IS A DEPRESSION COMING OR IS IT ALREADY HERE? Spies And Lies
June 30th, 2010 - by: danny
If you want to follow Mediachannel, you will have to come to the site. We can no longer afford to send out emails. You can access my blog at newsdissector.org/blog and there is now a newly rebuilt Globalvision.org to visit. Check it out.
LYING AND SPYING: THE ECONOMY IS SINKING, CONFIDENCE IS DOWN ALONG WITH THE MARKET. IS A DEPRESSION COMING?
By Danny Schechter
Author of The Crime Of Our Time
The FBI arrests 1200 Americans for mortgage fraud in the largest crackdown of its kind in history. There is no media focus on the companies that securitized and insured their toxic loans. This white-collar crime sweep is, at best, a one-day story with most of the reports carried by local outlets.
Clearly the FBI did not get the media punch it had hoped for. The issue of financial industry fraud did not even register on the media’s Richter scale.
Two weeks later, the FBI tried again, this time with an ill-timed, years in the making bust of 11 alleged Russian spies accused, so it seems, of impersonating Americans with no sign that they carried out successful espionage missions.
The story grew legs, in several senses, after it was discovered that one of the “spies” posted sexy pictures of herself on Facebook and other sites.
Ooo la-la: Predictably, she has now become the story; No one knows what to think about the FBI’s motives in pumping up this cold war like drama. Their big spy-catch was questioned in both the US and Russia. Now watch for payback in the form of arrests of Americans in Moscow.
Meanwhile, the financial “reform” bill has passed the House but it still may go down in the Senate after the way lobbyists persuaded, cajoled and paid off legislators to water it down, and defang it. The Party of NO seems mostly united in once again killing a third attempt to extend unemployment benefits.
If it passes, the Wall Street lobby is already working to insure any proposed regulations are as weak as can be.
Did you know that firms such as Citigroup and Goldman Sachs could exploit loopholes until 2022 before withdrawing from “illiquid” funds such as private equity? The long gestation period is an example of the degree of compromise inserted into the package following months of lobbying on Capitol Hill by powerful banks, according to Bloomberg News.
This is a scandal that has yet to be fully disclosed as Amped Status reported,
“A devastating report in the NY Times documents how Tim Geithner’s New York Fed worked tirelessly to make sure that AIG was forced to pay banks such as Goldman Sachs 100 percent on dubious contracts that might otherwise have been slashed or subjected to lawsuits. Geithner, of course, was promoted for his efforts to run the rest of the nation’s economy. The article is full of revelations that would be mind-numbing if we weren’t so used to reading about how taxpayers have been fleeced in the meltdown.”
At the same time, the economy is heading for a dive. Reports the Washington Post:
“The recession has directly hit more than half of the nation’s working adults, pushing them into unemployment, pay cuts, reduced hours at work or part-time jobs, according to a new Pew Research Center survey.
The economic shock has jolted many Americans into a new, more austere reality, which is likely to have lasting consequences for an economy fueled mostly by consumer spending. More than six in 10 Americans say they have cut down on borrowing and spending, the survey found.
The reason: Nearly half of the survey’s respondents say they are in worse financial shape as a result of the downturn, which destroyed 20 percent of Americans’ wealth.”
And who is going to fix it? The NY Times doubts that the private sector can or will:
“In cutting spending to rein in deficits, governments are effectively betting that the private sector can make up for lost stimulus spending – and the markets are skeptical.”
It’s worse than that. The markets have been turbulent and volatile. Explains the AP, “Investors have been so burned by the financial crisis of 2008-09 that they fear any hint of a slowdown means the economy will start tanking again.” The quarter, which ended June 30th, was at the lowest level in a year.
Paul Farrell offers this analysis on Marketwatch, “tragically for future generations of Americans the guidance system of capitalism’s Invisible Hand has been replaced by the guiding hand of Wall Street: With no public conscience, no soul, no ethics, no moral values, nothing other than the addict’s obsession to get as rich as possible, fast as possible.”
At the same time, the focus by governments on “austerity” in the name of containing deficits will bring enormous pain to working people but is unlikely to generate jobs or economic stability. Economist Paul Krugman – and others – fears the onset of a depression.
Some like Mish’s Global Economic Trends analysis say it is already here, writing, ” By the way, a depression is not coming, we are clearly in one, a deflationary one at that. Once again, those chanting hyperinflation all missed the boat by light-years.
Various safety nets like food stamps, unemployment insurance, and of course people no longer paying their mortgage and living in their houses for free all mask over the depression.”
But, whether its here or coming, the once unthinkable idea of a depression is being taken seriously as the Columbia Journalism Review observes, “What with Washington still unable to get its act together on a new round of stimulus spending, warnings about the consequences of inaction are taking on a much more serious tone, and the word “depression” is starting to creep into the coverage.”
And what about international cooperation and regulation some hoped would emerge in this age of globalization? No one at the G20 even wanted to talk about that. The German Parliament killed a tough measure to ban naked short selling. The G 20 would not consider called for a global regime of needed regulations.
“It’s the responsibility of government to make the world financial system less dangerous. Judging from the G20 summit this weekend, we are making no progress at all in that direction,” writes Economist Simon Johnson on Baseline Scenario.
No wonder consumer confidence is said to be “dipping.”
“Americans, worried about jobs and the sluggish economic recovery, had another relapse in confidence, causing a widely watched barometer to tumble in June, reported AP.
The Conference Board, a private research group based in New York, said Tuesday that its Consumer Confidence Index dropped almost 10 points to 52.9, down from the revised 62.7 in May. Economists surveyed by Thomson Reuters had been expecting the reading to dip slightly to 62.8.”
So where are we? Nowhere at all! The next jobs report is already said to be bad. The Republicans blame Democrats and vice versa. Wall Street has shifted the blame from them. Why aren’t people in the streets?
No wonder it’s more fun to read about sexy Russian spies or even Sarah Palin spying on Russia from her front porch,
News Dissector Danny Schechter directed Plunder The Crime of Our Time. You can read about his investigation of the crisis as a crime story on Plunderthecrimeofourtime.com. Comments to dissector@mediachannel.org.
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FINANCIAL “REFORM” Passes House Update: Dems Water Down Bill Further To Win Passage
June 30th, 2010 - by: danny
June 30: REPUBLICANS FORCE COMPROMISE: NOW WILL FINANCIAL “REFORM” BILL PASS?”
This afternoon, it did pass the House.
The Washington Post reports:
The House on Wednesday overwhelmingly passed far-reaching new financial regulations, but Senate leaders postponed a similar vote on the bill, preventing the landmark legislation from reaching President Obama’s desk until at least mid-July.
CreditWritedowns carries an analysis By Annaly Capital Management
“The death of Senator Robert Byrd (“an institution within an institution” is what President Obama called him) may be the butterfly wings that alter the financial landscape of the United States. Without him, it is not entirely clear whether there are 60 votes to pass the financial regulatory reform bill. For example, Scott Brown, who voted for the Senate version of the bill, may vote against the final version because of the bank tax; Feingold and Cantwell may not vote for it because they don’t think the bill is tough enough; and the other Republican Senators who voted with the majority on the Senate bill, including the twin Maine senators, are also back in play. So if the votes break according to party lines, it won’t pass. ”
So what did the Dems do? They changed the bill:
Financial Times: US lawmakers scrapped a proposed $19bn bank fee on Tuesday night as Democrats struggled to secure sufficient votes to pass the Wall Street reform bill.
The Hill reports they were “forced to do it.” “Democrats were forced to rewrite part of the Wall Street overhaul bill on Tuesday after objections from Republicans threatened to scuttle the legislation.”
According to the Boston Globe, Senator Scott Brown of Massachusetts played the key role: ”
WASHINGTON – Senator Scott Brown yesterday forced Democrats to remove a $19 billion tax on big banks and hedge funds from the proposed Wall Street regulatory overhaul, the second time the Massachusetts Republican has used his pivotal role in the Senate to influence the legislation in favor of major financial institutions.
After Brown threatened in writing yesterday to oppose the package unless the $19 billion tax was eliminated, House and Senate lawmakers reconvened late yesterday and agreed on a new way to pay for the additional regulatory oversight in the sweeping legislation, which is intended to help prevent another economic crisis like the 2008 market meltdown.
Instead of the tax, Congress would use $11 billion in funds from the 2008 bank bailout, combined with a small increase in bank fees paid to the Federal Deposit Insurance Corp. (DS: That falls short of $19 Billion according to my math.)
MEANWHILE: RECESSION DEEPENS, MARKET DROPS, CONFIDENCE DIPS–A Time For A Hug?
The Washington Posts carries a study about the state of the economy:
“The recession has directly hit more than half of the nation’s working adults, pushing them into unemployment, pay cuts, reduced hours at work or part-time jobs, according to a new Pew Research Center survey.
The economic shock has jolted many Americans into a new, more austere reality, which is likely to have lasting consequences for an economy fueled mostly by consumer spending. More than six in 10 Americans say they have cut down on borrowing and spending, the survey found.
The reason: Nearly half of the survey’s respondents say they are in worse financial shape as a result of the downturn, which destroyed 20 percent of Americans’ wealth.”
And who is going to fix it? The NY Times doubts that the private sector can or will:
” In cutting spending to rein in deficits, governments are effectively betting that the private sector can make up for lost stimulus spending – and the markets are skeptical.”
Speaking of markets: The Dow plunged 286 points yesterday in a major sell-off.
AP analysis: “Investors have been so burned by the financial crisis of 2008-09 that they fear any hint of a slowdown means the economy will start tanking again.”
Paul Farrell offers and analysis on Marketwatch: “tragically for future generations of Americans the guidance system of capitalism’s Invisible Hand has been replaced by the guiding hand of Wall Street: With no public conscience, no soul, no ethics, no moral values, nothing other than the addict’s obsession to get as rich as possible, fast as possible.”
And what about international cooperation in this age of globalization.
It’s not happening, writes economist Simon Johnson on Baseline Scenario:
“It’s the responsibility of government to make the world financial system less dangerous. Judging from the G20 summit this weekend, we are making no progress at all in that direction.
Consumer Confidence DIPS:
AP: Americans, worried about jobs and the sluggish economic recovery, had another relapse in confidence, causing a widely watched barometer to tumble in June.
The Conference Board, a private research group based in New York, said Tuesday that its Consumer Confidence Index dropped almost 10 points to 52.9, down from the revised 62.7 in May. Economists surveyed by Thomson Reuters had been expecting the reading to dip slightly to 62.8.
Joe Bageant : America’s Totalitarian Democracy and the Politics of Plunder
The uniformity on Planet Norte is striking. Each person is a unit, installed in life support boxes in the suburbs and cities; all are fed, clothed by the same closed-loop corporate industrial system. Everywhere you look, inhabitants are plugged in at the brainstem to screens downloading their state approved daily consciousness updates.
In Italy and elsewhere, there’s a new service being offered to the stressed: FREE HUGS.
For more on the crisis as a criminal enterprise, see PLUNDER THE CRIME OF OUR TIME (plunderthecrimeofourtime.com)
I was interviewed yesterday about financial crimes by Laura Flanders on GRIT TV. See my take.
Comments to Dissector@mediachannel.org
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UPDATING THE UPDATE ON FINANCIAL REFORM; MEDIACHANNEL ANNOUNCEMENT
June 27th, 2010 - by: danny
JUNE 27: TO MEDIA CHANNEL READERS
FROM YOUR NEWS DISSECTOR
In a few days at the end of June, we will lose the capacity to send out these newsletters through our friends at Democracy in Action who have worked with us for years as the not for profit distribution arm for Mediachannel blogs and newsletters. We can no longer afford their great services.
If we are to survive at all, we have to conserve our resources even further. That means, if you want to read my commentaries and other Mediachannel news, you will have to come to us at Mediachannel.org. That takes a little more time than just having content plop in your inbox, but we hope it will be worth it.
Today, I offer an update of the analysis of the financial reform bill that I have been covering with religious intensity. As readers also know I have also been urging that you support my film PLUNDER THE CRIME OF OUR TIME on the financial crisis as a crime story(Plunderthecrimeofourtime.com) by ordering it from our website or downloading it from iTunes or Video On Demand Channels. Its also on Netflix, Amazon etc, We are encouraging folks who do care about this issue to set up home and community screenings as an educational tool in the fight for economic justice.
My own life is going through some changes too in the aftermath of the closing of Globalvision’s office. As it happens, I have a big Birthday on June 27 and hope it will be a turning point.
Thanks for those of you who sent such kind greetings.
Comments are welcome to dissector@mediachannel.org
Danny Schechter
JUNE 29: UPDATE ON THE UPDATE, DO THE DEMS HAVE THE VOTES TO PASS FINANCIAL REFORM?
I promised myself and advised readers that I won’t be writing every day but I have to make an exception, in summary form, when it comes to the financial reform issues that I have been focusing on even as most progressives do not.
Reform activists find alot in the Dodd-Frank bill to like although most are disappointed over its failure to tighten the reins on big banks, derivatives and the shadow banking system. The finance industry knew what its was doing as it swarmed on Capital Hill with a lobbying force 25 times bigger than the Congress itself. Last Friday morning, after a 20 hour marathon, it seemed liked the Dems with a small sprinkle of Repugs pulled it off. But now, just a few days later, it is unclear if the bill has the votes to pass. Senators in Maine and Massachusetts didn’t like the last minute addition of a provision to tax the banks for the monies they received from TARP. And then Robert Byrd up and died at age 92. If the Party of No holds firm and votes no, this massive 2000 page bill, constructed over months in a process characterized compromise, collusion and corruption, can go DOWN leaving us with no new regulations governing the party of Money, and leaving us more open to prophecies of Paul Krugman and Andrew Ross Sorkin in the Times, namely a new crash and depression. The G8 was ineffectual, as usual, last weekend, in tackling structural economic problems and real reforms while the coverage focused on the street protests, not the sleaze in the suites. Bad News is expected in this week’s jobs report and with the cutbacks to come as Europe embraces new austerity measures.
Meanwhile, the FBI is riding high in the aftermath of its busting of 11 alleged Russian Spies. That story got more ink than its earlier arrest of TWELVE HUNDRED AMERICAN MORTGAGE FRAUDSTERS, the largest such crackdown in history. Meanwhile, the Roberts Court has ruled that laws governing the prosecutions of financial criminals are flawed in the cases of a former CFO at Enron and the odious hypocrite Conrad Black, the right-wing publisher who loved to give lectures on political morality.
To Be Continued.
WHAT NOW, AFTER FINANCIAL “REFORM?” WILL WE BE SPARED ANOTHER CRASH, WILL WALL STREET BANKSTERS GO TO JAIL?
By Danny Schechter
Author of The Crime Of Our Time
The Sturm und Drang is over. The Bank lobbyists went home to collect their bonuses as the House and Senate agreed on a 2000 page financial “reform” quickly praised by the White House and superficially covered in the press.
The key underreported fact highlighted by Naked Capitalism: “On a flat trading day, financial firms shares rose 2.7% after the deal was announced.” Compare that to the market volatility and dire forecasts on Wall Street that followed the call for new financial regulations and you can see who won.
The industry has already figured out how to get around the new law even before it is passed, as expected. They are preparing for the next fight – to influence the new rules and regulations and tailor them to their liking. What will the Democrats still have to give up for needed votes, much less substantive change? Stay tuned.
President Obama packed his latest ‘triumph” in his bags when he winged North to a bragging session at the G20 meeting in Canada where many countries wanted far tougher measures given the depressed state of the global economy. The Financial Times was underwhelmed by this legislative ‘breakthrough,” as were the nearly one million Americans being cut off from their benefits. Many analysts pointed to loopholes galore in a measure the President labeled the toughest crackdown on Wall Street “since the great depression.” Wall Street smiled.
Somehow on cue, Dick Cheney checked back into the hospital, and in Iceland, the scene of the first post-meltdown economic collapse, a comedian from “The Best Party” was elected to head the largest city.”
There is something very comic about all this, but that hasn’t stop big media from using the occasion to trumpet the President’s assertion of his “command authority,” duh, and give him another illusionary achievement to boast about. Financial analyst Yves Smith was dismissive,
“So what does the bill accomplish? It inconveniences banks around the margin while failing to reduce the odds of a recurrence of a major financial crisis.
The only two measures I see as genuine accomplishments, the Audit the Fed provisions, and the creation of a consumer financial product bureau, do not address systemic risks. And the consumer protection authority was substantially watered down.”
Now what? Already “Dodd-Frank,” as the bill is known is being compared to Glass-Steagall even though it us not reorganizing the banking system or guarding us against giant banks being considered too big to fail, Republicans, including Scott Brown from Massachusetts, the Dems ‘great white hope in this charade, now threatens to vote against the bill because it assesses fees to pay for costs they incur in the event of their own collapse.
Smith again: “Dodd-Frank effectively anoints the existing banking elite. The bill makes it likely that they will be the future giants of banking as well. Legislators touted changes that would restrict proprietary trading by banks and force them to spin off their swaps desks into separately capitalized operations. But banks get to keep the biggest part of their derivatives business, which is dominated by interest-rate and foreign exchange swaps.
Does this great betrayal sound familiar? Perhaps its just part of a deeper pattern that is not just a commentary on Obama but our whole political culture: Dems dependent on Wall Street for donations, and a media that invariably touts the interests of the status quo.
Meanwhile what’s left of the American left is in retreat in Detroit at the Social Forum debating a plethora of important issues but unable, it seems, to agree on a joint program for economic survival. They are more upset with the hideous Israeli embargo on Gaza than our own corporate elites embargo on jobs and justice for American workers. As a result many have become sadly irrelevant in this fight with the exception of some brave members of Congress, and groups like A New Way Forward and Citizens for Financial Reform who stuck to their guns.
President Obams now hopes to tax the firms who received bailouts. But he yet to call for a full criminal investigation of those behind the crimes of Wall Street.
As far as prosecuting wrong doers in high places, the pro-corporate Supreme Court this week more than signaled a rejection of statues passed in the wake of the Enron scandal to jail financial criminals. The FBI did carry out the biggest bust in history of mortgage fraudsters this month, but has not touched the Wall Street firms that knowingly securitized and sold fraudulent mortgages and profited from them. (These Wall St billionaires can now retreat to their mansions in East Hampton, where, perhaps not so coincidentally, the Town Government is embroiled in its own financial crime scandal.) Meanwhile 14 million families face foreclosure.
Will prosecutors ever get it together to act?
Does this relate to the financial reform battle? You bet. As reporter Charles Gasperino asked on the Daily Beast: “Why should anyone expect some paper-pushers in Washington to prevent something as complicated as the next great financial meltdown when they couldn’t stop Bernie Madoff’s Ponzi scheme?
What to do? I feel like I am fighting a loosing battle even trying to distribute my film PLUNDER THE CRIME OF OUR TIME (plunderthecrimeofourtime.com), and companion book that argues the case for the financial crisis as a crime story. I would like to think that screenings and discussions nationwide could help stoke a movement to keep this fight for a jailout and economic justice going, at least until the next crash.
Anyone out there want to get involved in helping? Clearly, the compromisers in a compromised Congress have gone as far as they will, or perhaps can, go. It’s our challenge to intensify the heat, or step aside and let hypocritical Teabaggers dominate the discourse.
News Dissector Danny Schechter directed the DVD Plunder The Crime of Our Time and In Debt We Trust try to educate and energize a movement for economic justice tapping into the massive anger that’s out there. Comments and suggestions to Dissector@mediachannel.org
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About Danny Schechter
Danny Schechter is an Emmy award winning journalist, television producer and independent filmmaker who also writes, blogs and speaks about media issues.
His latest film is PLUNDER The Crime Of Our Time.
Mr. Schechter is NOT the Godfather of Soul.
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