cryptogon.com

Appearing before congressional panels to defend the State Department’s $52.8 billion budget request for 2011, Clinton said the massive U.S. foreign debt had sapped U.S. strength around the world.

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Clinton urged lawmakers to tackle the federal budget deficit, which reached a record $1.4 trillion for the fiscal year that ended last September.

“We have to address this deficit and the debt of the United States as a matter of national security not only as a matter of economics,” Clinton said. “I do not like to be in a position where the United States is a debtor nation to the extent that we are.”

Having to rely on foreign creditors hit “our ability to protect our security, to manage difficult problems and to show the leadership that we deserve,” she said.

“The moment of reckoning cannot be put off forever,” she said. “I really honestly wish I could turn the clock back.”

In a robust and at times testy video interview for the Financial Times’s View from DC series, Mr Gregg also complimented China for showing rising alarm about the US’s mounting levels of public debt.

“We have had China say that they are looking for other places to put their reserves and that is probably a smart decision on their part,” said Mr Gregg, who will not seek re-election in November. “So the warning signs are pretty clear and the path is unsustainable and, at this point, unless we take different actions, unavoidable.”

We’re already the kings of CCTV. An estimated 20 per cent of the world’s CCTV cameras are in the UK, a remarkable achievement for an island that occupies only 0.2 per cent of the world’s inhabitable landmass.

A few years ago some local authorities introduced the Mosquito, a gadget that emits a noise that sounds like a faint buzz to people over the age of 20 but which is so high-pitched, so piercing, and so unbearable to the delicate ear drums of anyone under 20 that they cannot remain in earshot. It’s designed to drive away unruly youth from public spaces, yet is so brutally indiscriminate that it also drives away good kids, terrifies toddlers, and wakes sleeping babes.

Police in the West of England recently started using super-bright halogen lights to temporarily blind misbehaving youngsters. From helicopters, the cops beam the spotlights at youths drinking or loitering in parks, in the hope that they will become so bamboozled that (when they recover their eyesight) they will stagger home.

And recently police in Liverpool boasted about making Britain’s first-ever arrest by unmanned flying drone. Inspired, it seems, by Britain and America’s robot planes in Afghanistan, the Liverpool cops used a remote-control helicopter fitted with CCTV (of course) to catch a car thief.

Britain might not make steel anymore, or cars, or pop music worth listening to, but, boy, are we world-beaters when it comes to tyranny. And now classical music, which was once taught to young people as a way of elevating their minds and tingling their souls, is being mined for its potential as a deterrent against bad behavior.

In January it was revealed that West Park School, in Derby in the midlands of England, was “subjecting” (its words) badly behaved children to Mozart and others. In “special detentions,” the children are forced to endure two hours of classical music both as a relaxant (the headmaster claims it calms them down) and as a deterrent against future bad behavior (apparently the number of disruptive pupils has fallen by 60 per cent since the detentions were introduced.)

One news report says some of the children who have endured this Mozart authoritarianism now find classical music unbearable. As one critical commentator said, they will probably “go into adulthood associating great music—the most bewitchingly lovely sounds on Earth—with a punitive slap on the chops.” This is what passes for education in Britain today: teaching kids to think “Danger!” whenever they hear Mozart’s Requiem or some other piece of musical genius.

The classical music detentions at West Park School are only the latest experiment in using and abusing some of humanity’s greatest cultural achievements to reprimand youth.

Across the UK, local councils and other public institutions now play recorded classical music through speakers at bus-stops, in parking lots, outside department stores, and elsewhere. No, not because they think the public will appreciate these sweet sounds (they think we are uncultured grunts), but because they hope it will make naughty youngsters flee.

Tyne and Wear in the north of England was one of the first parts of the UK to weaponize classical music. In the early 2000s, the local railway company decided to do something about the “problem” of “youths hanging around” its train stations. The young people were “not getting up to criminal activities,” admitted Tyne and Wear Metro, but they were “swearing, smoking at stations and harassing passengers.” So the railway company unleashed “blasts of Mozart and Vivaldi.”

Apparently it was a roaring success. The youth fled. “They seem to loathe [the music],” said the proud railway guy. “It’s pretty uncool to be seen hanging around somewhere when Mozart is playing.” He said the most successful deterrent music included the Pastoral Symphony by Beethoven, Symphony No. 2 by Rachmaninov, and Piano Concerto No. 2 by Shostakovich. (That last one I can kind of understand.)

The executive, Daniel Bonventre, was described by investigators as the director of operations of the Madoff firm from at least 1978 until its collapse in December 2008 when Madoff was arrested.

Madoff, 71, pleaded guilty last March to running Wall Street’s biggest investment fraud of as much as $65 billion and he is serving a 150-year prison sentence.

Investigators and the trustee winding down Bernard L. Madoff Investment Securities LLC (BLMIS) have previously said the activity took place in the firm’s investment arm (IA), but the charges against Bonventre directly link the investment and proprietary trading operations.

U.S. prosecutors and the FBI said in a statement that Bonventre, 63, who started working for Madoff in 1968, had broad responsibility for the general ledger, financial statements, accounting records and supervising back office staff.

The proposed protections were cast aside when Senate Democrats lacked the necessary 60-vote supermajority to pass them. Dashing the hopes of liberals, the Senate Wednesday night instead passed — by voice vote without debate — a one-year extension of key parts of the USA Patriot Act that would have expired on Sunday.

Thrown away were restrictions and greater scrutiny on the government’s authority to spy on Americans and seize their records.

The House was prepared to approve the extension Thursday, dropping even more extensive privacy protections approved by the House Judiciary Committee.

If this was the case yesterday, then foreign governments barely bought much of anything in yesterday’s auction (only 19% of total debt issued). Moreover, it implies that Primary Dealers (those having to buy) had to gorge on the auction to make up for the fact that few if any foreign governments are interested in buying our debt anymore (including even short-term debt).

Or…

One could potentially argue that this indirect buying came from the Fed covertly buying under the guise of an indirect bidder (the Treasury recently changed the definition of what qualifies for an indirect bidder to make it more vague). It IS rather odd that every single cent of competitive bidding coming from indirect buyers was filled. It’s almost as if the indirect buyers knew precisely WHAT yield to accept… OR were simply trying to take up the slack in what was already a VERY weak auction.

I cannot tell you which of the above is true. Heck, neither of them could be and something completely different could be happening. But regardless, something very, VERY strange is going on in US debt auctions.

I wrote earlier this year that bonds, not stocks, would be the big story of 2010. We’re only into February and there are already some very unusual things happening on both the long (30 year) and the short (4 week) ends of the Treasury curve. And with the Fed’s Quantitative Easing Program scheduled to end in March, things are about to get a whole lot more interesting (barring of course an extension of the QE or QE 2.0).

Keep your eye on US Treasuries. Stocks, despite being so popular with investors are usually the LAST to get what’s coming down the pike. And investors just parked $30 billion for a month with Uncle Sam at virtually NO YIELD yesterday.

Echoing the kind of trades that nearly toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers.

These contracts, known as credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company or, in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit.

“It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich.

Bernanke said the Fed is looking into companies’ use of credit default swaps, a form of insurance against bond defaults. Bernanke made the comments at the start of a Senate Banking Committee hearing, where the Fed chief delivered his twice-a-year economic report to Congress.

“Obviously, using these instruments in a way that intentionally destabilizes a company or a country is counterproductive,” Bernanke said, adding that the Securities and Exchange Commission probably will be looking into this matter as well.

“We’ll certainly be evaluating what we can learn from the activities of the holding companies that we supervise here in the U.S,” Bernanke said.

The panel’s chairman, Sen. Christopher Dodd, D-Conn., said he is troubled that this practice could worsen Greece’s debt crisis.

“We have a situation in which major financial institutions are amplifying a public crisis for what would appear to be for private gain,” Dodd said.

Over recent decades, other development disorders also appear to have proliferated, along with certain cancers in children and adults. Why? No one knows for certain. And despite their financial and human cost, they presumably won’t be discussed much at Thursday’s White House summit on health care.

Yet they constitute a huge national health burden, and suspicions are growing that one culprit may be chemicals in the environment. An article in a forthcoming issue of a peer-reviewed medical journal, Current Opinion in Pediatrics, just posted online, makes this explicit.

The article cites “historically important, proof-of-concept studies that specifically link autism to environmental exposures experienced prenatally.” It adds that the “likelihood is high” that many chemicals “have potential to cause injury to the developing brain and to produce neurodevelopmental disorders.”

The author is not a granola-munching crank but Dr. Philip J. Landrigan, professor of pediatrics at the Mount Sinai School of Medicine in New York and chairman of the school’s department of preventive medicine. While his article is full of cautionary language, Dr. Landrigan told me that he is increasingly confident that autism and other ailments are, in part, the result of the impact of environmental chemicals on the brain as it is being formed.

“The crux of this is brain development,” he said. “If babies are exposed in the womb or shortly after birth to chemicals that interfere with brain development, the consequences last a lifetime.”