Fireside Republic

Icelandic Shoppers Splurge as Currency Woes Reduce Food Imports

jimbrewster — Tue, 14 Oct 2008 23:27:56 +0000

Oct. 13 (Bloomberg) — After a four-year spending spree, Icelanders are flooding the supermarkets one last time, stocking up on food as the collapse of the banking system threatens to cut the island off from imports.

“We have had crazy days for a week now,” said Johannes Smari Oluffsson, manager of the Bonus discount grocery store in Reykjavik’s main shopping center. “Sales have doubled.”

Bonus, a nationwide chain, has stock at its warehouse for about two weeks. After that, the shelves will start emptying unless it can get access to foreign currency, the 22-year-old manager said, standing in a walk-in fridge filled with meat products, among the few goods on sale produced locally.

Iceland’s foreign currency market has seized up after the three largest banks collapsed and the government abandoned an attempt to peg the exchange rate. Many banks won’t trade the krona and suppliers from abroad are demanding payment in advance. The government has asked banks to prioritize foreign currency transactions for essentials such as food, drugs and oil.

The crisis is already hitting clothing retailers. A short walk from Bonus in the capital’s Kringlan shopping center, Ragnhildur Anna Jonsdottir, 38, owner of the Next Plc clothing store, said she can’t get any foreign currency to pay for incoming shipments and, even if she could, the exchange rate would be prohibitively high.

“We aren’t getting new shipments in, as we normally do once a week,” Jonsdottir said. “This is the third week that we haven’t had any shipments.”

Bankrupt

Iceland’s 320,000 inhabitants have enjoyed four years of economic growth in excess of 4 percent as banks and businesses expanded abroad, buying up companies from brokerages to West Ham United soccer club. Now, the three biggest banks, Kaupthing Bank hf, Landsbanki Island hf and Glitnir Bank hf have collapsed under the weight of about $61 billion in debts, 12 times the size of the economy, according to data compiled by Bloomberg.

The central bank, or Sedlabanki, ditched its attempt to peg the krona to a basket of currencies on Oct. 9, after just two days, citing “insufficient support” in the market. Nordea Bank AB, the biggest Scandinavian lender, said the same day that the krona hadn’t been traded on the spot market, while the last quoted price was 340 per euro, compared with 122 a month ago.

“There is absolutely no currency in the country today to import,” said Andres Magnusson, chief executive officer of the Icelandic Federation of Trade and Services in Reykjavik. “The only way we can solve this problem is to get the IMF into the country.”

Imports Dependency

The International Monetary Fund sent a delegation to the island last week. Prime Minister Geir Haarde said on Oct. 9 his country may ask it for money after failing to get “the response that we felt that we should be able to get” from European governments and central banks. The state will also start talks with Russia over a possible 4 billion-euro ($5.5 billion) loan.

Iceland’s rugged, treeless terrain, a barren stretch of volcanic rock, geysers and moss, means the country imports most food, other than meat, fish and dairy products.

Magnusson said last week that one of Iceland’s largest supermarket chains was unable to get any foreign currency to make purchases abroad and another retailer’s electronic payment didn’t go through. Iceland will begin to see shortages of “regular goods” by the end of the week if nothing changes, he said.

“We are struggling to make the economy survive from hour to hour,” Magnusson said. “There is an enormous amount of capital that wants to get out of the country.”

Sedlabanki told lenders on Oct. 10 that residents who want foreign currency should first prove they need the money for traveling by providing documentation for their trip.

Essential Goods

Wholesalers are demanding that importers pay before any goods are shipped, said Knutur Signarsson, head of the Reykjavik-based Federation of Icelandic Trade. Under normal circumstances, wholesalers abroad would extend credit for 30 to 90 days, he said.

“Many of them ask us to pay cash before they send the goods to Iceland,” Signarsson said. “Because of the situation, Iceland has become a country that no one trusts any longer.”

Bogi Thor Siguroddsson, owner of Johan Roenning, an import and retail business which has about 7 billion krona ($71 million) in annual sales, says he’s instructed his purchasing managers to only import the core goods, including light bulbs, lamps and electrical cables, they need to serve their customers.

“It’s enough to have the credit crisis,” he said. “Then you have the currency crash. Unfortunately, we have shown that we can’t handle it ourselves.”

Food Inflation

Icelanders, whose per capita gross domestic product is the fifth highest in the world, according to the United Nations 2007/2008 Human Development Index, will have to tighten their belts.

Shoppers are paying more for the goods they do get. The cost of fruits and vegetables, nearly all of which are imported, have gone up about 50 percent in recent months, said Steinunn Kristinsdottir, a 33-year-old Reykjavik resident who was leaving the Bonus store with her cart full.

“This situation really has been a bit troubling for people,” she said. “They don’t know what’s going to happen.”

To contact the reporter on this story: Chad Thomas in Reykjavik, Iceland, via the Helsinki newsroom at cthomas16@bloomberg.net.

Last Updated: October 13, 2008 01:47 EDT

Obama Voters May Scuttle Same-Sex Marriage Efforts

lowell — Tue, 14 Oct 2008 23:16:28 +0000

Lowell PonteNewsmax, Sunday, October 12, 2008
http://www.newsmax.com/lowell_ponte/same_sex_marriage/2008/10/12/139767.html

Same-sex marriage advocates in Florida, Arizona, and California may face their toughest opponents in the wave of new, minority voters set to hit the polls next month.

Initiatives on those states’ Nov. 4 ballots would define marriage as being between one man and one woman, thereby prohibiting same-sex marriage.

Gay-rights supporters worry not only that Democratic presidential hopeful Barack Obama has pledged to oppose such efforts but also that his candidacy will bring out record numbers of blacks and Hispanics to vote for him. Those two groups vote mostly for Democratic candidates but often are cultural and religious conservatives who tend to oppose same-sex unions.

About 6 percent of California voters are black, and 15 percent are Hispanic.

“It’s a Catch-22,” Andrea Shorter, campaign director of California’s gay and civil rights coalition And Marriage for All, told The New York Times.

Obama’s tepid support for same-sex marriage compounds the issue for gay-rights activists. Obama has said he favors “extending fully equal rights and benefits to same-sex couples under both state and federal law,” according to a letter he wrote in June in a letter to the San Francisco-based Alice B. Toklas LGBT [Lesbian Gay Bisexual Transgender] Democratic Club.

His letter described California initiative Proposition 8 as a “divisive and discriminative” effort to amend the Golden State’s Constitution.

But that sanction for civil unions is a long way from an endorsement for same-sex marriage, a political hot potato that neither Obama nor Republican rival Sen. John McCain seems eager to juggle into a major campaign issue.

Obama has indicated that, if elected president, he would change the military’s “don’t ask, don’t tell” policy of keeping sexual orientation private, a compromise that Democratic President Bill Clinton put in place in 1993. Obama also supports repealing the Defense of Marriage Act, which Clinton signed into law in 1996.

Such a repeal could require all states to accept same-sex marriages from Connecticut, California and Massachusetts, the three states where such unions are legal.

Obama used to say that each state should be able to make its own laws regarding same-sex marriage, but his former love of states’ rights apparently has changed.

And few doubt that Obama would appoint liberal judges inclined to legalize same-sex marriage from the bench, as California Supreme Court justices did in May by overturning an earlier marriage-defining initiative that 61 percent of voters made state law.

Ironically, liberal Obama thus could become the pivotal factor that passes anti-same-sex-marriage initiatives in three states.

Such unintended interactions between ballot propositions and candidates have happened before, but never before in precisely this way.

In 2004, a same-sex marriage ban initiative on the ballot “brought out enough conservative voters in Ohio to swing the state to GOP President Bush, giving him the state’s 20 electoral votes and a national victory,” according to San Francisco Chronicle reporter John Wildermuth.

Pundits have discussed for more than a year whether Obama might fall victim to the so-called “Bradley Effect,” in which people trying to avoid appearing bigoted tell pollsters they will vote for a black candidate but do not. It was named for Los Angeles Mayor Tom Bradley, who narrowly lost his race to become California’s governor in 1982 after a near-election Field Poll predicted he would win by 5 percent.

Field Poll analysts concluded that factors other than race may have defeated Bradley. One such element was the fact that the ballot included a statewide initiative, which liberal Democrats such as Bradley pushed, that would have restricted the legal possession of handguns.

This gun control initiative “brought out a skewed electorate different from the model used to predict likely voters,” Field Poll director Mark DiCamillo reportedly told veteran San Francisco Bay Area Democratic operative Frank D. Russo.

In other words, it brought an unexpectedly large number of Second Amendment conservatives to the polls to vote down the initiative. They also voted for Bradley’s Republican opponent, George Deukmejian, who became governor.

After the election next month, political scientists and pollsters might coin a new term, the “Obama Effect,” if his name on the ballot helps pass anti-same-sex marriage initiatives.

As of late September, California’s Field Poll showed Proposition 8 trailing by 55 percent to 38 percent.

“There’s no question African-American and Latino voters are among our strongest supporters,” said Frank Schubert, co-manager of the Yes on 8 campaign behind the measure. “And to the extent that they are motivated to get to the polls, whether by this issue or by Barack Obama, it helps us.”

By early October, Yes on 8 had begun buying heavy airtime for its first TV ad. The ad features San Francisco’s controversial liberal Mayor Gavin Newsome, who defied state law in 2004 by performing illegal same-sex marriages (3,995 of which were later annulled by the California Supreme Court) at city hall, boasting: “This door’s wide open now. It’s wide open, whether you like it or not.”

The Yes on 8 ad then warns that, unless outlawed, same-sex marriage could be taught as normal behavior to young children in public schools and be forced into churches and other traditional social institutions via anti-discrimination laws and lawsuits.

The Proposition 8 pro and anti groups plan to spend up to $20 million each on this campaign.

The Knights of Columbus, a Catholic fraternal service organization, has committed $1 million to pass Proposition 8. The American Family Association has committed $500,000 to do likewise, and the lobbying arm of Focus on the Family has spent $450,000.

On the other side, Bruce Bastian, co-founder of WordPerfect software, reportedly donated $1 million to the opponents of Proposition 8.

And to further complicate this issue, University of Southern California constitutional law expert David B. Cruz has noted that Proposition 8 would ban same-sex marriage, but not the legal requirement that heterosexuals and homosexuals be treated equally under law. Therefore, Proposition 8 could create a legal situation in which “no one could get married in California,” Cruz said.

Four years ago, 11 state ballots carried similar same-sex marriage ban initiatives. All won, by margins of at least 60 percent in every state except Oregon and Michigan, without the “Obama Effect” to boost them. Traditional marriage continues unchanged in those states.

In Arizona, Proposition 102, the Marriage Protection Amendment, was placed on the ballot by 16 Republican state senators, including the Senate president, and by 30 members of Arizona House. Recent polling found it leading by 49 percent to 42 percent.

This measure, as well as those in Florida and California, are supported by Arizona McCain. But in 2004, McCain opposed a Republican-backed constitutional amendment to outlaw same-sex unions nationwide.

Arizona law presents same-sex marriage. Proposition 102 would make such prohibition a part of the Arizona Constitution to put it beyond the power of liberal judges, like those in California, to declare it unconstitutional, its supporters argue.

In 2006, Arizona voters rejected Proposition 107, which opponents argued would have prohibited not only same-sex marriage but also domestic partnerships and civil unions.

In Arizona Hispanics make up about 29 percent of the population and 17 percent of eligible voters. Four percent of the state population is African-American.

In Florida, Proposition 2 aims to put into the state Constitution the following language: “In as much as a marriage is the legal union of only one man and one woman as husband and wife, no other legal union that is treated as marriage or the substantial equivalent thereof shall be valid or recognized.”

Because this is an initiative to change the Florida Constitution, it must gain a 60 percent supermajority to win. Recent polling shows the measure with 55 percent support and 41 percent opposition.

In Florida, Hispanics total about 20 percent of the population and 14 percent of eligible voters. Fifteen percent of the state population is black.

“Especially among social conservatives, there have been a lot of things about McCain they didn’t like,” the head of Yes2Marriage, the group behind Florida’s Proposition 2, told the San Francisco Chronicle. “But this will give a lot of conservatives a reason to come to the polls.”

Obama is expected to win California easily, and Arizona native son McCain is expected to carry his home state by a solid margin.

“Florida is one state where same-sex marriage might have a serious effect,” said Jack Pitney, a political science professor at Claremont McKenna College. “It’s a close campaign there between McCain and Obama, and a point or two might make a difference.”

But if Obama wins in Florida, will his “Obama Effect” also put a hard-to-remove same-sex marriage ban into the Florida Constitution?

Obama’s transformative effect on American politics and culture may be bigger, and more surprising, than he ever anticipated.

Financial mess can’t be fixed with Lies

Roger Fredinburg — Tue, 14 Oct 2008 23:11:38 +0000

Lies Won’t Save Us This Time

By Radio Host Roger Fredinburg

03-09-2008

Here we go again…..

Stupid is as stupid does…….

The hard cold fact is the USA is now over 50 Trillion Dollars in debt counting off budget obligations.

While our Senators and Representatives “Fiddle” the rest of us are feeling the heat from the flames as we reenter the atmosphere from fiscal fantasy back to reality.

It may come as no surprise to you that there aren’t enough trees on earth to print the paper currency required to amount to 55 Trillion dollars in normal denominations of fives, tens and 20’s etc.

You may be further shocked knowing that every household in America now owes nearly $500,000.00

Aside from the harsh reality that we really are up the proverbial creek without a paddle, the solutions to the problems, which are obvious, are lost on the scoundrels who created the mess to begin with.

Let me shock you scoundrels by letting you in on a little secret … “You cannot borrow your way out of debt” you idiots.

I hope that my language isn’t too harsh for your tired little ears to hear but I am going to tattle on you Robber Barons before its too late, if only someone will hear my cry.

The obvious issue that everyone is afraid to address is the fact that the Federal Reserve System with its “Fiat Currency” and “Fractionalized Banking” (That’s fancy double speak for hocus-pocus money made from thin air) has failed. This is the real culprit behind the scene that the “elitist Banker class” hope you won’t learn about.

Here are the things we must hear from our leaders if we are to know the talk is real and not just more drunken financial heresy.

Dismantle the Federal Reserve and the monetary farce and replace it with annual fiscal management and a balanced budget amendment. (Imagine Government living within its means).

Establish a currency that is backed up with real collateral, like Gold maybe? Gee, I wonder who thought that up?

Return to a limited form of government as designed by our founders and get government out of our daily lives and off the backs of our citizens by establishing a constitutionally defensible tax code.

Yes, burn the tax code we have now and restore our original system of tariffs, duties and excise taxes. (Works well in the Bahamas right now).

As our founders warned, avoid foreign entanglements and stay focused on keeping our priorities on what’s best for Americans and our way of life.

Place accountability in the political system by making it so that false statements and lies by government employees, agents, assignees, candidates and elected or appointed office holders are felony offenses with mandatory prison time. In other words a “truth in government” Act with teeth.

Modernize government by using technology to automate information traffic. This will enable us to eliminate over 1/2 of the federal payroll and cut the taxpayers expenses by a trillion dollars a year over 4 years.

Most of the federal government is simply pushing numbered papers back and forth. Technology has this covered and just like the automobile industry and the Longshoreman and much of the private sector did, government and their powerful union’s need to follow along and help us eliminate expensive and unnecessary government jobs. (We call it downsizing out here in the real world).

And sadly, on the immediate banking and mortgage crisis we can only repudiate the debt, that’s right, declare bankruptcy and reorganize building toward a long term solution that will reflect positively in the future regarding our courage and tenacity today. And record the fact that we accepted the responsibility and didn’t saddle our children with it. We need to take this bullet ourselves.

And to the crooks, scoundrels, opportunists, liars, thieves and all those who personally profited from this debacle, it should really be “off with their heads”.

Can anyone say “special prosecutor”?

I know I won’t rest until the likes of Barney Frank D-Mass. and Chuck Schumer D- NY and about 25,000 of their friends and colleagues are marched off in chains to Leavenworth.

Only sound fiscal policy, not global monetary policy, combined with honest money, a fair tax code and spending limits with real rules and constraints will solve the long term challenges we face.

Once we end the fraud of fractional banking, banks will only be allowed to loan money they actually have in deposit. No more creation of trillions out of thin air. That will solve the banking crisis forever.

Meanwhile, a moratorium on foreclosures and especially evictions as we head into winter would be appropriate. Why toss families out in the cold during holiday season when this problem is going to take a long while to sort out and fix.

And, we must rewrite the endangered species act to account for human beings as part of the natural environment and accommodate human needs in the Act along with the varmints, fur-balls, plants and assorted critters.

Re-writing the endangered species Act means we can open up natural resource development, oil, gas, timber, coal, aggregate resources, metals, jewels, minerals etc.

We can establish and maintain a quality environment while taking advantage of the offerings of the planet and we should. None of us wants to dirty up the planet, but we also must live here and that means using the resources available for our comfort and survival. To argue otherwise is just plain stupid.

This will create real time honored jobs that fit with America’s heritage, culture and history. Jobs people can proudly perform and with family wages.

The policies suggested here are the only things I know that will lead us back to greatness and out of the hands of the elite power brokers. We are the wage slaves who must reject their planned economy and false hope.

We need to get our best teachers and a pro-America curriculum and place on TV and on the W.W.W. We need to determine and promote the pitch with the most compelling resources available. Individuals, groups, however we do it, we must train our children up in the American way.

Face it, we have 2 or 3 generations of baby boomer damage to get control of, and we have very little time. Today’s citizens are actually warming up to socialism/communism and we already proved in the former Soviet Union and across Europe that it was an abject failure. If we know that, how is it possible that it’s actually taking root in America?

Our great Universities and colleges need to put up web-cams and offer E-Degrees for qualified students, but offer them really inexpensively. Say Harvard is basically full, then they offer the E Degree at a low price like $29.95 a month with a promise to support the schools Alumni program for 10 years etc. This makes college affordable for other than the elite.

Political correctness, which is at least partly at the core of our current crisis (Appeasing minority cries for affordable housing with accusations of racial inequality) has shaken us at our core. And let’s be honest, This shakedown of the banking and mortgage industry by minorities has become a real suspect as the catalyst for our immediate crisis.

Perversions of every Ilk are clawing away at the fabric of America, shredding and ripping her heart out one generation at a time .. Wow!

It’s time for you to stand up people, grab a pitch fork and head on down to city hall. If not, you will regret missing the opportunity later, and it will be to late.

As for me, I put a few years worth of food away, (EFoodsdirect.com) picked up a decent water filtration system, some alternative cold weather gear and lots of candles and assorted items just in case you all let me down..

God Bless

Roger Fredinburg

radioroger@aol.com

Roger Fredinburg is a nationally known radio personality with several networks and radio stations who deliver the show daily at 10PM Eastern . His nearly one million listeners are loyal dedicated and active. www.accentradio.com www.republicbroadcasting.org

New images of Mercury released

admin — Thu, 09 Oct 2008 04:45:49 +0000

This image provided by NASA Tuesday Oct. 7, 2008 shows the planet Mercury taken on Oct. 6, 2008, at roughly 4:40 a.m. ET, when MESSENGER flew by Mercury for the second time this year.

MESSENGER is the first mission sent to orbit the planet closest to the sun. During the encounter, the probe swung just 125 miles (200 kilometers) above the cratered surface of Mercury, snapping hundreds of pictures and collecting a variety of other data from the planet as it gains a critical gravity assist that keeps the probe on track to become the first spacecraft ever to orbit the innermost planet beginning in March 2011. The spectacular image shown here is one of the first to be returned. It shows Mercury about 90 minutes after the spacecraft
(AP Photo/NASA)
http://news.yahoo.com/nphotos/New-images-Mercury-released

Screaming in a Burning Theater: Zero Bank Reserves

Vermont Trotter — Tue, 30 Sep 2008 17:57:39 +0000

by Letters to the Fathers
Mon Sep 29, 2008 at 10:46:56 PM PDT

Daily Kos http://www.dailykos.com/story/2008/9/30/01617/5440/126/615177

I am quite aware the theater is on fire, but everyone seems to be running towards a locked exit. I will keep screaming and pointing towards the open door to the left, but for now let me show you the locks on the door.

I hear a lot of cheerleading right now for this economic bill, one that will supposedly end this crisis, or at least extend it for a few years. It will do neither and tucked inside are some of the most horrific ideas ever put to paper by a politician. This is not a good bill; this is an armed robber’s note.

I will begin with two aspects, which while buried, are still widely available to the viewing public. When someone puts forth such an overwhelming colorfast of stupidity, it should see never see the light of day. This such absurdity was voted on in no less that very Halls of Congress.

So to begin, I will make a second hand observation based on verification of one of my fears. I do hope Forbes is a name still somewhat trusted in the financial world:

Bailing Out The Oil Market
William Pentland, 09.23.08, 11:35 AM ET
http://www.forbes.com/…

While everyone knows the U.S. government is looking to bail Wall Street banks, few people realize that it’s also bailing out speculative oil and commodities traders in the process, fueling a sharp rise in energy prices.

Lehman Brothers (nyse: LEH - news - people ) and AIG (nyse: AIG - news - people ) held enormous trading positions in commodities markets. If those positions had been liquidated suddenly, the price of everything from wheat to oil would have collapsed. The Commodity Futures Trading Commission, the main regulator of U.S. commodity markets, allowed Wall Street’s investment banks and trading companies to take control of massive positions in commodities markets called swaps held by Lehman Brothers and AIG.

“If speculators were forced to liquidate their positions, oil would easily be $65 to $75 per barrel by the time the liquidation was complete,” said Michael Masters, the founder of Atlanta-based hedge fund Masters Capital Management. Tuesday, oil was trading at $108.74 in midday trading in New York.

In 2006, the U.S. Senate’s Subcommittee for Permanent Investigations had already reported “there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices.” The trouble is that so much of the trading happens in so-called “dark markets,” unregulated over-the-counter electronic exchanges where trading companies buy and sell energy derivatives, that this role is hard to document.

“The market dynamics induced more and more financial players to move into commodities markets,” said Fadel Gheit, a senior oil analyst at Oppenheimer & Co. “It was a perfect storm. The Federal Reserve was cutting interest rates and people were running away from the dollar as it lost value. Hedge funds, pension funds and mutual funds started pumping money into commodities because they were the safest place and the safest of them all was crude oil. There were too many dollars chasing too few physical assets. That’s the bottom line.”

Now no one should act shocked that oil is inflated when we have oilmen sitting as President and Vice-President. How this is covered in the bailout is that investment banks got heavily involved in speculation. Now that the sheer amount of dollars in the system drove the price up, the actual value of the commodities is well below the speculation price.

What this bill purposes to do is cover the banks in this value gap, between fantasyland and reality. This will keep oil prices artificially high, much to the delight of President Bush’s base. His real base. Now if we were to let the market work itself out, these long positions would have to be liquidated and the prices for oil and wheat would drop back down to real intrinsic value.

The losses incurred by these banks would remove a lot of the money currently driving the demand and driving the price of the commodity to unrealistic trading values. So in a nutshell, the banks made a very bad investment and now they want us to pay for it. And not only that, they want us to pay with our own money to keep oil prices artificially high.

We also need to address the dark markets. How is there an unregulated energy market when Enron was just a few years ago? Who was asleep at the wheel on this? And not only the energy market, but there is an exchange where the SEC has no oversight? How did this come to be, and why hasn’t this been addressed?

This was an economic bill, was it not? Is it to much to ask while Congress is artificially inflating the value of oil that they at least close a rogue market that led to oil being artificially high? Just simple SEC oversight is all I am asking. This still is a country of rule of law, no matter what the last eight years say.

I will keep screaming about above until I get some kind of answer. Then I will be screaming louder about this. I have not seen any coverage of what is below, and I fault the media and the both parties for such language to find its way into a bill. It is reckless, dangerous and calls into question Congress’s very sanity.

Yes, I read the bill. And here is what I found most shocking:

Follow along, so you know I am not making this up:
http://financialservices.house.gov/…

So here is the bill. Kindly download and turn to page 83. The following passage:

13 SEC. 128. ACCELERATION OF EFFECTIVE DATE.
14 Section 203 of the Financial Services Regulatory Re-
15 lief Act of 2006 (12 U.S.C. 461 note) is amended by strik-
16 ing ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2008’’.

This made me almost cry for my country. Looks pretty innocuous, just sitting there, looking all legal. Sitting pretty if you will. No one will ever see it, buried so deep.

Well, I did.

So what is Title 12 of the Financial Services Regulatory Relief Act of 2006, proudly passed by the Republican-lead Congress? You remember that gang, don’t you? Surely they would have our best interests at heart.

What’s in Sec. 203?
http://www.govtrack.us/…

SEC. 203. EFFECTIVE DATE.

The amendments made by this title shall take effect October 1, 2011.

Oh well, that’s fine. But what’s in the amendment?

SEC. 202. INCREASED FLEXIBILITY FOR THE FEDERAL RESERVE BOARD TO ESTABLISH RESERVE REQUIREMENTS.

Section 19(b)(2)(A) of the Federal Reserve Act (12 U.S.C. 461(b)(2)(A)) is amended–
(1) in clause (i), by striking `the ratio of 3 per centum’ and inserting `a ratio of not greater than 3 percent (and which may be zero)’; and
(2) in clause (ii), by striking `and not less than 8 per centum,’ and inserting `(and which may be zero),’.

Wow, looks like somebody is taking a ratio to zero. I wonder what that ratio is? I bet you in the back already know.

Let’s go to 12 U.S.C. 461, and see exactly what is is we are adjusting.

Let’s see here, Section 2, Subnote A of 12 U.S.C. 461. How is that for obscure! Let’s see what we got here.

http://www.law.cornell.edu/…

(2)
(A) Each depository institution shall maintain reserves against its transaction accounts as the Board may prescribe by regulation solely for the purpose of implementing monetary policy—
(i) in the ratio of 3 per centum for that portion of its total transaction accounts of $25,000,000 or less, subject to subparagraph (C); and
(ii) in the ratio of 12 per centum, or in such other ratio as the Board may prescribe not greater than 14 per centum and not less than 8 per centum, for that portion of its total transaction accounts in excess of $25,000,000, subject to subparagraph (C).

You dirty apes.

You mean to tell me that each depository institution can maintain zero reserves against its transaction accounts?

You put it right there in writing! Sure you buried it across three bills, but you are now allowing for the possibility that banks can hold zero reserves!

This is how the bank code would have read had the bill passed today:

Each depository institution shall maintain reserves against its transaction accounts as the Board may prescribe by regulation solely for the purpose of implementing monetary policy—
(i) in a ratio of not greater than 3 percent (and which may be zero) for that portion of its total transaction accounts of $25,000,000 or less, subject to subparagraph (C); and
(ii) in the ratio of 12 per centum, or in such other ratio as the Board may prescribe not greater than 14 per centum and which may be zero, for that portion of its total transaction accounts in excess of $25,000,000, subject to subparagraph (C).

So you plan on restoring confidence in the banks by allowing the banks not to have any reserves to match people’s checking and savings accounts? What, was the FDIC just going to cover that all? Wait, don’t answer that, I already know the answer.

But remember the effective date! The original Relief Act of 2006 called for a date of October 1, 2011 to allow banks zero reserves, if the Federal Reserve Board thought it fit. This bill would have moved that up to tomorrow!

Tomorrow people! Do you hear me! Tomorrow we could have all woken up to the possibility of zero holdings in our banks and it being legally allowed!

And you dare cheerlead for this bill?

These two items, among other things, must be stricken from this bill. It is an affront to any decent citizen in this country and should be hung as a mark of shame on any fellow citizen who voted for it today.

Zero reserves and artificially high energy prices, brilliant. Just brilliant.

And yes, I do have a plan b. But for now, I must plead with you not to run to the lock door, the fire is fierce, the theater is ablaze, but this bill is just kindling.

Don’t go pouring gasoline on yourself.

Update:

Sorry I did not update this earlier, but I was busy reading and processing the debate it caused. I would highly suggest reading Pinkbunny’s companion diary to this one, FYI: Zero Bank Reserves What Does It Mean. The comments are also highly recommended.

After reviewing the counter-arguments of what I have presented above, I believe I can offer a solution to this rather poorly written portion of the economic bill presented yesterday:

SEC. 203. EFFECTIVE DATE.

The amendments made by this title shall take effect February 1, 2008 with a sunset date set to June 1, 2008, unless otherwise updated by another act of Congress.

Now, from what I have gathered from reading some insightful critics is that banks need a little wiggle room in the liquidity of the market in its current state. While this is a solvency issue at its core, the current crisis is a self-fulfilling prophecy of write-downs. Unless we can break the cycle of write-downs, the whole point of this exercise is futile and the problem of solvency never properly addressed.

I have chosen the date of February 1, 2008 based on the fact that next President will be inaugurated on January 20, 2008. That ten day span should be more than enough time to get all the principles needed for this plan to work to be properly vetted and confirmed by Congress.

I have zero faith in the people currently in charge of the economy, and even less in the Executive Branch as a whole in aspect to the general welfare of the citizens of this country. It is in our best interest to wait until President Obama, and trust me, it will be President Obama, has his people in place to tackle this economic crisis.

The key here is the sunset clause. At the root of any solvent bank is the faith that deposits are secure. While creative accounting might be needed to end the cycle created by even more creative accounting, it should not be left open ended with no closure date. We can offering the banking system a window to move capital around to stop the write-down cycle, then we must close it.

Other points:
Lost in the shuffle of allowing zero bank reserves, was the fact that “dark markets” exist without SEC oversight. This must be address in the next bill. How this exists now is beyond reproach, and these rogue markets must be brought into the fold of rule of law.
I never stated that the FDIC was going to be defunded. The point I was trying to make is that deposits in the bank help counter the full load expected of the FDIC should an institution fail. There is no way the FDIC, as it is currently funded, could over night pay out all the deposits currently in all banks in this nation. And if banks were at zero percent holding ratios, there would be nothing to help support the pay out by the FDIC because the very institutions they are bailing out have no money in the coffers. That was the point I was trying to relay.
I also am not hitting the panic button, I am calling for cooler, and more rational, heads to prevail. I long sensed this nation was being railroaded into a very bad bill. I am all for economic assistance to help stop this crisis, but I am not for a bill that would only do more damage.
There are alternatives. There are better ways of tackling this problem than just throwing money at it. This is not a time to pack up the bags, grab the shotgun and head to the hills. This is actually a chance to right the many, many wrongs of the last 30 years.
This bill should not be viewed as the end of the world, or America. It should be viewed as a golden opportunity to get the fundamentals of our economy sound and squared. Rarely does such a mandate come from the citizens, who rarely take interests in such matters, and rarely do we have a Democratically-controlled Congress.

Where other people see gloom and doom, I see an end to the tunnel and light. We must not allow Congress to order more tunnel. Now is the time to craft a bill that secures our economic fortunes and restores faith in said system by looking out for the general welfare of the public.

If the Democrats, and even moderate Republicans, can come together and forge such a bill, a new dawn will rise in this country, instead of the nightfall all the doom and gloomers are panicking over.

So in closing, thank you for all the input, the greatest success of this diary is that it started a dialogue that should have started weeks ago. Thank you for the recommends, I find them rather flattering. And thank you to those like pinkbunny, whose voices are needed to bring all aspects of the issue to the table.

Now let’s work together to make sure the bill passed works in the best interests of the nation as a whole, and not against.

And let’s also make sure to check the fine print as well.

The Shadow of the Pitchfork: Elite Panic Attack as Bailout Goes Bust

Vermont Trotter — Tue, 30 Sep 2008 14:51:32 +0000

Mon
29 Sep 2008 The Shadow of the Pitchfork: Elite Panic Attack as Bailout Goes Bust
Written by Chris Floyd

http://www.chris-floyd.com/component/content/article/3/1618-the-shadow-of-the-pitchfork-elite-panic-attack-as-bailout-goes-bust.html

The vote by the House of Representatives to defeat the Wall Street bailout plan is the first act of political courage that the Congress of the United States has mounted in the last seven years. The fact that it was due largely to right-wing Republicans afraid of going down with the sinking ship of the witless leader they have followed blindly throughout his reign is a delicious irony — but the whys and wherefores of the vote are not important. What matters is that one of America’s moribund institutions has flickered to life long enough to derail a disastrous action that would have shoved the nation even deeper into the pit of corruption and ruin where it has been mired for so long.

The New York Times called the House vote “a catastrophic political defeat for President Bush, who had put the full weight of the White House behind the measure.” But this is manifestly untrue. As everyone but the nation’s media — and the Democratic Party — knows, George W. Bush has no “political weight” to use, or lose. Yes, he still retains the authoritarian powers that the spineless Democrats have given him with scarcely a whimper of protest (and often with boundless enthusiasm); but as a political force — i.e., someone whose opinions and statements can sway popular opinion — he has been a dead and rotting carcass for a long time. He is the most unpopular president in American history; and I can report from first-hand, eyewitness knowledge that he is thoroughly despised by some of the most rock-ribbed, Bible-believing, flag-waving, down-home, John Wayne-loving Heartland types that you can imagine. Even his own party — a party fashioned in his own image, the Frankensteinian melding of willfully ignorant religious primitivism and rapaciously greedy crony capitalism that he has embodied in his twerpish person — kept him away from their convention this year.

Nothing — absolutely nothing — could be politically safer than opposing George W. Bush. And yet the entire Democratic leadership, Barack Obama included, lined up to support a cockamamie plan proposed by this scorned and shriveled figure, a plan that was transparently nothing more than an audacious raid on the Treasury by Big Money hoods and yet another authoritarian power grab by a gang of murderous, torturing, warmongering toadies. This was the plan and these were the people that the Democrats decided to fight for.

What’s more, the Democrats stood shoulder to shoulder with the president on what is apparently the only issue that can now stir Americans to genuine anger and widespread protest: a direct threat to their bank accounts. Wars of aggression like the Nazis used to wage; elaborate tortures like the KGB used to practice; concentration camps, lawbreaking leaders, diminishment of liberty, the slaughter of a million innocent people in a land destroyed by an illegal and pointless invasion — all of that stuff is pretty much OK, easily swallowable, worth no more than a shrug or perhaps a frowny “tsk tsk” before going on to the sports pages or flipping over to another channel. But put out an open ploy to steal their money and give it to the filthy rich — and baby, it’s pitchfork time! Yet here, as the public face of just such a ploy, is where the Democrats chose to make their stand.

So Monday’s rejection of the bailout plan is not a catastrophic political defeat for George W. Bush; he has no political standing, no political future. But it is a vast and humiliating defeat for the Democratic leadership, across the board, who, as Democrat Lloyd Dogget of Texas said

“never seriously considered any alternative” to the administration’s plan, and had only barely modified what they were given. He criticized the plan for handing over sweeping new powers to an administration that he said was to blame for allowing the crisis to develop in the first place.
Now the Democratic elites have had their collective head handed to them on a platter. It is a dish most richly deserved. And although it is almost possible to believe that they will learn anything from this episode, there is now a chance — a chance — that we can at least have a discussion of alternatives to the Bush scheme.

I still believe it is unlikely any genuinely effective program — one that could manage and mitigate the now-unavoidable effects of the Wall Street/Washington-induced disaster — will ever get enacted. After all, the Democrats are largely owned by the same corrupt and greedy elites now seeking a handout. And it seems reasonable to assume that the Bipartisan Bailout Bunch will eventually find some kind of sugar to tempt away the two dozen votes they need for their next “compromise” on the Bush-Paulson plan.

Then again, who knows? There are obviously a lot of very powerful and privileged people sweating more bullets tonight than they have sweated in many and many a year. They have roused the drowsy beast of popular anger at last, and no one can say what might happen next. Probably nothing — or rather, more of the same, in some form or another. But still, it is good to see the icy beads of panic dotting the brows of elites who have inflicted and/or countenanced so much death, destruction, terror and degradation in the past few years. Today they have suffered a very rare defeat in the relentless, remorseless class war they have been waging against us for decades. And that it is something to celebrate — at least for one night.

3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate—

Vermont Trotter — Sat, 27 Sep 2008 19:29:13 +0000

United States Geological Survey

http://www.usgs.gov/newsroom/article.asp?ID=1911

Reston, VA - North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in an area known as the Bakken Formation.

A U.S. Geological Survey assessment, released April 10, shows a 25-fold increase in the amount of oil that can be recovered compared to the agency’s 1995 estimate of 151 million barrels of oil.

3 to 4.3 Billion Barrels of Oil in North Dakota and Montana

Technically recoverable oil resources are those producible using currently available technology and industry practices. USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources.

New geologic models applied to the Bakken Formation, advances in drilling and production technologies, and recent oil discoveries have resulted in these substantially larger technically recoverable oil volumes. About 105 million barrels of oil were produced from the Bakken Formation by the end of 2007.

The USGS Bakken study was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocol as required by the Energy Policy and Conservation Act of 2000.

The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest “continuous” oil accumulation ever assessed by the USGS. A “continuous” oil accumulation means that the oil resource is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences. The next largest “continuous” oil accumulation in the U.S. is in the Austin Chalk of Texas and Louisiana, with an undiscovered estimate of 1.0 billions of barrels of technically recoverable oil.

“It is clear that the Bakken formation contains a significant amount of oil - the question is how much of that oil is recoverable using today’s technology?” said Senator Byron Dorgan, of North Dakota. “To get an answer to this important question, I requested that the U.S. Geological Survey complete this study, which will provide an up-to-date estimate on the amount of technically recoverable oil resources in the Bakken Shale formation.”

The USGS estimate of 3.0 to 4.3 billion barrels of technically recoverable oil has a mean value of 3.65 billion barrels. Scientists conducted detailed studies in stratigraphy and structural geology and the modeling of petroleum geochemistry. They also combined their findings with historical exploration and production analyses to determine the undiscovered, technically recoverable oil estimates.

USGS worked with the North Dakota Geological Survey, a number of petroleum industry companies and independents, universities and other experts to develop a geological understanding of the Bakken Formation. These groups provided critical information and feedback on geological and engineering concepts important to building the geologic and production models used in the assessment.

Five continuous assessment units (AU) were identified and assessed in the Bakken Formation of North Dakota and Montana - the Elm Coulee-Billings Nose AU, the Central Basin-Poplar Dome AU, the Nesson-Little Knife Structural AU, the Eastern Expulsion Threshold AU, and the Northwest Expulsion Threshold AU.

At the time of the assessment, a limited number of wells have produced oil from three of the assessments units in Central Basin-Poplar Dome, Eastern Expulsion Threshold, and Northwest Expulsion Threshold.
The Elm Coulee oil field in Montana, discovered in 2000, has produced about 65 million barrels of the 105 million barrels of oil recovered from the Bakken Formation.

Results of the assessment can be found at http://energy.usgs.gov.

For a podcast interview with scientists about the Bakken Formation, listen to episode 38 of CoreCast at http://www.usgs.gov/corecast/.

The Blood of Dresden

Vermont Trotter — Fri, 26 Sep 2008 14:20:44 +0000

http://www.informationclearinghouse.info/article20857.htm

By Kurt Vonnegut

25/09/08 “”The Times” — - It was a routine speech we got during our first day of basic training, delivered by a wiry little lieutenant: “Men, up to now you’ve been good, clean, American boys with an American’s love for sportsmanship and fair play. We’re here to change that.

“Our job is to make you the meanest, dirtiest bunch of scrappers in the history of the world. From now on, you can forget the Marquess of Queensberry rules and every other set of rules. Anything and everything goes.

“Never hit a man above the belt when you can kick him below it. Make the bastard scream. Kill him any way you can. Kill, kill, kill – do you understand?”

His talk was greeted with nervous laughter and general agreement that he was right. “Didn’t Hitler and Tojo say the Americans were a bunch of softies? Ha! They’ll find out.”

And of course, Germany and Japan did find out: a toughened-up democracy poured forth a scalding fury that could not be stopped. It was a war of reason against barbarism, supposedly, with the issues at stake on such a high plane that most of our feverish fighters had no idea why they were fighting – other than that the enemy was a bunch of bastards. A new kind of war, with all destruction, all killing approved.

A lot of people relished the idea of total war: it had a modern ring to it, in keeping with our spectacular technology. To them it was like a football game.

[Back home in America], three small-town merchants’ wives, middle-aged and plump, gave me a ride when I was hitchhiking home from Camp Atterbury. “Did you kill a lot of them Germans?” asked the driver, making cheerful small-talk. I told her I didn’t know.

This was taken for modesty. As I was getting out of the car, one of the ladies patted me on the shoulder in motherly fashion: “I’ll bet you’d like to get over and kill some of them dirty Japs now, wouldn’t you?”

We exchanged knowing winks. I didn’t tell those simple souls that I had been captured after a week at the front; and more to the point, what I knew and thought about killing dirty Germans, about total war. The reason for my being sick at heart then and now has to do with an incident that received cursory treatment in the American newspapers. In February 1945, Dresden, Germany, was destroyed, and with it over 100,000 human beings. I was there. Not many know how tough America got.

I was among a group of 150 infantry privates, captured in the Bulge breakthrough and put to work in Dresden. Dresden, we were told, was the only major German city to have escaped bombing so far. That was in January 1945. She owed her good fortune to her unwarlike countenance: hospitals, breweries, food-processing plants, surgical supply houses, ceramics, musical instrument factories and the like.

Since the war [had started], hospitals had become her prime concern. Every day hundreds of wounded came into the tranquil sanctuary from the east and west. At night, we would hear the dull rumble of distant air raids. “Chemnitz is getting it tonight,” we used to say, and speculated what it might be like to be the bright young men with their dials and cross-hairs.

“Thank heaven we’re in an ‘open city’,” we thought, and so thought the thousands of refugees – women, children and old men who came in a forlorn stream from the smouldering wreckage of Berlin, Leipzig, Breslau, Munich. They flooded the city to twice its normal population.

There was no war in Dresden. True, planes came over nearly every day and the sirens wailed, but the planes were always en route elsewhere. The alarms furnished a relief period in a tedious work day, a social event, a chance to gossip in the shelters. The shelters, in fact, were not much more than a gesture, casual recognition of the national emergency: wine cellars and basements with benches in them and sandbags blocking the windows, for the most part. There were a few more adequate bunkers in the centre of the city, close to the government offices, but nothing like the staunch subterranean fortress that rendered Berlin impervious to her daily pounding. Dresden had no reason to prepare for attack – and thereby hangs a beastly tale.

Dresden was surely among the world’s most lovely cities. Her streets were broad, lined with shade-trees. She was sprinkled with countless little parks and statuary. She had marvellous old churches, libraries, museums, theatres, art galleries, beer gardens, a zoo and a renowned university.

It was at one time a tourist’s paradise. They would be far better informed on the city’s delights than am I. But the impression I have is that in Dresden – in the physical city – were the symbols of the good life; pleasant, honest, intelligent. In the swastika’s shadow, those symbols of the dignity and hope of mankind stood waiting, monuments to truth. The accumulated treasure of hundreds of years, Dresden spoke eloquently of those things excellent in European civilisa-tion wherein our debt lies deep.

I was a prisoner, hungry, dirty and full of hate for our captors, but I loved that city and saw the blessed wonder of her past and the rich promise of her future.

In February 1945, American bombers reduced this treasure to crushed stone and embers; disembowelled her with high explosives and cremated her with incendiaries.

The atom bomb may represent a fabulous advance, but it is interesting to note that primitive TNT and thermite managed to exterminate in one bloody night more people than died in the whole London blitz. Fortress Dresden fired a dozen shots at our airmen. Once back at their bases and sipping hot coffee, they probably remarked: “Flak unusually light tonight. Well, guess it’s time to turn in.” Captured British pilots from tactical fighter units (covering frontline troops) used to chide those who had flown heavy bombers on city raids with: “How on earth did you stand the stink of boiling urine and burning perambulators?”

A perfectly routine piece of news: “Last night our planes attacked Dresden. All planes returned safely.” The only good German is a dead one: over 100,000 evil men, women, and children (the able-bodied were at the fronts) forever purged of their sins against humanity. By chance, I met a bombardier who had taken part in the attack. “We hated to do it,” he told me.

The night they came over, we spent in an underground meat locker in a slaughterhouse. We were lucky, for it was the best shelter in town. Giants stalked the earth above us. First came the soft murmur of their dancing on the outskirts, then the grumbling of their plodding towards us, and finally the ear-splitting crashes of their heels upon us – and thence to the outskirts again. Back and forth they swept: saturation bombing.

“I screamed and I wept and I clawed the walls of our shelter,” an old lady told me. “I prayed to God to ‘please, please, please, dear God, stop them’. But he didn’t hear me. No power could stop them. On they came, wave after wave. There was no way we could surrender; no way to tell them we couldn’t stand it any more. There was nothing anyone could do but sit and wait for morning.” Her daughter and grandson were killed.

Our little prison was burnt to the ground. We were to be evacuated to an outlying camp occupied by South African prisoners. Our guards were a melancholy lot, aged Volkssturmers and disabled veterans. Most of them were Dresden residents and had friends and families somewhere in the holocaust. A corporal, who had lost an eye after two years on the Russian front, ascertained before we marched that his wife, his two children and both of his parents had been killed. He had one cigarette. He shared it with me.

Our march to new quarters took us to the city’s edge. It was impossible to believe that anyone had survived in its heart. Ordinarily, the day would have been cold, but occasional gusts from the colossal inferno made us sweat. And ordinarily, the day would have been clear and bright, but an opaque and towering cloud turned noon to twilight.

A grim procession clogged the outbound highways; people with blackened faces streaked with tears, some bearing wounded, some bearing dead. They gathered in the fields. No one spoke. A few with Red Cross armbands did what they could for the casualties.

Settled with the South Africans, we enjoyed a week without work. At the end of it, communications were reestablished with higher headquarters and we were ordered to hike seven miles to the area hardest hit.

Nothing in the district had escaped the fury. A city of jagged building shells, of splintered statuary and shattered trees; every vehicle stopped, gnarled and burnt, left to rust or rot in the path of the frenzied might. The only sounds other than our own were those of falling plaster and their echoes.

I cannot describe the desolation properly, but I can give an idea of how it made us feel, in the words of a delirious British soldier in a makeshift POW hospital: “It’s frightenin’, I tell you. I would walk down one of them bloody streets and feel a thousand eyes on the back of me ’ead. I would ’ear ’em whis-perin’ behind me. I would turn around to look at ’em and there wouldn’t be a bloomin’ soul in sight. You can feel ’em and you can ’ear ’em but there’s never anybody there.” We knew what he said was so.

For “salvage” work, we were divided into small crews, each under a guard. Our ghoulish mission was to search for bodies. It was rich hunting that day and the many thereafter. We started on a small scale – here a leg, there an arm, and an occasional baby – but struck a mother lode before noon.

We cut our way through a basement wall to discover a reeking hash of over 100 human beings. Flame must have swept through before the building’s collapse sealed the exits, because the flesh of those within resembled the texture of prunes. Our job, it was explained, was to wade into the shambles and bring forth the remains. Encouraged by cuffing and guttural abuse, wade in we did. We did exactly that, for the floor was covered with an unsavoury broth from burst water mains and viscera.

A number of victims, not killed outright, had attempted to escape through a narrow emergency exit. At any rate, there were several bodies packed tightly into the passageway. Their leader had made it halfway up the steps before he was buried up to his neck in falling brick and plaster. He was about 15, I think.

It is with some regret that I here besmirch the nobility of our airmen, but, boys, you killed an appalling lot of women and children. The shelter I have described and innumerable others like it were filled with them. We had to exhume their bodies and carry them to mass funeral pyres in the parks, so I know.

The funeral pyre technique was abandoned when it became apparent how great was the toll. There was not enough labour to do it nicely, so a man with a flamethrower was sent down instead, and he cremated them where they lay. Burnt alive, suffocated, crushed – men, women, and children indiscriminately killed.

For all the sublimity of the cause for which we fought, we surely created a Belsen of our own. The method was impersonal, but the result was equally cruel and heartless. That, I am afraid, is a sickening truth.

When we had become used to the darkness, the odour and the carnage, we began musing as to what each of the corpses had been in life. It was a sordid game: “Rich man, poor man, beggar man, thief . . .” Some had fat purses and jewellery, others had precious foodstuffs. A boy had his dog still leashed to him.

Renegade Ukrainians in German uniform were in charge of our operations in the shelters proper. They were roaring drunk from adjacent wine cellars and seemed to enjoy their job hugely. It was a profitable one, for they stripped each body of valuables before we carried it to the street. Death became so commonplace that we could joke about our dismal burdens and cast them about like so much garbage.

Not so with the first of them, especially the young: we had lifted them on to the stretchers with care, laying them out with some semblance of funeral dignity in their last resting place before the pyre. But our awed and sorrowful propriety gave way, as I said, to rank callousness. At the end of a grisly day, we would smoke and survey the impressive heap of dead accumulated. One of us flipped his cigarette butt into the pile: “Hell’s bells,” he said, “I’m ready for Death any time he wants to come after me.”

A few days after the raid, the sirens screamed again. The listless and heartsick survivors were showered this time with leaflets. I lost my copy of the epic, but remember that it ran something like this: “To the people of Dresden: we were forced to bomb your city because of the heavy military traffic your railroad facilities have been carrying. We realise that we haven’t always hit our objectives. Destruction of anything other than military objectives was unintentional, unavoidable fortunes of war.”

That explained the slaughter to everyone’s satisfaction, I am sure, but it aroused no little contempt. It is a fact that 48 hours after the last B-17 had droned west for a well-earned rest, labour battalions had swarmed over the damaged rail yards and restored them to nearly normal service. None of the rail bridges over the Elbe was knocked out of commission. Bomb-sight manufacturers should blush to know that their marvellous devices laid bombs down as much as three miles wide of what the military claimed to be aiming for.

The leaflet should have said: “We hit every blessed church, hospital, school, museum, theatre, your university, the zoo, and every apartment building in town, but we honestly weren’t trying hard to do it. C’est la guerre. So sorry. Besides, saturation bombing is all the rage these days, you know.”

There was tactical significance: stop the railroads. An excellent manoeuvre, no doubt, but the technique was horrible. The planes started kicking high explosives and incendiaries through their bomb-bays at the city limits, and for all the pattern their hits presented, they must have been briefed by a Ouija board.

Tabulate the loss against the gain. Over 100,000 noncombatants and a magnificent city destroyed by bombs dropped wide of the stated objectives: the railroads were knocked out for roughly two days. The Germans counted it the greatest loss of life suffered in any single raid. The death of Dresden was a bitter tragedy, needlessly and wilfully executed. The killing of children – “Jerry” children or “Jap” children, or whatever enemies the future may hold for us – can never be justified.

The facile reply to great groans such as mine is the most hateful of all clichés, “fortunes of war”, and another: “They asked for it. All they understand is force.”

Who asked for it? The only thing who understands is force? Believe me, it is not easy to rationalise the stamping out of vineyards where the grapes of wrath are stored when gathering up babies in bushel baskets or helping a man dig where he thinks his wife may be buried.

Certainly, enemy military and industrial installations should have been blown flat, and woe unto those foolish enough to seek shelter near them. But the “Get Tough America” policy, the spirit of revenge, the approbation of all destruction and killing, have earned us a name for obscene brutality.

Our leaders had a carte blanche as to what they might or might not destroy. Their mission was to win the war as quickly as possible; and while they were admirably trained to do just that, their decisions on the fate of certain priceless world heirlooms – in one case, Dresden – were not always judicious. When, late in the war, with the Wehrmacht breaking up on all fronts, our planes were sent to destroy this last major city, I doubt if the question was asked: “How will this tragedy benefit us, and how will that benefit compare with the ill-effects in the long run?”

Dresden, a beautiful city, built in the art spirit, symbol of an admirable heritage, so antiNazi that Hitler visited it but twice during his whole reign, food and hospital centre so bitterly needed now – ploughed under and salt strewn in the furrows.

There can be no doubt that the allies fought on the side of right and the Germans and Japanese on the side of wrong. World war two was fought for near-holy motives. But I stand convinced that the brand of justice in which we dealt, wholesale bombings of civilian populations, was blasphemous. That the enemy did it first has nothing to do with the moral problem. What I saw of our air war, as the European conflict neared an end, had the earmarks of being an irrational war for war’s sake. Soft citizens of the American democracy had learnt to kick a man below the belt and make the bastard scream.

The occupying Russians, when they discovered that we were Americans, embraced us and congratulated us on the complete desolation our planes had wrought. We accepted their congratulations with good grace and proper modesty, but I felt then as I feel now, that I would have given my life to save Dresden for the world’s generations to come. That is how everyone should feel about every city on earth.

Extracted from Armageddon in Retrospect by Kurt Vonnegut, with an introduction by Mark Vonnegut, is published by Jonathan Cape at £16.99. Copies can be ordered for £15.29, including postage, from The Sunday Times BooksFirst on 0870 165 8585

The littlest guys are still lending

admin — Fri, 26 Sep 2008 13:26:02 +0000

NEW YORK (CNNMoney.com) — Interest rate spreads. Libor. Collateralized debt obligations.

Unless you’re fluent in the language of high finance, it’s tough to make heads or tails of all the terms being tossed around in the headlines lately.

Simply put, the meltdown on Wall Street has made it tough for many Americans to get a loan to buy a home, purchase a car, start a business or even send a kid to college.

And with all the talk of a credit crunch — some are even calling it a credit freeze — it may get even tougher.

But instead of relying on arcane numbers to show that banks are more reluctant to lend to you and me, as well as to each other, we decided to speak to banking executives and have them explain how their lending standards have changed.

The financial turmoil is affecting banks of all sizes — from rural community banks to one of the nation’s largest banking giants. Here’s how.

The littlest guys are still lending

While the credit crisis has shaken Wall Street to its core, the thousands of community banks that make up the lion’s share of the nation’s banking system remain, to a large extent, quite secure.

“Our lending window continues to remain open,” said Jonathan Fox, the chairman and CEO of The Fowler State Bank, a Colorado-based bank an hour’s drive from Pueblo with about $56 million in assets.

Fox admitted that, since the credit crunch began, his bank has taken a harder look at the value of a piece of real estate involved in a loan as well as a customer’s income.

But he said that his bank, which traces its roots back to 1899, can continue to lend freely because they didn’t get caught up in the subprime mortgage market.

Fowler is not unique in this regard either.

Karla Wilbur, a senior vice-president at Passumpsic Savings Bank in St. Johnsbury, Vermont, said that an existing customer with a good credit standing and steady income who applies for a home equity loan could very well qualify for it.

She said the 11-branch bank, which serves towns along the Vermont-New Hampshire border, has ratcheted back on some of its non-core loan business — such as buying loans from car dealerships or doing joint commercial loan deals with other banks.

But she added that the bank’s consumer lending business hasn’t been affected all that much following the panic that spread through the credit markets last week.

“It pretty much looks like it did a month ago or two months ago,” said Wilbur. “Things haven’t changed a lot.”

Regional banks tightening their standards

It may still be business as usual for customers of small banks. But the higher up in the bank food chain you go, the tougher it seems to get credit.

At larger institutions, such as the San Francisco-based Bank of the West, which has approximately 700 branches mostly west of the Mississippi River, consumers need a better credit score than they did before the credit crunch hit.

“We have seen a change in the landscape and responded to it,” said Bruce Heysse, an executive vice president for Bank of the West’s consumer lending business.

Consumers whose credit rating teeters between ‘good’ and ‘not so great’ are the ones getting squeezed the most, added Carole Merchant, a fellow Bank of the West executive vice president in the company’s indirect lending business.

“Will loans be available for people who have some sort of credit blemish? That will probably remain more difficult,” said Merchant.

Given the current state of the economy, banks such as the San Antonio, Texas-based Cullen/Frost (CFR), have been forced to withdraw lines of credit from some customers.

Still, the lending spigot hasn’t been completely shut off. Instead, Dick Evans, chairman and CEO of Cullen/Frost, said that his bank is charging customers higher rates for loans than they did before.

“We have tightened from the standpoint that we get paid for the risk,” said Evans, whose bank focuses primarily on business lending and had more than $13 billion in assets as of the end of last year.

Turmoil at the top of the heap

Finally, customers of big banks may face the toughest time getting approved for new loans.

As home values continue to sink across the country, borrowers looking to get home equity loans are finding they are limited in how much they can borrow against their home. That’s especially true at many of the nation’s biggest banks, such as Citigroup (C, Fortune 500), Washington Mutual (WM, Fortune 500) and Wachovia (WB, Fortune 500), which have been hit hardest during the mortgage meltdown.

But even JPMorgan Chase (JPM, Fortune 500), which has emerged as one of the strongest banks in the wake of the credit crisis, is taking a closer look at borrowers as well.

Tom Kelly, a spokesperson for the New York City-based bank, acknowledged that the company has had to tighten lending standards over the past year.

“Last month, a student who was looking for a college loan qualified with a co-signer,” he said. “A year ago that student, with a marginal credit history might have qualified on their own.”

Experts are hopeful that banks will become more comfortable lending more freely again if the $700 billion bailout package, which is currently being hashed out on Capitol Hill, is approved.

But until then, it will continue to be tough for many Americans to get new loans from banks.

The Creation of the Second Great Depression

Vermont Trotter — Fri, 26 Sep 2008 00:20:24 +0000

by Ron Paul

http://www.lewrockwell.com/paul/paul479.html

Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

The events of the past week are no exception.

The bailout package that is about to be rammed down Congress’ throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! “This is welfare for the rich,” he said. “This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters.”

That describes the current bailout package to a T. And we’re being told it’s unavoidable.

The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences – predictable, that is, to those who understand sound, Austrian economics – are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!
The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.
Financial institutions are “designated as financial agents of the Government.” This is the New Deal to end all New Deals.
Then there’s this: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this “sadly necessary.” Sad, yes. Necessary? Don’t make me laugh.

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind – another example of the big choice we’re supposedly presented with this November: yes or yes. Now, with a backlash brewing, they’re not quite sure what their views are. A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we’ll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.