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Archive for the ‘Financial crisis’ Category

The financial system established in England after 1688, based on usurious lending to the state by private bankers, is reaching its final blowout in the form of a series of devastating bubbles and a massive bailout of the financiers with public money. But the issuance of money doesn’t have to be in the hands of a private consortium: another credit system is possible.

New York Fed Chairman’s Ties to Goldman Raise Questions

Posted by smeddum on May 4, 2009

By KATE KELLY and JON HILSENRATH
4th May
Wall Street Journal
The Federal Reserve Bank of New York shaped Washington’s response to the financial crisis late last year, which buoyed Goldman Sachs Group Inc. and other Wall Street firms. Goldman received speedy approval to become a bank holding company in September and a $10 billion capital injection soon after.

During that time, the New York Fed’s chairman, Stephen Friedman, sat on Goldman’s board and had a large holding in Goldman stock, which because of Goldman’s new status as a bank holding company was a violation of Federal Reserve policy. Read the rest of this entry »

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Max Keiser on Chrysler Bankruptcy

Posted by smeddum on May 2, 2009

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Britain’s crushing debt burden

Posted by smeddum on May 1, 2009

Britain’s crushing debt burden

By Associate Editor David Stevenson May 01, 2009

moneyweek
Alistair Darling tried to magic it away with some fantasy growth projections. But a future Budget will have to get serious about Britain’s debt, says David Stevenson.

How bad are the numbers?
Awful. At £90bn, public-sector borrowing for the year to 5 April 2009 hit its highest since the early 1990s. Yet for this year, the Chancellor has pencilled in a deficit of nearly double that – £175bn. “It’s difficult to put into words the extent of the meltdown in the UK’s public finances,” says The Daily Telegraph’s Liam Halligan. “During his 2008 budget, Alistair Darling said the UK would borrow a total of £70bn during 2009/2110 and 2010/2011. Today we learnt that £348bn of new debts will be racked-up on our behalf over that period.” The future looks no brighter. Even on official figures, the public purse will have to borrow more than £700bn from gilt market investors between now and 2013/2014, a rise of more than 60% on Darling’s estimates in last November’s Pre-Budget Report. Read the rest of this entry »

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China has ‘canceled US credit card’: lawmaker

Posted by smeddum on May 1, 2009

Thursday April 30, 2009

RawStory

China, wary of the troubled US economy, has already “canceled America’s credit card” by cutting down purchases of debt, a US congressman said Thursday. Read the rest of this entry »

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Britain ‘may inflate itself out of debt’

Posted by smeddum on April 29, 2009

 

Britain ‘may inflate itself out of debt’

Thisismoney


Britain’s national debt could be headed on an ‘explosive path’ that triggers chaos in the public finances, according to a leading City consultancy.

Alistair Darling
Alistair Darling: The Chancellor plans to borrow £175bn this year alone

Interest payments threaten to reach such stratospheric levels Britain may have to print more money and inflate its way out of debt, Fathom Financial Consulting will say at a conference next week.

The only alternative would be ‘Herculean’ efforts to rein in public spending and raise taxes, but this may prove politically unachievable. Read the rest of this entry »

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UAW union may take over Chrysler

Posted by smeddum on April 29, 2009

Guardian 

Tuesday 28 April 2009 

By Andrew Clark

Chrysler may give union 55% stake instead of $10.6bn to provide healthcare after Obama administration piles pressure on carmaker

Chrysler workers in Michigan factory  

Men work on cars at Chrysler. The company’s largest union could own more than half of the company under a deal to save it from bankruptcy. Photograph: Bill Pugliano/Liaison

Chrysler‘s largest trade union could end up owning 55% of the ailing carmaker under a tentative deal intended to save the cash-strapped 84-year-old company from bankruptcy and possible liquidation. Read the rest of this entry »

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AIG’s Fall: Bad Business Or Criminal Acts?

Posted by smeddum on April 28, 2009

 

CBS Exclusive: Investigators Digging Into Whether Execs Of Failed Financial Giant Misled The Public


Was AIG’s Fall Criminal?

New information has surfaced in the federal investigation of the collapse of insurance giant AIG. As Armen Keteyian reports, investigators wonder if AIG?s downfall was due to criminal acts. |

(CBS)  A $5 million Connecticut mansion. A $4 million London townhouse. A $7 million English estate. The houses are owned by three men CBS News has learned are now the subjects of a Justice Department criminal investigation into how AIG crumbled.  Read the rest of this entry »

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Milan Police Seize UBS, JPMorgan, Deutsche Bank Funds

Posted by smeddum on April 28, 2009


By Elisa Martinuzzi

April 28 (Bloomberg) — Milan’s financial police seized 476 million euros ($620 million) of assets belonging to UBS AGDeutsche Bank AGJPMorgan Chase & Co. and Depfa Bank Plc as part of a probe into an alleged fraud.

The police froze the banks’ stakes in Italian companies, real estate assets and accounts, the financial police said in a statement today. The assets seized yesterday also include those of an ex-municipality official and a consultant, the police said. Read the rest of this entry »

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Bargaining fails to break deadlock over IMF

Posted by smeddum on April 27, 2009

 

April 27, 2009

Cracks have opened up in the united front maintained by the leading world economies in trying to combat the global recession.

Tensions flared at talks between finance ministers over how to carry through key elements of the pact sealed at this month’s London summit of the Group of 20 nations. Read the rest of this entry »

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China Spearheads Dollar Dethroning

Posted by smeddum on April 27, 2009

 

CHINESE DIVERSIFICATION STRATEGY
Jim Willie CB                        April 23, 2009

home: Golden Jackass website
subscribe: Hat Trick Letter
Jim Willie CB is the editor of the “HAT TRICK LETTER”

Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

In a series of maneuvers, Chinese officials have revealed their strategy implementation in a very broad set of steps. Beijing leaders plan to establish the yuan currency as a global reserve currency. The process will be made more complete after issuance of a large volume of Chinese Govt debt securities, soon in coming. The number of policy actions is impressive. While the USGovt is busy stepping backwards with FASB rules enabling false bank accounting, gearing up Treasury programs to direct colossal elite welfare / confiscation to failed banks responsible for the crisis, covering up Wall Street fraud and regulatory lapses and debt rating agency collusion, and ordering pork like the $9 billion high speed train from Disneyland to Las Vegas, the Chinese are making important meaningful critical strides. Within a year, the Chinese will have established the yuan currency as a legitimate alternative to the USDollar for global trade, and later to some extent for global banking. The Chinese Govt has ordered monetary policy changes that have boosted their money supply by 25.5% over the last twelve months, with a giant stimulus program and relaxed bank credit rules. Since new maneuvers are being funded by incremental new surplus funds, they are exhibiting their financial power without upsetting their vast reserves accounts. The lost in the USCongress might talk about ‘Pay-Go’ measures to pay for programs as we go forward, but China does it in actual terms. Read the rest of this entry »

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Guilty of Being Poor

Posted by seumasach on April 26, 2009

The jailers of the 19th century — even in the pre-Civil War South — largely abandoned the practice of imprisoning people for falling into debt as counterproductive and ultimately barbaric. In the 1970s and ’80s, the U.S. Supreme Court affirmed that incarcerating people who can’t pay fines because of poverty violates the U.S. Constitution.

Apparently, though, some states and county jails never got the memo. Welcome to the debtors’ prisons of the 21st century.

“Edwina Nowlin, a poor Michigan resident, was ordered to reimburse a juvenile detention center $104 a month for holding her 16-year-old son,” the New York Times wrote in an editorial.

“When she explained to the court that she could not afford to pay, Ms. Nowlin was sent to prison. The American Civil Liberties Union of Michigan, which helped get her out last week after she spent 28 days behind bars, says it is seeing more people being sent to jail because they cannot make various court-ordered payments. That is both barbaric and unconstitutional.”

The details of Nowlin’s case are even more alarming than the Times editorial suggests. Not only was Nowlin under orders to pay a fine stemming from someone else’s actions, but she had been laid off from work and lost her home at the time she was ordered to “reimburse” the county for her son’s detention.

Despite her inability to pay, she was held in contempt of court and ordered to serve a 30-day sentence. On March 6, three days after she was incarcerated, she was released for one day to work. She also picked up her paycheck, in the amount of $178.53. This, she thought, could be used to pay the $104, and she would be released from jail.

But when she got back to the jail, the sheriff told her to sign her check over to the county — to pay $120 for her own room and board, and $22 for a drug test and booking fee.

Even more absurd, Nowlin requested but was denied a court-appointed lawyer. So because she was too poor to afford a lawyer and denied her constitutional right to have the court provide one for her, she couldn’t fight the contempt charge that stemmed from her poverty. And her contempt conviction only added to her poverty, as the fines and fees she was obligated to pay now multiplied.

“Like many people in these desperate economic times, Ms. Nowlin was laid off from work, lost her home and is destitute,” said Michael Steinberg, legal director of the Michigan ACLU. “Jailing her because of her poverty is not only unconstitutional, it’s unconscionable and a shameful waste of resources. It is not a crime to be poor in this country, and the government must stop resurrecting debtor’s prisons from the dustbin of history.”

Michigan isn’t the only place where you can be imprisoned for the crime of involuntary poverty. The same Catch-22 ensnares poor defendants daily in courtrooms across the country.

In 2006, the Southern Center for Human Rights (SCHR) filed a suit on behalf of Ora Lee Hurley, who couldn’t get out of prison until she had enough money to pay a $705 fine. But she couldn’t pay the fine because she had to pay the Georgia Department of Corrections $600 a month for room and board, and spend $76 a month on public transportation, laundry and food.

She was released five days a week to work at the K&K Soul Food restaurant, where she earned $6.50 an hour, which netted her about $700 a month after taxes. Hurley was trapped in prison for eight months beyond her initial 120-day sentence until the Southern Center intervened. Over the course of her incarceration, she earned about $7,000, but she never had enough at one time to pay off her $705 fine.

“This is a situation where if this woman was able to write a check for the amount of the fine, she would be out of there,” Sarah Geraghty, a SCHR lawyer, told the Atlanta Journal Constitution while Hurley was still imprisoned. “And because she can’t, she’s still in custody. It’s as simple as that.”

Georgia also lets for-profit probation companies prey on people too poor to pay their traffic violations and court fees. According to a 2008 SCHR report entitled “Profiting from the poor”:

In courts around Georgia, people who are charged with misdemeanors and cannot pay their fines that day in court are placed on probation under the supervision of private, for-profit companies until they pay off their fines. On probation, they must pay these companies substantial monthly “supervision fees” that may double or triple the amount that a person of means would pay for the same offense.

For example, a person of means may pay $200 for a traffic ticket on the day of court and be done with it, while a person too poor to pay that day is placed on probation and ends up paying $500 or more for the same offense.

The privatization of misdemeanor probation has placed unprecedented law enforcement authority in the hands of for-profit companies that act essentially as collection agencies. These companies, focused on profit rather than public safety or rehabilitation, are not designed to supervise people or connect them to services and jobs. Rather, they charge exorbitant monthly fees and use the threat of imprisonment and a variety of bullying tactics to squeeze money out of the men and women under their supervision.

For too many poor people convicted of misdemeanors, our state is not living up to the constitutional promise of equal justice under law.

In Gulfport, Miss., the municipal court started a “fine collection task force” to crack down on people who owed fees for misdemeanors. According to the SCHR Web site:

The task force trolled through predominantly African American neighborhoods, rounding up people who had outstanding court fines. After arresting and jailing them, the City of Gulfport processed these people through a court proceeding at which no defense attorney was present or even offered.

Many people were jailed for months after hearings lasting just seconds. While the city collected money, it also packed the jail with hundreds of people who couldn’t pay, including people who were sick, physically disabled and/or limited by mental disabilities.

The disregard of the justice system for the rights of poor people to equal protection and due process is cause for outrage. But it shouldn’t come as a surprise in an era when the government spends billions bailing out banks while letting foreclosures and unemployment ruin the lives of working people.

We need to build a movement, like the working-class struggles of the 1930s, that can demand an end to the inhuman practice of incarcerating people for no other crime than finding themselves at the bottom of the social ladder.

Eric Ruder writes for Socialist Worker where this article first appeared. Thanks to Alan Maass. Read other articles by Eric, or visit Eric’s website.

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