The Richest Rich Are in a Class by Themselves

econ_onepercentchartThe rallying cry of the Occupy Movement was that the richest 1 percent of Americans is getting richer while the rest of us struggle to get by. That’s not quite right, though. The bottom nine-tenths of the 1 Percent club have about the same slice of the national wealth pie that they had a generation ago. The gains have accrued almost exclusively to the top tenth of 1 Percenters. The richest 0.1 percent of the American population has rebuilt its share of wealth back to where it was in the Roaring Twenties. And the richest 0.01 percent’s share has grown even more rapidly, quadrupling since the eve of the Reagan Revolution.

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Judge said du Pont heir ‘will not fare well’ in prison

A Superior Court judge who sentenced a wealthy du Pont heir to probation for raping his 3-year-old daughter noted in her order that he “will not fare well” in prison and needed treatment instead of time behind bars, court records show.  Judge Jan Jurden’s sentencing order for Robert H. Richards IV suggested that she considered unique circumstances when deciding his punishment for fourth-degree rape. Her observation that prison life would adversely affect Richards was a rare and puzzling rationale, several criminal justice authorities in Delaware said. Some also said her view that treatment was a better idea than prison is a justification typically used when sentencing drug addicts, not child rapists.

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G-20 Plus Five: The Economic Forum’s Mixed Record

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It is time to take stock of the G-20. Just over five years ago, during the free fall of the global financial crisis, representatives from 20 of the world’s leading economies agreed to gather twice a year in order to develop a more sustainable regulatory framework for financial institutions.

 

There have been many signs of promise. The group has agreed on a new framework for regulatory standards for each country’s most important financial institutions and tasked a Financial Stability Board (FSB) with monitoring adherence to them. But the G-20 has also fallen short of some expectations. Although there have been improvements in global financial regulation over the past five years, serious flaws remain.

 

The G-20 has already addressed the main pillars of financial regulatory reform. The most important decision concerned international bank capital regulations. Prior to the G-20, there were serious problems. The Basel II agreement, initially published in June 2004, gave banks enormous discretion in determining whether they met minimum capital standards. That agreement was also undermined by the fact that the United States decided not to live up to it.

 

The Basel III regulations, which were agreed upon in 2011, were a great improvement. The first important step was that all the G-20 countries agreed to recognize the regulations and task a new body, called the Regulatory Consistency Assessment Programme (RCAP), with monitoring, assessing, and evaluating the implementation of new, more stringent capital standards. The RCAP audits the regulatory frameworks of participating countries and issues formal publications evaluating their progress. It has the authority to request improvements as necessary, and has done so. In each of the four countries it has reviewed, it has requested improvements — 90 of them, in the case of China. In a preliminary assessment, the European Union was declared materially noncompliant on two items, and the United States was declared materially noncompliant on one item.

 

Another achievement of the G-20 was the creation of a regulatory framework for over-the-counter-derivatives, risky financial instruments that were at the center of the last financial crisis. Before the crisis, there were essentially no regulations on the riskiest derivatives trading and there was no transparency in the derivatives marketplace. Now the majority of these transactions are bound to multilateral standards of transparency and regulation. Although these ideas were discussed by the G-20, ultimately the United States and Europe — where 85 to 90 percent of derivatives trading is conducted — are primarily responsible for implementing them. Although most countries have passed laws implementing these regulations, it is too early to tell whether they are working.

 

A third accomplishment of the G-20 was its reforms to international regulations on rating agencies. Before the crisis, ratings agencies, which are responsible for assessing the ability of debtors to pay back what they borrow, were unregulated in most G-20 countries. After the crisis, it was clear that this was a grave mistake. The industry was highly concentrated, with two U.S. firms controlling more than 80 percent of the market. But the ratings issued by these agencies were often sloppily fabricated.

 

The assumption behind the new regulations was that greater transparency and scrutiny of ratings agencies would encourage competition and improve overall performance. Preliminary data suggest that the plan has worked. In the United States and the EU, new entrants have joined the market and a greater number of firms are now rating financial institutions and asset-backed securities.

 

The G-20 has also succeeded at regulating hedge funds. Before the crisis, hedge funds were dealt with in different ways in different countries. (Even the EU lacked a single regulatory framework.) All G-20 economies, with the exception of Brazil, have now passed hedge fund regulations as part of broader efforts to regulate and supervise the shadow banking sector, which involves entities and activities (including hedge funds) that exist fully or partially outside the regular banking system.

 

Finally, the G-20 has made major progress on standards for winding down troubled banks. During the crisis, the lack of such standards proved to be a major problem, as the lack of a common playbook worsened market jitters. The need for a clear resolution scheme is especially relevant for large cross-border banks, which are especially difficult to unravel and are concentrated in the United States and the EU.

 

Resolution regimes require a clear operational authority to stabilize the bank, as well as a clear legislative framework that allows authorities to force creditors to take losses. It is already evident that such a system is easier to build in the United States than the EU. The United States already has a clear authority, the FDIC, which is responsible for taking control of the parent company of the distressed financial group. It has always been capable of keeping distressed operations open by injecting extra liquidity. The FDIC can also access an Orderly Liquidation Fund (OLF), administered by the U.S. Treasury, to finance a “bridge” bank, which is authorized to hold the assets and liabilities of an insolvent bank. A bridge bank is charged with continuing the operations of the insolvent bank until the bank becomes solvent through acquisition by another entity or through liquidation.

 

The EU is only halfway there. Although Europe has agreed on the procedure to resolve a bank, the proposed common fund for that kind of activity is, at 55 billion euro, still too small given the size of the EU banking market, and will only come in place too late. In practice, national governments will still likely be responsible for providing most of the money to assist their ailing banks, which would only worsen the distortions in European financial markets.

 

LONG ROAD AHEAD

 

The G-20 still has plenty of work in coming years. New financial regulatory items have emerged on the agenda, including regulation of the non-bank financial sector. International standards for the non-bank financial sector are far less developed than those for banking. In July 2013, the FSB published a list of nine insurance companies (five are European, three are American, and one is Chinese) that it deemed systemically important. It will soon publish a similar list for other finance and asset management companies. Although the size of total assets of insurers and asset management companies is far below that of the banking sector, and systemic risks are much lower, their business models and risk diversification still require proper supervision.

 

The G-20 regulations have also not yet solved the problem posed by central counterparties (CCPs), the entities that increasingly serve as an exchange for derivatives transactions. They play a critical role, but are still under-regulated: at periods of financial stress, they may not be able to meet the liquidity needs of their members. If inadequately managed, CCPs could become the Fukushimas of global finance. CCP board members need to take a much more hands-on approach to insulating risks coming from CCPs.

 

The G-20 also needs to place greater emphasis on macroeconomics, especially when it comes to coordinating exit policies from the unconventional monetary policy that developed countries have pursued since the start of the crisis. The prospect of the end of such policies — namely, the U.S. Federal Reserve’s decision to draw down its bond-buying program — has already led capital to flee emerging markets. Similar policies are sure to follow in the other developed countries. Whether central banks will take the global dimension into account remains an open question.

 

Overall, the G-20 has taken a big step toward instituting better global governance and a more consistent regulatory framework for financial markets. Five years on, the G-20 countries — and especially the United States and Europe, where the seeds of the last financial crisis were sown — have largely delivered on their commitments. Better rules are in place on bank capital, derivatives, ratings agents, hedge funds, and bank liquidation. How these rules are enforced will matter, of course, but at least the rules exist. Initial reports on the implementation of the new Basel III rules, which are key to the entire framework, are already promising.

 

That raises the question of how the G-20 has managed to enforce its agenda without possessing coercive authority. One important factor has been the quality and dedication of its leadership. The past and current chairs of the FSB, Mario Draghi and Mark Carney, were instrumental in driving the process forward. But another factor has been the subtle effectiveness of peer pressure. Although the G-20 cannot force any single country to pass regulations, each country is very aware of being observed by the others. No member of the group has wanted to be accused of shirking its responsibilities. For now, that should be enough for the G-20 to move forward on its remaining agenda.

 

Solar Radiation Management, Geoengineering and Chemtrails

The Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) warns that, despite global side effects and long-term consequences, geoengineering techniques involving solar radiation management (SRM) should be maintained: “If SRM were terminated for any reason, there is high confidence that global surface temperatures would rise very rapidly to values consistent with the greenhouse gas forcing.” [emphasis in original]  “Climate Change 2013: The Physical Science Basis,” (referred to as “AR5”) supercedes the former report published in 2007. [1]  The IPCC’s first Assessment Report was published in 1990.  The discussion in the Summary for Policymakers and in the body of AR5 commends solar radiation management over carbon dioxide removal methods, which are limited in their efficacy on a global scale, yet admits that neither are ideal, and that both geoengineering techniques will have long-term consequences.  “While the entire community of academia still pretends not to know about the ongoing reality of global geoengineering,” comments Dane Wigington at Geoengineering Watch, “the simple fact that they are now discussing geoengineering in the latest IPCC report indicates that the veil is beginning to lift.” [2]

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Most still believe in JFK assassination conspiracy

Some things will never die — and John F. Kennedy assassination conspiracy theories appear to be among them.  Fifty years later, no less than 61% of Americans believe others besides Lee Harvey Oswald were involved in Kennedy’s murder, reports the Gallup Poll.  This is the lowest percentage in nearly 50 years, Gallup notes, but remains a solid majority.  The suspects are many: The Mob, the government (including the CIA), Cuba, and various political interests.  Numerous investigations have failed to yield any determinative evidence that anyone besides Oswald killed Kennedy. But that message apparently has not penetrated with most Americans.

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China to Foreign Media: Get in Line or Get Out

It’s no secret that China bans foreign news portals that offend its oh-so delicate sensibilities, swiftly and without mercy or explanation. This week has seen The Wall Street Journal and Reuters‘ Chinese websites blocked. There is, so far, no explanation for China’s blocking of these sites — could be anything from the Tiananmen attack reporting to Paul Mooney’s rejected visa — but signs point to a bleak future for foreign media in the Middle Kingdom.  This news comes as Bloomberg is under scrutiny for allegedly censoring sensitive stories to be able to report in China; their site has been blocked since July 2012 for running a story on Xi Jinping’s family wealth. This is not totally dissimilar to the censor’s axe that is still chopping on The New York Times‘ neck (Chinese and English language websites) for a story about Wen Jiabao’s family wealth. The message from China’s censorship czars is clear: get in line, or get out.

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TPP Leak Confirms the Worst: US Negotiators Still Trying to Trade Away Internet Freedoms

After years of secret trade negotiations over the future of intellectual property rights (and limits on those rights), the public gets a chance to looks at the results. For those of us who care about free speech and a balanced intellectual property system that encourages innovation, creativity, and access to knowledge, it’s not a pretty picture.  Today Wikileaks published a complete draft of the Trans-Pacific Partnership (TPP) agreement’s chapter on “intellectual property rights.” The leaked text, from August 2013, confirms long-standing suspicions about the harm the agreement could do to users’ rights and a free and open Internet. From locking in excessive copyright term limits to further entrenching failed policies that give legal teeth to Digital Rights Management (DRM) tools, the TPP text we’ve seen today reflects a terrible but unsurprising truth: an agreement negotiated in near-total secrecy, including corporations but excluding the public, comes out as an anti-user wish list of industry-friendly policies.

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Secret Trans-Pacific Partnership Agreement (TPP)

Today, 13 November 2013, WikiLeaks released the secret negotiated draft text for the entire TPP (Trans-Pacific Partnership) Intellectual Property Rights Chapter. The TPP is the largest-ever economic treaty, encompassing nations representing more than 40 per cent of the world’s GDP. The WikiLeaks release of the text comes ahead of the decisive TPP Chief Negotiators summit in Salt Lake City, Utah, on 19-24 November 2013. The chapter published by WikiLeaks is perhaps the most controversial chapter of the TPP due to its wide-ranging effects on medicines, publishers, internet services, civil liberties and biological patents. Significantly, the released text includes the negotiation positions and disagreements between all 12 prospective member states.

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The New American Security Force: A Revolution in U.S. Military Strategy, Part I

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Did the rest of the world go to sleep when Sen. Ted Cruz started filibustering at the end of September? Well, he did read aloud Dr. Suess’s Green Eggs and Ham. Meanwhile, was peace established in Middle East or did the Taliban suddenly become a humanitarian organization? Americans might think so after the obsessive media attention of the federal government shutdown, the debt-ceiling showdown and the troubled rollout of Obamacare.

External Systems

Unfortunately, not so.  Civil war continues to rage in Syria, violence escalates in Iraq, a barbaric terrorist attack was recently perpetrated on civilians in Kenya, and tensions escalate in India and Pakistan. As well, the global proliferation of precision-guided weapons poses new threats, and old threats grow with the rise of China’s military and Russia’s re-emergence on the world’s geopolitical stage

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Public Mass Executions Carried Out in Seven North Korean Cities

PYONGYANG, North Korea, Nov. 12 (UPI) — Dozens of people were executed recently in seven North Korean cities in the first known mass executions in the Kim Jong Un regime, South Korean media reported.  The executions of about 80 people occurred Nov. 3 for relatively minor infractions, such as watching South Korean movies or distributing pornographic material, Korea Joongang Daily reported Monday.  People were executed in cities such as Wonsan, Chongjin, Sariwon and Pyongsong. No one was executed in Pyongyang, North Korea’s capital.  In Wonsan, eight people tied to stakes at a local stadium with their heads covered were shot with a machine gun, a source told Korea Joongang Daily. Witnesses said Wonsan authorities brought about 10,000 people, including children, to the stadium and forced them to watch.

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Armies and Police Are Being Privatized Around the World and Business Is Booming

In a world where budgets are tight, and bottom lines daunting, it makes sense that governments around the world have to do more with less, or they just have to do less. Surprisingly, one part of the state apparatus that most countries seem happy to outsource is one of its most fundamental—security. At home, cash-strapped American cities, and even communities, are turning to private forces to protect public order. And a report out of the UN on Monday shows that the private security industry is experiencing a global economic boom that many of its customers would love—the shadowy industry is growing at 7.4 percent a year and is on target to balloon to a $244 billion global market by 2016.  Unsurprisingly, the U.S. is the world’s biggest spender on private security, totaling $138 billion a year, thanks in large part to a spike in demand during the concurrent wars in Iraq and Afghanistan.

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Battlehawks and rocks that spy: 3 wild new military technologies from AUSA

BattleHawk Textron

What do a kamikaze drone, a “field and forget” surveillance system and an Israeli robot have in common? Buzz at the annual AUSA Army meeting in Washington, D.C.  Here are three new pieces of tech revealed at this year’s show.  A new “kamikaze” drone that blows itself up — and takes its target with it — was revealed at AUSA.  Made by Textron System, the Battlehawk is similar to Aerovironment’s widely publicized Switchblade. Both are drones that can be carried in a backpack and hand-launched. And they both represent a movement towards making drones more accessible at a squad level.  Rather than call in air support, a squad would have a drone literally in their hands to deploy against threats like a sniper or an ambush waiting around the corner. The Battlehawk is made of carbon-fiber wings – wings that can be curled up for deployment from a 22-inch tube launcher.

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Pentagon agency creating digital map of the world

Future military operations may use a constantly updated digital “image skin” for a comprehensive map of the world under development by the Pentagon’s National Geospatial-Intelligence Agency (NGA).  This week the NGA sought information from potential contractors to help develop the “orthorectified image skin” that would provide the base layer for the world map. Such a map would give the military a clearer picture of any potential trouble spot where they would have to operate.  Orthoimagery, according to the U.S. Geological Survey, are “high resolution aerial images that combine the visual attributes of an aerial photograph with the spatial accuracy and reliability” of a traditional map.  “A key element necessary to support global readiness is the availability of a current and accurate worldwide image base to ensure a common operational picture for all users,” the NGA document says.

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India tops new global slavery index

WhereHaveAlltheChineseMELBOURNE: About 14 million Indians are living in conditions of modern-day slavery, nearly half of 30 million across the world, according to the first Global Slavery Index published today.  The Global Slavery Index 2013, which surveyed 162 nations, was compiled by Australia-based rights organisation Walk Free Foundation using a definition of modern slavery that includes debt bondage, forced marriage, trafficked into brothels and the use of children in the military.  The Foundation’s estimate of 29.8 million slaves worldwide is higher than other attempts to quantify modern slavery. The UN estimates almost 21 million people are victims of forced labour.  India (13,956,010), China (2,949,243), Pakistan (2,127,132) and Nigeria (701,032) have the highest numbers of people enslaved, the rights group claimed.

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China employs two million microblog monitors state media say

The Beijing News says the monitors, described as internet opinion analysts, are on state and commercial payrolls.  China’s hundreds of millions of web users increasingly use microblogs to criticise the state or vent anger.  Recent research suggested Chinese censors actively target social media.  The report by the Beijing News said that these monitors were not required to delete postings.  They are “strictly to gather and analyse public opinions on microblog sites and compile reports for decision-makers”, it said. It also added details about how some of these monitors work.

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House Republicans Want To Kill Net Neutrality As Part Of Their Debt Ceiling Bill

Not sure what to make of this episode, but it matters and so here we are: A draft of provisions that Republican leaders in the House are attempting to demand in return for allowing the debt ceiling to be raised includes the elimination of net neutrality.  The language of the legislative outline that the National Review obtained calls for the “blocking” of net neutrality.  Net neutrality, if you didn’t know, is the set of rules forcing ISPs treat traffic on their networks equally, not speeding or slowing any one piece of content more than any other. This matters as many companies that provide Internet access are also part of larger conglomerates that produce media. Those companies have an inherent incentive to speed their content and slow that of their rivals.

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Americans’ Belief That Gov’t Is Too Powerful at Record Level

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PRINCETON, NJ — Six in 10 Americans (60%) believe the federal government has too much power, one percentage point above the previous high recorded in September 2010. At least half of Americans since 2005 have said the government has too much power. Thirty-two percent now say the government has the right amount of power. Few say it has too little power.  These most recent data come from Gallup’s Governance survey, conducted Sept. 5-8. The 7% who feel the government has too little power has been mostly steady since Gallup started tracking the measure regularly in 2002.

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Revealing Pictures From 1972 Rothschild “Illuminati” Ball

Rothchild MansionOn 12/12/72 Marie-Hélène de Rothschild, member of the most powerful elite family in the world, held a Surrealist Ball at Château de Ferrières, one of the family’s gigantic mansions. While these events are usually extremely secretive, photographs of this particular Ball surfaced on the web. In short, it is a mix of an “Eyes Wide Shut”-style masked ball mixed with a Lady Gaga-style pop video. I’m not even kidding. Indeed, behind the fun and games, these pics reveal the underlying ideology and the mind state of the occult elite  – which is apparently also used in the countless MK/Illuminati theme music videos discussed on this site.

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Top 1 percent take record share of U.S. income

WASHINGTON — The top 10 percent of earners took more than half of the country’s total income in 2012, the highest level recorded since the government began collecting such data a century ago, according to an updated study by prominent economists Emmanuel Saez and Thomas Piketty.  The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels since 1913, when the government instituted an income tax.  The figures underscore that even after the recession the country remains in a new Gilded Age, with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so.  High stock prices, rising home values and surging corporate profits have buoyed the recovery-era incomes of the most affluent Americans, with the incomes of the rest still weighed down by high unemployment and stagnant wages.

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