Saturday, September 18, 2010

Record number of US homes seized by banks

Record number of US homes seized by banks

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More US homes were repossessed by banks in August—more than 95,000—than in any other month in history, according to, a real estate marketplace. The company expects 1.2 million bank repossessions this year, a level 12 times higher than in 2005, when there were only 100,000.

Every month, the company releases a summary of all foreclosure actions, which includes bank repossessions. Realtytrac said that the number of foreclosures increased 4 percent last month, but was down by 5 percent compared with a year earlier.

The University of Michigan index of consumer sentiment unexpectedly dropped to its lowest level since 2009, according to results published Friday. The preliminary September reading of the index fell to 66.6, down from 68.9 in August.

And they have reason to feel that way, given the most recent economic developments. The news came as more companies announced layoffs, and economic figures continued to darken.

Meanwhile, the Philadelphia Federal Reserve’s index of Mid-Atlantic manufacturing showed that factory activity again contracted, disappointing analysts, who had expected it to plateau.

“Regional manufacturing activity has stalled over the past two months,” observed the bank. “The broadest indicators of growth—general activity, new orders, and shipments—have all remained slightly negative for at least the last two months.”

Fedex, the second-largest package shipping company in the United States, announced Thursday that it would cut 1,700 jobs, in line with a gloomy projection for US business.

“We expect a phase of somewhat slower economic growth going forward,” said CEO Fred Smith in the company’s second-quarter conference call on Friday. “Slower growth is consistent with historical business cycles,” he said.

The number of people putting in new claims for unemployment benefits remained basically unchanged last week, at 450,000, the same level as nine months ago, and nearly double the pre-recession level.

In short, all indicators point to a protracted economic slump, with little, if any, improvement in housing prices. The bad housing market will further hurt families burdened by falling wages and high unemployment. According to figures released by the US Census Bureau on Friday, one in seven Americans is now living below the poverty level, and the total number living in poverty, nearly 44 million, is the highest since the 1960s.

The Bureau of Labor Statistics said Friday that real average hourly earnings for production and non-supervisory workers fell again in August. A 0.3 percent increase in prices wiped out a 0.2 percent increase in average hourly wages, leaving these workers with a 0.1 percent fall in average hourly earnings.

Housing prices are down 28 percent since 2006, leaving nearly one quarter of mortgaged houses “underwater,” or valued at less than what their owners owe on them. In some states, the majority of homes are in this condition.

In Nevada, for instance, 68 percent of homes were under water, with the total value of mortgages being more than double the total value of houses.

Meanwhile Corelogic, a California-based real estate tracker, said that housing prices in some cities, such as Detroit and Las Vegas, will not return most homeowners to positive equity for another 10 years. And in a separate interview with Bloomberg radio, Fannie Mae chief economist Sam Khater said that there are 7 million US homes that are either vacant or in some stage of foreclosure.

Economists expect prices to drop—some by up to 10 percent, before the US housing market begins a lasting rebound. There had been a temporary resurgence in home values earlier in the year, but this ran out of steam as the Obama administration withdrew a tax credit to encourage first-time homebuyers in May.

Fannie Mae, the home mortgage company, said in a report issued Thursday that the expiration of the tax credit “suggests weakening home prices” in the coming period, and that the company projects a 7 percent decline in home sales in 2010, putting even more homeowners underwater.

The latest figures underscore the critical absence of any government programs to create jobs or alleviate the plight of families in foreclosure.

The “Home Affordable Modification Program,” which the Obama administration promised would help up to 8 million people adjust their mortgages, has to date offered permanent mortgage modification to only 422,000 homeowners. This figure is miniscule compared to the 10 million home foreclosures that are expected through 2012. But even this small assistance has taken the form of an adjustment to borrowers’ monthly payments, and not the total amount that they have to pay.

Instead of helping workers and homeowners, the administration has recently announced a program that would further extend tax credits for businesses, including write-offs for research and capital investments.

Economic crisis threatens to unleash global currency wars

Economic crisis threatens to unleash global currency wars

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Two events this week have highlighted the growth of global economic tensions and the slide toward international trade and currency wars.

On Wednesday, Japan unilaterally intervened in currency markets to drive down the exchange rate of its currency by selling an estimated 1 trillion yen (worth some $20 billion). The move, the first such intervention by Japan in more than six years and the country's biggest ever one-day currency action, breached a tacit agreement among the established industrial powers to avoid unilateral currency moves.

Japan had threatened such action after the value of the yen in relation to the dollar rose by more than 10 percent since May. The Japanese currency also climbed sharply in relation to the euro and the Chinese renminbi. Tokyo, heavily dependent on exports, had warned that it would take action to protect its industries from the negative effect of the yen's rise on its ability to sell goods abroad.

The following day, US Treasury Secretary Timothy Geithner testified in two separate congressional hearings on Chinese currency policy and demanded that Beijing allow its currency to rise faster and more steeply, tacitly threatening retaliatory action if the Chinese regime refused to do so. Congressmen and senators from both parties blamed China for the loss of American jobs and criticized the Obama administration for failing to officially declare China a "currency manipulator" and impose tariffs and other penalties on Chinese exports to the US.

The eruption of currency exchange conflicts is bound up with mounting signs that the global economic crisis is systemic, rather than merely conjunctural, and growing fears that a genuine recovery is not in the offing. The European sovereign debt crisis and the weakening of US economic growth have led governments around the world to seek to secure a greater share of export markets. Under conditions of slowing growth and stagnant markets, this inevitably heightens trade conflicts between competing capitalist nations.

In particular, the US and the European Union, spearheaded by the export power Germany, have aggressively pursued a cheap currency policy in order to gain a trade advantage against their rivals. Of the major economic powers, Japan has suffered the greatest damage from these policies, as investors and speculators have shifted from dollar- and euro-denominated investments to the yen, driving up the currency's exchange rate.

This has embittered relations between Japan and both the US and the EU. Japan has also denounced China for artificially keeping its currency low while bidding up the yen by increasing its purchases of Japanese government securities.

Japanese Prime Minister Naoto Kan ordered the selloff of yen one day after he survived a bid by rival Democratic Party of Japan leader Ichiro Ozawa to unseat him. The markets were taken by surprise, thinking that the defeat of Ozawa, who had called for stronger action to halt the appreciation of the yen, lessened the likelihood of an intervention.

The Japanese currency had hit a series of 15-year highs versus the dollar. By late Wednesday, the yen had dropped nearly 3 percent in relation to the greenback. On Thursday, Kan warned that additional interventions were possible, pledging to take "resolute action" to further reduce the value of the yen.

Japan is the first of the old-line economic powers to intervene in currency markets in response to the global crisis, but the practice is more general and it is spreading. South Korea, Thailand and Singapore have all seen their currencies rise some 30 percent versus the Chinese renminbi. They and Taiwan have been active in currency markets, purchasing dollars to slow the rise of their currencies.

Brazilian Finance Minister Guido Mantega said this week that his country was readying a dollar-buying strategy to curb the appreciation of his country's currency, the real.

While the US and European central banks and governments have not officially commented on the Japanese action, they have let it be known that they deem it to be hostile to their interests. Jean-Claude Juncker, who chairs the 16-member group of euro zone finance ministers, said, "Unilateral actions are not an appropriate way to deal with global imbalances."

US Congressman Sander Levin (Democrat from Michigan), who chairs the House Ways and Means Committee, suggested at Thursday's hearing on Chinese currency policy that Japan's intervention meant it had a "predatory exchange rate policy."

The Japanese move set off warnings of an outbreak of competitive currency devaluations, similar to those that contributed in the 1930s to a collapse in world trade. "It almost gives everyone else the right to intervene unilaterally and trigger a competitive devaluation process," said Noriko Hama of Japan's Doshisha University.

The Wall Street Journal quoted Denis Gould, AXA Investment Managers' director of investment for Asia, as doubting the long-term effectiveness of unilateral interventions in lowering the value of the yen. "To make this move stick," he said, "it needs the US to play, as well as the Chinese." He continued, "Nobody will do it in a coordinated manner because nobody wants their currency going up. Everywhere in the world there are problems with economic growth."

Ted Truman of the Peterson Institute in Washington said, "This action is symptomatic of the sense that at the moment it is every country for itself."

Thursday's testimony by US Treasury Secretary Geithner before the Senate Banking Committee and the House Ways and Means Committee was staged for the purpose of ratcheting up pressure on China. Treasury is required under law to report to Congress by October 15 on international currency relations, and name those countries deemed to be "currency manipulators." Any country so designated is subject to tariffs and other penalties on its exports.

The hearings became a forum for legislators of both parties to fulminate against China, assuming a populist pose of defending American jobs. They exemplified the reactionary use of economic nationalism to divert popular anger away from the American ruling class and government and scapegoat other countries--in this case China--for the social disaster produced by US capitalism.

Prior to the hearings, 100 members of the House of Representatives, the majority of them Democrats, sent a letter to House Speaker Nancy Pelosi calling on her to bring to a vote a bipartisan bill mandating the government to impose tariffs and other penalties on countries that undervalue their currency.

Earlier in the week, the United Steelworkers union filed a complaint with the US trade representative against Chinese practices in the renewable energy field.

The Obama administration, for its part, announced on Thursday the bringing of two cases against China before the World Trade Organization. One accuses China of blocking imports of a specialty steel product and the other of denying US credit card companies access to its markets.

In opening the Senate Banking Committee hearing, Chairman Christopher Dodd (Democrat of Connecticut) declared China a currency manipulator and said its "economic and trade policies" present "roadblocks to our recovery." He went on to accuse China of stealing intellectual property, violating international trade agreements and dumping goods. He also denounced China for acquiring national resources in developing countries and building up its military.

In his opening statement, the ranking Republican on the committee, Richard Shelby of Alabama, declared, "There is no question that China manipulates its currency in order to subsidize Chinese exports. The only question is: Why is the administration protecting China by refusing to designate it as a currency manipulator?"

Senator Charles Schumer, a New York Democrat, said, "China's currency manipulation is like a boot on the throat of our recovery and this administration refuses to try to get China to remove that boot."

In his statement to the committee, Geithner dismissed as inadequate China's moves since June to allow the renminbi to appreciate versus the dollar. The Chinese currency has risen about 1.5 percent since then. On the day of the hearings, it had its strongest close on Shanghai markets since it began trading in 1994.

Geithner indicated a reluctance to officially declare China a currency manipulator and he did not take a position on the anti-Chinese bill in the House. But he stated categorically that the renminbi was undervalued.

"We are concerned," he said, "as are many of China's trading partners, that the pace of appreciation has been too slow and the extent of appreciation too limited… China needs to allow significant, sustained appreciation over time to correct this undervaluation and allow the exchange rate to full reflect market forces."

The treasury secretary suggested that China should raise its exchange rate by at least 20 percent and issued a thinly veiled threat, noting that "China has a very substantial economic stake in access to the US market."

How Corporations Own the US Congress

How Corporations Own the US Congress

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With the November elections quickly approaching, the majority of Americans will be thinking one thing: "Who cares?” This apathy isn't due to ignorance, as some accuse. Rather, working people's disinterest in the two party system implies intelligence: millions of people understand that both the Democrats and Republicans will not represent their interests in Congress.

This begs the question: Whom does the two party system work for? The answer was recently given by the mainstream The New York Times, who gave the nation an insiders peek on how corporations "lobby" (buy) congressmen. The article explains how giant corporations — from Wall-mart to weapons manufacturers — are planning on shifting their hiring practices for lobbyists, from Democratic to Republican ex-congressmen in preparation for the Republicans gaining seats in the upcoming November elections:

"Lobbyists, political consultants and recruiters all say that the going rate for Republicans — particularly current and former House staff members — has risen significantly in just the last few weeks, with salaries beginning at $300,000 and going as high as $1million for private sector [corporate lobbyist] positions." (September 9, 2010)

Congressmen who have recently retired make the perfect lobbyists: they still have good friends in Congress, with many of these friends owing them political favors; they have connections to foreign Presidents and Kings; and they also have celebrity status that gives good PR to the corporations.

Often, these congressmen have done favors for the corporation that is now hiring them, meaning, that the corporations are rewarding the congressmen for services rendered while in office, offering them million dollar lobbyist jobs (or seats on the corporate board of directors) that requires little to no work.

The same New York Times article revealed that the pay for 13,000 lobbyists [!] currently bribing Congress is a combined $3.5 billion. It was also explained how some lobbying firms keep an equal amount of Democrats and Republicans on hand, so they can be prepared for any eventuality in the elections.

This phenomenon is more than a little un-democratic: when millions of people vote for a candidate, the outcomes are quickly manipulated and controlled before the election even happens.

Interestingly, the corporate-directed Wall Street Journal wrote a similar article in 2008, as the Democrats had begun to dominate politics in Washington:

"Washington's $3 billion lobbying industry has begun shedding Republican staffers [politicians], snapping up Democratic operatives [politicians] and entire firms, a shift that started even before Tuesday's ballots were counted and Democrat Barack Obama captured the presidency." (November 5, 2008)

This article was appropriately titled “Lobbyists Put Democrats Out Front as Winds Shift.”

The corporate money flows from party to party, so that the same goals are achieved: higher profits for corporations. The sums thrown at these politicians are mind boggling: the Associated Press reported that the corporate-orientated Chamber of Commerce spent "... nearly $190 million since Barack Obama became president in January 2009." (August 21, 2010)

These numbers explain the "deeper" differences between Democrats and Republicans — money. Each party is a machine that vies for power because this power carries with it vast sums of corporate money. The longer a party is in office and the more connections it makes, the more its net worth to corporations, the more that these rewards can be spread to the different layers of the party. There is indeed a real-life, nasty fight between the Republican and Democratic Parties to dominate this corporate money.

One "interest group" that ex-Congressmen don't work for is labor unions. Unions spend millions of dollars to help get Democrats elected, and millions more is spent trying to get their ear while they're in office.

But unions cannot out-spend the banks; and they can't offer millionaire retirement packages to retired Senators. The corporate retirement plans of Congressmen prove where their minds are while in office, and whose interests are being looked after.
Unions cannot continue to pretend that the Democrats are their "friends.” Labor has very little to show for this dysfunctional, decades-long friendship: union membership continues to shrivel as do jobs, wages and benefits for workers – a losing strategy if ever there was one.

A “lesser of two evils” approach to politics equals evil politicians for labor, no matter who wins. In fact, the lesser-evil Democrats have become increasingly evil over the years, to the point where the party as a whole is more Conservative than the Nixon-era Republicans.
The point has been reached where — in various states — Democratic governors are being endorsed by unions after promising to attack the wages and benefits of public workers!

To get out of this vicious, dead-end cycle, unions could unite their strength to form coalitions that promote independent labor candidates: 100 percent funded by labor to govern 100 percent in the interest of working people. All other roads lead back to the corporate lobbyists.

Poverty Rises as Wall Street Billionaires Whine

Poverty Rises as Wall Street Billionaires Whine

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The ranks of the working-age poor in the United States climbed to the highest level since the 1960s as the recession threw millions of people out of work last year, leaving one in seven Americans in poverty. The overall poverty rate climbed to 14.3 per cent, or 43.6 million people, the Census Bureau said yesterday in its annual report on the economic well-being of US households.

While 43.6 million Americans live in poverty, the richest men of finance sure are getting pissy. First Steve Schwartzman, head of the Blackrock private equity company, compares the Obama administration's effort to close billionaires' tax loopholes to "the Nazi invasion of Poland." Then hedge fund mogul David Loeb announces that he's abandoning the Democrats because they're violating "this country's core founding principles" -- including "non-punitive taxation, Constitutionally-guaranteed protections against persecution of the minority, and an inexorable right of self-determination." Instead of showing their outrage about the spread of poverty in the richest nation on Earth, the super-rich want us to pity them?

Why are Wall Street's billionaires so whiny? Is it really possible to make $900,000 an hour (not a typo -- that's what the top ten hedge fund managers take in), and still feel aggrieved about the way government is treating you? After you've been bailed out by the federal government to the tune of $10 trillion (also not a typo) in loans, asset swaps, liquidity and other guarantees, can you really still feel like an oppressed minority?

You'd think the Wall Street moguls would be thankful. Not just thankful -- down on their knees kissing the ground taxpayers walk on and hollering hallelujah at the top of their lungs! These guys profited from puffing up the housing bubble, then got bailed out when the going got tough. (Please see The Looting of America for all the gory details.) Without taxpayer largess, these hedge fund honchos would be flat broke. Instead, they're back to hauling in obscene profits.

These billionaires don't even have to worry about serious financial reforms. The paltry legislation that squeaked through Congress did nothing to end too big and too interconnected to fail. In fact, the biggest firms got even bigger as they gobbled up troubled banks, with the generous support of the federal government. No bank or hedge fund was broken up. Nobody was forced to pay a financial transaction tax. None of the big boys had a cap placed on their astronomical wealth. No one's paying reparations for wrecking the US economy. The big bankers are still free to create and trade the very derivatives that catapulted us into this global crisis. You'd think the billionaires would be praying on the altar of government and erecting statues on Capital Hill in honor of St. Bailout.

Instead, standing before us are these troubled souls, haunted by visions of persecution. Why?

The world changed. Before the bubble burst, these people walked on water. Their billions proved that they were the best and the brightest -- not just captains of the financial universe, but global elites who had earned a place in history. They donated serious money to worthy causes -- and political campaigns. No one wanted to mess with them.

But then came the crash. And the things changed for the big guys -- not so much financially as spiritually. Plebeians, including me, are asking pointed questions and sometimes even being heard, both on the Internet and in the mainstream media. For the first time in a generation, the public wants to know more about these emperors and their new clothes. For instance:

• What do these guys actually do that earns them such wealth?
• Is what they do productive and useful for society? Is there any connection between what they earn and what they produce for society?
• Did they help cause the crash?
• Did these billionaires benefit from the bailouts? If so, how much?
• Are they exacerbating the current unemployment and poverty crisis with their shenanigans?
• Why shouldn't we eliminate their tax loopholes (like carried interest)?
• Should their sky-high incomes be taxed at the same levels as during the Eisenhower years?
• Can we create the millions of jobs we need if the billionaires continue to skim off so much of our nation's wealth??
• Should we curb their wealth and political influence?

How dare we ask such questions! How dare we consider targeting them for special taxes? How dare we even think about redistributing THEIR incomes... even if at the moment much of their money comes directly from our bailouts and tax breaks?

It's true that the billionaires live in a hermetically sealed world. But that doesn't mean they don't notice the riffraff nipping at their heels. And they don't like it much. So they've gotten busy doing what billionaires do best: using their money to shield themselves. They're digging into their bottomless war chests, tapping their vast connections and using their considerable influence to shift the debate away from them and towards the rest of us.

We borrowed too much, not them. We get too much health care, not them. We retire too soon, not them. We need to tighten our belts while they pull in another $900,000 an hour. And if we want to cure poverty, we need to get the government to leave Wall Street alone. Sadly, their counter-offensive is starting to take hold.

How can this happen? Many Americans want to relate to billionaires. They believe that all of us are entitled to make as much as we can, pretty much by any means necessary. After all, maybe someday you or I will strike it rich. And when we do, we sure don't want government regulators or the taxman coming around!

Billionaires are symbols of American individual prowess and virility. And if we try to hold them back or slow them down, we're on the road to tyranny. Okay, the game is rigged in their favor. Okay, they got bailed out while the rest of us didn't -- especially the 29 million people who are jobless or forced into part-time work. But what matters most is that in America, nothing can interfere with individual money-making. That only a few of us actually make it into the big-time isn't a bad thing: It's what makes being rich so special. So beware: If we enact even the mildest of measures to rein in Wall Street billionaires, we're on the path to becoming North Korea.

Unfortunately, if we don't adjust our attitudes, we can expect continued high levels of unemployment and more people pushed below the poverty line. It's not clear that our economy will ever recover as long as the Wall Street billionaires keep siphoning off so much of our wealth. How can we create jobs for the many while the few are walking off with $900,000 an hour with almost no new jobs to show for it? In the old days, even robber barons built industries that employed people -- steel, oil, railroads. Now the robber barons build palaces out of fantasy finance. We can keep coddling our financial billionaires and let our economy spiral down, or we can make them pay their fair share so we can create real jobs. These guys crashed the economy, they killed billions of jobs, and now they're cashing in on our bailout. They owe us. They owe the unemployed. They owe the poor.

Dwight D. Eisenhower was no radical, but he accepted the reality: If America was going to prosper -- and pay for its costly Cold War -- the super-rich would have to pony up. It was common knowledge that when the rich grew too wealthy, they used their excess incomes to speculate. In the 1950s, memories of the Great Depression loomed large, and people knew that a skewed distribution of income only fueled speculative booms and disastrous busts. On Ike's watch, the effective marginal tax rate for those earning over $3 million (in today's dollars) was over 70 percent. The super-rich paid. As a nation we respected that other important American value: advancing the common good.

For the last thirty years we've been told that making as much as you can is just another way of advancing the common good. But the Great Recession erased that equation: The Wall Streeters who made as much as they could undermined the common good. It's time to balance the scales. This isn't just redistribution of income in pursuit of some egalitarian utopia. It's a way to use public policy to reattach billionaires to the common good.

It's time to take Eisenhower's cue and redeploy the excessive wealth Wall Street's high rollers have accumulated. If we leave it in their hands, they'll keep using it to construct speculative financial casinos. Instead, we could use that money to build a stronger, more prosperous nation. We could provide our people with free higher education at all our public colleges and universities -- just like we did for WWII vets under the GI Bill of Rights (a program that returned seven dollars in GDP for every dollar invested). We could fund a green energy Manhattan Project to wean us from fossil fuels. An added bonus: If we siphon some of the money off Wall Street, some of our brightest college graduates might even be attracted not to high finance but to jobs in science, education and healthcare, where we need them.

Of course, this pursuit of the common good won't be easy for the billionaires (and those who indentify with them.). But there's just no alternative for this oppressed minority: They're going to have to learn to live on less than $900,000 an hour.

U.S. Consumer Sentiment Index Unexpectedly Declines

U.S. Consumer Sentiment Index Unexpectedly Declines

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Confidence among U.S. consumers unexpectedly dropped to a one-year low in September, indicating the biggest part of the economy is being handcuffed by a struggling labor market.

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to 66.6 from 68.9 in August, the group said today. This month’s reading was less than the most pessimistic forecast in a Bloomberg News survey.

Flagging optimism with unemployment close to a 26-year high may increase the risk consumers will cut back on their purchases, which account for 70 percent of the economy. Staff reductions at companies such as FedEx Corp. indicate it will take years to recover the 8.4 million jobs lost in the recession.

“Already cautious consumers are even more cautious,” said Jim O’Sullivan, global chief economist at MF Global Ltd. in New York. “Consumer spending has certainly been a weak part of the recovery and there is no sign in these numbers of any sudden change in that.”

To attract shoppers, companies such as Wal-Mart Stores Inc. and Kroger Co. are discounting merchandise. The U.S. cost of living, minus food and energy prices, was unchanged in August, the Labor Department said today. The overall consumer price index rose 0.3 percent, reflecting in part more expensive gasoline.

A limited risk of inflation and a slowing economy help explain why economists project the Federal Reserve will hold interest rates close to zero until late next year.

Boosting Growth

“These numbers won’t be a surprise to Fed policy makers,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York, who accurately forecast the consumer price figures. “They need to worry about unemployment and boosting growth and not worry about inflation.”

Stocks rose, with the Standard & Poor’s 500 Index completing the longest weekly rally since April, as better-than- estimated earnings at technology companies overshadowed the drop in confidence. The S&P 500 gained 0.1 percent to 1,125.59 at the 4 p.m. close in New York. The yield on the 10-year Treasury note fell to 2.74 percent from 2.76 percent late yesterday.

Economists forecast the confidence measure would rise to 70, according to the Bloomberg survey median of 65 economists whose estimates ranged from 68 to 73. The index, which declined this month to the lowest level since August 2009, averaged 89 in the five years leading up to the recession that began in December 2007.

Lower Expectations

The University of Michigan gauge of consumer expectations for six months from now, which more closely projects the direction of consumer spending, decreased to 59.1, the lowest since March 2009.

About 67 percent of Americans in the Michigan survey said they anticipate “bad financial conditions” in the coming year, according to the report.

All of the decrease in the consumer sentiment index was recorded among households with incomes above $75,000. The decline in that group reflected a decrease in sentiment about personal finance, buying plans and prospects for the U.S. economy. Confidence rose among lower-income households.

The disparity centers around the debate on Capitol Hill over whether to extend the Bush-era tax cuts. A prolonged delay in extending the reductions would be detrimental to the economic recovery, the report said.

Obama’s Ratings

President Barack Obama’s approval ratings have slipped as economic growth slowed this year and employment stagnated. Fifty-six percent of voters said they disapproved of his handling of the economy, according to a poll by Quinnipiac University taken Aug. 31 to Sept. 7.

The University of Michigan’s gauge of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items such as cars, rose to 78.4 from 78.3 in the prior month.

As Americans remain cautious about spending, retailers such as Wal-Mart are feeling the pinch.

“Our customer remains challenged,” William Simon, president and chief operating officer of Wal-Mart’s U.S. operations, said at an analyst presentation Sept. 15. “We need to figure out how to operate in this environment.”

Second-quarter earnings were not what Wal-Mart “wanted” them to be, Simon said. The world’s largest retailer is experiencing a rising number of transactions being paid for with government-assistance programs and seeing some customers wait to buy baby formula until paychecks or assistance checks are issued, he said.


FedEx, the second-largest U.S. package-shipping company, yesterday said it will eliminate 1,700 jobs, less than 1 percent of its global workforce.

“We expect a phase of somewhat slower economic growth going forward,” Chief Executive Officer Fred Smith said on a conference call with analysts. “Slower growth is consistent with historical business cycles.”

The preliminary Thomson Reuters/University of Michigan consumer confidence report reflects about 300 responses, compared with 500 households for the final survey.

Forty-four million living in poverty in the US

Forty-four million living in poverty in the US

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The number of people living in poverty in America rose to 43.6 million in 2009, the US Census Bureau reported Thursday. This is the largest number since the agency began making such estimates 50 years ago and represents an increase of 3.8 million compared to 2008.

As of last year, one in every seven Americans was poor, according to the government’s definition of poverty. The official poverty rate of 14.3 percent is the highest since 1994.

The poverty rate jumped more than a full percentage point, from 13.2 percent in 2008. There were 8.8 million families living in poverty in 2009, including one child in every five. This is the same rate of child poverty that existed nearly five decades ago, when President Lyndon B. Johnson announced his “War on Poverty.”

The census report gives something of a historical dimension to the fluctuations in the poverty rate in the United States. The 2009 total of 43.6 million is the highest figure since the Census Bureau first began estimating poverty in 1959, arriving at a total of 40 million. The number living in poverty fell to 30 million by 1965, as economic conditions improved during the postwar boom. The “War on Poverty” launched by Lyndon Johnson in that year had some success, cutting the number of poor to a low of 23 million just before the 1974-75 recession. The number living in poverty rose sharply in the 1980s, reaching 40 million 1993, then fell significantly to 31 million in 1999. It has increased steadily since then, a process that accelerated dramatically with the onset of the slump.

Reflecting the impact of the economic slump and mass layoffs and wage-cutting, the increase in poverty was concentrated among working-age adults and their children, with the poverty rate for those 65 and older actually falling from 9.7 percent to 8.9 percent. The poverty rate for children rose from 19.4 percent to 20.7 percent, and the poverty rate for working-age adults rose from 11.9 percent to 12.7 percent.

Poverty increased for all racial and ethnic groups, but was far higher for blacks and Hispanics. The poverty rate for blacks was 25.8 percent, and for Hispanics 25.3 percent. For whites the poverty rate was 9.4 percent, up from 8.6 percent in 2008.

An entire section of the report was devoted to health insurance coverage. The massive elimination of jobs over the past two years has had a devastating effect on health care coverage, which in the United States is largely employment-based.

The number of people without health insurance topped the 50 million mark in 2009 for the first time since such statistics began to be collected, in 1987. The figure rose from 46.3 million in 2008.

Some 16.7 percent of the population is without health coverage, up from 15.4 percent in 2008. This figure is understated, since an individual had to be without coverage for the entire year to be counted as uninsured. A worker laid off in July 2009 and losing his or her coverage three months later would be counted as insured for the year.

The number of people with government-sponsored health coverage rose from 87.4 million to 93.2 million due to increased enrolment in Medicaid, Medicare and the Children’s Health Insurance Program. But this was more than offset by a drop in the number of people with private insurance coverage, which fell from 201 million to 194.5 million. Only 55.8 percent of the population has job-based health insurance.

Other figures reported in the Census Bureau report document the deepening social crisis in the United States:

• Household income stagnated in 2009, declining slightly to $49,777, from $50,112 in 2008.

• Women who worked full-time, year-round earned only 77 percent of the income of men who worked similar hours.

• Median income declined between 2008 and 2009 by 4.4 percent for black households and by 1.6 percent for non-Hispanic white households.

• Regionally, median income dropped 2.1 percent last year in the Midwest, hardest hit by the collapse of industry, 1.9 percent in the West, the center of the housing collapse, and was unchanged in the South and Northeast.

• Compared to the pre-recession peak in 1999, median household income was down 11.8 percent for blacks, 7.9 percent for Hispanics, 5.7 percent for Asians and 4.2 percent for whites.

• Income inequality continues to increase. In 2009, the top 20 percent received 50.3 percent of all income, and the top 5 percent received 21.7 percent of all income.

• Even before the onset of the recession, poverty was a familiar experience to one-third of all Americans. From 2004 to 2007, some 31.6 percent of the population lived in poverty for at least one period of two months or more.

The current slump has already driven up the poverty rate by 1.9 percentage points and the total living in poverty by 6.3 million, including 2.1 million children. This is larger than during any other recession since World War II, with the exception of the 1980-81 and 1981-82 recessions combined, when the number living in poverty rose by 10 million.

Equally significant is the large number of Americans just barely above the official poverty line, subsisting on incomes that are completely inadequate for a decent life. Extended unemployment benefits, for example, kept 3 million families above the poverty line last year. These benefits were allowed to expire three times this year already, and are likely to end completely after the November election, plunging millions of working people into destitution.

Commenting on the poverty figures, Isabel Sawhill of the Brookings Institution, a liberal think tank, noted, “This adds 6.3 million new people to the ranks of the poor since 2007, before the recession began. The problem will get much worse long before it gets better.”

Sawhill added that her research suggested the recession would add 10 million people to the poverty rolls, including 6 million children, by the middle of this decade.

There is ample reason to believe that the actual poverty level is far higher than that reported by the Census Bureau. The official poverty threshold is set ridiculously low, at an annual income of $22,050 for a family of four or $10,830 for a single adult. It is not adjusted for geographical location, and accordingly greatly understates the poverty level in high-cost areas like New York City, Boston, Washington DC and California.

The census survey excludes significant sections of the population: more than 2 million prisoners, elderly people living in nursing homes and long-term-care hospitals, and students living in college dormitories. Many if not most of these would be classified as poor if they were not living in institutional settings.

The poverty line is also grossly out of date, since it is based on a 50-year-old formula derived from a period when food was the single largest expense in family budgets, most women did not work outside the home, most young people did not attend college, and the typical family had only one car. It therefore understates the impact of rising costs for health care, education, child care, transportation and other necessities.

In addition, as the census report noted, there has been a large increase in the number of individuals and families doubling up, mainly for economic reasons. Combining several families or unrelated individuals into a single household has the effect of reducing the official poverty rate, which is calculated on a household basis.

“If the poverty status of related subfamilies were determined by only their own income, their poverty rate would be 44.2 percent,” David Johnson, chief of the Housing and Household Economic Statistics Division at the US Census Bureau, told the Wall Street Journal. “When their poverty status is determined based on the resources of all related household members, it is about 17 percent.”

The number of multifamily households increased by 11.6 percent from 2008 to 2010, and the proportion of adults 25-34 living with their parents rose from 12.7 percent in 2008 to 13.4 percent in 2010. The poverty rate for these young adults was 8.5 percent when they were considered part of their parents’ household, but would have been 43 percent if they had been living on their own.

The poverty figures demonstrate both the bankruptcy of American capitalism and the failure of the Obama administration. The White House greeted them with a perfunctory nod.

Obama issued a five-paragraph statement conceding that the census data “illustrates just how tough 2009 was,” while boasting that the stimulus bill adopted early last year had prevented an even worse situation from developing.

“A historic recession does not have to translate into historic increases in family economic insecurity,” he argued. “Because of the Recovery Act and many other programs providing tax relief and income support to a majority of working families—and especially those most in need—millions of Americans were kept out of poverty last year.”

“It could have been worse” is the only argument the Obama administration can make heading into the fall election campaign, but it is doubtful that the millions of workers who have lost their jobs, health insurance and homes over the past two years draw any comfort from it.

Obama’s statement combined this minimizing of the crisis with a concluding declaration that: “For all of our challenges, I continue to be inspired by the dedication and optimism of America’s workers, and I am confident that we will emerge from this storm with a stronger economy.”

This rhetorical flourish might be translated as follows: As the chief political representative of American capitalism, I am amazed that there has not yet been a mass upheaval among American workers against both my government and the financial aristocracy it serves. I hope to be able to delude working people with rhetoric about “hope” and “change” for at least a few more years.

While arrogantly dismissing the plight of tens of millions of poverty-stricken Americans in a brief written statement, Obama devoted most of his working day to meeting with two groups of corporate CEOs: the President’s Export Council, which seeks to promote the competitiveness of US industries by cutting their costs, including labor costs; and leaders of 100 of the biggest corporations, who gathered to insure that the administration’s education policy is aligned with the needs of corporate America.

Real Versus Fake Crises: Concealing The Risk of An All Out Nuclear War

Real Versus Fake Crises: Concealing The Risk of An All Out Nuclear War

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We have reached a turning point in our history. The US and its allies are preparing to launch a nuclear war with devastating consequences.

During the Cold War, the concept of "mutual assured destruction" (MAD) was put forth. An understanding of the consequences of nuclear war largely contributed to avoiding the outbreak of war between the US and the Soviet Union.

Today, in the post-Cold war era, no such understanding prevails.

The spectre of a nuclear holocaust, which haunted the world for half a century has been relegated to the status of "collateral damage".

This military adventure in the real sense of the word threatens the future of humanity.

While one can conceptualize the loss of life and destruction resulting from present-day wars including Iraq and Afghanistan, it is impossible to assess or fully comprehend the devastation which would result from a Third World War, using "new technologies" and advanced weapons systems, until it actually occurs and becomes a reality.

A sequence of US sponsored wars characterizes a period of our history euphemistically referred to as "the post-War era". The US led war in Afghanistan has been ongoing, in various stages, for thirty-one years. Iraq has been under US and allied military occupation for more than seven years.

We are living history but at the same time we are unable to comprehend the events which shape our future and which are currently unfolding in front of our very eyes.

The details of ongoing war preparations in relation to Iran have been withheld from the public eye. (See See Michel Chossudovsky, Preparing for World War III, Targeting Iran, Global Research, August 1, 2010, Towards a World War III Scenario? The Role of Israel in Triggering an Attack on Iran, August 13, 2010)

The media is involved in acts of camouflage. The devastating impacts of a nuclear war are either trivialized or not mentioned. Meanwhile, public opinion has its eyes rivetted on what might be described as "fake crises".

A Third World War is no longer a hypothetical scenario. Already in 2007, president Bush had hinted in no uncertain terms that if Iran did not comply with US demands, we might "reluctantly" be forced into in a World War III situation:

" We got a leader in Iran who has announced that he wants to destroy Israel. So I've told people that if you're interested in avoiding World War III, it seems like you ought to be interested in preventing them from have the knowledge necessary to make a nuclear weapon. I take the threat of Iran with a nuclear weapon very seriously...." (George W. Bush, 17 October 2007)

Grin and Laugh: "Here's Bush's expression while saying the words "World War Three" (Huffington Post, 17 October 2007)

Real versus Fake Crises

In an utterly twisted logic, World War III is presented as a means to preserving World Peace.

Iran is blamed for refusing to abide by the "reasonable demands" of "the international community".

Realities are twisted and turned upside down. Iran is being accused of wanting to start World War III. Inherent in US military doctrine, the victims of war are often heralded as the aggressor.

World War III is upheld as a bona fide humanitarian undertaking which contributes to global security. In a bitter irony, those who decide on the use of nuclear weapons believe their own propaganda. President and Commander in Chief Barack Obama believes his own lies.

Neither the War nor the worldwide economic depression are understood as part of an unprecedented crisis in World history. Ironically, the dangers to humanity of an all out nuclear war do not instil fear and public concern.

Instead, fake "crises" -- e.g. a global warming, a Worldwide flu pandemic, a "false flag" nuclear attack by "Islamic terrorists"--, are fabricated by the media, the governments, the intelligence apparatus and the Washington think tanks.

An understanding of fundamental social and political events is replaced by a World of sheer fantasy, where "evil folks" are lurking. The purpose of these "fake crises" is to obfuscate the real crisis as well as instil fear and insecurity among the population:

"The whole aim of practical politics is to keep the populace alarmed ... by menacing it with an endless series of hobgoblins, all of them imaginary... The urge to save humanity is almost always only a false face for the urge to rule it." (H. L. Menken)

While the real danger of nuclear war is barely acknowledged, these "fake crises" are invariably front page news.

  • Mass unemployment, foreclosures and poverty are not characteristic of a (social) crisis.
  • The legalization of torture and targeted political assassinations is not part of a (constitutional) crisis. Torturing and killing potential terrorists are intended to "make the world safer".
  • War waged on humanitarian grounds is considered a "solution" to a crisis rather than its cause.
    Economic Depression is not mentioned because the economic recession is said to be over. In other words there is no economic crisis.

Three Types of Fake Crises

1. A Nuclear Attack on America by Al Qaeda

"Sooner or later there will be a nuclear 9/11 [by Islamic terrorists] in an American city or that of a US ally... A terrorist nuclear attack against an American city could take many forms. A worst case scenario would be the detonation of a nuclear device within a city. Depending upon the size and sophistication of the weapon, it could kill hundreds of thousands or even millions of people." David Krieger, Is a Nuclear 9/11 in Our Future?, Nuclear Age Peace Foundation, October 6, 2003

The nuclear threat comes from "non-State" organizations, with limited advanced weapons' capabilities rather than from known nuclear powers (nuclear States).

2 A Global Public Health Emergency. A Global Flu Pandemic

"As many as 2 billion people could become infected [H1N1] over the next two years — nearly one-third of the world population." (World Health Organization as reported by the Western media, July 2009, emphasis added)

"Swine flu could strike up to 40 percent of Americans over the next two years and as many as several hundred thousand could die if a vaccine campaign and other measures aren't successful." (Official Statement of the US Administration, Associated Press, 24 July 2009).

"The U.S. expects to have 160 million doses of swine flu vaccine available sometime in October", (Associated Press, 23 July 2009)

"Vaccine makers could produce 4.9 billion pandemic flu shots per year in the best-case scenario", (Margaret Chan, Director-General, World Health Organization (WHO), quoted by Reuters, 21 July 2009)

3. The Perils of Global Warming

"The headline figures are: 300,000 deaths and 300 million people affected every year [by global warming]" (Greenpeace, Deaths and displacement due to climate change set to grow. June 5, 2009)

"Climate change is life or death.
It is the new global battlefield." (Wangari Maathai, Nobel Peace Laureate)

"Two thousand scientists, in a hundred countries, engaged in the most elaborate, well organized scientific collaboration in the history of humankind, have produced long-since a consensus that we will face a string of terrible catastrophes unless we act to prepare ourselves and deal with the underlying causes of global warming. (Al Gore, speech at National Sierra Club Convention, Sept. 9, 2005)

"The ultimate concern is that if runaway global warming occurred, temperatures could spiral out of control and make our planet uninhabitable.... this is the first time that a species has been at risk of generating its own demise.… The dinosaurs dominated the earth for 160 million years. We are in danger of putting our future at risk after a mere quarter of a million years." (Michael Meacher, Former UK Minister for the Environment, quoted in the The Guardian, 14 February 2003, emphasis added)

The American Inquisition

Heralded as the "real threat", these fake crises constitute a cover-up of the "real crisis".

The objective is to distort the facts, create an atmosphere of fear and intimidation as well as quell popular dissent and resistance against the established political and economic order. We are dealing with an inquisitorial environment. In the words of Monty Python:

“Nobody expects the Spanish Inquisition! [Read the American inquisition] Our chief weapon is surprise [Read insecurity] ...surprise and fear...fear and surprise.... Our two weapons are fear and surprise...and ruthless efficiency .... Our *three* weapons are fear, surprise, and ruthless efficiency... and an almost fanatical devotion to the Pope [Read the US government].... Our *four* *Amongst* our weapons.... Amongst our weaponry...are such elements as fear, surprise.... I'll come in again.”

The fear campaign underlying a fake crisis is intended to obfuscate the real crisis --including the danger of nuclear war-- as well as disarm all forms of meaningful resistance and opposition.

Blackwater's Black Ops

Blackwater's Black Ops

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Over the past several years, entities closely linked to the private security firm Blackwater have provided intelligence, training and security services to US and foreign governments as well as several multinational corporations, including Monsanto, Chevron, the Walt Disney Company, Royal Caribbean Cruise Lines and banking giants Deutsche Bank and Barclays, according to documents obtained by The Nation. Blackwater's work for corporations and government agencies was contracted using two companies owned by Blackwater's owner and founder, Erik Prince: Total Intelligence Solutions and the Terrorism Research Center (TRC). Prince is listed as the chairman of both companies in internal company documents, which show how the web of companies functions as a highly coordinated operation. Officials from Total Intelligence, TRC and Blackwater (which now calls itself Xe Services) did not respond to numerous requests for comment for this article.

One of the most incendiary details in the documents is that Blackwater, through Total Intelligence, sought to become the "intel arm" of Monsanto, offering to provide operatives to infiltrate activist groups organizing against the multinational biotech firm.

Governmental recipients of intelligence services and counterterrorism training from Prince's companies include the Kingdom of Jordan, the Canadian military and the Netherlands police, as well as several US military bases, including Fort Bragg, home of the elite Joint Special Operations Command (JSOC), and Fort Huachuca, where military interrogators are trained, according to the documents. In addition, Blackwater worked through the companies for the Defense Intelligence Agency, the Defense Threat Reduction Agency and the US European Command.

On September 3 the New York Times reported that Blackwater had "created a web of more than 30 shell companies or subsidiaries in part to obtain millions of dollars in American government contracts after the security company came under intense criticism for reckless conduct in Iraq." The documents obtained by The Nation reveal previously unreported details of several such companies and open a rare window into the sensitive intelligence and security operations Blackwater performs for a range of powerful corporations and government agencies. The new evidence also sheds light on the key roles of several former top CIA officials who went on to work for Blackwater.

The coordinator of Blackwater's covert CIA business, former CIA paramilitary officer Enrique "Ric" Prado, set up a global network of foreign operatives, offering their "deniability" as a "big plus" for potential Blackwater customers, according to company documents. The CIA has long used proxy forces to carry out extralegal actions or to shield US government involvement in unsavory operations from scrutiny. In some cases, these "deniable" foreign forces don't even know who they are working for. Prado and Prince built up a network of such foreigners while Blackwater was at the center of the CIA's assassination program, beginning in 2004. They trained special missions units at one of Prince's properties in Virginia with the intent of hunting terrorism suspects globally, often working with foreign operatives. A former senior CIA official said the benefit of using Blackwater's foreign operatives in CIA operations was that "you wouldn't want to have American fingerprints on it."

While the network was originally established for use in CIA operations, documents show that Prado viewed it as potentially valuable to other government agencies. In an e-mail in October 2007 with the subject line "Possible Opportunity in DEA—Read and Delete," Prado wrote to a Total Intelligence executive with a pitch for the Drug Enforcement Administration. That executive was an eighteen-year DEA veteran with extensive government connections who had recently joined the firm. Prado explained that Blackwater had developed "a rapidly growing, worldwide network of folks that can do everything from surveillance to ground truth to disruption operations." He added, "These are all foreign nationals (except for a few cases where US persons are the conduit but no longer 'play' on the street), so deniability is built in and should be a big plus."

The executive wrote back and suggested there "may be an interest" in those services. The executive suggested that "one of the best places to start may be the Special Operations Division, (SOD) which is located in Chantilly, VA," telling Prado the name of the special agent in charge. The SOD is a secretive joint command within the Justice Department, run by the DEA. It serves as the command-and-control center for some of the most sensitive counternarcotics and law enforcement operations conducted by federal forces. The executive also told Prado that US attachés in Mexico; Bogotá, Colombia; and Bangkok, Thailand, would potentially be interested in Prado's network. Whether this network was activated, and for what customers, cannot be confirmed. A former Blackwater employee who worked on the company's CIA program declined to comment on Prado's work for the company, citing its classified status.

In November 2007 officials from Prince's companies developed a pricing structure for security and intelligence services for private companies and wealthy individuals. One official wrote that Prado had the capacity to "develop infrastructures" and "conduct ground-truth and security activities." According to the pricing chart, potential customers could hire Prado and other Blackwater officials to operate in the United States and globally: in Latin America, North Africa, francophone countries, the Middle East, Europe, China, Russia, Japan, and Central and Southeast Asia. A four-man team headed by Prado for countersurveillance in the United States cost $33,600 weekly, while "safehouses" could be established for $250,000, plus operational costs. Identical services were offered globally. For $5,000 a day, clients could hire Prado or former senior CIA officials Cofer Black and Robert Richer for "representation" to national "decision-makers." Before joining Blackwater, Black, a twenty-eight-year CIA veteran, ran the agency's counterterrorism center, while Richer was the agency's deputy director of operations. (Neither Black nor Richer currently works for the company.)

As Blackwater became embroiled in controversy following the Nisour Square massacre, Prado set up his own company, Constellation Consulting Group (CCG), apparently taking some of Blackwater's covert CIA work with him, though he maintained close ties to his former employer. In an e-mail to a Total Intelligence executive in February 2008, Prado wrote that he "recently had major success in developing capabilities in Mali [Africa] that are of extreme interest to our major sponsor and which will soon launch a substantial effort via my small shop." He requested Total Intelligence's help in analyzing the "North Mali/Niger terrorist problem."

In October 2009 Blackwater executives faced a crisis when they could not account for their government-issued Secure Telephone Unit, which is used by the CIA, the National Security Agency and other military and intelligence services for secure communications. A flurry of e-mails were sent around as personnel from various Blackwater entities tried to locate the device. One former Blackwater official wrote that because he had left the company it was "not really my problem," while another declared, "I have no 'dog in this fight.'" Eventually, Prado stepped in, e-mailing the Blackwater officials to "pass my number" to the "OGA POC," meaning the Other Government Agency (parlance for CIA) Point of Contact.

What relationship Prado's CCG has with the CIA is not known. An early version of his company's website boasted that "CCG professionals have already conducted operations on five continents, and have proven their ability to meet the most demanding client needs" and that the company has the "ability to manage highly-classified contracts." CCG, the site said, "is uniquely positioned to deliver services that no other company can, and can deliver results in the most remote areas with little or no outside support." Among the services advertised were "Intelligence and Counter-Intelligence (human and electronic), Unconventional Military Operations, Counterdrug Operations, Aviation Services, Competitive Intelligence, Denied Area Access...and Paramilitary Training."

The Nation has previously reported on Blackwater's work for the CIA and JSOC in Pakistan. New documents reveal a history of activity relating to Pakistan by Blackwater. Former Pakistani Prime Minister Benazir Bhutto worked with the company when she returned to Pakistan to campaign for the 2008 elections, according to the documents. In October 2007, when media reports emerged that Bhutto had hired "American security," senior Blackwater official Robert Richer wrote to company executives, "We need to watch this carefully from a number of angles. If our name surfaces, the Pakistani press reaction will be very important. How that plays through the Muslim world will also need tracking." Richer wrote that "we should be prepared to [sic] a communique from an affiliate of Al-Qaida if our name surfaces (BW). That will impact the security profile." Clearly a word is missing in the e-mail or there is a typo that leaves unclear what Richer meant when he mentioned the Al Qaeda communiqué. Bhutto was assassinated two months later. Blackwater officials subsequently scheduled a meeting with her family representatives in Washington, in January 2008.

Through Total Intelligence and the Terrorism Research Center, Blackwater also did business with a range of multinational corporations. According to internal Total Intelligence communications, biotech giant Monsanto—the world's largest supplier of genetically modified seeds—hired the firm in 2008–09. The relationship between the two companies appears to have been solidified in January 2008 when Total Intelligence chair Cofer Black traveled to Zurich to meet with Kevin Wilson, Monsanto's security manager for global issues.

After the meeting in Zurich, Black sent an e-mail to other Blackwater executives, including to Prince and Prado at their Blackwater e-mail addresses. Black wrote that Wilson "understands that we can span collection from internet, to reach out, to boots on the ground on legit basis protecting the Monsanto [brand] name.... Ahead of the curve info and insight/heads up is what he is looking for." Black added that Total Intelligence "would develop into acting as intel arm of Monsanto." Black also noted that Monsanto was concerned about animal rights activists and that they discussed how Blackwater "could have our person(s) actually join [activist] group(s) legally." Black wrote that initial payments to Total Intelligence would be paid out of Monsanto's "generous protection budget" but would eventually become a line item in the company's annual budget. He estimated the potential payments to Total Intelligence at between $100,000 and $500,000. According to documents, Monsanto paid Total Intelligence $127,000 in 2008 and $105,000 in 2009.

Reached by telephone and asked about the meeting with Black in Zurich, Monsanto's Wilson initially said, "I'm not going to discuss it with you." In a subsequent e-mail to The Nation, Wilson confirmed he met Black in Zurich and that Monsanto hired Total Intelligence in 2008 and worked with the company until early 2010. He denied that he and Black discussed infiltrating animal rights groups, stating "there was no such discussion." He claimed that Total Intelligence only provided Monsanto "with reports about the activities of groups or individuals that could pose a risk to company personnel or operations around the world which were developed by monitoring local media reports and other publicly available information. The subject matter ranged from information regarding terrorist incidents in Asia or kidnappings in Central America to scanning the content of activist blogs and websites." Wilson asserted that Black told him Total Intelligence was "a completely separate entity from Blackwater."

Monsanto was hardly the only powerful corporation to enlist the services of Blackwater's constellation of companies. The Walt Disney Company hired Total Intelligence and TRC to do a "threat assessment" for potential film shoot locations in Morocco, with former CIA officials Black and Richer reaching out to their former Moroccan intel counterparts for information. The job provided a "good chance to impress Disney," one company executive wrote. How impressed Disney was is not clear; in 2009 the company paid Total Intelligence just $24,000.

Total Intelligence and TRC also provided intelligence assessments on China to Deutsche Bank. "The Chinese technical counterintelligence threat is one of the highest in the world," a TRC analyst wrote, adding, "Many four and five star hotel rooms and restaurants are live-monitored with both audio and video" by Chinese intelligence. He also said that computers, PDAs and other electronic devices left unattended in hotel rooms could be cloned. Cellphones using the Chinese networks, the analyst wrote, could have their microphones remotely activated, meaning they could operate as permanent listening devices. He concluded that Deutsche Bank reps should "bring no electronic equipment into China." Warning of the use of female Chinese agents, the analyst wrote, "If you don't have women coming onto you all the time at home, then you should be suspicious if they start coming onto you when you arrive in China." For these and other services, the bank paid Total Intelligence $70,000 in 2009.

TRC also did background checks on Libyan and Saudi businessmen for British banking giant Barclays. In February 2008 a TRC executive e-mailed Prado and Richer revealing that Barclays asked TRC and Total Intelligence for background research on the top executives from the Saudi Binladin Group (SBG) and their potential "associations/connections with the Royal family and connections with Osama bin Ladin." In his report, Richer wrote that SBG's chair, Bakr Mohammed bin Laden, "is well and favorably known to both arab and western intelligence service[s]" for cooperating in the hunt for Osama bin Laden. Another SBG executive, Sheikh Saleh bin Laden, is described by Richer as "a very savvy businessman" who is "committed to operating with full transparency to Saudi's security services" and is considered "the most vehement within the extended BL family in terms of criticizing UBL's actions and beliefs."

In August Blackwater and the State Department reached a $42 million settlement for hundreds of violations of US export control regulations. Among the violations cited was the unauthorized export of technical data to the Canadian military. Meanwhile, Blackwater's dealings with Jordanian officials are the subject of a federal criminal prosecution of five former top Blackwater executives. The Jordanian government paid Total Intelligence more than $1.6 million in 2009.

Some of the training Blackwater provided to Canadian military forces was in Blackwater/TRC's "Mirror Image" course, where trainees live as a mock Al Qaeda cell in an effort to understand the mindset and culture of insurgents. Company literature describes it as "a classroom and field training program designed to simulate terrorist recruitment, training, techniques and operational tactics." Documents show that in March 2009 Blackwater/TRC spent $6,500 purchasing local tribal clothing in Afghanistan as well as assorted "propaganda materials—posters, Pakistan Urdu maps, etc." for Mirror Image, and another $9,500 on similar materials this past January in Pakistan and Afghanistan.

According to internal documents, in 2009 alone the Canadian military paid Blackwater more than $1.6 million through TRC. A Canadian military official praised the program in a letter to the center, saying it provided "unique and valid cultural awareness and mission specific deployment training for our soldiers in Afghanistan," adding that it was "a very effective and operationally current training program that is beneficial to our mission."

This past summer Erik Prince put Blackwater up for sale and moved to Abu Dhabi, United Arab Emirates. But he doesn't seem to be leaving the shadowy world of security and intelligence. He says he moved to Abu Dhabi because of its "great proximity to potential opportunities across the entire Middle East, and great logistics," adding that it has "a friendly business climate, low to no taxes, free trade and no out of control trial lawyers or labor unions. It's pro-business and opportunity." It also has no extradition treaty with the United States.

An Unsettling Protest in Israel

An Unsettling Protest in Israel

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Toward the end of August, a group of theater artists in Israel provoked an uproar when they declared that they would not perform at a new stop added to government-funded theatrical tours around the country. That actors, directors and playwrights have sparked controversy is nothing new in a nation where theater has always participated in the feisty public discourse. But this time, with Washington trying to resuscitate Israeli-Palestinian peace talks, their offstage action holds a mirror up to society with especially urgent exactitude.

The artists, members of some of Israel’s leading repertory theater companies, are refusing to cooperate with the government’s plan to have them perform in the new, $10 million, 530-seat cultural center in the West Bank settlement of Ariel. They are refusing because settlements like Ariel sprawl across Palestinian land occupied by Israel and are illegal under international law. The theater artists point out that performing in the settlement constitutes crossing the Green Line that demarcates the sovereign state of Israel and the lands it has occupied since 1967. They object to their government’s attempt to use them as part of its program to erase that boundary, to treat Ariel, and other settlements like it, as if they were simply a part of the state of Israel. These artists—more than sixty of them at this writing—refuse to be deployed in an effort to normalize the existence and continual expansion of the settlements; they refuse what they see as an effort to use culture to weave the occupation of Palestinian land into the national life of Israel.

Some of Israel’s most prominent authors and cultural personalities quickly responded to the protest with statements of support; a letter from 150 professors and scholars vowing not to participate in academic events in the settlements soon followed. So, too, did denunciations from the highest offices of the government. Prime Minister Benjamin Netanyahu called the artists’ declaration an attack on the state from within. The finance minister threatened to cut off funding to any cultural institution that boycotted settlements.

Critics of the protesting artists, among them the culture minister Limor Livnat, argue that settlers have as much right to see the theater productions their taxes pay for as their compatriots in Israel proper. But the artists aren’t unwilling to play for settlers. They’re unwilling to play in a settlement. They’re rejecting the settlers’ credo that the presence of an Israeli on Palestinian land turns the land into Israel.

Ariel, with a population of about 18,000, is one of the largest Jewish settlements in the West Bank. Already extending twelve miles past the Green Line, Ariel continues to grow. In January Israel announced the development of the Ariel University Center, with plans to triple the size of the campus of a local college and to build a neighborhood for housing the new faculty and staff. The settlement is one of the sites of the expansion criticized by President Obama last year, when he pushed Israel to adopt a freeze in new settlement construction as a step toward renewing peace negotiations (as every American president since settlements began in 1967 has had occasion to do).

Ariel cuts deep into the West Bank, blocking off villages from one another, forcing Palestinians to travel extra-long distances around the settlement to reach the area’s commercial center of Salfit. Villages to the north are cut off from Salfit altogether by Ariel’s bypass road. Salfit itself has no room to expand for economic development or population growth because Israel has claimed every bit of land around it, and a few years ago the Israeli army prevented the town from building a water-treatment plant. Meanwhile, according to the Israeli human rights organization B’Tselem, Ariel’s sewage runs down into the Palestinians’ agricultural valleys—a blatant metaphor for the way settlers’ privileges come at the cost of Palestinian human rights.

You can drive easily from Tel Aviv or Jerusalem onto the four-lane settlement road and arrive in this Jews-only bedroom community of pretty, red-roofed houses and suburban shopping centers—and the John Hagee Sports Center, named after the Texas televangelist who has donated millions of dollars to the settlement—and not notice that you’ve actually left Israel. The theater artists who will not play in Ariel are refusing because they want to break through this carefully constructed illusion of seamlessness to shine their spotlights on the true nature of such places.

Prime Minister Netanyahu has tried to discredit the protest by linking it to the call for an international boycott of Israel. But these theater artists are not boycotting their own Israeli institutions or towns; they are insisting on a distinction that Netanyahu seeks to elide. Their refusal to perform in Ariel is predicated on a recognition of the difference between the state of Israel and its illegal occupation of the Palestinian territories. The theater refuseniks are Israeli citizens, unwilling to accept their country’s occupation of the West Bank as a permanent condition, as anything other than a misbegotten and immoral policy to which opposition is demanded, not only by standards of human decency but by patriotism.

Last winter Netanyahu stated that Israel intends to annex Ariel. Such an annexation would kill any possibility of a contiguous Palestinian state. Even Ariel Sharon at least made a show of acknowledging the importance of dismantling some settlements for any meaningful peace negotiations to commence. We’ll never know how far Sharon would have gone; skepticism is as legitimate as the hope that in dire circumstances, people change. Whether a hardened ideologue like Netanyahu will change remains to be seen. His government’s furious reaction to the theater artists’ protest is an indication not only that he’s unlikely to bring to the peace talks a new tractability regarding the settlements, but also that the decades-long democratic openness to protest against the occupation is now imperiled by a bunker mentality from a coalition that owes its power in large measure to the settler movement.

Recent polls indicate that a majority of Israelis don’t agree with an internal boycott of the settlements. But often, principled and courageous actions are initially met by public disapproval; and just as often, principled and courageous action changes public opinion. These Israeli artists are acting out of love and concern for their fellow citizens and the Palestinian people. More than 150 American theater artists and scholars have signed a statement in support of their action, because we agree with them that the settlements are among the greatest obstacles to achieving a just and lasting peace in the Middle East.

Our Israeli colleagues are obeying not only their consciences but the mandates of their art. The best that theater can do is to confront truths that are difficult to countenance, to focus attention on specifics and subtleties that are too easily sacrificed to the rhetoric of strategy and propaganda. Like the best theater artists have always done, these refuseniks are attempting to create a space for imagining a different world.

Goldman: The ISM Manufacturing Index Will Collapse By 2011

Goldman: The ISM Manufacturing Index Will Collapse By 2011

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The ISM Index of U.S. manufacturing could collapse from its current 56.3 level to below 50, says Goldman Sachs. This would imply that manufacturing activity could contract, since any reading below 50 signifies shrinking output.

Goldman's Andrew Tilton:

The vigorous rebound in industrial activity that began in mid-2009 has begun to fade in recent months. This is already quite evident in the growth rate of industrial production, and to a lesser extent in the decline of the ISM manufacturing index from its peak in April.

We expect the ISM index to decline to 50 or below by early 2011. A significantly weaker ISM manufacturing index would be more consistent with a) the detail of the ISM report, specifically the small gap between the new orders and inventories indexes, b) the weighted average of regional factory surveys, c) the current rate of inventory growth, which has stabilized the manufacturing I/S ratio, d) the typical behavior of the ISM index after large inventory cycles such as the one we have just experienced, e) the recent sub-1% pace of final demand growth.

Note this is more than your run-of-the-mill growth slow-down double dip forecasts. We've heard a lot of those lately, and most are mis-using the term 'double dip' to mean any kind of deceleration. Here, rather, Goldman forecasting a real double dip, ie. a contraction of economic activity, for manufacturing. (Though not for overall American GDP, which they still expect to grow)


(Via Goldman Sachs, U.S. Daily, 16 September 2010)

More Bad News For Housing, As Foreclosures Gather Steam Again

More Bad News For Housing, As Foreclosures Gather Steam Again

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Are we seeing the next wave of the housing decline that everyone's been waiting for?

Foreclosure activity -- which would certainly be a key spur -- is back on the rise, says RealtyTrac:

RealtyTrac the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for July 2010, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 325,229 properties in July, a nearly 4 percent increase from the previous month but a nearly 10 percent decrease from July 2009. One in every 397 U.S. housing units received a foreclosure filing during the month.

“July marked the 17th consecutive month with a foreclosure activity total exceeding 300,000,” said James J. Saccacio, chief executive officer of RealtyTrac. “Declines in new default notices, which were down on a year-over-year basis for the sixth straight month in July, have been offset by near-record levels of bank repossessions, which increased on a year-over-year basis for the eighth straight month.”

Here's how the worst states look:


U.S. Home Seizures Reach Record for Third Time in Five Months

U.S. Home Seizures Reach Record for Third Time in Five Months

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U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc.

Bank repossessions climbed 25 percent from a year earlier to 95,364, the most since the Irvine, California-based data provider began keeping records in 2005. Foreclosure filings, including default and auction notices, fell 5 percent to 338,836. One out of every 381 U.S. households received a filing, RealtyTrac said today in a statement.

“We’re on track for a record year for homes in foreclosure and repossessions,” Rick Sharga, RealtyTrac’s senior vice president, said in a telephone interview. “There is no improvement in the underlying economic conditions.”

Foreclosures are contributing to a growing housing supply that may add as many as 12 million homes to the U.S. market. Demand is crumbling amid high unemployment and following the expiration of a federal homebuyer tax credit in April. Sales of new and existing homes fell in July to the lowest level on record. Home prices have fallen 28 percent since 2006, according to the S&P/Case-Shiller index of values in 20 U.S. cities.

About 2 million houses will be seized by lenders through 2011, according to Mark Zandi, chief economist of Moody’s Analytics in West Chester, Pennsylvania. Home sales this year will be 7 percent below the 2009 total, Fannie Mae, the largest U.S. mortgage finance company, said yesterday in a report.

Default notices are falling while seizures rise because lenders are trying to control the number of properties that enter the foreclosure process, RealtyTrac said. That doesn’t mean more owners are catching up on their mortgage payments, Sharga said.

‘Serious Price Depreciation’

“If the market is left to fend for itself, you may see more serious price depreciation,” he said. “Whether things fall precipitously depends on government and lenders controlling the inflow of new foreclosure actions.”

The number of homes that received default notices last month was 96,469, down 1 percent from July and 30 percent from a year earlier, RealtyTrac said. A default notice is the first stage of foreclosure. They peaked at 142,064 in April 2009.

A foreclosure auction, the second stage in the process, was scheduled on 147,003 properties, up 9 percent from July and 2 percent from August 2009. The record was 158,105 in March.

Bank seizures rose 3 percent from July and had their ninth straight monthly increase on a year-over-year basis, RealtyTrac said. The August total was 1.7 percent more than the previous record of 93,777 set in May.

Highest in Nevada

Nevada had the highest foreclosure rate for the 44th straight month. One in every 84 households got a notice, more than four times the national average. Filings fell 25 percent from a year earlier.

Florida had the second-highest rate, at one in every 155 households, two and a half times the U.S. average. Filings fell 8.9 percent from a year earlier. Arizona ranked third at one in 165 households, and California was fourth at one in 194.

Idaho ranked fifth at one in 220 households, with filings up 8.9 percent from July and 11 percent from a year earlier, RealtyTrac said. Utah, Georgia, Michigan, Illinois and Hawaii also ranked among the 10 highest rates.

Five states accounted for more than half of all U.S. filings, led by California’s 69,143, a fifth of the national total. Filings in the most populous state rose 3 percent from July and declined 25 percent from a year earlier.

Second in Filings

Florida ranked second with 56,877 filings, up 10 percent from July and down 9 percent from a year earlier. The state accounted for almost 17 percent of the U.S. total. Michigan was third at 17,764 filings, followed by Illinois at 16,808 and Arizona at 16,510.

Georgia, Texas, Ohio, Nevada and Washington rounded out the top 10, said RealtyTrac, which sells default data from more than 2,200 counties representing 90 percent of the U.S. population.

As many as 8 million homes that are owned or will be seized by banks have yet to reach the market, according to Oliver Chang, a U.S. housing strategist with Morgan Stanley in San Francisco. Owners of 3.8 million more homes said they are “very likely” to put them up for sale within six months if there is improvement, a survey by Seattle-based Zillow Inc. showed.

Vitamin D proven far better than vaccines at preventing influenza infections

Vitamin D proven far better than vaccines at preventing influenza infections

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(NaturalNews) If scientists discovered something that worked better than vaccines at preventing influenza, you'd think they would jump all over it, right? After all, isn't the point to protect children and adults from influenza?

A clinical trial led by Mitsuyoshi Urashima and conducted by the Division of Molecular Epidemiology in the the Department of Pediatrics at the Jikei University School of Medicine Minato-ku in Tokyo found that vitamin D was extremely effective at halting influenza infections in children. The trial appears in the March, 2010 issue of the American Journal of Clinical Nutrition (Am J Clin Nutr (March 10, 2010). doi:10.3945/ajcn.2009.29094)

The results are from a randomized, double-blind, placebo-controlled study involving 334 children, half of which were given 1200 IUs per day of vitamin D3. In other words, this was a "rigorous" scientific study meeting the gold standard of scientific evidence.

In the study, while 31 of 167 children in the placebo group contracted influenza over the four month duration of the study, only 18 of 168 children in the vitamin D group did. This means vitamin D was responsible for an absolute reduction of nearly 8 percent.

Flu vaccines, according to the latest scientific evidence, achieve a 1 percent reduction in influenza symptoms (

This means vitamin D appears to be 800% more effective than vaccines at preventing influenza infections in children.

To further support this, what really needs to be done is a clinical trial directly comparing vitamin D supplements to influenza vaccines with four total groups:

Group #1 receives a vitamin D placebo
Group #2 receives real vitamin D (2,000 IUs per day)
Group #3 receives an influenza vaccine injection
Group #4 receives an inert injection

Groups 1 and 2 should be randomized and double blind while groups 3 and 4 should also be randomized and double blind. The results would reveal the comparative effectiveness of vitamin D versus influenza vaccines.

Unfortunately, such a trial will never be conducted because vaccine pushers already know this trial would show their vaccines to be all but useless. So they won't subject vaccines to any real science that compares it to vitamin D.

Vitamin D also significantly reduced asthma in children

Getting back to the study, another fascinating result from the trial is that if you remove those children from the study who were already being given vitamin D by their parents, so that you are only looking at children who started out with no vitamin D supplementation before the trial began, the results look even better as vitamin D reduced relative infection risk by nearly two-thirds.

More than six out of ten children who would have normally been infected with influenza, in other words, were protected by vitamin D supplementation.

Also revealed in the study: vitamin D strongly suppressed symptoms of asthma. In children with a previous asthma diagnosis, 12 of those receiving no vitamin D experienced asthma attacks. But in the vitamin D group, only 2 children did.

While this subset sample size is small, it does offer yet more evidence that vitamin D prevents asthma attacks in children, and this entirely consistent with the previous evidence on vitamin D which shows it to be a powerful nutrient for preventing asthma.

Vaccine pushers aren't followers of real science

Now, given that vitamin D3 shows such a powerful effect in preventing influenza -- with 800% increased efficacy over vaccines -- shouldn't CDC officials, doctors and health authorities be rushing to recommend vitamin D before flu season arrives?

Of course they should. But they won't. Because for them, it's not about actually preventing influenza and it never has been. The vaccine pushing camp is primarily interested in using influenza as an excuse to vaccinate more people regardless of whether such vaccines are useful (or safe).

Even if vitamin D offered 100% protection against all influenza infections, they still wouldn't recommend it.

Why? Because they flatly don't believe in nutrition! It runs counter to their med school programming which says that nutrients are useless and only drugs, vaccines and surgery count as real medicine.

The vaccine pushers, you see, aren't followers of real science. You could publish a hundred studies proving how vitamin D is many times more effective than vaccines and they still would never recommend it.

They are promoters of medical dogma rather than real solutions for patients. They promote vaccines because... well... that's what they've always promoted, and that's what their colleagues promote. And how could so many smart people be wrong, anyway?

But that's the history of science: A whole bunch of really smart people turn out to be wrong on a regular basis. That's usually how science advances, by the way: A new idea challenges an old assumption, and after all the defenders of the old (wrong) idea die off, science manages to inch its way forward against the hoots and heckles of a determined dogmatic resistance.

This attitude is blatantly reflected in a quote from Dr John Oxford, a professor of virology at Queen Mary School of Medicine in London, whose reaction to this study was: "This is a timely study. It will be noticed by scientists. It fits in with the seasonal pattern of flu. There is an increasing background of solid science that makes the vitamin D story credible. But this study needs to be replicated. If it is confirmed we might think of giving vitamin D at the same time as we vaccinate." (

Did you notice his concluding remark? He wasn't even considering the idea that vitamin D might replace vaccines. Rather, he's assuming vitamin D only has value if given together with vaccines!

You see this in the cancer industry, too, with anti-cancer herbs and nutrients. Any time an anti-cancer nutrient gains some press (which isn't very often), the cancer doctor will say things like, "Well, this might be useful to give to a patient after chemotherapy..." but never as a replacement for chemo, you see.

Many mainstream doctors and medical scientists are simply incapable of thinking outside the very limiting boxes into which their brains have been shoved through years of de-education in medical schools. When they see evidence contrary to what they've been taught, they foolishly dismiss it.

"The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widespread belief is more likely to be foolish than sensible." - Bertrand Russell

Medical journals as guardians of ignorance

Medical journals largely function not as beacons of scientific truth but as defenders of pseudoscientific dogma. To have your paper published in most journals, your paper must meet the expectations and beliefs of that journal's editor. Thus, the advancement of scientific knowledge reflected in each journal is limited to the current beliefs of just one person -- the editor of that journal.

Truly pioneering research that challenges the status quo is almost always rejected. Only papers that confirm the presently-held beliefs of the journal's editorial staff are accepted for publication. This is one reason why medical science, in particular, advances so slowly.

Studies that show vitamin D to be more effective than vaccines will rarely see the light of day in the scientific community. It is to the great credit of the American Journal of Clinical Nutrition, in fact, that it accepted the publication of this paper by Mitsuyoshi Urashima. Most medical journals wouldn't dare touch it because it questions status quo beliefs about vaccines and influenza.

Medical journals, you see, are largely funded by the pharmaceutical industry. And Big Pharma doesn't want to see any studies lending credibility to vitamins, regardless of their scientific merit. Even if vitamin D could save America billions of dollars in reduced health care costs (which it can, actually), they don't want vitamin D to receive any scientific backing whatsoever because drug companies can't patent vitamin D. It's readily available to everyone for mere pennies a day.

In time, it will be recognized as superior to vaccines for seasonal flu, but for now, we must all suffer under the foolish propaganda of an industry that has abandoned science and now worships a needle.