Hint: It's not the "sovereigns." The chart below (an update of a chart we showed some years ago: not unexpectedly, Dexia no longer made the cut) shows the ratio of the biggest European and American bank assets to domicile nation GDP. The red line is the 50% assets/GDP breakeven. It is safe to say that if a bank's "assets" whether marked to myth, unicorns, or markets (sadly nobody has done the latter in the past 3 years) represents at least half of a domicile nation's GDP, the bank is obviously Too Humongous To Fail, and when it comes to leverage it is its unelected executive committee which calls the real shots for not only the host country, but any monetary union it may be part of. This is how 20 or so corner offices hijacked Europe. The ironic observation is that for all the complaints about the TBTF phenomenon in the US (banks in red), it is Europe where the TBTF spectacle will truly unfurl once the central banks finally lose control, and the giant unwind begins.
and isn't it ironic that the global elites who won't " suffer " the slightest degree of austerity or shared sacrifice , endlessly demand austerity from the plebs and prols of the world ?
Webster Tarpley: Emergency Call for a United Front Against Austerity! – Austerity and Sacrifice Spell Genocide Against Americans
No matter whether Obama or Romney wins the coming presidential election, American working people will face a savage assault on their economic rights starting after the vote. The asset stripper Romney and his sidekick Ryan have openly demanded the shredding of the existing social safety net, while channeling the proceeds to parasitical bankers and hedge fund operators. Obama, using his usual method of deception, has signaled more discreetly his intention of using the hysteria around the alleged Fiscal Cliff to seal a Grand Bargain with the reactionary Republicans at the expense of the American people during the December lame duck session of Congress.
Austerity and Sacrifice Spell Genocide Against Americans
In reality, any demand for more austerity, sacrifice, or cuts in social services on the part of the American people amounts to a demand for genocide — a Nuremberg crime. Real unemployment is now in excess of 30 million people in the United States . Over 50 million people are in the most extreme poverty, with no job, no unemployment benefits, no welfare system, no health care, and only a meager allotment of food stamps to stay alive. And Republicans and Democrats agree that food stamps will be next to go! Other families are facing foreclosures by corrupt robo-judges and robo-signers, as the American middle class is crushed under $1 trillion of student loan debt and $1 trillion of high interest credit card debt. All of this follows a secular decline of almost two thirds in the American standard of living over the last four decades.
Who Will Pay for the World Depression? As a result of globalization and the world derivatives panic of 2008, the United States and the world are gripped by an economic depression more destructive than that of the 1930s. The central political question today is: Who will pay for this depression? The class warriors of Wall Street want working people, the middle class, and the poor to foot the bill. But justice and economic survival demand that the costs of the Depression be borne by the zombie bankers and hedge fund hyenas who were responsible for the crisis in the first place.
Class Defense Needed
The urgent need is therefore to establish the principle of class defense against the financiers and their retainers both left and right. But how? Obama’s betrayals reveal him as a committed Wall Street puppet. He has sold out the Wisconsin pro-union and recall efforts, and waged a merciless campaign of union busting against teachers. One year after their heyday, the anarchists of Occupy Wall Street have failed to grab any piece of political power. Some deluded individuals thought that Ron Paul might save them, but Ron Paul turned out to be pushing the most fascist austerity of anybody in sight. Any illusions that OWS or the libertarians represented a real alternative have long since collapsed.
The only method that can fill the resulting void is a united front of existing organizations and individuals coming together to cooperate in the fight for an emergency platform of class-based demands. This process must begin in New York City on October 27.
Life and Death Issues for Working Families
Effective intervention begins with fighting demands related to the life or death struggles of working people. The typical working family is beleaguered by threats of foreclosure, the inability to see a doctor, the inability to pay a tuition bill, the lack of a job, the exhaustion of unemployment benefits, the need to win a strike, and other concrete concerns. We must begin here, with a new Frasier-Lemke Act to freeze all foreclosures, immediate institution off Medicare for All, a student loan freeze for at least five years, open-ended jobless payments, and similar measures designed to shift the cost of the depression back onto the Wall Street bankers who are responsible. Process reforms about campaign finance reform and the like are too abstract for the present phase.
“And who will pay for that?”, the reactionaries will ask. Wall Street, like the French aristocrats before 1789, pays virtually no tax — especially on the quadrillions of dollars of buying and selling derivatives and other securities through flash trading, program trading, and high frequency trading. Apply a 1% Wall Street Sales Tax to quadrillions in financial turnover, and federal and state budgets can be replenished to permit the measures just stated. Taxes on individual income or wealth should be considered, but they cannot come close to raising the needed revenue. The answer to the question about where the money will come from is therefore the Wall Street Sales Tax.
Policy, Candidates, and Mass Struggles
The United Front against Austerity will operate through policy and through candidates, and it will also intervene into mass struggles. In particular, any strike by teachers, policemen, firemen, or other public employees that does not specify that their demands are to be paid for by the Wall Street Sales Tax cannot hope to succeed in the current depression. National Nurses United and other effective unions have understood this. The Chicago Teachers Union was defeated, among other reasons, because they did not fight for this demand. Our approach to any strike will be to offer a program to make the bankers pay for the demands, while at the same time expanding the base of struggle in the population by bringing in potential social allies on the side of the strikers.
Nationalize the Federal Reserve and Issue 0% Long-Term Credit for Infrastructure and Physical Production
The social safety net can and must be maintained by shoring up government budgets with tax revenues extracted from the zombie bankers. But the overburdened federal budget and the bankrupt money center banks are not adequate to finance a broad-based recovery of the real economy by creating new productive plant and equipment and new productive jobs. The credit needs of a recovering US economy can only be met by taking control of the Federal Reserve System and using it as a National Bank. No longer should economic policy be controlled by cliques of bankers meeting in secret; money supply, interest rates, and approved categories of lending must be determined by public laws voted by the Congress and signed by the president. This is what nationalization of the Fed means. Right now, bankers can borrow from the Fed at 0% interest. We need to end that practice and instead create a Main Street Window where companies in manufacturing, construction, energy production, export trade, mining, and agriculture can obtain 0% credit.
Rebuild National Infrastructure and Create 30 Million Jobs To restart the US economy as a whole, we will need an initial credit stimulus of $1 trillion to be used by the Fed to purchase 0% coupon, hundred-year bonds issued by the states to finance the rebuilding of the nation’s collapsing public works and infrastructure in superhighways and bridges; freight, passenger, and commuter railroads; ports, canals, and water projects; public housing; 1,000 modern hospitals; schools, public buildings, etc.
This infrastructure program will deliver a self-sustaining economic recovery in capital goods and other industries, while creating 30 million new productive jobs at union wages, and bringing the United States near full employment for the first time since 1945.
End Too Big to Fail, Ban Toxic Derivatives
Along the way to recovery, we will need to wipe out large parts of the mass of toxic, bankrupt, kited derivatives which is currently crushing economic activity around the world. The principle of Too Big to Fail must be ended, and insolvent banks must be subjected to bankruptcy liquidation, making sure that their toxic derivatives are wiped out. It is time to return to the New Deal Commodities Exchange Act of 1936-1982, in particular by banning the most dangerous derivatives, including Collateralized Debt Obligations, Credit Default Swaps, and the derivatives which are used to bid up the prices of food and energy. To promote the growth of world trade, we will require a new Bretton Woods System designed to maximize the economic progress of sub-Saharan Africa , South Asia , and the poorer countries of Latin America.
“But who should I vote for?”, some may still ask. Vote for whatever protest candidate seems to offer the greatest bang for the buck where you are, and try to avoid a power monopoly of either party, but do not imagine that mere voting represents an adequate response to the present crisis. It is time to stop looking for prepackaged political alternatives, and to recognize that successful action depends on your initiative in helping real alternatives to materialize.
Above all, understand that it is still possible to win. A year ago in Greece, the opposition to the brutal austerity dictates of the European Commission, International Monetary Fund, and European Central Bank was fragmented and in disarray. But Alexis Tsipras and the Syriza Party proved capable of welding over a dozen organizations, splinter parties, and groups into a single united front, which then went from 4% of the votes to 27% in the course of two elections. Syriza now leads the opposition, based on a program of fighting class-based demands similar to the one advocated here. The current US vacuum in anti-establishment politics could make a similar regroupment even more rapid in the United States over the next six months. It is time to mobilize to seize this opportunity.
and consider when ( not if ) JP Morgan gets in trouble , check the leverage they have on governments - US and UK .....
Broker Blair, JP Morgan, and benefits from the Post Office
Tony Blair, neocon Socialist
Celebrated financial blogger Max Keiser is fond of saying that the nine scariest words in the English language are “I’m from JP Morgan, and I’m here to help you.” He’s probably right, but did you know they are the main partner bank for the UK Post Office? No, I didn’t either.
The reality is that JP Morgan (Europe) handles all the welfare payment transmissions for the Post Office. (They’re into this welfare shtick in a big way in the States as well). So JPM has all the details of how much money HMG pays out in welfare benefits, and all the people on the recipients’ database.
Hands up all those who think this is a good idea. All those with their hands up, read on.
Morgan the Pirate’s Chief Investment Office in London booked billions of dollars in losses earlier this year, after several gigantic trades went pear-shaped. In 2011, Bank of England officials raised concerns internally about the riskiness of some JPM practices, although Merv’s pervs didn’t formally alert other regulators. (Nothing new there then). In 2010, the BoE’s finest also became nervous about J.P. Morgan’s domination of residential mortgage-backed securities in the City.
Only last week, the respected financial site Seeking Alpha suggested that ‘the JP Morgan trading blunder could result in a $100 billion loss, a contagion of its massive portfolio, and even the wipeout of its entire asset base.’
And, um, leave millions of Britons without any welfare payments.
The Pirate’s credit derivatives, interest rate derivatives, and currency trading are in turn vulnerable to leveraged hidden bets. “At J P Morgan, we view leverage as a potentially powerful resource,” burbles the firm’s website, but like Goldman Sachs and other Wall Street habituees, JPM is ludicrously over-leveraged….and really hasn’t a clue to the nearest $50 billion how much of its debt is or isn’t adequately hedged.
So what on earth is this Wily ol’ Coyote doing running our dear old Post Office?
Well, you may recall that when Teflon Tony was shoved out of Downing Street by the Caledonian blackmailer resigned gracefully as Prime Minister in 2006, he fairly swiftly became a consultant to…..J P Morgan. Within months, Northern Rock went under and, to save three Labour seats, was bailed out by Alistair Darling, Brown’s Chancellor of the Exchequer. Now, you’ll never guess who lucked into getting the good bit of the bank where all the savings were: J P Morgan, thanks to an introduction from Moral Tone. We the taxpayers picked up Northern Crock, the debt-ridden part that was standing on the naughty step.
In a speech last month, Blair observed that “We need to be on the side of the modern-minded, sensible people”. All along, in fact – as the debate raged throughout the Naughties – he insisted that we couldn’t afford to keep the Post Office going in its then form. So although Peter Mandelson made promises to the TUC in the mid 1990s that he would keep the royal mail a closed shop if they helped get Tony Blair into power, once in power Mandelson demanded they get rid of 30,000 staff.
Ironically, Margaret Thatcher never seriously considered privatising it. Like most people of her generation, she saw the post as one of the bulwarks of the British state — an institution of which the nation could be proud. But Tony Blair had very different ideas.
As part of the softening-up process, Blair propagated the myth that the Post Office was losing money. This simply wasn’t true: in 1999, it contributed £310m to the Exchequer, and had made a profit for every one of the previous twenty-three years. But keen to conform to the new orthodoxy of Thatcherism, New Labour meddled and fiddled and left it in limbo, neither public nor private. Meanwhile, deliveries were slashed, staff numbers were axed mercilessly, and many villages saw their post offices sacrificed in the name of solving an inefficiency problem that didn’t exist.
Even the bonkers Dacre Mail observed last December that ‘Future generations may laugh with disbelief that we were so attached to our state monopoly. But the Royal Mail’s proud history is a reminder that there is more to life than fat profits for the few.’
One of the few is, of course, Teflon himself. When he joined Jamie Dimorgan Chase, the former British PM gushed (my italics):
"It is a great opportunity to be able to contribute to
the work of JPMorgan Chase. They are a leading company at the cutting edge
of the global economy, with a footprint in virtually every part of the
world. I look forward to advising them on how they approach the huge political and economic changes that globalisation brings."
Well, one of the huge changes wrought by braindead neocon globalism was an awful lot more folks needing welfare. And funnily enough, the piratical moron has wound up doing just that.
The deal between Blurrgh and Morgan has been hugely enriching for both sides. A month ago, Blair made $1 million in less than three hours by brokering late night talks between billionaire businessmen trying to save a £50billion mining deal.
And no doubt, when the hour came for the Post Office to get into bed with JPM, Tony was able to oil the wheels and grease the pump. I don’t know that’s what happened. But isn’t it awful when you suggest such a heinous thing about a former socialist, God-fearing bible-thumper, and everyone’s immediate reaction is that it’s highly possible…not to say probable? As they used to say in the mail business, “Sorted”.
In 2010, President Obama signed into law the Healthy, Hunger-Free Kids Act. The bill added $4.5 billion to child-nutrition programs over the next decade, put in place nutrition standards for school lunch programs and vending machines, and implemented training for the cafeteria workers who feed 31 million students a day through the National School Lunch and School Breakfast programs. It received bipartisan support, and was hailed as a compassionate victory for America’s poorest children.
A woman displays her EBT card at the Anacostia Farmer's Market in Washington D.C.. (Rod Lamkey Jr., The Washington Times / Landov)
The bill was also, however, a potentially good development for mega bank JP Morgan Chase. Why, you may be wondering, would one of the nation’s biggest banks benefit from a bill meant to feed poor children? A closer look at the legislation reveals the answer. The bill mandates that “all state agencies implement Electronic Benefit Transfer (EBT) systems by October 1, 2020” for those receiving money through the Women, Infants, and Children (WIC) program. And which company administers nearly half of all states’ EBT programs? You guessed it: JP Morgan Chase.
We seldom think of poverty programs as profit centers, preferring to discuss them as matters of ideology. Liberals view programs like WIC—which provides food to both pregnant mothers and mothers of young children—as the mark of a compassionate nation. Conservatives see them as a gateway to government dependency.
Arguably, they may fit either of those descriptions. But as with so many other government programs in Washington, both WIC and its close cousin, the federal food stamp program, have morphed into something else: cash cows for powerful corporate interests.
At one point, food stamps were actual stamps: Those participating in the program handed retailers pieces of paper in exchange for goods. Today, the process has been digitized and the social stigma minimized. The 1996 welfare reform law required all states to implement debit-like cards, known as EBT cards, no later than October 1, 2002. EBT cards allow states to make Supplemental Nutrition Assistance Program (SNAP) benefits—the official name for the food stamp program—and direct cash assistance programs such as Temporary Assistance for Needy Families (TANF) accessible at retail locations in each state. (TANF benefits are also accessible through ATM machines.)
According to the website of the Agriculture Department—which oversees the food stamp program—three companies administer the bulk of EBT card programs in 49 states (the state of Montana runs its own program) through multi-year contracts ranging from five to seven years. JP Morgan Electronic Financial Services, Inc. (a subsidiary of JP Morgan Chase), which entered the welfare market in 2004 by acquiring Citicorp Electronic Financial Services, has contracts with 24 states and two U.S. territories. Affiliated Computer Services (ACS), a subsidiary of Xerox, has 15 state contracts. And eFunds Corporation, a subsidiary of Fidelity National Information Services (not connected to Fidelity Investments), handles the EBT cards for 10 states and one U.S. territory.
“This business is a very important business to JP Morgan,” Christopher Paton, the company’s managing director of treasury services, told Bloomberg News in 2011. “It’s an important business in terms of its size and scale. We also regard it as very important in the sense that we are delivering a very useful social function. We are a key part of this benefit delivery mechanism. Right now volumes have gone through the roof in the past couple of years or so … The good news from JP Morgan’s perspective is the infrastructure that we built has been able to cope with that increase in volume.”
Since 2002, JP Morgan’s political donations to members of the House and Senate agriculture committees have been on a steady climb upward.
Just how lucrative JP Morgan’s EBT state contracts are is hard to say, because total national data on EBT contracts are not reported. But thanks to a combination of public-records requests and contracts that are available online, here’s what we do know: 18 of the 24 states JP Morgan handles have been contracted to pay the bank up to $560,492,596.02 since 2004. Since 2007, Florida has been contracted to pay JP Morgan $90,351,202.22. Pennsylvania’s seven-year contract totaled $112,541,823.27. New York’s seven-year contract totaled $126,394,917.
These contracts are transactional contracts, meaning they are amendable based on changes in program participation. Each month, the three companies that administer EBT receive a small fee that can range from $.31 to $2.30 (or higher depending upon the number of welfare services on an EBT card and state contractual requirements) for each SNAP recipient.
EBT processors charge for other services as well. For example, any time TANF recipients withdraw their cash benefits or make balance inquiries through out-of-network ATM machines, the user may incur ATM transaction fees generally ranging from $.75 to $1.50. In addition, most states allow EBT processors to charge card replacement fees. Arizona cardholders, for example, are permitted one free replacement a year, after which a $5 per card fee is imposed. The same goes for customer service calls: After an EBT cardholder exceeds the state’s maximum number of free calls, EBT processors typically tack on a $.25 per call fee.
With states paying EBT processors so much, one might think that these companies would be expected to tenaciously prevent and investigate fraud and abuse. But according to state officials and a review of a sampling of these contracts, they do not task EBT providers with aggressive fraud prevention. That job is left to states’ EBT fraud investigation units (which police recipients of benefits) and the Agriculture Department (which polices retailers). According to the USDA’s website, the federal food stamp program has “over 100” inspectors to police the nearly 200,000 retailers nationwide that accept EBT cards. For its part, the state of Florida has 63 positions allocated to police over 3 million EBT users. JP Morgan is currently involved in an eight-month pilot project with Florida focused on EBT fraud and abuse. The total staff? Just one JP Morgan employee and five to ten state employees, according to Florida officials. Moreover, critics, such as author James Bovard, say that under President Obama the federal government has tried (unsuccessfully) to thwart states like California, New York, and Texas from implementing commonsense anti-fraud measures, such as requiring those applying for an EBT card to provide finger images.
The administration has, to be sure, signed on to some EBT restrictions. After a spate of recent news stories revealed that EBT cards were used to withdraw millions of dollars from ATM machines at strip clubs, casinos, liquor stores, and even aboard cruise ships, Obama signed a law banning EBT cardholders from receiving cash at ATM machines in strip clubs, casinos, and liquor stores.
Still, EBT scams continue to flourish. Earlier this year, a Los Angeles CBS affiliate conducted a hidden-camera investigation to demonstrate the ease with which California welfare recipients can sell their EBT cards on Craigslist. Meanwhile, a 2011 investigation by the Milwaukee Journal Sentinel uncovered widespread selling of Wisconsin EBT cards on Facebook. And, according to the paper, “nearly 2,000 FoodShare recipients claimed they lost their card six or more times in 2010 and requested replacements.”
(A spokesperson for Xerox said that the company’s anti-fraud measures “are industry standard and guided by federal regulations,” but added that “because the techniques used to protect cardholders are proprietary, we’re unable to discuss them in detail.” A JP Morgan spokesperson declined to comment, and two eFunds spokespersons did not return requests for comment.)
The rapid growth of welfare enrollments—and concomitant issuance of EBT cards—can be partially explained by America’s moribund economy and bleak jobs picture. It is also attributable to the fact that, in recent years, more and more states (the number is now up to 43) have begun to operate under “broad-based categorical eligibility” rules—which allow poor individuals who qualify for TANF, Supplemental Security Income, and state-financed government assistance programs to be automatically eligible for food stamps. That means households which were previously ineligible to receive SNAP benefits may now receive them.
But there may be one more reason the food stamp industrial complex continues to balloon: because wealthy corporate interests have been filling the campaign coffers of politicians who control the program’s trajectory. Prior to the 2002 EBT implementation mandate, JP Morgan’s political donations to members of the House and Senate agriculture committees were modest. But since 2002, they’ve been on a steady climb upward, rising from $82,302 to $332,930 in just the span of eight years. Adding to the unseemliness is the fact that three senators and six representatives who are agriculture committee members had, as of 2010, investments in JP Morgan; one senator, meanwhile, had money invested in Xerox. And in March 2012, the White House disclosed that President Obama has money in a JPMorgan Chase private client asset management checking account.
Of course, it’s impossible to say whether all these dollars influence the decisions made by politicians. But the appearance is certainly unbecoming. And one thing is for sure: The decisions that have been made on food stamps in recent years, however they are reached, have often benefited the corporations that administer the EBT program. Indeed, even if the U.S. economy improves, the future for EBT processors looks bright: The Healthy, Hunger-Free Kids Act’s requirement to move all WIC recipients onto EBT systems means they have plenty of new customers waiting in the wings.
Submitted by Tyler Durden on 10/04/2012 18:39 -0400
Tony Blair, neocon Socialist
Tony Blair, neocon Socialist
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