UK wages collapse at fastest rate in 60 years
Weekly wages fell at the fastest rate in 60 years in February as City bonuses were slashed and workers agreed to reduced hours in the wake of recession, the latest official figures show.
By Angela Monaghan and Edmund Conway
Last Updated: 8:32PM BST 29 Apr 2009
Downtrodden: weekly wages fell in the UK have fallen at the fastest rate in 60 years Photo: Reuters The Office for National Statistics said average weekly earnings fell 5.8pc compared with the same month last year, to £459.10. The private sector took the full force of the fall in weekly earnings, down sharply by 7.7pc at £463.50, while average weekly earnings in the public sector actually rose by 3.2pc to £442.90. Bonuses in the financial services fell to £549.90 a week in February - which is part of the peak period for bonus payments - from £1,312.80.
"We certainly haven't seen anything like this in the last 60 years - and probably not in peacetime since the 1930s. In that sense it's much like everything else in the economy," said Michael Saunders, chief UK economist at Citigroup.
According to the ONS data, it is only the second month of falls during the current downturn, after weekly wages fell 1.9pc in January compared with a year earlier. The falls partly reflect moves by some private sector employees to freeze wages and even cut pay as they struggle to keep jobs and stay afloat during the recession.
However, Mr Saunders said that the figures did not look as negative when bonus payments were excluded. "Indeed, after bonus period you may see earnings go slightly into positive territory."
The Chartered Institute of Personnel and Development has on the other hand argued that with price deflation already a reality, the chances are that pay excluding bonuses will show "a further marked slump in the coming months".
Despite the gloomy economic backdrop, consumer confidence rose for the third month in a row in April, according to GfK NOP's latest survey. The GfK NOP Consumer Confidence Index ticked up three points to -27, the highest level since April 2008 and 12 points above the survey's lowest ever level of -39 in July last year.
"Significantly, this is now the third consecutive month that we have seen a rise in the index – suggesting a definite upward trend - and it's largely driven by the public's perception that the next twelve months will be better for both our own personal finances and particularly for the economy in general," said Rachael Joy from GfK NOP.
She added that the "feel-good" factor triggered by improving weather after the Easter bank holiday weekend could also have been a factor behind improved sentiment. However, the survey was conducted before the Budget was announced, so any impact it had on confidence will be contained within the May report. _________________ 'Come and see the violence inherent in the system.
Help, help, I'm being repressed!'
“The more you tighten your grip, the more Star Systems will slip through your fingers.”
"And the banks - hard to believe in a time when we're facing a banking crisis that many of the banks created - are still the most powerful lobby on Capitol Hill. And they frankly own the place," Durbin said.
A lone voice in the Senate? Durbin spells it out in words of multiple syllables:-
"A policy mistake made by some major central bank may bring inflation risks to the whole world," said the People's Central Bank in its quarterly report.
"As more and more economies are adopting unconventional monetary policies, such as quantitative easing (QE), major currencies' devaluation risks may rise," it said. The bank fears a "big consolidation" in the bond markets, clearly anxious that interest yields will surge as western states try to exit their QE experiment.
Simon Derrick, currency chief at the Bank of New York Mellon, said the report is the latest sign that China is losing patience with the US and aims to diversify part its $1.95 trillion (£1.3 trillion) foreign reserves away from US Treasuries and other dollar securities.
"There is a significant shift taking place in China. They are concerned about the stability of the global financial system so they are not going to sell US bonds they already have. But they are still accumulating $40bn of fresh reserves each month, and they are going to be much more careful where they invest it," he said.
Hans Redeker, head of currencies at BNP Paribas, said China is switching into hard assets. "They want to buy production rights to raw materials and gain access to resources such as oil, water, and metals. They know they can't keep buying bonds," he said
Premier Wen Jiabao left no doubt at the Communist Party summit in March that China is irked by Washington's response to the credit crunch, * suspecting that the US is engaging in a stealth default on its debt by driving down the dollar. "We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets. To speak truthfully, I do indeed have some worries," he said.
Days later, the central bank chief wrote a paper suggesting a world currency based on Special Drawing Rights issued by the International Monetary Fund.
Some economists say China is suffering from "cognitive dissonance" by anguishing so much over its reserves, accumulated as a result of its own policy of holding down the yuan to promote exports. Quantitative easing by the US Federal Reserve and fellow central banks may have saved China as well, since the country's growth strategy is built on selling goods to the West.
China's fears of imported inflation may reflect its concerns about over-heating. The M2 money supply rose 25pc in March on a year earlier, and there has been explosive credit growth since the government relaxed loan restraints. There are concerns that the stimulus is leaking into a new asset bubble rather than promoting job growth. The Shanghai bourse is up over 50pc since November _________________ 'Come and see the violence inherent in the system.
Help, help, I'm being repressed!'
“The more you tighten your grip, the more Star Systems will slip through your fingers.”
I don't think this applies to Chinese economists - more likely to the majority of Americans and Brits fed on an unrelenting diet of Zionist-generated FUD. _________________ "We will lead every revolution against us!" - attrib: Theodor Herzl
"Timely Demise to All Oppressors - at their Convenience!" - 'Interesting Times', Terry Pratchett
fed on an unrelenting diet of Zionist-generated FUD.
lol phd 'he's a real no where man' lol what a great film and maybe a hidden message eh? but maybe not _________________ 'Come and see the violence inherent in the system.
Help, help, I'm being repressed!'
“The more you tighten your grip, the more Star Systems will slip through your fingers.”
June 15, 2009 "Truthdig" --- This week marks the end of the dollar’s reign as the world’s reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will be very, very painful.
Barack Obama, and the criminal class on Wall Street, aided by a corporate media that continues to peddle fatuous gossip and trash talk as news while we endure the greatest economic crisis in our history, may have fooled us, but the rest of the world knows we are bankrupt. And these nations are damned if they are going to continue to prop up an inflated dollar and sustain the massive federal budget deficits, swollen to over $2 trillion, which fund America’s imperial expansion in Eurasia and our system of casino capitalism. They have us by the throat. They are about to squeeze.
There are meetings being held Monday and Tuesday in Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization. The United States, which asked to attend, was denied admittance. Watch what happens there carefully. The gathering is, in the words of economist Michael Hudson, “the most important meeting of the 21st century so far.”
It is the first formal step by our major trading partners to replace the dollar as the world’s reserve currency. If they succeed, the dollar will dramatically plummet in value, the cost of imports, including oil, will skyrocket, interest rates will climb and jobs will hemorrhage at a rate that will make the last few months look like boom times. State and federal services will be reduced or shut down for lack of funds. The United States will begin to resemble the Weimar Republic or Zimbabwe. Obama, endowed by many with the qualities of a savior, will suddenly look pitiful, inept and weak. And the rage that has kindled a handful of shootings and hate crimes in the past few weeks will engulf vast segments of a disenfranchised and bewildered working and middle class. The people of this class will demand vengeance, radical change, order and moral renewal, which an array of proto-fascists, from the Christian right to the goons who disseminate hate talk on Fox News, will assure the country they will impose.
I called Hudson, who has an article in Monday’s Financial Times called “The Yekaterinburg Turning Point: De-Dollarization and the Ending of America’s Financial-Military Hegemony.” “Yekaterinburg,” Hudson writes, “may become known not only as the death place of the czars but of the American empire as well.” His article is worth reading, along with John Lanchester’s disturbing exposé of the world’s banking system, titled “It’s Finished,” which appeared in the May 28 issue of the London Review of Books.
“This means the end of the dollar,” Hudson told me. “It means China, Russia, India, Pakistan, Iran are forming an official financial and military area to get America out of Eurasia. The balance-of-payments deficit is mainly military in nature. Half of America’s discretionary spending is military. The deficit ends up in the hands of foreign banks, central banks. They don’t have any choice but to recycle the money to buy U.S. government debt. The Asian countries have been financing their own military encirclement. They have been forced to accept dollars that have no chance of being repaid. They are paying for America’s military aggression against them. They want to get rid of this.”
China, as Hudson points out, has already struck bilateral trade deals with Brazil and Malaysia to denominate their trade in China’s yuan rather than the dollar, pound or euro. Russia promises to begin trading in the ruble and local currencies. The governor of China’s central bank has openly called for the abandonment of the dollar as reserve currency, suggesting in its place the use of the International Monetary Fund’s Special Drawing Rights. What the new system will be remains unclear, but the flight from the dollar has clearly begun. The goal, in the words of the Russian president, is to build a “multipolar world order” which will break the economic and, by extension, military domination by the United States. China is frantically spending its dollar reserves to buy factories and property around the globe so it can unload its U.S. currency. This is why Aluminum Corp. of China made so many major concessions in the failed attempt to salvage its $19.5 billion alliance with the Rio Tinto mining concern in Australia. It desperately needs to shed its dollars.
“China is trying to get rid of all the dollars they can in a trash-for-resource deal,” Hudson said. “They will give the dollars to countries willing to sell off their resources since America refuses to sell any of its high-tech industries, even Unocal, to the yellow peril. It realizes these dollars are going to be worthless pretty quickly.”
The architects of this new global exchange realize that if they break the dollar they also break America’s military domination. Our military spending cannot be sustained without this cycle of heavy borrowing. The official U.S. defense budget for fiscal year 2008 is $623 billion, before we add on things like nuclear research. The next closest national military budget is China’s, at $65 billion, according to the Central Intelligence Agency.
There are three categories of the balance-of-payment deficits. America imports more than it exports. This is trade. Wall Street and American corporations buy up foreign companies. This is capital movement. The third and most important balance-of-payment deficit for the past 50 years has been Pentagon spending abroad. It is primarily military spending that has been responsible for the balance-of-payments deficit for the last five decades. Look at table five in the Balance of Payments Report, published in the Survey of Current Business quarterly, and check under military spending. There you can see the deficit.
To fund our permanent war economy, we have been flooding the world with dollars. The foreign recipients turn the dollars over to their central banks for local currency. The central banks then have a problem. If a central bank does not spend the money in the United States then the exchange rate against the dollar will go up. This will penalize exporters. This has allowed America to print money without restraint to buy imports and foreign companies, fund our military expansion and ensure that foreign nations like China continue to buy our treasury bonds. This cycle appears now to be over. Once the dollar cannot flood central banks and no one buys our treasury bonds, our empire collapses. The profligate spending on the military, some $1 trillion when everything is counted, will be unsustainable.
“We will have to finance our own military spending,” Hudson warned, “and the only way to do this will be to sharply cut back wage rates. The class war is back in business. Wall Street understands that. This is why it had Bush and Obama give it $10 trillion in a huge rip-off so it can have enough money to survive.”
The desperate effort to borrow our way out of financial collapse has promoted a level of state intervention unseen since World War II. It has also led us into uncharted territory.
“We have in effect had to declare war to get us out of the hole created by our economic system,” Lanchester wrote in the London Review of Books. “There is no model or precedent for this, and no way to argue that it’s all right really, because under such-and-such a model of capitalism ... there is no such model. It isn’t supposed to work like this, and there is no road-map for what’s happened.”
The cost of daily living, from buying food to getting medical care, will become difficult for all but a few as the dollar plunges. States and cities will see their pension funds drained and finally shut down. The government will be forced to sell off infrastructure, including roads and transport, to private corporations. We will be increasingly charged by privatized utilities—think Enron—for what was once regulated and subsidized. Commercial and private real estate will be worth less than half its current value. The negative equity that already plagues 25 percent of American homes will expand to include nearly all property owners. It will be difficult to borrow and impossible to sell real estate unless we accept massive losses. There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless. Our corporate-controlled media, already banal and trivial, will work overtime to anesthetize us with useless gossip, spectacles, sex, gratuitous violence, fear and tawdry junk politics. America will be composed of a large dispossessed underclass and a tiny empowered oligarchy that will run a ruthless and brutal system of neo-feudalism from secure compounds. Those who resist will be silenced, many by force. We will pay a terrible price, and we will pay this price soon, for the gross malfeasance of our power elite.
Bankers get what they lobbied for, media reports total lack of transparency as “regulation”
Steve Watson, Infowars.net, Tuesday, June 16, 2009
The privately owned and run Federal Reserve is to be handed sweeping new powers under Obama administration proposals in a deal that will please bankers who lobbied for more Fed “oversight” of their activities.
The new rules would see the Fed given the authority to “regulate” any company whose activity it believes could threaten the economy and the markets.
“The final plan due to be released on Wednesday — which originally aimed to streamline and consolidate banking and securities regulation in one or two agencies — now is expected to sidestep most jurisdictional disputes and simply impose across the board standards to be applied by all financial regulators, according to administration and industry sources, ” reports the Washington Times.
In other words, the Fed, which is already totally unaccountable to Congress, is to be placed in complete control of the entirety of the US financial system, to do as it wishes without repercussion.
As the LA Times reports, the government, in conjunction with the private Federal Reserve, would effectively have the clout to simply seize and take over any company it desires.
In order to appease those opposed to the plan, such as Sen. Christopher J. Dodd, chairman of the Committee on Banking, Housing and Urban Affairs, the Obama administration has agreed to create a “watchdog” council of regulators to “advise the Fed”.
However, as former chairman Alan Greenspan has most recently pointed out, given that the Fed is an independent entity, accountable to no one, it will have the power to simply reject and overrule any advice it is offered.
The mainstream media, for the most part, has reported the oversight plan as a much needed regulatory crackdown on those responsible for the financial crisis. However, the details of the plan constitute almost exactly what lobbyists for leading bankers have been pushing for over the past few weeks.
“All derivatives contracts will be subject to regulation and all derivatives dealers subject to supervision,” Treasury Secretary Timothy F. Geithner said at a Time Warner Economic Summit in New York on Monday, also noting “When you have too many people involved, there’s an accountability problem.”
As we reported earlier this month, heads of nine of the biggest banks in the derivatives market, including JP Morgan Chase, Goldman Sachs, Citigroup and Bank of America, secretly lobbied to keep derivatives under Federal Reserve “oversight” and away from real scrutiny.
As reported by The New York Times, they all met secretly to discuss how to use the lax regulation and institutional secrecy of the NY Fed to shield their credit-default swaps business from prying eyes and attempts at regulation.
The banks formed a lobby– the CDS Dealers Consortium– only weeks after accepting TARP funds in October 2008 to protect its interests. Heading this effort was Edward Rosen, who previously helped fend off derivatives regulation. Rosen wrote and circulated a “confidential memo” to the Treasury Department and leaders on Capital Hill, making their agenda clear, the Times reported.
Rosen and his backers propose that derivatives be “traded in privately managed clearinghouses, with less disclosure,” according to the Times. The clearinghouse of choice for the big banks in Rosen’s CDS Consortium is ICE U.S. Trust, which is in turned regulated only by the Federal Reserve system.
So the upshot of all this is that the bankers get what they want, are allowed to carry on as they were, while at the same time the fractional reserve banking system and the federal government are both greatly expanded and empowered, and the compliant corporate media ludicrously tells us that a strict crackdown is underway.
This kind of activity is exactly what some leading representatives have warned of in recent weeks.
A fortnight ago, the Democratic Chairman of the Agriculture Committee, Collin Peterson, announced to the press that “The banks run the place,” in reference to the US Congress.
While Peterson is also pushing for legislation to regulate derivatives trading, his proposed bill would limit derivatives trading to public exchanges, rather than private clearinghouses, which are managed by banks.
Peterson’s warning mirrors that of Democratic Senator Dick Durbin, who just a few weeks before uttered the same rarely acknowledged truth.
“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,” Durbin said.
How simultaneously dangerous and ridiculous it is that the Federal Reserve is given more authority to oversee the economy. This is the same privately run entity that refused to comply with congressional demands for transparency and disclose the destination of trillions dollars in bailout funds. It is the same privately owned entity that has withheld internal memos, in spite of freedom of information act requests. It is the same private entity, run for the most part by European banking elites, that has arrogantly refused to tell Senators and Congressmen which banks were in receipt of government loans.
The government is ready to hand over everything to a monolithic private corporation and a gaggle of b****** banker offspring, that have gobbled up an amount close to the entire GDP of the country in taxpayers’ money and figuratively stuck the middle finger up regarding questions over where that money has gone.
It can be no more apparent than at this time that legislation to audit, repeal and eventually end the Federal Reserve, must be supported by Americans if they want to see their children and their grandchildren grow up without indentured debt and entrenched servitude to a fascistic marriage of private banks and hugely inflated government.
De-Dollarization: Dismantling America’s Financial-Military Empire The Yekaterinburg Turning Point
by Prof. Michael Hudson, Global Research, June 13, 2009
The city of Yakaterinburg, Russia’s largest east of the Urals, may become known not only as the death place of the tsars but of American hegemony too – and not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground.
Challenging America will be the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).
The attendees have assured American diplomats that dismantling the US financial and military empire is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the United States, NATO or the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. That is what a multipolar world means, after all. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.
Yet the meeting has elicited only a collective yawn from the US and even European press despite its agenda is to replace the global dollar standard with a new financial and military defense system. A Council on Foreign Relations spokesman has said he hardly can imagine that Russia and China can overcome their geopolitical rivalry,1 suggesting that America can use the divide-and-conquer that Britain used so deftly for many centuries in fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a divider”) built on the Clinton administration’s legacy in driving Russia, China and their neighbors to find a common ground when it comes to finding an alternative to the dollar and hence to the US ability to run balance-of-payments deficits ad infinitum.
What may prove to be the last rites of American hegemony began already in April at the G-20 conference, and became even more explicit at the St. Petersburg International Economic Forum on June 5, when Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar world order.” What this means in plain English is: We have reached our limit in subsidizing the United States’ military encirclement of Eurasia while also allowing the US to appropriate our exports, companies, stocks and real estate in exchange for paper money of questionable worth.
"The artificially maintained unipolar system,” Mr. Medvedev spelled out, is based on “one big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks.”2 At the root of the global financial crisis, he concluded, is that the United States makes too little and spends too much. Especially upsetting is its military spending, such as the stepped-up US military aid to Georgia announced just last week, the NATO missile shield in Eastern Europe and the US buildup in the oil-rich Middle East and Central Asia.
The sticking point with all these countries is the US ability to print unlimited amounts of dollars. Overspending by US consumers on imports in excess of exports, US buy-outs of foreign companies and real estate, and the dollars that the Pentagon spends abroad all end up in foreign central banks. These agencies then face a hard choice: either to recycle these dollars back to the United States by purchasing US Treasury bills, or to let the “free market” force up their currency relative to the dollar – thereby pricing their exports out of world markets and hence creating domestic unemployment and business insolvency.
When China and other countries recycle their dollar inflows by buying US Treasury bills to “invest” in the United States, this buildup is not really voluntary. It does not reflect faith in the U.S. economy enriching foreign central banks for their savings, or any calculated investment preference, but simply a lack of alternatives. “Free markets” US-style hook countries into a system that forces them to accept dollars without limit. Now they want out.
This means creating a new alternative. Rather than making merely “cosmetic changes as some countries and perhaps the international financial organisations themselves might want,” Mr. Medvedev ended his St. Petersburg speech, “what we need are financial institutions of a completely new type, where particular political issues and motives, and particular countries will not dominate.”
When foreign military spending forced the US balance of payments into deficit and drove the United States off gold in 1971, central banks were left without the traditional asset used to settle payments imbalances. The alternative by default was to invest their subsequent payments inflows in US Treasury bonds, as if these still were “as good as gold.” Central banks now hold $4 trillion of these bonds in their international reserves – land these loans have financed most of the US Government’s domestic budget deficits for over three decades now! Given the fact that about half of US Government discretionary spending is for military operations – including more than 750 foreign military bases and increasingly expensive operations in the oil-producing and transporting countries – the international financial system is organized in a way that finances the Pentagon, along with US buyouts of foreign assets expected to yield much more than the Treasury bonds that foreign central banks hold.
The main political issue confronting the world’s central banks is therefore how to avoid adding yet more dollars to their reserves and thereby financing yet further US deficit spending – including military spending on their borders?
For starters, the six SCO countries and BRIC countries intend to trade in their own currencies so as to get the benefit of mutual credit that the United States until now has monopolized for itself. Toward this end, China has struck bilateral deals with Argentina and Brazil to denominate their trade in renminbi rather than the dollar, sterling or euros,3 and two weeks ago China reached an agreement with Malaysia to denominate trade between the two countries in renminbi. Former Prime Minister Tun Dr. Mahathir Mohamad explained to me in January that as a Muslim country, Malaysia wants to avoid doing anything that would facilitate US military action against Islamic countries, including Palestine. The nation has too many dollar assets as it is, his colleagues explained. Central bank governor Zhou Xiaochuan of the People's Bank of China wrote an official statement on its website that the goal is now to create a reserve currency “that is disconnected from individual nations.”5 This is the aim of the discussions in Yekaterinburg.
In addition to avoiding financing the US buyout of their own industry and the US military encirclement of the globe, China, Russia and other countries no doubt would like to get the same kind of free ride that America has been getting. As matters stand, they see the United States as a lawless nation, financially as well as militarily. How else to characterize a nation that holds out a set of laws for others – on war, debt repayment and treatment of prisoners – but ignores them itself? The United States is now the world’s largest debtor yet has avoided the pain of “structural adjustments” imposed on other debtor economies. US interest-rate and tax reductions in the face of exploding trade and budget deficits are seen as the height of hypocrisy in view of the austerity programs that Washington forces on other countries via the IMF and other Washington vehicles.
The United States tells debtor economies to sell off their public utilities and natural resources, raise their interest rates and increase taxes while gutting their social safety nets to squeeze out money to pay creditors. And at home, Congress blocked China’s CNOOK from buying Unocal on grounds of national security, much as it blocked Dubai from buying US ports and other sovereign wealth funds from buying into key infrastructure. Foreigners are invited to emulate the Japanese purchase of white elephant trophies such as Rockefeller Center, on which investors quickly lost a billion dollars and ended up walking away.
In this respect the US has not really given China and other payments-surplus nations much alternative but to find a way to avoid further dollar buildups. To date, China’s attempts to diversify its dollar holdings beyond Treasury bonds have not proved very successful. For starters, Hank Paulson of Goldman Sachs steered its central bank into higher-yielding Fannie Mae and Freddie Mac securities, explaining that these were de facto public obligations. They collapsed in 2008, but at least the US Government took these two mortgage-lending agencies over, formally adding their $5.2 trillion in obligations onto the national debt. In fact, it was largely foreign official investment that prompted the bailout. Imposing a loss for foreign official agencies would have broken the Treasury-bill standard then and there, not only by utterly destroying US credibility but because there simply are too few Government bonds to absorb the dollars being flooded into the world economy by the soaring US balance-of-payments deficits.
Seeking more of an equity position to protect the value of their dollar holdings as the Federal Reserve’s credit bubble drove interest rates down China’s sovereign wealth funds sought to diversify in late 2007. China bought stakes in the well-connected Blackstone equity fund and Morgan Stanley on Wall Street, Barclays in Britain South Africa’s Standard Bank (once affiliated with Chase Manhattan back in the apartheid 1960s) and in the soon-to-collapse Belgian financial conglomerate Fortis. But the US financial sector was collapsing under the weight of its debt pyramiding, and prices for shares plunged for banks and investment firms across the globe.
Foreigners see the IMF, World Bank and World Trade Organization as Washington surrogates in a financial system backed by American military bases and aircraft carriers encircling the globe. But this military domination is a vestige of an American empire no longer able to rule by economic strength. US military power is muscle-bound, based more on atomic weaponry and long-distance air strikes than on ground operations, which have become too politically unpopular to mount on any large scale.
On the economic front there is no foreseeable way in which the United States can work off the $4 trillion it owes foreign governments, their central banks and the sovereign wealth funds set up to dispose of the global dollar glut. America has become a deadbeat – and indeed, a militarily aggressive one as it seeks to hold onto the unique power it once earned by economic means. The problem is how to constrain its behavior. Yu Yongding, a former Chinese central bank advisor now with China’s Academy of Sciences, suggested that US Treasury Secretary Tim Geithner be advised that the United States should “save” first and foremost by cutting back its military budget. “U.S. tax revenue is not likely to increase in the short term because of low economic growth, inflexible expenditures and the cost of ‘fighting two wars.’”6
At present it is foreign savings, not those of Americans that are financing the US budget deficit by buying most Treasury bonds. The effect is taxation without representation for foreign voters as to how the US Government uses their forced savings. It therefore is necessary for financial diplomats to broaden the scope of their policy-making beyond the private-sector marketplace. Exchange rates are determined by many factors besides “consumers wielding credit cards,” the usual euphemism that the US media cite for America’s balance-of-payments deficit. Since the 13th century, war has been a dominating factor in the balance of payments of leading nations – and of their national debts. Government bond financing consists mainly of war debts, as normal peacetime budgets tend to be balanced. This links the war budget directly to the balance of payments and exchange rates.
Foreign nations see themselves stuck with unpayable IOUs – under conditions where, if they move to stop the US free lunch, the dollar will plunge and their dollar holdings will fall in value relative to their own domestic currencies and other currencies. If China’s currency rises by 10% against the dollar, its central bank will show the equivalent of a $200 million loss on its $2 trillion of dollar holdings as denominated in yuan. This explains why, when bond ratings agencies talk of the US Treasury securities losing their AAA rating, they don’t mean that the government cannot simply print the paper dollars to “make good” on these bonds. They mean that dollars will depreciate in international value. And that is just what is now occurring. When Mr. Geithner put on his serious face and told an audience at Peking University in early June that he believed in a “strong dollar” and China’s US investments therefore were safe and sound, he was greeted with derisive laughter.7
Anticipation of a rise in China’s exchange rate provides an incentive for speculators to seek to borrow in dollars to buy renminbi and benefit from the appreciation. For China, the problem is that this speculative inflow would become a self-fulfilling prophecy by forcing up its currency. So the problem of international reserves is inherently linked to that of capital controls. Why should China see its profitable companies sold for yet more freely-created US dollars, which the central bank must use to buy low-yielding US Treasury bills or lose yet further money on Wall Street?
To avoid this quandary it is necessary to reverse the philosophy of open capital markets that the world has held ever since Bretton Woods in 1944. On the occasion of Mr. Geithner’s visit to China, “Zhou Xiaochuan, minister of the Peoples Bank of China, the country’s central bank, said pointedly that this was the first time since the semiannual talks began in 2006 that China needed to learn from American mistakes as well as its successes” when it came to deregulating capital markets and dismantling controls.8
An era therefore is coming to an end. In the face of continued US overspending, de-dollarization threatens to force countries to return to the kind of dual exchange rates common between World Wars I and II: one exchange rate for commodity trade, another for capital movements and investments, at least from dollar-area economies.
Even without capital controls, the nations meeting at Yekaterinburg are taking steps to avoid being the unwilling recipients of yet more dollars. Seeing that US global hegemony cannot continue without spending power that they themselves supply, governments are attempting to hasten what Chalmers Johnson has called “the sorrows of empire” in his book by that name – the bankruptcy of the US financial-military world order. If China, Russia and their non-aligned allies have their way, the United States will no longer live off the savings of others (in the form of its own recycled dollars) nor have the money for unlimited military expenditures and adventures.
US officials wanted to attend the Yekaterinburg meeting as observers. They were told No. It is a word that Americans will hear much more in the future.
Iceland – the banks, the bust, the fish and the history
June 17, 2009 by Notsilvia Night
Today is Iceland´s Independence Day. The Prime Minister held a speech in front of the Parliament telling the Icelanders, the next few years would be very hard. She also said that a new struggle for independence would have to be fought, but she added, it would mainly be about Iceland´s relationship towards other nations and Iceland´s cooperation with the international community in winning it´s trust again abroad, while the dealings of the “business-Vikings” had cost the Icelandic people a big deal of this former trust.
True,near every day new facts about insider deals and enormous corruption and waste of funds come to light. However, the bankrupcy of the banks was not exclusively caused by the corruption of the Icelandic bankers. They just followed the lead of both American and British bankers. And while doing this they were constantly lauded for their “innovative” business concept which spread risks far and wide and so minimized them.
This was the true essence of the “innovative” deregulated neo-liberal financial markets: Spread everything thin, so if one goes under everybody else will drown, too. Actually, before Lehman Brothers went under, the Icelandic banks were still swimming on credits from other banks.
What initially brought on the decline of the banks was the attack on the Icelandic Krona starting in January 2008. Some large “investors” started to massively short-sell the Krona. It dropped like a Stone. More investors pulled out, and the banks lost part of their equity and from then on were depending on inter-bank loans to stay solvent.
When the day of reckoning came the government had no choice but to re-nationalize the banks, splitting them into a domestic and a foreign part, allowing the foreign part to file for bankruptcy, while protecting the domestic banks.
The Icelandic banks held domestically all Icelandic household and business debts. With the catastrophic drop of the currency most Icelandic businesses and many households were over their head in debts, since their bankers had encouraged everyone to take on loans in foreign currencies to avoid the high Icelandic interest rates on loans.
In it´s neo-liberal sell-out spree the Icelandic government had sold the fishing quota to the Icelandic fishing industry. Like others the fishing-industrywas over it´s head debts now. If those businesses went under and were taken over by the creditors of the bankrupt banks all things would be over for Iceland. In spite of us making big strides to diversify the economy, 70% of all export revenues still come from fish. If the fishing quota goes abroad Iceland cannot survive. The Icelanders had fought two “cod-wars” with Britain coming close to shooting wars to retain their fishing waters and protect them from over-fishing by foreigners. They are the most vital part of the economy.
No fish – no bread.
This has been true since the 12. century, when the medieval climate optimum was slowly coming to an end , which made traditional Nordic agriculture more and more impossible. Icelanders are no Inuits. They, even then, were used to an European diet and for that they needed to trade: dried fish and wool and wool-clothing.
Trade was so important that in 1262 Icelanders surrendered their national independence to the Norwegian crown in order to keep the trade lines open and the ships from Norway coming. A century earlier, for probably for the same reason, an Icelandic historian had to burn his first book on Icelandic history together with all his orginal sources to write a new and “revised” edition of it.
When in 1308, due to a royal marriage, Iceland came under Danish rule, trade started to decline, poverty grew. When the Danish government put monopoly trade restrictions on Iceland, which banned Icelanders to trade with anyone other than Danish licensed traders, the anti-Danish anger grew in Iceland. The monopoly traders sold nonsense and spoiled food, and bought Icelandic fish and other products under value.
The trade-restrictions were the main motivation for Icelanders to start their struggle for independence from Denmark.
When Iceland became finally a fully sovereign nation in 1944, the country finally started to rise from abstract poverty and underdevelopment. Iceland was not a near socialist country, as some people claim. All industries were in private hands. Only the infrastructure was public like the roads, the schools, the post-offices, the universities, the hospitals, electricity- , hot- and cold water pipe-lines as well as the phone lines were in public hands…… and the banks.
The banks and mortgage loan funds were some owned by the central goverment, some by the local communities and some by the labor-union-connected pension funds.
And they, together with the general tax-payer, financed all the infra-structure needed for a modern society, even one with a very small population in a difficult climate on a relative large land. The banks and the pension-funds also financed the construction of new modern housing, built from steel and concrete, strong enough to withstand all the strong fall- and winter-storms and flexible enough to outlast earthquakes. There was no real rent-market in Iceland, except a few public housing blocks for handicapped and disabled people. Everyone else had to buy their house or apartment and most everyone could, even low income single mothers. The mortgages were affordable, although not cheap.
With all revenues of the banks pumped back into the economy and not siphoned out by self-interested bankers the system worked and the economy grew steadily. Before the privatization of the banks the Icelandic economy seemed to have running in a very similar way to the one of North Dakota, the rural state which also owns his own bank, and is one of the few among the 50 that isn´t broke. (Ellen Brown describes the economic system of North Dakota on her Web of Debt Blog)
Sure with the dependence on fish-prizes and exchange rates abroad, there were several periods of high inflation, but the strong domestic labor unions allowed the Icelandic working class to regain the buying power that was lost in a very short time and increasing it steadily. The Icelandic living standard was already high long before the banks were privatized, although prizes were a lot higher than in Europe and wages a bit lower. But there was close to zero unemployment most of the time, and most people worked overtime up to double the normal working hours, especially in the fishing industry. All women worked outside the home. Children started to work at least part time by the age of 14 or even 13. And the early years they also worked as long hours as their parents. Fishermen on tour worked often 16 hours a day 7 days a week and still do. Their work is backbreaking hard and until recent years used to be very dangerous also. They are the national heroes of Iceland honored with a special holiday weekend.
Of course their where ups and downs and occasional economic problems. And so the age of the neo-libs began, with their golden bullet works for all recipe: deregulation, privatization of infrastructure and foreign “investment”:
If they only would do this, the government believed, Iceland would be able to diversify it´s industry. From the 2 Aluminum melting companies, we had before, the country then could get many more. And other industries would be founded as well in every part of the country. And there would be lots of free trade.
“Free trade” that´s what the Icelandic government fell for. And so they started selling the country´s silver-ware and in the end, the banks. And the foreign advisers of the government, coming from one of the largest British banks, HSBC, also told them, that should not put any stricter regulations on the Icelandic banks than the European Union had written in their laws. That´s exactly what the government did and what brought on the catastrophy. The first one to be privatized in 2003 was Landsbanki. It was sold to a company with the name of “Samson”. (The members of the government had obviously forgotten to read their bibles.)
The economy indeed grew like crazy after that, new industries developed all over the place, but the Icelandic labor market was already over-extended, so mass-immigration followed, which again put pressure on the housing market and the prizes there sky-rocketed.
When Samson finally crashed the temple of greed upon the Icelandic people,the crash was total. The country became the one with the highest per capita debt burden in the world. Besides their own debts, the Icelanders now are obligated to also pay the Icesave debts of the bankcrupt privatized bank, Landsbanki. The debt is mainly owed to the British government now.
This makes the Icelanders really angry. They argue, that it was the British government who was responsible for at least some of Iceland´s problems. With their actions of putting Iceland on the list of terrorist countries and organizations, right next to Iran, and treating Iceland like Iran, freezing it´s assets, the Brits had driven the third and largest Icelandic bank into bankruptcy, the only which might have survived. This increased the burden on the Icelandic economy and reduced it´s revenues even further.
But when the Icelandic government considered to settle the matter of the dispute with the British government in an European court, no court would even consider to hear our case, and the whole international banking system put a total trade ban on Iceland. For weeks no money transfers whatsoever, necessary for any kind of imports or exports could be done anymore. Icelandic industries went further under water. And Icelandic retailers finally pronounced that within another three weeks, they would be running out of food. And so once again:
No fish, no bread
Without trade we cannot survive, and therefore, under pressure of the united bankers of the world and in concert with the European Union, the Icelandic government gave in to demands, all Icelanders consider to be unfair. (A new poll published today says that over 70% of Icelanders believe, the government is for the banks, not for the people.)
And so we now will pay the debts of the banks in addition to the household debts and the government debts and the debts of our industries , and hope that in the years to come some money will still be left for bread.
P.S.: Many Icelanders are now putting their hope in becoming an oil- and gas-producing country, being on the same list as Iran, after all. No joke,surveys have found there is a 98% chance of oil and gas being found in a certain area of the Icelandic sea. We just don´t have the money to drill.
Thanks for posting this tragic tale, item7. I doubt many can comprehend life on the edge as it is lived in Iceland. This coming winter will create suffering beyond anything imaginable to cosy Brits.
It also demonstrates the long-term sheer vindictiveness of UK Govt 'foreign policy' as they never forgave Iceland's 'cheek' in standing up to British Naval warships attempt at bullying them out of their fishing grounds. The main reason for the Cod Wars never really reached the maintream - severe stock depletion by UK and others' factory ships. Now we know better.
Skömm á þú, ræningi barón! _________________ "We will lead every revolution against us!" - attrib: Theodor Herzl
"Timely Demise to All Oppressors - at their Convenience!" - 'Interesting Times', Terry Pratchett
THIS HATRED WILL BE STILL FURTHER MAGNIFIED BY THE EFFECTS of an ECONOMIC CRISES, which will stop dealing on the exchanges and bring industry to a standstill.
We shall create by all the secret subterranean methods open to us and with the aid of gold, which is all in our hands, A UNIVERSAL ECONOMIC CRISES WHEREBY WE SHALL THROW UPON THE STREETS WHOLE MOBS OF WORKERS SIMULTANEOUSLY IN ALL THE COUNTRIES OF EUROPE.
These mobs will rush delightedly to shed the blood of those whom, in the simplicity of their ignorance, they have envied from their cradles, and whose property they will then be able to loot.
"OURS" THEY WILL NOT TOUCH, BECAUSE THE MOMENT OF ATTACK WILL BE KNOWN TO US AND WE SHALL TAKE MEASURES TO PROTECT OUR OWN.
# We shall soon begin to establish huge monopolies, reservoirs of colossal riches, upon which even, large fortunes of the GOYIM will depend to such an extent that they will go to the bottom together with the credit of the States on the day after the political smash ...
# You gentlemen here present who are economists, just strike an estimate of the significance of this combination! ...
To complete the ruin of the industry of the GOYIM we shall bring to the assistance of speculation the luxury which we have developed among the GOYIM, that greedy demand for luxury which is swallowing up everything.
The substitution of interest-bearing paper for a part of the token of exchange has produced exactly this stagnation. The consequences of this circumstance are already sufficiently noticeable.
Economic crises have been producer by us for the GOYIM by no other means than the withdrawal of money from circulation. Huge capitals have stagnated, withdrawing money from States, which were constantly obliged to apply to those same stagnant capitals for loans.
China’s Got a New Currency…and It Sure AIN’T the Dollar
Written by Graham Summers
Let’s talk about China.
China is the US’s largest creditor. All told, the People’s Republic has $700+ billion in US Treasuries. However, if you account for other dollar denominated investments, China is believed to have 70% of its $1.7 trillion in foreign reserves sitting in green backs.
That’s an unbelievable amount of money invested in the US dollar. Needless to say, the Chinese are not too happy about our Central Bank’s decision to print TRILLIONS of dollars propping up the US financial system.
Indeed, the initial rumblings of what will eventually turn into outright conflict (either economic or war) have already begun. China’s Premier Wen Jiabao recently commented, "We have lent a huge amount of money to the US…Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried."
Other, former Chinese officials have been less polite in their public statements. Yu Yongding, a former Chinese central bank adviser, recently referred to the US Federal Reserve “as the world’s biggest junk investor… ridden with rubbish assets,” and to Chairman Ben Bernanke as “helicopter Ben.”
The situation has gotten intense enough that Secretary of the State Hillary Clinton flew to Asia to plead with China and other US creditor nations to continue buying US Treasuries. “By continuing to support American Treasury instruments the Chinese are recognizing our interconnection. We are truly going to rise or fall together," Clinton said at the US embassy there.
In simple terms, China owns a TON of dollar denominated assets. And the Fed is doing everything it can to devalue the dollar. Thus China has a few options:
1) Openly sell the dollar, thereby destroying the value of its reserves and inviting open war with the US.
2) Quietly shift away from the dollar without openly attracting attention or threatening the US publicly.
The Chinese government, particularly its Premier, has been floating option #1 in the media, discussing the potential for dropping the dollar standard along with Russia and Brazil.
However, this boils down to nothing more than grandstanding. The Chinese are not idiots. And they know that dropping the dollar standard would destroy a HUGE portion of their foreign reserves, since everyone and their mother would follow suit.
Indeed, abandoning the dollar for another currency (say the yen or euro) would serve no benefit from an economic standpoint. It would crush China’s Treasury denominated reserves as the dollar plunged. It would also be akin to trading one problematic investment for another: no major world currency is backed by gold or any asset of real value.
No, to my way of thinking, the Chinese are merely posturing with these statements, trying to draw attention away from the fact that they’re already begun pursuing option #2 (diversifying away from the dollar in private). Indeed, China has already begun moving into a new currency, one that is neither fiat nor flawed. And they did it in their usual manner: under the radar with great focus and determination.
That new currency is natural resources.
Throughout 2009, China has been buying up natural resources, commodities, and other real assets at a break-taking pace: copper imports hit a record 329,000 tons in February, only to be eclipsed by a new record of 375,000 tons in March.
The copper story is just the latest and most obvious display of China’s new currency binge. The Chinese have been buying up mines, metal ore (57 million tons of iron in April alone), and other resources for years now. The headlines were right under the world’s collective nose, but no one was thinking “diversification away from the dollar.” Instead they were thinking, “purchases needed to fuel economic growth.”
Truly, it wasn’t until the world noticed that China was still buying commodities in record amounts even after its economy took a hit that the media began to connect the dots.
Here’s a few dots to consider…
Feb.10, 2009: China buys Oz Minerals, the world’s second largest zinc miner for $1.7 billion
Feb. 12, 2009: China buys $20 billion worth of Rio Tinto, one of the three largest iron ore producers, giving it the potential to raise its stake to 19%.
Feb. 24. 2009: China buys 16% of Fortescue Metals an Australian iron ore company.
April 1, 2009 China buys $46 million worth of Terramin Australia’s lead and zinc supplies in Algeria.
April 15, 2009: China buy 51% of Ontario’s Liberty Mines: a nickel producer.
One should also consider that these are merely the transactions that are publicly displayed. The Chinese government has proved adept at buying assets below the radar via foreign holding companies and other complicated business structures. Informal accounts posit that China has in fact scooped up even more natural resources and mines via these methods today.
The reasoning here is simple. Unlike paper currencies, natural resources and commodities cannot be reproduced ad infinitum by central banks. Thus they are inflation proof. In addition, natural resources actually offer a direct benefit to China’s economy whereas an investment in a foreign currency (the dollar or otherwise) is merely a means of parking cash for a return.
Finally, and most notably, natural resources allow the Chinese to diversify away from the dollar without damaging their current dollar holdings: or their relationship with the US: if word got out that the Chinese were dumping Treasuries, the Treasury market would implode, destroying the value of China’s current investment.
Make no mistake, the Chinese have already begun diversifying away from the dollar. They just haven’t advertised the fact openly. Chinese students openly laughed at our Treasury Secretary Tim Geithner when he gave a talk there promising that “Chinese assets were safe” in the dollar. If Chinese STUDENTS can figure the Fed’s moves out, what do you think the Chinese GOVERNMENT is doing?
No conspiracy charge by feds against Madoff is covering up links to domestic and foreign intelligence.
The failure of federal prosecutors to bring conspiracy charges against Bernard Madoff, the mega-billion dollar Ponzi scammer who pleaded guilty March 12 to eleven counts of fraud and other crimes in U.S. District Court in Manhattan, is providing cover to those who pulled the strings on Madoff's illegal operation.
WMR spoke to a former close aide to Madoff who related how he handled a number of transactions personally for Madoff. The source said that Madoff was running a special type of "pump and dump" scheme. The source said Madoff would "pump money out of the system and dump it out to another place." When asked what that "other place" was, the source replied, "Israel."
The source believes that no conspiracy charges were brought by the federal government against Madoff because it is the government and not necessarily Madoff that is trying to protect his "network and superiors."
Madoff's Chief Financial Officer was Frank DiPasquale, who is being represented by Marc Mukasey of Bracewell Giuliani. Mukasey's father is former Bush Attorney General Michael Mukasey. The U.S. judge handling the Madoff case, Denny Chin, is, according to informed legal sources in Manhattan, over his head in corruption. ... ... ...
So it goes - 'it' being your taxes. _________________ "We will lead every revolution against us!" - attrib: Theodor Herzl
"Timely Demise to All Oppressors - at their Convenience!" - 'Interesting Times', Terry Pratchett
Joined: 25 Jul 2005 Posts: 16365 Location: St. Pauls, Bristol, England
Posted: Sat Jul 04, 2009 12:00 am Post subject:
Its No Secret that the Banks Own the Government
George Washington Blog
Friday, July 3, 2009
It is no secret that the banks own the U.S. government. For example:
* Leading economist Dean Baker wrote today “Banks Own the US Government”
* The number two ranking Democrat in the Senate, Senator Dick Durbin (D-IL), said: “Frankly, banks own the place.”
* Collin Peterson, Chairman of the Agriculture Committee, said: “The banks run the place … I will tell you what the problem is — they give three times more money than the next biggest group. It’s huge the amount of money they put into politics.”
Of course, not all banks are equal. For example, Goldman Sachs clearly has a leading role.
FED FOCUS-Bid to clip Fed's wings gains support in Congress
Wed Jul 8, 2009 5:41pm EDT, By Alister Bull
WASHINGTON, July 8 (Reuters) - A proposal from a long-time congressional foe of the Federal Reserve that could give lawmakers sway over monetary policy has won the support of a majority in the House of Representatives, alarming officials at the U.S. central bank.
The Federal Reserve Transparency Act of 2009, put forward by Republican Representative Ron Paul of Texas, now has 250 co-sponsors in the House. It will get air-time on Thursday during a congressional hearing on Fed independence that will feature testimony from the Fed's No. 2 official, Donald Kohn.
Public anger over the trillion dollars the Fed has put into play to battle the financial crisis and bail out investment bank Bear Stearns and insurer American International Group (AIG.N) has created a backlash and calls for more accountability.
A proposal from President Barack Obama to put the Fed in charge of monitoring risks to the entire financial system has intensified the scrutiny.
Paul has tapped into this anger and put forward a 2-1/2 page bill that would explicitly repeal a provision of law that prohibits the Government Accountability Office, a government watchdog agency, from auditing monetary policy decisions.
Fed officials see this as a dangerous intrusion on their independence that could hinder their ability to make the best long-term decisions for the economy.
Paul, however, thinks Congress needs more control.
"Why should they be independent? Independence to them means secrecy, do whatever they want, spend billions of dollars, bail out their friends," Paul told Reuters Television.
Paul's bill, which is co-sponsored by 78 Democrats, would also expose Fed transactions with foreign central banks, Fed emergency lending operations and discussions between Fed officials to scrutiny by the GAO, which can offer policy suggestions to lawmakers.
To become law, the bill would need to win support from the House Democratic leadership, who have yet to show an appetite to move the bill. It would then have to pass the Senate, where support would likely be scarcer.
But analysts say Congress is unusually sensitive to the public mood in the wake of the crisis and say the bill must be taken seriously.
"This is the most populist Congress that we've seen in decades and legislation like this can quickly gain momentum if it is ignored," said Jaret Seiberg, a financial services policy analyst at the Washington Research Group.
Citing the recent congressional clamor over executive compensation and new rules on credit cards, he said Democratic leaders may be wary of blocking legislation they feel is picking up popular support.
"This Congress has shown that when the electorate is upset it will act extraordinarily quickly ... This should not have any legs at all, and the fact that it does shows how populist this Congress has become," Seiberg said.
The Fed, for its part, is taking Paul very seriously.
"My concern about the legislation is that if the GAO is auditing not only the operational aspects of our programs and the details of the programs, but is making judgments about our policy decisions, that would effectively be a takeover of monetary policy by the Congress," Fed Chairman Ben Bernanke said during congressional testimony on June 25.
That would be "a repudiation of the independence of the Federal Reserve, which would be highly disruptive to the stability of the financial system, the dollar and our national economic situation," he warned.
Co-sponsors of Paul's bill say the intention is not to clip the Fed's wings, but simply to let a little daylight into a very secretive institution.
"It is important for them to remain independent. But I still believe that these are taxpayer dollars, and the more light that is shined on expenditures and cost analysis is something that the taxpayer is entitled to," said Representative Shelley Capito, a Republican from West Virginia.
An effort in the Senate to attach a matching bill to other legislation was thwarted on procedural grounds.
But analysts say the bill could be offered up as a possible Republican amendment to any finance bill until midterm elections in November 2010 in the hope of persuading a few more Democrats to give it their backing.
"There's a trade-off between their business as a central banker and their need for stability in the financial system and also their accountability and transparency," said Senator Jack Reed, a Rhode Island Democrat who is a senior member of the Senate Banking Committee. "That's going to have to be worked out. I don't think there's yet a complete conclusion as to how that's done," he told Reuters. (Additional reporting by Jeremy Pelofsky and Corbett Daly in Washington; Editing by Kenneth Barry)
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