Sunday, February 23, 2014

Today's Links

1--Fed Misread Crisis in 2008, Records Show, NYT


Revisionist history of financial crisis


2---The Decision to Let Lehman Fail, Dean Baker
NYT exposes  cover up about Lehman


Gretchen Morgensen picks up an important point in the Fed transcripts from 2008. The discussion around the decision to allow Lehman to go bankrupt makes it very clear that it was a decision. In other words the Fed did not rescue Lehman because it chose not to.


This is important because the key regulators involved in this decision, Ben Bernanke, Hank Paulson, and Timothy Geithner, have been allowed to rewrite history and claim that they didn't rescue Lehman because they lacked the legal authority to rescue it. This is transparent tripe, which should be evident to any knowledgeable observer. (Who has legal standing to stop a bailout?)


3--The 2008 FOMC Laugh Track: Gallows Humor at the Federal Reserve, wsj


Media tries to humanize the Fed


4---Fed’s Lacker: Fed Emergency Actions Made Crisis Worse, wsj


“The evidence strikes me as fairly persuasive that the Fed missed an opportunity to respond far more constructively than it did,” Mr. Lacker said in the text of a speech to be presented at Arizona State University on Friday.


He said a defining characteristic of the events of 2007 and 2008 was the role played by Fed and government intervention. “Financial instability is a consequence of the moral hazard effect of expected official intervention,” Mr. Lacker said.
Mr. Lacker said that Fed officials he disagreed with were nevertheless trying to act in the nation’s best interest. “Fed policymakers during the crisis were genuinely concerned that the problems in financial markets might have costly consequences for the real economy and the American people,” he said. “With that concern in mind, they acted in what they thought was the best interest of the economy and the public.”


But the actions they took, which extended the safety net more broadly, have created a situation where the largest firms are viewed as being too-big-to-fail. That distorts risk taking and creates broader instability in the financial system, the official said.
Mr. Lacker also said that Fed officials raised the specter of the Great Depression to gain greater emergency lending powers. “I believe the resulting shock to consumers’ and businesses’ expectations significantly deepened the recession already underway.”


5---Fed transcripts: Bernanke chose to let Lehman fail, CNN Money


6--Serfdom nation: First time where a six year period of household formation of renters outpaced that of homeowners. Purchase applications back to levels last seen 20 years ago., Dr Housing Bubble


7---Ukraine’s “Brown Shirt Revolution”: Part of a US -NATO -EU Plan to Break up Russia?, global research


8---Ukrainian rabbi tells Kiev's Jews to flee city, Ha aretz
Fearing violence against Ukraine's Jews, the Jewish community asks Israel for assistance with the security of the community


9---Ukraine's Maidan is the struggle for gas market, Pravda


10--Anatomy of the Deep State, Mike Lofgren, Moyers


What America lacks is a figure with the serene self-confidence to tell us that the twin idols of national security and corporate power are outworn dogmas that have nothing more to offer us. Thus disenthralled, the people themselves will unravel the Deep State with surprising speed....


 there is another government concealed behind the one that is visible at either end of Pennsylvania Avenue, a hybrid entity of public and private institutions ruling the country according to consistent patterns in season and out, connected to, but only intermittently controlled by, the visible state whose leaders we choose. My analysis of this phenomenon is not an exposé of a secret, conspiratorial cabal; the state within a state is hiding mostly in plain sight, and its operators mainly act in the light of day. Nor can this other government be accurately termed an “establishment.” All complex societies have an establishment, a social network committed to its own enrichment and perpetuation. In terms of its scope, financial resources and sheer global reach, the American hybrid state, the Deep State, is in a class by itself. That said, it is neither omniscient nor invincible. The institution is not so much sinister (although it has highly sinister aspects) as it is relentlessly well entrenched. Far from being invincible, its failures, such as those in Iraq, Afghanistan and Libya, are routine enough that it is only the Deep State’s protectiveness towards its higher-ranking personnel that allows them to escape the consequences of their frequent ineptitude. [...


The Deep State does not consist of the entire government. It is a hybrid of national security and law enforcement agencies: the Department of Defense, the Department of State, the Department of Homeland Security, the Central Intelligence Agency and the Justice Department. I also include the Department of the Treasury because of its jurisdiction over financial flows, its enforcement of international sanctions and its organic symbiosis with Wall Street. All these agencies are coordinated by the Executive Office of the President via the National Security Council. Certain key areas of the judiciary belong to the Deep State, such as the Foreign Intelligence Surveillance Court, whose actions are mysterious even to most members of Congress. Also included are a handful of vital federal trial courts, such as the Eastern District of Virginia and the Southern District of Manhattan, where sensitive proceedings in national security cases are conducted. The final government component (and possibly last in precedence among the formal branches of government established by the Constitution) is a kind of rump Congress consisting of the congressional leadership and some (but not all) of the members of the defense and intelligence committees. ....


As the indemnification vote showed, the Deep State does not consist only of government agencies. What is euphemistically called “private enterprise” is an integral part of its operations. In a special series in The Washington Post called “Top Secret America,” Dana Priest and William K. Arkin described the scope of the privatized Deep State and the degree to which it has metastasized after the September 11 attacks. There are now 854,000 contract personnel with top-secret clearances — a number greater than that of top-secret-cleared civilian employees of the government. While they work throughout the country and the world, their heavy concentration in and around the Washington suburbs is unmistakable: Since 9/11, 33 facilities for top-secret intelligence have been built or are under construction. Combined, they occupy the floor space of almost three Pentagons — about 17 million square feet. Seventy percent of the intelligence community’s budget goes to paying contracts. And the membrane between government and industry is highly permeable: The Director of National Intelligence, James R. Clapper, is a former executive of Booz Allen Hamilton, one of the government’s largest intelligence contractors. His predecessor as director, Admiral Mike McConnell, is the current vice chairman of the same company; Booz Allen is 99 percent dependent on government business. These contractors now set the political and social tone of Washington, just as they are increasingly setting the direction of the country, but they are doing it quietly, their doings unrecorded in the Congressional Record or the Federal Register, and are rarely subject to congressional hearings.

Washington is the most important node of the Deep State that has taken over America, but it is not the only one. Invisible threads of money and ambition connect the town to other nodes. One is Wall Street, which supplies the cash that keeps the political machine quiescent and operating as a diversionary marionette theater. Should the politicians forget their lines and threaten the status quo, Wall Street floods the town with cash and lawyers to help the hired hands remember their own best interests. The executives of the financial giants even have de facto criminal immunity...


Domestically, whatever they might privately believe about essentially diversionary social issues such as abortion or gay marriage, they almost invariably believe in the “Washington Consensus”: financialization, outsourcing, privatization, deregulation and the commodifying of labor. Internationally, they espouse 21st-century “American Exceptionalism”: the right and duty of the United States to meddle in every region of the world with coercive diplomacy and boots on the ground and to ignore painfully won international norms of civilized behavior......


governing classes of the Deep State may continue to deceive themselves with their dreams of Zeus-like omnipotence, but others do not. A 2013 Pew Poll that interviewed 38,000 people around the world found that in 23 of 39 countries surveyed, a plurality of respondents said they believed China already had or would in the future replace the United States as the world’s top economic power.
The Deep State is the big story of our time. It is the red thread that runs through the war on terrorism, the financialization and deindustrialization of the American economy, the rise of a plutocratic social structure and political dysfunction. Washington is the headquarters of the Deep State, and its time in the sun as a rival to Rome, Constantinople or London may be term-limited by its overweening sense of self-importance and its habit, as Winwood Reade said of Rome, to “live upon its principal till ruin stared it in the face.” “Living upon its principal,” in this case, means that the Deep State has been extracting value from the American people in vampire-like fashion.....


11---Ukrainian regime bows to pressure from Washington, EU and far-right opposition, wsws


12---U.S. Deflation Risk Seen Growing in Wells Fargo Model , Bloomberg


The U.S. economy may prove more prone to deflation than the Federal Reserve acknowledges and that may present a reason to keep monetary policy loose, according to a model created by Wells Fargo Securities LLC.
Deflationary pressures have been “relatively high” since January 2010 and now have a 66 percent chance of prevailing in the U.S., according to Charlotte, North Carolina-based economists John Silvia, Azhar Iqbal and Blaire Zachary. Their calculations include factors such as the personal consumption expenditures price deflator, unemployment rate and the Fed’s inflation target.


13---EU, Russia say third package conflict can be solved, Reuters
Nat gas pipeline dispute at center of conflict


14--'I'll be fighting Jews and Russians till I die': Ukrainian right-wing militants aiming for power, RT


Nazi anti Semites help topple democratically elected Ukrainian regime while US applauds


15---A Short History Of The War On Syria - 2006-2014, Moon of Alabama



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