Wall Street’s Banks May Cut 35% of Jobs
April 10th, 2008Anyone need a used Porsche?
Via: Bloomberg:
Kenneth Moelis, the former president of UBS AG’s investment bank, said Wall Street firms may have to eliminate as much as 35 percent of employees as leveraged lending dwindles and the pace of mergers and acquisitions slows.
“The Street got staffed up to support what was a slight bubble in M&A,” Moelis, 49, said in an interview on Bloomberg Television today. “You’re going to see a significant retrenchment.”
Moelis resigned from UBS, Switzerland’s largest bank by market value, a year ago and now runs Moelis & Co., an investment banking boutique. Some of the largest financial “conglomerates” may break up as Wall Street shifts focus from lending to its clients to furnishing them with strategic advice, he said. Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001.
“They’re going to have to go back out and remember that their client is a relationship, not a counterparty,” said Moelis, who is based in Los Angeles. His clients include Yahoo! Inc., which rejected a $44.6 billion buyout bid from Microsoft Corp. in February.
IMF: U.S. Crisis is ‘Largest Financial Shock since Great Depression’
April 10th, 2008Hold on to your wallet.
Via: Guardian:
America’s mortgage crisis has spiralled into “the largest financial shock since the Great Depression” and there is now a one-in-four chance of a full-blown global recession over the next 12 months, the International Monetary Fund warned today.
The US is already sliding into what the IMF predicts will be a “mild recession” but there is mounting pessimism about the ability of the rest of the world to escape unscathed, the IMF said in its twice-yearly World Economic Outlook. Britain is particularly vulnerable, it warned, as it slashed its growth targets for both the US and the UK.
The report made it clear that there will be no early resolution to the global financial crisis.
“The financial shock that erupted in August 2007, as the US sub-prime mortgage market was derailed by the reversal of the housing boom, has spread quickly and unpredictably to inflict extensive damage on markets and institutions at the heart of the financial system,” it said.
After warning earlier this week that the world’s financial firms could end up shouldering $1 trillion (£500bn) worth of losses from the credit crunch, the IMF said it expects the US to achieve GDP growth of just 0.5% this year, and 0.6% in 2008, with the housing crash getting even worse.
What Power Looks Like
April 10th, 2008In case Newsweek’s fluff isn’t cutting it for you, here are some core materials:
The Power Elite by C. Wright Mills
Anglo-American Establishment by Carroll Quigley
Who Rules America? Power, Politics, and Social Change by G. William Domhoff
Wealth and Democracy: A Political History of the American Rich by Kevin Phillips
War is a Racket: The Antiwar Classic by America’s Most Decorated Soldier by Smedley D. Butler
America’s Secret Establishment: An Introduction to the Order of Skull & Bones by Antony C. Sutton
Drugs, Oil, and War: The United States in Afghanistan, Colombia, and Indochina by Peter Dale Scott
The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin
Anyway… That list could just keep going.
Via: Newsweek:
That such a group exists is indisputable. It includes the heads of the biggest financial institutions, the 14 families Blankfein joked about, and then some; the top 50 control almost $50 trillion in assets. The heads of the world’s biggest corporations are also members; the top 2,000 support perhaps 500 million people, generate almost $30 trillion in sales and have well over $100 trillion in assets. The list also includes top government officials with real cross-border influence: heads of state, of course, leading diplomats and military chiefs, but also central bankers like Geithner and Bernanke, and their counterparts like Chinese Central Bank Gov. Zhou Xiaochuan, reappointed this week, and the other top economic officials responsible for the world’s fastest-growing economy and its nearly $1.5 trillion in reserves.
They are joined by media barons like Rupert Murdoch, whose global network of newspapers, Web products, movie studios and TV stations reach hundreds of millions of people every day, or tech entrepreneurs like Facebook wunderkind, 23-year-old Mark Zuckerberg, whose company is redefining what global community means. Alongside them you’ll also find those who have different forms of power: religious leaders from the pope to Iran’s Ayatollah Khamenei, perhaps the most powerful man in the Middle East today; clerics who have taken to a media pulpit and reach millions around the world daily like Latin America’s Luis Palau or the Egyptian “tele-Muslim,” former accountant turned religious TV star Amr Khaled. Cultural icons who use their celebrity platforms for activism like Bono and Angelina Jolie would certainly make the list, as would terrorist leaders and others who form a kind of shadow elite, like Osama bin Laden or the recently arrested arms dealer, Russia’s Viktor Bout. A growing number of tycoons from emerging markets make the cut: Indian industrialist Ratan Tata, Russian oligarch Roman Abramovich, Saudi oil investor Prince Alwaleed bin Talal, and Chinese real-estate billionaire Yang Huiyan, among others.
One can debate who is in and who is out endlessly. Indeed, given that so much power today is institutional or job related (and thus fleeting), any ranked list is out of date almost as soon as it’s finished. Those who would have dropped off the list so far this year include the former heads of big banks who lost their jobs as a result of betting too heavily on subprime loans, including the ex-leaders of Citibank, Merrill Lynch and, as of last week, UBS. This is a very fluid ranking. But for the purposes of trying to understand the nature of today’s topmost global elite, working with the above criteria, I have ended up with a core group of somewhere between 6,000 and 7,000 people—meaning that each one is “one in a million.”
Hand-Held Lie Detector… Yeah Right
April 9th, 2008The Homeland’s Ministry of Magic 8 Ball Technologies is at it again.
Via: MSNBC:
The Pentagon will issue hand-held lie detectors this month to U.S. Army soldiers in Afghanistan, pushing to the battlefront a century-old debate over the accuracy of the polygraph.
The Defense Department says the portable device isn’t perfect, but is accurate enough to save American lives by screening local police officers, interpreters and allied forces for access to U.S. military bases, and by helping narrow the list of suspects after a roadside bombing. The device has already been tried in Iraq and is expected to be deployed there as well. “We’re not promising perfection — we’ve been very careful in that,” said Donald Krapohl, special assistant to the director at the Defense Academy for Credibility Assessment, the midwife for the new device. “What we are promising is that, if it’s properly used, it will improve over what they are currently doing.”
But the lead author of a national study of the polygraph says that American military men and women will be put at risk by an untested technology. “I don’t understand how anybody could think that this is ready for deployment,” said statistics professor Stephen E. Fienberg, who headed a 2003 study by the National Academy of Sciences that found insufficient scientific evidence to support using polygraphs for national security. “Sending these instruments into the field in Iraq and Afghanistan without serious scientific assessment, and for use by untrained personnel, is a mockery of what we advocated in our report.”
UN: Food Price Rises Threaten Global Security
April 9th, 2008This situation is maddening. I’ve been reading our Bill Mollison permaculture books again (Intro and Design) and the path to abundance is right there. I have to conclude that the governments involved want the chaos they’re experiencing, or are about to experience. Rather than yielding some control to localities and supporting smaller, integrated animal/garden/food forest systems, these states are trying to do the old top-down command economy nonsense, and the result is totally predictable: famine.
Remember the one about give-a-man-a-fish vs. teach-a-man-to-fish? What happened to that?
Oh yeah, I remember. If the man is out fishing he’s not working in a mobile phone factory, etc…
What I find most amazing is that we made it as far as we have, as long as we have, without system wide failures. I’d like to think that people will get together and say, “F&@$ this, let’s produce our own food instead of waiting for it to arrive in a plastic bag on a military convoy.” Hint: Don’t wait for that day to come.
What’s going through Bill Mollison’s head right now, in the twilight of his days, as he sees all of this crap unfolding? Is it weird to have seen this coming for 30 years, to have dedicated his life to building and teaching people about other realities, and then, well, watch this unfold? I’ve seen some interviews with him, none of them recent, and he comments on agricultural devastation in a matter-of-fact, detached way; sometimes, with a hint of a smile and benign wonder at the intractable stupidity of people.
Via: Guardian:
Rising food prices could spark worldwide unrest and threaten political stability, the UN’s top humanitarian official warned yesterday after two days of rioting in Egypt over the doubling of prices of basic foods in a year and protests in other parts of the world.
Sir John Holmes, undersecretary general for humanitarian affairs and the UN’s emergency relief coordinator, told a conference in Dubai that escalating prices would trigger protests and riots in vulnerable nations. He said food scarcity and soaring fuel prices would compound the damaging effects of global warming. Prices have risen 40% on average globally since last summer.
“The security implications [of the food crisis] should also not be underestimated as food riots are already being reported across the globe,” Holmes said. “Current food price trends are likely to increase sharply both the incidence and depth of food insecurity.”
Philippines Threatens Rice Hoarders with Life Imprisonment
April 9th, 2008Via: USA Today:
Filipinos face life in prison if they’re caught hoarding rice.
“The Department of Justice is preparing economic sabotage or plunder charges that carry a life sentence against traders found to be hoarding rice, the price of which has risen sharply amid a tight global supply,” The Inquirer reports. “Although the country has yet to experience a shortage, Justice Secretary Raul Gonzalez Thursday vowed to hale to court hoarders and other unscrupulous rice traders for acts ‘inimical to the public interest.'”
President Gloria Macapagal-Arroyo reiterated the warnings during a speech today, but also pledged to increase imports of the staple.
“Those who seek to take advantage of our people must be stopped,” she says, according to The Inquirer. “I am leading the charge to crack down on any form of corruption by public or private officials who would divert supplies or pervert the price of this essential commodity in any way.”
“Anyone caught stealing rice from the people will be thrown in jail,” she adds.
Bloomberg News reports that the price of rice, a key staple in the global food supply, keeps hitting record highs. It’s now twice as expensive as it was at this time in 2007.
“We’re in for a tough time,” Roland Jansen, CEO of Mother Earth Investments AG, tells the financial news service, adding: “you will have huge problems of daily nutrition for half the planet.”
Major Banks in Trouble
April 8th, 2008Via: Bloomberg:
Bank holding companies including Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. have the thinnest safety cushion against losses in seven years.
The margin may erode further in coming weeks. Credit ratings on $704 billion of bonds have been cut this year following the collapse of the U.S. housing market. Sheila Bair, chairman of the Federal Deposit Insurance Corp., said last week that the downgrades may compromise bank capital ratios enough that some of the largest institutions will no longer be considered well capitalized.
Falling below a regulatory benchmark that is intended to maintain a minimum level of capital to protect depositors against losses would subject banks to more scrutiny from regulators than they have ever experienced.
“This is a nightmare for the country,” said William Isaac, who was chairman of the FDIC from 1981 to 1985. Banks will “raise what capital they can, then they’ll slow down their growth and stop lending, and what should be a mild recession becomes a much more serious one.”
The biggest danger to the economy is that to preserve their ratios, banks will cut off the flow of credit, causing a decline in loans to companies and consumers. Banks have already raised $136 billion in capital, based on data compiled by Bloomberg, and cut dividends. More stock sales and payout reductions are likely to follow, says analyst Meredith Whitney at Oppenheimer & Co.
`Institutional Panic’
The credit crunch has already cost the world’s biggest financial companies about $232 billion and forced a government bailout of New York-based Bear Stearns Cos., the fifth-largest U.S. investment bank. The International Monetary Fund said last week that banks were in the worst financial crisis since the Great Depression.
“Banks have to maintain their ratios,” said Dennis Santiago, chief executive officer of Institutional Risk Analytics, a Torrance, California-based research firm that monitors banking statistics. “This is an institutional panic. At what point will consumers feel the panic? I don’t know.”
New Zealand to Accelerate the Exportation of Its Remaining Top Soil to China
April 8th, 2008Kiwis will get even cheaper jandles in return.
Bargains.
Sorry, I don’t feel like looking at this one squarely in the eyes right now. It’s too grim, and too close to home.
Via: New Zealand Herald:
Helen Clark said the free trade agreement opened the door for New Zealand business to step up the pace in China.
“We’ve scarcely scratched the surface with what’s possible.”
—
That’s right, Helen. I see bits of it floating out to sea when it rains.
How about country of origin labels? Is that possible? Never mind.
Warning: Google Is In Your Driveway
April 8th, 2008Via: The Smoking Gun:
Faced with a lawsuit by a Pittsburgh couple who claims that their privacy was invaded by Google’s “Street View” mapping technology, the search giant has removed images of the family’s home from its servers. Several photos of the Oakridge Lane home of Aaron and Christine Boring have been yanked from Google Maps and replaced with a black image, as seen below… As the “Street View” images show, a Google vehicle–outfitted with a roof-mounted camera taking 360-degree images–drove down the gravel path and onto the paved driveway leading to the McKee home. The Google car continued past the steps leading to the McKees’s front door and came to a stop outside the house’s three-car garage (and next to the family’s trampoline and portable basketball rim). Taking photos all the time, the Google vehicle was squarely on private property, a fact that presumably should have been apparent when the gravel path became paved. Janet McKee, who was unaware of the “Street View” images until contacted by TSG, said that it was “a little bit creepy to think of someone filming our home without me knowing about it.” She said that the property line began with the paved driveway.
Wired: Do We Have a Right to “Mental Privacy”?
April 8th, 2008The point is moot since the average person’s mind has already been destroyed and filled with nonsense. The tech that’s coming will be targeted at those of us who are trying to feign ignorance, obedience and apathy in order avoid being branded as a thought criminal.
But even then… Why? The U.S. Government already has the capability, I’m practically sure, to draw up a list of thought criminals at will. The Internet already serves as a massive brain scanning device. We voluntarily pour a lot of ourselves into it. And there is no doubt that the infrastructure is in place for everything we do online to be traced, tracked, analyzed, sliced, diced and saved forever, or until it becomes necessary to charge us with something. According to the Washington Post, in Every Click You Make, “‘deep-packet inspection,’ enables a far wider view — every Web page visited, every e-mail sent and every search entered. Every bit of data is divided into packets — like electronic envelopes — that the system can access and analyze for content.”
Mind reading machines?
To be worried about such madness is to be ignorant of what has already been deployed. It’s another case of the present situation already being further gone than most people can even imagine. Never mind the sci-fi horrors of the future. We’re already in it.
Via: Wired:
Trolling down the street in Manhattan, I suddenly hear a woman’s voice.
“Who’s there? Who’s there?” she whispers. I look around but can’t figure out where it’s coming from. It seems to emanate from inside my skull.
Was I going nuts? Nope. I had simply encountered a new advertising medium: hypersonic sound. It broadcasts audio in a focused beam, so that only a person standing directly in its path hears the message. In this case, the cable channel A&E was using the technology to promote a show about, naturally, the paranormal.
I’m a geek, so my first reaction was, “Cool!” But it also felt creepy.
We think of our brains as the ultimate private sanctuary, a zone where other people can’t intrude without our knowledge or permission. But its boundaries are gradually eroding. Hypersonic sound is just a portent of what’s coming, one of a host of emerging technologies aimed at tapping into our heads. These tools raise a fascinating, and queasy, new ethical question: Do we have a right to “mental privacy”?
“We’re going to be facing this question more and more, and nobody is really ready for it,” says Paul Root Wolpe, a bioethicist and board member of the nonprofit Center for Cognitive Liberty and Ethics. “If the skull is not an absolute domain of privacy, there are no privacy domains left.” He argues that the big personal liberty issues of the 21st century will all be in our heads — the “civil rights of the mind,” he calls it.
