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Marketplace Senior Editor Paddy Hirsch gives a bubbly explanation of the intricacies of “collateralized debt obligations” – those financial instruments that got us into this financial mess. More coverage of the financial crisis at Marketplace.org

By Ellen Brown
The Web of Debt

“Regular people know that they got done in by excesses on Wall Street, and they see a Democratic administration shoveling trillions of dollars to the same Wall Street banks that caused the mess. . . . What is overdue is a little bit of populist retribution against the people who brought down the system — and will bring it down again if the hegemony of the traders is not constrained.”

--Economist Robert Kuttner arguing for a “Tobin tax”

In the midst of the worst recession since the Great Depression, Goldman Sachs is having a banner year. According to an October 16 article by Colin Barr on CNNMoney.com:

“While Goldman churned out $3 billion in profits in the third quarter, the economy shed 768,000 jobs, and home foreclosures set a new record. More than a million Americans have filed for bankruptcy this year, according to the American Bankruptcy Institute. A September survey of state finances by the Center on Budget and Policy Priorities think tank found that state governments faced a collective $168 billion budget shortfall for fiscal 2010. Goldman, by contrast, is sitting on $167 billion in cash . . . .”

Barr writes that Goldman’s “eye-popping profit” resulted “as revenue from trading rose fourfold from a year ago.” Really. Revenue from trading? Didn’t we bail out Goldman and the other Wall Street banks so they could make loans, take deposits, and keep our money safe.

Our Loss, Your Problem
China May Bail Out On Costly Futures Contracts

The Economist - London
 

HONG KONG -- Given its vast reserves and seemingly healthy economy, a default by China's government or one of its tentacles should be one of the lesser concerns for international markets. This perception was jolted on August 28th by reports that the State-owned Assets Supervision and Administration Commission (SASAC) might endorse a move by large state-controlled enterprises under its umbrella to break derivatives contracts that were purchased last year from international banks to protect them from rising commodity prices.
 
Details, inevitably, are fuzzy. There is no official comment; terrified international bankers are silent. But reports in the local press and some elaboration by participants suggest that efforts by the country's large shippers, airlines and power companies to cope with high oil prices by taking out futures contracts produced steep losses as the market reversed and prices fell.

A record made with a series of marks, or an account of how much is given or owed. Tally is derived from the Latin word talea that means twig, and the French word tailler that means to cut. A “tally stick” is an ancient device used to aid a person’s memory by A tally uses a series of cuts or marks to account for how much is given or owed.recording numbers, quantities, and messages.

A “single tally stick” is an elongated piece of wood that is marked with notches carved with a knife. In England, for example, the value of a shilling was marked with a thin cut without removing any wood, and twenty pounds was marked with a gouge equal to the width of the little finger. Medieval Europe was constantly short of coins and the population was predominately illiterate, so tally sticks were a simple substitute.

Joseph Stiglitz is another one of those guys that plays both sides of the fence, a guy that seems to be a good guy because he tells the truth about many things but is really quite duplicitous.  These guys set up institutions like the IMF and World Bank, knowing they will be incredibly destructive, then people like Stiglitz come forward and expose the facts of what these institutions really are doing to appear like a good guy who then comes forward with the next phase, or solution these same guys want to put in place.   It's a constant con job.  

He is a major player in the agenda to establish a global government and global banking system run by the same ruthless predators that are destroying the world's economy in the first place as the pretext to ram their global agenda down our throats.  This article exposes where Stiglitz's allegiance truly lies.  He wants a global reserve currency, control by the criminal global banking cartels.


By Shiyin Chen
Bloomberg.com

The dollar’s role as a good store of value is “questionable” and the currency has a high degree of risk, said Nobel Prize-winning economist Joseph Stiglitz.

“There is a need for a global reserve system,” Stiglitz, a Columbia University economics professor, said at a conference in Bangkok today. Support from countries like China should ensure orderly discussions on a new reserve system, he added.

The dollar has lost 12 percent since March 5 against an index comprising the euro, yen and four other major currencies. China, the world’s largest holder of foreign-currency reserves, and Russia have both called for a new global currency to replace the dollar as the dominant place to store reserves.

“The current reserve system is in the process of fraying,” Stiglitz said. “The dollar is not a good store of value. Right now, the dollar is yielding almost no return and yet anybody looking at the dollar has to say there’s a high degree of risk.”

By Lyubov Pronina
Bloomberg

Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.”

“Here it is,” Medvedev told reporters today in L’Aquila, Italy, after a summit of the Group of Eight nations. “You can see it and touch it.”

The coin, which bears the words “unity in diversity,” was minted in Belgium and presented to the heads of G-8 delegations, Medvedev said.

The IMF's conditions on financial aid to poor countries are unnecessary. It can afford to be more generous

By Mark Weisbrot
Guardian

"You don't have to do this." Those are the near-last words of several victims in the Coen brothers' classic film No Country for Old Men, as they try to convince the movie's unrelenting assassin that he should spare them. The assassin, played by Javier Bardem, finds this annoying, because in his mind these murders are pre-determined.

So it is with the IMF's continuing confrontations with its borrowers, with one government after another pleading: "You don't have to do this." Turkey and Latvia were in the news last week, having joined the roster of governments whose IMF disbursements are being withheld because they find it politically impossible to impose the required punishments on their citizens.

In this episode of People & Power Max Keiser investigates whether the claims of the World Bank that they alleviate poverty is true or not.   Gee.  What do you think he finds?