This page has been archived and commenting is disabled.

The Big Banks are Amateurs When It Comes to Manipulating Interest Rates

George Washington's picture




 

 

The Biggest Manipulators of All

People are justifiably furious over the big banks' manipulation of hundreds of trillions of dollars of assets.  This violates the banks' most central function: loaning money based upon the going rate.

Indeed, the Libor manipulation is so serious that even mainstream economists are starting to call for heads to roll.

The Bank of England and Federal Reserve's encouragement of Libor manipulation is not an isolated incident.  Rather than being an aberration, it is their central effort.

Indeed, the big banks are rank amateurs when it comes to manipulating interest rates. Central banks have been manipulating rates for a hundred years or more.

David Zervos - Managing Director and Chief Market Strategist for  Jefferies, with $3 billion under management - points out:

Central bankers try to influence rates directly and indirectly EVERY day. That is their job. From the NYFED website this is description of the monetary policy objective –

“the directive for implementation of U.S. monetary policy from the FOMC to the Federal Reserve Bank of New York states that the trading desk should “create conditions in reserve markets” that will encourage fed funds to trade at a particular level. Fed open market operations change the supply of reserve balances in the system, and by affecting the supply of balances, the Fed can create upward or downward pressure on the fed funds rate.”

All central banks, and central bankers, are in the business of setting rates. That’s what they do for a living. That’s why we spend so much time watching them. Surely, the Fed and BoE were unhappy that Libor rates, commercial lending rates, residential mortgage rates and the like were not cooperating with their traditional rate manipulation techniques in the overnight market for unsecured funds. That is why they created a myriad of unusual and exigent programs during the 2008/2009 crisis. But for the senior management of Barclays to come out and claim the Bank of England, or any central banker, was at fault for trying to “manipulate” interest rates is absurd. Congresses and Parliaments have given central banks monopoly power in the printing of money and the management of interest rate policy.

Indeed, one of the core functions of central banks is buying or selling government bonds to keep market interest rates at a specified target value. For example as the BBC notes:

Usually, central banks try to raise the amount of lending and activity in the economy indirectly, by cutting interest rates.

 

Lower interest rates encourage people to spend, not save.

The Federal Reserve's key policy lever is its "Federal Funds Rate", which is the base interest rate that many other rates (generally including Libor, and see this and this) key off of.

As the Financial Industry Regulatory Authority - the largest independent regulator for all securities firms doing business in the United States - explains:

The Federal Reserve (or "the Fed") sets a target for the federal funds rate and maintains that target interest rate by buying and selling U.S. Treasury securities.

The express purpose of the central banks' emergency actions since 2007 is to effect interest rates.  For example, the express purpose of quantitative easing is:

When interest rates are close to zero there is another way of affecting the price of money: Quantitative Easing (QE). The aim is still to bring down interest rates faced by companies and households and the most important step in QE is that the central bank creates new money for use in an economy.

And of operation twist:

Confronted with a stumbling U.S. recovery and a financial crisis in Europe, the Federal Reserve decided Wednesday that it would extend a program known as "Operation Twist" aimed at pushing down long-term interest rates and boosting the economy.

Indeed, central banks are now forcing private companies to buy government bonds as a way to further drive down interest rates.  CNBC reports:

US and European regulators are essentially forcing banks to buy up their own government's debt—a move that could end up making the debt crisis even worse, a Citigroup analysis says.

 

Regulators are allowing banks to escape counting their country's debt against capital requirements and loosening other rules to create a steady market for government bonds, the study says.

 

While that helps governments issue more and more debt, the strategy could ultimately explode if the governments are unable to make the bond payments, leaving the banks with billions of toxic debt, says Citigroup strategist Hans Lorenzen.

And the Financial Times notes:

Almost exactly a year ago, the economists Carmen Reinhart and Belén Sbrancia wrote a path-breaking International Monetary Fund paper about “financial repression”. It initially caused many western investors to blink. For while such “repression” has been extensively discussed in emerging markets in recent years, not many people in America knew what this dark-sounding phrase meant. (Answer: “financial repression” occurs when governments engineer a situation in which investors feel compelled to buy bondsat unfavourable rates, ie below the prevailing level of inflation, thus helping to reduce national debt.)

 

How times change. A year later, the word “repression” is being bandied about at investor conferences across the western world. No wonder. In the eurozone, there are growing signs that governments in places such as Spain and Ireland are “encouraging” – if not forcing – banks and state pension funds to buy public sector bonds, at potentially unfavourable prices.

 

***

 

What is crystal clear is that Fed and Treasury officials alike are determined to keep those Treasury yields ultra low, if not negative in real terms, for the foreseeable future. And they may well succeed.

Indeed, manipulating interest rates is one of the Fed's 3 core, express mandates:

(1) maximize employment;

 

(2) stabilize prices; and

 

(3) moderate long-term interest rates.

"Moderating" interest rates means acting on interest rates so that free market forces do not set the rates.  In other words, it means manipulating those rates.  So one of the Fed's 3 primary reasons for existence is to manipulate rates.

Central Banks Have Been Doing a Terrible Job of Manipulating Interest Rates

Austrian school economists have said for decades that interest rates which are too low destroy the economy. For example, Walter Block told me:

In the Austrian economic view, depressions are caused by big banks (the Fed) artificially lowering interest rates.

Hayek won the Nobel prize in 1974 partly for arguing that artificially low interest rates lead to the misallocation of capital and to bubbles, which in turn lead to busts.

But its not only Austrians.  The central banks' central bank - the Bank of International Settlements - which is the world's most prestigious mainstream financial body, has repeatedly said that interest rates which are too low can destroy the economy.

BIS' chief economist William White warned against overly lax monetary policy as early as 2003.   As Spiegel reported:

White and his team of experts observed the real estate bubble developing in the United States. They criticized the increasingly impenetrable securitization business, vehemently pointed out the perils of risky loans and provided evidence of the lack of credibility of the rating agencies. In their view, the reason for the lack of restraint in the financial markets was that there was simply too much cheap money available on the market. [Low interest rates equal cheap money.] To give all this money somewhere to go, investment bankers invented new financial products that were increasingly sophisticated, imaginative — and hazardous….

The Telegraph noted:

"The fundamental cause of today's emerging problems was excessive and imprudent credit growth over a long period. Policy interest rates in the advanced industrial countries have been unusually low," [White] said.

 

The Fed and fellow central banks instinctively cut rates lower with each cycle to avoid facing the pain. The effect has been to put off the day of reckoning.

 

***

 

"Policymakers interpreted the quiescence in inflation to mean that there was no good reason to raise rates when growth accelerated, and no impediment to lowering them when growth faltered," said the report.

In 2009, BIS released a paper amplifying on this point:

Easy monetary conditions are a classic ingredient of financial crises: low interest rates may contribute to an excessive expansion of credit, and hence to boom-bust type business fluctuations. In addition, some recent papers find a significant link between low interest rates and banks’ risk-taking ....

Indeed, BIS documents that interest rates which are too low are a grave risk financial to stability. See this, this and this.

The Fed's low rate policies also reward speculators and punish savers, and quantitative easing helps the big guy at the expense of the little guy.

So the Fed - and central banks worldwide - have been manipulating interest rates, and have been doing a horrible job for the economy.

Central Banks Have Propped Up The Giant Banks' Bad Behavior

Not only have central banks been doing a horrible job of manipulating interest rates themselves, but they have built, propped up and enabled the giant private banks to manipulate the system.

We've previously noted:

The corrupt, giant banks would never have gotten so big and powerful on their own. In a free market, the leaner banks with sounder business models would be growing, while the giants who made reckless speculative gambles would have gone bust. See this, this and this.

 

It is the Federal Reserve, Treasury and Congress who have repeatedly bailed out the big banks, ensured they make money at taxpayer expense, exempted them from standard accounting practices and the criminal and fraud laws which govern the little guy, encouraged insane amounts of leverage, and enabled the too big to fail banks – through “moral hazard” – to become even more reckless.

 

Indeed, the government made them big in the first place. As I noted in 2009:

As MIT economics professor and former IMF chief economist Simon Johnson points out today, the official White House position is that:

(1) The government created the mega-giants, and they are not the product of free market competition

***

(3) Giant banks are good for the economy

And given that the 12 Federal Reserve banks are private – see this, this, this and this- the giant banks have a huge amount of influence on what the Fed does. Indeed, the money-center banks in New York control the New York Fed, the most powerful Fed bank. Indeed,

 

Jamie Dimon – the head of JP Morgan Chase – is a Director of the New York Fed.

 

Any attempt by the left to say that the free market is all bad and the government is all good is naive and counter-productive.

 

And any attempt by the right to say that we should leave the giant banks alone because that’s the free market are wrong.

 

The [corrupt, captured government "regulators"] and the giant banks are part of a single malignant, symbiotic relationship.

Shah Gilani writes at Forbes, in an article entitled "It's Not Libor Stupid, Central Banks Are The Problem":

Central banks have done nothing to countermand the trend (nothing but encourage) leading to big banks getting bigger; so big, in fact, that now all of the big banks around the world are all too-big-to-fail.

 

The bigger the world’s banks are (bankers want size, because more size equals more power to price, to manipulate markets, and to pay bigger bonuses) the more important central banks become, both to the big banks, nations, and the global economy.

 

Central banks are the saviors of big banks that get in trouble, especially when economies and systems are leveraged for profits that backfire and they all have to be bailed out.

 

Central banks are supposed to be above what’s going on below their ivory towers, but, in fact, they are the puppets being manipulated by the big banks. It’s a case of the tail wagging the dog.

 

Why are central banks pouring money into banks, really? Why aren’t governments printing money to pour into ailing economies but aiding and abetting central banks instead?

 

It’s because central banks are independent supra-national bodies who have been ceded monetary power by governments almost everywhere to benefit banks and bankers the world over, who are their only constituents, and for all intents and purposes, effectively “own” legislators and governments.

 

They’re pouring money into banks to keep them solvent. That’s what central banks are there for. The banks aren’t lending the money (massive reserves are sitting on balance sheets to shore up appearances) because they need it to meet reserve requirements and offset the illiquidity evident in the interbank lending market…the same interbank (Libor) market that the Bank of England wanted to make look more liquid than it was viscous back in 2008.

 

***

 

We need to break up all the world’s big banks so they can fail when they overleverage themselves, and entire systems, nations, economies and the global economy aren’t all brought to their knees.

If we break up all the too-big-to-fail banks we won’t need central banks. We can go back to what are supposed to be free markets dictating interest rates and creating honest, open economies and opportunities everywhere.

Central Banks Have Failed To Provide Market Stability

While central banks' too-low interest rates have led to an unstable economy, at least - one would hope - they've helped the consumer in other ways.

But as the following chart of historical Dow Jones Industrial Average - courtesy of the St. Louis Federal Reserve Bank - shows, the stock market has been more volatile since the Fed was formed in 1913 than before:

Moreover, the value of the dollar has been destroyed since 1913:

Dollar from 1913.gif A Banana Republic With No Bananas

We’re suffering more or less depression-level unemployment.

And I'm not sure the Fed has been doing a great job of stabilizing prices, either.

The Fed has also failed at its self-proclaimed counter-cyclical role of "taking the punch bowl away" when the party gets too wild.

Central banks like the Fed are also rotten with corruption and conflicts of interest. And see this.

No wonder Nobel prize winning economists think that central banks should be abolished or drastically downsized.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 07/10/2012 - 10:47 | 2602060 CustomersMan
CustomersMan's picture

 

The Israeli plan is to have the US and NATO destroy and degrade every country in the ME that does not bow to the wishes of the Israeli's.

 

In other words bomb their infrastucture to set them back 20 - 50 years which in turn will increase Israel's hedgemony in the region and allow them to expand without contention since the attacked countries will all be trying to rebuild from the destructive onslaught.

Tue, 07/10/2012 - 10:06 | 2601860 falak pema
falak pema's picture

Ponder this saying by Hayek :

Hayek stated that if the Conservative leader had said "that free choice is to be exercised more in the market place than in the ballot box, she has merely uttered the truism that the first is indispensable for individual freedom while the second is not: free choice can at least exist under a dictatorship that can limit itself but not under the government of an unlimited democracy which cannot".[

Not only was he "antidemocratic" in terms of thinking that a dictator who encouraged "free markets" was better than a "democrat" who encouraged "central planning", he also said this :

 

The Denationalization of Money

In 1976, in a paper on The Denationalization of Money,[44] Hayek advocated that rather than re-instituting a government-mandated gold standard, a free market in money be allowed to develop, with issuers of money competing with each other to produce the best, most stable and healthy currency.

This sparked an entire school of thought within economics, Free Banking, with banks not being banned from having fractional reserves as Rothbard advocated, but instead being free to experiment and discover the best method of conducting business. Economists including Richard TimberlakeGeorge SelginLawrence White, and Steven Horwitzare part of this school of thought.

Friedrich Hayek - Wikipedia, the free encyclopedia

 

.... He is an original thinker, whatever we may think about his truisms; Economics is not an exact science, so there is room for theory not being verifiable as NO two real situations are identical, as in true natural science. 

 

Tue, 07/10/2012 - 09:02 | 2601682 midgetrannyporn
midgetrannyporn's picture

The fed has not failed. Their only mission is to guarantee their own prosperity. Everything else is BS.

Tue, 07/10/2012 - 09:56 | 2601757 i-dog
i-dog's picture

It's alarmist nonsense! ... Yet another scare tactic to push for Agenda 21 and the global carbon tax to finance world government. Don't get sucked in.

Just a few days ago, I was pondering the limits of population growth and whether we might need a population reduction, and arrived at a calculation that the whole population of the planet ... all 7,000,000,000 that are scattered throughout North and South America, Europe, Africa, Asia, and Oceania ... would fit into just the area occupied by Finland (ie. less than the area of Montana), with a population density the same as that of the modern city-state of Macau.

FYI, Macau is quite small - with a smaller population than Las Vegas - but has an airport, racetrack, university campus, lakes, jungle covered mountains and plenty of beaches. Here is a view of one part of that "high density" living:

http://mw2.google.com/mw-panoramio/photos/medium/12465012.jpg

Tue, 07/10/2012 - 08:07 | 2601546 blueridgeviews
blueridgeviews's picture

What time does dancing with the stars come on?

Tue, 07/10/2012 - 04:43 | 2601342 ebear
ebear's picture

Yawn... tell us something we don't know.

Tue, 07/10/2012 - 07:46 | 2601500 HAL 9000
HAL 9000's picture

There is a circular object near the equator. It is 22 thousand kilometres in diameter. It is comprised of rectangular objects. One million, three hundred and fifty five thousand, plus or minus one thousand.

Tue, 07/10/2012 - 08:16 | 2601570 JamesBond
JamesBond's picture

open the pod door, HAL.  the bernanke wants in.

Mon, 07/09/2012 - 23:35 | 2601064 CustomersMan
CustomersMan's picture

And Now Iceland's Approach:

***********************************************

From VT :

 

"....As of June 2012, there has been only one exception to this sad tale of gargantuan theft—Iceland.  There, thanks to an inordinately courageous and decent president, the people were allowed to decide their fate, twice, despite the strenuous opposition of the international bankers.

“These were private banks,” said Iceland’s president, “and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.” 

The people voted and, consequently, Iceland is now in far better economic shape than countries such as Greece, Spain, or the USA.  In Iceland, too, some bankers actually ended up paying for their crimes, and the country has, in the wake of the crisis, moved in a more democratic direction.  The people of Iceland:

 “…took a different path than the United States after their financial crisis and nationalized the banks, threw some the people responsible for the crash in jail, and bailed out the homeowners instead of worrying about only bailing out the banks.  And now they’re coming back and their economy is growing again.”

Even the corporate press, on the rare occasions when it covers the Icelandic story, underscores the fabulous potential of genuine democracy:

“Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.  Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population . . .

The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective.  Iceland’s economy will this year outgrow the euro area and the developed world on average . . .   The island’s households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. 

On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses. . . .  Iceland’s $13 billion economy, which shrank 6.7 percent in 2009, grew 2.9 percent last year and will expand 2.4 percent this year and next . . . The euro area will grow 0.2 percent this year and the OECD area will expand 1.6 percent, according to November estimates. . . . 

Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.  Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. 

The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed. 

Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.  . . . That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown.”

.......continued at Veterans Today

Mon, 07/09/2012 - 22:37 | 2600931 Duke of Con Dao
Duke of Con Dao's picture

need I say more? or even mash more... the gesture of unassailable guilt comes at the 65 sec. mark... 

the time for talk is over. let's hang the bastards!

YouTube - Squirm Worm, Squirm! Chairman Paul Tucker roasted by Parliament Inquiry over LIBOR Manipulations

Tue, 07/10/2012 - 02:28 | 2601251 All Risk No Reward
All Risk No Reward's picture

George, WHO do you think runs the central banks?  The same crowd that runs the mega banks.

Thw Wizard of Oz (money power) is manipulating all sorts of things through their "curtain" of central and mega banks.

The real question is why we don't out the Federal Reserve as CRIMINALLY breaking Section 2A of the Federal Reserve for 25 years running in order to run the world's larget credit bubble / bust, societal asset stripping operation in human history.

Federal Reserve Crime Spree...

http://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?tr=77

The Fed's criminal bubble is the root cause of the ongoing bust.

Or, how about the fraudulent, from the ground up, monetary system that enslaves society to debt servitude to a bunch of criminal banksters?

http://www.keepandshare.com/doc/3325954/debt-dollar-tyranny-2-54k?tr=77

BTW, please print these graphs out and share them with friends, family and enemies as well.  We all need to get these two data points down pat or else we can't properly understand the world in which we live.

Tue, 07/10/2012 - 03:42 | 2601314 AnAnonymous
AnAnonymous's picture

The same crowd that runs the mega banks.

_____________________________

And that is US citizens...

Tue, 07/10/2012 - 08:57 | 2601670 Mitzibitzi
Mitzibitzi's picture

So we're ignoring the Russian, Japanese, Brazilian, South African, Indian and Chinese TBTF institutions, then? Not many US citizens represented on the boards of those (though there is the odd one - those pesky US and UK banksters get everywhere).

This isn't just a problem of US corruption, or even primarily of US corruption - the UK probably takes the biscuit on that one - it's simply a problem with corruption. Greedy, lying motherfuckers everywhere, dude, even in your Communo-Capitalist homeland.

Mon, 07/09/2012 - 21:03 | 2600690 deez nutz
deez nutz's picture

The FED has only one REAL MANDATE:  Keep stock markets afloat.

Tue, 07/10/2012 - 08:59 | 2601676 Mitzibitzi
Mitzibitzi's picture

...until all the pieces are in place to benefit more from not doing so.

Tue, 07/10/2012 - 02:31 | 2601255 All Risk No Reward
All Risk No Reward's picture

"shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production"

The dual mandate is a lie.  The mandate is singular...

"shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production"

Why did they lie, other than enjoying it, that is?

The broke the law.

http://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?tr=77

Since they represent feudal lord oligarchs, their laws have no penalties. 

You know, like tyrant kings of old.

Mon, 07/09/2012 - 22:40 | 2600683 Element
Element's picture

OT:

 

More on the war with Oceania ...

 

--

West Clings To Arab Influence With Airstrike Democracy - Putin
 
Published: 09 July, 2012, 14:39
 
Russian President Vladimir Putin (RIA Novosti / Mikhail Klimentyev)

 

Russian President Vladimir Putin has criticized the West for clinging to its influence in the Arab world under the guise of “humanitarian operations.” He dubbed western involvement in Arab affairs as the export of “rocket and bomb democracy.”
 
At a meeting with top Russian diplomats Putin said that certain countries [yeah, we know who] will do anything to retain the influence they have become accustomed to in the Arab world.
 
He stressed that western nations often adopt a one-sided policy in Arab affairs that violates international law.
 
“We must do everything in our power to coerce the opposing forces in the Syrian conflict [by which he means to COERCE the USA/ NATO ... and not just the 'free' Syrian 'army'] into coming to a peaceful solution,” underlined the Russian President.
 
Citing the importance of an active dialogue in Syria, he said “this is, of course, a more complicated and delicate task than just barreling in with military intervention.”
 
Putin added that only a diplomatic solution could lead to long-term peace and stability in the region.
 
Russia opposes any resolution to the Syrian conflict that stipulates the removal of President Assad, maintaining the political future of the nation is the prerogative of the Syrian people.
 
At a summit of UN countries in Geneva last week, diplomats agreed on the adoption of UN envoy to Syria Kofi Annan’s new plan for a unified transition government in Syria.
 
The plan states that the unity government should include elements of the opposition, but exclude political figures that put the stability of Syria in jeopardy.
 
Russia agrees with the plan, although Foreign Minister Sergey Lavrov claims some western nations have distorted the wording of the plan to push for Assad’s forced removal.
 
US Secretary of State Hillary Clinton claims the document specifically calls for the ouster of President Bashar al-Assad.
 
http://www.rt.com/news/putin-west-influence-bomb-democracy-722/

--

Note the words " ... everything in our power to coerce the opposing forces in the Syrian conflict ... ", to make them agree to a, "peaceful solution".  Make no mistake, he's referring to coercing Washington, to fuck-right-off, out of it, and to stop promoting war and instability spreading in the whole middle-east.

And that is quite a lot of "power", firstly diplomatic, of course.  So Putin is making clear they intend to use every bit of power they have here, especially if diplomacy fails, hence the reference to US/NATO threat to use of military force, and actual arming, and on-going support of the western-trained death-squads.

So what's the aim?  What does this Eastern (non-Western) great-power want?

To stop self-appointed western-backed armed terrorist militias from destroying the infrastructure and operational capacity of Govts to service the general daily needs of communities and cities, so that they still have jobs, homes, food, electricity, running water and toilets that will flush, etc.

You know, the little stuff like that, which then tends to become the most pressing and immediate issue for families and maternal affairs, after every such western-armed and backed proxy destroys all of it, in order to destabilise and take-over then reshape the state's politics and allegiances into a western framework, via deliberately making the state so dysfunctional and desperate for outside help and "Humanitarian Aid" that they'll then do almost anything for NATO, in order to get it.

Create the problem ... provide the solution ... who benefits here?

No one will ever 'deliver' freedom to you, it simply doesn't exist in that form, it's a lie.  'Freedom', if it can be called that, only exists where you create it yourself, in conjunction with others nearest to you.  No govt is ever going to do this for you, not Damascus, and definitely not going to come from or be 'delivered' by Washington's bombs and constant stabbing at the heart of any country operating independently of Washington's foreign policy and global strategising and aggressive posture.

And clearly this 'free' Syrian 'army', who are on Washington's NATO payrole, are not the slightest bit interested in freedom and stability or peacefulness in Syria -- not at all -- not even a little bit!

Look at the 'free' Syrian 'army's', most recent statements, and their context:

--

" ... UN special Syrian Envoy Kofi Annan said that the “evidence suggests his plans for peace had not yet succeeded”, and that there was “no guarantee” that negotiations would ever be successful.  He also, however, stressed that there was no other alternative besides cooperation on a peaceful and diplomatic solution to the crisis. ...
 
“Little is known about other countries sending arms, money being spent, and the situation on the ground,” Annan said. “All these countries claim to want a peaceful solution, but they take individual and collective initiatives [i.e. arming and funding] that undermine the resolutions of the Security Council.” ...  “Shouldn’t the countries [involved] find ways to work together to ensure that Syria does not rip itself apart, not spread problems to its neighbors, and to avoid a situation that creates instability in the region and for the world? Or will these countries [he clearly means the USA and NATO states here] continue on the path on which they have embarked, leading to a destructive competition [strategic competition ... i.e. this is not actually about Syria you know ...] in which everyone will eventually lose? [by which he means the next great global war may be bought about]” Annan asked. ...
 
[Yes, Hillary Clinton, he's referring to you and Barry O'bomber]
 
"Unfortunately, some representatives of the Syrian 'opposition' began to state that the Geneva decisions are unacceptable for them," the minister [Foreign Minister Lavrov] said. ... The Free Syrian Army (FSA), a resistance movement on the ground inside Syria, boycotted a meeting in Cairo in early July where some 250 delegates discussed an internationally backed transition plan following the Geneva summit. The armed rebels branded it a "conspiracy" and said the agenda lacked an aggressive stance.  The rebel FSA and some "independent" activists lashed out at the organizers of the two-day conference for “rejecting the idea of a foreign military intervention to save the people … and ignoring the question of buffer zones protected by the international community, humanitarian corridors, an air embargo and the arming of rebel fighters."­
 
Annan refuted claims that concessions were made to Russia and China in the resolution, stating in the interview that such reactions to the document were "unfortunate".  “The Geneva resolution was drawn up by a group of nations, 80 percent of whom are members of the Friends of Syria Group that called for the removal of Bashar al-Assad on July 6th. That is why claims by the opposition that it has been "betrayed" or "sold out" are rather odd,” he concluded.
 
http://www.rt.com/news/russia-iran-syria-annan-664/

--

 
And this is who Hillary Clinton supports?

And with such vigor and insane/irrational fervor, that she was willing a few days ago to request the entire Western world and Western allies to make Russian and China 'pay', over coming years, for not supporting this ultra aggressive and militant 'free' Syrian 'army', to effect a Damascus regime-change ... people who would love nothing more than to see the entire western-world fighting it out pointlessly, and actually wrongly, while dieing in vast numbers, in the middle-east.

Outstanding Hillary! 

 So we are seeing precisely the same pattern of rebel intransigence and demands for western bombs, as in Libya. These NATO-backed rebels refuse any suggestion of compromise to find a solution, that does not involve disembowelling the country and murdering massive numbers of Syrians -- first.   They want an aggressive stance and NATO intervention -- Period -- and clearly intend to do all they can to bring it about.

It's th same idiotic position as that taken by the 'Libyan' NATO-back ultra-destructive rebellion fiasco, that remains hopelessly unstable, and very bloody to this day, where we find genuine radical fundamentalist elements have, surprise-surprise, taken over the country.

So there'll be an on-going enduring conflict, instability and material weakness in Libya, as the ordinary people, realise things are much worse than before, and start fighting-back against the ultra-violent radicals in their midst, and of course that again provides NATO the on-going opportunity and pretext to involve themselves and to ... 'help' them ... some more.  As they will wring their hands and say "the job was not fully done", and, "we left too early", and appeal to the patent nonsense of, "If you break it, you own it".

 When NATO should never have been allowed to break anything in Libya, and now in Syria, in the first place.

 

--

 

The quintessential under-pinning nature of genuine  Fascism, is not the mere symptoms of corporate central-planned police state and war-based economy and governmental funding biases, etc.,  but the actual philosophical basis for all of that, came from the Italian "Fascisti" movement, who held the ardent political position that violence (overt, or covert) should be the first-resort of the government, to acheive the governement's policy aims and implementations.

That is what Fascism actually is.  The rest of it are just the symptoms of how they organise themselves, to go about enacting their first principle of governance.

So, Ladies and Gentlemen, I give you Hillary Clinton and Barry Obomber ... and I almost forgot, that other petty psychotic freak, in this sick global-war shadow-play preliminary -- Benjamin Netanyahu.
 

 

BTW: There used to be a wikipedia page about the Italian Fascisti moverment and also a few online research articles about it, and what the Fascisti held as their inner-core philosophy and approach to politics (i.e. warfare and unlimited physical aggression) but like so many pages that now tend to cut much too close to the bone, of current US foreign policies and actions, it is of course, no more.  So any search for the Italian Fascisti movement just directs you back to the wiki Fascism page where this core peice of information is barely alluded to at all, and the core-message of the fascisti, has been carefully woven and warped, to not mention that violence, as a first-resort, is always and forever, the purpose of the fascist state.  This is not mentioned at all ... ... hmm, wasn't there a part in George Orwell's book '1984', about this sort of thing?  Constantly re-writing and re-vision-ing the past, in order to match the desired 'past', to the needs of the war-time political lies and myths of the day?  

Maybe Orwell fore-saw a CIA-edited and constantly adjusted Wikipedia page on his visi-screen?

Tue, 07/10/2012 - 05:13 | 2601356 Hobie
Hobie's picture

Element, what war with Oceania? I've just had a look out the window and it looks fairly peaceful down here in the South Pacific.

Naturally we're at war with our politicians and banksters (which are one and the same - John Key), but who isn't these days.

Tue, 07/10/2012 - 08:31 | 2601598 Element
Element's picture

Oceania was one of the combatants in Orwell's 1984

http://www.youtube.com/watch?v=ajP_ReJj0YE&feature=player_detailpage

Mon, 07/09/2012 - 22:56 | 2600972 i-dog
i-dog's picture

When history has such a habit of rhyming -- if not outright repeating -- it is well to remember the past lessons of:

1. Napoleon being led off on a suicide mission against Russia -- after he had taken down the remaining Bourbon and Habsburg royalty of Europe (in punishment for them expelling the Jesuits/Khazars from Spain, France, Portugal and Austria-Hungary).

2. Hitler being led off on a suicide mission against Russia -- after he had taken down the protestant Prussians and eliminated and/or driven out the sephardic Jooz to herd them towards Israel (the Khazars being, for the most part, blonde-haired and blue-eyed cryptos, "missed" the cut).

Now we have Billary and Obomber doing their best to soon lead the American military into a suicide mission against Russia (and their sympathisers in the SCO)  -- after it has been used to successfully impoverish and alienate the previously independent American people (in punishment for them having parted from European feudal control in the first place).

I see a pattern emerging.....

Mon, 07/09/2012 - 23:08 | 2601005 Element
Element's picture

Interesting isn't it, that each of these heralded visionary 'leaders', turned out to be over-confident high-stakes playing inept morons, who just got 'lucky' for a bit, until they were so caught-up in their own ego-soup, that they thought they were too big to fail.

Sort of like a neo-Roman Empire ... but much, much shorter.

Tue, 07/10/2012 - 08:39 | 2601617 dizzyfingers
dizzyfingers's picture

"Interesting isn't it, that each of these heralded visionary 'leaders', turned out to be over-confident high-stakes playing inept morons, who just got 'lucky' for a bit, until they were so caught-up in their own ego-soup, that they thought they were too big to fail"

I think the TBTF analogy is getting stale. I doubt they thought that, but I would agree that lots of egotistic, narcissistic, high-stakers do believe they won't fail, and probably believe if they do they can recover. However, usually they are playing their own game for themselves. It's the ones that stand for election (congress, presidency) OR FOR APPOINTMENT TO NON-ELECTIVE HIGH OFFICE so that they can use other peoples money for self-enrichment and fulfill  their own agendae who are one of our bigger problems. How about psychological testing to weed out sociopaths, narcissists, and others whose interests are not the common  good -- in elective and appointive politics and in finance.

Look around at the so-called capital of the US and notice the sociopathic center of the universe.

Mon, 07/09/2012 - 23:27 | 2601038 i-dog
i-dog's picture

I don't think for a moment that they acted alone, or even independently.

They are selected, schooled and financed from an early age to get them into those positions of power ... then they are/were all surrounded by advisors, strategists, think tanks and intelligence services that "guide" their decisions by presenting them with the information and options that they "need to know". Today it is the CIA, Heritage, Stratfor, and others. It was the same back then. Their egos lead them to endorse "the right decision".

The overall master plan is an old ideology worked on by thousands of unknowing adherents directed from the background.

Omnes viae Romam ducunt!

Mon, 07/09/2012 - 20:58 | 2600682 max2205
max2205's picture

If the 98% had any money not getting good interest rates, we'd get rid of the fed. But they don't so Ben Ben can masturbate interest rates forever now.

Mon, 07/09/2012 - 20:47 | 2600661 eatthebanksters
eatthebanksters's picture

When are the sheeple going to wake up and realize they are getting fucked?  When to the heads start to roll?  Not soon enough in my mind.  I worry that if Barry wins re-election that this country will break out in civil war.

Mon, 07/09/2012 - 20:42 | 2600643 rsnoble
rsnoble's picture

Can't Jesus Christ just come down in a bolt of lightning and vaporize these motherfuckers?

Mon, 07/09/2012 - 22:35 | 2600925 AurorusBorealus
AurorusBorealus's picture

It may be that men are soon to meet their God, and He will not be happy with them.

Mon, 07/09/2012 - 20:00 | 2600505 vast-dom
vast-dom's picture

The Fed is both a colossal aberration of homeostatic markets more at utter perversion, and a total failure. Not to mention ILLEGAL in what they do, which is so much worse than LIBOR could ever be. 

 

*you can claim that the fed saved the financial system back in 08/09, but i say they delayed and staggered something far worse precisely due to their ill-conceived and unconstitutional un-free market meddling. the invisible dying hand is rotting and even if it couldn't be seen it surely reeks.

Mon, 07/09/2012 - 19:53 | 2600496 Miles Kendig
Miles Kendig's picture

George, it's designed to work this way.  All of the regulatory and legal framework is just a facade.

Mon, 07/09/2012 - 23:15 | 2601029 New_Meat
New_Meat's picture

Miles, post WWII, like coming out of the '46 recession that finally ended the Great Depression, the Fed started doing the interest rate thingie to get out of the 1:1 Debt:GDP situation.  It more or less worked back when.

I'm convinced that Ben has the hubris to think that this will work again.

But I doubt it will work.

- Ned

Mon, 07/09/2012 - 23:58 | 2601106 Miles Kendig
Miles Kendig's picture

This very policy seems to mock "natural" equilibrium, just as perfected information doesn't equate to "perfect" information, and so on.....

Regards-

Tue, 07/10/2012 - 00:16 | 2601128 New_Meat
New_Meat's picture

mock? rather nay,  and i'm with you on the "market exposes all information... meme.

- Ned

Mon, 07/09/2012 - 19:49 | 2600488 catch edge ghost
catch edge ghost's picture

But the NYT said I probably realized a net gain from LIBOR being rigged lower. Control Fraud and crimes are okey-dokey so long as they help me, erm, The Poor (tm).

So that must mean when The Fed does it, it's helping me, gah, The Poor (tm), a whole lot more even! 

Mon, 07/09/2012 - 19:48 | 2600479 Snakeeyes
Snakeeyes's picture

The Central Banks (re: The Fed) are expert at manipulating interest rates, particularly on the short end.

The banks have to lend to generate velocity. And they can't do iit!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

http://confoundedinterest.wordpress.com/2012/07/09/consumer-credit-rises-but-is-it-enough-to-spur-growth-velocities-and-labor-market-still-lousy/

Mon, 07/09/2012 - 19:39 | 2600449 rocker
rocker's picture

I like the title of this post.  What are they really trying to distract us from.

Are the banks insolvnet?  Are the banks getting credit for bad assets? 

Mon, 07/09/2012 - 19:39 | 2600448 dolph9
dolph9's picture

The Fed has been manipulating interest rates down since 1981.

You were born a debt slave, and, unless this system collapses while you still live, you will die a debt slave.

Mon, 07/09/2012 - 21:15 | 2600716 world_debt_slave
world_debt_slave's picture

thus, I'm a world_debt_slave

Mon, 07/09/2012 - 22:43 | 2600943 Duke of Con Dao
Duke of Con Dao's picture

YouTube - Squirm Worm, Squirm! Chairman Paul Tucker roasted by Parliament Inquiry over LIBOR Manipulations

watch Paul Tucker eat a shit sandwich when faced with undeniable guilt.  

time for talk is over, let's hang the bastards! 

Tue, 07/10/2012 - 00:15 | 2601131 CompassionateFascist
CompassionateFascist's picture

Watch paint dry. Watch grass grow. Watch nothing happen. It's all the same gang of kosher mafiosi banksters and shabbatz goy pols chasing each other around in circles, putting on a show, just as banks and "sovereigns" pass the ever-growing debt grenades back and forth, back and forth. Soon enough enough one or more grenades will hit the floor and explode, and the show will end with extreme violence. Invest in lead.   

Do NOT follow this link or you will be banned from the site!