Fed Delays Volcker Rule, Giving Wall Street Another Holiday Gift

by Zach Carter, Huffington Post

Christmas came early for Wall Street this year. The Federal Reserve on Thursday granted banks an extra year to comply with a key provision of the Volcker Rule, a move that gives financial lobbyists more time to kill the new regulation before it goes into effect.

The Volcker Rule is a key element of the 2010 Dodd-Frank financial reform law that bans banks from engaging in proprietary trading — speculative deals that are designed only to benefit the bank itself, rather than its clients. Thursday’s move by the Fed gives banks an additional year to unwind investments in private equity firms, hedge funds and specialty securities projects. The central bank also said it plans to extend the deadline by another 12 months next year, which would give Wall Street a two-year reprieve through the 2016 presidential election.

The Fed’s delay comes less than a week after Congress granted Wall Street a reprieve from another reform that had been mandated by the 2010 Dodd-Frank financial reform law. The measure, known as the swaps push-out rule had eliminated federal subsidies for trading in risky derivatives — the complex contracts at the heart of the 2008 banking meltdown. Bank watchdogs say the Volcker Rule delay adds insult to injury.

[read more here]

Brussels protests: Anti-austerity demonstrations end in violent clashes with police

by Kashmira Gander, from the Independent

Violent clashes marred trade union-led demonstration in the Belgian capital of Brussels today, where some 100,000 workers gathered to protest against the government’s free-market reforms and austerity measures.

For around two hours, the unexpectedly large crowd rallied peacefully in the main streets of central Brussels, against measures they claim are damaging the welfare state.

The trade unions object to government policies that promise to raise the pension age from 65 to 67, freeze the automatic link between wages and inflation, and cut public services in a way that would affect the entire population.

Violence later broke out, with police firing tear gas and using water canon against the crowd to break up incidents. No casualties were immediately reported.

Philippe Dubois, a protester who came from the industrial rust belt of Liege, told reporters:”They are not looking for money where it is, I mean people with a lot of money.”

The event launched a month-long campaign by trade unions against the pro-business governing coalition, which will culminate in a nationwide strike on 15 December.

[read more here]

French President Hollande’s mid-term TV appearance: No shift in right-wing policies

by Alex Lantier, WSWS

French president François Hollande made a 90-minute appearance on TF1 television last night on a special show titled “Live with the French People,” billed as a last-ditch attempt to halt the collapse of his presidency, which threatens to bring down Hollande’s Socialist Party (PS) with him.

The appearance came at precisely the middle of Hollande’s five-year term, with 5 million people on unemployment rolls in France and economic forecasts continuing to worsen, and Hollande’s own approval ratings collapsing to 12 percent. His jobs policy has only a 3 percent approval rating. This makes Hollande far and away France’s most unpopular president since General Charles de Gaulle created the office in 1958.

Nonetheless, Hollande signalled that there will be no change of course from his pro-business, pro-war agenda. Pressed by presenters to admit to errors that he could use to claim that he was identifying his mistakes and learning from them, Hollande refused, saying only that he wished that unemployment were not so high.

Instead, he unabashedly laid out his right-wing views. He hailed businesses as the engines of economic growth, praised the social cuts of Germany’s former social-democratic chancellor Gerhard Schroeder and his own Responsibility Pact, with its €50 billion of social cuts, and pledged to continue France’s wars in Africa

[read more here]

BRICS Against Washington Consensus

by Pepe Escobar, from Asia Times

The headline news is that this Tuesday in Fortaleza, northeast Brazil, the BRICS group of emerging powers (Brazil, Russia, India, China, South Africa) fights the (Neoliberal) World (Dis)Order via a new development bank and a reserve fund set up to offset financial crises.

The devil, of course, is in the details of how they’ll do it.

It’s been a long and winding road since Yekaterinburg in 2009, at their first summit, up to the BRICS’s long-awaited counterpunch against the Bretton Woods consensus – the IMF and the World Bank – as well as the Japan-dominated (but largely responding to US priorities) Asian Development Bank (ADB).

The BRICS Development Bank – with an initial US$50 billion in capital – will be not only BRICS-oriented, but invest in infrastructure projects and sustainable development on a global scale. The model is the Brazilian BNDES, which supports Brazilian companies investing across Latin America. In a few years, it will reach a financing capacity of up to $350 billion. With extra funding especially from Beijing and Moscow, the new institution could leave the World Bank in the dust. Compare access to real capital savings to US government’s printed green paper with no collateral.

Continue reading

The US Housing Market is Still “Flat on its Back”

from Mike Whitney, CounterPunch

Get a load of this chart from DataQuick’s National Home Sales Snapshot. It’ll tell you everything need to know about housing.

As you can see, prices are flatlining or drifting lower while sales are sinking like a stone. That’s the whole ball of wax, isn’t it?

Sure, sales will increase in the spring (as they always do), but judging by the sharp dropoff in last year’s hottest markets, this could be the crappiest spring selling season since the crash.

Why?

unnamed

(Note: MSA=metropolitan statistical area)

Because prices are too high, rates are too high, “organic” demand is too weak, credit is too tight, and the pool of potential buyers has shrunk to the size of a walnut, that’s why.The banks have reduced the percentage of distressed homes (foreclosures and short sales) on the market to roughly 11 percent from 59 percent in 2009. Fewer distressed homes mean higher prices, but higher prices mean fewer sales. It’s a trade-off. The banks get their money, but the market goes to hell. That’s how it works. According to most estimates, there are roughly 4.5 million homes in some stage of foreclosure. That means that –at the present pace–we should get through this Housing Depression a few weeks before Judgment Day. But don’t hold me to that.

Did you catch this gem on Bloomberg last week? It’s about the big private equity guys exiting the market. Take a look:

“Blackstone Group LP is slowing its purchases of houses to rent amid soaring prices after a buying binge made it the biggest U.S. single-family home landlord. Blackstone’s acquisition pace has declined 70 percent from its peak last year, when the private equity firm was spending more than $100 million a week on properties, said Jonathan Gray, global head of real estate for the New York-based firm…” (Blackstone’s Home Buying Binge Ends as Prices Surge, Bloomberg)

Okay, so the speculators are getting out of housing. How’s that going to effect the market?

No one really knows yet, but it can’t be good, after all, all-cash deals amounted to nearly 50 percent of all homes sales in many of the hotter markets last year. That’s why prices went up even though the economy was still in the shitter, because the fatcats were loading up on cheap real estate. Now it looks like they’re headed for the hills. That’s NOT going to be good for sales.

Did you know that existing home sales have dropped for six months straight, dipping below trend to the same level they were at in 1998?

But how can that be, you ask, when everyone’s blabbing about the recovery? How can that be when the Fed has purchased more than $1.4 trillion in mortgage-backed securities (MBS) and rates are a measly 4.5%? How can that be prices have been climbing higher for more than a year?

[read the rest, here]

Soros Praises “Ukrainian renaissance” – He’s An Apologist for Neo-Nazi Violence and Brutal Repression

by Scott Creighton

[see updates at the end of this article]

“[N]obody who has read a business magazine in the last few years can be unaware that these days there really are investors who not only move money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit. These new actors on the scene do not yet have a standard name; my proposed term is ‘Soroi’.” Paul Krugman 1999

You can’t make this stuff up. You just can’t.

Billionaire speculator and vulture capitalist George Soros (family changed their name from Schwartz in 1936) has penned an Op Ed praising the outcome of the recent IMF serving color revolution in the Ukraine. For a man who famously hates anti-Semitism, it seems rather odd that he would be aligning himself with the rise of the neo-Nazi nationalist parties in the Ukraine. But then again, Soros (Schwartz) has always been more about the money than he was about his religious identity.

That’s probably because money is his religion.

Not only is Mr. Soros (chosen name means “designated successor” or “next in line” in Hungarian) busily rewriting the history of this bloody conflict in his new Op Ed, he’s actually serving as an apologist for the neo-Nazi’s brutal violence which ultimately brought down the elected government of the country and now is positioning itself to wipe out what they consider to be enemies of the true Ukrainian state; Jews and other leftists.

Continue reading

Ukraine’s Brown Revolution: Brought to you by your friends at the IMF

by Scott Creighton

Just a couple of quotes from recent articles to put all of this Ukrainian “democracy” into perspective for you.

  • Among the reasons Mr. Yanukovych turned away from signing political and trade accords with Europe in November was his unwillingness to carry out austerity measures and other reforms that the International Monetary Fund had demanded in exchange for a large assistance packageNew York Times
  • A $15 billion bailout package secured by Mr. Yanukovych from Russia in December has been suspended, and Ukraine is now hurtling toward default. New York Times
  • Arseniy P. Yatsenyuk, the leader in Parliament of the Fatherland Party and a leading contender to serve as acting prime minister, pleaded with colleagues to swiftly reach an agreement on the designation of an interim government, which is needed to formally request emergency economic assistance from the International Monetary Fund. New York Times
  • The International Monetary Fund has made clear that it will demand austerity measures and other long-stalled economic changes in exchange for any assistance package. New York Times

As I have written in the past, the color revolution currently unfolding in Thailand was also brought to you by your friends at the International Monetary Fund (IMF) as was the illegal Washington backed coup in Egypt.

 

Follow

Get every new post delivered to your Inbox.

Join 982 other followers