Obama Hand Seen in Justice Department Ending Criminal Probe of AIG Executives

May 24, 2010 (LPAC)—Responding to news that the Justice Department has dropped its criminal probe of two AIG executives, Lyndon LaRouche commented yesterday that extraordinary pressure must have been exerted on the Attorney General for him to have taken such a step, and that it was undoubtedly Obama himself, along with sidekick Timothy Geithner, who put the screws on the DOJ.

After all, when Obama held his press conference to crow about the passage of the cloture motion on the "finance reform" May 20, he led off by saying, "Our goal is not to punish the banks...."

LPAC will be investigating this matter further.

The Justice Department probe had focussed on Joseph Cassano, the chief executive of AIG's London-based Financial Products unit, and his deputy, Andrew Forster. The case against them has now been dropped, without charges having been filed, although the Securities and Exchange Commission (SEC) could file a civil fraud lawsuit against them for securities violations.

The FBI and other government agencies had been investigating whether Cassano and his deputy knowingly misled investors about AIG's accounting losses on its credit default swaps portfolio. In December 2007, Cassano told investors that the company's obligations on its mortgage-backed securities were unlikely to produce losses. In the year that followed, AIG took write-downs of more than $40 billion on the swaps, and was forced to put up billions more in collateral to counterparties like Goldman Sachs.

The New York Federal Reserve, together with the U.S. Treasury, ultimately bailed out AIG to the tune of $180 billion.

Afhenti lista yfir heróínbaróna. NATO í Afghanistan !

Viktor Ivanov, yfirmaður fíkniefnadeildar lögreglunnar í Rússlandi, þingaði með Gil Kerlikowske, bandarískum starfsbróður sínum, í Moskvu í gær, og afhenti honum lista yfir níu umsvifamestu heróínbaróna Afganistans og lýðveldanna í Mið-Asíu. Ivanov bætti við að ráðamenn í Rússlandi væru reiðubúnir að draga þessa menn fyrir rétt, fengjust þeir framseldir. Ivanov segist áður hafa látið Bandaríkjastjórn í té upplýsingar um 25 menn í Afganistan sem fáist við heróínviðskipti, og bent henni á 175 staði þar sem fíkniefni séu unnin úr ópíumvalmúa í landinu, en ekkert hafi verið gert.
Ivanov segir að 95 prósent af heróíni á heimsmarkaði komi frá Afganistan, nú sé framleitt helmingi meira heróín í landinu en í öllum heiminum fyrir áratug.

Í mars hafnaði Atlantshafsbandalagið kröfu Rússa um að hersveitir þess í Afganistan tortímdu valmúaekrum bænda, en þaðan kemur ópíum sem heróín er unnið úr, og báru því við að margir bændur hefðu ekki aðrar tekjur en af þessari afurð. Eyðing valmúans yrði vatn á myllu Talíbana. Stjórnvöldum í Moskvu finnst þessi röksemd léttvæg.

Hálf þriðja milljón Rússa er háð fíkniefnum, flestir neyta heróíns. Ivanov segir landa sína neyta 35 tonna af efninu ár hvert. Árlega dregur heróín 30 þúsund Rússa til dauða og 80 þúsund manns neyta þess í fyrsta sinn. Ivanov segir fimmtung heróíns, og annarra ópíuefna í heiminum, ganga kaupum og sölum í Rússlandi, en söluandvirðið nemur jafnvirði um 1.700 milljarða króna á ári.

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After Glass-Steagall Sabotage, Obama Must Be Impeached Now!

May 23, 2010 (LPAC)—On Monday, May 17, President Barack Obama met with Rahm Emanuel, and was informed by his chief of staff that a number of Democratic U.S. Senators were still insisting on the inclusion of the Glass-Steagall amendment and the restrictions on derivatives in the Dodd financial reform bill. Emanuel had been engaged in round-the-clock negotiations, over the weekend, with a group of Senators, attempting to cajole, bribe and threaten them into dropping their amendments, and letting the Dodd bill go to a final vote, unchanged. In characteristic Nero fashion, the President went absolutely berserk, and demanded that all such Senate insubordination be crushed immediately. He demanded that the Dodd bill be passed, as-is, by Thursday, May 20.

Over the course of the next 72 hours, on Obama's orders, Emanuel, Larry Summers, Majority Leader Harry Reid, and Sen. Chris Dodd used every dirty trick in the book, to kill the Cantwell-McCain amendment, and the Lincoln-Cantwell amendment, which sought to reverse Dodd's sabotage rewrite of the anti-derivatives measure already in the bill. The White House even crushed the Levin-Merkley amendment, that would have incorporated the so-called Volcker Rule, limiting certain activities by commercial banks—demonstrating that Obama's professed public support for the Volcker reforms were themselves pure lies.

While other factors were clearly at play, including a desperate Wall Street and City of London drive to kill every effort to strengthen the final bill, none of those factors mitigate against President Obama's own, personal role in virtually guaranteeing the total destruction of the United States in the immediate weeks and months ahead. He is accountable for his own actions, in killing off—for the moment—the restoration of Glass-Steagall and the banning of derivatives, the only two actions that could, at this late date, save the United States economy from a total collapse. Obama's deeds well surpass the "high crimes and misdemeanors" standard for impeachment.

Polling data from the immediate 24-hour period following the Senate's shameful Thursday night vote for the Dodd bill, without taking up the Cantwell-McCain amendment, the Cantwell-Lincoln derivatives language, or even the Levin-Merkley "Volcker Rule," revealed that the overwhelming majority of Americans saw through the President's lies and realized that the bill was a complete piece of filth. Democratic voters who participated in the poll said they were sick and tired of the fake rhetoric and the lecturing. The across-the-board repudiation of the Dodd bill, and the posturing by the Senate leadership, and particularly the President, clearly registered among some of the President's top White House aides. Reportedly, Rahm Emanuel contacted Rep. Barney Frank, who was crowing in public about how he and Sen. Dodd were going to ram through the final House-Senate version of the bill by the Fourth of July, and ordered him, in his typical expletive-laden language to shut his mouth.

Lyndon LaRouche said today that "the American people are in a total rage against the Congress and against President Obama. Face it: Obama is the problem. Time for his impeachment is over-ripe. The honeymoon is over—and it was lousy."

MEP Muscardini Files a Glass-Steagall Resolution in European Parliament

May 22, 2010 (LPAC)—On May 17, Cristiana Muscardini, Deputy Chairman of the International Trade Committee in the European Parliament, filed a resolution to be voted on in the European Parliament. The resolution is entitled "On the Advisability of Re-Establishing the Principles of the 'Glass-Steagall Act' in the New Rules To Be Defined To Overcome the Systemic Financial Crisis." It reads:

"The European Parliament, considering the various meetings of the Ecofin and Eurozone member countries to confront the crisis of the euro, which since January has lost 14% of its value with respect to the U.S. dollar, considering the previous resolutions on the financial crisis and the need to define new rules to avoid the growth of speculative bubbles,

"A. Considering the function played in the U.S.A. in 1933 by the 'Glass-Steagall Act,' which in the midst of the 'Great Depression' protected banking deposits from speculation;

"B. Considering the amendment filed in the U.S. Senate last May 6 by Democratic Sen. Maria Cantwell and Republican Sen. John McCain, as an amendment to President Obama's financial reform introduced by Sen. Chris Dodd, modeled after the Glass-Steagall legislation that separated commercial banks from investment banks, preventing the latter from using taxpayer money;

"C. Considering the inadvisability of bailing out bankrupt banking operations with taxpayer money;

"Invites the Council and the Commission

"1. To consider the advisability of referring to the principles of the 'Glass-Steagall Act' in defining new rules to overcome the systemic financial crisis;

"2. To propose initiatives to reduce the excessive expansion of virtual money and to favor actions aimed at fostering investment for development, the only type of investment that produces real wealth and that can actually contribute to reducing debt."

Austria and Belgium May Follow Germany Soon, in Banning Short Sales

May 22, 2010 (LPAC)—The spreading European policy chaos was evidenced once again by the stonewalling which Germany's Finance Minister Wolfgang Schaeuble ran up against in Brussels, when presenting his nine-point financial reform plan, which apparently was rejected mainly because it was a proposal coming from a country that has unilaterally decreed a ban on short sales. But that will backfire, because it will enrage the Germans even more, so that more of such unilateral decisions are possible and likely.

The German ban on short sales will, however, most likely be joined by similar steps of the governments of Austria and Belgium, and maybe also by the Netherlands—after the early elections there at the beginning of June. Some insiders have been assessing these developments as first signs of a kind of "d-mark bloc" forming inside the eroding system of the euro, since it is countries that earlier grouped around Germany at the time the d-mark still was the German hard currency. The Czech Republic and Switzerland are said to orient towards the same direction.

Meanwhile, rebellious momentum is building up in Germany also, in reaction to the scandalous majority vote in the Bundestag, the national parliament, on Friday, in favor of the EU's new super-bailout fund of EU750 billion. First of all, Chancellor Angela Merkel's government coalition lost 20 votes from their own ranks, which normally count 322 votes in the Bundestag, so that only with some votes from the opposition Greens, could the required minimum majority of 312 be exceeded by meager 7 votes, thereby passing the bailout with 319 votes. That vote has already prompted two legal complaints at the Constitutional Court: one by Christian Social Union Bundestag member Peter Gauweiler, the other by Prof. Joachim Starbatty—both of whom were plaintiffs in the case against the Lisbon Treaty a year ago.

And the rebellion is on also on the European Parliament level, where Cristiana Muscardini, deputy chair of the EP International Trade Committee, has drafted a resolution demanding a European complement to Glass-Steagall, for which she is certain to collect enough supporting signatures to table it for a formal EP vote. And—not surprisingly: the BueSo, and the LaRouche movement, is in the middle of things, on all of these fronts.

White House Caught Lying Again

May 22, 2010 (LPAC)—On May 18, EIR correspondent Bill Jones raised the question of White House support for Glass-Steagall to Obama Press Secretary Robert Gibbs at the daily White House press briefing. A destabilized Gibbs replied that he had nothing on it. The dean of the Washington Press corps, Helen Thomas, then followed up EIR's question, asking whether Gibbs' silence was related to the swarm of bankers around town. Gibbs tried to defend himself behind the Dodd bill.

Yesterday, another reporter from the White House press corps again raised Glass-Steagall, in the absence of EIR's Bill Jones, in the following colloquy:

QUESTION: "Okay, the Glass-Steagall amendment, you were going to...

GIBBS: "Glass-Steagall is—the Administration strongly believes that the Volcker rule that limits the size and the scope of banks fully addresses what needs to happen in that area of financial reform.

QUESTION: "So you don't need to re-impose Glass-Steagall because the Volcker rule will take care of it?

GIBBS: "Yes."

But Gibbs got one small detail wrong: When Obama used a subterfuge to prevent the Senate from voting on the Merkley-Levin amendment, written with Volcker, it stuck the stiletto into poor old Paul Volcker and his "rule."

.The Senate Swapped Protecting the People for Protecting Derivatives Traders

May 21, 2010 (LPAC)—Sen. Maria Cantwell, the sponsor, with Sen. John McCain, of the amendment to restore the 1933 Glass-Steagall Act, was organizing Republican Sen. Richard Shelby and Saxby Chambliss to support the bill yesterday, and specifically, to add language making swaps dealers legally liable if they didn’t “clear” trades on a legally recognized clearinghouse, when a messenger from “Old Hob” intervened.

The International Swaps Dealer Association protested that such language would open the floodgates to litigation. With this pronouncement from the deep, the language was dropped, a source close to Cantwell told Newsweek.

As the Financial Reform bill currently stands, nothing states that a swap which does not comply with the statute is illegal; and in fact, the bill actually says the swap cannot be voided. There is no legal consequence for counterparties who enter into uncleared swaps even after a finding by the Commodity Futures Trading Commission or the SEC that the swaps must be cleared. Spokesmen for Shelby and Chambliss refused to comment.

The source says that in Sen. Cantwell’s view, “The bill is a joke. The clearing of derivatives and exchange trading is the heart of the whole bill.”

The Congressional Baby Still Needs to Be Changed!

May 21, 2010 (LPAC)--After the U.S. Senate, late on Thursday night, passed the Dudd bill on financial regulation, Lyndon LaRouche immediately dubbed it "the best bill dirty money could buy." The bill, minus the Glass-Steagall amendment, and stripped of any enforcement of derivatives, is a total piece of garbage, bought and paid for by the derivatives industry and by the Vault, the combine of Boston banks that represent the last living embodiment of the British East India Company. And everything being said about the bill by Obama, in particular, is nothing but a pack of lies.

President Obama showed, once again, that he is an idiot and a traitor to the United States. And with but a few exceptions, the Members of the U.S. Congress, especially the U.S. Senate, showed that they are absolute cowards.

The American people are about to repudiate the U.S. Senate, once they realize the travesty that was just carried out. The disgust of the American voters is now going to be totally aroused. We already saw, with the outcome of the primary elections on Tuesday, May 18, that the American people are in a state of total revolt against the leadership of both the Democratic and Republican parties. President Obama campaigned heavily for Senator Arlen Specter, to the point of trying to bribe Rep. Joe Sestak with a top Administration post, if he would drop out of the race. Voters rejected Obama, even more than they rejected Sen. Specter. In Kentucky, Mitch McConnell's handpicked candidate for the open U.S. Senate seat was clobbered by Rand Paul, in another brutal repudiation of the powers that be, in Washington.

Lyndon LaRouche commented on the week's events: "Nothing is more disgusting to the American people than President Obama—except the U.S. Congress."

Now is not the time for pissing and moaning. The fundamental reality is that the world is headed, immediately, for a plunge into a new, very dark, dark age, unless we force the Congress to reinstate Glass-Steagall, as the Cantwell-McCain bill specifies. And there must be a shutdown of the entire derivatives market. Wipe it out, now!

Seventy-eight percent of the American people want Glass-Steagall, and they will not allow a bunch of losers in Congress and at the White House to stand in their way. The President, in his infinite stupidity, has walked into an impeachment trap. By playing the personal role, that we know he played, in killing Glass-Steagall, for the moment, the President succeeded in intensifying the disgust that the American people feel for him. They will demand his removal, at the first opportunity. A $13-24 trillion blank check for Wall Street fat-cats, and not a dime towards job creation or infrastructure investment? We don't think so, Mr. President.

Chancellor Merkel Just Did it in Germany, But We're Not Allowed to Do it Here!

May 21, 2010 (LPAC)—Acting after the close of the markets on Tuesday, May 18, in a sudden surprise move made on orders from the German government, Germany's financial regulatory agency Bafin banned certain derivatives trades for one year or longer. It banned naked short sales of Eurozone countries' bonds, naked credit default swaps (CDS) against those bonds, and naked short sales of the stocks of ten major German banks and insurance companies.

Speaking the next day in the German parliament, the Bundestag, Chancellor Angela Merkel said that she had been forced to act in this way against what she called "an existential threat to financial stability in Europe and even the world."

Merkel is right. As leading US economist Lyndon LaRouche said on Thursday, May 20, "While the U.S. Congress, especially the Senate, is being tied up with all kinds of silliness, the fact of the matter is that a warning shot for the dissolution of the entire world financial system has already taken place. The world as a whole stands on the edge of a sudden, overnight collapse, which will make the 1,000 point drop in the Dow Jones on May 6 look like a small perturbation. We could wake up one morning, and find that we have no financial system at all—an instant plunge into a New Dark Age.

"The immediate key to this situation is the derivatives. The derivatives markets must be shut down now!"

"German Chancellor Merkel, with her sovereign ban on parts of the derivatives market as of May 19, has done the right thing, acting to protect her nation from the devastation of the speculators. The U.S. government must be forced to take the same action, immediately."

But Barack Obama, acting through Senator Harry Reid, has refused even to allow a vote to restore enforceability to Title VII, governing derivatives, of the so-called Wall Street Reform Act. The discredited Senator Chris Dodd of Connecticut surreptitiously removed the enforceability of the regulations of Title VII, making them mere "suggestions" instead of "regulations," in the words of derivatives expert Michael Greenberger quoted in firedoglake. When Arkansas Sen. Blanch Lincoln, the author of Title VII, and Washington Sen. Maria Cantwell introduced an amendment to restore enforceability, Harry Reid refused to allow it to come to a vote.

German Government Wants Regulation of Over-the-Counter Trading

May 21, 2010 (LPAC)—In what is certain to stir up more hysteria in the City of London, German Finance Minister Wolfgang Schaeuble called for more far-reaching regulations, in an exclusive interview with the Financial Times taped last night from his Luftwaffe airplane on the flight to Brussels. "I'm convinced the markets are really out of control," he said. "That is why we need really effective regulation, in the sense of creating a properly functioning market mechanism. A market does not function properly if the risks and rewards are completely unbalanced." Schaeuble called for more market transparency, saying, "Given the complexity of modern technology, the individual needs a chance to judge what he is doing. That's why we need standardization of products. And we need transparency for all market participants."

Schaeuble said there was a striking disconnection between financial transactions and economic reality: "We must regulate over-the-counter transactions, and we must also focus on the ratio of financial transactions to the real exchange of goods and services. They bear no relationship to each other. I understand that we need new financial instruments to cope with the huge financial tasks that we face. But, forgive my saying so, minimum profits of 25% are simply unimaginable in the real economy. It isn't healthy."

Schaeuble admitted that the chances of government leaders reaching a global decision on whether to introduce a financial transaction tax at the G20 summit in Canada in June were slim, but said there should be a push for an agreement, if only among European countries. "If we get a Yes, that is good. If we get a No, then we will once again work intensively to see if we cannot have a transaction tax at a European level."

Remarks by German Chancellor Angela Merkel in Berlin Wednesday also took the same direction, when she announced legislative initiatives for "more regulatory steps, also without international coordination."