Saturday, 1 January 2011

Weekend Update January 01, 2011

The Banana Republic.

"It's a war. It's like when Hitler invaded Poland in 1939."

Steven Schwarzman

Schwarzman should be proud though: He gets 2010's Dumbest Wall Street Quote of the Year Award. Bravo! (In 2009 the honor went to Lloyd Blankfein, CEO of Goldman Sachs, who claimed he was "doing God's work.") Les Leopold.

Super power or Banana Republic run by banksters and spend-aholic politicians in their pay? You be the judge. Below, America as it enters the new decade.

"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."

F.A. von Hayek

Wall Street's Ten Biggest Lies for 2010

Posted: December 29, 2010 07:02 AM Les Leopold

What a great year for Wall Street: profits up, bonuses up and, best of all, criticism down, especially from Washington. Somehow Wall Street has much of America believing its lies and rationalizations. We're even beginning to forget that Wall Street is largely responsible for the economic mess we're in.

So before we're completely overtaken by financial Alzheimer's, let's revisit Wall Street's greatest fabrications for 2010. (For the full story, please see The Looting of America.)

1."Honest, we didn't do it!"
Two years ago Wall Street's colossal greed crashed our economy. Our financial elites created and spewed highly leveraged toxic assets around the globe. These poisonous "innovations" pumped up the housing bubble and Wall Street grew insanely rich in the process. When it all burst, we learned that the big Wall Street institutions that had caused the crash were far too big to fail -- and too connected. High government officials came to their rescue with trillions in cash and guarantees -- underwritten, of course, by we taxpayers. Everyone knew this at the time. But if you asked just about anyone on "The Street" they denied all culpability and pointed the finger everywhere else: Fannie, Freddie, the Fed, the Community Reinvestment Act, tax deductions for home buying, bad regulations, not enough regulations, too many regulations, too much consumer debt, the rating agencies, the Chinese -- and on and on. Sadly, their blame-shifting strategy worked, bamboozling the media and people across the political spectrum. The GOP members of the Financial Crisis Commission are so drunk with this Kool-Aid that in their minority report, they refuse even to use the words "Wall Street" or "speculation" in assessing the causes of the crash. Hypocrites? Crooks? Morons? Take your pick.

2."The overall costs will be incredibly small in comparison to almost any experience we can look at in the United States or around the world."
Ever since Treasury Secretary Timothy Geithner screwed up his tax returns we knew he was numerically challenged. But his statement to Congress on December 16, 2010, on the cost of the bailout shows a willful inability to count. Yes, Wall Street has paid back most of our bailout funds. Whoopee! Our economy is in shambles, and millions of people are suffering. With his offensive "no big deal" analysis, Geithner glosses over all this human misery, and sidesteps the hidden costs of the bailout, including the financial insurance we taxpayers provided to every giant financial company in the country via the Fed. On the open market, that insurance -- which guarantees trillions of dollars in toxic assets -- would come at a very steep price. We coughed it up for free. But that's still chump change compared to the human costs of the worst employment crisis since the Great Depression -- the lost income, the depleted savings, the ravaged neighborhoods…..


Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009. He is currently working on a new book, How to Earn $900,000 an Hour: The Rise of Wall Street Billionaires and the New Class War, (hopefully to be published in 2011).

Next, the rule of law for ordinary people in America.

DECEMBER 31, 2010

Dead Soul Is a Debt Collector

Deceased Woman's Name Was Robo-Signed on Thousands of Affidavits

Martha Kunkle has come back to life.

She died in 1995. Yet her signature later appeared on thousands of affidavits submitted by one of the nation's largest debt collectors, Portfolio Recovery Associates Inc., in lawsuits filed against borrowers.

Some regulators complain that the use of Ms. Kunkle's name reflects an epidemic of mass-produced, sloppy and inaccurate documentation in the debt-collection industry. Lawsuits have surged as more borrowers fall behind on payments and collection firms turn to courts to get what they are owed.

After being sued for fraud, Portfolio Recovery Associates decided in early 2008 that any documents bearing Ms. Kunkle's name had "defects" and shouldn't be used when trying to collect debts, a company spokeswoman said.

Last July, though, lawyers for Portfolio Recovery Associates sought a court judgment in a lawsuit against a Seattle woman for $2,892.10 in credit-card debt and interest that she allegedly owed. It was a cookie-cutter case, except for one thing: To vouch for the debt's validity, the Norfolk, Va., company included an affidavit signed by Martha Kunkle.

The spokeswoman said the document was "inadvertently used by our outside counsel" because of "human error," adding that the suit was dropped later "upon review of the case."

The company said Ms. Kunkle's name isn't on any other affidavits submitted to judges since early 2008 by Portfolio Recovery Associates or outside lawyers who handle most of its debt-collection cases.

"When you see corner-cutting like this, it's alarming," Minnesota Attorney General Lori Swanson said about the Kunkle case. Ms. Swanson is investigating numerous buyers and collectors of consumer debt for falsifying affidavits.  A spokeswoman for the company, the second-largest debt buyer in the U.S. by revenue, said the company is unaware of the investigation and declined further comment.

Missouri Attorney General Chris Koster said he wants to investigate whether Martha Kunkle's name appears on any affidavits used to collect debt in the state of Missouri.


For comparison, Latin America’s leading Banana Republic. The raving lunatic “worker’s paradise” of oil rich, Hugo Chavez’s hell hole Venezuela. See the difference.

DECEMBER 31, 2010

Venezuela to Devalue Currency

CARACAS—Venezuela will devalue its "strong bolívar" currency on New Year's Day, the government said Thursday, the second such devaluation within a year and at least the fifth major devaluation during the decade-long populist government of President Hugo Chávez.

News of the devaluation came just after the central bank said the Venezuelan economy contracted 1.9% in 2010, the second consecutive year of declining output in the oil-rich nation after a 3.3% decline in 2009.

Both pieces of news suggest Mr. Chávez is having an increasingly difficult time balancing his populist policies with economic reality, according to economists. His government's widespread nationalizations of private industry have sapped economic growth, while public spending has sparked inflation that the government has tried to contain by measures such as price controls.

One such price control is the exchange rate. In January 2010, Mr. Chávez's government devalued the strong bolívar from its previous official rate of 2.15 per dollar to 4.3 per dollar. To help the poor, however, the government set up a stronger rate of 2.6 per dollar for imports of food, medicine and other essentials.

On Thursday, the government said it would scrap the 2.6 rate—and keep the higher 4.3 per dollar rate.

It will also keep intact another exchange rate, called the SITME, of 5.3 bolívars per dollar, which is used to provide companies with limited access to greenbacks.

----- Despite the coming devaluation, the bolívar will still be overvalued against the dollar, economists say, leading to a scarcity of dollars. The lack of dollars at official rates has led to a thriving black market, where the dollar currently fetches more than 8 bolívars.

"The government will continue to tightly ration foreign dollars to guard reserves," said Tamara Herrera, an economist with Venezuelan research group Global Source Partners.

The new devaluation will do little to address Venezuela's underlying economic problems. In the past few months, Mr. Chávez has stepped up the pace of nationalizations, further weakening the private sector.


Stay long precious metals. Nothing was fixed after the banking crash. The “next Lehman” is out there and rumoured to be the all but insolvent Bank of America, with its gigantic US real estate problems, or any number of European banks once Ireland, Greece, Portugal and Spain have to restructure their debts. The “next Lehman”, this new decade, wipes out the fiat currency, something for nothing, Ponzi finance system that’s been in place since August 1971. President Nixon’s great blunder, the long punt into the future on unbacked currencies, that lead to banksterism and insane derivatives gambling, that’s now turned out to be backed by the nation state. The “next Lehman”, and unreformed there will be one, takes out the national states.

"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz

More on Monday.


No comments:

Post a Comment