The Problem Was Never Liquidity, But Insolvency . . . And We Should Let Insolvent Banks Fail

The problem was never really liquidity.

Says who?

Says Anna Schwartz, co-author of the leading book on the Great Depression, and someone who actually lived through it.

The Wall Street Journal ran an interview with Schwartz last weekend:

Most people now living have never seen a credit crunch like the one we are currently enduring. Ms. Schwartz, 92 years old [but still sharp as a tack], is one of the exceptions. She’s not only old enough to remember the period from 1929 to 1933, she may know more about monetary history and banking than anyone alive. She co-authored, with Milton Friedman, “A Monetary History of the United States” (1963). It’s the definitive account of how misguided monetary policy turned the stock-market crash of 1929 into the Great Depression.

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Federal Reserve Chairman Ben Bernanke has called the 888-page “Monetary History” “the leading and most persuasive explanation of the worst economic disaster in American history.” Ms. Schwartz thinks that our central bankers and our Treasury Department are getting it wrong again.

Read moreThe Problem Was Never Liquidity, But Insolvency . . . And We Should Let Insolvent Banks Fail

The federal reserve caused the 700 billion dollar bailout and economic crash


Added: Oct. 18, 2008
Source: YouTube

The federal reserve caused the 700 billion dollar bailout.

The Rothschilds and the Bank of England, and the London banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank stock and their subsidiary firms in New York.

The two principal Rothschild representatives in New York, J. P. Morgan Co., and Kuhn,Loeb & Co. were the firms which set up the Jekyll Island Conference The Federal Reserve was created with no constitutional authority in 1913, the Fed prints money out of thin air and loans it to the U.S. treasury at interest.

This can only lead to one outcome: debt. Currently, the Federal Reserve is printing billions of dollars to bail out Wall Street while destroying the middle class and the dollar with inflation.

If our country wants a sound and transparent monetary system, we need to abolish the Federal Reserve.

Paris to quadruple number of CCTV cameras

Paris will quadruple the number of closed-circuit police cameras in its streets by the end of next year, after President Nicolas Sarkozy’s promise to emulate London in an attempt to track crime and terrorism threats.

While the Paris metro and rail networks already operate around 9,500 CCTV devices, police have only 330 at their disposal to survey outside public areas. The new plan, dubbed “A Thousand Cameras for Paris”, will raise that number to more than 1,200 – with most installed in high-risk areas and outside railway and underground stations.

The figure is still small compared with London, where each citizen is caught on average several hundred times a day. Britain has about four million closed-circuit security cameras compared with France’s 340,000.

The CCTV drive follows Mr Sarkozy’s pledge last autumn to follow London’s surveillance lead. “I am very impressed by the efficiency of the British police thanks to this network of cameras,” the French president said. “In my mind, there is no contradiction between respecting individual freedoms and the installation of cameras to protect everyone’s security.”

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Live CCTV on buses to be tested


Live CCTV launched on buses

A six-month trial of live CCTV on a London bus route has begun.

London Mayor Boris Johnson announced that the technology had been installed on 21 double-decker buses on a north London route.

The real-time images will be beamed to a control room manned by Transport for London (TfL) and police.

The trial will be monitored to determine whether live images can help transport staff deal with disorder more effectively.

Mr Johnson said: “I am determined to banish the sad minority of hoodlums and trouble makers that have blighted our buses.

“Having the facility to access live pictures from buses travelling around the capital will mean our bus controllers can play a far more effective role in sending police officers to sort out troublemakers.

“If this trial is successful then we will consider rolling out the system on other routes as part of our campaign to stamp out the casual disorder that led to a culture of fear on public transport.”

Read moreLive CCTV on buses to be tested

David Davis: We are losing Taliban battle

In an alarming dispatch from Afghanistan, the Conservative MP reveals the rampant corruption that has infected public life and threatens to destroy Nato’s hopes of bringing peace to this traumatised country


‘We need a new strategy,’ says Tory MP David Davis, on a factfinding mission to Afghanistan

It is time to face facts in Afghanistan: the situation is spiralling downwards, and if we do not change our approach, we face disaster. Violence is up in two-thirds of the country, narcotics are the main contributor to the economy, criminality is out of control and the government is weak, corrupt and incompetent. The international coalition is seen as a squabbling bunch of foreigners who have not delivered on their promises. Although the Taliban have nowhere near majority support, their standing is growing rapidly among some ordinary Afghans.

In Kabul, foreign delegations huddle behind concrete and barbed wire, often with the Afghans’ main roads shut. That causes jams throughout the city, exacerbated by convoys of armoured four-wheel drives loaded with bodyguards that push their way through the traffic. These vehicles carry warning signs telling ordinary Afghans that the occupants reserve the right to shoot anyone who comes within 50 metres. Afghans veer between resentment of the high-handed foreigners and fear of the Taliban, who appear to be inexorably seizing the provinces around the city.

In Britain’s area of responsibility, Helmand, the governor admits the Taliban control most of the province. While we were, properly, celebrating the delivery of the turbine to the Kajaki dam, we were being forced out of one of the richest poppy growing areas, and the Taliban fought their way to within 12km of Lashkar Gar, the provincial capital. Time after time, our soldiers win tactical victories, only to have the advantage lost because of a lack of coherent international strategy.

The regime we are defending is corrupt from top to bottom. While the President’s brother faces accusations of being a drug baron, some three-quarters of the Afghan National Police actively steal from the people. The irony is that Afghan expectations of government are traditionally low, and their faith in President Hamid Karzai was initially high.

Read moreDavid Davis: We are losing Taliban battle

Worst slump since Great Depression

Major industrialised economies will suffer the worst slump since the 1930s, according to new research from Deutsche Bank.


Worst slump since Great Depression: Bud Fields and his family in their home during the Great Depression in Alabama, 1935. Photo: Corbis

The warning underlines the fact that policymakers have failed to prevent the financial crisis from turning into a full-blown economic slump. It comes as world leaders agreed to hold a summit in New York billed as the “Bretton Woods meeting for the 21st century”.

In its major assessment of the global economy’s health, Deutsche Bank also warned that Britain is even more vulnerable than the US or the euro area, as it predicted that the powerhouses of India and China would fail to support the wider global economy through the downturn.

The banks’ economists Thomas Mayer and Peter Hooper said: “We now expect a major recession for the world economy over the year ahead, with growth in the industrial countries falling to its lowest level since the Great Depression and global growth falling to 1.2pc, its lowest level since the severe downturn of the early 1980s.”

According to the International Monetary Fund, global growth of anything less than 3pc constitutes a world recession. The warning was echoed by Richard Berner of Morgan Stanley, who said: “A global recession is now under way, and risks are still pointed to the downside for commodity prices and earnings.”

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F.B.I. Struggles to Handle Financial Fraud Cases


Robert S. Mueller III, director of the Federal Bureau of Investigation

WASHINGTON – The Federal Bureau of Investigation is struggling to find enough agents and resources to investigate criminal wrongdoing tied to the country’s economic crisis, according to current and former bureau officials.

The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. Current and former officials say the cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime, which has taken on urgent importance in recent weeks because of the nation’s economic woes.

The pressure on the F.B.I. has recently increased with the disclosure of criminal investigations into some of the largest players in the financial collapse, including Fannie Mae and Freddie Mac. The F.B.I. is planning to double the number of agents working financial crimes by reassigning several hundred agents amid a mood of national alarm. But some people inside and out of the Justice Department wonder where the agents will come from and whether they will be enough.

So depleted are the ranks of the F.B.I.’s white-collar investigators that executives in the private sector say they have had difficulty attracting the bureau’s attention in cases involving possible frauds of millions of dollars.

Read moreF.B.I. Struggles to Handle Financial Fraud Cases

New law to allow police to collect DNA in secret from teacups

MI5 and the police may be allowed to secretly collect genetic samples from items such as cigarette butts and teacups under new laws that could massively expand the national DNA database.

The powers would allow investigators to break in to suspects’ homes to collect DNA which could then be shared with foreign governments to check for links to crime and terrorism.

The new law, being discussed by Parliament, would mean the ‘stolen’ samples – thousands of which have already been taken by the security services – would be admissible in court and at a stroke hugely expand the Government’s controversial DNA database.


Concern: Minister Lord West wants data shared between governments

But human rights activists fear the new powers could lead to more innocent people having their DNA stored and, due to cross-contamination, being wrongly accused of crimes or terrorism.

The proposals, which are contained in the Counter-Terrorism Bill, were outlined last week by Security Minister Lord West in the wake of Labour’s unsuccessful attempt to introduce legislation to hold terror suspects for 42 days without charge.

Read moreNew law to allow police to collect DNA in secret from teacups

Britain faces crisis as negative equity to reach 2 million

Estate agents signs outside a row of properties

Collapsing house prices are plunging 60,000 homeowners a month into negative equity, which means the country is on course for a worse crisis than the 1990s crash.

At current trends, 2m households will enter negative equity by 2010, outstripping the 1.8m affected at the bottom of the last housing slump.

New research from Standard & Poor’s, the ratings agency, coincides with evidence that banks are aggressively seizing homes whose owners have slipped just a few hundred pounds behind on their mortgage payments.

It is a further signal that the financial crisis is now infecting the real economy as hundreds of thousands of families face the prospect of being unable to move house because their home is worth less than the value of their mortgage.

Many more homeowners will now be afraid that the bank may suddenly repossess their property. Repossessions have soared to 19,000 in the first half of the year, up 40% on the previous six months. That figure is expected to rise to 26,000 in the second half of 2008.

Economists believe house prices will fall by up to 35% from their peak by 2010. This compares with a drop of only 20% in the early 1990s.

Read moreBritain faces crisis as negative equity to reach 2 million

Stalin planned to send a million troops to stop Hitler if Britain and France agreed pact

Stalin was ‘prepared to move more than a million Soviet troops to the German border to deter Hitler’s aggression just before the Second World War’

Papers which were kept secret for almost 70 years show that the Soviet Union proposed sending a powerful military force in an effort to entice Britain and France into an anti-Nazi alliance.

Such an agreement could have changed the course of 20th century history, preventing Hitler’s pact with Stalin which gave him free rein to go to war with Germany’s other neighbours.

The offer of a military force to help contain Hitler was made by a senior Soviet military delegation at a Kremlin meeting with senior British and French officers, two weeks before war broke out in 1939.

The new documents, copies of which have been seen by The Sunday Telegraph, show the vast numbers of infantry, artillery and airborne forces which Stalin’s generals said could be dispatched, if Polish objections to the Red Army crossing its territory could first be overcome.

But the British and French side – briefed by their governments to talk, but not authorised to commit to binding deals – did not respond to the Soviet offer, made on August 15, 1939. Instead, Stalin turned to Germany, signing the notorious non-aggression treaty with Hitler barely a week later.

Read moreStalin planned to send a million troops to stop Hitler if Britain and France agreed pact