Judge Griesa Demands Argentina Negotiate “Nonstop” with Vultures

In a hearing yesterday morning in Manhattan, Federal Judge Thomas Griesa refused Argentina’s request to reinstate a stay on his earlier ruling mandating that the Fernandez de Kirchner government must pay $1.6 billion dollars to the vulture funds that speculated on the nation’s defaulted debt.

Attacking the Argentina government for its “incendiary rhetoric,” Griesa claimed that a stay is “unnecessary,” and ordered both sides to negotiate “promptly and continuously” with Special Master Daniel Pollack until a “settlement is reached.” According to The Wall Street Journal, Griesa said that Argentina should negotiate for “more time” during those meetings, the first of which is scheduled for July 23 at 10:00 am.

The deadline by which Argentina must pay is July 30, the end of the thirty-day grace period that began on June 30, the original date on which the Fernandez de Kirchner government had been ordered to pay the vultures. Argentina’s lawyer, Jonathan Blackman, told Griesa today that reaching an agreement by July 30, without a stay in place, “simply cannot be done.”

Speculation is rampant as to what Argentina might do next—but the issue here is a political, not a technical one. The government continues to maintain that paying the vultures is not an option, as this would trigger the RUFO (Rights Upon Future Offers) clause, which states that Argentina may not make a better offer to holdouts (as the vultures call themselves) than what was offered to the restructured bondholders.

The vultures are meanwhile salivating over what they can extract from Argentina. Bloodthirsty plaintiff Elliott Management, owned by multimillionaire Paul Singer, went to court in San Francisco last week, to demand the embargo of U.S.-based funds belonging to the state oil firm YPF and its U.S. partner, Chevron Corp., as payment for its claim. The two companies are partners in the development of Argentina’s giant Vaca Muerta shale oil and gas reserve.

As cabinet Chief of Staff Jorge Capitanich pointed out in his July 21 press conference, these reports very clearly demonstrate the vultures’ “voraciousnes in appropriating real assets.” He added that were the RUFO clause to be activated, this would cause Argentina’s debt to balloon by $120 to $500 billion, and inflict enormous institutional harm on the country, as the President and her cabinet could become the subjects of criminal and civil suits for hundreds of millions of dollars.

Posted in New Economic Order | Tagged , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

LaRouche: Launch All-Out Fight for Glass Steagall — Because It Must Be Done

Lyndon LaRouche today forcefully urged Sen. Elizabeth Warren (D-Mass.) and other Glass-Steagall sponsors to act immediately to push for Congressional debate and vote. “Don’t wait until the perfect moment when you think you have the votes lined up. You have to campaign to win. You fight to get it through because it has to be done.”

Indeed, not only is passage of Glass Steagall urgent at this very moment, as major European banks and Wall Street unravel over their mountain of unpayable debt. There is a building groundswell for implementation. According to one Washington source, there is now a clear majority in support of Glass Steagall or neutral. This is the perfect time to strike.

In the past several days, there have been repeated calls appearing in the media for reinstatement of Glass Steagall. Former Senator Ted Kaufman (D-Del.) wrote in today’s Forbes magazine website that “After Four Years of Dodd-Frank, We’re Still Waiting for Wall Street Reform.” He wrote that “The solemn pronouncements coming from Washington that ‘Too Big to Fail’ is a thing of the past are ludicrous. The megabanks are bigger than ever, and are behaving exactly the way they did when, one year before the crash, Citibanks’s CEO Charles Prince declared ‘as long as the music is playing you’ve got to get up to dance.’ And the music being made these days while the banks gamble with FDIC-insured money and expand trading in risky derivatives is truly beautiful for the dancers. Megabank profits are soaring.” He concluded, “Of course the real solution is reinstating the Glass-Steagall Act,” but then added his often heard caveat that “there is no movement in Congress or the administration to do that.”

Another push for Glass Steagall appeared today in Business Spectator which reported on a recent study by a Chinese economist, Liu He, who is a leading advisor to President Xi Jinping, who looked at ways for China to avoid a crash by studying the common features of the 1929 and 2008 crashes. One common feature the study highlighted was the adoption of deregulation. Business Spectator writer Peter Cai noted the parallels between Calvin Coolidge’s policy of non-interference and non-regulation and the Thatcherite “free market ideology” of the 1980s and 90s, noting “The Glass-Steagall Act, which separated investment banking from commercial banking was abolished.”

Robert Scheer also published today an Oped News column picked up in newspapers around the country, noting the recent $7 billion out of court settlement by Citicorp and the role the bank played in the repeal of Glass Steagall, which some people referred to as “the Citigroups authorization act.”

Joe Nocera, writing in today’s New York Times, noted on the fourth anniversary of the passage of Dodd-Frank that no one believes that the TBTF problem has been solved, and the mechanisms in Dodd-Frank are so complex and arcane that “we have no way of knowing whether ‘too big to fail’ still exists until we have another crisis. Let’s just hope we don’t have to find out anytime soon.’

Posted in Glass Steagall | Tagged , , , , , , , , | Leave a comment

BRICS Developments, July 23rd, 2014

The Importance of BRICS Bank Is Slowly Sinking In

After a spate of articles trashing the BRICS proposed New Development Bank that appeared in the western press, some pundits have now begun to acknowledge the importance of setting up the bank and trying to figure out why the BRICS chose to do it.
Shifting Weight

According to reports, the New Development Bank is scheduled to start lending in 2016 and will be open to membership by other countries. The World Post said two days ago that the establishment of the BRICS bank marks the delayed shift of ‘soft power’ from the ‘West’, from the US and Europe to Asia and to emerging economies, confirming the shift in economic and financial weight. The center of global economic and financial geography has been progressively shifting “East” for the past three decades, with the epicenter now lying East of Mumbai.Today, the BRICS member countries account for about 25% of global GDP, 35% of total international reserves (with China at over US$4 trillion), 25% of total land area and around 42% of the world’s population. However, despite their economic weight, the BRICS have a major power-gap in global economic governance. The tectonic shift in world economic geography has not reflected itself in the governance and management of international economy. The BRICS and emerging countries do not set the agenda, but they must bow to the diktats! Voting power at the IMF disproportionately favors the US 16.75%; Japan 6.23%; Germany, France, and the UK votes add up to 14.39%, compared to a total of 11% for BRICS, of which China represents 3.8%, The World Post noted.

A Brookings Institute paper, penned by Bruce Jones and Thomas Wright on July 17, said the BRICS may not be allies, but they all see a common interest in preventing the United States from calling the shots and isolating one of their own. “All but one of the BRICS have been subjected to U.S. sanctions and others to strict IMF conditionality. Indeed, for some it is personal. Modi was barred from the United States up until his recent election. And, they see the U.S. sanctions on Russia as a test run for a strategy that may be used on others that incur Washingtons displeasure in the future.”

Jones and Wright said, “the BRICS want to diversify their relationships beyond western-dominated institutions and have a safety net if they get pushed out. They are purchasing an insurance policy against the risk of U.S. sanctions. This sentiment is amplified by the recurrent recalcitrance of the West in opening up the governance structure of key institutions,” the Brookings analysts wrote.

Putin Plans BRICS “Energy Association,” Including Nuclear Fuel Bank

During the BRICS Summit last week in Brazil, Russian President Putin announced that there are plans to establish a BRICS “energy association,” which will include a nuclear fuel reserve bank, and an energy policy institute.
Ground-Breaking Initiative

This ground-breaking international initiative follows on the heels of broad-ranging bilateral Russian nuclear energy agreements concluded with Argentina and with Brazil the week of the summit. A Russia/BRICS nuclear fuel bank has the potential to unloosen the stranglehold that the Bertrand Russell-spawned non-proliferation mafia has held on nuclear power in developing nations for decades. The concept itself is not new, and it is not the first time Russia has proposed it. But in the new political geometry of the BRICS, it is potentially an enabling mechanism, along with the new bank for infrastructure investment, for the large-scale deployment of nuclear technology globally.In 2004, disturbed by the political control the U.S., in particular, had over the availability of nuclear power, and on-going dust-ups with North Korea and Iran, Dr. Mohamed ElBaradei, then head of the International Atomic Energy Agency, established a task force to come up with options for making nuclear energy available, “without being subject to extraneous political considerations.” Although the IAEA would try to get new nuclear countries to forego uranium enrichment and reprocessing, ElBaradei stressed that any proposal “should not alter the right of any State to take its own decision regarding its nuclear fuel cycle,” providing it adheres to the IAEA regulations.

Two years later, President Putin proposed setting up an international uranium-enrichment and nuclear fuel center in eastern Siberia, to break the deadlock in the Iranian nuclear dispute, by offering to host all of Iran’s uranium enrichment—Iran would own the fuel, but Russia would hold for Iran in the Russian factory. Not surprisingly, U.S. opposition meant the proposal never went anywhere, in terms of solving the Iran situation, or more broadly.

Today, three-quarters of the nuclear power plants that are under construction around the world are being built in the BRICS nations. Taking the control of commerce and availability of nuclear technology away from the dying trans-Atlantic system, and providing necessary project funding, will lead to a global break-out of nuclear development.

And there is a warning that the sanctions against Russia under consideration by the European nations could have a serious impact on the operating of even Europe’s dwindling nuclear capacity. BBC economics correspondent Andrew Walker outlined in an article yesterday, how more sanctions from Europe could cripple what is still standing of Europe’s nuclear power capacity, should the Russians retaliate. It’s not only oil and gas that are exported from Russia to Europe, but also uranium (18%), enriched uranium for nuclear fuel (30%), and the care of the 18 Russian-built nuclear plants that are operating in Europe. A number of countries in Europe—France, Slovakia, and Hungary, for example—obtain half or more of their electricity from nuclear plants. “There are plenty of reasons for EU countries to be wary about tighter sanctions against Russia. The need for nuclear supplies is only one of them,” Walker concludes.

Russia, China and India Push for Next-Generation Reactors

Russia plans to start construction of three BN-1200 sodium-cooled fast neutron reactors before 2030, the director general of Rosenergoatom, Evgeny Romanov, said on July 21.
The World is Going Nuclear

Russian nuclear engineering company OKBM Afrikantov is developing a BN-1200 reactor, commonly known as Generation IV. The first of these units will be located at the Beloyarsk nuclear power plant in Zarechny, in the Urals, Romanov said. The BN-1200 reactor for Beloyarsk will generate 1220 MWe and have a 60-year life span. The BN-1200 reactor is a 1200-MW sodium-cooled fast breeder reactor project, under development in Zarechny, and the design is planned to be complete by 2017. Goals are enhanced safety and a breeding ratio of 1.2 to 1.31-1.35 for mixed uranium-plutonium oxide fuel and 1.45 for nitride fuel.Over the decades, Russia (earlier, USSR), introduced a number of industrial and research fast neutron reactors. One of them, the BN-600 (600-megawatt), has been operating since 1980 at the same Beloyarskaya nuclear power plant site. It is the only fast neutron reactor in the world that generates electricity on an industrial scale. The next-generation BN-800 breeder reactor (880 megawatts) assembled at Russia’s Beloyarskaya nuclear power plant site was put in the “critical” state last month.

Meanwhile, India and China are speeding up development of their respective thorium-fueled nuclear reactors. In China, where the schedule to deliver a thorium-based nuclear power plant was recently overhauled, meaning scientists in Shanghai have been told to deliver such a facility within the next ten years. India, where thorium fuel is plentiful, has already announced completion of design of its Thorium-fueled Advance Heavy Water Reactor (AHWR). It has announced plans to build its first thorium-based nuclear reactor by 2016.

China and Brazil Extend Their Successful Remote Sensing Space Project

China and Brazil will move ahead with their China-Brazil Earth Resources Satellite (CBERS) program, adding a new satellite, and considering more in the future, the director of China National Space Administration, Xu Dazhe, said yesterday.
Broad Cooperation

The two nations have launched a series of four Earth remote sensing satellites, with Brazil building the spacecraft and China providing the launch vehicle. The program was inaugurated from a 1984 agreement, and CBERS-1 was launched in 1999, CBERS-2 in 2003, and CBERS 2b in 2007. The CBERS-3 satellite was lost in a rocket launch failure last year. So, the two nations have accelerated the readiness of CBERS-4, which is now planned for a Dec. 7, 2014, launch. Under consideration is a CBERS 4a satellite to be added on.The increasingly sophisticated satellites are being used by more then 2,500 organizations and 35,000 users, with 250 images being distributed daily. The data helps determine water resources, deforestation, etc. Xu indicated that China is interested in proceeding with CBERS 5 and 6, and talks will be held at the end of this year to plan them.

The joint program has enjoyed support from the top leadership of both nations. In 1993, Chinese President Jiang Zemin visited the engineering facilities in Brazil, to observe a CBERS satellite under construction. The joint project is a model for inter-BRICS, and broader, cooperation in space applications and technology.

Former Ambassador Chas Freeman: BRICS Summit Means End to Sanctions Blackmail on Iran

Appearing at a July 21 Capitol Hill forum sponsored by the Middle East Policy Council, former US Ambassador to Saudi Arabia and Assistant Secretary of Defense Chas Freeman, not only tore into the Bush-Cheney and Obama administrations’ destruction of US foreign policy, particularly in the Middle East. He issued a stark warning that the world is turning away from American unilateral leadership and is embarking on a new direction, epitomized by the recent BRICS summit in Brazil. Freeman brought the BRICS summit right back into the discussion of “Obama’s Foreign Policy and the Future of the Middle East” by noting that Iran has undoubtedly taken careful note of the full implications of the BRICS developments. If the BRICS countries succeed in creating new trade arrangements in local currencies and actually bypass the SWIFT system of New York clearinghouse banks, it will no longer be possible to impose global US and European Union sanctions with any teeth. “They’ve cooked their own goose,” he noted with considerable glee.

The full text of Freeman’s speech is on his website, and the entire conference video and transcript will be posted shortly on www.mepc.org. The other speakers, Ken Pollack, Paul Pillar, and Amin Tarzi, all panned the successive failures of Bush-Cheney and Obama, and all singled out the 2003 US-UK invasion of Iraq and the overthrow of Saddam Hussein as the greatest US policy blunder in decades.

Denmark’s Jyllands-Posten Has Thoughtful BRICS Editorial

Jyllands-Posten, Denmark’s largest newspaper, had an editorial, “The BRICS Want To Do It Themselves,” in the July 21 issue, which is thought-provoking and useful. The following translation was provided, of which we provide excerpts:
‘The BRICS Want To Do It Themselves’

“The World Bank and IMF, the International Monetary Fund, have as their stated objectives promoting financial stability, employment and development in an interaction between developed and developing countries. But during the recent years, it is as if they have lost sight of this goal. The two organizations, both residing in Washington, D.C., are increasingly being criticized for favoring the big developed countries to the detriment of the developing countries, and that was the real background, when in 2001, four of the world’s rapidly growing economies, Brazil, Russia, India and China formed the BRIC group, which in 2010, when South Africa joined, appended an ‘S’ to its name.

“These five nations gathered in Brazil, just two days after the World Cup soccer finals, and the outcome of the summit was the creation of a New Development Bank, with an initial capital of $100 billion, and a Contingent Reserve Arrangement of additional $100 billion. …

…the BRICS group, think that enough is enough, when it comes to the Western-dominated economic world order…”

Posted in New Economic Order | Tagged , , , , , , | Leave a comment

Leaflet: No Recess Until Obama is Impeached

It is time for members of the US House of Representatives and US Senate to wake up to a deadly strategic reality. Exactly one century after WWI began in the infamous “Guns of August,” mankind faces a global war with much more devastating implications, because such a war today will be a thermonuclear war which no one will survive. On September 2, 1945, upon the surrender of Japan, after nuclear bombs were dropped on Hiroshima and Nagasaki, General Douglas MacArthur stated the following regarding the use of war as a means to settle disputes between nations: “. . . The utter destructiveness of war now blocks out this alternative. We have had our last chance. If we will not devise some greater and more equitable system, Armageddon will be at our door.”

Leaflet: No Recess Until Obama is Impeached

Posted in Impeach Obama | Tagged , , , , , , , , , , | Leave a comment

Commentator Eric Zuesse: Democrats Should Impeach Obama To Save Party

Eric Zuesse, a progressive blogger at OpEd News, has put the question squarely on the table: Do the Democrats have the guts to impeach Obama?

In an article yesterday, entitled, “Republicans Rule Out Obama-Impeachment. But Democrats … We’ll See:,” Zuesse — one of many progressive bloggers to be hard on Obama’s case since the Nazi takeover of Ukraine early this year — makes the argument that, unless the Democrats move against the occupier of the White House, they will not only lose control of both the House and the Senate in 2014, but also the White House in 2016. Citing recent polls equating Obama’s popularity ratings to that of Bush in 2006, Zeusse says that Bush dragged the party down so that the Republicans lost first, control of the Congress, then, in 2008, the White House. Right now, it “would require almost a miracle” for the Democrats to maintain control, “but if Democrats push for Obama’s impeachment, that impeachment of Obama by Democrats might provide this ‘miracle.’”

To his possibly still hesitant audience, Zuesse carefully makes the case, primarily on the grounds of Obama’s continued defense of Wall Street, and his active impeding of prosecutions of banksters. Quoting the Presidential Oath of Office, to “protect and defend” the laws of the land, he says that “If the President does not ‘execute’ the laws, then nobody does. … Obama instead BLOCKS its being carried out! He actively prevents it. He even persecutes whistleblowers.” [capitalized emphasis in original] Obama told Wall Street that his administration “stood between them and the pitchforks,” and he did whatever it took to protect them.

Zuesse notes flatly that, “Republicans certainly won’t do it,” and quotes Republican Goodlatte’s subservient “We are not working on or drawing up articles of impeachment,” as proof. Either the Democrats impeach Obama, or we will effectively have two “conservative” parties, and true progressives will have to think of a third option. “They [Congress] have their choice to make. And we voters will have ours.”

Ultimately, “Without accountability, there is nothing but dictatorship,” Zuesse says in closing. “This is not America; and for us to accept it as if it were, would be for us to defile our great Founders, who waged their Revolution in order to defeat such tyrants — tyrants who now have come back from the dead, only with different faces and names. Our Founders would be in horror to see them. We need to be as progressive as they were. Their Revolution is now in tatters.”

Posted in Impeach Obama | Tagged , , , , , , , , , , , | Leave a comment

Carnage In Gaza: Israel Wiping Out Entire Families

The Israeli military may, indeed, be inflicting damage on Palestinian militant groups that they hold responsible for shooting rockets into Israel, but in the process they’re killing large numbers of civilians and destroying entire families. Officials of the Israeli Defense Forces (IDF) and the government of Prime Minister Netanyahu cynically say that they’re trying to avoid civilian casualties by warning Gazans ahead of time about oncoming Israeli strikes.

The only problem with that is, where are people going to go that’s safe in the Gaza Strip, where every square inch of territory is within range of Israeli artillery? So, according to numerous press accounts, many don’t bother leaving their homes despite the warnings, believing that it’s more dignified to die in their home than hiding in some shelter where it’s just as likely they might die anyway. “A book on Israeli military psychology should have an entire chapter devoted to this sadism, sanctimoniously disguising itself as mercy,” writes Ha’aretz journalist Amira Hass in an article posted, this morning.

Since the Israeli ground incursion into Gaza, the death rate seems to have gone up to nearly 100 Palestinians per day. According to the Palestinian Wafa and Ma’an news agencies, 73 died today as a result of Israeli air strikes, bringing the total since Operation Protective Edge began two weeks ago to 539. Another 3,245 people have been injured. One of the targets was the Shuhadaa al-Aqsa Hospital in Deir el-Balah, in the central Gaza Strip, reports Wafa, which was already overloaded with injuries from earlier attacks. Ma’an names several of families that have lost 8, 9 members and, in one case, even 26 members, as a result of Israeli bombing.

The fighting intensified, yesterday, when IDF troops moved into the Shujaiyeh neighborhood east of Gaza City. There, 13 Israeli soldiers died in intense fighting, all members of the Golani brigade, and another 7 were reported killed, today, including 4 who died when Palestinian gunmen penetrated the border fence and fire an anti-tank rocket. IDF casualties now stand at 25 since the ground invasion began.

In her article, Hass blasts those in Israel who claim that this genocidal war is an act of self defense, by citing some of the real history of how Israel has oppressed the Palestinians. “Those who turned Gaza into an internment and punishment camp for 1.8 million human beings should not be surprised that they tunnel underneath the Earth. Those who sow strangling, siege and isolation reap rocket fire. Those who have, for 47 years, indiscriminately crossed the Green Line, expropriating land and constantly harming civilians in raids, shootings and settlements what right do they have to roll their eyes and speak of Palestinian terror against civilians?” To prevent escalation: “Now is the time: Open up the Gaza Strip, let the people return to the world, the West Bank, and to their families and families in Israel. Let them breathe, and they will find out that life is more beautiful than death.”

Posted in International Terrorism | Tagged , , , , , , | Leave a comment

BRICS Development Bank vs. Collapsing Financial System

Imperial Financial Power Opposes the new Development Banks

Battle lines are forming regarding the BRICS nations’ decisions to operate two new $100 billion infrastructure investment and development banks over the next year. London and Wall Street finance oppose these international development banks and would wreck them by “internal competition among the capitalizing (BRICS) nations,” believing that they (the Empire) can inject “IMF conditionalities” into these banks. And then, there is the imperial drive toward war.
Losing Their Nerve

Indian Proposal for BRICS to use Local Currencies

Although the New Development Bank launched by the BRICS nations has not explicitly established the use of local currencies in its operations, it is being widely discussed, and a proposal to facilitate such use was issued in the Financial Times yesterday by Akshay Mathur of the Indian Council on Global Relations.
Enhancing Further Development

Halligan: BRICS Challenges Dollar

Economic columnist Liam Halligan comments on the new BRICS development bank in the Daily Telegraph. After a rather long introduction on how since the Bretton Woods Conference, the dollar has become the unquestioned reserve currency, he points to the BRICS conference, which he mentions ironically took place within days of the 70th anniversary of the Bretton Woods Conference July 22, 1944, as challenging this status quo.
The BRICS Are Coming!

Edge of the Collapse: Europe

The oncoming breakdown of the European section of the trans-Atlantic banking system is being discussed with great nervousness in the financial press.
‘Shut Them Down!’

The Latest Rotten Asset Bubble Waiting to Collapse

A front-page New York Times story datelined July 19 details the latest phony asset bubble blossoming on Wall Street: subprime auto loans, those made to individuals with bad credit, which have grown more than 130% since the 2009 aftermath of the latest blowout. Like the “liars’” home mortgage loans which helped bring down the system then, these loans typically exaggerate or totally fabricate the income of the borrower, while also, they are typically made for amounts exceeding the resale value of the car two to three times over, because of add-ons, debt carried over from an older car traded-in, or just pure fraud.
Sub-Prime Auto

Like the liars’ home loans, the subprime auto ripoff loans are securitized and AAA-rated by the lying rating agencies, so that Wall Street can pyramid them in their games. “Since 2009, total auto loan securitizations have surged 150%, to $17.6 billion last year, though some estimates have put the total volume even higher.”Orders to invest in one such bond issue by Prestige Financial Services of Utah were recently four times greater than the $390 billion of securities it had to sell. And what were these AAA-rated securities? The rebundling of loans to people already in bankruptcy! “Major insurance companies and mutual funds, which manage money on behalf of mom-and-pop investors” are snapping up securities backed by subprime auto loans. And private equity firms are investing in the lenders. One such investment by Kohlberg Kravis Roberts and other sharks doubled in value in only about two years.

Wells Fargo made $7.8 billion in auto loans in the second quarter, up 9% from a year earlier. In May, the company said it had $52.6 billion in outstanding car loans. Seventeen percent went to borrowers with credit scores of 600 or less. The bank ranks behind Capital One as the nation’s second-largest subprime auto lender.

Repossessions increased nearly 78% to an estimated 388,000 cars in the first three months of this year from a year earlier. The number of borrowers more than 60 days behind jumped in 22 states during the same period. Fuelling the orgy on Wall Street are Americans who often lose their savings and their homes in the attempt to keep up payments, before losing their cars and often going into bankruptcy, if they are able to. While much smaller in dollar terms than the last housing boom, this subprime auto ripoff is a part of a similar process progressing now on an even larger scale.

In a related development, the Wall Street Journal reported on July 21, a study by Jussi Keppoy and Josef Kortez that the “Volcker Rule” embedded in the Dodd-Frank law has cut the size of the banks’ trading books, but not the amount of risks they take. Instead, they have reduced the hedging (betting on) their banking (“propietary”) books, while increasing the speculative use of assets not limited by the Volcker Rule, like U.S. Treasuries. This may explain why banks’ holdings of Treasuries have grown so spectacularly, — by 23% in the first quarter of this year, compared to last.

Posted in New Economic Order | Tagged , , , , , , , , , , , , , , | Leave a comment