• Geithner's Waterloo?

When Tim Geithner became Treasury Secretary he was appointed even though he had skipped on taxes and paid $42,702 to make up his omission. He pretended at the time that this failure to pay taxes owed for a number of years had simply been an oversight. Anyone really paying attention at the time, and applying reasonable judgment, was astonished. The Former head of the New York Fed was being placed into the control seat of the Nation’s Treasury.

Not a single taxpayer in the Nation who trudges through the annual process of filing income taxes believed Geithner’s excuses on this egregious wrong doing. The MSM however slobbered all over itself protecting Obama’s nominee, pretending that when someone so busy and so smart is working so selflessly for his country, he can forget to pay his taxes. That was a lie. Average wage earners, millionaires and billionaires do not forget to pay their taxes - minimize them as much as they can, but they don’t forget.

From your very first job you knew, we all knew, to pay income taxes owed. We are all intimately familiar with that annual date with destiny - tax time. Still, Geithner was given a pass. We don’t need to get into the details here of the additional distaste his judgment left us with when we discovered he had hired of an undocumented housekeeper.

Was this a telltale? Yes it was - look to what someone did yesterday, and you’ll know what he or she will do tomorrow. It’s called listening. It’s called paying attention. It’s called basic human common sense. We find ourselves with an MSM void such competence, and too broad a sector of the electorate willing to forego such proficiency.

We skip forward to this week’s Congressional hearings, and witness our same Tax avoiding Treasury Secretary, the very same person who pushed for the bailout of AIG, slipping on a pair of Gretzky skates, racing circles around the rink, and slapping pucks at the foreheads of the questioning House Financial Services Committee. Gretzky would have been envious. How dare a bunch of Representatives ask impudent questions of Geithner about something so complex as Libor?

So we were entertained. Geithner admitted knowing that the Libor rate was vulnerable to exploitation - this was at least six years ago. He knew it was being manipulated and did some speed-skating. "That was the best alternative available at the time, and you can't say now with confidence that that choice in any way disadvantaged the American taxpayer," Geithner said. It gives you a genuinely balmy feeling, doesn’t it, knowing the astute mind of Geithner is looking after your interests? No? How about this then, “I think it's quite unlikely, but we're going to take a careful look at that." When? After November? After all, Geithner was only head of the New York Fed when he discovered this monstrosity.

If that is not enough to summon your favour, it gets better, “and we felt, and I still believe this, that it was really going to be on the UK to take responsibility.” Geithner basically said, “it wasn’t my job.” Keep in mind that JP Morgan, Citigroup, and B of A, participate in the daily Libor interest rate setting. Oh, and the first two are supervised by the New York Fed. But, hey, “it’s not my job.”

The Representative asking if Geithner was aware of wrongdoing, was met with a, "We don't know that. But I think that is a question you need torefer to the enforcement agencies." Again, when? When will this fraud be taken seriously and be arduously investigated? When another Attorney General replaces Holder?

Should taxpayers care?Aside from the fact that almost everything you spend money on is affected inone way or another by the Libor rate, it also happens that the Libor rate was used for the $182 billion bailout of AIG and the trillion dollar emergency Term-AssetBacked Securities Loan Facility program. Geithner said it "was the best alternative available at the time." He knew the Libor interest rate was being manipulated, but this genius now claims there was nothing better. Why? Because he was winking and nodding? In response, a committee member used the phrase, “someone dropped the ball,” so as to not offend Geithner's ego and sensitivities. Dropped the ball?

Dropping the ball is forgetting the sandwiches on your picnic. Dropping the ball cannot and should not refer to defrauding the taxpayers of billions of dollars through interest rate “fixing.” Dropping the ball cannot and should not refer to defrauding the borrowers around the world of billions of dollars through conspiring on the fixing of interest rates. Because he knows no one will really investigate the Too Big To Analyze theft, Geithner sanctimoniously hides behind the shield, "We don't know at this point what impact that behaviour had [in moving] the rate up or down for investors or borrowers.” Well, that settles it then. No one will do any due diligence, and no one will renegotiate interest rates on any of the billions used inbailouts and backed by the Nation’s taxpayers.

There remains the remote possibility that the man who fought against the notion of breaking up the largest banks, today thinks the bankers looked after the best interests of taxpayers. Well, that is until we recall that we already knew what he was. We learned that before he was officially appointed, and it was before that that he knew of the Libor dishonesty.

We can be confident that Geithner is watching attentively as Paul Tucker, the Deputy Governor of the Bank of England, gets grilled in the UK by the Treasury Select Committee overthe Libor rate scandal. Tucker will inevitably invoke “market confidence” as being the overwhelming concern at the time, but if he’s asked of his discussions with the likes of Geithner, he may have to slip on some Gretzkys.

Truth emanating from mouths of those who initiate fabrications with such ease will be hard to come by. How about not placing individuals in positions of power who in the past have had such difficulty with truth? We already know what they will do.

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• Obama Cannot Explain This:

Twenty four centuries ago Socrates argued that the greatest of evils and the only evil worse than doing wrong was getting away with it. Since we experienced the economic near-collapse four years ago, we have also witnessed complete and utter failure in the administration of justice. Senior levels of the Department of Justice, of the banking industry, of the political system, are all “getting away with it.”

Is there any chance that Covington and Burling, the firm which represents JP Morgan, Goldman Sachs, Morgan Stanley, B. Of A., Wells Fargo, etc., and spawned AG Eric Holder and AAG Lanny Breuer, might be receiving disdain and a wagging finger from Socrates looking down from wherever he now sits and observes? Where have ethics gone?

We were recently provided with results of research which claimed that of five hundred financial sector senior executives in the US and the UK, 24% said unethical or illegal conduct was necessary, 26% said they had firsthand knowledge of wrongdoing, and 30% said their compensation pressured them to violate their ethical standards or violate laws. What a surprise, we thought. How could that be? Even the talking heads pretended to be flummoxed. Here’s another one to stupefy the public: 26% of the respondents in this survey said they had firsthand knowledge of wrongdoing. I don’t believe it. Any of it. Actually, it’s not that it’s not believable, because this is not an opinion arrived at through analysis - it is that this is simply not true. Such low percentages would fly in the face of common sense and human nature, . . .  oh, and observation.

These percentages are likely off from reality by 100%. No one with any faint familiarity of the Street reading these fictional statistics would have difficulty, if applying objectivity and assessment that driven by motivations such as self preservation, a vast majority would throw ethics aside in favour of bonuses and prolonged career well-being.

Anyone who has hovered around the Wall Street crowds knows, for example, that insider trading is “de rigueur.” There are laws which traders heed, such as, “don’t you dare make a trade for the house without inside information or some knowledge.” But we will continue to hear otherwise, and occasionally be spectators to a very public destruction of a sacrificial lamb.

HSBC Holdings this past week made news when it became the subject of allegations that it conducted money-laundering for drug lords, dictators, and thieves, operating in places from Mexico to Saudi Arabia. It didn’t help that the bank provided terrorists with access to U.S. Dollars and the U.S. Financial system. Why does this bank still have anyone holding an account after news like this? Why isn’t the executive suite and the Board of Directors flushed? Oh, of course, a resignation or two, like David Bagley, the head of HSBC compliance, and all is forgiven. No harm done.

When we watch a Congressional committee pretend to question Jamie Dimon, the head of JP Morgan, we know the sparring will not be a public admonishment, or even a censure. JP Morgan turned $5 billion into noxious vapors, and Dimon faces Congressmen and eats their lunch, or as Daniel Day Lewis might say, “Drinks their milkshake.” He is evidently smarter than anyone who faced him from the bench, and his arrogance intimidated them. Congressmen will not get truth from Dimon or any of the guys controlling the money joystick. What they seem not to know, is that Arrogance is rooted in Insecurity. Don’t back off, go get him.

Are we not amazed when we observe Ben Bernanke in front of the Senate Banking Committee telling them nothing, and being asked nothing? It’s a thing of beauty. Deer-in-the-headlights would look more effective from behind the bench. When Bernanke makes profound statements like, “The most effective way that the Congress could help to support the economy right now would be to work to address the nation’s fiscal challenges in a way that takes into account both the need for long-run sustainability and the fragility of the recovery,” followed by the unequivocal, desk pounding, and seizure causing, “We will evaluate our options going forward,” . . . and the Senators sit numb and clueless, but struggle to appear plugged-in. We shake our heads in disbelief at the dearth of political leadership. We then cross our fingers and turn to Justice and the system that should be getting answers and marching fraudsters unceremoniously to a tiny room. We hear nothing. Silence.

Trillions have been created to bailout financial institutions, governments, and a few too many companies. We have become numbed to the term “bailout.” Who controlled the bailouts? The very individuals who control the printing presses which you most fear, or should fear. Those very same presses which have decimated the purchasing power of your money over the past fifty years while moving economic controls beyond power of governments. It did not help to frame our confidence when we learned at least 18 former and current directors sitting on Boards of Federal Reserve Banks handed their own banks and companies over $4 Trillion in low-interest loans from the Federal Reserve. GE received $16 billion from The Fed, but does anyone in position to do something about it care that GE CEO Jeffrey Immelt was a New York Fed Board Member?

Jamie Dimon trumps Immelt, however, with JP Morgan getting $391 billion of the $4 trillion in emergency Fed funds. The amounts are insane, and of course, so are the bonuses these guys paid themselves. Their own Boards would never argue with them. That isn’t how the system works. It is not surprising that a Dimon walks into Congress and treats it as an annoyance. A gnat on his arm would get more respect. He doesn’t even approach Congress with contempt, he regards it as a bad joke. Conflict of interest? Abuse of power? No one asks. Guys like Dimon make Putin look like a kleptocratic piker.

Forbes magazine digs into its humour drawer and comes up with, “If Jamie Dimon had been on the Titanic, he’d have jumped in a lifeboat … and then issued a press release describing his heroism.” What jokes will Forbes come up with when the full extent of the Libor scandal finds daylight? Manipulating interest rates sounds uninteresting, compared to oil price manipulations. Uninteresting, unappetizing and tedious, until you discover that up to $800 Trillion in financial products depend on the Libor rate. No one knows the extent of the fraud. While you toil at your job, or trudge through the want ads looking for one, think of what shaving a few points here and there off $800,000,000,000,000 might mean as it bounces at the speed of electrons around the world.

And yet, from the well connected and well-paid heads of the DOJ, not a squeak. Still silence. Ssshhhh. There are no consequences. There can be no repercussions. The pretence for this inaction revolves around the supposed “complexities” of the financial sector where many heads should be rolling. The books are too big to understand, too big to analyze, too big for a forensic audit, and, well, . . . just too darned complicated to find guilt. Who believes this insanity? If any of the senior politicians who led the social/economic experiment which brought us the financial implosion, and a few senior bankers who took advantage of the abuse possibilities were even charged, not even convicted but just charged, there might be a chance at clarity going forward.

We hear nothing but misrepresentations from our genius experts and the media on the state of the National and global economies. The top of the food-chain on these misrepresentations, and those in the MSM feeding us the distortions without intelligent analysis, are anesthetizing the majority of taxpayers into paralysis.

So back to Socrates and consequences. Where is the most senior cop in America in all this? Where is his boss? Nowhere. With induced condoning from the AG and his needy leader, a lazy and uninformed MSM, and an inept Congress, the “they” whom we are intimately familiar with, are all “getting away with it.” Narcissism must be a contagious disease. Ethics or integrity anyone? Anyone? As Socrates claimed, getting away with it is the worst of evils.

Therein lies the product of Leadership Missing in Action.

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• The Challenge Being Drowned Out By Noise

As we watch the battle for the Presidency get thrown into the gutter by a President unable to lead the Nation out of its disastrous stagnation, no serious action from Washington will be applied to the national debt, the deficit, or the international banking system heading for a major crash.

For well over one generation, America’s and the world’s middle class has been primed and pumped by financial institutions to borrow. The majority was persuaded to incur debt because debt was good. Debt fed the system and placed you in a home. Debt filled that home with appliances and furniture suitable to your preference and taste. Debt placed you in an automobile, and placed you in a boat. Debt had to be good. Wasn’t it the capitalist way? Wasn’t this the road to economic growth? The banks said so.

No. Absolutely not. This level of debt is not the capitalist way. It is not the road to economic growth. It is not the path to economic independence and sovereignty. Some debt can be stimulative to growth. The out-of-control debt we are now saddled with, is not. It has been a deceptive illusion. It has been a beguiling fraud.  Savings? What savings? This beautifully executed but virulent elevation of debt to the dizzying heights of the economic firmament by banks has harmed savers and pushed them into risky and treacherous waters - right into the arms of brokerages which were also owned by the banks.

Load yourself up with debt - you can afford it. You have nothing to worry about, we’ll keep the interest rates low. Your dollar or pound or franc is dropping in value, and your earning power is sliding, but you won’t notice, because as far as you’re concerned, you’re doing fine. The new home you think you own tells you so, and aren’t you on your way to purchase the latest flat-screen-digital TV?

The mindset on main street toward personal debt, affected and infected the attitude toward debt in government. For too many years our politicians at all levels accepted the mantra - “what magic this debt business is, I can buy votes and support wherever and whenever I need them.”

Bankers didn’t care who was in office or what ideology they promoted. They still don’t. Couldn’t care less. The higher the office being sought, the more money the campaign needs. Who’s the weaker person running? Who has no understanding of anything remotely related to anything economic? Who understands nothing of the the critical elements governing finance, business and money? That’s what they really concerned themselves with. The weaker the politician, and the more ignorant, the better for bankers, particularly as it came to the most important office in the land. Ideology be damned. Why?

Bankers may appear to be based in New York or London or Zurich. Not true. Their game has no borders, and they control a licensed cartel. The best part of the monster they have created is that their frauds hold no consequences. Keep in mind, these bankers control debts worth Hundreds of Trillions of Dollars - not billions, trillions.

We are fast moving in the middle of a hurricane propelling us toward a world fiscal authority with no borders. Europe is the initial maelstrom where complete integration and absolute loss of national sovereignty will be effectively and surreptitiously implemented, with North America to follow, and the seduction of king dollar used as the convincing bait.

Loss of sovereignty will mean that someone not of your choosing or election, will dictate how you conduct yourself. Greeks have been maligned by all banks, central and national, and by the MSM parroting their message. What? Greece borrowed too much? Really? Borrowing like a marriage, takes at least two parties agreeing to the financial transaction. Bankers knew what they were doing better than did their prey. They were running hell-bent-for-leather to convert as many countries as possible into overwhelmed debtor nations. Already the same is being written of Spain, Italy, France, and other Eurozone countries - structural concerns, worsening deficits etc. And England? It’s economy has become principally dependent on banking. England is a lost cause and it will push to strengthen whatever demands satisfy bankers, particularly central bankers. Don't misconstrue my intent here. I don't aim to defend borrowers, but point to the long term objective of those bankers whose thumbs control the joystick.

Mariano Rajoy, the Spanish Prime Minister, recently said “The European Union needs to reinforce its architecture. This entails moving towards more integration, transferring more sovereignty, especially in the fiscal field. And this means a compromise to create a new European fiscal authority which would guide the fiscal policy in the eurozone, harmonize the fiscal policy of member states and enable a centralized control of finances.” He is simply voicing the attitude and inclination of more powerful insiders who control the most critical strings of all.

The European Commission makes its demands and countries cower in fear. Just imagine a banker from somewhere in the netherlands levitating in the middle of the Atlantic, telling America, “your austerity measures aren’t enough and we don’t care that you have over 20% unemployment.” And yet, unfortunately, the trend is heading us in that direction.

Amidst all this uncertainty which everyone hopes someone else understands and will do something about, we have Ben Bernanke announcing a non-announcement that he might unleash QE3 on America. On that vacuous expectation we will see the markets buoyed, possibly with Greenspan type “irrational exuberance.” What might come as a mid-term follow-on might just be a market implosion worse than we witnessed four years ago. This time, the shorts won’t be there to provide a floor and support. The big shorts have been scared and expunged right out of the system by such measures as government intervention on cave-ins which we have come to know and puzzle about, and named, “bailouts.” Uncertainty is dangerous.

The world’s debt crisis is looming as America faces what may well prove to be the most significant Presidential election in generations. America must elect an individual who has understood economics, business, trade and entrepreneurialism. America must elect someone not from the Wall Street and not a banker, but someone who understands them because they will have to be brought to heel and punished for their frauds. A different relationship to fiat money will have to be considered. Above all other considerations, America must bring creative energies to putting its workforce back to work. America is offered in Mitt Romney the only candidate who has a chance of filling the Oval Office with such capacities.

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Steve Paul Jobs, Thank You

Steve,

You have directly affected the consciousness of hundred of millions around the world through your uncommon grasp of the most critical elements guiding the human interaction with technology.

You opened new paths in aesthetics, transforming mundane technologies into design marvels which each of us absolutely had to take home.

You set standards of quality and reliability that all others could only strive to emulate, but never imitate.

You established a standard for every executive running a large corporation, completely ignoring the corrupting siren songs of Wall Street brokerages. You couldn’t be bought. That maintenance of independence enabled a clarity of thinking and an unadulterated direction of America’s greatest company.

It was a pleasure to have participated in those earliest days of the ride.

All best wishes as you continue your voyage of discovery.

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• Canada’s Welcome Mat To Crime

As Canadian taxpayers contemplate personal debt ceilings, increasing costs of living, increasing taxes, and regressing net incomes, they are being failed by a broken judicial system and police forces who are no longer empowered or willing to act in their defense and protection.

Grasping for the good life, the average Canadian family has enshrouded itself with over $100,000 of debt, which represents a debt-to-income ratio of 150%. Admitting it is difficult, and discussing it in detail brings certain shades of shame, but the stress is undeniable. That stress has consequences. One of them is the blindness it brings to the breakdown occurring in the broader society. That blindness seems like complacency, however, when you’re overburdened with the challenge of feeding your family month to month, keeping up with what your own government is or is not doing, rarely makes your priority list.

While Canadian taxpayers were averting their attention throughout the past generation, their streets became littered with crime. Whether you visit Vancouver, Toronto, or Edmonton, on almost every street corner you cannot miss the drug pushers. The drug industry has a hierarchy that is unmistakeable, from the kid with the hoody and the backpack pretending to be waiting for a bus, to the low level distributor running low riding foreign subcompacts, to the black Chrysler 300s, to the Black Cadillac Escalades with $5,000 wheels, and all with necessary and prescribed blacked out windows, the drug industry command food chain is obvious. Obvious to all, but the judicial system.

Generally, there is the pernicious attitude that, “As long it doesn’t affect me, I don’t care.” Along come the gang wars, with high caliber, automatic weapons blaring, and spraying SUVs with bullets. The latest one on sunny Sunday afternoon in front of the high-end Delta Grand Hotel on the Kelowna, BC, waterfront. Temporarily, or for a few days at best, attitudes change then go back to, “As long it doesn’t affect me, I don’t care.”

Unfortunately, we don’t care, and neither do the police, the lawyers, the judges, or the liberal minds of the legislators who evolved Canada’s judicial system, laws and sentencing guidelines.

To keep the populace quiet, the suggestion promulgated by the media is that this particular shooting, for example, was a “targeted hit.” What a classy, diverting phrase this is. Oh, well, that makes it OK, “It's just criminals killing one another, which does not concern me.” Of course, the fact that a salon was also peppered with bullets from the automatic assault weapon didn’t quite make the front pages. And still, we don’t care.

The police departments have for years rationalized their lack of aggressive effort against the proliferation of criminals and criminality, by whining that their efforts are a waste of time since the courts let the criminals go when the criminals are brought in, . . . so what’s the point? The Court system in Canada is so lax that a murderer, Sasan Ansari, can kill Josh Goos at the Hoolyburn Country Club in West Vancouver, to whom he owes $100,000, by stabbing him 30 times with video evidence, and he gets two and half years for the crime.

Canadian taxpayers believe that their judicial system contains Sentencing Guidelines because their judges tell them so. That is an outright lie. Guidelines are virtually non existent because judges’ egos will not succumb to being instructed or told what to do. They also use the rationalization that each crime is committed in a different context from the previous one. Excuses are simply, that, excuses. There should be tight guidelines and regulations for crimes, rather than loose, very loose, recommendations.

There should also be a legislated shift away from the broken liberal belief that all criminals can be rehabilitated. This is one Trudeau legacy that must be put to rest conclusively. The politically correct attitude that people change and can be “improved,” may be occasionally true, but is not the rule. It is devastating the streets of Canada to backwaters where all doors are locked.

For two decades now, the British Columbia joke is that marijuana is the biggest industry in the Province. In truth, the immigration business is bigger, but drugs have become a major multi billion dollar industry that is enormous by any comparative measure.

It’s time the courts quit hiding behind the veil of poor guidelines, and the police quit hiding behind the poor record of Canadian courts. If the trend continues, Canada’s civil society will disintegrate to unrecognizable degradation which its children and grandchildren will regret.

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