TBR News May 22, 2010

May 23 2010

The Voice of the White House

Washington, D.C., May 22, 2010: “Today I would like to discuss a strange and very dangerous person, now entrenched in the Obama White House. I am speaking about one Cass Sunstein, (also known, but not to his face, as ‘Mr Sunshine’) now head of the OIRA White House Office of Information and Regulatory Affairs .

Mr. Sunstein, who is Jewish, went to Harvard and later served as a law clerk for Justice Benjamin Kaplan of the Massachusetts Supreme Judicial Court.

He later worked for the Justice Department as a legal advisor and in 2002, when the late and unlamented George Bush set up “military commissions’ without first obtaining the obligatory permission of Congress, Sunny volunteered his unsought-for opinion that “[u]nder existing law, President George W. Bush has the legal authority to use military commissions” and that “President Bush’s choice stands on firm legal ground.”

He laughingly procliamed that the Supreme Court would easily and quickly find that Bush was correct.

Like so many of Sunny’s proclamations and bombast, four years later, the disobedient Supreme Court ruled that Bush lacked the legal authority to create military commissions without approval from Congress, i.e., the Court (and Stevens) found Bush lacked exactly the “legal authority” which Sunstein vehemently insisted he possessed.

Cass Sunstein has been trying to shut down the bloggers for some time on the expressed theory that they are “misleading” the public into accepting what Sunstein and his co-religionists believe are views that could prove to be injurious to them.

Sunstein is a supporter of the idea that American judges should only rule on the specifics of a case before them and not meddle in Federal policies..

Naturally, Cass is a strong supporter of the death penalty, is in favor of higher taxes to support law enforcement  and his basic belief is that Federal law should be interpreted and enforced not by the courts but solely by the American president and his personal staff. In a recent book, Sunstein proposes that government recognition of marriage be discontinued. Among other odd ideas, he believes that animals should be considered as human beings in order to establish and protect their rights.

But it is the present Internet that has become an annoyance to him because he reasons that the mass of the public are essentially stupid and easily led. From this, he goes on to express anger at the flood of “conspiracy” sites and the logical conclusion that their essentially anti-government beliefs could lead to anarchy, resistance to, as he sees it, more government control over a population that could be inifluenced by others to, let us say, attack the Jewish community.

In 2008, Sunstein and one Adrian Vermeule authored a paper on conspiracy theories and wrote:”The existence of both domestic and foreign conspiracy theories, we suggest, is no trivial matter, posing real risks to the government’s antiterrorism policies, whatever the latter may be.” They go on to propose that, “the best response consists in cognitive infiltration of extremist groups”, where they suggest, among other tactics, “Government agents (and their allies) might enter chat rooms, online social networks, or even real-space groups and attempt to undermine percolating conspiracy theories by raising doubts about their factual premises, causal logic or implications for political action.”

In short, this strange and unpleasant character wants to clamp down on the American internet to prevent any opinions aired that might offend his Jewish sensibilities (and many friends) as well as a sitting administration. Sunstein said that if this system couldn’t be implemented voluntarily, “Congress should hold hearings about mandates,” which would legally force people to dilute their own free speech, and that blogs should be forced to list a random draw of 25 popular websites, such as CNN.com. “The best would be for this to be done voluntarily,” said Sunstein, “But the word voluntary is a little complicated and people sometimes don’t do what’s best for our society,” he added. “The idea would be to have a legal mandate as the last resort. . . an ultimate weapon designed to encourage people to do better,”

Sunstein is now proposing a method of officially dealing with what he calls “dangerous” ideas, by claiming that the government could, “ban conspiracy theorizing,” or “impose some kind of tax, financial or otherwise, on those who disseminate such theories”. In short, Sunstein wants strong, official censorship, backed by threats of legal punishment, for those whose ideas he views as “dangerous” to not only a sitting president but his own co-religionists.

Sunstein has submitted a number of papers to the President in support of his censorship and punishment thesis and we managed to get a photo-copy of one of these. As it is illustrative of his dangerous views, we are reprinting parts of it for the education, not of the President and his top people but the American public.

Sunstein is a compulsive writer and chatters on like a old woman on speed, so instead of linking to 140 pages of babble, we are extracting the meat from a stew of ideological sewage:  

  • ‘…..a very obviously growing public disillusionment with all governmental aspects is clearly manifest on the Internet

  • ….among other factors, we have the recent anti-immigration movement in Arizona, the so-called tea party movement and a growing tendency to attack Israel, and by inference, the American Jewish community…over the unfortunate incidents in Lebanon and the Gaza….the right of Israel to defend herself against Arab aggression is certainly clear…

  • ….the Internet has proven to be a breeding ground for a mixture of professional trouble-makers and various hate groups…many sites, the Rense and Prison Planet as well as the Voice of the White House and numerous other hate merchants….aimed not only at the political right but, by inference, at the Jewish community….these should either be completely shut down or compelled to give ‘equal time’ to the groups and individuals they maliciously and anonymously attack

  • ….a Federal commission should be set up, by Presidential order, that would serve as a “filter” for these irresponsible merchants of hatred…a control board made up of diverse and politically positive elements…for example we can consider the ADL and the Southern Poverty Law Center as prime candidates for such a control board…pro-immigration groups could supply additional membership….
  • ……the position of the black community is not entirely clear. Heady over the election of Obama….many of these black groups are now, unfortunately, taking up the theme of illegal immigration which is, in actuality, a farce. Having been a persecuted minority, the black community is now turning against other minority and special interest groups….latent anti-Semitism (Louis Farrakhan for example) can be found online, stemming from black sources and while forcing them to stop their activities could prove to be sensitive politically, nevertheless, what is fair for one should be fair for all…

  • …..I can say with some sense of pride that my advices and assistances to the authorities in Australia has borne fruit in their very successful clampdowns on their own Internet systems….as a substitute, it should be feasible to put up our own “blogs” and websites in response to the distracting and disruptive others….these would receive Federal support and would, like Google and other sites, be fully responsive to current governmental needs. …identifying public disruptors, conspiracy theorists and racists is not difficult as the FBI already had a very long list of undesirables and these can be made available for restrictive and, if necessary, punitive actions….

  • …..the first clear-cut violation of this new policy should be a specific warning, followed by legal action and banishment from the Internet on a permanent basis if it is found that these sites are unresponsive…..’

Also, the new Arizona law, aimed at stopping an incredible flood of illegals pouring into their state and taxing law enforcement with various felonies and misdemeanors, is causing spastic colon in the ranks of militant Latinos and their simple-minded supporters.

A flood of mawkish fiction, cranked out on Orders from Above, is gushing out of the liberal sewage tanks and spread in a reeking lake across the country. The comments on this twittish nonsense are delightful. This republic (we are not a democracy after all) is in a boiling state of anti-authority foment these days and the frantic efforts on the part of the Establishment to dampen things down with pathetic pap will not only not achieve success but will certainly redound upon the creators.

We now have millions of illegals in this country, costing the American people billions of dollars in lost taxes, increased law enforcement expenses, clogged hospitals and schools and are a foreign object lodged well in the body politic. Foreign objects cause infections until they are either removed or kill the host.

And then there is the slowly growing awareness that the Federal government is deliberately concealing the fact that the mortgages of millions and millions of unsuspecting

Americans have vanished into the criminal machinations of the large banks. What has happened is that all of these mortgages have been put into packets for foreign investors and are so dispersed that no one, anywhere, has any idea as to who really owns them. The result is that if a citizen tries to pay off their mortgage, it is completely impossible to locate a distant holder to obtain a free title. In essence, Americans are only paying unproductive rent on the homes they mistakenly think they own. The Federal government has set up a system, MERS, that is solely designed not only to conceal these ugly facts but to encourage the same banks to continue their manipulations.

YouTube, FaceBook, Twitter and all the rest of the “social network” systems are only a means to an end and that is not to encourage mindless chatter among the idiot brigades that infest the nation ,but to get free personal information on millions of citizens that the eager government spies can quickly harvest. It was not enough that they have had eager cooperation from the credit bureaus, telephone companies and some of the computer services but the social network scam has proven to be priceless!”

The Unbelievably Rampant Corruption On Wall Street

The Economic Collapse
May 20, 2010

In order for a financial system to be able to function properly, it is absolutely essential that the general population has faith in it.  After all, who is going to want to invest in the stock market or entrust their money to big financial institutions if there is not at least the perception of honesty and fairness in the financial marketplace?  For decades, the American people did have faith in Wall Street.  But now that faith is being shattered by a string of recent revelations.  It seems as though the rampant corruption on Wall Street is seeping up almost everywhere now.  In fact, some of the things that have come out recently have been absolutely jaw-dropping.  The truth is that the corruption on Wall Street is much deeper and much more systemic than most of us ever dared to imagine.  As the general public digests these recent scandals, it is going to result in a tremendous loss of faith in the U.S. financial system.  Once faith in a financial system is lost, it can take years or even decades to get back.  So how is the U.S. financial system supposed to work properly when large numbers of people simply do not believe in it anymore?

Just consider some of the recent revelations of Wall Street corruption that have come out recently….

*Bloomberg is reporting that a massive network of big banks and financial institutions have been involved in blatant bid-rigging fraud that cost taxpayers across the U.S. billions of dollars.  The U.S. Justice Department is charging that financial advisers to municipalities colluded with Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers, Wachovia and 11 other banks in a conspiracy to rig bids on municipal financial instruments.  Apparently what was going on was that it was decided in advance who would win the auctions of guaranteed investment contracts, which public entities purchase with the proceeds from municipal bond sales, and then other intentionally losing bids were submitted in order to make the process look competitive.  The U.S. Justice Department claims that this fraud has been industry-wide and has been going on for years.  In fact, at least four financial professionals have already pleaded guilty in this case.

*An industry insider has come forward with “smoking gun” evidence that some of the biggest banks have been openly and blatantly manipulating the price of gold and silver.  For a time it looked like the federal government was just going to ignore all of this fraud, but after substantial public uproar some action is indeed being taken.  In fact, it has been reported that federal agents have launched parallel criminal and civil probes of JPMorgan Chase and its trading activity in the precious metals markets.

*New York attorney general Andrew Cuomo is investigating whether eight major Wall Street banks purposely misled the big credit ratings agencies so that they would give their mortgage-backed securities AAA ratings that they did not deserve.

There has been a ton of legal action surrounding mortgage-backed securities lately.  For example, the Justice Department and the Securities and Exchange Commission are now investigating Morgan Stanley as part of a probe into whether Wall Street firms deliberately misled investors regarding the sale of mortgage-related securities.

*Goldman Sachs is getting most of the press about fraud in the mortgage-backed securities market these days.  Of course Goldman is strenuously denying that it “bet against its clients” when it changed its position in the housing market in 2007.  But we all know the truth at this point.  The truth is that Goldman Sachs clearly bet against its clients and was involved in a whole lot of things that were even worse than that.  Many did not think the U.S. government would dare go after Goldman, but that is what we are starting to see.  U.S. federal prosecutors have opened a criminal investigation into whether Goldman Sachs or its employees committed securities fraud in connection with its trading of mortgage-backed securities, and it will be very interesting to see if anything comes of that investigation.

*But not everyone is being held accountable for their actions.  The guy who helped bring down AIG is going to get off scott-free and is going to be able to keep the millions in profits that he made in the process.

*Entire U.S. cities have been victims of this rampant Wall Street fraud.  In fact, it is now being alleged that the biggest banks on Wall Street are ripping off some of the largest American cities with the same kind of predatory deals that brought down the financial system in Greece.

*The really sad thing is that fraud is very, very lucrative.  Executives at many of the big banks that received large amounts of money during the Wall Street bailouts are being lavished with record bonuses as millions of other average Americans continue to suffer economically.  Even the CEOs of bailed-out regional banks are getting big raises.  It must be really nice to be them.

So does all of this make you more likely or less likely to invest in the stock market?

Do you think that the American people can see all of this and still believe that the financial system is “fair” and “honest”?

The truth is that Wall Street is full of rip-off artists and fraudsters who don’t even try to hide their greed anymore.

It is as if a thousand junior Gordon Gekkos have been unleashed and they are all trying to be masters of the universe at any cost.

But what they are doing is ripping the heart out of the U.S. financial system.

If people lose faith in the system the system will ultimately fail.

A financial system that allows open fraud and manipulation is operating on borrowed time.

So will the rampant corruption on Wall Street now be cleaned up?

Only time will tell.

But one thing is for certain.

The American people will be watching

One in Ten Mortgage Borrowers Will Lose Their Home To The Bank

May 21, 2010

by Michael White
Implode-meter blog

New Observations is forecasting that a minimum of one in ten homes with a mortgage today will be lost to foreclosure in the next two years and that this loss represents a staggering five-million-unit addition to inventory-for-sale.

A record high 4.63% of mortgages were in foreclosure at the end of March The Mortgage Bankers Association reported Wednesday. Much worse, a mammoth 9.54% of mortgages are 90-days or more past due.

Given cure rates are slim-to-nothing-at-all beyond a 60-day delinquency, in practical terms, all of these seriously-delinquent homes will be lost through a sheriff’s auction, a short sale, a deed-in-lieu passing title from borrower to bank, or some other variant of distressed sale. Amherst Securities Group in a Sept. 2009 report said of the cure rate: “The cure rate on 60+ loans has decreased from 66% in early 2005 to 5% in Q2 2009.”

What is obvious and apparent from the cure-rate chart (see above-click for a clear view) is that borrowers who miss a payment are giving up quickly. After two payments are missed, the mortgage is a goner. It’s a new phenomena and adds a serious risk of falling prices for those who currently own homes.

If 50 million homes carry a mortgage, and with 10 percent lost to the bank in the next two years, five million units will be added to the current for-sale inventory. The five million bank-repo homes works out to about 10 months of sales at an average rate. Amherst estimated 7 million liquidations to the bank, but it was unclear over what period of time. The numbers will have even a more exaggerated impact if mortgage-payment performance continues to fall.

New Observations is forecasting that a minimum of one in ten homes with a mortgage today will be lost to foreclosure in the next two years and that this loss represents a staggering five-million-unit addition to inventory-for-sale.

A record high 4.63% of mortgages were in foreclosure at the end of March The Mortgage Bankers Association reported Wednesday. Much worse, a mammoth 9.54% of mortgages are 90-days or more past due.

Given cure rates are slim-to-nothing-at-all beyond a 60-day delinquency, in practical terms, all of these seriously-delinquent homes will be lost through a sheriff’s auction, a short sale, a deed-in-lieu passing title from borrower to bank, or some other variant of distressed sale. Amherst Securities Group in a Sept. 2009 report said of the cure rate: “The cure rate on 60+ loans has decreased from 66% in early 2005 to 5% in Q2 2009.”

What is obvious and apparent from the cure-rate chart (see above-click for a clear view) is that borrowers who miss a payment are giving up quickly. After two payments are missed, the mortgage is a goner. It’s a new phenomena and adds a serious risk of falling prices for those who currently own homes.

If 50 million homes carry a mortgage, and with 10 percent lost to the bank in the next two years, five million units will be added to the current for-sale inventory. The five million bank-repo homes works out to about 10 months of sales at an average rate. Amherst estimated 7 million liquidations to the bank, but it was unclear over what period of time. The numbers will have even a more exaggerated impact if mortgage-payment performance continues to fall.

Current inventory is at eight months. The recent inventory high was 11 months in April 2008. Our figures already show current supply for-sale at 3.6 million units – which we have estimated is excessive by over 900,000 units (see chart “Units For Sale”-click for a clear view). In an average month 500,000 existing homes sell.

In another derogatory sign, purchase applications fell 27 percent to their lowest point since May 1997. A government-paid down-payment program ended April 30th.

The guesstimate that one-in-ten mortgage borrowers will lose their home is not a wild proclamation. It’s basic math based on the cure rate. What is wild is considering what will happen to real estate prices should mortgage failure gain greater momentum. Serious delinquencies are 30% greater today than a year ago.

A crash has the same irrational exuberance as a mania. We have already lost 30 percent of house prices nationwide. There is simply no question that a radical loss in value may still lie ahead. Mortgage performance has gone down hill, and only a strong employment recovery can change the math.

Prime mortgages going bust at an alarming rate

May 19, 2010

by Kevin G. Hall

McClatchy Newspapers

WASHINGTON — Aftershocks from the nation’s financial crisis continue rumbling through the housing sector as fixed-rate mortgages held by the safest borrowers accounted for nearly 37 percent of new foreclosures during the first three months of this year, the Mortgage Bankers Association reported Wednesday.

Additionally, more than one in 10 homeowners were behind on their mortgage payments in the first quarter — a record, the association said. That’s up from 9.47 percent in the last three months of 2009.

Prime loans, those made to the safest borrowers with the highest credit scores, account for almost 66 percent of outstanding U.S. mortgages, so their rising foreclosure numbers are troubling.

“People with higher scores are defaulting at rates we have not seen in the past,” said Jay Brinkmann, the chief economist for the trade group.

The slide into foreclosure of the strongest borrowers is partly a function of the nation’s unemployment rate, which is now 9.9 percent. The Great Recession has mowed down white-collar and blue-collar workers alike.

In the first quarter, almost 21 percent of foreclosure starts were for adjustable-rate mortgages held by credit-worthy borrowers. Fixed and adjustable-rate prime mortgages combined accounted for more than 57 percent of all new foreclosures.

The MBA’s data also showed that more than 6 percent of fixed-rated prime mortgages were delinquent from January to March and more than 13 percent of all homeowners with adjustable-rate prime mortgages were behind on payments.

California — the most populous state, which accounts for more than 13 percent of all U.S. mortgages — seems to have turned a corner in housing problems. It held 21 percent of all foreclosure starts during the first quarter of 2009 but only 14.5 percent in the first quarter of 2010.

Florida improved but only slightly, from 16.1 percent of first-quarter 2009 foreclosure starts to 15.3 percent in the same period this year.

“We’re actually starting to see improvement in California. Florida is a little slower,” Brinkmann said.

Some analysts saw the report as a glass half full, partly because of a wide variation between the numbers when they were adjusted statistically for seasonal variation. Many numbers, when not seasonally adjusted, showed a slight improvement over the final quarter of 2009. These included a drop in delinquent loans.

“I’d say we’re probably hitting a turning point, but if you call me in six months, who knows?” said Patrick Newport, an economist who specializes in housing for forecaster IHS Global Insight. He pointed to the improving labor market and a drop in serious delinquencies reported by Fannie Mae, the mortgage finance giant.

One potentially troubling trend emerged: foreclosure starts rising in states that aren’t commonly viewed as housing-bubble states. Washington state posted the largest increase in foreclosure starts overall in 2010’s first quarter versus a year earlier, followed by Maryland, Oregon and Georgia. Washington state also posted the largest rise in foreclosure starts that involved prime and subprime adjustable-rate mortgages.

In another troubling trend, 42 states and the District of Colombia saw increased foreclosure starts for homes that were carrying FHA loans, which are considered among the safest. Only nine states, including Alaska and Idaho, saw foreclosure starts for FHA loans fall.

The rise in prime-mortgage foreclosures is important in the context of the sweeping revamp of financial regulation that’s moving through Congress. Big financial institutions are trying to defeat a provision that would require them to retain 5 percent of the mortgages that they underwrite or sell into a secondary market to be packaged into mortgage bonds. They argue that they shouldn’t have to do this for prime fixed-rate loans, but the latest data show that these loans aren’t immune to delinquency and foreclosure.

The data also suggest that the Obama administration’s efforts to reverse the rate of delinquencies and foreclosures haven’t been effective. The Treasury Department reported Monday that lenders or loan servicers had permanently modified only 68,000 mortgages in April, while more than 277,000 modification offers were canceled and presumed to be back on foreclosure tracks.

“It is jolting to see the persistence of the foreclosure epidemic,” Michael Calhoun, the president of the Durham, N.C.-based Center for Responsible Lending, said in a statement

Read more: http://www.mcclatchydc.com/2010/05/19/94464/prime-mortgages-going-bust-at.html#ixzz0ogzz72BG

House votes to expand national DNA arrest database

May 19, 2010


Millions of Americans arrested for but not convicted of crimes will likely have their DNA forcibly extracted and added to a national database, according to a bill approved by the U.S. House of Representatives on Tuesday.

By a 357 to 32 vote, the House approved legislation that will pay state governments to require DNA samples, which could mean drawing blood with a needle, from adults “arrested for” certain serious crimes. Not one Democrat voted against the database measure, which would hand out about $75 million to states that agree to make such testing mandatory.

“We should allow law enforcement to use all the technology available to them…to reduce expensive and unjust false convictions, bring closure to victims by solving cold cases, better identify criminals, and keep those who commit violent crime from walking the streets,” said Rep. Harry Teague, the New Mexico Democrat who sponsored the bill.

But civil libertarians say DNA samples should be required only from people who have been convicted of crimes, and argue that if there is probable cause to believe that someone is involved in a crime, a judge can sign a warrant allowing a blood sample or cheek swab to be forcibly extracted.

“It’s wrong to treat someone as guilty before they’re convicted,” says Jim Harper, director of information policy studies at the Cato Institute. “It inverts the concept of innocent until proven guilty.”

House Speaker Nancy Pelosi and the Democratic leadership scheduled Tuesday’s debate on the bill–called the Katie Sepich Enhanced DNA Collection Act of 2010–using a procedure known as the “suspension calendar” intended to be reserved for non-controversial legislation.

“Suspension of the rules is supposed to be for praising the winner of the NCAA championship or renaming Post Offices,” Harper says. “Things like collecting Americans’ DNA are supposed to be fully debated in Congress.”

In a surprise move, as the U.S. Congress was expanding the FBI’s DNA database, the U.K.’s new coalition government was pledging sharp curbs on its own databases.

Created in the mid-1990s, the UK National DNA Database originally was supposed to store data on convicted criminals, but grew to include records on more than 5 million Britons, including many who were only arrested on suspicion of a crime.

U.K. Deputy Prime Minister Nick Clegg promised once-in-a-century privacy reforms in a speech on Wednesday: “We won’t hold your Internet and e-mail records when there is just no reason to do so. CCTV will be properly regulated, as will the DNA database, with restrictions on the storage of innocent people’s DNA. Britain must not be a country where our children grow up so used to their liberty being infringed that they accept it without question.”


The United States has followed a similar pattern: first, DNA was collected from convicted criminals, and then the practice was expanded to sweep in Americans arrested on suspicion of a crime.

A 2000 federal law called the DNA Analysis Backlog Elimination Act required that DNA samples be taken from anyone convicted of or on probation for certain serious crimes. This was challenged in court on Fourth and Fifth Amendment grounds, but a federal appeals court upheld (PDF) the DNA collection requirement as constitutional.

A second bill that President Bush signed in January 2006 said any federal police agency could “collect DNA samples from individuals who are arrested.” Anyone who fails to cooperate is, under federal law, guilty of an additional crime.

In addition, federal law and subsequent regulations from the Department of Justice authorize any means “reasonably necessary to detain, restrain, and collect a DNA sample from an individual who refuses to cooperate in the collection of the sample.” The cheek swab or blood tests can be outsourced to “private entities.”

A May 2009 ruling from a federal judge in California was the first decision to say that police can forcibly take DNA samples from Americans who have been arrested but not convicted of a crime. U.S. Magistrate Judge Gregory Hollows said the requirement of DNA-sampling felony arrestees did not violate the Fourth Amendment’s prohibition of “unreasonable searches and seizures”–but noted that he took no position on whether or not DNA sampling for misdemeanor offenses was reasonable and constitutional.

But that law applied only to federal agencies, and the bill approved this week would provide a strong incentive for state and local governments to follow suit.

If states do follow suit, it’s difficult to overstate how many more DNA samples would flood into the FBI’s Convicted Offender DNA Index System (CODIS) database. Federal agencies arrested about 133,000 people in 2004, according to data compiled by the Urban Institute under a Justice Department grant.

But local and state governments arrested nearly 14 million Americans that year, not counting traffic offenses, according to FBI data.

Rep. Teague’s proposal would extend DNA sampling and testing to anyone arrested on suspicion of burglary or attempted burglary; aggravated assault; murder or attempted murder; manslaughter; sex acts that can be punished by imprisonment for more than one year; and sex offenses against minors. The attorney general would be required to report to Congress which states have and have not signed up for the DNA database.

Rep. Dave Reichert (R-Wash.), a former sheriff who spoke on the House floor in favor of the bill, said the measure is supported by the National Sheriffs’ Association, the National District Attorney’s Association, and the Rape, Abuse, and Incest National Network (RAINN).

The legislation would allow states to receive 15 percent “bonuses” from the Edward Byrne Memorial Justice Assistance Grant Program. The program gave out $165 million in local funding and $318 million in state funding for fiscal year 2009, not counting stimulus grants.

“We’re strongly opposed to expanding collection,” says Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington, D.C. He suggested the U.S. should follow the lead of the European Court of Human Rights, which ruled two years ago that holding DNA samples from people arrested but not convicted of a crime violates their privacy rights.

Greenland Rising as Ice Melts

May 19, 2010

by Christine Lepisto

Berlin: Scientists are reporting that Greenland is rising as the large weight of ice pressing down on land is melting. And the country’s elevation gains are speeding up. Glacial melt on Greenland is being watched very carefully because ice that is piled up on land flows into the oceans when it melts, raising sea levels. Floating ice, on the other hand, already displaces a lot of water and has less impact of sea levels when it melts.

Greenland’s rocky areas are shooting up almost an inch per year in some spots. That elevator may go up as much as 2 inches per year by 2025 if current trends continue, according to University of Miami professor Tim Dixon. The study, published in Nature Geoscience, adjusts for the confounding effects of historical glacial growth and retreat by examing the acceleration of the change in elevation on rocky territories, rather than the velocity. The study, led by Yan Jiang, found that “some parts of western coastal Greenland were experiencing accelerated melting of coastal ice by the late 1990s.”

The False Claims for Palestine

by Issa Nakhleh

Palestine was known as the land of Canaan. It was inhabited by Canaanite tribes which had migrated from the Arabian Peninsula and Mesopotamia. They were living in at least 31 kingdoms throughout the country. They were a well-developed people. It was the Romans who called the land Palestina, a word derived from the Philistines, who were of Aegean origin and entered the land of Canaan in the 13th century B.C. They never left the country and had a great influence on its history.

The Israelites entered the land of Canaan as invaders in the 13th century B.C. They conquered parts of the country, mainly in the mountainous regions in the areas known today ad Judaea and Samaria. They lived side by side with the Canaanite tribes, intermarried with them and were greatly affected by them, because the Canaanites were more advanced economically, culturally and socially.

The Israelites established a kingdom, first under King Saul, later on under King David and King Solomon. This kingdom was a multinational and multireligious state. Its population was composed of Canaanites, Israelites and Philistines. The people worshipped Jehovah and many Canaanite deities. This kingdom was not at all times independent, but was a satellite at different times to the Egyptians, the Syrians and the Assyrians.

After the reign of King Solomon the kingdom was divided into the kingdom of Israel in the north and the kingdom of Judah in the south.

The kingdom of Israel, which was also known as the kingdom of Samaria, was conquered by the Assyrians in 722 B.C. The Assyrians brought many captive peoples and took many of the inhabitants of the kingdom to Assyria.

The Babylonians conquered both the kingdom of Israel and the kingdom of Judah in 586 B.C. and transferred many thousands of the population of the two kingdoms to Babylonia. Some of these people who were transferred returned to Judah and Samaria, but the bulk of those who were transferred settled permanently in Babylonia and intermarried with the indigenous people of Babylonia.

The kingdom of Israel barely lasted two hundred years, and the kingdom of Judah only lasted for three hundred years.

The land of Canaan was conquered by the Greeks in 330 B.C. The Greeks settled in the country and greatly influenced the population culturally, religiously and socially. The Greek language became the dominant language in the country, although the bulk of the population was speaking Aramaic, which is a derivative of the Arab language. Aramaic, in different dialects, was spoken in the countries known today as Syria, Lebanon and Palestine

The Romans conquered the land of Canaan in 63 B.C. They named the country Palestine and they named the provinces Judea, Samaria, Galileee, Philistia, and Idumea. During the Roman ear, the people still were speaking Aramaic and Greek. The Hebrew language, which was only a dialect of the Canaanitish language, was only used by scribes, but never  by the Israelites, the Canaaites or the Philistines. During the Roman era, the majority of the Palestinian population, whether Canaaites, Israelites or Edomites, adopted Christianity. The Apostles were of Israelite and Canaaite origin. At the beginning of Christianity, the followers of Jehovah and Canaanite deities persecuted the Christian minority. When the Christians became a majority, and when Christianity became the official religion of the Roman Empire, the Christians persecuted Jews and pagans who did not adopt their religion. Thereafter, many of the Jews migrated to neighboring countries, which are known today as Lebanon, Syria, Egypt, Iraq, Arabia, and North Africa. Overall, Palestine from the 4th century until the 19th century had very few Jews.

The Old Testament, called by Jews, the Torah, and the Talmud, were developed mostly in Babylonia, The Palestine Talmud was partly developed in Palestine and partly in Babylonia. It can be stated that the tenets of Judaism were developed outside of Palestine. Neither the Old Testament nor the Talmud has any exclusive connection with Palestine, and both have more ties with Babylonia that with the land of Canaan, or Palestine. Furthermore, after the 13th century A.D. the center of Talmudic Judaism was transferred to the non-Semitic Khazar converts to Judaism of Eastern and Central Europe.

The Zionist Jews who invaded Palestine and set up the State of Israel in 1948 were Ashkenazi Jews. The Jews of today are not Semitic, but are a people of Turkish origin who were living in the kingdom of the Kahzars and had converted to Judaism by the 9th century A.D. The king, nobles and members of the government and the great majority of the  population adopted Judaism. The Jewish population in the domain of the Khazars between the seventh and tenth centuries were very considerable. When the Russians invaded the kingdom of the Khazars, the Khazar Jews spread throughout Russia and Central and Eastern Europe. It could be safely stated, according to authorities on the subject, that 90% of the Jews today are Ashkenazim of Khazar origin, that they are not Semitic, and that their ancestors have never had any connection with Palestine whatsoever. The Jews of the Maghreb are mostly Berbers who adopted Judaism. They are not Semites, and their ancestors had no connection with Palestine. The Jews of Spain were mostly descendants of Berber Jews who migrated to Andalusia during the Arab domination of Spain.

The Palestinians of today, who call themselves Arabs, are Muslims and Christians. They are the descendants of all the races and nations which have lived in and conquered Palestine from the time of the Canaaites until the British occupation of Palestine in 1918. They are a cohesion of all of those races. The Christians among them are descendants of the first Christians, who adopted Christianity at the time of Jesus and his Apostles. The Muslims are those who were either Christians or pagans who adopted Islam after the Arab conquest of Palestine in the 7th century A.D.,

For the above reasons, it can be seen that Zionist claims to Palestine cannot be justified on historical, ethnic, legal or religious grounds, and that therefore, Zionist claims are unfounded.

Issa Nakhles was a Palestinian Christian, a graduate of London University with an LL.B degree, was a former Minister Plenipotentiary and subsequent Legal Advisor to the United Nations.

Germany, Greece and Exiting the Eurozone
May 18, 2010


Rumors of the imminent collapse of the eurozone continue to swirl despite the Europeans’ best efforts to hold the currency union together. Some accounts in the financial world have even suggested that Germany’s frustration with the crisis could cause Berlin to quit the eurozone — as soon as this past weekend, according to some — while at the most recent gathering of European leaders French President Nicolas Sarkozy apparently threatened to bolt the bloc if Berlin did not help Greece. Meanwhile, many in Germany — including Chancellor Angela Merkel herself at one point — have called for the creation of a mechanism by which Greece — or the eurozone’s other over-indebted, uncompetitive economies — could be kicked out of the eurozone in the future should they not mend their “irresponsible” spending habits.

Rumors, hints, threats, suggestions and information “from well-placed sources” all seem to point to the hot topic in Europe at the moment, namely, the reconstitution of the eurozone whether by a German exit or a Greek expulsion. We turn to this topic with the question of whether such an option even exists.

The Geography of the European Monetary Union

As we consider the future of the euro, it is important to remember that the economic underpinnings of paper money are not nearly as important as the political underpinnings. Paper currencies in use throughout the world today hold no value without the underlying political decision to make them the legal tender of commercial activity. This means a government must be willing and capable enough to enforce the currency as a legal form of debt settlement, and refusal to accept paper currency is, within limitations, punishable by law.

The trouble with the euro is that it attempts to overlay a monetary dynamic on a geography that does not necessarily lend itself to a single economic or political “space.” The eurozone has a single central bank, the European Central Bank (ECB), and therefore has only one monetary policy, regardless of whether one is located in Northern or Southern Europe. Herein lies the fundamental geographic problem of the euro.

Europe is the second-smallest continent on the planet but has the second-largest number of states packed into its territory. This is not a coincidence. Europe’s multitude of peninsulas, large islands and mountain chains create the geographic conditions that often allow even the weakest political authority to persist. Thus, the Montenegrins have held out against the Ottomans, just as the Irish have against the English.

Despite this patchwork of political authorities, the Continent’s plentiful navigable rivers, large bays and serrated coastlines enable the easy movement of goods and ideas across Europe. This encourages the accumulation of capital due to the low costs of transport while simultaneously encouraging the rapid spread of technological advances, which has allowed the various European states to become astonishingly rich: Five of the top 10 world economies hail from the Continent despite their relatively small populations.

Europe’s network of rivers and seas are not integrated via a single dominant river or sea network, however, meaning capital generation occurs in small, sequestered economic centers. To this day, and despite significant political and economic integration, there is no European New York. In Europe’s case, the Danube has Vienna, the Po has Milan, the Baltic Sea has Stockholm, the Rhineland has both Amsterdam and Frankfurt and the Thames has London. This system of multiple capital centers is then overlaid on Europe’s states, which jealously guard control over their capital and, by extension, their banking systems.

Despite a multitude of different centers of economic — and by extension, political — power, some states, due to geography, are unable to access any capital centers of their own. Much of the Club Med states are geographically disadvantaged. Aside from the Po Valley of northern Italy — and to an extent the Rhone — southern Europe lacks a single river useful for commerce. Consequently, Northern Europe is more urban, industrial and technocratic while Southern Europe tends to be more rural, agricultural and capital-poor.

Introducing the Euro

Given the barrage of economic volatility and challenges the eurozone has confronted in recent quarters and the challenges presented by housing such divergent geography and history under one monetary roof, it is easy to forget why the eurozone was originally formed.

The Cold War made the European Union possible. For centuries, Europe was home to feuding empires and states. After World War II, it became the home of devastated peoples whose security was the responsibility of the United States. Through the Bretton Woods agreement, the United States crafted an economic grouping that regenerated Western Europe’s economic fortunes under a security rubric that Washington firmly controlled. Freed of security competition, the Europeans not only were free to pursue economic growth, they also enjoyed nearly unlimited access to the American market to fuel that growth. Economic integration within Europe to maximize these opportunities made perfect sense. The United States encouraged the economic and political integration because it gave a political underpinning to a security alliance it imposed on Europe, i.e., NATO. Thus, the European Economic Community — the predecessor to today’s European Union — was born.

When the United States abandoned the gold standard in 1971 (for reasons largely unconnected to things European), Washington essentially abrogated the Bretton Woods currency pegs that went with it. One result was a European panic. Floating currencies raised the inevitability of currency competition among the European states, the exact sort of competition that contributed to the Great Depression 40 years earlier. Almost immediately, the need to limit that competition sharpened, first with currency coordination efforts still concentrating on the U.S. dollar and then from 1979 on with efforts focused on the deutschmark. The specter of a unified Germany in 1989 further invigorated economic integration. The euro was in large part an attempt to give Berlin the necessary incentives so that it would not depart the EU project.

But to get Berlin on board with the idea of sharing its currency with the rest of Europe, the eurozone was modeled after the Bundesbank and its deutschmark. To join the eurozone, a country must abide by rigorous “convergence criteria” designed to synchronize the economy of the acceding country with Germany’s economy. The criteria include a budget deficit of less than 3 percent of gross domestic product (GDP); government debt levels of less than 60 percent of GDP; annual inflation no higher than 1.5 percentage points above the average of the lowest three members’ annual inflation; and a two-year trial period during which the acceding country’s national currency must float within a plus-or-minus 15 percent currency band against the euro.

As cracks have begun to show in both the political and economic support for the eurozone, however, it is clear that the convergence criteria failed to overcome divergent geography and history. Greece’s violations of the Growth and Stability Pact are clearly the most egregious, but essentially all eurozone members — including France and Germany, which helped draft the rules — have contravened the rules from the very beginning.

Mechanics of a Euro Exit

The EU treaties as presently constituted contractually obligate every EU member state — except Denmark and the United Kingdom, which negotiated opt-outs — to become a eurozone member state at some point. Forcible expulsion or self-imposed exit is technically illegal, or at best would require the approval of all 27 member states (never mind the question about why a troubled eurozone member would approve its own expulsion). Even if it could be managed, surely there are current and soon-to-be eurozone members that would be wary of establishing such a precedent, especially when their fiscal situation could soon be similar to Athens’ situation.

One creative option making the rounds would allow the European Union to technically expel members without breaking the treaties. It would involve setting up a new European Union without the offending state (say, Greece) and establishing within the new institutions a new eurozone as well. Such manipulations would not necessarily destroy the existing European Union; its major members would “simply” recreate the institutions without the member they do not much care for.

Though creative, the proposed solution it is still rife with problems. In such a reduced eurozone, Germany would hold undisputed power, something the rest of Europe might not exactly embrace. If France and the Benelux countries reconstituted the eurozone with Berlin, Germany’s economy would go from constituting 26.8 percent of eurozone version 1.0’s overall output to 45.6 percent of eurozone version 2.0’s overall output. Even states that would be expressly excluded would be able to get in a devastating parting shot: The southern European economies could simply default on any debt held by entities within the countries of the new eurozone.

With these political issues and complications in mind, we turn to the two scenarios of eurozone reconstitution that have garnered the most attention in the media.

Scenario 1: Germany Reinstitutes the Deutschmark

The option of leaving the eurozone for Germany boils down to the potential liabilities that Berlin would be on the hook for if Portugal, Spain, Italy and Ireland followed Greece down the default path. As Germany prepares itself to vote on its 123 billion euro contribution to the 750 billion euro financial aid mechanism for the eurozone — which sits on top of the 23 billion euros it already approved for Athens alone — the question of whether “it is all worth it” must be on top of every German policymaker’s mind.

This is especially the case as political opposition to the bailout mounts among German voters and Merkel’s coalition partners and political allies. In the latest polls, 47 percent of Germans favor adopting the deutschmark. Furthermore, Merkel’s governing coalition lost a crucial state-level election May 9 in a sign of mounting dissatisfaction with her Christian Democratic Union and its coalition ally, the Free Democratic Party. Even though the governing coalition managed to push through the Greek bailout, there are now serious doubts that Merkel will be able to do the same with the eurozone-wide mechanism May 21.

Germany would therefore not be leaving the eurozone to save its economy or extricate itself from its own debts, but rather to avoid the financial burden of supporting the Club Med economies and their ability to service their 3 trillion euro mountain of debt. At some point, Germany may decide to cut its losses — potentially as much as 500 billion euros, which is the approximate exposure of German banks to Club Med debt — and decide that further bailouts are just throwing money into a bottomless pit. Furthermore, while Germany could always simply rely on the ECB to break all of its rules and begin the policy of purchasing the debt of troubled eurozone governments with newly created money (“quantitative easing”), that in itself would also constitute a bailout. The rest of the eurozone, including Germany, would be paying for it through the weakening of the euro.

Were this moment to dawn on Germany it would have to mean that the situation had deteriorated significantly. As STRATFOR has recently argued, the eurozone provides Germany with considerable economic benefits. Its neighbors are unable to undercut German exports with currency depreciation, and German exports have in turn gained in terms of overall eurozone exports on both the global and eurozone markets. Since euro adoption, unit labor costs in Club Med have increased relative to Germany’s by approximately 25 percent, further entrenching Germany’s competitive edge.

Before Germany could again use the deutschmark, Germany would first have to reinstate its central bank (the Bundesbank), withdraw its reserves from the ECB, print its own currency and then re-denominate the country’s assets and liabilities in deutschmarks. While it would not necessarily be a smooth or easy process, Germany could reintroduce its national currency with far more ease than other eurozone members could.

The deutschmark had a well-established reputation for being a store of value, as the renowned Bundesbank directed Germany’s monetary policy. If Germany were to reintroduce its national currency, it is highly unlikely that Europeans would believe that Germany had forgotten how to run a central bank — Germany’s institutional memory would return quickly, re-establishing the credibility of both the Bundesbank and, by extension, the deutschmark.

As Germany would be replacing a weaker and weakening currency with a stronger and more stable one, if market participants did not simply welcome the exchange, they would be substantially less resistant to the change than what could be expected in other eurozone countries. Germany would therefore not necessarily have to resort to militant crackdowns on capital flows to halt capital trying to escape conversion.

Germany would probably also be able to re-denominate all its debts in the deutschmark via bond swaps. Market participants would accept this exchange because they would probably have far more faith in a deutschmark backed by Germany than in a euro backed by the remaining eurozone member states.

Reinstituting the deutschmark would still be an imperfect process, however, and there would likely be some collateral damage, particularly to Germany’s financial sector. German banks own much of the debt issued by Club Med, which would likely default on repayment in the event Germany parted with the euro. If it reached the point that Germany was going to break with the eurozone, those losses would likely pale in comparison to the costs — be they economic or political — of remaining within the eurozone and financially supporting its continued existence.

Scenario 2: Greece Leaves the Euro

If Athens were able to control its monetary policy, it would ostensibly be able to “solve” the two major problems currently plaguing the Greek economy.

First, Athens could ease its financing problems substantially. The Greek central bank could print money and purchase government debt, bypassing the credit markets. Second, reintroducing its currency would allow Athens to then devalue it, which would stimulate external demand for Greek exports and spur economic growth. This would obviate the need to undergo painful “internal devaluation” via austerity measures that the Greeks have been forced to impose as a condition for their bailout by the International Monetary Fund (IMF) and the EU.

If Athens were to reinstitute its national currency with the goal of being able to control monetary policy, however, the government would first have to get its national currency circulating (a necessary condition for devaluation).

The first practical problem is that no one is going to want this new currency, principally because it would be clear that the government would only be reintroducing it to devalue it. Unlike during the Eurozone accession process — where participation was motivated by the actual and perceived benefits of adopting a strong/stable currency and receiving lower interest rates, new funds and the ability to transact in many more places — “de-euroizing” offers no such incentives for market participants:

The drachma would not be a store of value, given that the objective in reintroducing it is to reduce its value.

The drachma would likely only be accepted within Greece, and even there it would not be accepted everywhere — a condition likely to persist for some time.

Reinstituting the drachma unilaterally would likely see Greece cast out of the eurozone, and therefore also the European Union as per rules explained above.

The government would essentially be asking investors and its own population to sign a social contract that the government clearly intends to abrogate in the future, if not immediately once it is able to. Therefore, the only way to get the currency circulating would be by force.

The goal would not be to convert every euro-denominated asset into drachmas but rather to get a sufficiently large chunk of the assets so that the government could jumpstart the drachma’s circulation. To be done effectively, the government would want to minimize the amount of money that could escape conversion by either being withdrawn or transferred into asset classes easy to conceal from discovery and appropriation. This would require capital controls and shutting down banks and likely also physical force to prevent even more chaos on the streets of Athens than seen at present. Once the money was locked down, the government would then forcibly convert banks’ holdings by literally replacing banks’ holdings with a similar amount in the national currency. Greeks could then only withdraw their funds in newly issued drachmas that the government gave the banks to service those requests. At the same time, all government spending/payments would be made in the national currency, boosting circulation. The government also would have to show willingness to prosecute anyone using euros on the black market, lest the newly instituted drachma become completely worthless.

Since nobody save the government would want to do this, at the first hint that the government would be moving in this direction, the first thing the Greeks will want to do is withdraw all funds from any institution where their wealth would be at risk. Similarly, the first thing that investors would do — and remember that Greece is as capital-poor as Germany is capital-rich — is cut all exposure. This would require that the forcible conversion be coordinated and definitive, and most important, it would need to be as unexpected as possible.

Realistically, the only way to make this transition without completely unhinging the Greek economy and shredding Greece’s social fabric would be to coordinate with organizations that could provide assistance and oversight. If the IMF, ECB or eurozone member states were to coordinate the transition period and perhaps provide some backing for the national currency’s value during that transition period, the chances of a less-than-completely-disruptive transition would increase.

It is difficult to imagine circumstances under which such support would not dwarf the 110 billion euro bailout already on the table. For if Europe’s populations are so resistant to the Greek bailout now, what would they think about their governments assuming even more risk by propping up a former eurozone country’s entire financial system so that the country could escape its debt responsibilities to the rest of the eurozone?

The European Dilemma

Europe therefore finds itself being tied in a Gordian knot. On one hand, the Continent’s geography presents a number of incongruities that cannot be overcome without a Herculean (and politically unpalatable) effort on the part of Southern Europe and (equally unpopular) accommodation on the part of Northern Europe. On the other hand, the cost of exit from the eurozone — particularly at a time of global financial calamity, when the move would be in danger of precipitating an even greater crisis — is daunting to say the least.

The resulting conundrum is one in which reconstitution of the eurozone may make sense at some point down the line. But the interlinked web of economic, political, legal and institutional relationships makes this nearly impossible. The cost of exit is prohibitively high, regardless of whether it makes sense.

By Marko Papic, Robert Reinfrank and Peter Zeihan


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