cryptogon.com

In unusually pessimistic comments for a senior political figure, Senator Joyce said the US Government was running such large deficits and building up so much debt that it was in a similar position to Iceland or Germany before World War II.

In a Senate estimates hearing on Wednesday night, he asked Treasury secretary Ken Henry what would be the implications of an American debt default for the Australian economy.

Dr Henry warned that canvassing extreme scenarios could alarm the community.

”I don’t mind discussing hypotheticals in general … [but] one has to be careful not to discuss publicly hypotheticals that are that extreme,” Dr Henry said.

”I don’t, myself, consider that outcome to be a high probability outcome, certainly not one that I would want to say much about in a public forum.”

But Senator Joyce insisted yesterday that the dangers to the global economy from the run-up in US private and public sector debt were real and should be debated.

”It is the elephant in the room,” Senator Joyce told The Age. ”This is a huge risk that Australia faces. What is the game plan, what happens if it comes unstuck?

”Far from turning around the [George] Bush legacy of deficits and debt, [US president Barack] Obama has made it worse. It has got all the hallmarks of a financial collapse about to happen in America.”

Senator Joyce said investor concerns about the American Government’s ability to fund its deficits were already undermining the role of the US dollar in the international trading and financial system.

The figure beats the previous record of $115 set in July and includes two-, five- and seven-year notes in tandem with an offering of previously issued five-year Treasury Inflation Protected Securities.

…

Investors have kept a close eye on U.S. debt auctions this year in light of the government’s burgeoning budget deficit. During a brief period in May some questioned the longevity of the United States’ prized AAA rating.

The U.S. budget deficit hit a record $1.4 trillion in the fiscal year that ended on Sept. 30 as the deep recession and a series of bank rescues cut a gaping hole in public finances.

The Fed now owns the Crossroads Mall, a sprawling shopping complex at the junction of Interstate highways 244 and 35, complete with an oil well pumping crude in the parking lot — except the Fed does not own the mineral rights.

The Fed finds itself in the unusual situation of being an Oklahoma City landlord after it lent JPMorgan Chase $29 billion to buy Bear Stearns last year.

That money was secured by a portfolio of Bear assets. Crossroads Mall is the only bricks and mortar acquired through bailout. The remaining billions are tied up in invisible securities spread across hundreds, if not thousands, of properties.

He worked for the Comprehensive Nuclear-Test-Ban Treaty Organization, an international agency charged with uncovering illicit nuclear tests.

A UN spokesman in the Austrian capital said there were no “suspicious circumstances” surrounding the man’s death, while a police spokesman said that no other person was believed to have been involved.

No suicide note has been found.

The incident happened on Tuesday as the United States, France, Russia and Iran held talks close by aimed at cooling tensions over Tehran’s nuclear programme.

Investigators refused to reveal any further background information on the official but confirmed an autopsy will be held.

Is it really nothing more than bad luck or is there something weirder at work? Such speculation generally belongs to the lunatic fringe, but serious scientists have begun to suggest that the frequency of Cern’s accidents and problems is far more than a coincidence.

The LHC, they suggest, may be sabotaging itself from the future — twisting time to generate a series of scientific setbacks that will prevent the machine fulfilling its destiny.

At first sight, this theory fits comfortably into the crackpot tradition linking the start-up of the LHC with terrible disasters. The best known is that the £3 billion particle accelerator might trigger a black hole capable of swallowing the Earth when it gets going. Scientists enjoy laughing at this one.

This time, however, their ridicule has been rather muted — because the time travel idea has come from two distinguished physicists who have backed it with rigorous mathematics.

What Holger Bech Nielsen, of the Niels Bohr Institute in Copenhagen, and Masao Ninomiya of the Yukawa Institute for Theoretical Physics in Kyoto, are suggesting is that the Higgs boson, the particle that physicists hope to produce with the collider, might be “abhorrent to nature”.

Torben Merriott, 63, of Stradbroke, Suffolk, was arrested on “suspicion of “acting in a manner likely to endanger an aircraft” on 18 September.

Police said Mr Merriott had been released from his bail conditions and no further action would be taken.

Mr Merriott said the experience had been “demeaning and humiliating”.

Mr Merriott, who runs a stage lighting firm, criticised police for being “heavy-handed” and “wasting resources”. He said he might complain.

‘Felt vibrations’

He said he was awoken by an “almighty noise and vibration” at 0100 BST on 18 September.

“My first reaction was that it was an earthquake,” he said.

“It was a clear night but pitch black and I could feel the vibrations beating against my chest – very frightening.

“That was when I realised it must be a helicopter really low and very close. I couldn’t see any navigation lights from the direction of the noise so I shone my torch.”

Mr Merriott said he found it hard to be believe the pilot would have lost control in the face of his torch.

“Don’t tell the Taliban that all they need is a 10-quid torch to bring down some of our finest young fliers in their multi-million pound, high-tech gunships,” he said.

Andrew Ross Sorkin tells the tale of the meeting in his new book, Too Big To Fail:

When Paulson learned that Goldman’s board would be in Moscow at the same time as him, he had [Treasury chief of staff] Jim Wilkinson organize a meeting with them. Nothing formal, purely social — for old times’ sake.

For fuck’s sake! Wilkinson thought. He and Treasury had had enough trouble trying to fend off all the Goldman Sachs conspiracy theories constantly being bandied about in Washington and on Wall Street. A private meeting with its board? In Moscow?

For the nearly two years that Paulson had been Treasury secretary he had not met privately with the board of any company, except for briefly dropping by a cocktail party that Larry Fink’s BlackRock was holding for its directors at the Emirates Palace Hotel in Abu Dhabi in June.

Anxious about the prospect of such a meeting, Wilkinson called to get approval from Treasury’s general counsel. Bob Hoyt, who wasn’t enamored of the “optics” of such a meeting, said that as long as it remained a “social event,” it wouldn’t run afoul of the ethics guidelines.

Still, Wilkinson had told [Goldman chief of staff John] Rogers, “Let’s keep this quiet,” as the two coordinated the details. They agreed that Goldman’s directors would join him in his hotel suite following their dinner with Gorbachev. Paulson would not record the “social event” on his official calendar…

“Come on in,” a buoyant Paulson said as he greeted everyone, shaking hands and giving bear hugs to some.

For the next hour, Paulson regaled his old friends with stories about his time in Treasury and his prognostications about the economy. They questioned him about the possibility of another bank blowing up, like Lehman, and he talked about the need for the government to have the power to wind down troubled firms, offering a preview of his upcoming speech.

Felix Salmon has the appropriate reaction:

How on earth did Paulson think this was OK? Goldman Sachs was a hugely powerful for-profit investment bank, and there he is, giving private chapter and verse on his opinions about the US and global economy, talking about internal Treasury matters, and previewing an upcoming (and surely market-moving) speech. All in secret, at a “social event” which somehow got kept off his official calendar. Oh, yes, and one other thing — the whole shebang took place in the Moscow Marriott Grand Hotel, in the context of Goldman directors joking about how all the Moscow hotels were surely bugged.

This is sleazy in the extreme, and will only serve to heighten suspicions that Paulson’s Treasury was rigging the game in favor of Goldman all along.

You might recall that trip to Russia. It was a disaster. Paulson had gone to encourage Russian investment in the US economy, which was rapidly sliding into a recession. He wound up just being mocked by Russian officials.

Here’s how Reuters described the debacle:

Paulson, who is in Russia to discuss trade and investment, told Putin the United States welcomes Russian investment and both sides were working together to outline best practices for SWFs, owned by governments of cash-rich countries.

“Since we do not have a sovereign wealth fund yet, you are confusing us with someone else,” Putin told Paulson during a meeting in the Kremlin, adding that Russia had indeed created “various funds”.