US and France-installed regime is killing and torturing worse than Gadhafi – who will bomb them?

The article has the details:

Amnesty: Libyan militias commit war crimes
By PETER JAMES SPIELMANN | Associated Press – 5 hrs ago

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FILE – In this Feb. 14, 2012 photo, Libyan militias from towns throughout the country’s west parade through Tripoli, Libya. This week, Libya will celebrate the one year anniversary of the start of the popular uprising that led to the ouster and killing of longtime dictator Moammar Gadhafi last October. (AP Photo/ Abdel Magid Al Fergany)Enlarge Photo

FILE – In this Feb. 14, 2012 photo, Libyan militias from towns throughout the country’s …
FILE – In this Feb. 14, 2012 photo, Libyan militias from towns throughout the country’s west parade through Tripoli, Libya. This week, Libya will celebrate the one year anniversary of the start of the popular uprising that led to the ouster and killing of longtime dictator Moammar Gadhafi last October. (AP Photo / Abdel Magid Al Fergany)Enlarge Photo

FILE – In this Feb. 14, 2012 photo, Libyan militias from towns throughout the country’s …

NEW YORK (AP) — Armed militias now rule much of Libya, Amnesty International said Wednesday, accusing them of torturing detainees deemed loyal to the ousted regime of Moammar Gadhafi and driving entire neighborhoods and towns into exile.

Amnesty International quoted detainees as saying “They had been suspended in contorted positions; beaten for hours with whips, cables, plastic hoses, metal chains and bars, and wooden sticks and given electric shocks with live wires and taser-like electroshock weapons.”

At least 12 detainees had died since September after torture, Amnesty said. “Their bodies were covered in bruises, wounds and cuts and some had had nails pulled off,” the group said.

The report is a fresh blow to Libya’s new government, the National Transitional Council, which helped lead the anti-Gadhafi uprising that broke out one year ago this week and spiraled into a brutal, eight-month civil war.

Since the war’s end with the capture and killing of Gadhafi last October, the NTC has struggled to extend its control over the vast desert nation. It has largely failed to rein in the hundreds of brigades that fought in the war, many of which now run their own detention centers for those accused of links to Gadhafi’s regime.

Amnesty said it visited 11 detention camps in central and western Libya in January and February, and found evidence of torture and abuse at all but one.

“Nobody is holding these militias responsible,” Donatella Rovera, senior crisis response adviser at Amnesty International, told The Associated Press by telephone from Jordan on Wednesday, a day after she left Libya.

The U.N.’s top human rights official, and Amnesty International, have urged Libya’s government to take control of all makeshift prisons to prevent further atrocities against detainees.

“There’s torture, extrajudicial executions, rape of both men and women,” U.N. High Commissioner for Human Rights Navi Pillay said on Jan. 27.

Some 2,400 detainees remain held in centers controlled by the new Libyan government, but the militias are holding uncounted thousands more prisoners, Amnesty said. Most are in and around Tripoli and Misrata, the coastal city that saw some of the war’s most brutal fighting, it said.

The International Committee of the Red Cross reported that from March to December 2011 it had visited over 8,500 detainees in some 60 detention centers.

Amnesty International’s delegation witnessed detainees being beaten and threatened with death at a detention center in Misrata.

In a Tripoli detention center, they found severely tortured detainees who interrogators tried to conceal, the group reported. It spoke to detainees held in and around Tripoli, Gharyan, Misrata, Sirte and Zawiya.

The humanitarian group Doctors Without Borders suspended its work in prisons in Misrata in late January because it said torture was so rampant that some detainees were brought for care only to make them fit for further interrogation and abuse.

Rovera accused the Tripoli-based national government of “a lack of political will. They’re not willing to recognize the scale of the problem. It is way, way beyond individual cases. It’s an irresponsible attitude,” she said.

The militias were one of the keys to the rebellion that toppled Gadhafi’s 42-year rule last year, but they are maintaining their independence from the National Transitional Council.

Hundreds of Libyan militias commemorated the anniversary of the anti-Gadhafi uprising this week by allying into a new unified military council.

Thousands of fighters from across western Libya held a mass parade in Tripoli on Tuesday, showing off heavy machine guns and rocket launchers and firing rifles in the air, an outburst that appeared intended as a warning to anyone who might stage attacks during the anniversary.

Some of the militia reprisals are against dark-skinned Libyans and African contract workers who the Gadhafis had brought in for jobs ranging from construction to security and riot control, leading to attacks on so-called “mercenaries” during the uprising.

“African migrants and refugees are also being targeted and revenge attacks are being carried out,” Amnesty said. “Entire communities have been forcibly displaced and authorities have done nothing to investigate the abuses and hold those responsible to account.”

The violence took on an ethnic twist. “It’s hunting down ‘the other,'” Rovera told the AP. “They’re wreaking havoc in the community.”

Amnesty said that militias from Misrata “drove out the entire population of Tawargha, some 30,000 people, and looted and burned down their homes in revenge for crimes some Tawargha are accused of having committed during the conflict.”

“Thousands of members of the Mashashya tribe were similarly forced out of their village by militias from Zintan, in the Nafusa Mountains. These and other communities remain displaced in makeshift camps around the country,” Amnesty said.

Amnesty called for Western pressure on the Libyan government and militias.

Rovera said that from the United States to Europe, “There are a lot of countries and governments seeking contracts in Libya, so there’s no shortage of contacts” that the West can use.

Europe, the U.S. and NATO “should tell them things as they are — the time for ‘wait and see’ has run out,” Rovera told the AP.

Libya

Isn’t it great that Ameica is being bankrupted in order to spread terror and torture in other countries?

“HRW and two other human rights groups, Amnesty International and Doctors Without Borders,

US (actually, just its government and specifically Hillary) is disgusted that Russia and China vetoed US – written resolution asking for regime change in Syria.

Russia refused to support the resolution condemning Syrian forces and government without also condemning Syrian armed opposition / guerillas.

According to this article, the reason is simple: US is financing, arming, and training the Syian guerillas and provided a secure bases in Turkey. How could they condemn people who are doing what the US wants them?

George Soros, billionaire octogenarian, philantropist, a Man who Broke the Bank of England, sponsor of Color Revolutions in Eastern Europe and Arab Spring issued a warning that his activities in the last 2 decades are finally about to culminate in riots and possibly revolutions in the United States and Europe.

He is warning that governments will use this upheaval to limit personal liberties and use force against destroyed middle class (newly poor) which may well succeed thanks to policies that he has been actively supporting in disarming law abiding citizens.

Is there a way to prevent his doom plan?

1. Repeal the last 10 years: Patriot act, TSA, and other measures to make us “safer”.
2. Focus on fixing America, not Iran or Syria. Decrease military spending to 2-3% of GDP (abot half of the current levels but still way more than e.g. China)
3. Care about US economy, not global economy. US is so big that it can survive without the “world”. Trade only in what is necessary, e.g. oil.
4. Elect Ron Paul (because no other US politician will do it). Obama has been financed by Soros so re-electing Obama means Soros’ dream will come true.

http://news.yahoo.com/soros-warns-riots-brutal-clampdowns-possible-total-economic-133218140.html

George Soros is no stranger to Blaze readers. The billionaire currency speculator and philanthropist has long been in the news, especially since the fateful day in 1992 when he helped crash England’s economy. In fact, since that day, he has been commonly referred to as “the man who broke the bank of England.”

Soros is shrewd, he has a keen eye for investments, and he knows how to play the markets. Therefore, when he makes a prediction, it might be safe to say it’s worth a listen. After all, his predictions (among other things) have made him the multi-billionaire he is today.

So you might want to pay attention to a recent story from The Daily Beast that claims George Soros is nervous about the future of the global economy and that he warns of dark things to come.

“At times like these, survival is the most important thing,” Soros said.

As he sees it, the world faces one of the most dangerous periods of modern history—a period of “evil,” writes the Beasts’ John Arlidge. “Europe is confronting a descent into chaos and conflict. In America [Soros] predicts riots in the streets that will lead to a brutal clampdown that will dramatically curtail civil liberties [emphases added]. The global economic system could even collapse altogether.”

And to add a little color, Aldridge notes Soros says it all while “peering through his owlish glasses and brushing wisps of gray hair off his forehead.”

“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros told Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”

As mentioned in the above, and as The Daily Beast points out, Soros’ warning is probably based on his natural market instincts as well as personal experience.

“I did survive a personally much more threatening situation, so it is emotional, as well as rational,” Soros said in reference to his personal experiences with both Nazi and Communist occupations.

“The collapse of the Soviet system was a pretty extraordinary event, and we are currently experiencing something similar in the developed world, without fully realizing what’s happening,” Soros said.

“Unrestrained competition can drive people into actions that they would otherwise regret,” Soros said. “The tragedy of our current situation is the unintended consequence of imperfect understanding. A lot of the evil in the world is actually not intentional. A lot of people in the financial system did a lot of damage without intending to.”

Wait a minute. Soros believes that the economic meltdown was the result of not just poor investments but honest-to-God “evil”?

“That’s correct,” Soros affirmed.

Soros continued in this vein, each prediction getting darker and grimmer than the last.

He believes that the EU must be held together because “if you have a disorderly collapse of the euro, you have the danger of a revival of the political conflicts that have torn Europe apart over the centuries—an extreme form of nationalism, which manifests itself in xenophobia, the exclusion of foreigners and ethnic groups.”

“In Hitler’s time, that was focused on the Jews,” Soros said. “Today, you have that with the Gypsies, the Roma, which is a small minority, and also, of course, Muslim immigrants.”

It is “now more likely than not” that Greece will formally default in 2012, Soros said. For this, he blames the EUs’ leadership and believes that eurozone leaders only know how to “do enough to calm the situation, not to solve the problem.”

Soros then went on to talk about how the Occupy Wall Street movement has added to the ever-changing dynamics in the world economy. Debt, Wall Street and capitalism have been put under intense scrutiny and people are becoming increasingly angry.

As this anger intensifies, will the inevitable result be a spontaneous eruption of violence and riots?

“Yes, yes, yes,” Soros says, almost “gleefully.”

However, according to Soros, worse than the riots and violence will be the government reaction.

“It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States,” Soros said.

Perhaps because he sees such a dark future for the West, Soros has staked his “hopes” for the global economy in Middle East and the “democracies” that are springing up over there.

“While the developed world is in a deep crisis, the future for the developing world is very positive,” Soros said. “The aspiration of people for an open society is very inspiring. You have people in Africa lining up for many hours when they are given an opportunity to vote. Dictators have been overthrown. It is very encouraging for freedom and growth.”

Soros insists the key to avoiding cataclysm in 2012 is not to let the crises of 2011 go to waste, writes John Arlidge.

“In the crisis period, the impossible becomes possible,” Soros said. “The European Union could regain its luster. I’m hopeful that the United States, as a political entity, will pass a very severe test and actually strengthen the institution.”

by Rep. Ron Paul, December 10, 2011
The Soviet Union detonated its first nuclear bomb on August 29, 1949, leading to the doctrine of Mutually Assured Destruction, shared by both the USA and the Soviets. The unwritten agreement by the two superpowers deterred nuclear war with an implied threat to blow up the world, if need be, to defend each of their interests.

I well remember the Cuban missile crisis of October 1962, having been drafted into the military at that time. Mutually Assured Destruction had significant meaning to the whole world during this period. This crisis, along with the escalating ill-advised Vietnam War, made me very much aware of the problems the world faced during the five years I served as a USAF flight surgeon.

It was with great pleasure and hope that I observed the collapse of the Soviet Empire between 1989 and 1991. This breakup verified the early predictions by the free market economists, like Ludwig von Mises, that communism would self-destruct because of the deeply flawed economic theories embedded in socialism. Our nukes were never needed because ideas are more powerful than the weapons of war.

Many Americans at the time were boldly hopeful that we would benefit from a generous peace dividend. Sadly, it turned out to be a wonderful opportunity wasted. There was to be no “beating their swords into plowshares,” even though history shows that without weapons and war there’s more food and prosperity for the people. Unfortunately, our leaders decided on another course that served the special interests who benefit from constant wars and the arbitrary rearrangement of national borders for control of national resources.

Instead of a peace dividend from ending the policy of Mutually Assured Destruction, US leaders opted for a foreign policy of American world domination as its sole superpower. It was all in the spirit of Woodrow Wilson’s idealistic goal of “making the world safe for democracy” by pursuing a war to end all wars.

The mantra became that American exceptionalism morally required us to spread our dominance world-wide by force. US world dominance, by whatever means, became our new bipartisan foreign policy. There was to be no peace dividend, though our enemies were virtually non-existent.

In many ways America had been “exceptional” but in an opposite manner from the neocon driven foreign policy of the last 20 years. If America indeed has something good to offer the cause of peace, prosperity, and liberty it must be spread through persuasion and by example; not by intimidation, bribes, and war.

Maintaining world domination is based on an intellectually and financially bankrupt idea that generates dependency, war, loss of civil liberties, inflation, and debt, all of which contribute to our economic crisis.

Saddest of all, this policy of American domination and exceptionalism has allowed us to become an aggressor nation, supporting pre-emptive war, covert destabilization, foreign occupations, nation building, torture, and assassinations. This policy has generated hatred toward Americans and provides the incentive for almost all of the suicide attacks against us and our allies.

To continue to believe the fiction that the militants hate us for our freedoms and wealth may even result in more attacks against us — that is, unless our national bankruptcy brings us to our knees and forces us to bring our troops home.

Expanding our foreign military intervention overseas as a cure for the attacks against us, tragically, only guarantees even more attacks. We must someday wake up, be honest with ourselves, and reject the notion that we’re spreading freedom and America’s goodness around the world. We cannot justify our policy by claiming our mission is to secure American freedoms and protect our Constitution. That is not believable. This policy is doomed to fail on all fronts.

The policy of Mutually Assured Destruction has been gone now for 20 years, and that is good.

The policy of American domination of the world, as nation builder-in-chief and policeman of the world, has failed and must be abandoned — if not as a moral imperative, then certainly out of economic necessity.

My humble suggestion is to replace it with a policy of Mutually Assured Respect. This requires no money and no weapons industry, or other special interests demanding huge war profits or other advantages.

This requires simply tolerance of others’ cultures and their social and religious values, and the giving up of all use of force to occupy or control other countries and their national resources. Many who disagree choose to grossly distort the basic principles shared by the world’s great religions: the Golden Rule, the Ten Commandments, and the cause of peace. Religions all too often are distorted and used to justify the violence engaged in for arbitrary power.

A policy of Mutually Assured Respect would result in the U.S.:

Treating other nations exactly as we expect others to treat us.

Offering friendship with all who seek it.

Participating in trade with all who are willing.

Refusing to threaten, bribe, or occupy any other nation.

Seeking an honest system of commodity money that no single country can manipulate for a trade advantage. Without this, currency manipulation becomes a tool of protectionism and prompts retaliation with tariffs and various regulations. This policy, when it persists, is dangerous and frequently leads to real wars.

Mutually Assured Respect offers a policy of respect, trade, and friendship and rejects threats, sanctions, and occupations.

This is the only practical way to promote peace, harmony, and economic well-being to the maximum number of people in the world.

Mutually Assured Respect may not be perfect but far better than Mutually Assured Destruction or unilateral American dominance.

In the worst case, the empire prints money to save their own while devaluing savings of the ordinary citizens.

Secret Fed Loans Gave Banks Undisclosed $13B

QBy Bob Ivry, Bradley Keoun and Phil Kuntz – Nov 27, 2011 5:01 PM MT Bloomberg Markets Magazine.

On Nov. 26, 2008, then-Bank of America Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his firm owed the central bank $86 billion that day. Photo: Joshua Roberts/Bloomberg

On Nov. 26, 2008, then-Bank of America Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his firm owed the central bank $86 billion that day. Photo: Joshua Roberts/Bloomberg
Chart: Uploaded by 5453389 at GMT:2011-11-27T19:55:19 .The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

‘Change Their Votes’
“When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”

The size of the bailout came to light after Bloomberg LP, the parent of Bloomberg News, won a court case against the Fed and a group of the biggest U.S. banks called Clearing House Association LLC to force lending details into the open.

The Fed, headed by Chairman Ben S. Bernanke, argued that revealing borrower details would create a stigma — investors and counterparties would shun firms that used the central bank as lender of last resort — and that needy institutions would be reluctant to borrow in the next crisis. Clearing House Association fought Bloomberg’s lawsuit up to the U.S. Supreme Court, which declined to hear the banks’ appeal in March 2011.

$7.77 Trillion

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”

Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day.

‘Motivate Others’
JPMorgan Chase & Co. CEO Jamie Dimon told shareholders in a March 26, 2010, letter that his bank used the Fed’s Term Auction Facility “at the request of the Federal Reserve to help motivate others to use the system.” He didn’t say that the New York-based bank’s total TAF borrowings were almost twice its cash holdings or that its peak borrowing of $48 billion on Feb. 26, 2009, came more than a year after the program’s creation.

Howard Opinsky, a spokesman for JPMorgan (JPM), declined to comment about Dimon’s statement or the company’s Fed borrowings. Jerry Dubrowski, a spokesman for Bank of America, also declined to comment.

The Fed has been lending money to banks through its so- called discount window since just after its founding in 1913. Starting in August 2007, when confidence in banks began to wane, it created a variety of ways to bolster the financial system with cash or easily traded securities. By the end of 2008, the central bank had established or expanded 11 lending facilities catering to banks, securities firms and corporations that couldn’t get short-term loans from their usual sources.

‘Core Function’
“Supporting financial-market stability in times of extreme market stress is a core function of central banks,” says William B. English, director of the Fed’s Division of Monetary Affairs. “Our lending programs served to prevent a collapse of the financial system and to keep credit flowing to American families and businesses.”

The Fed has said that all loans were backed by appropriate collateral. That the central bank didn’t lose money should “lead to praise of the Fed, that they took this extraordinary step and they got it right,” says Phillip Swagel, a former assistant Treasury secretary under Henry M. Paulson and now a professor of international economic policy at the University of Maryland.

The Fed initially released lending data in aggregate form only. Information on which banks borrowed, when, how much and at what interest rate was kept from public view.

The secrecy extended even to members of President George W. Bush’s administration who managed TARP. Top aides to Paulson weren’t privy to Fed lending details during the creation of the program that provided crisis funding to more than 700 banks, say two former senior Treasury officials who requested anonymity because they weren’t authorized to speak.

Big Six
The Treasury Department relied on the recommendations of the Fed to decide which banks were healthy enough to get TARP money and how much, the former officials say. The six biggest U.S. banks, which received $160 billion of TARP funds, borrowed as much as $460 billion from the Fed, measured by peak daily debt calculated by Bloomberg using data obtained from the central bank. Paulson didn’t respond to a request for comment.

The six — JPMorgan, Bank of America, Citigroup Inc. (C), Wells Fargo & Co. (WFC), Goldman Sachs Group Inc. (GS) and Morgan Stanley — accounted for 63 percent of the average daily debt to the Fed by all publicly traded U.S. banks, money managers and investment- services firms, the data show. By comparison, they had about half of the industry’s assets before the bailout, which lasted from August 2007 through April 2010. The daily debt figure excludes cash that banks passed along to money-market funds.

Bank Supervision
While the emergency response prevented financial collapse, the Fed shouldn’t have allowed conditions to get to that point, says Joshua Rosner, a banking analyst with Graham Fisher & Co. in New York who predicted problems from lax mortgage underwriting as far back as 2001. The Fed, the primary supervisor for large financial companies, should have been more vigilant as the housing bubble formed, and the scale of its lending shows the “supervision of the banks prior to the crisis was far worse than we had imagined,” Rosner says.

Bernanke in an April 2009 speech said that the Fed provided emergency loans only to “sound institutions,” even though its internal assessments described at least one of the biggest borrowers, Citigroup, as “marginal.”

On Jan. 14, 2009, six days before the company’s central bank loans peaked, the New York Fed gave CEO Vikram Pandit a report declaring Citigroup’s financial strength to be “superficial,” bolstered largely by its $45 billion of Treasury funds. The document was released in early 2011 by the Financial Crisis Inquiry Commission, a panel empowered by Congress to probe the causes of the crisis.

‘Need Transparency’
Andrea Priest, a spokeswoman for the New York Fed, declined to comment, as did Jon Diat, a spokesman for Citigroup.

“I believe that the Fed should have independence in conducting highly technical monetary policy, but when they are putting taxpayer resources at risk, we need transparency and accountability,” says Alabama Senator Richard Shelby, the top Republican on the Senate Banking Committee.

Judd Gregg, a former New Hampshire senator who was a lead Republican negotiator on TARP, and Barney Frank, a Massachusetts Democrat who chaired the House Financial Services Committee, both say they were kept in the dark.

“We didn’t know the specifics,” says Gregg, who’s now an adviser to Goldman Sachs.

“We were aware emergency efforts were going on,” Frank says. “We didn’t know the specifics.”

Disclose Lending
Frank co-sponsored the Dodd-Frank Wall Street Reform and Consumer Protection Act, billed as a fix for financial-industry excesses. Congress debated that legislation in 2010 without a full understanding of how deeply the banks had depended on the Fed for survival.

It would have been “totally appropriate” to disclose the lending data by mid-2009, says David Jones, a former economist at the Federal Reserve Bank of New York who has written four books about the central bank.

“The Fed is the second-most-important appointed body in the U.S., next to the Supreme Court, and we’re dealing with a democracy,” Jones says. “Our representatives in Congress deserve to have this kind of information so they can oversee the Fed.”

The Dodd-Frank law required the Fed to release details of some emergency-lending programs in December 2010. It also mandated disclosure of discount-window borrowers after a two- year lag.

Protecting TARP
TARP and the Fed lending programs went “hand in hand,” says Sherrill Shaffer, a banking professor at the University of Wyoming in Laramie and a former chief economist at the New York Fed. While the TARP money helped insulate the central bank from losses, the Fed’s willingness to supply seemingly unlimited financing to the banks assured they wouldn’t collapse, protecting the Treasury’s TARP investments, he says.

“Even though the Treasury was in the headlines, the Fed was really behind the scenes engineering it,” Shaffer says.

Congress, at the urging of Bernanke and Paulson, created TARP in October 2008 after the bankruptcy of Lehman Brothers Holdings Inc. made it difficult for financial institutions to get loans. Bank of America and New York-based Citigroup each received $45 billion from TARP. At the time, both were tapping the Fed. Citigroup hit its peak borrowing of $99.5 billion in January 2009, while Bank of America topped out in February 2009 at $91.4 billion.

No Clue
Lawmakers knew none of this.

They had no clue that one bank, New York-based Morgan Stanley (MS), took $107 billion in Fed loans in September 2008, enough to pay off one-tenth of the country’s delinquent mortgages. The firm’s peak borrowing occurred the same day Congress rejected the proposed TARP bill, triggering the biggest point drop ever in the Dow Jones Industrial Average. (INDU) The bill later passed, and Morgan Stanley got $10 billion of TARP funds, though Paulson said only “healthy institutions” were eligible.

Mark Lake, a spokesman for Morgan Stanley, declined to comment, as did spokesmen for Citigroup and Goldman Sachs.

Had lawmakers known, it “could have changed the whole approach to reform legislation,” says Ted Kaufman, a former Democratic Senator from Delaware who, with Brown, introduced the bill to limit bank size.

Moral Hazard
Kaufman says some banks are so big that their failure could trigger a chain reaction in the financial system. The cost of borrowing for so-called too-big-to-fail banks is lower than that of smaller firms because lenders believe the government won’t let them go under. The perceived safety net creates what economists call moral hazard — the belief that bankers will take greater risks because they’ll enjoy any profits while shifting losses to taxpayers.

If Congress had been aware of the extent of the Fed rescue, Kaufman says, he would have been able to line up more support for breaking up the biggest banks.

Byron L. Dorgan, a former Democratic senator from North Dakota, says the knowledge might have helped pass legislation to reinstate the Glass-Steagall Act, which for most of the last century separated customer deposits from the riskier practices of investment banking.

“Had people known about the hundreds of billions in loans to the biggest financial institutions, they would have demanded Congress take much more courageous actions to stop the practices that caused this near financial collapse,” says Dorgan, who retired in January.

Getting Bigger
Instead, the Fed and its secret financing helped America’s biggest financial firms get bigger and go on to pay employees as much as they did at the height of the housing bubble.

Total assets held by the six biggest U.S. banks increased 39 percent to $9.5 trillion on Sept. 30, 2011, from $6.8 trillion on the same day in 2006, according to Fed data.

For so few banks to hold so many assets is “un-American,” says Richard W. Fisher, president of the Federal Reserve Bank of Dallas. “All of these gargantuan institutions are too big to regulate. I’m in favor of breaking them up and slimming them down.”

Employees at the six biggest banks made twice the average for all U.S. workers in 2010, based on Bureau of Labor Statistics hourly compensation cost data. The banks spent $146.3 billion on compensation in 2010, or an average of $126,342 per worker, according to data compiled by Bloomberg. That’s up almost 20 percent from five years earlier compared with less than 15 percent for the average worker. Average pay at the banks in 2010 was about the same as in 2007, before the bailouts.

‘Wanted to Pretend’
“The pay levels came back so fast at some of these firms that it appeared they really wanted to pretend they hadn’t been bailed out,” says Anil Kashyap, a former Fed economist who’s now a professor of economics at the University of Chicago Booth School of Business. “They shouldn’t be surprised that a lot of people find some of the stuff that happened totally outrageous.”

Bank of America took over Merrill Lynch & Co. at the urging of then-Treasury Secretary Paulson after buying the biggest U.S. home lender, Countrywide Financial Corp. When the Merrill Lynch purchase was announced on Sept. 15, 2008, Bank of America had $14.4 billion in emergency Fed loans and Merrill Lynch had $8.1 billion. By the end of the month, Bank of America’s loans had reached $25 billion and Merrill Lynch’s had exceeded $60 billion, helping both firms keep the deal on track.

Prevent Collapse
Wells Fargo bought Wachovia Corp., the fourth-largest U.S. bank by deposits before the 2008 acquisition. Because depositors were pulling their money from Wachovia, the Fed channeled $50 billion in secret loans to the Charlotte, North Carolina-based bank through two emergency-financing programs to prevent collapse before Wells Fargo could complete the purchase.

“These programs proved to be very successful at providing financial markets the additional liquidity and confidence they needed at a time of unprecedented uncertainty,” says Ancel Martinez, a spokesman for Wells Fargo.

JPMorgan absorbed the country’s largest savings and loan, Seattle-based Washington Mutual Inc., and investment bank Bear Stearns Cos. The New York Fed, then headed by Timothy F. Geithner, who’s now Treasury secretary, helped JPMorgan complete the Bear Stearns deal by providing $29 billion of financing, which was disclosed at the time. The Fed also supplied Bear Stearns with $30 billion of secret loans to keep the company from failing before the acquisition closed, central bank data show. The loans were made through a program set up to provide emergency funding to brokerage firms.

‘Regulatory Discretion’
“Some might claim that the Fed was picking winners and losers, but what the Fed was doing was exercising its professional regulatory discretion,” says John Dearie, a former speechwriter at the New York Fed who’s now executive vice president for policy at the Financial Services Forum, a Washington-based group consisting of the CEOs of 20 of the world’s biggest financial firms. “The Fed clearly felt it had what it needed within the requirements of the law to continue to lend to Bear and Wachovia.”

The bill introduced by Brown and Kaufman in April 2010 would have mandated shrinking the six largest firms.

“When a few banks have advantages, the little guys get squeezed,” Brown says. “That, to me, is not what capitalism should be.”

Kaufman says he’s passionate about curbing too-big-to-fail banks because he fears another crisis.

‘Can We Survive?’

“The amount of pain that people, through no fault of their own, had to endure — and the prospect of putting them through it again — is appalling,” Kaufman says. “The public has no more appetite for bailouts. What would happen tomorrow if one of these big banks got in trouble? Can we survive that?”

Lobbying expenditures by the six banks that would have been affected by the legislation rose to $29.4 million in 2010 compared with $22.1 million in 2006, the last full year before credit markets seized up — a gain of 33 percent, according to OpenSecrets.org, a research group that tracks money in U.S. politics. Lobbying by the American Bankers Association, a trade organization, increased at about the same rate, OpenSecrets.org reported.

Lobbyists argued the virtues of bigger banks. They’re more stable, better able to serve large companies and more competitive internationally, and breaking them up would cost jobs and cause “long-term damage to the U.S. economy,” according to a Nov. 13, 2009, letter to members of Congress from the FSF.

The group’s website cites Nobel Prize-winning economist Oliver E. Williamson, a professor emeritus at the University of California, Berkeley, for demonstrating the greater efficiency of large companies.

‘Serious Burden’
In an interview, Williamson says that the organization took his research out of context and that efficiency is only one factor in deciding whether to preserve too-big-to-fail banks.

“The banks that were too big got even bigger, and the problems that we had to begin with are magnified in the process,” Williamson says. “The big banks have incentives to take risks they wouldn’t take if they didn’t have government support. It’s a serious burden on the rest of the economy.”

Dearie says his group didn’t mean to imply that Williamson endorsed big banks.

Top officials in President Barack Obama’s administration sided with the FSF in arguing against legislative curbs on the size of banks.

Geithner, Kaufman
On May 4, 2010, Geithner visited Kaufman in his Capitol Hill office. As president of the New York Fed in 2007 and 2008, Geithner helped design and run the central bank’s lending programs. The New York Fed supervised four of the six biggest U.S. banks and, during the credit crunch, put together a daily confidential report on Wall Street’s financial condition. Geithner was copied on these reports, based on a sampling of e- mails released by the Financial Crisis Inquiry Commission.

At the meeting with Kaufman, Geithner argued that the issue of limiting bank size was too complex for Congress and that people who know the markets should handle these decisions, Kaufman says. According to Kaufman, Geithner said he preferred that bank supervisors from around the world, meeting in Basel, Switzerland, make rules increasing the amount of money banks need to hold in reserve. Passing laws in the U.S. would undercut his efforts in Basel, Geithner said, according to Kaufman.

Anthony Coley, a spokesman for Geithner, declined to comment.

‘Punishing Success’
Lobbyists for the big banks made the winning case that forcing them to break up was “punishing success,” Brown says. Now that they can see how much the banks were borrowing from the Fed, senators might think differently, he says.

The Fed supported curbing too-big-to-fail banks, including giving regulators the power to close large financial firms and implementing tougher supervision for big banks, says Fed General Counsel Scott G. Alvarez. The Fed didn’t take a position on whether large banks should be dismantled before they get into trouble.

Dodd-Frank does provide a mechanism for regulators to break up the biggest banks. It established the Financial Stability Oversight Council that could order teetering banks to shut down in an orderly way. The council is headed by Geithner.

“Dodd-Frank does not solve the problem of too big to fail,” says Shelby, the Alabama Republican. “Moral hazard and taxpayer exposure still very much exist.”

Below Market
Dean Baker, co-director of the Center for Economic and Policy Research in Washington, says banks “were either in bad shape or taking advantage of the Fed giving them a good deal. The former contradicts their public statements. The latter — getting loans at below-market rates during a financial crisis — is quite a gift.”

The Fed says it typically makes emergency loans more expensive than those available in the marketplace to discourage banks from abusing the privilege. During the crisis, Fed loans were among the cheapest around, with funding available for as low as 0.01 percent in December 2008, according to data from the central bank and money-market rates tracked by Bloomberg.

The Fed funds also benefited firms by allowing them to avoid selling assets to pay investors and depositors who pulled their money. So the assets stayed on the banks’ books, earning interest.

Banks report the difference between what they earn on loans and investments and their borrowing expenses. The figure, known as net interest margin, provides a clue to how much profit the firms turned on their Fed loans, the costs of which were included in those expenses. To calculate how much banks stood to make, Bloomberg multiplied their tax-adjusted net interest margins by their average Fed debt during reporting periods in which they took emergency loans.

Added Income
The 190 firms for which data were available would have produced income of $13 billion, assuming all of the bailout funds were invested at the margins reported, the data show.

The six biggest U.S. banks’ share of the estimated subsidy was $4.8 billion, or 23 percent of their combined net income during the time they were borrowing from the Fed. Citigroup would have taken in the most, with $1.8 billion.

“The net interest margin is an effective way of getting at the benefits that these large banks received from the Fed,” says Gerald A. Hanweck, a former Fed economist who’s now a finance professor at George Mason University in Fairfax, Virginia.

While the method isn’t perfect, it’s impossible to state the banks’ exact profits or savings from their Fed loans because the numbers aren’t disclosed and there isn’t enough publicly available data to figure it out.

Opinsky, the JPMorgan spokesman, says he doesn’t think the calculation is fair because “in all likelihood, such funds were likely invested in very short-term investments,” which typically bring lower returns.

Standing Access
Even without tapping the Fed, the banks get a subsidy by having standing access to the central bank’s money, says Viral Acharya, a New York University economics professor who has worked as an academic adviser to the New York Fed.

“Banks don’t give lines of credit to corporations for free,” he says. “Why should all these government guarantees and liquidity facilities be for free?”

In the September 2008 meeting at which Paulson and Bernanke briefed lawmakers on the need for TARP, Bernanke said that if nothing was done, “unemployment would rise — to 8 or 9 percent from the prevailing 6.1 percent,” Paulson wrote in “On the Brink” (Business Plus, 2010).

Occupy Wall Street
The U.S. jobless rate hasn’t dipped below 8.8 percent since March 2009, 3.6 million homes have been foreclosed since August 2007, according to data provider RealtyTrac Inc., and police have clashed with Occupy Wall Street protesters, who say government policies favor the wealthiest citizens, in New York, Boston, Seattle and Oakland, California.

The Tea Party, which supports a more limited role for government, has its roots in anger over the Wall Street bailouts, says Neil M. Barofsky, former TARP special inspector general and a Bloomberg Television contributing editor.

“The lack of transparency is not just frustrating; it really blocked accountability,” Barofsky says. “When people don’t know the details, they fill in the blanks. They believe in conspiracies.”

In the end, Geithner had his way. The Brown-Kaufman proposal to limit the size of banks was defeated, 60 to 31. Bank supervisors meeting in Switzerland did mandate minimum reserves that institutions will have to hold, with higher levels for the world’s largest banks, including the six biggest in the U.S. Those rules can be changed by individual countries.

They take full effect in 2019.

Meanwhile, Kaufman says, “we’re absolutely, totally, 100 percent not prepared for another financial crisis.”

To contact the reporters on this story: Bob Ivry in New York at bivry@bloomberg.net; Bradley Keoun in New York at bkeoun@bloomberg.net; Phil Kuntz in New York at pkuntz1@bloomberg.net.

To contact the editors responsible for this story: Gary Putka at gputka@bloomberg.net; David Scheer at dscheer@bloomberg.net.

Cry for help.

With the recent plans of the Serbian government to accept Albanian customs officers on the line between Kosovo and the rest of Serbia, Kosovo Serbs have realized that they are doomed and will have to either leave their ancestral lands or accept daily terrorism of the human organs-trading Thaci and his government. Both their own government and EU/US “human rights” organizations have abandoned them. Even sympathetic governments in Romania and Slovakia won’t do anything that could make US and Germany angry. The only help if any can come from Russia.

Precedents

Russia has in the past granted Russian citizenship to ethnic Russians living in the former soviet republics to increase its influence in those republics and defend its interests. For example in Crimea, it used this strategy to convince Ukrainians that they should not try to evict Russian fleet from Crimea’s deep see ports. In South Ossetia, Russia qualified Georgian attack as an attack against its own citizens and a reason to intervene.

Impact on Europe

The impact on Europe could potentially be very significant. The question is what Russia would do if its (Serbian) citizens came under attack as they inevitably will. Compared to its “Near Abroad”, Kosovo and Serbia are surrounded by countries that follow US orders and therefore a direct military help is implausible.

It seems that Russian government itself is unsure what granting Russian citizenship would mean for it and therefore is “studying the applications” according to Russian Foreign Minister Sergei Lavrov.

Opportunity for Russia

While Russia will not get involved militarily, it could use the Kosovo Serb citizenships to increase its diplomatic and humanitarian involvement and prevent US and EU from consolidating their gains in Balkans and Serbia. It could essentially freeze the conflict and get a lever on those in EU that for the lack of other challeges feel like medling in Russia’s periphery.

Threat to pro-US/EU Serbian elites

Serbian citizens have grudgingly accepted that they lost the war and Kosovo and they cannot do anything about it and largely stopped supporting pro-Kosovo parties. If Russia stops Serb loses in Kosovo, Serbs may think that Kosovo (or at last the northern part of it) is not necessarily lost and elect pro-Kosovo parties like Kostunica’s DS. Those parties could be more forceful in defending Kosovo Serbs and make Germany and US positions in Kosovo painful. The standoff could also impact other countries in the region.

Russia could build it position awaiting a possible EU and US economic (and maybe also political) breakdown.

Is this the demonstration of Romney’s business skills, to borrow money to wage a new useless war? But he is being financed by big business, so there must be money to be made … just not for the middle class. Yet middle class is going to vote for those crack heads?! Is the American middle class crack heads, then, too?

Return of the War Party?
By Patrick J. Buchanan

Is a vote for the Republican Party in 2012 a vote for war?

Is a vote for Mitt Romney or Newt Gingrich a vote for yet another unfunded war of choice, this time with a nation, Iran, three times as large and populous as Iraq?

Mitt says that if elected he will move carriers into the Persian Gulf and “prepare for war.” Newt is even more hawkish. America should continue “taking out” Iran’s nuclear scientists — i.e., assassinating them — but military action will probably be needed.

Newt is talking up uber-hawk John Bolton for secretary of state.

Rick Santorum has already called for U.S.-Israeli strikes: “Either we’re going to stop them … or take the long term consequences of having a nuclear Iran trying to wipe out the state of Israel.”

But if Iran represents, as Bibi Netanyahu is forever reminding us, an “existential threat,” why does not Israel itself, with hundreds of nuclear weapons, deal with it?

Bibi’s inaction speaks louder than Bibi’s words.

He wants the Americans to do it.

For the retired head of Mossad, Meir Dagan, calls attacking Iran “the stupidest thing I have ever heard of.” He means stupid for Israel.

Why? Because an Israeli attack would be costly in planes and pilots, and only set back Iran’s nuclear program. And such a pre-emptive strike would unify Iranians behind the regime.

Moreover, Israel would be inviting Tehran’s ally Hezbollah to rain down rockets on Israel, igniting another of the bloody Lebanon wars that Israel was desperate to end the last time.

As for the United States, the only way we could eliminate Iran’s nuclear program would be days of air and missile strikes.

Iran could retaliate by cutting off oil exports and mining the Strait of Hormuz, tripling the world price of oil, and hurling the European Union and United States into recession.

Iran could also turn Hezbollah loose on Americans in Lebanon and urge Shias to attack U.S. troops, diplomats and civilians in Bahrain, Iraq and Afghanistan, and here in the United States.

No one knows how this would end. A U.S.-Iran war could force us to march to Tehran to remove the Islamic regime and scour that huge country to ensure that it was shorn of weapons of mass destruction — for an Islamic regime that survived a U.S. war would be hellbent on acquiring the bomb to pay us back. Yet, we lack a large enough army to occupy Iran.

And why should thousands more Americans have to die or come home to be fitted for metal limbs so Israel can remain sole proprietor of a nuclear weapon from Morocco to Afghanistan?

And where is the hard evidence Iran is acquiring nukes?

The U.S. intelligence community declared in December 2007, with “high confidence,” that Iran was no longer seeking nuclear weapons. It has never rescinded that declaration.

And there is no conclusive evidence in that media-hyped report last week from the International Atomic Energy Agency that Iran is for certain building nuclear weapons. Indeed, that report was exposed as the work of incompetents within hours.

Relying on intelligence agencies, the IAEA said a top Russian nuclear weapons scientist had been instructing Iranians for years. The scientist turns out to be V.I. Danilenko, who has no expertise in nuclear weapons, but is a specialist in using conventional explosives to produce nanodiamonds for the manufacture of lubricants and rubber.

Are we being lied and stampeded into yet another war by the same propagandists who gave us the yellow-cake-from-Niger forgeries?

Bibi calls Mahmoud Ahmadinejad another Hitler and says we are all in 1939 again. But is this credible?

True, Ahmadinejad hosted a Holocaust conference featuring David Duke and said Israel should be wiped off the map, but he does not control Iran’s military, has lost favor with the ayatollah, and has been threatened with impeachment. Ahmadinejad is a lame duck with less than two years left in his term. Is mighty Israel afraid of this man?

Told that the IAEA said Iran was actively pursuing nuclear weapons, Ahmadinejad laughed: “The Iranian nation is wise. It won’t build two bombs against 20,000 (nuclear) bombs you (Americans) have.”

Does he not have a point? How would an Iranian bomb secure Iran, when Israel’s nuclear arsenal would be put on a hair trigger, and Turkey, Saudi Arabia and Egypt would then rush to get their own bombs?

In that South Carolina debate, Ron Paul, the one person there proven right on Iraq, was given less than 90 seconds to speak.

Under the Constitution, said Paul, no president has the right to launch an unprovoked attack on Iran without congressional authorization.

Before America goes to war with Iran, let Congress, whose members are forever expressing their love for the Constitution, follow it, and vote on war with Iran. And before we go to the polls in 2012, let’s find out if the GOP is becoming again the same old War Party that bankrupted the nation.

90 seconds

That’s how much of the first hour of tonight’s GOP debate was given to Ron Paul. 90 measly seconds out of 3,600 seconds.

The remaining 3,510 seconds were spent with the other major candidates:

** Declaring their desire to start wars in Iran, Pakistan, and Syria;
** Rehashing their support for torture;
** Agreeing that President Obama has the right to unilaterally assassinate an American citizen without a court conviction;
** Explaining their plans to continue nation-building, policing, and occupying countries across the globe.

Ron Paul was silenced, in perhaps the most important debate of the cycle.

You have to ask yourself why.

I think I know the answer. Both parties have perpetuated the foreign policy that is bankrupting our nation and tearing apart the world.

Both parties have started wars without proper congressional authorization.

Both parties have fabricated reasons for war.

Both parties’ outrageous spending has taken us to the brink of disaster.

And if the other candidates on the stage tonight are to be believed, then there is only one candidate who would break the globalists’ stranglehold over our foreign policy, our Treasury, and the lives of our family, friends, and neighbors in the armed forces.

Ron Paul could change history. He could save our great nation from its own devastating policies of the past 10 years.

If his voice could be heard.

The media has once again BLACKED OUT Ron Paul.

Peace was ignored. A sane national defense policy was shut out.

Rational spending and our Constitution were thrown out the window.

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