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Are US Banks Still ‘Too Big to Fail’?

By Michael Winship | Consortium News | August 5, 2014

Analyzing a government report is like eating and digesting a meal — better to take it slowly than gobble quickly and suffer the possible consequences. Example: last Thursday’s report from the Government Accountability Office (GAO) on whether or not large financial institutions were still perceived as “too big to fail.”

The immediate takeaway by many in the media, government and investment community was that the need for a taxpayer subsidy like the bailouts of 2008  “may have declined or reversed in recent years” and, in the words of Mary J. Miller, the Treasury Department’s under secretary for domestic finance, “We believe these results reflect increased market recognition of what should now be evident – Dodd-Frank ended ‘too big to fail’ as a matter of law.”

But with just a little time to digest the GAO’s findings, much of the response has shifted to, “Not so fast.”

On the day of the report’s release, Sen. Sherrod Brown, D-Ohio, who, with Sen. David Vitter, R-Louisiana, requested the GAO analysis and co-sponsors the Terminating Bailouts for Taxpayer Fairness Act, held hearings.

Stanford University economist Anat Admati, a recent guest on Moyers & Company, testified that, “The main problem with the guarantees is they reinforce and create perverse incentives and intensify the conflicts of interest between the banks and the rest of society. … Requiring that banks fund themselves so that those who benefit from the upside of risk bear more of its downside brings about more safety and corrects distortions.”

In The New York Times, columnist Gretchen Morgenson writes, “Six years after the financial crisis, it’s clear that some institutions remain too complex and interconnected to be unwound quickly and efficiently if they get into trouble.

“It is also clear that this status confers financial benefits on those institutions. Stated simply, there is an enormous value in a bank’s ability to tap the taxpayer for a bailout rather than being forced to go through bankruptcy.”

Morgenson adds, “Were we to return to panic mode, the value of the implied taxpayer backing would rocket. The threat of high-taxpayer bailouts remains very much with us.”

Financial professionals echo her concern. Camden Fine, president and CEO of the Independent Community Bankers of America, notes in American Banker (not without self-interest) that while the size of big bank subsidies may have “diminished since the crisis … the larger point is that the biggest and riskiest financial firms still have a competitive advantage in the marketplace. They can still access subsidized funding more cheaply than smaller financial firms because creditors believe the government would bail them out in the event of a crisis. No matter how you cut it, a subsidy is a subsidy. And this subsidy is one that puts the American taxpayer on the hook. …

“Meanwhile, the largest financial institutions are only getting bigger. According to our analysis of call report data from the Federal Deposit Insurance Corp., since the end of 2009, the assets of the six largest financial institutions have grown each year. Their total assets rose from $6.41 trillion in 2009 to $7.22 trillion in 2014 — a total increase of $800 billion. The top six banks are also responsible for more than half of the $2 trillion increase in total U.S. banking assets in the years since 2009.”

In those same pages, Mayra Rodriguez Valladares, managing principal at a capital markets and financial regulatory consulting firm, is concerned that there are “signs that banks have failed to learn from the detrimental effects of the global credit crisis and pleas from bank regulators. This year, large banks are loosening their credit underwriting standards and are extending leveraged loans to companies. …

“Additionally, large banks continue to exhibit incredibly weak operational risk management. Operational risk is the threat of a breach in the day-to-day running of a business because of people, processes, systems, and external events. Since big banks have yet to make ethics a top priority, not a day goes by that one does not see examples of operational risk. Market rate manipulations and incorrect foreclosure procedures continue to plague banks and their reputation.” 

She concludes, “As the U.S. economy continues to grow and the financial crisis is relegated to the dustbin of history, big banks are taking bigger chances. The challenge for regulators now is to remember that when the party gets going, it is difficult to stop the champagne flowing.”

Gretchen Morgenson’s colleague at the Times, Paul Krugman, has a more positive point of view, while asking the crucial question, “How do you rescue a banking system without rewarding bad behavior? …

“The answer is that the government should seize troubled institutions when it bails them out, so that they can be kept running without rewarding stockholders or bondholders who don’t need rescue. In 2008 and 2009, however, it wasn’t clear that the Treasury Department had the necessary legal authority to do that. So Dodd-Frank filled that gap, giving regulators Ordinary Liquidation Authority, also known as resolution authority, so that in the next crisis we can save ‘systemically important’ banks and other institutions without bailing out the bankers.”

The GAO report, he writes, “suggests that reform has done at least part of what it was supposed to do… Wall Street and its allies wouldn’t be screaming so loudly, and spending so much money in an effort to gut [Dodd-Frank], if it weren’t an important step in the right direction.”

Nonetheless, as Senators Brown and Vitter stated, “Today’s report confirms that in times of crisis, the largest megabanks receive an advantage over Main Street financial institutions. Wall Street lobbyists may try to spin that the advantage has lessened. But if the Army Corps of Engineers came out with a study that said a levee system works pretty well when it’s sunny — but couldn’t be trusted in a hurricane — we would take that as evidence we need to act.”

Michael Winship is the Emmy Award-winning senior writer of Moyers & Company and BillMoyers.com, and a senior writing fellow at the policy and advocacy group Demos.

August 7, 2014 Posted by | Corruption, Economics | | Leave a comment

What the NML vs Argentina case means for the world

By Oscar Ugarteche | ALAI | July 29, 2014

At the end of June, 2014, a New York Second District Judge ruled in favour of a hedge fund, NML Capital, and against the Republic of Argentina. The issue at stake was if a hedge fund that bought debt paper three years after a debt restructuring, had or not the right to collect on the same terms as the rest of creditors. The ruling was, yes it has. The problem is that in the original debt restructuring creditors received new instruments with a strong haircut that made the payback possible for Argentina, while the old instruments do not have any debt reduction. In this way, the profitability of the hedge funds in buying, in 2008, those old unwanted instruments of a debt rescheduled in 2005, and unpaid since 2001, will be of 1,600%. The way the hedge fund works is through buying, at a very heavy discount, the debt paper that was not included in the rescheduling, and then suing the Argentine Government for full payment of capital plus all the interest due. Interest comes free when debt paper is under impaired value credit category. Elliott Associates, major shareholder of NML Ltd., has made a reputation for cornering Governments in times of need and getting away with it. Panama was the first one, Congo, Peru, Argentina amongst others. Their argument is that these lawsuits discipline the debtors.

The international relevance of this sort of activity is that it brings to the fore the nature and presence of US law and rulings in international finance. Most US dollar-denominated debt is issued under US law and subject to the Southern district courts of New York City, those near Wall Street. This means that if Botswana borrows from Uganda in US dollars, it is almost certain those contracts will be written under NY law. The ramifications of this are that any legal action between those two countries will be subject to New York law, with the implication that New York law becomes world law and is applied worldwide, becoming a mechanism of coercion. The enforcement of payment in the ruling is executed through bank account or asset embargoes. For example, in 2012 the Argentine frigate Libertad was seized in a port in Ghana under orders from the New York judge. She was released after some months under a ruling from the UN International Tribunal for the Law of the Sea because she holds diplomatic immunity.

The last ruling includes non-dollar denominated instruments signed under British and other laws, with the argument that the payment due to one creditor is equally due to all. Ecuador, a debtor that defaulted and bought its debt at a 70% discount in 2008 decided in May 2014 to buy back 80% of the held out debt plus interest and got it over with.[1] The huge return on investment for unpaid bondholders was less of a problem for Ecuador than the likelihood of having its accounts frozen after the new loans were disbursed, given it is a dollar denominated economy.[2]

Vulture Funds

Vulture funds are hedge funds specialised in buying debt paper from problem debtors who have solved or are in the process of solving a default problem. They jump over their prey, the struggling country, purchase his debt instruments not included in the final debt restructuring arrangement at a small percentage of face value and sue the country for full payment including interest. If the country is undergoing duress, the fund is perfectly happy to subject her citizen’s to more hardship in exchange for a huge profit. This is possible because debt papers before 2001 did not have collective action clauses (CAC) yet, which means that if most creditors agreed to a debt workout solution, this included only those who joined voluntarily. With a CAC, if a large portion of the creditors are in favour of a workout, all instruments are included.

The lack of CAC was made evident when Elliott sued Peru[3] in the 1990s and won the case in 2000. Peru had undergone the longest sovereign default in history, from 1984 to 1994, and came out with a debt restructuring that included a sharp haircut and new Brady bonds. Only four instruments were left at Swiss Bank Corp., the Peruvian manager of the Brady deal, belonging to Banco Popular, a bankrupt bank closed in 1992. These four instruments were sold by Swiss Bank, the agent for Peru’s debt, to Elliott not to Peru, after the Brady deal had been signed in what appeared to be a breach of contract on Swiss bank’s side. Elliott then sued Peru and apparently got a helping hand from a Peruvian lawyer who happened to be an official at the Ministry of Finance in 1994. There was much information passed in 1994 from the Ministry of Finance to the creditors leading to the trial of Finance Minister Camet, responsible for this operation. He died in 2013 serving prison term at home for this and other cases.

Elliott sued Peru for 100% of capital. It had paid 5% of the face price of the papers. On top it sued it for unpaid interest since 1984. The profitability on the Peruvian operation was 1,600%. Peru’s case was made using the Champerty Doctrine that says that no debt purchased with the sole purpose of harming a debtor should be taken into account by the US judiciary. Investors who become creditors through the purchase of debt instruments at a time when the debtor is undergoing hardship should not be taken into legal consideration. Nevertheless, the New York judge ruled against Peru. Amongst the group of investors was a former US ambassador to Peru. It remains unclear if the former ambassador was there on his own right or as a representative of the US State Department. The Peruvian Government lost the case and the appeal and as a result all Society for Worldwide Interbank Financial Telecommunication (SWIFT) dollar transactions were blocked. After that, Elliott sued Peru in the Belgian courts that ruled in favour of Elliott and prevented the use of Brussels based Euroclear.[4] It then proceeded to use Clearstream in Luxembourg, but knowing this would also be blocked. The argument of the Belgian Court was pari passu, all creditors should be treated equally.

The Argentine operation[5]

NML associates, a subsidiary used by Elliott to do the Argentine operation, purchased 50 million dollars of debt paper that had not entered the restructuring scheme in 2005 and has sued for 1,500 million USD. The holders of those unrestructured papers sold them to NML in 2008 after the 2005 swap was arranged and before the 2010 swap was finalised. They then started the legal proceedings that have lasted six years until finally the judiciary ruled in favour of NML. The Argentine debt is held with creditors in many jurisdictions and not all are subject to US law, theoretically. Equally there are dollar and non-dollar denominated instruments and agent banks operating outside the US. The ruling however starts from a peculiar reading of the principle of pari passu, equal payments must be made to all creditors either if they restructured or if they did not, regardless of the law applied in their contract. The Trustee in charge of making the payments is Bank of New York who must abide by this ruling and comply with the law.

This ruling essentially takes away the incentive to restructure sovereign debts normally done on the basis of debt reductions. Worse, it places legal creditors who underwent the restructuring procedure on the same basis as highly speculative investors who operate on bad faith buying the debt after the swaps are finalised, in the spirit of Champerty. The gravest consequence is that a New York ruling is converted into a global ruling for any Argentine assets held by anyone anywhere. An explanation was given that the ruling is not meant to be a precedent[6] which means the ruling was done as a specific punishment reminding the ruling of the Court of the Hague against Austria in 1931 when it decided it wanted to form a customs union with Germany. Then as now, if it is not a precedent, it is a punishment. The question is why.

Ways forward

Argentina’s position is that it is the right of a sovereign debtor to restructure its debt. It believes in the principle of non-intervention in foreign states and does not admit legal actions executed outside the natural range of the justice of the United States. In so doing it believes it is defending the property rights of the holders of Argentine bonds, especially those whose right is not governed by justice of the United States. But also of those who entered willingly and in good faith in the swap agreements of 2005 and 2010 and who this ruling has declared, for all purposes, invalid. Argentina is opening the fight by depositing the money at the Bank of New York so bondholders will collect. As the money belongs to the bondholders, they should be able to do so. This is the sense of a communique published in the international press in July, 2014, a week after the ruling was made public.

The vultures, being what they are, have a press campaign stating that Argentina does not want to pay any of its debt nor comply with US law. Argentina, on its side, has informed the clients it will pay through Euroclear which should protect them from the US international payment embargo, as book entry accounts in Euroclear enjoy unconditional immunity from attachment.

Finally

The international support given to Argentina is an expression of what is globally perceived as being an unjust ruling from a court that should not have extraterritorial functions over currencies and assets that are not US assets. The capture of a payment for Cuban cigars traded between Germany and Denmark under US law is an expression of the extraterritorial use of US law, which is unacceptable.[7] If the international system is going to evolve it must go in the direction of international law and international courts and not in the direction of local law with a local court with global ramifications. This implies a new financial architecture which, following the lines of the BRICS in terms of financial reforms, could mean the creation of a clearing house and greater use of non-dollar means of payments in international transactions. The creation of an international financial law process in the United Nations sphere, similar to that being developed for international trade law (UNCITRAL), is vital. This should come together with the development of the concept of international tribunals for debt arbitration in order to obtain reasonable debt workouts of sovereign defaults following the principles of fair and transparent arbitration that should begin with a debt audit, keeping the Champerty principle in mind.

There are major flaws in the international financial architecture that allow the supreme court of the leading debtor country in the world to rule over the lives of millions of people in another land in an unjust, unfair and non-transparent manner. The ruling affects the position of other bondholders in non-dollar denominated instruments issued under other legal domains and opens the possibility of embargoes worldwide. It also opens up the possibility of disavowing the debt to international bondholders, following the same logic in reverse.

The practice of extorting money from troubled nations in favour of a minuscule group of investors who purchase debt paper after debt negotiations with the rightful creditors are finished, with the sole purpose of extorting an unfair profit from it, is sanctioned by US law.  This is called the Champerty Doctrine.  This sort of practice was outlawed in New York by Judiciary Law §489 http://codes.lp.findlaw.com/nycode/JUD/15/489#sthash.TroVCUs0.dpuf.  The rulings from the New York courts, however, seem to favour the vultures and the application of the rulings worldwide has dire consequences on the debtor.

The lesson from the NML-Argentina case is that non-OECD countries in the future should not issue debt instruments in US dollars nor be subject to New York law and courts, given the risk expressed above.  Given the world power structure change, BRICS should continue to develop a new international financial architecture.  International trade should equally not be settled in US dollars and a new non-OECD international clearing house should be started to prevent harassments from dubious US rulings.  International capital is not going to give up its power to extort wealth from distressed countries.

Newcastle and Fortaleza, 15 July, 2014.

– Oscar Ugarteche, Peruvian economist, is the Coordinador del Observatorio Económico de América Latina (OBELA), Instituto de Investigaciones Económicas de la UNAM, México – http://www.obela.org. Member of SNI/Conacyt and president of ALAI http://www.alainet.org

[1] “Ecuador Sells $2 Billion in to Bond Market,” Bloomberg, 17 June, 2014, at  http://www.bloomberg.com/news/2014-06-17/ecuador-plans-bond-market-return-today-five-years-after-default.html

[2] “Argentina’s Woes don’t Chill Ecuador’s New York Bond Sales”, Bloomberg, June 24, 2014 at  http://www.bloomberg.com/news/2014-06-24/argentina-s-chilling-effect-on-new-york-debunked-by-ecuador-sale.html

[3] Congreso del Perú. Comisión Investigadora de la Corrupción. Caso Elliott. Junio, 2003. Fallo judicial. http://www.congreso.gob.pe/historico/ciccor/anexos/CASO%20ELLIOT%20ASSOCIATES%20LLP%20TOMO%20II.pdf

[4] Rodrigo Olivares-Caminal, “The Pari Passu Interpretation in the Elliott Case. A Brilliant Strategy but an awful (mid long term) outcome”, Hoftsra Law Review, 2011, Vol. 40, pp. 39-63.

http://www.hofstralawreview.org/wp-content/uploads/2013/09/BB.4.Olivares-Caminal.final_.pdf

[5]Conversations with various Argentine officials over the February to June 2014 period.

[6] “Don’t worry about an Elliott vs Argentina precedent”, January 11, 2013, http://blogs.reuters.com/felix-salmon/2013/01/11/dont-worry-about-an-elliott-vs-argentina-precedent/

[7] “US snubs out legal cigar transaction.” Copenhagen Post, February 27, 2012.  http://cphpost.dk/news/us-snubs-out-legal-cigar-transaction.898.html

http://alainet.org/active/75763

August 7, 2014 Posted by | Economics | , , , | Leave a comment

Brazil to increase Russia meat exports after US sanctions

The BRICS Post | August 7, 2014

Russia’s BRICS partner, Brazil has said it would step up to fill in the void of chicken imports to Russia after Russian President Vladimir Putin signed a decree banning certain food imports from countries that have sanctioned Russia over the Ukraine crisis.

Russian news agency Ria Novosti quoted a Brazilian official as saying the Latin American economy could increase chicken exports to Russia by 150,000 tons. Brazil, the world’s largest chicken exporter currently exports 60,000 tons of chicken to Russia. US exports of poultry to Russia are expected to be affected after Russia hit back at the US in a tit-for-tat move.

Head of the Brazilian Poultry Association Francisco Turra said the numbers of poultry plants licensed to send chicken to Russia will grow from the current figure of 20 as US and Canadian chicken and pork industries brace for a heavy blow to business after Putin’s announcement of the anti-sanction decree on Wednesday.

Brazilian firms like chicken exporter BRF SA and meatpacker JBS SA stand to majorly benefit from the move.

The Dilma Rousseff government in Brazil was quick to respond to Putin’s strong criticism of the EU’s latest round of sanctions against Russian businesses by offering to step up dairy and meat exports to Russia.

Russia’s agricultural watchdog, Rosselkhoznadzor, is expected to hold discussions on increasing exports from Latin American countries on Thursday.

Earlier on Wednesday, Putin signed a decree prohibiting “import into the territory of the Russian Federation of certain agricultural products, raw materials and foodstuffs originating in the state, has decided to impose economic sanctions against Russian legal entities and (or) physical individual or party to this decision”, said a Kremlin statement.

Russian Prime Minister Dmitry Medvedev said on Thursday  fruit, vegetables, meat, fish, milk and dairy imports from the US, EU, Australia and Norway would be banned for the stipulated one-year period according to the decree signed by President Putin yesterday.

Brazil and other BRICS countries had last month rallied against the economic sanctions imposed by the West on Moscow.

“We condemn unilateral military interventions and economic sanctions in violation of international law and universally recognized norms of international relations. Bearing this in mind, we emphasize the unique importance of the indivisible nature of security, and that no State should strengthen its security at the expense of the security of others,” said the joint declaration at the end of the BRICS leaders plenary meet in Fortaleza in July.

August 7, 2014 Posted by | Economics | , , , , , | Leave a comment

Russia to ban all US agricultural products, EU fruit & vegetable imports – watchdog

RT | August 6, 2014

Moscow plans to ban all US agricultural products, including poultry, as well as EU fruit and vegetable imports in response to Western sanctions imposed on Russia over the Ukrainian crisis, according to the country’s agricultural watchdog.

All agricultural goods produced in the US and imported into Russia will be halted for one year, the assistant to the head of Rosselkhoznadzor, Aleksey Alekseenko, told RIA Novosti.

The list of banned products will be published on Thursday, he added.

August 6, 2014 Posted by | Economics | , , , | Leave a comment

Gaza industrial sector hit hard as 134 factories destroyed

Ma’an – 06/08/2014

GAZA CITY – At least 134 factories were destroyed during Israel’s four-week military offensive in the Gaza Strip, a Palestinian industrial union said Wednesday, causing severe damage to an already fragile industrial sector.

The union of Palestinian industries said that most factories stopped operations for over 30 days, with reported losses of at least $70 million.

Over 30,000 workers were made redundant due to the closures.

“The Israeli war machine deliberately destroyed the infrastructure of the Palestinian national economy by targeting factories which posed no security threat to the occupation,” the union said.

The industrial sector had already suffered major damage during previous Israeli military offenses in Gaza in 2012 and 2008.

The ongoing Israeli blockade has also severely limited the productivity of the industrial sector since it was imposed eight years ago, forcing factories to close or fire workers to remain in operation.

“Israel shouldn’t be rewarded for this aggression, and so Israeli products should be boycotted both locally and internationally,” the union added.

Deputy PA economy minister Taysir Amro said the 29-day war had caused total damage of up to $6 billion dollars.

August 6, 2014 Posted by | Economics, Ethnic Cleansing, Racism, Zionism | , , , | Leave a comment

The Subprime Economy is Back—But It Never Really Left

By JP Sottile | WhoWhatWhy | August 3, 2014

Remember the sub-prime economy?

It’s back, but it’s different this time. Well, sorta different. And you may be affected by it in all kinds of ways.

The new sub-prime economy is a direct result of the catastrophic financial ruin caused by the old sub-prime mortgage crisis. Wall Street’s biggest money has figured out how to profit off of people deep in debt and unable to climb out because of the still-limping economy.

So, after pushing people to the margins with exotic financial instruments, Wall Street is now profiting off the increasingly marginal existence of many Americans. With more and more people renting their homes, the median household now 20% poorer today than it was in 1984, and almost half of all Americans now living paycheck to paycheck, the sub-prime economy has shifted away from big-ticket mortgages to profiting off the banalities of everyday life.

The numbers don’t lie: 35% of Americans—roughly 77 million people—have an outstanding debt currently being pursued by a collection agency, according to a new study by the Urban Institute. Although the individual amounts of delinquent debt range from as little as $25 to over $125,000, the national average is a staggering $5,178.

That’s a lot of bad debt in the system, and there are rich pickings in all of it.

Maybe that’s why the study was funded by Encore Capital Group—the country’s largest publicly-traded buyer of defaulted debt—and co-authored by its very own think-tank, the Consumer Credit Research Institute. The latter, founded in 2011, describes its work as a “ground-breaking effort to develop new knowledge about low- and moderate-income consumers” using techniques borrowed from economics, statistics and psychology.

The first go-round on the subprime roulette wheel was fueled primarily by the post-9/11 “go-go” housing boom. The middlemen of Manhattan systematically used predatory lending to ensnare hundreds of thousands of hopeful American Dreamers into an adjustable-rate, no-money-down, balloon-payment nightmare. So they made money handing out subprime mortgages like Halloween candy, bundled that risky, unsustainable debt into exotic financial instruments, and profited again by betting they’d fail.

But that was then, and things are supposed to be different now, right?

Now the financial system is supposed to be chastened. It is, according to its staunchest critics, wholly and restrictively regulated by Dodd-Frank. In fact, Dodd-Frank is so restrictive, they say, that it has impeded the “recovery” and needs to be loosened. That’s despite the fact that many key rules still haven’t been written and despite the omnipresence of corporate banking interests at every step of the rule-making process.

Things are different now. This new sub-prime bubble is not being inflated by predatory lenders targeting would-be homeowners. Even though the real estate market is improving in places like San Francisco, New York and Washington, D.C., homeownership is at a 19-year low, with more people opting to rent because of tighter finances.

Hedge Funds, Hedge Hogs

Well-positioned hedge funds gobbled up tens of thousands of homes left vacant by the bursting mortgage bubble. Sometimes entire neighborhoods were purchased by those firms, who—unlike Lehman Brothers—were not broken by the crash. Like JP Morgan hoarding the devalued financial assets of its failed competitors, hedge funds saw the sudden surge in low-cost real estate as a buying opportunity.

The Blackstone Group—one of the world’s largest hedge funds—went on a two-year buying spree that transformed it into “America’s largest landlord” with over 40,000 houses in its profitable inventory.

And that’s where bad debt is accumulating—in the day-to-day struggle to make ends meet.

To wit, the Urban Institute’s study focused on collections of non-mortgage bills. These include credit card bills, medical bills, and utility bills that are “more than 180 days past due and have been placed in collections.”

A good example of the financial jeopardy many face is in Detroit. That’s where the median household income is less than half the national average—and where tens of thousands couldn’t afford to pay their water bills.

The bankrupted city decided to do something about chronic delinquencies—they began shutting off people’s water. As the pace of the shut-offs sped up, the city paid $6 million to a private contractor to make sure the taps ran dry. So far, some 100,000 have been without water at times.

This is exactly the sort of compromised position many find themselves in with this new economy. And it’s where predatory lending is taking its toll, targeting the desperate with high-risk, high-interest and, therefore, high-reward loans that epitomize Wall Street’s unending “search for yield.”

Bad Credit? We Can Help You Make It Worse

And what a yield lending to subprime customers earns. The “Payday Loan” industry still gets away with interest rates as high as 700 percent, a story WhoWhatWhy reported in March. That kind of loan puts many people into a modern form of sharecropping, accruing debt faster than they can pay it off.

The $3 billion-a-year industry is finally being scrutinized by federal regulators at the Consumer Financial Protection Bureau. Even so, the underlying business model is being profitably recycled.

Take, for example, the entry of banks and private equity firms into the used car business.

They identify distressed and marginal candidates for risky, high-interest loans on cars that all too often end up being lemons, according to the New York Times. After searching for potential customers with low credit scores, banks like Capital One and Wells Fargo work with dealers who send them “certificates” redeemable for a “no credit, no problem” loan. That traps the less financially savvy customers into long-term loans that eventually triple or quadruple the cost of the car—or worse.

New victim targeted: rank and file of the U.S. Military

A little-known company called USA Discounters has opened another front of the high-interest assault, targeting the rank and file of the U.S. military.

USA Discounters leverages the low-wage position of active-duty military families into high-yield loans for mundane household items like TVs and washers and dryers. Despite their name, the company sometimes charges double the normal retail price for items, and gives customers credit on terms that can quickly turn unfavorable.

And that’s really what the subprime economy is now—easy money at the lowerend of America’s wealth gap. And the lower end is growing.

Photo Credit: BUDGET PICTURE

August 5, 2014 Posted by | Economics | | Leave a comment

35% of Americans are in Debt to Collection Agencies

By Noel Brinkerhoff | AllGov | August 5, 2014

More than a third of all adults in the United States find themselves dealing with collections agencies as a result of falling seriously behind on their debts.

It is estimated that 35% of Americans nationwide are in collections, according to Delinquent Debt in America, a new report from the Urban Institute. Debts in collection can include medical bills and traffic fines, as well as consumer credit accounts.

In some states, nearly half of those with credit files are being hounded by debt collectors. Nevada, “which was hard hit by the housing crisis,” the report says, has a 47% rate, the highest in the country.

A dozen states, including 11 in the South, as well as the District of Columbia, are above 40%: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, South Carolina, Texas, and West Virginia. At the other end are Minnesota, North Dakota, and South Dakota, which have the lowest rate of people in collections, about 20%.

Looking at the numbers of what people owe, it isn’t a shock to learn that so many Americans are so far behind on paying their credit cards, mortgages and other debts.

Nerd Wallet reported these sobering figures for the U.S. in April:

Average per household credit card debt: $15,191

Average per household mortgage debt: $154,365

Average per household student loan debt: $33,607

At any one time, about 5% of the population has a non-mortgage bill such as a credit card account, car loan or student loan that’s more than 30 days past due.

To Learn More:

Delinquent Debt in America (Urban Institute) (pdf)

American Household Credit Card Debt Statistics: 2014 (by Tim Chen, Nerd Wallet)

Debt Collection Complaints by Military Members and Veterans Skyrocket (by Noel Brinkerhoff, AllGov)

Largest Debt Collector Gets away with Minor Fine for Harassing Citizens (by Matt Bewig, AllGov)

August 5, 2014 Posted by | Economics | | Leave a comment

Switzerland will not blindly follow EU sanctions against Russia – Swiss economy minister

RT | August 4, 2014

For Switzerland to copy and paste EU sanctions against Moscow is unwise, and would jeopardize the country’s role as a mediator, said Swiss Economy Minister Johann Schneider-Ammann.

The Swiss government has no plans to follow in the EU’s footsteps and impose sanctions against Russia, Schneider-Ammann said in an interview with the Swiss newspaper Schweiz am Sonntag.

Schneider-Ammann said that choosing a side would undermine the country’s neutrality in the matter.

“This role [as mediator] will be weakened, if we duplicate EU sanctions,” Schneider-Ammann said, adding that Switzerland holds the chairmanship of the Organization for Security and Co-operation in Europe (OSCE), which is vitally important for peace talks between Russia and Ukraine.

Another main concern for Switzerland, home to many Russian nationals, is any economic blowback from sanctions.

The economy minister warned that shutting out Russia could “result in a domino effect” which will “have a negative impact on our economy.”

Unlike its European neighbors who are dependent on Russia for natural gas, Switzerland is financially tied to Russia. Switzerland is home to an estimated $15.2 billion in Russian assets as of 2012, and oil exchanges in Geneva account for 75 percent of Russian crude exports, Reuters reports. Many Russians live in the country.

In March, after Crimea reunited with Russia and the US unveiled its first round of sanctions, Switzerland said it would take measures if needed.

Switzerland has however frozen assets of ousted Ukrainian President Viktor Yanukovich and other former Kiev government officials.

The minister plans to visit Moscow in October to discuss Swiss-Russian bilateral economic cooperation. Schneider-Ammann is a member of Switzerland’s Free Democratic Party, and was first elected to the Swiss National Council in 1999.

August 4, 2014 Posted by | Economics | , , , , | Leave a comment

Iron Dome blocked just 8 out of 120 rockets: Israeli military

Press TV – August 4, 2014

The Israeli army has admitted that Israel’s Iron Dome missile system intercepted only eight out of nearly 120 rockets that were fired from the Gaza Strip into the occupied Palestinian territories on Sunday.

The military confirmed that around 110 rockets struck the occupied territories.

The development comes as the US Senate on Friday approved an additional USD 225 million in funding for the missile system despite Israel’s deadly war on the Gaza Strip.

Last month, US Defense Secretary Chuck Hagel sent a letter to congressional leadership requesting USD 225 million in additional US funding for the Iron Dome.

The money would be in addition to the USD 351 million that is already under discussion for Israel’s Iron Dome in fiscal 2015. It would bring total funding to USD 576 million, compared with the USD 176 million requested by the Pentagon for the fiscal year that begins on October 1.

On July 28, US Senate Majority Leader Harry Reid said Tel Aviv urgently needs more financial aid from Washington for its offensive against Palestinians in the Gaza Strip.

Israeli warplanes have been pounding numerous sites in the Gaza Strip since July 8, demolishing houses and burying families under the rubble. Israeli forces also began a ground offensive against the besieged Palestinian territory on July 17.

According to Palestinian sources in the Gaza Strip, Israel’s airstrikes and ground invasion have left at least 1,822 people dead and some 9,400 others injured.

The Israeli military says 64 soldiers have been killed in the conflict, but Palestinian resistance movement Hamas puts the fatalities at more than 150.

Iron Dome is a short-range missile system designed to intercept rockets and artillery shells fired from a range of four to 70 kilometers.

August 4, 2014 Posted by | Economics, Ethnic Cleansing, Racism, Zionism, Wars for Israel | , , , | Leave a comment

Westinghouse moves forward with nuclear scheme in Bulgaria

World Nuclear News | August 1, 2014

Westinghouse plans to hold a competitive tender “within the next year” for construction of a seventh reactor at the Kozloduy nuclear power plant in Bulgaria. The AP1000 reactor is projected to be online by 2023.

The site is already home to two operating Russian-designed VVER-1000 pressurised water reactors, Kozloduy 5 and 6, as well as four shut-down VVER-440s.

Westinghouse, part of Japan’s Toshiba group, announced the target date following its signing today of a shareholder agreement for the Kozloduy nuclear power plant expansion project. A source close to the talks in Sofia told World Nuclear News the agreement decides the ownership of project company Kozloduy NPP – New Builds plc, of which Kozloduy NPP plc and Westinghouse will own, respectively, 70% and 30%.

The agreement followed consultations with all of Bulgaria’s political parties, Westinghouse said in a statement. This and subsequent agreements for the project will be subject to future government oversight, it said. Bulgaria will have an interim government for two months, following the resignation of prime minister Plamen Oresharski’s government last week and a snap election in October.

The agreement also formalizes the selection of an AP1000 design reactor by Bulgarian Energy Holding EAD (BEH EAD), Kozloduy NPP plc and Kozloduy NPP – New Build plc. These parties entered into exclusive talks with Westinghouse in December 2013, following a feasibility study conducted under a competitive tender. Westinghouse will provide all of the plant equipment, design, engineering and fuel for the new unit.

A tender for the plant’s construction will follow European Union and Bulgarian public procurement rules, Westinghouse said. This process is expected to involve Bulgarian and global construction companies.

Bulgaria’s council of ministers approved an economy and energy ministry report on the shareholder agreement on 30 July, BEH EAD said yesterday. The agreement – including the financing terms of an engineering, procurement and construction (EPC) contract for the project – will enter into force after approval by the next government, it said.

No guarantee

Today’s agreement does not in itself mean that Kozloduy 7 will be built, however.

“Any future build will be dependent on future agreements such as an EPC. It will also require mutual agreement on financing terms and conditions,” Westinghouse spokesman Hans Korteweg told World Nuclear News.

“This agreement does not identify any specific assumptions on state support of any kind. It allows both Westinghouse and Kozloduy to engage international finance entities to determine best conditions for both parties. If this is not realized, the project will not go forward,” Korteweg said.

“This agreement in no way creates a binding decision to proceed – by either party. What it does do is to provide a basis for the project to go forward through a working partnership in reaching the next key agreements and obtaining attractive financing,” he said.

Some commentators in Bulgaria have said discussion about the project had lacked transparency, but Korteweg said this assertion was false.

“The process is similar to those conducted in France and the UK, for instance, where a partner and a technology are selected from current viable alternatives,” he said. “Specifically, there are only three PWR reactor designs certified in Europe – AP1000, EPR and MIR.1200. The Westinghouse AP1000 meets the criteria of diversified technology from existing reactors and 1200 MW maximum in size due to Bulgarian grid limitations,” he said.

Prior to today’s announcement, Kozloduy NPP and Westinghouse were bound by confidentiality common in all industries before release of the parameters of an agreement, he said.

Bulgarian owner

Although he would not confirm the share ownership of the project company, Korteweg said Westinghouse will not remain an equity investor once the reactor has been completed.

“We believe this is a national asset for Bulgaria and do not wish to dictate or otherwise influence the decision-making of its owners and operators. Bulgaria will have 100% of the revenue and profits of this plant,” Korteweg said. “Westinghouse’s stake in the project company during construction incentivizes Westinghouse to build a plant that meets international and Bulgarian safety standards, on schedule and within budget,” he said.

Bulgaria has an oversupply of electricity, but supply will fall in the mid-2020s with changes in the country’s energy mix, including fossil fuel plant closures due to CO2 emission reduction requirements and relative competitiveness of renewable energy, he said.

Additional nuclear power capacity during this timeframe “can certainly be utilized domestically and in export growth,” he said. Kozloduy 7 also represents the “smooth and eventual” replacement of units 5 and 6 in the next 20-30 years, especially after units 1-4 were shut down as part of Bulgaria’s accession to the EU in 2007, he said.

Asked if there will be a guaranteed power price for the reactor once it comes online, Korteweg said today’s agreement does not mention this.

“While many EU countries will be utilizing this tool, such as the UK, this is the decision of the Bulgarian government and its energy regulator to decide. The most important point is that the project produces power at the most competitive price compared to alternatives. This is something we are confident will be achieved,” he said.

Korteweg would not comment on the cost to build Kozloduy 7, but said Westinghouse has “offered a commercially attractive price to Bulgaria to provide diverse energy security without greenhouse gas generation.”

The company has “full confidence” that the conditions of this and future agreements for the project will meet EU rules, he said.
Energy diversification

Korteweg referred to the European Commission’s publication in May of a Communication outlining its recommendations for the establishment of a European Energy Security Strategy.

“Central to that strategy is the urgent need for the EU to increase its indigenous energy production, reduce its dependence upon external suppliers, and encourage diversity in the energy mix in order to meet its energy needs,” he said.

A European Council decision in late June to diversify energy supplies from Russia is also consistent with the Kozloduy 7 project, he said, as currently Russian companies have a monopoly supply of fuel to the plant.

“Westinghouse is not an integrated vendor and must therefore contract with local suppliers,” Korteweg said. “A significant amount of the project will be done in Bulgaria and is expected to significantly boost local, regional and national Bulgarian economies. Bulgarian companies are currently heavily involved with other contracts that Westinghouse has with units 5 and 6,” he said.

At the height of construction of the new unit, close to 3500 local workers will be employed on site, with an additional 15,000 workers involved in the associated supply chain, he said. Regional unemployment around the construction site could be reduced to 9% from the current rate of 13%, he said. Once the reactor is completed, its operation will require between 500 and 800 highly-skilled specialists, he said.

Westinghouse is also prepared to integrate Bulgarian companies into other ongoing and prospective projects, such as in the UK, he said.

Westinghouse recently announced an agreement to supply three Westinghouse AP1000 nuclear reactors to the NuGeneration Limited’s Moorside project in West Cumbria, England, in partnership with Toshiba and GDF Suez.

August 3, 2014 Posted by | Economics, Nuclear Power | , , , , | Leave a comment

The CIA Does Las Vegas

By Bill Blunden | CounterPunch | August 1, 2014

One evening over drinks in Ethiopia, during his tour as a CIA officer back in the 1960s, John Stockwell expressed reservations about covert operations to a senior fellow officer named Larry Devlin. Stockwell worried that the CIA was infiltrating governments and corrupting leaders to no useful end. Devlin, well-known in spy circles for his work in the Congo, berated Stockwell[i]:

“You’re trying to think like the people in the NSC back in Washington who have the big picture, who know what’s going on in the world, who have all the secret information, and the experience to digest it. If they decide we should have someone in Bujumbura, Burundi, and that person should be you, then you should do your job, and wait until you have more experience, and you work your way up to that point, then you will understand national security, and you can make the big decisions. Now, get to work, and stop, you know, this philosophizing.”

It’s a compelling argument: trust me, I know secrets. In fact it’s the same sort of argument that a federal informant named Hector Xavier Monsegur used to convince an activist named Jeremy Hammond to break into a whole slew of servers belonging to foreign governments[ii]. Monsegur assured Hammond: “Trust me, everything I do serves a purpose.” Hammond didn’t realize that he was actually part of an elaborate intelligence campaign being run by the FBI. Pimped out to other American three-letter agencies as it were.

Trust Me: I’m an Insider

John Stockwell was patient. He stayed on with the CIA and rose through the ranks, ultimately garnering enough clout to sit in on subcommittee meetings of the National Security Council. What he witnessed shocked him. Stockwell saw fat old men like senior ambassador Ed Mulcahy who fell asleep[iii] and petty officials like Henry Kissinger who got into embarrassing spats when someone else sat in their chair.[iv] All the while decisions were made that would kill people.

Quelle surprise! There were no wise men making difficult decisions based on dire threats to national security. Merely bureaucrats in search of enemies whose covert programs created more problems than they solved.

There’s a lesson in this story that resonates very strongly. A security clearance is by no means a guarantee of honesty or integrity. The secrets that spies guard don’t necessarily justify covert programs. Rather the veil of the government’s classification system is often leveraged to marginalize the public, to exclude people from policy making, and conceal questionable activity that would lead to widespread condemnation and social unrest if it came to light.

Past decades offer an endless trail of evidence: Operation Gladio, Operation Mockingbird, Project MKUltra, Operation Wheeler/Wallowa, Watergate, Operation CHAOS, COINTELPRO, Operation Northwoods, P2OG (the Proactive, Preemptive Operations Group), Iran-Contra, etc.

Cryptome’s John Young describes how this dynamic literally unwinds democracy[v]:

“Those with access to secret information cannot honestly partake in public discourse due to the requirement to lie and dissimulate about what is secret information. They can only speak to one another never in public. Similarly those without access to secret information cannot fully debate the issues which affect the nation, including alleged threats promulgated by secret keepers who are forbidden by law to disclose what they know.”

The Parade of Lies

In light of Ed Snowden’s revelations, and the remarkably flat-footed response of our political leaders, society is witnessing a crisis of trust. Time after time we’ve been lied to by ostensibly credible government officials. Not little white lies, but big scandalous ones. Lies that bring into question the pluralistic assumptions about American democracy and suggest the existence of what political analysts from Turkey would call a “Deep State[vi].”

For instance, both former NSA director Keith Alexander and House Intelligence Chair Mike Rogers claimed that NSA mass interception was instrumental in disrupting over 50 terror plots, a claim that dissolved quickly upon closer scrutiny[vii].

Or contemplate an unnamed NSA spokesman who vehemently told the Washington Post that the NSA was not engaged in economic espionage[viii], only to be contradicted by leaked top-secret documents which described how the NSA broke into networks run by the Chinese telecom giant Huawei and made off with the company’s crown jewels (i.e. product source code).

When President Obama scored some air time with Charlie Rose, in soothing tones he calmly explained to viewers that the NSA doesn’t monitor American citizens without a warrant. It’s surprising that POTUS, a man with a background in constitutional law no less, would be unaware of Section 702 of the Foreign Intelligence Surveillance Act (FISA). This legal provision contains a loophole that allows just this sort of warrantless monitoring to transpire[ix]. Never mind Executive Order 12333, which is arguable an even greater threat[x].

More recently, consider Dianne Feinstein’s claim back in March that the CIA had been monitoring a network used by the Senate Intelligence Committee. John Brennan, the CIA director, told her that she was full of it and sanctimoniously replied “when the facts come out on this, I think a lot of people who are claiming that there has been this tremendous sort of spying and monitoring and hacking will be proved wrong[xi].”

Well guess what? It turns out Brennan was on the losing side of that bet. An internal investigation showed that CIA officers had indeed been watching the Senate Committee[xii]. Stop and pause for a moment. This disclosure is a serious warning sign. What, pray tell, do you think happens to the whole notion of checks and balances when the executive branch spies on the other two branches? Do you suppose there are implications for the balance of power?

Damage Control

Faced with this ever expanding dearth of credibility, spies have worked diligently to maintain the appearance of integrity. Specifically, industry conferences like Black Hat and DEF CON have regularly catered to the needs of U.S. Intelligence by serving as platform for the Deep State and its talking points: that Cyberwar is imminent[xiii], that cybercrime represents an existential threat[xiv], and that mass interception is perfectly normal and perfectly healthy[xv].

“If the tariff of security is paid, it will be paid in the coin of privacy. [xvi]”

In these hacker venues high-profile members of the intelligence community like Cofer Black[xvii], Shawn Henry[xviii], Keith Alexander[xix], and Dan Greer[xx] are positioned front and center in keynote slots, as if they were glamorous Hollywood celebrities. While those who value their civil liberties might opine that they should more aptly be treated like pariahs[xxi].

“Time Out” Posturing

One would hope that the gravity of Ed Snowden’s documents would have some impact. Indeed, Jeff Moss, the organizer who currently runs DEF CON and who originally founded Black Hat (and, by the way, currently sits on the Department of Homeland Security’s Advisory Council[xxii]), did attempt to make a symbolic gesture of protest in the summer of 2013. He gently requested that feds call a “time-out” and not attend DEF CON[xxiii].

To grasp the nature of this public relations maneuver is to realize that roughly 70 percent of the intelligence budget is channeled to private sector companies[xxiv]. As Glenn Greenwald observed during the 2014 Polk Award ceremony, as far as the national security state is concerned there is little distinction between the private and public sector[xxv]. Anyone who has peered into the rack space of the data broker industry knows that the NSA is an appendage on a much larger corporate apparatus[xxvi].

So asking federal employees to stay away really doesn’t change much because the driving force behind the surveillance state, the defense industry and its hi-tech offshoots, will swarm Vegas in great numbers as they normally do. Twelve months after Moss calls his halfhearted “time-out,” Black Hat rolls out the red carpet for the Deep State[xxvii], (while the government threatens to clamp down on attendance to conferences by foreign nationals[xxviii]). This is all very telling.

Bill Blunden is an independent investigator whose current areas of inquiry include information security, anti-forensics, and institutional analysis. He is the author of several books, including The Rootkit Arsenal , and Behold a Pale Farce: Cyberwar, Threat Inflation, and the Malware-Industrial Complex. Bill is the lead investigator at Below Gotham Labs.

Notes

[i] John Stockwell, THE SECRET WARS OF THE CIA: part I, lecture given in October, 1987,

http://www.thirdworldtraveler.com/Stockwell/StockwellCIA87_1.html

[ii] Mark Mazzetti, “F.B.I. Informant Is Tied to Cyberattacks Abroad,” New York Times, April 23, 2014, http://www.nytimes.com/2014/04/24/world/fbi-informant-is-tied-to-cyberattacks-abroad.html

[iii] John Stockwell, THE SECRET WARS OF THE CIA: part I, lecture given in October, 1987,

http://www.thirdworldtraveler.com/Stockwell/StockwellCIA87_1.html

[iv] John Stockwell, The Praetorian Guard: The U.S. Role in the New World Order, South End Press, July 1, 1999.

[v] John Young, “Wall Street Journal Secrecy,” Cryptome, August 22, 2014, http://cryptome.org/0002/wsj-secrecy.htm

[vi] Peter Dale Scott, “The Deep State and the Wall Street Overworld”, Asia-Pacific Journal: Japan Focus, March 10, 2014, http://japanfocus.org/-Peter_Dale-Scott/4090

[vii] Cindy Cohn and Nadia Kayyali, “The Top 5 Claims That Defenders of the NSA Have to Stop Making to Remain Credible,” Electronic Frontier Foundation, June 2, 2013, https://www.eff.org/deeplinks/2014/06/top-5-claims-defenders-nsa-have-stop-making-remain-credible

[viii] Barton Gellman and Ellen Nakashima, “, U.S. spy agencies mounted 231 offensive cyber-operations in 2011, documents show” Washington Post, August 30, 2013

[ix] Nadia Kayyali, “The Way the NSA Uses Section 702 is Deeply Troubling. Here’s Why,” Electronic Frontier Foundation, May 7, 2014, https://www.eff.org/deeplinks/2014/05/way-nsa-uses-section-702-deeply-troubling-heres-why

[x] John Napier Tye, “Meet Executive Order 12333: The Reagan rule that lets the NSA spy on Americans,” Washington Post, July 18, 2014, http://www.washingtonpost.com/opinions/meet-executive-order-12333-the-reagan-rule-that-lets-the-nsa-spy-on-americans/2014/07/18/93d2ac22-0b93-11e4-b8e5-d0de80767fc2_story.html

[xi] Mark Mazzetti And Jonathan Weisman, “Conflict Erupts in Public Rebuke on C.I.A. Inquiry,” New York Times, March 11, 2014, http://www.nytimes.com/2014/03/12/us/cia-accused-of-illegally-searching-computers-used-by-senate-committee.html

[xii]Mark Mazzetti, “C.I.A. Admits Penetrating Senate Intelligence Computers,” New York Times, July 31, 2014, http://www.nytimes.com/2014/08/01/world/senate-intelligence-commitee-cia-interrogation-report.html

[xiii] Molly Mulrain, “Former CIA Official: ‘Cyber Will Be Key Component of Any Future Conflict’”, ExecutiveBiz, August 4, 2011, http://blog.executivebiz.com/2011/08/former-cia-official-cyber-will-be-a-key-component-of-any-future-conflict/

[xiv] Gerry Smith, “Cyber-Crimes Pose ‘Existential’ Threat, FBI Warns,” Huffington Post, January 12, 2012, http://www.huffingtonpost.com/2012/01/12/cyber-threats_n_1202026.html

[xv] “U.S. Cyber Command Head General Alexander To Keynote Black Hat USA 2013,” Dark Reading, May 14, 2013, http://www.darkreading.com/risk/us-cyber-command-head-general-alexander-to-keynote-black-hat-usa-2013/d/d-id/1139741

[xvi] Daniel E. Geer, “Cybersecurity and National Policy,” Harvard Law School National Security Journal, Volume 1 – April 7, 2010, http://harvardnsj.org/2011/01/cybersecurity-and-national-policy/

[xvii] https://www.blackhat.com/html/bh-us-11/bh-us-11-archives.html#Black

[xviii] https://www.blackhat.com/html/bh-us-12/speakers/Shawn-Henry.html

[xix] Jim Finkle, “Defcon 2012 Conference: Hackers To Meet With U.S. Spy Agency Chief,” Reuters, July 20, 2012, http://www.huffingtonpost.com/2012/07/20/defcon-2012_n_1691246.html

[xx] Spencer Ackerman, “NSA keeps low profile at hacker conventions despite past appearances,” Guardian, July 31, 2014, http://www.theguardian.com/world/2014/jul/31/nsa-hacker-conventions-recruit-def-con-black-hat/print

[xxi] George Smith, “Computer Security for the 1 Percent Day,” Escape From WhiteManistan, May 19, 2014, http://dickdestiny.com/blog1/?p=18011

[xxii] http://www.dhs.gov/homeland-security-advisory-council-members

[xxiii] Dan Goodin, “For first time ever, feds asked to sit out DefCon hacker conference,” Ars Technica, July 11, 2013, http://arstechnica.com/security/2013/07/for-first-time-ever-feds-asked-to-sit-out-defcon-hacker-conference/

[xxiv] Tim Shorrock, “Put the Spies Back Under One Roof,” New York Times, June 17, 2013, http://www.nytimes.com/2013/06/18/opinion/put-the-spies-back-under-one-roof.html

[xxv] “”We Won’t Succumb to Threats”: Journalists Return to U.S. for First Time Since Revealing NSA Spying,” Democracy Now! April 14, 2014, http://www.democracynow.org/2014/4/14/we_wont_succumb_to_threats_journalists#

[xxvi] “Inside the Web’s $156 Billion Invisible Industry,” Motherboard, December 18, 2013, http://motherboard.vice.com/blog/inside-the-webs-156-billion-invisible-industry

[xxvii] Spencer Ackerman, “NSA keeps low profile at hacker conventions despite past appearances,” Guardian, July 31, 2014, http://www.theguardian.com/world/2014/jul/31/nsa-hacker-conventions-recruit-def-con-black-hat/print

[xxviii] Andrea Shalal and Jim Finkle, “U.S. may act to keep Chinese hackers out of Def Con hacker event,” Reuters, May 24, 2014, http://www.reuters.com/article/2014/05/24/us-cybercrime-usa-china-idUSBREA4N07D20140524

August 1, 2014 Posted by | Civil Liberties, Corruption, Deception, Economics, Full Spectrum Dominance | , , , , | Leave a comment

U.S. Anti-Iran Lobby Group Accused of Mossad Ties

By Richard Silverstein | Tikun Olam | July 31, 2014

The NY Times reports a blockbuster story about the anti-Iran lobby group, United Against a Nuclear Iran. It’s an especially perfidious group supporting regime change, though it couches its approach in terms of opposing Iran’ nuclear program. Curiously, this is precisely the same way Israel’s far-right government disguises its own support for the violent overthrow of the Iranian government. Knowing that such a plan is not supported by the west including the Obama administration, they believe that they can paint Iran as enough of a threat to the world through it’s alleged plans to create nuclear weapons, that this will get them half-way to regime change.

rami ungar

Rami Ungar, Israeli “fixer” working either for Mossad or UANI to make problems of sanctions-busting companies “go away”

UANI specializes in “outing” companies which allegedly violate UN sanctions against Iran. The Times article revealed that the companies are usually approached by an Israeli “fixer” with close ties to the Mossad. He’s Rami Ungar, owner of an Israeli company, Ray Shipping, who’s worth $500-million.

Ungar gives them an opportunity to renounce their supposed trade with Iran.  Sometimes they’re extorted for a donation to UANI as well. Though the article doesn’t mention it, I’m certain that the Mossad intermediary probes for companies that will serve Israel’s interests in its fight against Iran.  Companies doing business with Iran who are willing to become Mossad assets are worth their weight in gold, since the Iranians trust them and Israel can use such trust to sabotage whatever aspect of the Iranian military or commercial interests the sanctions-buster participates in.

What brought much of this to light is a lawsuit brought by one of the ship owners who was targeted by UANI.  Instead of rolling over and playing dead, Victor Restis decided to sue UANI to find out what was going on inside the bowels of this organization. Restis, who denies all charges against him made by UANI, decided to take the battle to UANI. He’s demanding to see internal documents that would show who conveyed information to the group about him, what the information said, and how it was collected. His suit also implies that the Mossad directly funds UANI, another explosive charge.

What’s especially odd about the case is that the U.S. Justice Department has threatened to intervene in the case on behalf of UANI. Clearly, the real reason they’re willing to take such an unusual step is that they’re trying to protect the Mossad. It would not only embarrass our Israeli ally[sic], it might expose the covert methods and work product of Israeli intelligence. It might allow Iran to find out what Mossad knows about it and how.

This is so unseemly because the Obama administration is protecting a foreign spy agency which aggressively steals U.S. secrets when possible. We are also protecting the Mossad as it attempts to manipulate U.S. public opinion in a witch hunt against Iran, which is a country with whom we’re trying to negotiate a rapprochement. Here is how the U.S. explained its “interest” in the case:

Government lawyers said they had a “good faith basis to believe that certain information” would jeopardize law enforcement investigations, reveal investigative techniques or identify confidential sources if released.

If we take this literally, it means the U.S. government has been in cahoots with the Mossad in this campaign against Iranian commerce. Even if it means something less than that, it certainly means that we’re protecting the Mossad as one of our “confidential sources.” The other possible interpretation is that the U.S. is investigating UANI or the Mossad for their collusion together, though the article doesn’t point in that direction at all.

UANI, though it claims to be a bi-partisan group above the political fray, is heavily laden with neocon, Bush-era personnel and board members. It’s full of U.S. intelligence officials and diplomats known as especially friendly to Israel, including Dennis Ross. Meir Dagan is also listed as an advisor. UANI appears little more than an extension of Israeli intelligence based in the U.S.

July 31, 2014 Posted by | Corruption, Deception, Economics, Timeless or most popular, Wars for Israel | , , , , , , | Leave a comment

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