The German Economy Ministry has attacked EU proposals to tackle climate change as "pointless" if other major contributors to greenhouse gas emissions are not also committed to significant reductions.

If climate polluters such as China, India and the United States are not also on board, the EU's climate package would end up harming German businesses.

Germany's criticisms go to the heart of the EU's climate and energy proposals

"Any success achieved in Europe would be pointless," says statement from the Economy Ministry issued on Tuesday (15 July).

The ministry laid out a raft of strong criticisms of the package, whose legislative proposals were unveiled by the European Commission in January, in a statement following a conference of German officials and business representatives.

Both the industry figures and deputy economy minister Jochen Homann at the meeting had offered reservations about some of the main planks of the climate package because they would hurt German competitiveness, according to a report from Reuters.

EUOBSERVER / BRUSSELS - Green lawmakers in the European Parliament have criticised EU energy commissioner Andris Piebalgs for allowing the extended use of a Russian-designed nuclear power plant in Slovakia.

"It is scandalous that commissioner Piebalgs has given the green light to resurrect an outdated nuclear project," reads a joint statement issued by leading green MEPs, Monica Frassoni and Rebecca Harms.

Green MEPs say Brussels is supporting the "renaissance aspirations" of the nuclear industry (

According to the two parliamentarians, the commission's opinion on the plant, situated in Mochovce, "highlights its complicity with energy giants". "Commissioner Piebalgs is turning a blind eye to the Mochovce project's problems and indulging the renaissance aspirations of the nuclear industry," they said.

The critical statement came shortly after the European Commission on Tuesday (15 July) gave its opinion on the project of Slovenske Elektrarne - owned by Italian energy firm Enel and the Slovak state - to build two reactors for the Mochovce nuclear power plant in western Slovakia.

Rises in food and energy costs pushed up inflation in the 15-nation eurozone to 4% in June from 3.7% in May.

Confirming estimates made two weeks ago, the Eurostat statistics office said the inflation rate was the highest since measurements began in 1997.

A 16% year-on-year rise in energy costs as oil prices headed above $140 a barrel was to blame, Eurostat said.

The European Central Bank (ECB) raised interest rates to 4.25% at the start of the month to try to contain inflation.

The ECB's target for inflation growth is about 2%, but rising food and fuel prices are making it difficult for the central bank to bring inflation back to this level.

At its latest meeting, the ECB increased interest rates to 4.25% from 4% - its first rise in a year - despite evidence that eurozone economic growth is decelerating.

MILAN, Italy: Italian aviation officials gave more details Wednesday of how they were able to identify two planes that allegedly transferred a kidnapped terror suspect from Italy to Egypt via Germany as part of the CIA's renditions program.

The officials, giving testimony at the trial of 26 Americans, said they found records at four different agencies of a Learjet flight. They said it left from the joint U.S.-Italian Aviano air base in northern Italy and landed at the U.S. Ramstein Air Base in southwestern Germany on the evening of the suspect's disappearance in 2003.

Brussels-based Eurocontrol -- Europe's air navigation agency -- had information on the final leg, confirmation of the departure of a Gulfstream jet from Ramstein for Cairo a short time later, they said.

The officials said they were able to cull the data some two years after the fact from records kept by Italy's civil air control, the Aviano airport itself, a NATO airport at Poggio Renatico near Ferrara, northern Italy, and Eurocontrol.

EUOBSERVER / BRUSSELS - The European Union has adopted an emergency aid package worth up to €2 billion to help the struggling fishing sector tackle the current fuel crisis, including monies previously announced, with €600 million in extra cash to be added to the existing funds.

"Political agreement was reached by a qualified majority on urgent measures for the fishing sector," said Michel Barnier, agriculture minister of France, the current holder of EU's six-month rotating presidency.

The EU has moved to boost cash for fishermen amid soaring oil prices

The move comes after intense pressure from the struggling sector, which saw militant protests by fishermen extending even to the Brussels, whose European institutions were rocked by violent demonstrations last month amid a jump in diesel prices by 240 percent since 2002.

After a tough debate that dragged until late evening on Tuesday (15 July), ministers agreed that the extra cash for fishermen would come from two key sources: some €1.4 billion from the European Fisheries Fund and national contributions, plus €600 million as part of an emergency plan announced last week by the European Commission.

Croatia will be ready to join the EU in 2009 and its membership is not going to be delayed by the EU's current institutional "crisis", Croatian President Stjepan Mesic has said.

"I understand European countries, including France, which intend to solve the EU's institutional problems before proceeding to any new accessions ... [But] we will speed up the rhythm of our reforms and be ready in 2009 to join the EU as its 28th member," Mr Mesic told French daily Le Figaro in an interview published on Tuesday (15 July).

Dubrovnik - Croatia is hoping to conclude EU talks next year

"The current situation will not discourage us," he added.

Following Ireland's rejection of the Lisbon treaty last month, some EU leaders - including French President Nicolas Sarkozy and German Chancellor Angela Merkel - have said that no further EU enlargement will take place until the document is ratified.

"I will veto any enlargement as long as there will be no new institutions," Mr Sarkozy said again on Tuesday.

Asked if he could imagine his country joining the EU without the bloc having dealt with the Irish No, Mr Mesic said: "No, the EU will find a way out of this crisis. If 26 EU states ratify Lisbon [traty]... they will find a solution for the 27th ... The European institutional crisis will be solved."

French President Nicolas Sarkozy has said that Ireland will have to vote once more on the EU treaty, in a move bound to ruffle feathers in Dublin, which has yet to say publicly how it plans to react to last month's treaty rejection.

According to a report in the Irish Times, Mr Sarkozy told a meeting of deputies from his UMP party in Paris on Tuesday (15 July): "The Irish will have to vote again."

Mr Sarkozy will visit Dublin next week to discuss the treaty options

The phrase was repeated to journalists by several deputies leaving the meeting.

The remark comes ahead of Mr Sarkozy's visit to Ireland on Monday (21 July) to discuss Ireland's options with Prime Minister Brian Cowen.

Speculation has been high about the political room for manuoeuvre open to Mr Cowen since Irish voters rejected the treaty on 12 June. Most analysts suggest that Dublin will have to opt for a second vote with France and Germany, in particular, keen to get the document put in place.

The European Commission unveiled on Wednesday (16 July) a slew of proposals aimed at convincing consumers to buy `green'.

Whether the consumer is a dad buying cans of pop or a new shower-head, or a local authority making a decision on what paper to buy for its photo-copiers, the commission wants to make it easier to know which products are better for the environment and which ones are worse.

Eco-labels to help consumers know which products are 'greener' would be extended to a wider range of items

Currently, all products that use energy - such as TVs or washing machines - are already governed by a set of compulsory minimum requirements under the `Eco-Design directive' - although companies can voluntarily go even greener.

However, products that do not consume energy directly but have a big impact on energy use - like water-saving taps or shower-heads - remain outside the directive's scope.

EUOBSERVER / BRUSSELS - The European Commission has suggested that the EU's current minimum excise duties on cigarettes and tobacco should be increased to reflect inflation, in a move aimed at helping to cut consumption as well as narrow price differences across the bloc's 27 member states.

"Substantial differences in tax and price levels of tobacco products lead to considerable cross-border shopping and intra-community smuggling," EU tax commissioner Laszlo Kovacs told journalists as he was introducing the proposal on Wednesday (16 July).

Brussels says the EU's tax rules on cigarettes need a brush up as they are over 30 years old and do not reflect current reality

"These differences undermined the budgetary and health objectives of the Member States and resulted in a distortion of the functioning of the Internal Market," he added.

According to the current rules dating back to 1970s, the EU's excise duties levied on cigarettes must account for at least 57 percent of the price, and must be at least €64 per 1000 cigarettes of the "most popular price category" - the prevailing brand in a country.

EUOBSERVER / BRUSSELS - Bulgaria is next week set to lose pre-accession funds following concerns over possible fraud cases, according to a report from the Reuters news agency.

The European Commission will next Wednesday (23 July) publish its annual reports on justice and home affairs problems in Bulgaria and Romania as part of its ongoing monitoring process for the two member states.

Sofia could lose some €500 million in pre-accession funds.

Additionally, Brussels will publish a third document on the handling of EU funds in the two states.

Both Sofia and Bucharest - EU members since 1 January 2007 - are expected to be criticised for their levels of corruption, but only Bulgaria is to be punished by losing funds, according to the press agency.

The funds are worth some €500 million and have already been frozen due to investigations by the European Anti-Fraud Office (OLAF).

AMSTERDAM: The Dutch are building windmills again. Up and down the coast, out from port cities like this one, you can see them: white and tall and slender as pencils, their three slim blades turning lazily in the North Sea breeze.

These ones generate electricity, of course, rather than grinding grain. The government has already built one enormous farm of mills far off the coast, where they are inoffensive to tourists, and plans a second. Yet it is also building, and rebuilding, mills like the squat, homely ones that have seemingly always dotted the Dutch countryside and reflect as much the nature of the country as do tulips or Gouda cheese.

"Revival might be a bit strong," said Leo Endedijk, director of The Dutch Mills, a group that supports mill restoration. Yet last year, the government, concerned that one of the foremost symbols of the Netherlands was about to disappear out of neglect, approved an $80 million program to build or restore 120 mills, of roughly 1,040 still standing. That has created a backlog of work for the country's previously strapped mill restorers.

"We have special companies, very specialized mill makers and restorers," said Endedijk, in an office in the shadow of De Gooyer, a soaring 18th century mill now housing a popular brewery. "They would not have the capacity to restore 120 mills."

They are like Ginger and Fred but they don't dance on a film set. They dance on the brink of crashing. Their shares have fallen in the month of July.
If Fannie and Freddie were to go bankrupt they would leave a hole of 5000 billion dollars, half the American Public Debt. The State should intervene and nationalize them with an automatic increase in the cost of money and in taxes. In Italy it is as though there were the bankruptcy of most of the companies quoted on the Stock Exchange all at the same time. Fannie must pay back 216 billion dollars within a year, Freddie a bit more than that, about 291 billion. The money's not there. For two reasons. The mortgage repayments are no longer being paid and no one is underwriting the new mortgages. Basically the property market has disappeared.
People no longer have money and the cost of money has gone up. Furthermore, the value of houses has collapsed and the banks are full of mortgaged houses. In the stomach of the banks' balance sheets there are still properties with values that go back to before the "subprime" crisis. The banks don't want to devalue, some can't allow themselves to do so, their share values would collapse. Fannie and Freddie represent a financial tsunami that in one way or another will arrive here. The prices of property in Italy are drugged by a cartel of property companies. The city centres are no longer for habitation but for making money. The price of apartments has no connection with reality. The property companies for some time have been in a strange media silence, losing their value on the Stock Market. Since January 2008 the top 9 companies in the sector lost 2.4 billion euro, about half of their capitalization. Pirelli Real Estate, a bit more than the average: 57.82%. The fall in the property market had already happened in part. Anyone who had a one Euro share at Christmas finds themselves with 50 cents before the holidays.
The value of houses is kept high artificially. The big cities are invaded by "For sale" and "To Let" signs and meanwhile new homes in the outskirts are still being built.
The astonishing thing is that the true crisis has not yet arrived. In the United States there are about 90 banks risking collapse. One of them, Indy Mac, closed on Friday. The third most important collapse in the United States since the war. The queues of people who were taking out their savings are an image of the situation.
A bit of advice: don't buy property; don't do debts; don't take out new mortgages; if you can, pay off the mortgages that you have; don't buy shares in property companies; don't buy funds with shares in property companies. Fannie and Freddie are arriving.

TeliaSonera the Finnish mobile data operator uses 55.000 mwh pa representing 4500 carbon tons. The main data centers together use as much power as a small town including industry.

I'm sorry, but we're going to have to give up blogging ;-(

You can't be me, I'm taken

BRUSSELS: A top executive at Coca-Cola, Michael Stopford, spends much of his working life guarding its image. But in August, he starts working on an even more powerful global name: NATO.

A British-born American, Stopford is a specialist in managing reputations. His career combines time at Coca-Cola and Exxon Mobil with two decades in the public sector, including the United Nations and the British Foreign Office.

By hiring Stopford, the North Atlantic Treaty Organization has shown how determined it is to revamp its image as it approaches its 60th anniversary in 2009.

Eighteen years after the fall of the Berlin Wall and confronted by evidence of ignorance or indifference among many in its 26 member nations, NATO is rethinking how it communicates with the taxpayers who pay for it.

For example, at its headquarters here, the alliance has created an Internet-based service called NATO TV and established a media operations center just for Afghanistan, with 14 media officers.

Wednesday's swap of prisoners between Israel and Hezbollah planned was mediated over an 18-month period by a German secret agent.

German involvement had been reported all along in the Middle East, but was not confirmed by Berlin until Tuesday, July 15.

 

Quoting an internal document compiled by Chancellor Angela Merkel's office, the sources said the "facilitator" was a staffer with the BND, the German foreign intelligence agency, who was authorized by the United Nations to manage the secret contacts.

 

Over the 18 months, he flew a total of 700,000 kilometers (435,000 miles), shuttling between UN headquarters in New York, Tel Aviv, Beirut and various European capitals.

America's banking crisis reached new levels of hysteria yesterday as police ordered angry customers of IndyMac, a Californian bank on the brink of collapse, to remain calm or face arrest.

Police waded in to quell unrest among anxious IndyMac depositors as they queued outside the bank's San Fernando Valley branch in a desperate attempt to withdraw their money.

The scenes reflected the growing panic that Americans are feeling over the safety of their savings, as every day brings a further dose of dire news about the deepening housing slump and the worsening outlook for US financial industries.

After the US Treasury moved at the weekend to throw an emergency $15 billion (£7.5 billion) funding lifeline to Fannie Mae and Freddie Mac, the stricken giants that underpin a vast slice of American mortgage lending, fears that the US economic turmoil is entering a dangerous new phase also spilled over into London's stock market, sending shares plunging again.

If you want to know how Fannie Mae and Freddie Mac have survived scandal and crisis, consider this: Over the past decade, they have spent nearly $200 million on lobbying and campaign contributions.

But the political tentacles of the mortgage giants extend far beyond their checkbooks.

The two government-chartered companies run a highly sophisticated lobbying operation, with deep-pocketed lobbyists in Washington and scores of local Fannie- and Freddie-sponsored homeowner groups ready to pressure lawmakers back home.

They've stacked their payrolls with top Washington power brokers of all political stripes, including Republican John McCain's presidential campaign manager, Rick Davis; Democrat Barack Obama's original vice presidential vetter, Jim Johnson; and scores of others now working for the two rivals for the White House.

Fannie and Freddie's aggressive political maneuvering has helped stave off increased regulation and preserve special benefits such as exemption from state and local income taxes and the ability to borrow at low rates.

The US is planning to establish a diplomatic presence in Tehran for the first time in 30 years, a remarkable turnaround in policy by president George Bush who has pursued a hawkish approach to Iran throughout his time in office.

The Guardian has learned that an announcement will be made in the next month to establish a US interests section in Tehran, a halfway house to setting up a full embassy. The move will see US diplomats stationed in the country.

The news comes at a critical time in US-Iranian relations. After weeks that have seen tensions rise with Israel conducting war games aimed at Iran and Tehran carrying out long-range missile tests, a thaw appears to be under way.

The White House announced today that William Burns, a senior state department official, is to be sent to Switzerland on Saturday to hear Tehran's response to a European offer aimed at resolving the nuclear standoff.

A day after he was prevented from visiting Gaza because of an assassination threat, Tony Blair for the first time raised doubts that a peace deal could be concluded between Israel and the Palestinians by the end of the year.

Mr Blair, who is the international community's envoy to the Middle East, said that the uncertain political future of Ehud Olmert, the Israeli Prime Minister, was undermining efforts to conclude a deal, which President Bush had pledged would be signed by the end of this year.

"The political situation in Israel makes it difficult to continue being optimistic about reaching a peace treaty between the Israelis and Palestinians by the end of the year," the former Prime Minister told the Palestinian newspaper Al-Quds.

Mr Olmert is expected not to stand for re-election in party primaries in September after becoming engulfed in a corruption investigation that has severely damaged his popularity. He is suspected of having received hundreds of thousands of dollars in bribes from Morris Talansky, a Jewish American businessman, over 15 years before becoming prime minister.

WASHINGTON - Democratic presidential candidate Senator Barack Obama is the man with the plan for Iraq and Afghanistan. Presidential in tone and delivery, quoting Harry S Truman and Dean Acheson, George Kennan and George Marshall - the greatest generation - Obama, in a major foreign policy speech in Washington on Tuesday, outlined what he calls his "new overarching strategy".

He said he would "focus this strategy on five goals essential to making America safer: ending the war in Iraq responsibly; finishing the fight against al-Qaeda and the Taliban; securing all nuclear weapons and materials from terrorists and rogue states; achieving true energy security; and rebuilding our alliances to

meet the challenges of the 21st century".

To say that Obama's plan - sketched earlier in an op-ed piece for The New York Times - is more realistic, thoughtful and sensible than that of rival Republican Senator John McCain's "road to victory" in Iraq would be an understatement.

But ... the devil in those (brave) details
Does Obama's proposed redeployment in Iraq automatically translate into no US troops in Mesopotamia by the summer of 2010?

No. It translates into "a residual force to perform specific missions in Iraq: targeting any remnants of al-Qaeda; protecting our service members and diplomats; and training and supporting Iraq's security forces, so long as the Iraqis make political progress."

Americans may be losing faith in free markets

Things are hard all over the financial landscape, and politicians and experts are now looking with favor at more, not less, government involvement in the economy.

By Peter G. Gosselin, Los Angeles Times Staff Writer
July 16, 2008

WASHINGTON -- For a generation, most people accepted the idea that the core of what makes America tick was an economy governed by free markets. And whatever combination of goods, services and jobs the market cooked up was presumed to be fine for the nation and for its citizens -- certainly better than government meddling.

No longer.

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Spurred by the continued housing crisis, turmoil in financial markets, spiking oil prices, disappearing jobs and shrinking retirement savings, the nation and its political leaders have begun to sour on the notion that the current market system is the key to a fair, stable and efficient society.

"We're at a hinge point," said William A. Galston, a senior fellow at the Brookings Institution in Washington who helped craft President Clinton's market-friendly agenda during the 1990s. "The strong presumption in favor of markets, which has dominated public policy since the late 1970s, has been thrown very much into question."

Now, to a degree not seen in years, politicians and outside experts are looking with favor at more, not less, government involvement in the economy.

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Yet the sheer volume of setbacks that people have been dealt has sent consumer confidence to some of its lowest levels in half a century, according to Reuters/University of Michigan surveys. A remarkable 84% of Americans are convinced that the nation is on the "wrong track," according to a recent Gallup poll.

In just the last week, the financial markets have provided ample new evidence that markets are not working smoothly.

Washington had to ride to the rescue of two government-chartered mortgage giants -- Fannie Mae and Freddie Mac, .....

Meanwhile, federal regulators seized IndyMac Bancorp...

And the already battered stock market took another sharp dip.

The fact that experts keep pushing back the date when conditions may improve and the failure thus far of any national leader -- including either of the major-party presidential candidates -- to offer a convincing vision of how America will make its way back to sustained prosperity suggest that the current crisis will probably be very different from other recent economic bad patches.

So may Americans' reaction to it.

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When Fannie Mae and Freddie Mac, which are government-chartered but investor-owned, began to teeter last week, the (Bush) administration quietly went to work on possible government action.

"If the pendulum swung away from government toward much greater confidence in markets during the last generation, the pendulum is clearly swinging back again now," said Daniel Yergin, whose 1998 book with coauthor Joseph Stanislaw, "The Commanding Heights," chronicled the worldwide spread of the free-market credo.

"Everything is weighing in at the same time, and that affects how people view markets and government," Yergin said.

"Nobody in this country really believes in unfettered free markets, and nobody really believes in socialism," said UC Davis historian Eric Rauchway, but economic crises of the past have produced constituencies favoring the reining in of markets and regulation of the economy -- constituencies that ultimately grew large enough to produce change.

Michael Hudson Why the Bail Out of Freddie Mac and Fannie Mae: is Bad Economic Policy

We are not in a cycle but the end of an era. The old world of debt pyramiding to a fraudulent degree cannot be restored, despite the repeal Glass-Steagall Act in 1999 that unleashed financial conflicts of interest when the Clinton Administration backed Treasury Secretary Robert Rubin and financial lobbyist Greenspan in claiming that financial markets would be self-regulating and law-abiding. The real estate bubble was made possible by the unique degree to which America's population emerged from World War II relatively debt free. Each recovery has taken off from a higher debt level. This something like trying to drive a car with the brakes pressed tighter and tighter to the floor each time there is a stoplight (recession). We have now reached the debt limit, and the economy is stuck. The class war is back in business, with a vengeance. Instead of it being the familiar old class war between industrial employers and their work force, this one reverts to the old pre-industrial class war of creditors versus debtors. Its guiding principle is "Big Fish Eat Little Fish," mainly by the debt dynamic that crowds out the promised economy of free choice.

This is being portrayed as a post-industrial economy, but it is a much older story. No economy in history ever has been able to pay off its debts. That is the essence of the "magic of compound interest." Debts grow inexorably, making creditors rich but impoverishing the economy in the process, thereby destroying its ability to pay. Recognizing this financial dynamic most societies have chosen the logical response. From Sumer in the third millennium BC and Babylonia the second millennium through Greece and Rome in the first millennium BC, and then from feudal Europe to the Inter-Ally war debts and reparations tangle that wrecked international finance after World War I, the response has been to bring debts back within the ability to pay.

This can be done only by wiping out debts that cannot be paid. The alternative is debt peonage. Throughout most of history, countries have found again and again that bankruptcy - wiping out the debts - is the way to free economies. The idea is to free them from a situation where the economic surplus is diverted away from new tangible investment to pay bankers. The classical idea of free markets is to avoid privatizing monopolies, such as the unique privilege of commercial bankers to create bank-credit and charge interest on it.

Current proposals would replace bad debts that are not publicly insured (except by an "implicit" guarantee that relevant legislators have bought into) with new debts, and new suckers are to be left holding the bag. Bahrainis and Saudis in particular are being courted.

But most of all, there is a public campaign being waged by the FIRE sector (Finance, Insurance and Real Estate) to convince the American public that, in the infamous words of Margaret Thatcher, TINA, "there is no alternative." (See for instance the Wall Street Journal's excellent coverage of the FNMA/mortgage crisis on July 11, 2002, p. A12.) When one hears this, it means that political censorship is being mobilized to flood the popular media with the intellectual equivalent of sterile fruit flies being released to stop the spread of a threat. All one hears is a barrage of claims that the government must preserve the financial fictions of FNMA and Freddie Mac in order to "save the market."

But what is "the market" that is to be "saved"? To Wall Street and its Congressional advocates, it is the mass of bad debts growing at compound "magic" rates of interest, beyond the ability of debtors to pay. If the debtors cannot pay, then the Government - "taxpayers" are to pick up the check to Wall Street. Meanwhile, more tax breaks are to be given to leave the finance, insurance and real estate sectors with enough money to "earn back" their losses, by extracting yet more rent and interest from the industrial economy's consumers and wage-earners.

This is financial incompetence writ on a scale far grander than anything seen for centuries.

As a nation, our institutions have failed us: Under Alan Greenspan, the Federal Reserve slept through the most reckless and irresponsible expansion of bank lending in history for reasons of ideological purity. His opposition to the Fed's regulatory role reached the point of malfeasance long ago.  History is unlikely to be kind to the Maestro.

There is a choice to be made: Either we regulate the Banks, or leave it to the vagaries of the free markets to punish those who trade with, or place their assets in the wrong institutions. But for God's sake, do not give us the worst of both worlds -- do not allow banks the freedom to make horrific but preventable mistakes (i.e., only lending money to those who can pay it back), but then expect the taxpayers to foot the trillion dollar bill.

That's not capitalism, its not socialism, its not regulation, and its sure as hell isn't what free markets are. Our language is insufficient to describe this hodge-podge system, other than to call it a random patchwork of quasi-capitalism, quadrennial-socialism, and politics as usual. Ideological idiocy is the only phrase I can muster that has any resonance with the daily insanity.

We have entered into a fit of Orwellian madness: The American Capitalists, long the globe's leading advocates for free markets, have become near Socialists. Halfway around the world, the Chinese Communists have picked up the baton, and are moving rapidly towards a form of Capitalism. Ironically, it is the once largest communist nations -- the Chinese and the Russians -- who holds much of Fannie and Freddie's paper.

Hey comrades, who's selling the rope to whom?

Perhaps the rescue of "Phony and Fraudy" are not so much a bail out of American homeowners as it is a desperate attempt to stay in the good graces of our friendly global bankers. We are the world's largest debtor nation, and as such, we depend upon the kindness of strangers -- be they Japanese or Europeans or Abu Dhabians -- or even former communists.

Back in the States, something beyond cognitive dissonance is occurring -- this is full blown case of dementia unfolding in the public sphere. When this era of excess and absurdity is treated by historians in the future, the question I expect to be asked most is not why many of these people weren't jailed for their financial felonies. Rather, I expect them to wonder why so many of these folk weren't placed in protective custody, and heavily medicated, for the only rational explanation for their statements and behaviors is that they have gone so far beyond the bend as to be completely and totally insane.

Massively over-leveraged companies? Blame short sellers.

Wildly under-capitalized financial firms? Blame rumors.

Heinously poor corporate management? Blame a Senator.

It is as if someone is running around Washington D.C. with a ball-peen hammer, smacking senior government officials on their skulls. If you find the standard finger pointing hard to fathom, perhaps blunt head trauma is a better explanations for the absurdities proferred.

Books will be written about this period of time, and our descendants will wonder in awe as to how this was allowed to happen. Tulips got nothing on us! Its not just the total dollar value of the losses that have exceeded all other global fits of financial madness combined, but rather, how so many warning signs were so blithely ignored by so many and for so long. What was wrong with these people, the authors and historians will wonder. Did the antibiotics in the food supply drive them mad? Did the High Fructose Corn Syrup compromise their ability to think? Some form of viral plague? Roid rage? What else could have created such a mass delusion amongst not just the populace, but their leadership and institutions?

Indy Mac goes belly up, having lost $900 million this year alone. Its shares fell 87% in 2007 and then its value dropped (on top of last year's collapse) another 95% this year-to-date. The stock fell to 28 cents yesterday. Some estimates of the total bad loans made by this somewhere in the neighborhood of $30 billion dollars -- and the Office of Thrift Supervision blames a senator who is investigating how much of the FDIC's $53 Billion this is going to eat up, with Wall Street estimates ranging from 15% to 30%. The towering incompetence of OTS is incomprehendable, but it is their colossal gall that is truly stupefying.

From beyond the grave, Adam Smith does not know whether to weep or retch. 

>

mighty hacks at the tree of ignorance...

"These days, there's nothing more ridiculous than the truth." Leonard Pitts Jr

The New York Times
Citigroup Regrets Bond Trades in Europe
By HEATHER TIMMONS
September 15, 2004

Citigroup told employees on Tuesday that it regretted executing a $13.5 billion bond trade that has raised the ire of rival traders in Europe and led to an investigation by regulators in Britain.

In an memorandum to all 40,000 employees of Citigroup's global corporate and investment bank, the chief executive for global capital markets, Thomas G. Maheras, said the trade was an "innovative transaction, that sought to access the liquidity in the European bond markets," but that it "did not meet our standards."

As a result, "we regret having executed this transaction," he said.

The bond sale, executed Aug. 2, caused widespread concern in Europe's markets. Citigroup sold 11 billion euros ($13.5 billion) of European government debt within minutes, mainly through electronic trades, then bought some of it back at lower prices less than an hour later, rival traders say.

Though the trades were not illegal, they angered other bond houses, which said the bank violated an unspoken agreement not to flood the market to drive down prices.

Citigroup "failed to fully consider its impact on our clients, other market participants and our regulators," Mr. Maheras said in the memo...