rise for several more years.

This was largely unavoidable. To a considerable extent, the fiscal legacy can be seen as one manifestation of a broader legacy of lost output (and hence weaker budgetary positions through ‘automatic stabilisers’) over a period of several years. Generally speaking, the public balance sheet has played the role of a temporary shock absorber as private balance sheets contracted.

But the servicing of the resulting debt is an ongoing cost to the citizens of the countries concerned. At present that additional cost is, in some countries, reduced compared with what it might have been due to the low level of interest rates on government debt that we see. Moreover had the debt not been taken on it could well be that the economic outcomes would have been much worse, so increasing fiscal and other costs. Nonetheless this lasting debt servicing burden is a real cost.

More importantly, the pace of the rise in public debt has increased focus on the question of fiscal sustainability. This is especially so in those countries where debt burdens were already considerable before the crisis.

The difficulty is that ‘sustainability’ is so hard to assess. It is more complex than simply the ratio of debt to GDP. In any number of countries, including our own, public debt ratios have on some past occasions been much higher than 100 per cent. Many countries found themselves with such a situation in the aftermath of World War II. Those ratios thereafter came down steadily though it took until the 1960s in our case, or longer in some others, for them to reach levels like 50 or 60 per cent that today is often regarded as a sort of benchmark.3 That reduction occurred for a combination of reasons. The big deficits of the war years really were temporary in most cases; economies recorded good average rates of output growth in the long post-war boom with strong growth in both population and productivity; in the same period, business cycle downturns were not especially deep or protracted; interest rates were low – so the comparison of the growth rate of GDP and the interest rate on the debt was favourable; and lastly, significant inflation raised the denominator of the ratio – in some cases in the late 1940s and early 1950s, and more widely in the 1970s.

So high or even very high debt ratios per se have not necessarily been an insurmountable problem in the past. On the other hand, that earlier decline in debt ratios may not be easy to replicate in the future. In some countries demographics are working the wrong way, with population growing more slowly or even declining. Other things equal, future growth of nominal GDP will thus be lower than in the past. A period of rapid catch-up growth in income, which helped Europe and Japan in the couple of decades after 1950, is more likely in the future to occur in the emerging world than in the parts of the developed world where most of the debt is.

In fact it might be argued that the fiscal position of a number of countries has been increasingly vulnerable for quite some years. Perhaps what the crisis has done is to act as a catalyst to bring forward a set of pressures for long-term budgetary reform that were bound to emerge anyway.

This has placed some governments in a very difficult bind, since the heightened focus on sustainability has increased the pressure for fiscal consolidation at a time when aggregate demand remains weak. The ‘least-damage path’ through the various competing concerns has become harder to tread.
Public Intervention in Finance

The second long-run implication of the crisis is that government intervention in the financial sector has become much more pervasive. I have already mentioned governments taking major stakes in banks in key countries, which was virtually unthinkable, certainly for an American or British government, only three years ago

But the intervention was broader than just a temporary period of public ownership – as massive an event as that has been. Take guarantees. Once the Irish Government guaranteed its banks, governments all over the world felt bound to follow suit in some form or other – expanding or (as in our case) introducing deposit insurance, and guaranteeing wholesale obligations (for a fee). The feeling was probably most acute in countries whose citizens could shift funds to a bank guaranteed by a neighbouring country without much effort.

In circumstances of incipient or actual panic, or potential complete market closure, measures along such lines had to be taken. The simple truth is that, given a big enough shock, the public backstop to the financial system has to be used.

But the backstop having been used so forcefully on this occasion, it is desirable not to use it again soon. The real question is how, having set the precedent, governments avoid too easy recourse to such measures in the future. They will want to get to a position where in future periods of financial turmoil, they are standing well in the background, not in the foreground.

Meanwhile there is a growing debate, at a very high level, about what the financial sector should do, and what it should not do. The number of inquiries, commissions, conferences, papers and ideas about the desirable shape of the system in the future is growing. This is a growth industry with, I should think, pretty good prospects over the next few years.

Another characteristic of public intervention is the expansion of central bank balance sheets. During a panic, the central bank’s job is to be prepared to liquefy quality assets, with a suitable combination of hair-cuts and penalty rates, to the extent necessary to meet the demand for cash.

Once the panic is over, the additional liquidity shouldn’t need to remain in place, and indeed some particular facilities established by central banks had design features which saw their usage automatically decline as conditions improved. But overall it has proven difficult, so far, for the major central banks to start the process of winding down the sizes of their balance sheets.

In effect central banks have been replacing markets. They had to. If counterparties feel they cannot trust each other and flows between them are cut off, with everyone preferring to keep large liquid balances with the central bank, the central bank has to replace the market to ensure that everyone has the cash they need each day (against suitable collateral of course). Central bank purchases have also acted to reduce credit spreads and yields.

I am not arguing that this policy is macro-economically wrong. But consider the implications of persisting with it over a long period. One doesn’t have to believe that markets can solve all problems to accept that well-functioning markets have a value. A cost of the zero or near zero interest rate and a greatly expanded role for the central bank’s balance sheet is that some markets tend to atrophy – as Japan has found over a decade.

Moreover some central banks have had to accept a degree of risk on their own balance sheets that is considerably larger than historical norms. Of course since the governments are ultimately the owners of the central banks, that is where the risk really resides. From a purely financial point of view, the risk of a rise in yields on bonds held by central banks, but issued by their own governments, is actually no risk at all once the central bank is consolidated with the government. On the other hand, to the extent that central banks are really exposed, or are exposing their governments, to private credit risk or to the risk of other sovereigns, those are genuine risks.

So some central banks, like their governments, have found themselves in very unusual terrain. It is terrain: in which the relationship between the central bank and the government is subtly changed; where the distinction between fiscal and monetary policy is less clear; from which it may be hard to exit in the near term; and a side effect of which may be wastage, over time, in some elements of market capability.
Regulation

Of course I have not yet mentioned the other significant public intervention in finance which is the major regulatory agenda being pursued by the international community. This is being pushed by the G-20 process and by the Financial Stability Board. The ‘perimeter’ of regulation is being extended to include hedge funds and rating agencies. Governments are demanding a say in the pay of bankers and talking of specific taxes on banks’ activities. The climate is more difficult for bankers these days, it seems, especially in countries where the public purse had to be used to save banks.

But the core work on regulatory reform is being done by the Basel Committee on Banking Supervision. I am not sure who first began to talk of this as ‘Basel III’ but the label seems to be starting to stick. Basel II came in only about two years ago for many countries, 20 years after Basel I. The gap between Basel II and Basel III looks like being a lot shorter. Warning: that pace of acceleration in devising new standards is unsustainable!

You would all be well aware of the essence of the proposals. In a nutshell, what regulators are pushing toward is a global banking system characterised by more capital and lower leverage, bigger holdings of liquid assets and undertaking less maturity transformation. It is hoped that this system will display greater resilience to adverse developments than the one that grew up during the 1990s and 2000s.

What will be the implications of the various changes? Put simply, the customers of banks around the world, and especially of large internationally active banks, will generally be paying more for intermediation services, in the form of higher spreads between rates paid by banks and rates charged by them. The reason is that capital is not free and it typically costs more than debt. The spread between a bank’s own cost of debt, both deposits and bonds etc, and the rate it charges its borrowers has to cover operating costs, expected credit and other losses and the required cost of equity capital. Assuming the costs of equity and debt do not change, the more capital intensive the financial structure is, the higher that spread has to be. A requirement to hold more high quality liquid assets and/or to lengthen the maturity of debt has a similar effect.

Of course the costs of equity and debt may not be, and actually should not be, constant as banking leverage declines. The cost of wholesale debt should fall over time if the equity buffer, which protects unsecured creditors against losses, is larger. In time, the cost of equity may even fall with lower leverage if the required equity risk premium declines to reflect a less variable flow of returns to equity holders. All of that assumes of course that the perceived riskiness of the underlying assets is unchanged.

Still, such effects would take some time to emerge. Most observers appear to agree that even allowing for some possible pricing changes over time, spreads between banks’ borrowing and lending rates will be wider in the new equilibrium after the regulatory changes have been fully implemented.4

What will be the broader economic effects of these higher costs of intermediation?

The conclusion most people are reaching is that economic activity will, to some extent and over some horizon, be lower than otherwise. The question is, by how much and for how long? There are various ways of approaching that question. Researchers are putting it to various macroeconomic models. The answers will vary, depending on the models and particularly according to the degree of detail in models’ financial sectors. Overall, these techniques are likely to show moderate but nonetheless non-zero effects on economic activity of the regulatory changes over an adjustment period of several years.

Some other analyses, often by banks themselves, find much larger adverse effects. This is usually because they find that credit to the private sector must be reduced in order to meet the various standards, particularly liquidity standards, because it is assumed there will be quantity limits on the availability of funding in the form necessary. It is further assumed that a mechanical relationship between credit and GDP exists, which in turn results in big adverse impacts on GDP.

To a fair extent these differences come down to a discussion about what economists would call elasticities: for the non-bank private sector to respond to a desire for banks to be funded differently, how big a change in the price is required – a little, or a lot? Some of the industry estimates appear (to me anyway) to assume elasticity pessimism. Official sector estimates are likely to be based on less pessimism.

In truth, it is impossible to know for sure exactly how big these effects will be. That is a reason to proceed carefully, and to allow time for the new rules to be phased in. Clearly, we wish the new rules to be constraining risk taking and leverage as the next boom approaches its peak, but that will probably be some years away, so we have time to implement strong standards and allow an appropriate period of transition.

That said, there are three broad observations that I would like to offer.

First, I think we ought to be wary of the assumption of a mechanical relationship between credit and GDP. Of course a sudden serious impairment in lenders’ ability to extend credit almost certainly amounts to a negative shock for growth in the short term. But did the steady rise in leverage over many years actually help growth by all that much? Some would argue that its biggest effects were to help asset values rise, and to increase risk in the banking system, without doing all that much for growth and certainly not much for the sustainability of growth in major countries. Some gradual decline in the ratio of credit to GDP over a number of years, relative to some (unobservable) baseline, without large scale losses in output may be difficult to achieve but I don’t think we should assume it is impossible.

Secondly, even accepting that there will probably be some effect of the reforms in lowering growth over some period of time, relative to baseline, we have to remember that there is a potential benefit on offer too: a global financial system that is more stable and therefore less likely to be a source of adverse shocks to the global economy in the future. So we have a cost-benefit calculation to make. Quantifying all this is very difficult, but then that is often the case when deciding policies.

Thirdly, however, the reforms do need to be carefully calibrated with an eye to potential unintended consequences. One such consequence, obviously, would be unnecessarily to crimp growth if the reforms are not well designed and/or implementation not well handled.

Another could be that very restrictive regulation on one part of the financial sector could easily result in some activities migrating to the unregulated or less regulated parts of the system. Financiers will be very inventive in working out how to do this. If the general market conditions are conducive to risk taking and rising leverage (which, sooner or later, they will be if the cost of short-term money remains at zero), people will ultimately find a way to do it. Of course while ever the unregulated or less-regulated entities could be allowed to fail without endangering the financial system or the economy, caveat emptor could apply and we could view this tendency simply as lessening any undue cost to the economy of stronger regulation of banks. But if such behaviour went on long enough, and the exposures in the unregulated sector grew large enough, policymakers could, at some point, once again face difficult choices.
Conclusion

The financial turbulence we have lived through over recent years has had profound effects. The most dramatic ones in the short term have been all too apparent. But big events echo for many years. My argument today has been that the full ramifications are still in train, insofar as impacts on governments’ finances, governments’ role in the financial sector and the trend in regulation are concerned. It will be important, as these reverberations continue, for there to be a balanced approach blending strong commitment to sensible long-run principles with pragmatism in implementation.

In Australia we have been spared the worst impacts of serious economic recession in terms of lost jobs, much as we will be spared the prospect of higher taxes that face so many in the developed world. These are factors that support our native optimism, at least about economic conditions.

Nonetheless depression still ranks as a serious, and underestimated, problem in our community including among our young people. That is why the work of the Anika Foundation, working alongside other bodies seeking to combat depression, is so important, and why I thank you all very much for coming along today.

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