AHMADENIJAD AT THE UNITED NATIONS, 9/21/10
The demanding liberal capitalism and transnational corporations have caused *the suffering of countless women, men and children in so many countries
ANDY STERN, Nov 12, 2009
We evolved into a more market worshiping, privatizing, deregulating, trickle-down, union-busting, I’ve got mine so long sucker economy which was a perfectly acceptable theory
For capitalism, we are merely consumers and a source of labour, and we have the right to say capitalism is the enemy of the planet.”
–Evo Morales, Bolivian President
April 21, 2010
HILLARY CLINTON, THE SORBONNE, PARIS, JUNE 17, 1999
And we now have to face up to creating a new architecture that will help us tackle runaway global capitalism’s worst effects; ensure social safety nets for the most vulnerable; address the debt burden that is crushing many of our poorest nations.”
GEORGE SOROS, FINANCIAL TIMES Oct 23, 2009
you need a new currency system and actually the special drawing rights do give you the makings of a system and I think it’s ill-considered on the part of the United States to resist
“The capitalism of today is a capitalism that no longer produces but just consumes.”
–Luiz Inacio Lula da Silva, Former Brazilian President
February 7, 2011
RON BLOOM, DISTRESSED INVESTING FORUM, FEB. 2008
Generally speaking, we get the joke. We know that the free market is nonsense. We know that the whole point is to game the system.
CHAVEZ AT THE UNITED NATIONS, /9/24/09
AS A HUMAN BEING – OBAMA — COME OVER TO THE SOCIALIST SIDE! COME JOIN THE “AXIS OF EVIL” HERE AND WE’LL BUILD A REAL ECONOMY AT THE SERVICE OF AN INDIVIDUAL, YOU CAN’T DO THIS WITH CAPITALISM!”
NEW WORLD ORDER RICHARD TRUMKA, JULY 2010 IN VANCOUVER
“So how are we going to achieve a new global economic order, one that puts the needs and rights of workers front and center?”
FORMER AUSTRALIAN PRIME MINISTER PAUL KEATING, Charlie Rose, PBS, 12/3/10
I believe we should have had enough ingenuity and imagination to have included a place for Russia in the new world order
GEORGE SOROS, FINANCIAL TIMES, OCT 23, 2009
you really need to bring China into the creation of a new world order, a financial world order
AHMEDINEJAD AT THE UNITED NATIONS, SEPT. 21 2010
I wish to propose that the second decade of this century be named by the UN as “the decade for the joint global governance”
PRES. OBAMA AT WEST POINT, May 23, 2010
So we have to shape an international order that can meet the challenges of our generation. We will be steadfast in strengthening those old alliances that have served us so well
ANDY STERN (“Bill Moyers Journal, PBS, June 2007)
Workers of the world unite..it’s not just a slogan anymore. It’s a way we’re going to have to do our work
HILLARY CLINTON, 10/6/2009
…As students as workers, as global citizens
GEORGE H.W. BUSH, 3/6/1991
“Now, we can see a new world coming into view. A world in which there is the very real prospect of a new world order”
1. UNION LEADERS FEATURED IN VIDEO FOR INTERNATIONAL TRADE UNION CONFEDERATION
2. MUSLIM BROTHERHOOD TEXT REVEALS SCOPE OF RADICAL CREED
3. SEN. FEINSTEIN: WE GOT NO WARNING
AMERICAN TEENS MURDERED IN MEXICAN BORDER TOWN
§ Killed: Carlos Mario Gonzalez Bermudez, 16, (right) and Juan Carlos Echeverri, 15
§ Three teenage boys were shot to death in the Mexican border city of Ciudad Juarez, at least two of them U.S. citizens and high school students in Texas, authorities said Monday.
§ The boys were killed at a car dealership in the city across the border from El Paso, Texas, Chihuahua prosecutors’ spokesman Arturo Sandoval said. One was found inside a white Jeep Cherokee and the other two in the courtyard.
§ There were no leads on suspects or a motive, and witnesses would give no statements, Sandoval said. At least 60 bullet casings were found at the scene.
§ One of the boys, Carlos Mario Gonzalez Bermudez, 16, was a sophomore at Cathedral High School in El Paso, said Nick Gonzalez, the Roman Catholic brother who is the principal. Another victim, Juan Carlos Echeverri, 15, had been a freshman at the private all-boys Catholic school last year but left to study in Ciudad Juarez, Gonzalez said.
§ Both were U.S. citizens, he said. The U.S. Embassy in Mexico City said it could provide no immediate information on the case.
§ The third teenager was identified as Cesar Yalin Miramontes Jimenez, 17.
§ The school principal said Gonzalez Bermudez mainly lived in Ciudad Juarez and commuted each day across the border. He said 20 percent of the 485 students enrolled at Cathedral are from Ciudad Juarez.
§ Gonzalez said the school’s sophomore class had a prayer service Monday and officials planned a rosary service for the entire school later in the week.
§ “It’s a lot of pain, a lot of sorrow, a lot of tears, a lot of coming together as a community to try to hold each other up and to try and make sense today,” Gonzalez said. “How do you make sense of this meaningless tragedy? Hopefully this can really empower us to make a positive change in the border community because their deaths will have no meaning otherwise.”
§ Many Ciudad Juarez residents travel across the border on a daily basis for work or study. Some Mexicans live in El Paso for safety reasons and commute to Ciudad Juarez.
§ Ciudad Juarez city has become one of the world’s most dangerous cities amid a fierce turf war between the Sinaloa and Juarez drug cartels. More than 3,000 people were killed last year in the city of 1.3 million residents.
§ Gonzalez said students at the school have had a number of relatives killed in the violence in Ciudad Juarez, a city that lost 3,000 residents last year alone. A graduate of the school was killed last fall, he said.
§ “Our Juarez kids knew all three” of the teenagers killed over the weekend, he said. “It’s a very tight knit community. A lot of them car pool; that’s how they know each other.”
BOOK FOUND NEAR THE BORDER
§ EXCLUSIVE: A book celebrating suicide bombers has been found in the Arizona desert just north of the U.S.- Mexican border, authorities tell Fox News.
§ The book, “In Memory of Our Martyrs,” was spotted Tuesday by a U.S. Border Patrol agent out of the Casa Grande substation who was patrolling a route known for smuggling illegal immigrants and drugs.
§ Published in Iran, it consists of short biographies of Islamic suicide bombers and other Islamic militants who died carrying out attacks.
§ According to internal U.S. Customs and Border Protection documents, “The book also includes letters from suicide attackers to their families, as well as some of their last wills and testaments.” Each biographical page contains “the terrorist’s name, date of death, and how they died.”
§ Agents also say that the book appears to have been exposed to weather in the desert “for at least several days or weeks.”
§ Authorities told Fox News that there were no people in the area at the time the book was found, and no arrests have been made in connection with it.
§ “At this time, DHS does not have any credible information on terrorist groups operating along the Southwest border,” a Department of Homeland Security official said in a statement. “We work closely with our partners in the law enforcement and intelligence communities and as a matter of due diligence and law enforcement best practice, report anything found, no matter how significant or insignificant it may seem.”
§ Statements from U.S. officials, including FBI director Robert Mueller, have raised serious concerns in recent years over “OTMs” — or illegal immigrants other than Mexicans — who have crossed the southwest border at alarming rates.
§ Mueller testified before the House Appropriations Committee in March 2005 that “there are individuals from countries with known Al Qaeda connections who are changing their Islamic surnames to Hispanic-sounding names and obtaining false Hispanic identities, learning to speak Spanish and pretending to be Hispanic.”
§ Just last year, the Department of Homeland Security had in custody thousands of detainees from Afghanistan, Egypt, Iraq, Iran, Pakistan, Saudi Arabia and Yemen. U.S. Border Patrol statistics indicate that there were 108,025 OTMs detained in 2006, compared to 165,178 in 2005 and 44,614 in 2004.
§ Authorities would not release a picture of the book to Fox News, or reveal how long they believe it was lying in the desert. Immigration officials have previously discovered items along the U.S.-Mexico border from Middle Eastern origin, including Iranian currency in Zapata, Texas, and a jacket found in Jim Hogg County, Texas, that was covered in patches including an Arabic military badge that illustrates an airplane flying into a tower.
FEBRUARY 9, 2011
In Muni-Bond Ills, Danger and Hope
By MICHAEL CORKERY
Wall Street Journal
§ “State and Municipal Debt: The Coming Crisis?” is the provocative topic of a congressional hearing Wednesday, which among other things will consider whether states should be allowed to file for bankruptcy protection.
§ It’s a reflection of more than three months of turmoil in municipal bonds-a period that has stoked fears a crisis in that market could set off a chain of events that would cripple the economy, in much the same way the subprime-mortgage fiasco sparked the recent recession.
§ Municipal bond investors have grown increasingly concerned about some states’ ability to pay their debts. This map reflects perceived risks on 10-year general-obligation bonds for states versus an AAA rated 10-year muni bonds.
§ That seems unlikely to many experts, who see big differences between the muni-bond troubles and the mortgage woes that triggered the global credit freeze in 2008.
§ “The near-term budget problems of states are difficult, painful, but survivable,” says Jay Powell, a former U.S. Treasury official who is now a visiting scholar at the Bipartisan Policy Center, a Washington, D.C., think tank. “Yes, this is the worst stress the system has been under for many, many years, but predictions of widespread defaults are overblown.”
§ The list of reasons analysts cite is long. Municipal bonds are held primarily by individuals, not by financial institutions. Compared with mortgages, they aren’t nearly as intertwined with the global financial system in opaque derivatives, hiding unknown risks and linkages.
§ Most states and municipalities owe long-term debt, and they don’t typically rely on short-term borrowing in the way that, say, the now-defunct Lehman Brothers Holdings Inc. did in 2008. In contrast to any kind of corporate borrower, state issuers of muni-bonds are in the rare position of being able to boost their revenues almost at will, by raising taxes (as Illinois recently did).
§ Moreover, states find their revenues are on the upswing as the economy grows and as inflation, while modest, helps to buoy the incomes and corporate profits that many states tax. During the 2010 fourth quarter, state tax revenues were up 6.9% from a year earlier, according to preliminary data from the Nelson Rockefeller Institute of Government in Albany, N.Y.
§ This isn’t to say that cash-strapped states won’t face higher borrowing costs, which could prove excruciating for some governments that rely on debt to fund their operations. Analysts also said that it is possible that the historically low rate of defaults could rise somewhat.
§ What many analysts and investors do doubt is a scenario outlined by one independent analyst, Meredith Whitney, who has publicly predicted “50 to 100 sizable defaults” amounting to “hundreds of billions of dollars.”
§ Municipal bonds-which are issued to finance projects such as airports and dormitories-yield interest income that’s free of federal and, often, state income tax. They began their slide last fall. If the $2.9 billion market continues to struggle, it will be because of the attitude of investors like Barry Fiske, an account manager for a Boston-area heating and air-conditioning contractor.
§ Mr. Fiske, 61 years old, had long considered muni-bonds a safe investment. But late last year, he says, he “just felt very uneasy” about the “threats [facing] certain states like Illinois, California, New Jersey and maybe New York.” He slashed his holdings in muni-bond funds to 5% of his investment portfolio, from 20%.
§ States face budget gaps totaling at least $125 billion as they plan for the coming fiscal year, the Center on Budget and Policy Priorities calculates. Long-ignored underfunding of public pensions is out in the open now, and setting off alarms. States in the coming year also must tackle their budgets largely without the federal assistance that the 2009 stimulus law gave them for a couple of years.
§ Default was rarely much of a concern in past muni-bond downturns. But now the long-held assumption that states and cities will always pay their debts has come under attack. “Credit concerns are much more prevalent and broad-based than they have been in the past 20 years,” says Elizabeth Fell, a fixed-income strategist at Barclays PLC.
§ Individuals like Mr. Fiske own about two-thirds of U.S. municipal bonds, directly or through mutual funds. This was long seen as a positive, because individual investors tend to “set it and forget it,” says Ms. Fell. But individual investors have been sellers of shares in muni-bond mutual funds for 12 consecutive weeks. Since early November, individuals have pulled a net $23.6 billion out of these funds.
§ Heightening concerns for some of them: Far fewer newly issued muni-bonds are insured now-6.2%, versus 57% in 2005, according to Bank of America Merrill Lynch. Many insurers have stopped issuing guarantees because they themselves are still struggling with their losses in the financial crisis.
§ “People have been through the tech bubble and the real-estate bubble, and they are scared,” says Peter Demirali, a managing director at Cumberland Advisors, an investment firm in Sarasota, Fla. “When they are told there is another bomb to go off, they head for the hills.”
§ Yet the sell-off that began last fall wasn’t due just to weaker state and city finances. The market also was hit with a massive supply of new bonds, which put downward pressure on prices. A key reason was the looming Dec. 31 expiration of a federal program, called Build America Bonds, under which the U.S. provided a subsidy to states that wanted to borrow.
§ In addition, the Federal Reserve’s program of buying bonds to encourage economic growth drew some investors into a rallying stock market, instead of to bonds. And long-term Treasury bonds-which municipal bonds tend to track-began to decline, as the Fed bond-buying program emphasized shorter-term debt.
§ Finally, the December extension of the federal income-tax cuts made it a bit less urgent for some individuals to seek out tax-exempt investments such as muni-bonds. Some of these factors, such as the subsidy expiration, no longer are pressuring the market.
§ But once muni-bonds began to slide last fall, their declines were exacerbated because of the structure of some mutual funds that hold the bonds. These funds enhance their exposure to the market, leading in some cases to forced selling when prices went down.
§ When individuals step away from the muni-bond market, there are a limited number of other investors to take their place. The tax-exempt returns that lure individuals aren’t as attractive to larger investors, such as hedge funds and investments banks.
§ Some states and cities have cut back on borrowing in the face of diminished demand for their bonds, which creates higher costs for borrowers. A New Jersey agency trimmed a refinancing by 40% last month. But states don’t always have that option.
§ Moody’s Investors Service has identified states that rely on the debt markets to fund their deficits and current operations, and thus will likely have to venture into the bond market even if it’s inhospitable. It was an urgent need for short-term borrowing that fueled the European debt crisis last year, when countries such as Greece found investors would lend to them only at exorbitant interest.
§ California typically borrows billions each year to cover seasonal shortfalls in its cash flows. Illinois is proposing this year to issue an $8.75 billion “debt restructuring bond” to pay past-due bills to suppliers and a $3.75 billion bond to make required contributions to its pension system.
§ A spokesman for the California Treasurer’s office said the state “will deal with market conditions as they come and we will get the best deal possible for taxpayers.” In Illinois, a spokeswoman for the governor said, “we do not see a loss of muni-market access” because the state is working to close its budget deficit.
§ Ms. Whitney, the analyst who has forecast many defaults, has drawn criticism from others in the muni-bond world for that dire prediction. The analyst, who correctly predicted future bank troubles in 2007, hasn’t widely disclosed the research on which she bases her outlook.
§ Ms. Whitney declined to comment. She declined an invitation to appear at Wednesday’s congressional hearing, which is before a subcommittee of the House Committee on Oversight and Government Reform, because of a scheduling conflict, a committee spokesman said.
§ A default by a major borrower could ripple out in hard-to-predict ways.
§ “In the highly unlikely event of a state default, you could have major macro-economic dislocations-teachers not getting paid, roads going unplowed,” says Mr. Powell, the former Treasury official. “Once that tree comes down, look out-it is falling on everyone, both the innocent and the guilty.”
§ A major default “would rock credit markets,” agrees Harvard economics professor Kenneth Rogoff, co-author of a history of financial catastrophes. He says it would likely affect financially stressed national governments: “If I were Spain, I wouldn’t be too happy if New Jersey defaulted.” He adds, “Clearly, we are in situation where markets are very skittish and there is uncertainty about how much risky debt there really is out there.” Yet some factors would tend to limit the impact even of a big default.
§ Banks, while they do a brisk business underwriting muni-bonds, are less active as owners of the securities. Banks have a total of 1.3% of their assets, or about $175 billion, invested in muni-bonds, according to Federal Deposit Insurance Corp. data.
§ Mortgage-backed securities, by comparison, made up about 10% of federally insured banks’ assets when the mortgage market began its slump in 2007, according to the FDIC.
§ Banks’ relatively modest position in muni-bonds means that further price declines wouldn’t likely crimp their ability to lend to businesses and homeowners, as occurred during the mortgage crisis.
§ The next-largest muni-bond holders after individuals are insurance companies, mainly property-and-casualty insurers, with about 15%. But muni-bond price fluctuations don’t hamper insurers’ income statements because the insurers tend to hold bonds to maturity; bond losses on paper generally remain unrealized. In an extreme case, state insurance regulators could force a firm to set aside more capital to guard against losses.
§ There are a few small muni-bond defaults every year, but the default rate on a broad index of municipal bonds rated by Standard & Poor’s was just 0.21% in 2010. Many investors and economists maintain that a default by a state or large city is unlikely for several reasons.
§ For one, U.S. states’ debts relative to the size of their economies are low, when compared with, say, the European governments that ran into deep trouble last year. Illinois’s debt, including bonds and unfunded pension obligations, is about 13% of the state’s gross domestic product, according to Moody’s. Greece’s debt, excluding pension liabilities, is about 144% of GDP.
§ Politically fraught as bailouts are, many investors and economists think Washington would ultimately come through with some kind of help before a state or large city defaulted. “It would be difficult for the federal government to say yes to AIG and no to Illinois,” says Hugh McGuirk, a portfolio manager at mutual-fund firm T. Rowe Price, referring to insurer American International Group Inc.
§ Most states must balance their budgets, and governors are now proposing spending cuts to do so. Illinois imposed sharp income-tax increases last month and is preserving cash by putting off paying vendors.
§ “What we are seeing on the ground is that states are taking actions that are good for bondholders,” says Daniel Loughran, a senior portfolio manager at OppenheimerFunds. The higher yields and lower prices on muni-bonds are luring some investors. An especially prominent one stepped up in December.
§ Bill Gross, co-chief investment officer at Pimco-the Pacific Investment Management Co. unit of Allianz SE-put money into five of its muni-bond funds, federal filings showed. Pimco said Mr. Gross wasn’t available to discuss his investments.
§ One muni-bond issuer that didn’t manage to sort out its problems is Vallejo, Calif., which more than two years ago filed for bankruptcy reorganization. (Many cities can do that, though states can’t.) Vallejo Mayor Osby Davis says the likelihood his government won’t be able to borrow for many years has a silver lining.
§ “We ought to stop living on credit and find ways to offer the same level of service for less money,” he says.