"Alexander Eichler"- Fed's $1.2 Trillion In Financial Sector Loans 'A Classic Case Of Moral Hazard'

Published on Tuesday, August 23, 2011 by Huffington Post

http://www.huffingtonpost.com/2011/08/22/federal-reserve-12-trillion-loans_n_933615.html

by Alexander Eichler

During the 2008 financial crisis, when the nation's banking system seemed on the verge of collapse, President George W. Bush authorized a $700 billion bailout of the financial industry. The U.S. Treasury implemented that program, known as TARP, in an effort to stave off economic catastrophe.

At the same time, and in the years that followed, the Federal Reserve was undertaking its own rescue operation, in the form of private, previously undisclosed loans to banks and other institutions -- lending as much as $1.2 trillion, nearly twice the amount of the Treasury bailout, according to a data analysis performed by Bloomberg News and published on Monday.

The scope of the Fed's private lending had previously only been guessed at, but figures obtained under the Freedom of Information Act by Bloomberg News show that the nation's central banker issued loans to more than 300 institutions between August 2007 and April 2010, including over 100 loans of $1 billion or more.

While the Fed's loans likely helped to prevent a complete implosion of the global banking system, analysts say they fear the loans may have contributed to an atmosphere of complacency on Wall Street. Banks that received emergency cash infusions during the crisis may now believe the Fed will always be there to bail them out of trouble, the thinking goes.

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"Mike Whitney"- The Eurozone Crackup

By Mike Whitney

Global Research, August 22, 2011

http://globalresearch.ca/index.php?context=va&aid=26138

"We believe that the market has now entered a major downtrend. It is a mistake to dismiss the slide we’ve seen to date as mindless and devoid of fundamentals as many strategists maintain. These are not just scary headlines—-they are scary fundamentals.... There will undoubtedly be some more sharp rallies that will be interpreted as new bull markets. In our view, however, the bear market has only begun, and has a long way to go." -- Comstock Partners, "Bear Market Rally Far From Over", Pragmatic Capitalism

A toxic combo of poor economic data in the US and a widening credit crunch in the eurozone has sent stocks plunging for a 4th consecutive week. On Friday, the Dow Jones Industrials fell 172 points as jittery investors exited equities for the safe haven of cash and government debt. Global equities have lost more than $6 trillion in the last month alone while the yield on the benchmark 10-year Treasury dropped to a record 1.99 per cent on Thursday. The low yields on Treasuries indicate the growing fear that troubles in the EU are reaching a crisis-phase. Political gridlock has increased volatility and triggered a slow-motion run on the EU banking system. The same process unfolded in the US for a full year before Lehman Brothers collapsed (from July 2007 to Sept 2008) putting the financial system into a death-spiral. Now it's Europe's turn. This is from the Wall Street Journal:

"A dramatic sell-off in European financial markets on Thursday renewed fears that Europe's banks are too weak to withstand the Continent's debt crisis, increasing the chances that the region's leaders will be forced to pursue radical steps toward fiscal union in order to preserve their single currency....

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"Agence France-Presse"- Greenpeace Finds Toxic Chemicals in Branded Clothing

Published on Tuesday, August 23, 2011 by Agence France-Presse

http://www.commondreams.org/headline/2011/08/23-1

BEIJING — Traces of toxic chemicals harmful to the environment and to human health have been detected in products made by 14 top clothing manufacturers, Greenpeace said Tuesday.

Samples of clothing from top brands including Adidas, Uniqlo (above), Calvin Klein, H&M, Abercrombie & Fitch, Lacoste, Converse and Ralph Lauren were found to be tainted with the chemicals, known as nonylphenol ethoxylates, the watchdog said at the launch of its report 'Dirty Laundry 2'. Samples of clothing from top brands including Adidas, Uniqlo, Calvin Klein, H&M, Abercrombie & Fitch, Lacoste, Converse and Ralph Lauren were found to be tainted with the chemicals, known as nonylphenol ethoxylates, the watchdog said at the launch of its report "Dirty Laundry 2".

Greenpeace campaigner Li Yifang said that nonylphenol ethoxylates (NPEs), commonly used as detergents in industries including the production of natural and synthetic textiles, were detected in two-thirds of the samples the group tested.

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"Agence France-Presse"- Japan's Fukushima Nuclear No-Go Areas to Last 'Decades'

Published on Monday, August 22, 2011 by Agence France-Presse

http://www.commondreams.org/headline/2011/08/22-0

TOKYO — Some areas close to Japan's crippled Fukushima nuclear plant will likely remain no-go zones for "several decades", a media report citing an unnamed government official said Monday.

Prime Minister Naoto Kan is expected to visit the region as early as Saturday to apologize to people who had to flee their homes as a result of the nuclear accident more than five months ago.

The Yomiuri Shimbun daily, citing an unnamed government source, said areas within about three kilometers (1.8 miles) of the plant will likely be kept off-limits "for an extended period — possibly for several decades".

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"Marcy Wheeler"- Obama Wants NY AG Schneiderman to Back Off Banks: NYT Reports

by Marcy Wheeler

The NYT has an article about efforts to strong-arm Attorney General Schneiderman to get him to put rule of law aside for yet another bank bailout.

First, it quotes HUD Secretary Shaun Donovan as saying,

The disagreement is around whether we should wait to settle and resolve the issues around the servicing practices for him — and potentially other A.G.’s and other federal agencies — to complete investigations on the securitization side. He might argue that he has more leverage that way, but our view is we have the immediate opportunity to help a huge number of borrowers to stay in their homes, to help their neighborhoods and the housing market. [my emphasis]

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"Alex Hawkes"- Report: UK Riots Were Product of Consumerism

by Alex Hawkes

http://www.guardian.co.uk/business/2011/aug/22/uk-riots-economy-consumerism-values

The recent riots in London and other big cities were the product of an "out-of-control consumerist ethos" which will have profound impacts for the UK economy, a leading City broker has said.

The report by Tullett Prebon warns: "The consumerist ethos, in which a materialist vision is both peddled and, for the vast majority, simultaneously ruled out by exclusion, has extremely damaging consequences, both social and economic."

The report, the firm's global head of research Tim Morgan, the report is part of a series one of in a series put out by in which the brokerage in which it analyses bigger issues for the UK. Last month, the broker Tullett Prebon issued a report on the UK's economic situation as part of Morgan's Project Armageddon.

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"Ed Silverman"- Is That Plastic Shrink Wrap In Your Merck Vaccine?

By Ed Silverman // July 29th, 2011 // 12:13 pm

As if Merck does not have enough problems with vaccine production, the drugmaker apparently distributed charred bits of plastic shrink wrap in vials of various vaccines - including Gardasil for preventing HPV infection, Varivax for chicken pox, Pneumovax for pneumococcal disease, Zostavax for shingles and MMR II for measles, mumps and rubella, according to Dow Jones.

In 2008, the FDA issued a warning letter about manufacturing problems at Merck’s West Point, Pa., plant (read here). Since then, FDA inspection reports have cited more problems: the presence of metal particles in certain products, cracks in vaccine vials and delays in Merck’s reporting adverse event from products made at the plant to the FDA, Dow Jones writes.

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"James Holmes"- China’s Underground Great Wall

ByJames R. Holmes

August 20, 2011

http://ht.ly/68BY7

The impending sea trials of China’s first aircraft carrier set commentators abuzz in the West and Asia over the past couple of months. I weighed in myself. And for good reason. The cruise of the yet-to-be-officially-named flattop, which finally took place last week, heralded a decisive break with the People’s Liberation Army Navy’s Maoist past as a coastal defence force. This is a development worth exploring in detail. As it happened, the Naval War College also convened its first Asian Strategic Studies Conference in Newport last week, in conjunction with the American Enterprise Institute and the Journal of Strategic Studies. My assigned topic was to determine whether there exists a common Asian culture of sea power (no, say I) and how influential the Western canon of maritime theory is among seafaring Asian nations (very, mainly by default).

To me, though, the most provocative presentation delivered at our conference related not to the sea but to the future of China’s land-based nuclear arsenal. In March 2008, China’s state-run CCTV network broke the news about a 5,000-kilometre-long network of hardened tunnels built to house the Chinese Second Artillery Corps’s increasingly modern force of nuclear-tipped ballistic missiles. Tunnelling evidently commenced in 1995. Located in, or rather under, mountainous districts of Hebei Province, in northern China, the facility is reportedly hundreds of meters deep. That makes it an exceptionally hard target against conventional or nuclear counterstrikes.China Defense Daily, a publication of the People’s Liberation Army (PLA), confirmed the CCTV account in December 2009.

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Bob Burnett: 5 Reasons Capitalism Has Failed

By Bob Burnett, The Smirking Chimp
Posted on August 21, 2011, Printed on August 22, 2011
http://www.alternet.org/story/152118/5_reasons_capitalism_has_failed

We live in interesting times. The global economy is splintering. U.S. voters hate all politicians and there's political unrest throughout the world. The root cause of this turmoil is the failure of the dominant economic paradigm -- global corporate capitalism.

The modern world is ruled by multinational corporations and governed by a capitalistic ideology that believes: Corporations are a special breed of people, motivated solely by self-interest. Corporations seek to maximize return on capital by leveraging productivity and paying the least possible amount for taxes and labor. Corporate executives pledge allegiance to their directors and shareholders. The dominant corporate perspective is short term, the current financial quarter, and the dominant corporate ethic is greed, doing whatever it takes to maximize profit.

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"Michael Hudson"- Financial Meltdown -- The Case Against the Ratings Agencies

By Prof. Michael Hudson

Global Research, August 20, 2011

http://globalresearch.ca/index.php?context=va&aid=26088

In today’s looming confrontation the ratings agencies are playing the political role of “enforcer” as the gatekeepers to credit, to put pressure on Iceland, Greece and even the United States to pursue creditor-oriented policies that lead inevitably to financial crises. These crises in turn force debtor governments to sell off their assets under distress conditions. In pursuing this guard-dog service to the world’s bankers, the ratings agencies are escalating a political strategy they have long been refined over a generation in the corrupt arena of local U.S. politics.

Why ratings agencies public selloffs rather than sound tax policy: The Kucinich Case Study

In 1936, as part of the New Deal’s reform of America’s financial markets, regulators forbid banks and institutional money managers to buy securities deemed “speculative” by “recognized rating manuals.” Insurance companies, pension funds and mutual funds subject to public regulation are required to “take into account” the views of the credit ratings agencies, provided them with a government-sanctioned monopoly. These agencies make their money by offering their “opinions” (for which they have never been legally liable) as to the payment prospects of various grades of security, from AAA (as secure government debt, the top rating because governments always can print the money to pay) down to various depths of junk.

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