World's Faith in Capitalism Erodes as Financial Crisis Continues: Survey

The financial crisis that has bred unemployment, austerity, and economic pain across the global for nearly fives years is also battering the reputation of the system many believe to be its main cause: "free market" capitalism.

According to a new global poll by Pew Research, only half or fewer -- in 11 of 21 nations surveyed -- now agree with the statement that people are better off in a "free market" economy than in some other kind.

In nine of the 16 countries for which there is trend data since 2007, before the financial crisis began, support for capitalism is down, with the greatest declines in Italy (down 23 percentage points) and Spain (down 20 points).

Support for capitalism is greatest in Brazil, China, Germany and the U.S, says the report. The biggest skeptics of the free market are in Mexico and Japan.

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http://www.commondreams.org/headline/2012/07/13?print

Paul Craig Roberts - The Real Libor Scandal

According to news reports, UK banks fixed the London interbank borrowing rate (Libor) with the complicity of the Bank of England (UK central bank) at a low rate in order to obtain a cheap borrowing cost. The way this scandal is playing out is that the banks benefitted from borrowing at these low rates. Whereas this is true, it also strikes us as simplistic and as a diversion from the deeper, darker scandal.

Banks are not the only beneficiaries of lower Libor rates. Debtors (and investors) whose floating or variable rate loans are pegged in some way to Libor also benefit. One could argue that by fixing the rate low, the banks were cheating themselves out of interest income, because the effect of the low Libor rate is to lower the interest rate on customer loans, such as variable rate mortgages that banks possess in their portfolios. But the banks did not fix the Libor rate with their customers in mind. Instead, the fixed Libor rate enabled them to improve their balance sheets, as well as help to perpetuate the regime of low interest rates. The last thing the banks want is a rise in interest rates that would drive down the values of their holdings and reveal large losses masked by rigged interest rates.

Indicative of greater deceit and a larger scandal than simply borrowing from one another at lower rates, banks gained far more from the rise in the prices, or higher evaluations of floating rate financial instruments (such as CDOs), that resulted from lower Libor rates. As prices of debt instruments all tend to move in the same direction, and in the opposite direction from interest rates (low interest rates mean high bond prices, and vice versa), the effect of lower Libor rates is to prop up the prices of bonds, asset-backed financial instruments, and other "securities." The end result is that the banks' balance sheets look healthier than they really are.

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http://www.opednews.com/articles/The-Real-Libor-Scandal-by-Paul-Craig-Roberts-120714-763.html

Is Occupy Wall Street Dead?

"Most of the social scientists who are at all like me - unsentimental leftists - ... think this movement is over," says Harvard University professor Theda Skocpol, speaking to Reuters about the grassroots 'Occupy' movement that began in Manhattan last fall and sparked nationwide encampments of public spaces and opened a long-ignored dialogue about income inequality and unaddressed Wall Street malfeasance.

The guffaws of OWS activists and organizers can already be heard as the news that a Harvard professor has called the movement null and void.

But even Adbusters, the 'culture-jamming' magazine that help spawn the original Wall Street occupation, says that things have changed dramatically for the movement. "Our movement is living through a painful rebirth..." began its frontpage essay this week, and then quoted a Zuccoti park regular who declared, "We are facing a nauseating poverty of ideas.”

Bill Dobbs, a member of Occupy New York's press team, challenged Skocpol's view, explaining to Reuters that he compares the OWS struggle to that of America's civil rights movement - long and uphill, with broad goals to radically alter American society. The first step, he said, has been to re-animate America's long-dormant spirit of social activism.

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http://www.commondreams.org/headline/2012/06/07

Renee Parsons - The Lost Forgotten Americans of 2012

As the austerity budget crisis continues to plague diverse Euro countries, American voters may breathe a sigh of relief that even with an economy that remains sluggish, the harsh level of austerity cuts being proposed in Greece and Spain and elsewhere have not happened here. At least that's what conventional wisdom espoused by those who have not suffered from the 2008 financial collapse or experienced the $1 trillion budget cuts in 2011 would have you believe.

As the early weeks of the presidential campaign have shown, the American electorate can expect a mind-numbing election season devoid of a real debate on real issues offering real solutions for millions of desperate citizens living on the edge, confronting the daily hopelessness of an utter catastrophe, abandoned by a government that once claimed to be 'Of, By and For the People". Lost in the shuffle of birth certificates or whether a private equity multi-millionaire is qualified to be president more than a community organizer is any discussion of the impacts on the upcoming second round of $1.2 trillion budget cuts.

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http://www.huffingtonpost.com/renee-parsons/the-lost-forgotten-americ_b_1574213.html

Paul Craig Roberts - Financial Collapse At Hand: When is "Sooner or Later"?

Ever since the beginning of the financial crisis and Quantitative Easing, the question has been before us:  How can the Federal Reserve maintain zero interest rates for banks and negative real interest rates for savers and bond holders when the US government is adding $1.5 trillion to the national debt every year via its budget deficits?  Not long ago the Fed announced that it was going to continue this policy for another 2 or 3 years. Indeed, the Fed is locked into the policy. Without the artificially low interest rates, the debt service on the national debt would be so large that it would raise questions about the US Treasury’s credit rating and the viability of the dollar, and the trillions of dollars in Interest Rate Swaps and other derivatives would come unglued. 

In other words, financial deregulation leading to Wall Street’s gambles, the US government’s decision to bail out the banks and to keep them afloat, and the Federal Reserve’s zero interest rate policy have put the economic future of the US and its currency in an untenable and dangerous position.  It will not be possible to continue to flood the bond markets with $1.5 trillion in new issues each year when the interest rate on the bonds is less than the rate of inflation. Everyone who purchases a Treasury bond is purchasing a depreciating asset. Moreover, the capital risk of investing in Treasuries is very high. The low interest rate means that the price paid for the bond is very high. A rise in interest rates, which must come sooner or later, will collapse the price of the bonds and inflict capital losses on bond holders, both domestic and foreign.

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http://globalresearch.ca/index.php?context=va&aid=31272

Ben and Jerry’s Co-founder: Time to Occupy Dollar Bills

Yahoo! News reports that Ben Cohen, co-founder of Ben and Jerry’s Ice Cream, is teaming up with Move to Amend to “distribute rubber stamps with anti-corporate election spending messages so that the politically-minded can mark their dollar bills.”

Cohen plans to put a giant stamping machine on a national tour in August to encourage "thousands of people to buy rubber stamps and stamp any currency that comes into their possession."

Slogans like “Corporations are not people,” “Money is not speech” and “Not to be used for bribing politicians,” will now adorn currency in an Occupy cash campaign.

The goal of Move to Amend is to secure a constitutional amendment that says “corporations do not enjoy the same protected rights as individuals and that money is not a form of speech.”

Cohen’s attorney says that as long as the bills are still legible, it is legal to put the stamps on them.

Yahoo! News' Lookout reports:

Ben Cohen, co-founder of Ben & Jerry's ice cream and one of the deep pockets behind the Occupy movement, says he is helping launch a campaign this summer to highlight the influence of corporate money in American politics.

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http://www.commondreams.org/headline/2012/06/04-3

Robert Oak - You Can't Blame The Economy On The Weather

The pathetic jobs report has ushered in a whole new blame game on the weather. January through March 2012 had the warmest temperatures on record for the United States.

Most economic data, including the employment report, is seasonally adjusted. The algorithm is called X-12-ARIMA and is maintained by the Census. Without going into the mathematics, this algorithm takes past cyclical patterns that are predictable and adjusts those spikes, attributed to the seasons. The algorithm takes out of an economic data series those wild swings, so one can more easily compare real growth instead of, say, fall harvesting or Christmas hiring. Construction employment, for example, is highly cyclical due to the nature of the work. Below is a graph of not seasonally adjusted construction employment.

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http://www.economicpopulist.org/content/you-cant-blame-economy-weather

The Bad Jobs Report Is Just A Very Small Taste Of The Nightmare That Is Coming

Another month, another bad jobs report.  For the month of May, the U.S. economy only added 69,000 jobs and the unemployment rate rose to 8.2%.  Many are calling this a total "disaster" and are worried that the U.S. economy could be headed back into another recession.  Economists had been expecting 150,000 payroll jobs would be added, so the 69,000 number really shocked a lot of people.  The truth is that the economy needs to add approximately 125,000 new jobs every single month just to keep the unemployment rate steady.  So yes, this bad jobs report is not welcome news at all - especially for the Obama administration.  When Barack Obama first took office the unemployment rate was sitting at 7.6 percent and now it is sitting at 8.2 percent.  Some "recovery", eh?  But the reality is that this jobs report was really not that "devastating" even though the stock market had its worst day of the year.  Unemployment in America is still about at the same level as it was back at the beginning of 2012.  The tough stretch that we are going through right now is only a very small taste of the economic nightmare that is on the horizon.  If you think that things are a "disaster" right now, just wait until you see what is coming.

At the moment, 53 percent of all Americans with a bachelor's degree under the age of 25 are either unemployed or underemployed, and there are more than 100 million working age Americans that do not currently have jobs.

Read More:

http://theeconomiccollapseblog.com/archives/the-bad-jobs-report-is-just-a-very-small-taste-of-the-economic-nightmare-that-is-coming

PF Louis - Financial strain may help curb prescription drug use

The economy's decline into an ever widening abyss may have one silver lining: less can be spent on pharmaceutical drugs. With unemployment increasing while menial jobs that are available don't offer insurance, more people will be depending on government insurance programs.

Now some of those programs are looking into increasing or tightening restrictions on what they'll pay out for medical expenses and pharmaceutical drug costs. One proposal not yet put into effect is the undergoing study at Penn State College of Medicine along with Dr. Robert Rosenheck of the Yale School of Medicine.

The ongoing study has thus far made one report regarding off label use of anti-psychotic drugs for patients of less serious psychological or behavioral symptoms. Off label simply means using an FDA approved drug for a purpose other than for what it was approved.

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http://www.naturalnews.com/036036_prescription_drugs_purchases_money.html

Jeremy Warner - Debt crisis: a $46 trillion problem comes sweeping in

Just as you thought things couldn't get any worse, credit markets are about to be hit by a veritable tsunami of maturing corporate debt. Standard & Poor's estimates that companies in Europe, the US and the major Asian economies require a combination of refinancing and new money to fund growth over the next four years of between $43 trillion and $46 trillion. The wall of maturing debt is unprecedented, raising the prospect of further, extreme difficulties in credit markets.

With the eurozone debt crisis still at full throttle, the Chinese economy slowing fast and a still tepid US recovery, it's not clear that the banking system is in any position to deal with this incoming wave of demand.

As if the refinancing problem wasn't already challenging enough, into it all stumbles the European commissioner for internal markets, Michel Barnier, to prove the old saw that there is no mess quite so bad that official intervention won't make even worse.

A traditionalist French socialist by background, Mr Barnier positively revels in his job as the EU's top financial services regulator. In a recent interview, he said that he liked the term "shareholder spring" because it implied "a regulation spring, a rule making spring". Yes, indeed, Mr Barnier likes very much rules and regulations. He wants to regulate everything from pay to solvency. The financial crisis has given him a wide open canvass on which to paint.

Read More:

http://www.telegraph.co.uk/finance/comment/jeremy-warner/9296117/Debt-crisis-a-46-trillion-problem-comes-sweeping-in.html