Max Keiser Interviewed by Helen Skopis of Athens International Radio

on April 9, 2010, on Greek debt crisis and IMF.

Max Keiser is basically saying that the Greek sovereign debt crisis and the Euro currency tumble that ensued was "manufactured" so that the European Central Bank would be discredited and Euro wouldn't dethrone US dollar as world reserve currency. By who? The Federal Reserve, Wall Street banks, UK banks and Bank of England.

Keiser calls it "financial terrorism". He's urging Greek people to stand up and take back their sovereignty. [That would mean pulling out of the European Union.]

Commenting on Greece's upcoming short-term debt auction, he says the outcome of the auction has nothing to do with the market force. It has to do with whether the Greek government "gives up" and cedes control to IMF. If it does, the auction will go well, according to Keiser. It is 100% political, he says. Political operatives using market to impose economic and political dictatorship.

People should not be paying for bankers' mistakes, but people have been made to, all over the world. Thus the No-Pay Movement he mentions in the interview, which is from Matt Taibbi's article.

(Long time ago I wrote a term paper in Development Economics class in my B-school discussing IMF's role in developing countries. In it, I said IMF was a distortion and should be abolished. I got C.)

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East Coast Wants To Kill Silicon Valley Entrepreneurism

As always. This time, they will attempt with "Friend of Angelo" Chris Dodd's 1,300-page financial so-called "reform" bill, which already passed the Senate Banking Committee and now is being pushed through the Senate with hardly anyone paying attention as the stock market continues its melt-up. Financial firms' stocks are leading the way.

Among many other things to hate in the Dodd bill, the bill will require startups to register with the SEC before it attempts to raise funds, and wait for 4 months while the SEC review the application. Investors, who wants to fund these startups, will have to have more than $2.3 million net worth, or more than $450,000 annual income.

In startups, 4 months is an eternity these days.

If you have some brilliant idea and want to run with it, you can't, if the bill becomes the law. You have to apply to an agency under the jurisdiction of the US federal government - an agency who turned a blind eye to Madoff's ponzi, who is yet to do anything about high-frequency trading (or fleecing the investors) by the large Wall Street banks and hedge funds not to mention naked short selling, leveraged financial derivatives, etc.

If you want to invest in someone else's brilliant idea but your net worth is less than $2.3 million, you can't.

It looks like yet another form of restriction of capital flow, which is vital for a free market to function. The federal government wants to control that flow as it sees appropriate, which, in my wild guess, differs radically from what entrepreneurs and investors have in mind.

And yet another way to kill the goose that lays golden eggs.

For more, check out this article: Dodd's Financial Reform Bill Makes the Angels Cry (4/1/2010 Reason.com)

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CBS News 2012 GOP Presidential Poll

Currently Ron Paul is winning (39%). Go vote.

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47% of US Households Don't Pay Fed Income Tax

so who is paying and how much?

Nearly half of US households escape fed income tax
(4/7/2010 AP via Yahoo Finance)

WASHINGTON (AP) -- Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem.

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.

In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.

What's more interesting to me is not so much that nearly half of US households do not pay to the federal government as this question: Then WHO pays and HOW MUCH?

10% of US households pay whopping 73% of the federal personal income tax.

If you go to another tax research organization called the Tax Foundation, you will find this article also, which says:

1% of US households pay over 40% of the federal personal income tax.

The above AP article also says that the bottom 40% actually make money in the form of tax credit from the government.

This article from the Tax Foundation in 2008 also tells us that the United States already has the most progressive (meaning pro-poor) income tax system among OECD nations. More so than the still very socialist France or Sweden. Under Obama, the pace is firmly set to accelerate.

With the introduction of VAT that one of the Obama's econ advisers Paul Volcker (hey whatever happened to that so-called "Volcker rule"?) wants his boss to introduce, America will become more "European" than Europe. Add cap and trade crap, and immigration "reform", all of which are designed to take in more and more from the tax-paying populace and give it to the "poor" through massive government bureaucracy as the government bureaucrats see fit.

I guess the president didn't grow up listening to one of Aesop's fables, The Goose That Laid Golden Eggs.

He surely hasn't heard of the early pilgrims who came close to extinction by having adopted the policy of forcible wealth redistribution.

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Fed's Hoenig Wants Feds Funds Rate Raised Soon

(If this is not a stock market manipulation by the Federal Reserve, I don't know what is...)

Kansas Fed President Thomas Hoenig, regular dissenting member of the Fed Open Market Committee (FOMC), said he would like to see the Feds fund rate raised "cautiously" to 1% soon.

He said it around 2:14 PM today, and this is what it did to the market. (It is a Dow 3-minute intraday chart.)

Oh BTW, the Treasury Department will be auctioning 30-year bond ($13 billion, 2nd reopening) tomorrow. I'm sure Treasury would like to see a lower rate (=higher price) for their offering. Flight from scary stock market to "safety" of US Treasuries.

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"Where Do We Get the Free ObamaCare and How Do I Sign Up?"

That's what many Americans are apparently asking, according to McClatchy News.

So I guess that's why some people (less than 50% of the country) have been supporting the President's health care insurance "reform" that will:

• cost nearly $1 trillion (by the administration's own estimate; you know how it will grow)
• expand IRS power;
• expand the federal government;
• increase taxes and/or institute new taxes on goods and services in health care;
• surtax on income tax for the "rich" (you are "rich" if you make more than $200K);
• force Americans to buy health insurance that the government (not they) deems "appropriate" and only from the federally-mandated insurance "exchanges";
• cause the existing insurance policy rates to go up significantly (because the insurance companies will be required to cover everyone, pre-existing condition or not, totally defying the very model of how insurance works - to underwrite a policy based on person's health status);
• cause Medicare services to be cut back (that's how this scheme will be paid for, in part).

In addition, there will be no more "disaster coverage" with high deductibles so that they can save money. Even if they have no intention of conceiving a child or physically incapable even if they want to, their insurance will have to have maternity care coverage. Same for the substance abuse, mental health, pediatric care (even if you are single). You will have to have the coverage in those "important" aspects of health care.

The government doesn't even have a definite, reliable number of how many Americans are actually lacking the health care insurance and how many need it. These days the number is somewhere between 30 million and 35 million. It used to be 40 to 50 million. They count people on COBRA (temporary health insurance after people lose their jobs) as "uninsured".

I have seen the number as low as 8 million, when you subtract non-documented immigrants.

Speaking of non-documented immigrants, Obama's new law will be grossly unfair to them IF they want to buy the health insurance in the new government-mandated insurance exchange with their own money. The law won't allow them. And this law stipulates you will have to buy your insurance at this exchange, and nowhere else. So, what will these immigrants do? They will do what they have been doing: use hospital emergency care as their "primary care family physician" and pay next to nothing. (Maybe that's one reason for the push for so-called immigration reform - legalize them so that they will be forced to buy health insurance.)

Investors Business Daily had a nice summary of what you can expect from this health care insurance "reform": "20 Ways ObamaCare Will Take Away Our Freedoms" (David Hogberg, 3/25/2010 IBD). The article mentions specific sections of the bill.

And remember: the insurance industry with powerful lobby supports the bill that is now the law. They were briefly against it (or so they said) because the penalty under the law for not having an insurance would be TOO LOW. (Nice people.)

I could go on and on, but I have already wasted so much breath (I have 75 posts on health care "reform" on this blog). As people discover what's in the bill that has become the law of the land (for now, unless these 18 states are successful), all I will say is "I told you so. You should have read my blog..."

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Slap on the Wrist: Citigroup vs Toyota

Toyota is facing a fine of over $16 million, maximum allowed by law, by the U.S. federal government which just happens to own two auto companies.

Toyota faces record $16.4M fine in gas pedal recall
(4/6/2010 USA Today)

"The government said Tuesday it has proof that Toyota knew about a safety problem involving sticking gas pedals for four months before it recalled vehicles and said it will penalize the automaker the maximum $16.4 million for the delay.

"That would be a record penalty for foot-dragging. The highest so far: $1 million against General Motors in 2004 for taking too long to fix potentially faulty windshield wipers.

"The law says an automaker must tell the government about a safety defect and begin a recall within five business days after discovering the problem.

""We now have proof that Toyota failed to live up to its legal obligations," Transportation Secretary Ray LaHood said Monday. "Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families. For those reasons, we are seeking the maximum penalty possible under current laws."" [Emphasis is mine. The article continues.]

Gee, remember those huge SUVs made by GM, Ford, and Chrysler that rolled over and injured or killed drivers and passengers? I don't remember exactly but I am sure the automakers were grilled in Congressional hearings and fined, with their engineers jailed for unsafe designs.

And I'm sure the subcontractor who manufactures those gas pedals (or has them manufactured somewhere, probably in China) will be severely punished.

And there's Citigroup, paying a fine of $650,000 to Finra for its stock lending practice from 2005 to 2008 November, when it finally stopped. Damage done, the market crashed. The U.S. federal government also happens to own a huge chunk of Citigroup.

Citigroup Fined $650,000 by Finra for Stock-Lending Violations
(4/6/2010 Bloomberg via Business Week)

"April 6 (Bloomberg) -- A Citigroup Inc. brokerage will pay $650,000 to settle regulatory claims it inadequately supervised a system for loaning customers’ shares to short sellers.

"Citigroup Global Markets gave clients insufficient information about terms of its Direct Borrow Program, in which their hard-to-borrow stocks were pooled to accommodate short selling from 2005 to 2008, the Financial Industry Regulatory Authority said in a statement today. The firm’s marketing materials weren’t “fair or balanced” and lacked key information, the regulator said.

"The program arranged more than 4,000 loans from 2,300 clients, including retail investors, according to Finra. The New York-based bank suspended the program on Nov. 30, 2008, and returned borrowed shares to their owners, the regulator said."

I wonder if Citi even borrowed the shares.

Bear raid attacks using naked shorting, credit default swaps on companies' debts, CDOs, CDS on CDOs (for details on how they are actually used, read about David Einhorn's stragegies here) killed large financial firms, triggered credit crisis, global stock market crash, and global recession that destroyed many trillion dollars of wealth.

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Obama's Nuke Policy's Gaping Loophole

President Obama is supposed to announce his new policy on nuclear weapons on Tuesday, which is supposed to be a departure from the Bush Doctrine (of preemptive strike, possibility of using nuclear weapons against non-nuclear states) and a step toward "a world without nuclear weapons" (according to Washington Post, sounding like what the Japanese have repeated over and over again since 1945).

Washington Post reports: "Under the new policy, the administration will foreswear the use of the deadly weapons against nonnuclear countries, officials said, in contrast to previous administrations, which indicated they might use nuclear arms against nonnuclear states in retaliation for a biological or chemical attack."

Except this policy comes with a major caveat.

Antiwar.com reports that there is an enormous loophole to the new Obama doctrine:

Obama Policy Retains Right to Nuke Iran: Obama's 'New' Policy Leaves Hydrogen Bomb-Sized Loophole (Jason Ditz, 4/5/2010 Antiwar.com)

"...But while the Obama Administration formally renouncing that option on the surface and claiming its arsenal is for “deterrence” only, it appears that the doctrine will include an enormous loophole that will mean the nominal policy shift will ultimately mean very little.

"The loophole will insist that the only non-nuclear states free of preemptive nuking are those which are “in compliance with their nonproliferation obligations.” This would, at least from the administration’s perspective, leave open the possibility of attacking Iran with nuclear weapons.

"Iran would certainly argue that they are in compliance, of course, but exactly what these obligations are is never altogether clear to the public (the IAEA safeguards agreements are not made public) and President Obama has made clear that he believes Iran is not.

"...while the president still claims to have a goal of a nuclear-free world, the manufacture of such a deliberate loophole for a nuclear first strike is beyond troubling."

Rather than a loophole, it seems more like a "qualifier" to me. Obama is clarifying which country will be singled out to be attacked by the US using nuclear weapons.

He could also redefine the meaning of "compliance" to include just about any country he wants to bomb. By another executive order, perhaps.

Crude oil went up again on Monday despite the US dollar strength. The supposed reason was the accelerating (and jobless) economic recovery in the US.

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ISM Report for March: Service Sector Expanded, But Not Jobs

The US stock market continued its amazing run today, with Dow threatening to break above 11,000. One of the reasons offered by analysts and pundits was the ISM (Institute of Supply Management) non-manufacturing index released today, which rose to 55.4 in March from 53 in February - bigger gain than expected.

As this AP article reminds us, "The service sector is important as it accounts for about 80 percent of U.S. jobs excluding farmworkers. It includes jobs in areas like health care, retail and financial services. The sector is highly dependent on consumer spending, which powers about 70 percent of the economy."

The article make it sound like the service sector expansion means job creation in the sector.

But does it? What exactly is expanding? What is this index measuring?

Looking for answers to my own questions, I went to the ISM website. Here's what I found:
[Clicking on the table will open a new window.]


The number in each category is essentially a sentiment expressed by the survey respondents. Yes, business activity seems to be picking up, backlog orders, export orders and import jumped, new orders accelerating, prices increasing. So far so good. Now, has it translated into creating jobs?

The answer seems NO. The direction is still "contracting". It may be very very slowly turning to "not contracting" but despite the accelerating pace of the recovery in other categories the employment was basically unchanged.

Business may be expanding, but companies are in no hurry to hire. They seem to make the existing resources (including human resources) work more efficiently. The recently-passed health care deform bill doesn't give any incentive for businesses to hire in America.

Without a job, how could one spend? Banks are not lending. Something doesn't quite add up, does it?

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Peter Schiff Will Pay to Debate Alan Greenspan

Peter Schiff is angry at Greenspan, who keeps repeating "Nobody saw it coming... Who could have known?" regarding the housing bubble he and his Fed created and the financial crisis triggered by it. Schiff knew, and he was laughed at (watch the second video in the link). So did many other people, including Ron Paul (he was laughted at, too, and continues to be laughed at by so-called mainstream media). Schiff is irate enough to offer money to debate Greenspan on TV (ABC in particular).

The New York Times Op-Ed piece Schiff is talking about in the video is here: "I Saw the Crisis Coming. Why Didn't the Fed?"

I, too, remember Greenspan praising adjustable-rate mortgages, instead of sounding caution.

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