Michael Collins's blog

Greece to EU - Drop Dead!

"The referendum of 5 July will stay in history as a unique moment when a small European nation rose up against debt-bondage.”  Yanis Varoufakis, Finance Minister, Greece.
Sixty percent of Greek voters rejected the financial bailout proposal offered by the European Union (EU) in Sunday’s referendum.  The EU-IMF proposal relied heavily on austerity, which would have taken current financial hardships to nightmarish proportions for the vast majority of Greeks.

Who in the World would trust Standard and Poor's?

Standard and Poor's finally did it.  They downgraded the credit rating of the United States from AAA to AA+.  There are serious questions about the reliability of S&P.  The White House pointed out that there is a $2 trillion error in the calculations used for the downgrade.  Ths is of interest since the two other agencies failed to change the AAA status of the US. (See S&P downgrades U.S.)

Jack Tapper of ABC News reported late this afternoon:

"A third official says that S&P made a "serious mistake" in its analysis, "based on flawed math and assumptions," so the Obama administration is pushing back. But even though "S&P has acknowledged its numbers are wrong, it's unclear what they're going to do.," the official said.

"S&P's numbers were off by "roughly $2 trillion," the official said.

Fitch and Moody's reaffirmed the AAA US rating earlier in the week.

In addition to the question raised about a mathematical error, there are substantial reasons to doubt S&P for any credit rating, let alone the sovereign debt of the United States  This material is from an article on April 25, 2011.  It is highly relevant to the situation at hand.

IMF Head Lagarde Under Investigation by French Court

 I reviewed the candidates for IMF head on May 23, "Old Europe" backs French finance minister Lagarde for IMF head. The traditional choice of a European to head IMF was challenged by candidates from Mexico and Asia. The United States ultimately tilted toward the French finance minister who is now in office.

The article noted that there was a controversial case pending in French court regarding Lagarde's actions as finance minister. She made a favorable ruling in a matter regarding a close friend and ally of French President Nicholas Sarkozy. It appeared that her actions resulted in an award viewed as excessive for the Sarkozy ally. The loser in that matter appealed to a French court. At the time, it was known that:

"A three judge panel of the Court of Justice for the Republic will recommend for or against further investigation by mid June. A yes on investigating Lagarde would end her chances for the IMF position.."Economic Populist, May 23

The decision was delayed and the US-European alliance pushed the nomination through. Today, the Guardian had this headline:

Debt Deal Delusions: Debt to Gross Domestic Product Ratio

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The compromise "is a positive step toward reducing the future path of the deficit and the debt levels,” Steven Hess, senior credit officer at Moody’s in New York, said in a telephone interview yesterday. “We do think more needs to be done to ensure a reduction in the debt to GDP ratio, for example, going forward." Bloomberg, Aug 2 (Image: Okko Pyykko)

How many times have you read or heard about the magic numbers concerning the ratio of national debt to gross domestic product (GDP)? This was trotted out by both sides of the debt ceiling debate as a fact: if the debt-to-GDP ratio exceeds 90%, the results will be dire. Therefore, our current situation calls for a crisis reaction and extreme measures to get below the magic number.

If you declare bankruptcy, will everything be OK in a few days, weeks?

The crazies in the United States House of Representatives would have you believe it were so.  They say fix that budget before we'll raise the debt ceiling.  If we don't get our fix, they announce, there's no deal.  We'll just default until things get straightened out. (Image: George Romero)

Obama's Budget Betrayal - Questions and Answers

Question: Why did President Obama put Social Security and Medicare on the table in the budget negotiations when 80% of the people oppose cuts to these programs?

Answer: The president is not in office to represent those people. He was selected, funded and carried over the finish line by corporate America. Look at the appointment of Wall Streeter Timothy Geithner, the bailouts, and the failure to prosecute any of the crooks who caused the current recession. He's serving the people who put him in office. Those people don't need Social Security and Medicare.

Q: Doesn't the president need to worry about reelection? Why would he risk that by going against such a large majority?

A: President Obama has no personal or financial risk if he loses his job.. He has a tidy lifetime pension and will, no doubt, be on plenty of corporate boards, not to mention the opportunities for huge speaking fees. There is less political risk than you might think. The only Republican presidential candidate who might be other than certifiable is the largely unknown John Huntsman, former governor of Utah and Obama's ambassador to China. The rest would do much more harm to seniors than Obama concessions this time around (if they materialize) and people know that.

Running Rupert to Ground – Vox Populi, Vox Dei

How will they get rid of Rupert Murdoch and his toxic enterprises?

July 4, 2011 may turn into the people's Independence Day.  On that day, stellar journalist Nick Davies of the Guardian released his story; Missing Milly Dowler's voicemail was hacked by News of the World.  Twelve year old Milly Dowler had been kidnapped with foul play feared.  The Murdoch tabloid couldn't resist.  News of the World (the News) hired a private detective to hack Milly's voicemail.  Finding the mail box full, the News or its hired dick deleted existing messages to make room for new ones, all to fuel their ongoing coverage.  The deleted messages raised hopes by Milly's parents that she was still alive and using her voicemail. (Image)

The Davies story elicited a reaction of near universal shock, outrage, and revulsion.  Milly had already been murdered by the time the Murdoch paper began its illegal tapping.

The public revulsion resulted in immediate and fervent popular demands for justice.  Those demands were compounded by follow-up stories on other Murdoch media hacking.  As it turned out, the News also broke into the voicemails of war widows to capture their most intimate exchanges on the loss of fallen soldiers in Afghanistan and Iraq.   All in all, at least 4,000 citizens had their voicemails hacked to boost the Murdoch publication's circulation and profits.

Driven by broad public ire, Murdoch's empire began unraveling immediately.  He became a target for those he'd tormented, particularly in politics.  In just a few days, he became anathema for those he'd placed in power, indicating the focused intensity and force of public outrage.   Conservative Prime Minister David Cameron fell in line with Labour Party Leader Ed Milliband's call to stop Murdoch's critical acquisition of pay TV network BSkyB.  The Independent spoke of Murdoch having to abandon his United Kingdom media properties.

The crisis spread across the Atlantic when Senator John D. (Jay) Rockefeller demanded that law enforcement look into possible voicemail and other electronic surveillance of 9/11 survivors in the United States by  Murdoch's News Corporation.

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