Showing posts with label Hunger Games. Show all posts
Showing posts with label Hunger Games. Show all posts

11 July 2015

Behind Germany’s Refusal to Grant Debt Relief: Financial Eugenics and the Will to Power


"What is at stake is a rather heroic rebellion by a very beleaguered people against a doctrine which has been destroying their lives — the austerity doctrine and the whole neoliberal project. For the rest of us, what is at stake is whether we have the moral courage in the sense of ethical responsibility to stand up to it."

Jamie Galbraith, Greek Revolt Threatens Entire Neoliberal Project

It is probably less an issue of ethical responsibility and more an act of self-interest for most.  Having taken their fill of the Third World, and now working their way into the developed nations, why would anyone assume that Greece would be sufficient for the maw of neoliberal greed.

The above interview with Galbraith is worth reading.  For one thing it contains the seed of the current spin that Tsipras called the referendum in order to lose it, and to somehow save himself and betray the Greeks.   And for another you will be able to read what Jamie Galbraith really thinks, the parts that the friends of the financial establishment have carefully excluded from their versions of the story.

The calling of the referendum was politically brilliant, because it defused the notion of an extremist government standing irrationally against the Troika.  This derailed the path towards a 'color revolution' backed by the oligarchs, to take out these mad leftists who were not speaking for the people.  

Remember the economic decision involving Europe which provoked the recent coup d'état in the Ukraine?  In that case the government did not have the backing of the people, and it took hold, at least in the Western portions of the country.   Wash, rinse, repeat.

Of course the Greek referendum was famously too close to predict when first called by Syriza, and surprisingly late in the game for most everyone else as you may recall   And Tsipras called it to lose? How soon some choose to forget.  But it changed the course of events in a dramatic way.  As it was it did not help their bargaining position, but as Galbraith says they did not expect it to improve their bargaining position because their counterparts were implacable and not negotiating in good faith.

But it put the field of play into better terms if your goal is playing for survival, and time.  Syriza is knocking down all the rationales and excuses to visit harsh terms on Greece that the Troika and their enablers are using.  They are exposing the Eurocrats for what they really are.

Empires set on unsustainable foundations are like financial bubbles and Ponzi schemes.  They are inherently non-productive and consuming, so they must continue to grow, or choke on their own detritus.   Transferring wealth as your major economic policy requires a steady source of new supply.

Most of the American media has fallen into line with the neoliberal agenda. It might seem surprising, but power has its attraction under corporatism, even for people who would ordinarily consider themselves to be 'liberal.'

There are concerning things happening in the Western world, and a lack of traction towards individual freedom amongst 'the great democracies.'

We look with a sense of foreboding at Germany's growing desire to bring their version of order and efficient management of lands and people to the rest of Europe.

The growing militancy in Japan, and Abe's aggressive pushing aside of constitutional restraints, is undernoted in the West, but of great concern to those in Asia.

Greece would look to the US for assistance in vain, given that Obama's representative to the continent is Victoria Nuland, the bearer of color revolutions and the reaping of ancient lands and cultures for profit.  

No, even the developed nations of the West have been caught up in the will to power.

What is good? All that enhances the feeling of power, the Will to Power, and the power itself in man. What is bad? All that proceeds from weakness. What is happiness? The feeling that power is increasing--that resistance has been overcome. Not contentment, but more power; not peace at any price, but war; not virtue, but competence.

The first principle of our humanism is that the weak and the failures shall perish. And they ought to be helped to perish.   What is more harmful than any vice?  Active pity for all failure and weakness--- Christianity.

Friedrich Nietzsche
At least in this latest incarnation of the will to power some, including the Pope thank God, are speaking out early, publicly, and strongly against the rising tide of injustice, the senseless abuse and indifference towards people, especially the vulnerable and the weakest, and the impulse towards dehumanizing bureaucratic rule and neo-totalitarianism. 

How many human lives, how much misery, how much of the richness of the land, are we willing to sacrifice to the indifferent god of the markets and its insatiable Banks.

As always silence is complicity, and apathy is a comfort to something as old as Babylon, and evil as sin.

Behind Germany’s refusal to grant Greece debt relief


Tomorrow’s EU Summit will seal Greece’s fate in the Eurozone. As these lines are being written, Euclid Tsakalotos, my great friend, comrade and successor as Greece’s Finance Ministry is heading for a Eurogroup meeting that will determine whether a last ditch agreement between Greece and our creditors is reached and whether this agreement contains the degree of debt relief that could render the Greek economy viable within the Euro Area.

Euclid is taking with him a moderate, well-thought out debt restructuring plan that is undoubtedly in the interests both of Greece and its creditors. (Details of it I intend to publish here on Monday, once the dust has settled.) If these modest debt restructuring proposals are turned down, as the German finance minister has foreshadowed, Sunday’s EU Summit will be deciding between kicking Greece out of the Eurozone now or keeping it in for a little while longer, in a state of deepening destitution, until it leaves some time in the future.

The question is: Why is the German finance Minister, Dr Wolfgang Schäuble, resisting a sensible, mild, mutually beneficial debt restructure? The following op-ed just published in today’s The Guardian offers my answer. [Please note that the Guardian’s title was not of my choosing. Mine read, as above: Behind Germany’s refusal to grant Greece debt relief ). Click here for the op-ed or…

Greece’s financial drama has dominated the headlines for five years for one reason: the stubborn refusal of our creditors to offer essential debt relief. Why, against common sense, against the IMF’s verdict and against the everyday practices of bankers facing stressed debtors, do they resist a debt restructure? The answer cannot be found in economics because it resides deep in Europe’s labyrinthine politics.

In 2010, the Greek state became insolvent. Two options consistent with continuing membership of the eurozone presented themselves: the sensible one, that any decent banker would recommend – restructuring the debt and reforming the economy; and the toxic option – extending new loans to a bankrupt entity while pretending that it remains solvent.

Official Europe chose the second option, putting the bailing out of French and German banks exposed to Greek public debt above Greece’s socioeconomic viability. A debt restructure would have implied losses for the bankers on their Greek debt holdings.Keen to avoid confessing to parliaments that taxpayers would have to pay again for the banks by means of unsustainable new loans, EU officials presented the Greek state’s insolvency as a problem of illiquidity, and justified the “bailout” as a case of “solidarity” with the Greeks.

To frame the cynical transfer of irretrievable private losses on to the shoulders of taxpayers as an exercise in “tough love”, record austerity was imposed on Greece, whose national income, in turn – from which new and old debts had to be repaid – diminished by more than a quarter. It takes the mathematical expertise of a smart eight-year-old to know that this process could not end well.
Once the sordid operation was complete, Europe had automatically acquired another reason for refusing to discuss debt restructuring: it would now hit the pockets of European citizens! And so increasing doses of austerity were administered while the debt grew larger, forcing creditors to extend more loans in exchange for even more austerity.

Our government was elected on a mandate to end this doom loop; to demand debt restructuring and an end to crippling austerity. Negotiations have reached their much publicised impasse for a simple reason: our creditors continue to rule out any tangible debt restructuring while insisting that our unpayable debt be repaid “parametrically” by the weakest of Greeks, their children and their grandchildren.

In my first week as minister for finance I was visited by Jeroen Dijsselbloem, president of the Eurogroup (the eurozone finance ministers), who put a stark choice to me: accept the bailout’s “logic” and drop any demands for debt restructuring or your loan agreement will “crash” – the unsaid repercussion being that Greece’s banks would be boarded up.

Five months of negotiations ensued under conditions of monetary asphyxiation and an induced bank-run supervised and administered by the European Central Bank. The writing was on the wall: unless we capitulated, we would soon be facing capital controls, quasi-functioning cash machines, a prolonged bank holiday and, ultimately, Grexit.

The threat of Grexit has had a brief rollercoaster of a history. In 2010 it put the fear of God in financiers’ hearts and minds as their banks were replete with Greek debt. Even in 2012, when Germany’s finance minister, Wolfgang Schäuble, decided that Grexit’s costs were a worthwhile “investment” as a way of disciplining France et al, the prospect continued to scare the living daylights out of almost everyone else.

By the time Syriza won power last January, and as if to confirm our claim that the “bailouts” had nothing to do with rescuing Greece (and everything to do with ringfencing northern Europe), a large majority within the Eurogroup – under the tutelage of Schäuble – had adopted Grexit either as their preferred outcome or weapon of choice against our government.

Greeks, rightly, shiver at the thought of amputation from monetary union. Exiting a common currency is nothing like severing a peg, as Britain did in 1992, when Norman Lamont famously sang in the shower the morning sterling quit the European exchange rate mechanism (ERM). Alas, Greece does not have a currency whose peg with the euro can be cut. It has the euro – a foreign currency fully administered by a creditor inimical to restructuring our nation’s unsustainable debt.

To exit, we would have to create a new currency from scratch. In occupied Iraq, the introduction of new paper money took almost a year, 20 or so Boeing 747s, the mobilisation of the US military’s might, three printing firms and hundreds of trucks. In the absence of such support, Grexit would be the equivalent of announcing a large devaluation more than 18 months in advance: a recipe for liquidating all Greek capital stock and transferring it abroad by any means available.

With Grexit reinforcing the ECB-induced bank run, our attempts to put debt restructuring back on the negotiating table fell on deaf ears. Time and again we were told that this was a matter for an unspecified future that would follow the “programme’s successful completion” – a stupendous Catch-22 since the “programme” could never succeed without a debt restructure.

This weekend brings the climax of the talks as Euclid Tsakalotos, my successor, strives, again, to put the horse before the cart – to convince a hostile Eurogroup that debt restructuring is a prerequisite of success for reforming Greece, not an ex-post reward for it. Why is this so hard to get across? I see three reasons.
One is that institutional inertia is hard to beat. A second, that unsustainable debt gives creditors immense power over debtors – and power, as we know, corrupts even the finest. But it is the third which seems to me more pertinent and, indeed, more interesting.

The euro is a hybrid of a fixed exchange-rate regime, like the 1980s ERM, or the 1930s gold standard, and a state currency. The former relies on the fear of expulsion to hold together, while state money involves mechanisms for recycling surpluses between member states (for instance, a federal budget, common bonds). The eurozone falls between these stools – it is more than an exchange-rate regime and less than a state.

And there’s the rub. After the crisis of 2008/9, Europe didn’t know how to respond. Should it prepare the ground for at least one expulsion (that is, Grexit) to strengthen discipline? Or move to a federation? So far it has done neither, its existentialist angst forever rising. Schäuble is convinced that as things stand, he needs a Grexit to clear the air, one way or another. Suddenly, a permanently unsustainable Greek public debt, without which the risk of Grexit would fade, has acquired a new usefulness for Schauble.

What do I mean by that? Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.
 

17 December 2014

David Cay Johnston: The Hunger Games Economy


“All the animals, the plants, the minerals, even other kinds of men, are being broken and reassembled every day, to preserve an elite few who are the loudest to theorize on freedom, but the least free of all.

I can’t even give you hope that it will be different someday— that they’ll come out, and forget death, and lose their technology’s elaborate terror, and stop using every form of life without mercy to keep what haunts men down to a tolerable level— and be like you instead, simply here, simply alive.”

Thomas Pynchon, Gravity's Rainbow

As you know The Hunger Games society has been a recurrent theme here for some time.

An elite minority economically oppresses the rest of the nation, using force and fraud to keep the public in line.

The Capitol district is unproductive, effete, and consumed with the self, consumption, fads, status, power, and fashions. And of course the sentimentality and reality televised gore of The Hunger Games themselves.  They are beautiful on the outside, in inwardly filled with every manner of corruption and the bones of their victims.
 
The games are designed to provide the Districts with some hope, but primarily fear.  Anyone may be chosen and destroyed, with debt increasing the odds of being chosen.

Hope and fear.  And what happens when the people lose confidence in a corrupt and manipulative system, and therein lose their hope? 

And may the odds be ever in your favour.

The ‘Hunger Games’ Economy
By David Cay Johnston
December 15, 2014

That our Congress is intent on taking from the many to enrich the few was on full display during passage of the new $1.1 trillion federal spending bill, as five provisions show.

In a Washington run by and for oligarchs, official theft happens suddenly and without warning. No public hearings. No public debate. Instead, as we saw in North Carolina and Wisconsin, it occurs with just abrupt moves to shift power and money from the many to the richest few.

And with little focus by our best news organizations on the consequences for people’s lives, especially if they are in the 90 percent, many people have no idea they just got officially mugged.

The continuing resolution to fund the government was combined with an omnibus spending bill to create a 1,603-page statutory monster called the “cromnibus.” Among the provisions that show how both political parties help corporations pick the pockets of the vast majority, while far too many mainstream journalists help obfuscate the awful truth...

Read the entire article with details here.



21 March 2014

Gold Daily and Silver Weekly Charts - The Hunger Games


Last night Nick Laird showed me some excellent original data analysis from his site, Sharelynx.com, that demonstrates that a decline in the price of gold during an FOMC week is no sure thing, but more normally distributed. And we have to balance that against a different, and much less statistically robust graph, that was on ZH, and which I also presented here, that clearly showed declines in FOMC weeks, and no similar declines in off weeks, but for a much shorter period of time.

Nick looked at full weeks, and even much tighter spreads of days, but only looked at FOMC events, and a lot of them going back to 2006, and then even to 1994. I plan on looking at some of his data much more closely, but it does drive home the conclusion that simply betting blindly on around certain events does not work. If it was that easy, everyone would do it. Rather, there are other variables at play, of that I am certain. And I will take a much closer analytical look at all the data, and not just cycles and dates, when I have a greater opportunity.

Next week is an option expiration for the precious metals futures on the Comex. A large tranche of gold was deposited into the JPM warehouse. Perhaps these are preparations for the next active month for physical bullion which is April. Otherwise things were quiet.

Another thing of which I am reasonably confident is that there is a 'currency war' in progress, and some great changes in the composure and complexion of international finance and trade. This 'war,' more like a new kind of cold war than a military war, ebbs and flows, manifesting itself first in one way and then in another. And sometimes it pokes its head out of the financial pages and onto the headlines, as it has recently done in the Ukraine and Crimea.

As you might always expect in times of change and contention, truth is in short supply. And I think some long standing trends are coming to a head. And so we should expect the unexpected, and look for things to happen, particularly from the top down, that we had not seen coming.

I will never forget how, shortly after the tragic events of 911, and the expected response against the Taliban in Afghanistan, that the word was given out from the top down, 'attack Iraq.' And people looked at each other and said with their eyes, what? And the media machine was put into gear, and the march to Iraq was begun.

I mean that sort of unexpected thing, that does not seem to make sense if you have been following some logical sequence of things, but that the media picks up from the top and repeats without fairly batting a jaundiced eye.

If you want a vision of the future, I would not look for a 1984 type boot stomping endlessly on a human face. Rather, I think we will see the kind of bifurcated society of a few effete haves in a few cities, and the great number of have nots, as is depicted to some effect in The Hunger Games. President Snow reminds me of the consummately ruthless CEO, moreso than a dictator. The various District have been reduced to their basic economic elements, and the people of the Capitol are living large on their efforts.

Like most works of fiction it is an oversimplification. But it has a resonance with the kids, wildly popular in the teens and younger set. The young have a tendency to pick up on trends based on behaviours that are not carried overtly perhaps in the official news and the spoken words of adults. When the books became popular I read them, just to keep in touch with my own children and what was attracting those of them who were thinking. And now the movies are coming out. The books are better, but you may find the movies to be diverting.

So it looks like interesting times ahead. And may the odds be ever in your favour.

Have a pleasant weekend.





12 June 2013

The Ongoing Debate Between Power and Conscience, Secrecy and Its Abuses


"At its very inception this movement depended on the deception and betrayal of one's fellow man; even at that time it was inwardly corrupt and could support itself only by constant lies. After all, Hitler states in an early edition of 'his' book:  'It is unbelievable, to what extent one must betray a people in order to rule it.'

If at the start this cancerous growth in the nation was not particularly noticeable, it was only because there were still enough forces at work that operated for the good, so that it was kept under control.

As it grew larger, however, and finally in an ultimate spurt of growth attained ruling power, the tumor broke open, as it were, and infected the whole body.

The greater part of its former opponents went into hiding. The German intellectuals fled to their cellars, there, like plants struggling in the dark, away from light and sun, to gradually choke to death."

The White Rose
Second Leaflet
Munich, 1942


"We can never forget that everything Hitler did in Germany was 'legal,' and everything the Hungarian freedom fighters did in Hungary [in 1956] was 'illegal.'

Martin Luther King


"All frauds, like the wall daubed with untempered mortar, with which men think to buttress up an edifice, always tend to the decay of what they are devised to support."

Richard Whately

I do not claim to have any particular authority in this difficult area of policy and ethics, except to note that we learn from history that this is a debate that must happen, always. Power that becomes too concentrated, that is accustomed to operating in secret, is deadly to a free society.

Individual judgment can be a dangerous thing. The great variety of people can rationalize almost any action in their private mind, whether it be a principled stand for justice, or a destructive and unjust act of violence.

As always, there is danger in the extremes.

We have seen, over and over as groups or self-defining classes of people come to power, that they can tend to rationalize actions that in retrospect were clearly not in the public interest, but largely in their own, from making their tasks more effective to lining their pockets with funds and abusing power.

Transparency, debate, and freedom of speech are the necessary safeguards that our Constitution has ensured.  This has been one of the greatest and most effective innovations in political theory.

One of my greatest ongoing concerns is the secrecy and incestuous dealing between the government and the financial sector, bonded by enormous amounts of money and mutual power. I am convinced that this corruption is impairing the real economy for the indulgence of a privileged few, who have set themselves above the people, and above the law.

So I present this debate to provoke some additional thought on the subject.

One thing I will say is that the vilification of the messenger, in this case Snowden, by the mainstream media in the States has been disappointing, and at times, almost surreal.

But why does that surprise us?  We have seen the same thing occurring in numerous whistle blower cases, including the slurs and marginalization against those who have stood up to expose corruption and fraud in the markets, even by otherwise intelligent and well-meaning people.   That is a culture of conformity, the status quo, and the enabling of a power that will, in the end, serve only itself.

I promised you that this would be a time of 'revelations.'  And that process is not done, but continues.  My greatest concern is that given enough time and official messaging that people will come to accept almost anything, and come to thrive on the spectacles of misery.  That is the Hunger Games.




09 May 2013

Chris Hedges: On a Windy Afternoon In Front of Goldman Sachs - Hunger Games


“All the animals, the plants, the minerals, even other kinds of men, are being broken and reassembled every day, to preserve an elite few who are the loudest to theorize on freedom, but the least free of all.

I can’t even give you hope that it will be different someday— that they’ll come out, and forget death, and lose their technology’s elaborate terror, and stop using every form of life without mercy to keep what haunts men down to a tolerable level— and be like you instead, simply here, simply alive.”

Thomas Pynchon, Gravity's Rainbow

Although people like to imagine dystopian futures like The Road, or even The Walking Dead, if you wish to see a more possible vision of the future, especially in Europe, go see The Hunger Games.  

Part 1 has been out for some time, and Part 2 is coming to theatres late this year.  I read the books when all the kiddos were reading them a few years ago. 

They not literary classics, but diverting and well worth reading. And I recommend them to you, so that you can at least know what many bright young people are thinking about the world which we are creating for them.

And when you see or read about the frivolous excess and self-important obsessions of the incredibly out of touch ruling elite in The Capitol, and their perfect records of achievement in games in which they make the rules as they go, recall that telling phrase of Hannah Arendt's, the banality of evil.

They would be as gods, and so revel in violence and death which, unable to create life, is their greatest power and the means of their control.

And the winners will owe their allegiance to a faceless System. And if they use power and money to pervert justice, instead of bombs and bullets, so much the better for its efficient use of resources.





04 February 2013

The Triumph of Spectacle


“Sadism dominates the culture. It runs like an electric current through reality television and trash-talk programs...

Washington has become our Versailles. We are ruled, entertained, and informed by courtiers -- and the media has evolved into a class of courtiers. The Democrats, like the Republicans, are mostly courtiers.

Our pundits and experts, at least those with prominent public platforms, are courtiers. We are captivated by the hollow stagecraft of political theater as we are ruthlessly stripped of power. It is smoke and mirrors, tricks and con games, and the purpose behind it is deception...

A culture that does not grasp the vital interplay between morality and power, which mistakes management techniques for wisdom, and fails to understand that the measure of a civilization is its compassion, not its speed or ability to consume, condemns itself to death.”

Chris Hedges, Empire of Illusion: The End of Literacy and the Triumph of Spectacle


"As flies to wanton boys are we to the gods, They kill us for their sport."

William Shakespeare, King Lear

They would be as gods, and so revel in violence and death which, unable to create life, is their greatest power.   These will live and prosper, and those will live miserably, and die.  And the winners will owe their allegiance to the system.

They seek to master death with their illusions.  The prospect of their own death drives their fears into madness.

And they hide their nakedness with spectacle, and fill their empty being with excess, fads, and distractions.

Welcome to the Hunger Games. And may the odds be ever in your favor.





“Why do you think we have a winner?,” Snow asks while cutting a white rose.

"What do you mean?,” Seneca asks. “I mean, why do we have a winner?,” Snow repeats, before pausing. “Hope.”

“Hope?,” Seneca replies slightly bewildered.

“Hope. It is the only thing stronger than fear. A little hope is effective, a lot of hope is dangerous,” Snow declares.

“A spark is fine, as long as it’s contained. So, contain it,” Snow warns.

Suzanne Collins, The Hunger Games


11 September 2012

The Hunger Games And a Dystopian View of America's Future from Chris Hedges


"One may safely say that it would be no sin if statesmen learned enough of history to realise that no system, which implies control of society by privilege seekers, has ever ended in any other way than collapse."

William E. Dodd, US Ambassador, Address to the American Chamber of Commerce in Berlin, 1933


"America's corporate and political elites now form a regime of their own and they're privatizing democracy. All the benefits, the tax cuts, policies and rewards, flow in one direction: up."

Bill Moyers

Spokesmodel for the 1 Percent Interviews Our Heroine
If you wish to see a vision of the future of America you may want to read the book that many of your brighter 'young adults' are reading, The Hunger Games, in which an almost frivolous, certainly decadent, and highly predatory elite located in the Rocky Mountains (Aspen?) rules the 13 districts of North America through its heavily armed squads of Peacekeepers.

Poverty and privation is the rule in most of the districts as the economy is largely extractive rather than productive. For whatever reasons, most districts seem rather lightly populated and underdeveloped. I suspect it is a nod to neo-feudalism where efficiency and productivity take a back seat to control.

I started reading the first book because I like to keep a finger on the pulse of what the kids are reading.  It gives us something to talk about, in addition to hearing the names and habits of these fellows in One Direction.

I ended up reading all three books. They are easily read and quite entertaining as a story, with decent character and plot development for a young adult book. They have a huge following judging by the backlogs for them at the public libraries.   I am sure that many teens have not read them, or read them with understanding, in the same way that most adults are similarly unaware of what is happening around them.

But there are certain pivotal books that capture the thinking minds of the young, and give us a cultural indication of what they are thinking and where they may be heading.  In my own generation, The Catcher in the Rye was one such book.

On one level beneath the drama and entertainment, The Hunger Games is a disingenuously brilliant political satire about today. 

Is this the future? No one can say. But for the moment at least, that is the direction in which we are heading. All that may be lacking is a war or natural catastrophe.

But certainly something is in the wind, if one only looks at the recent proliferation of dystopian essays and novels, which seem to spring up during periods pregnant with change. And this is certainly a recurrent theme even in important scholarly works as cited in Inequality Matters: Why Nations Fail.

Here is a recent video discussion with Alex Jones and Chris Hedges that piqued my interest, even though I am not a regular listener to Mr. Jones. But it reminded me that I wanted to write a brief piece about the substory in The Hunger Games.

And below that is one of the better maps of Panem which I have found, showing the Capitol and the Thirteen Districts, with a brief description of what they supply to their parasitic elites.  Spoiler Alert.  A rebellion occurs, triggered by a seemingly trivial act of defiance and individualism by the heroine. Much of it is powered by those hardy souls in District 13.

I have seen the first movie based on book one, and it does not quite capture the depth and detail of the book, given the limitations of the time and the medium.  But it is well done for what it is, but it is a supplement, not a substitute.



Watch the entire interview here.

"And may the odds be ever in your favor."

24 August 2012

Matt Taibbi and Eliot Spitzer Discuss Eric Holder's (and Obama's) Failure: Credibility Trap


The failure of Obama's Justice Department to engage in any systemic investigations and indictments of a thoroughly rotten and corrupt financial system that has laid waste to the real economy is an almost perfect example of the credibility trap.
A credibility trap is when the regulatory, political and/or informational functions of a society have been compromised by a corrupting influence and a fraud, so that they cannot address the situation without implicating, at least incidentally, a broad swath of the power structure. The status quo has at least tolerated the corruption and the fraud, if not profited directly from it, and most likely continues to do so. The power brokers have become susceptible to various forms of blackmail. And so a failed policy can become almost self-sustaining long after it is seen to have failed, and even become counterproductive, because admitting failure is not an option for those in power.
Another example is the blatant fraud, and principles not of productivity but of prey, that prevail on the financial asset exchanges and the monetary system, the stealing of customer funds, and the manipulation of commodity markets such as silver. And it expresses itself in the frivilous coarseness of spectacle, and careless brutality of decline.
"Happy Hunger Games. And may the odds be ever in your favor."
Normally a two party system or a balance of powers would correct such a situation, but if the fraud is pervasive and enduring enough, those remedies can lose their effectiveness since the fraud binds even seemingly diverse elements in its grasp. And therein lies the trap.

There is a general loss of honor, a disparagement of moral principles, the common welfare, and a sense of 'service.' People in power are creatures of the system, 'getting their ticket punched' in Washington, as resume builder on their way to an even more lucrative position back in the corrupt system where they can leverage their connections and knowledge of the system to further undermine the rule of law. Their guiding principles are self-referential greed and power.

After one of the most outrageous periods of widespread fraud in a major developed country, prosecutions for fraud are at twenty year lows.  Who expected this outcome from an election in which the theme was change and reform?

Here is a recent article, Why Can't Obama Bring Wall St to Justice, asking the broader question inferred by this video interview. Why?  And the answer is not to be found in making excuses and allowing him to hide behind the incompetency or disengagement defense so popular in American management circles.

And if you think that voting for the other guy in this case, the emotinally engaging but fatally flawed red v. blue paradigm, is going to provide a cure you are sadly mistaken. The other guy in this case is the poster child for most of the problems that face a nation under siege by a financial elite engaged in an economic, ideological, and political coup d'etat.

As Glenn Greenwald recently put it:
"You can often, and I would say more often than not, in leading opinion-making elite circles, find an expressed renouncement or repudiation of that principle [of the rule of law]...All of these acts entail very aggressive and explicit arguments that the most powerful political and financial elites in our society should not be, and are not, subject to the rule of law because it is too disruptive, it is too divisive, it is more important that we should look forward, that we find ways to avoid repeating the problem...the rule of law is not that important of a value any longer...

The law is no respecter of persons, but the law is also a respecter of reality, meaning if it is too disruptive or divisive that it is actually in our common good, not the elite criminals, but in our common good, to exempt the most powerful from the consequences of their criminal acts, and that has become the template used in each of these instances."
And thanks to the apathy of the people and the gullibility of the badly used, self-proclaimed 'patriots' they are winning.
“The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least to neglect, persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.”

Adam Smith
Such unsustainable social arrangements are backed by force and fraud. And as the fraud loses its power over time, force must increase, until there is an end in genuine reform, or evenutal self-destruction.




02 April 2012

More Evidence of Fraud at MF Global and the Intent to Commit Fraud - Hunger Games


"As flies to wanton boys are we to the gods,
They kill us for their sport."

William Shakespeare, King Lear

I noted reports on this from account holders last year, who had their requests for wire transfers, which are the customary manner of moving large sums from bank to bank, denied and instead were issued checks at a much slower pace. The checks of course bounced when they were received and the firm declared bankruptcy.

I also reported at least one instance of a customer who did have a wire transfer that was 'reversed.' I have not subsequently heard about that.

The point here is that the Customer Commodity Coalition is concerned about the continuing statements being put forward, and parroted by the mainstream media, that MF Global was merely engaged in 'sloppy bookkeeping' and their failure to segregate customer money was inadvertent.

For example, here is a quote from yesterday's New York Times:
"While clients of MF Global say that it was unprecedented for the firm to abandon a longstanding business practice to wire money to customers who were closing accounts, the documents are not definite proof of wrongdoing. In recent weeks, federal authorities have come to suspect that MF Global’s actions amount to sloppy record-keeping, rather than criminal fraud."

As I said in November, there will be a concerted effort to sweep this one under the rug.

Check-kiting is a crime. And this deviation from standard procedures and legitimate customer requests shows a clear intent to place the customers at risk because of the firm's own liquidity circumstances. Their money was being sent to banks in London while they were being promised its rightful return.

It also indicates that the management of MF Global was keenly aware of the low levels of cash in their customer seg accounts. One can choose whom to pay among creditors, but they cannot do so fraudulently denying fair claims through fraudulent means in order to conceal the facts of their firm's true status.

I doubt justice will be done in this case because of who is involved. But I do hope to see the customer money returned, and the perpetrators made aware that such theft will not pass unremarked in the future. And there is some small hope that the regulators will be shamed into doing their jobs.

And at the very least, all retail customers should be aware of the fraudulent taint in the US financial system, and that leaving your money in their slimy hands may be hazardous to your wealth.    Perhaps you feel as though you can take your chances in the system, that this cannot happen to you.

May the odds be ever in your favor.

Futures
Evidence of fraud at MF Global
By Daniel P. Collins
April 2, 2012

The Commodity Customer Coalition delivered a memo to U.S. Attorney General Eric Holder as well as U.S. attorneys from New York and Chicago and members of Congress stating that there is clear evidence of intent to commit fraud by MF Global.

In the early days of the MF Global bankruptcy one of the red flags that something was incredibly wrong at the firm were reports from multiple customers that MF Global had told them that they would no longer wire transfer money to them and instead cut them checks.

This was disturbing to customers used to moving money by wire at a moment’s notice. Worse yet is that many of these checks—perhaps thanks to the delay—ended up bouncing. After last week’s hearing when it became clear that money was transferred out of customer segregated accounts the fact that MF Global purposely slowed down payment to customers is evidence of intent to commit fraud according to the CCC memo. “When you have abrupt changes in standard business practices that is a “badge of fraud,”” says CCC co-founder John Roe.

The memo includes account statements from Steven N. Kaplan a client of Roe’s firm BTR Trading. Kaplan had requested a wire transfer of customer funds but instead received a check, which was co-signed by Edith O’Brien and Christy Vavra, that later bounced.

The memo states, “The decision to stop sending wires to customers from the segregated accounts demonstrates that MF Global was concerned with preserving liquidity. This may have been done to bolster the prospects of selling the firm to Interactive Brokers or because they were concerned that the draining of this account would reveal that customer funds had already been commingled to stave off MF Global’ s bankruptcy.”

The CCC is concerned press reports citing unnamed sources claiming that no actual crimes have been committed in the MF Global bankruptcy would hurt customers’ chances of being made whole. The memo states, “we believe that sufficient evidence exists of intent to commit an actual fraud to support probable cause to arrest one or more employees of MF Global for several state and federal financial crimes.”

Read the rest here.