More Economic News

ECONOMIC SHECKELNOMIC




World's Stocks Controlled by Select Few


by Lauren Schenkman

WASHINGTON -- A recent analysis of the 2007 financial markets of 48 countries has revealed that the world's finances are in the hands of just a few mutual funds, banks, and corporations. This is the first clear picture of the global concentration of financial power, and point out the worldwide financial system's vulnerability as it stood on the brink of the current economic crisis.



A pair of physicists at the Swiss Federal Institute of Technology in Zurich did a physics-based analysis of the world economy as it looked in early 2007. Stefano Battiston and James Glattfelder extracted the information from the tangled yarn that links 24,877 stocks and 106,141 shareholding entities in 48 countries, revealing what they called the "backbone" of each country's financial market. These backbones represented the owners of 80 percent of a country's market capital, yet consisted of remarkably few shareholders.



"You start off with these huge national networks that are really big, quite dense," Glattfelder said. “From that you're able to ... unveil the important structure in this original big network. You then realize most of the network isn't at all important."



The most pared-down backbones exist in Anglo-Saxon countries, including the U.S., Australia, and the U.K. Paradoxically; these same countries are considered by economists to have the most widely-held stocks in the world, with ownership of companies tending to be spread out among many investors. But while each American company may link to many owners, Glattfelder and Battiston's analysis found that the owners varied little from stock to stock, meaning that comparatively few hands are holding the reins of the entire market.



“If you would look at this locally, it's always distributed,” Glattfelder said. “If you then look at who is at the end of these links, you find that it's the same guys, [which] is not something you'd expect from the local view.”



Matthew Jackson, an economist from Stanford University in Calif. who studies social and economic networks, said that Glattfelder and Battiston's approach could be used to answer more pointed questions about corporate control and how companies interact.



"It's clear, looking at financial contagion and recent crises, that understanding interrelations between companies and holdings is very important in the future,” he said. "Certainly people have some understanding of how large some of these financial institutions in the world are, there's some feeling of how intertwined they are, but there's a big difference between having an impression and actually having ... more explicit numbers to put behind it."



Based on their analysis, Glattfelder and Battiston identified the ten investment entities who are “big fish” in the most countries. The biggest fish was the Capital Group Companies, with major stakes in 36 of the 48 countries studied. In identifying these major players, the physicists accounted for secondary ownership -- owning stock in companies who then owned stock in another company -- in an attempt to quantify the potential control a given agent might have in a market.



The results raise questions of where and when a company could choose to exert this influence, but Glattfelder and Battiston are reluctant to speculate.



"In this kind of science, complex systems, you're not aiming at making predictions [like] ... where the tennis ball will be at given place in given time," Battiston said. “What you're trying to estimate is ... the potential influence that [an investor] has."



Glattfelder added that the internationalism of these powerful companies makes it difficult to gauge their economic influence. "[With] new company structures which are so big and spanning the globe, it's hard to see what they're up to and what they're doing,” he said. Large, sparse networks dominated by a few major companies could also be more vulnerable, he said. "In network speak, if those nodes fail, that has a big effect on the network."



The results will be published in an upcoming issue of the journal Physical Review E.

http://www.globalresearch.ca/index.php?context=va&aid=14934

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Related link below:

FEDERAL RESERVE MAKES 14 BILLION PROFIT OFF "CRISIS LOANS"

http://www.dailyfinance.com/2009/08/31/fed-makes-14-billion-on-risky-loans/


http://pencildicksvstheworld.blogspot.com/2009/07/total-economic-collapse-of-usa-2009.html





ECONOMIC COLLAPSE

WHO REALLY OWNS THE FEDERAL RESERVE

http://www.land.netonecom.net/tlp/ref/federal_reserve.shtml

"JUST A FEW" ROTHSCHILD ESTATES










http://en.wikipedia.org/wiki/Waddesdon_Manor





http://en.wikipedia.org/wiki/Halton_House





http://en.wikipedia.org/wiki/Ascott_House









http://en.wikipedia.org/wiki/Ch%C3%A2teau_de_Ferri%C3%A8res




http://en.wikipedia.org/wiki/Mentmore_Towers
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http://www.texemarrs.com/rothschilds_choice_promo.htm







Rothschild and their sock puppet Barack Obama....

Who Is Behind Barack Obama’s Rise to Stardom?

‘The Rothschild-Soros connection controls voter registration (ACORN), money laundering (Tides), billions in stimulus spending (Apollo), possibly the future of health care (SEIU), finance (Franks), and the Oval Office’s inner workings (Emanuel, Axelrod and Summers)’

By Victor Thorn — AFP

Is Barack Obama the product of a vast socialist conspiracy designed to undermine the fundamental tenets established by our Founding Fathers, all bankrolled and organized by Jewish financiers? The answer is unequivocally yes.

To deconstruct this labyrinth-like network, one must start at the top with Jewish businessman George Soros and his ties to the world’s most powerful Jewish banking family. Journalist, historian and economic researcher William Engdahl sets the stage.

“Soros has been identified as a front man for the Rothschild banking group. Understandably, neither he nor the Rothschilds wants this important fact to be public.” He continues, “Soros’s connection to the ultra-secret international finance circles of the Rothschilds is not just an ordinary or accidental banking connection.”

Finally, in a November 1, 1996 article, Engdahl writes, “From the very first days when Soros created his own investment fund in 1969, he owed his success to his relation to the Rothschild family banking network.”

Soros, through his Open Society Institute, funnels approximately $300 million a year into various liberal venues, including the influential MoveOn.org, which he owns. According to veteran researcher Anton Chaitkin, Soros also hand-picked Barack Obama to challenge Hillary Clinton (and ultimately defeat GOP nominee John McCain). On Sept. 5, 2008, he wrote, “Barack Obama came under special Soros sponsorship in the 2004 U.S. Senate race [and] raised $60,000 for his campaign.” After attaining victory, Obama met personally with Soros, then attended a fundraiser at his home.

Chaitkin elaborates further in “Soros Runs British Foreign Office Coup Against U.S. Elections,” an online article. “On December 4, 2006, two years after getting into the U.S. Senate, Barack Obama went to Soros’s New York office to be interviewed for higher office. Soros then took Obama into a conference room for other politically subordinate billionaires. With money and connections assured, Obama announced for the presidency soon afterward.”
Lets look at the words of Michelle Obama from a June 19, 2008 speech. She said, “We’re going to have to change our traditions and our history.” She explained further on Aug. 25, 2008. “All of us are driven by a simple belief that the world as it is just won’t do. We have an obligation to fight for the world as it should be.”

Who, precisely, will determine how our world should be? Mrs. Obama’s poignant phrase was lifted directly from Saul Alinsky, a Chicago-based Jewish extremist who penned the handbook for far-left causes, Rules for Radicals.

To implement his plans to undermine America, an intricate network needed to be established that would spread its tentacles throughout every aspect of society. One of the primary vehicles they utilized was the Tides Foundation, to which Soros contributed $13 million from 1997-2003. Established by Jewish antiwar activist Drummond Pike in 1976, this tax-exempt organization serves a very important function. According to researcher Ben Johnson of Front Page Magazine in September 2004, they “allow high-profile individuals to fund extremist organizations by ‘laundering’ their money through Tides, leaving no paper trail.”

In essence, after taking a 10 percent cut, Tides has fed over $300 million to entities such as cop killer Mumia Abu-Jamal, MoveOn.org and those who advocate abortion-on-demand, all the while assuring contributors that they won’t be publicly linked to these causes. One look at the Tide Foundation’s board reveals who calls the shots.

Drummond, senior vice president Gary Schwartz, and executive vice president Ellen Friedman are all Jewish. Pike also used his leverage to bail out ACORN’s welfare rights leader Wade Rathke, after he embezzled $948,507. To protect Rathke, ACORN never contacted law enforcement officials or sought prosecution. Instead, Stephanie Strom of The New York Times wrote on Aug. 17, 2008, “The organization announced that an anonymous supporter had agreed” to pay off the debt. That man was Drummond Pike. To cover their tracks, Arthur Schwartz (also Jewish) now coordinates their slippery public relations.

Of course, Barack Obama began his political career as the chief national trainer for ACORN, which now faces lawsuits in 14 states for voter fraud. Obama’s mentor as a community organizer in Chicago was Gerald Kellman, a Saul Alinksy proteg�. To begin his meteoric rise toward the White House, money originated from what Clarice Feldman of American Thinker calls the “Gang of Four”— Soros, Peter Lewis, Stephen Bing and Herbert & Marion Sandler. All are Jewish billionaires.

One of Obama’s most important backers was Marilyn Katz (Jewish), who oversaw security for the SDS (Students for a Democratic Society) and advocated violent guerrilla tactics toward the police (as did Obama associate William Ayers of the Weather Underground). Katz became a fundraising bundler for Obama, as well as hosting fundraisers and serving as an Illinois delegate at the 2008 Democratic National Convention.

The Tides Foundation controls the San Francisco-based Apollo Alliance, which “absolutely believes that government is the solution to all social and economic problems.”

On July 28, Phil Kerpen of Americans for Prosperity described how the “Apollo Alliance is designed to bring together the elements of organized labor with community organizers and green groups.” More importantly, Kerpen revealed that the Apollo Alliance “put out a draft stimulus bill in 2008 . . . that included almost everything that ended up being in the final stimulus bill.”

Van Jones, Obama’s new “green jobs czar,” described the Apollo Alliance as a “grand unified field theory for progressive left causes.” Who exactly is Van Jones? After participating in the 1992 L.A. riots (for which he was arrested and incarcerated), Jones told the East Bay Express on November 2, 2005, “I met all these young radical people of color—I mean, really radical Communists and anarchists. And it was like: this is what I need to be part of. I spent the next 10 years of my life working with a lot of these people I met in jail, trying to be a revolutionary. I was a rowdy black revolutionary on April 28th, and when the verdicts came down on April 29th, I was a Communist.”

To round out this list, the SEIU (Service Employees International Union) is primarily responsible for what is contained in Obama’s socialized health care bill. Andy Stern and Anna Burger lead the SEIU, both of whom are Jewish cronies of George Soros. Their vice president is Gerald Hudson (Jewish). Pushing this bill and the stimulus package to various media outlets is Robert Borosage (Jewish) of the Institute for America’s Future (also a huge recipient of Soros’s funding). Overseeing the housing and banking industries is none other than Barney Frank (Jewish), chairman of the House Financial Services Committee. Last but not least, Key members of Obama’s inner circle—David Axelrod, Lawrence Summers and Rahm Emanuel are Jewish and Bilderberg.

Putting this complicated matter into perspective is educational theorist and critic David Solway. On July 7, 2009 he wrote, “We Jews are a sly and surreptitious people . It pains me to admit this, but candor compels. . . . [T]he best way to bring America to its knees, to weaken its will to survive, to cleverly turn it against itself, was to do everything in our considerable arsenal of means to deliver the White House to Barack Obama.”

The conspiracy has been completed, and now the Jewish Rothschild-Soros connection controls voter registration (ACORN), money laundering (Tides), billions in stimulus spending (Apollo), possibly the future of health care (SEIU), finance (Franks), and the Oval Office’s inner workings (Emanuel, Axelrod and Summers).


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(Issue # 33, August 17, 2009, AMERICAN FREE PRESS)


http://www.americanfreepress.net/html/behind_barack_obama_188.html


Not Copyrighted. Readers can reprint and are free to redistribute – as long as full credit is given to American Free Press – 645 Pennsylvania Avenue SE, Suite 100 Washington, D.C. 20003

Staff








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Weekend Edition
August 28-30, 2009

Chairman Milquetoast's Solutions
Band-Aids for the Recession
By MIKE WHITNEY

A recent poll shows that most economists now believe that the recession, which began in December 2007, will end in the third quarter of 2009. There's been an uptick in manufacturing and consumer confidence, and the decline in housing prices appears to be flattening out. Unfortunately, the return to positive GDP will likely be short-lived. The current surge in production is mainly the result of President Obama's fiscal stimulus and the rebuilding of inventories that were slashed after Lehman Bros defaulted in September, 2008. These factors should boost GDP for two or perhaps three quarters before the economy lapses back into recession.

The most serious problems facing the economy have not yet been addressed or resolved. Consumer spending and bank lending are still contracting, and the banks are buried beneath $1.5 trillion in toxic assets and non-performing loans. Also, the wholesale credit system, (securitization) which provided up to 40 per cent of the credit flowing into the economy, is barely operating. No one really knows whether the system is salvageable or not. On a fundamental level, the financial system is broken and neither the Fed's zero per cent interest rates nor Obama's gigantic fiscal stimulus has reversed the prevailing downward trend. Capital has stopped moving; the velocity of money has slowed to a crawl. It's true, things are getting worse slower, but the signs of "recovery" are as faint and irregular as a dying man's breath.

The financial media has played a key role in restoring consumer confidence. Negative reports are air-brushed or shuffled to the back pages while modest improvements in housing, corporate earnings or "clunker" sales are splashed boldly across the headlines. Naturally, most of the media's attention has focused on the 6 month rally in the stock market. The S&P 500 has lunged ahead 52 percent from its March 9 low. But equities are merely reacting to the ocean of liquidity the Fed has poured into the financial system through its quantitative easing (QE) and liquidity swaps. Market analyst Andy Xie explains how it all works in his article "New Bubble Threatens a V-shaped Rebound":

"Central banks around the world, although they haven't done so deliberately, have created another liquidity bubble. It manifested itself first in surging commodity prices, next in stock markets, and lately in some property markets....

"A pure bubble tied to excess liquidity that affects one or many financial assets cannot last long. Its multiplier effect on the broad economy is limited. It could have a limited impact on consumption due to the wealth effect. As it neither stimulates the supply side nor boosts productivity, whatever story it is based on will have holes that become apparent to speculators. It doesn't take long for them to flee. Furthermore, a pure liquidity bubble without support from productivity can easily lead to inflation, which causes tightening expectations that trigger a bubble's burst.

“What we are seeing now in the global economy is a pure liquidity bubble. It's been manifested in several asset classes. The most prominent are commodities, stocks and government bonds. The story that supports this bubble is that fiscal stimulus would lead to quick economic recovery, and the output gap could keep inflation down. Hence, central banks can keep interest rates low for a couple more years. And following this story line, investors can look forward to strong corporate earnings and low interest rates at the same time, a sort of a goldilocks scenario for the stock market.

“What occurred in China in the second quarter and started happening in the United States in the third quarter seems to lend support to this view. I think the market is being misled. The driving forces for the current bounce are inventory cycle and government stimulus." Andy Xie, "New Bubble Threatens a V-Shaped Rebound"

Fed chair Ben Bernanke's low interest rates and monetization programs have flooded the markets and created the illusion of economic recovery. But investors and consumers remain skeptical. In fact, (according to zero hedge) less than $400 billion has moved from Money Markets into stocks in the last 6 months even though the index value has increased by more than $2.7 trillion. So, where did the money come from? The Fed has taken trillions in toxic securities onto its balance sheet, thus, providing financial institutions with the liquidity they need to goose the stock market. With securitization in a shambles, the banks have fewer opportunities to meet earnings expectations. Lending is down, but speculation is up. Way up.

Bernanke knows that neither stimulus nor liquidity will fix the economy. That's because many of the financial institutions that took out loans from the Fed are technically insolvent. (Borrowing more money won't help if you're already drowning in red ink) Even so, he is committed to keeping the big banks afloat and patching together the flawed wholesale credit system any way he can. This is why Bernanke should never have been reappointed. True, he demonstrated impressive imagination and skill in pumping liquidity into the financial system, but he's done nothing to role up insolvent institutions or to purge toxic assets and non performing loans from the system. The Fed has merely provided enough taxpayer-funded scaffolding to keep a rotten system propped up a little longer. What good does that do?

As early as 2006, the Bank for International Settlements (BIS) warned that loose monetary policy and complex debt-instruments were increasing systemic risk and could trigger a 1930s-type slump. In June 2008, the UK Telegraph wrote:

"A year ago, the Bank for International Settlements startled the financial world by warning that we might soon face challenges last seen during the onset of the Great Depression. In a pointed attack on the US Federal Reserve, it said central banks would not find it easy to "clean up" once property bubbles have burst...

“The fundamental cause of today's emerging problems was excessive and imprudent credit growth over a long period....The Fed and fellow central banks instinctively cut rates lower with each cycle to avoid facing the pain. The effect has been to put off the day of reckoning...

“Should governments feel it necessary to take direct actions to alleviate debt burdens, it is crucial that they understand one thing beforehand. If asset prices are unrealistically high, they must fall. If savings rates are unrealistically low, they must rise. If debts cannot be serviced, they must be written off. To deny this through the use of gimmicks and palliatives will only make things worse in the end." (UK Telegraph)

Far from heeding the BIS's warning, Bernanke headed in the opposite direction, doing everything in his power to avoid price discovery and keep the price mortgage-backed securities (MBS) and other toxic assets artificially high by providing full-value, rotating loans to underwater financial institutions. At the same time the Fed was using public funds to prop up financial markets, Bernanke was shrugging off Congress's attempts to find out which companies secured the loans; how much the loans were worth, the terms under which they were issued, and the true "mark-to-market" value of the collateral accepted by the Fed. On Aug 24, 2009, a federal judge ruling on a case brought by Bloomberg News against the Fed decided that " The Federal Reserve must make public reports about recipients of emergency loans from U.S. taxpayers under programs created to address the financial crisis, a federal judge ruled." There's no doubt that the Fed will refuse to provide the relevant information as it would surely expose the Fed's cozy and collusive relationship with the nation's biggest banks. The Fed's stonewalling in the Bloomberg case and refusal to let Congress audit its books stands in sharp contrast with Bernanke's professed commitment to "transparency", a handy buzzword typically invoked by confidence men and charlatans when they feel noose tightening around their necks.

Green Shoots or “Sugar High”?

The bond market has not been duped by the "green shoots" hype. As Paul Krugman points out:

"Net yields on most longer-term Treasury securities are lower today than they were at the end of May, even as the economy has shown signs of recovery. The 10-year T-note yield is at 3.45 per cent today, down from 3.74 per cent on May 27....There’s no hint in the data of fears about (a) crowding out (b) inflation (c) default." In other words, bonds are priced for deflation, which casts doubt on the rally in the stock market.”

Deflation is now visible in every sector of the economy. The banks are facing major losses from dodgy assets and non performing loans (A recent article in US News and World Report predicted that the loss rate on bank loans could rise to 9.1 percent, worse than the 1930s.) financial institutions and households are continuing to deleverage and pay down debt, business investment is a record lows, and unemployment is soaring. Rising defaults, foreclosures and bankruptcies all add to the massive debt liquidation that has brought about a steady decline in economic activity.

Exports are down, so is trucking. Railroad freight is off 18 per cent year-over-year. Department stores, building materials, restaurants, furniture sales, appliances, travel, retail, outdoor equipment, tech; down, down, down, down, down and down. You name it; it's down. Consumer credit is plummeting and personal savings are up. Industrial production is down, PPI down. Capacity utilization has slipped to 68.5 per cent.(another record) There's so much slack in the system, inflation could be low for years. Commercial real estate--a $3.5 trillion industry--is plunging faster than residential housing. Corporate bond defaults are at record highs, Treasury yields are flat, and the dollar index is teetering at the brink. It's a wasteland.

The main problem is falling demand from stagnant wages. 30 years of anti-labor hysteria and trickle down economics has produced a system where GDP depends on ever-increasing amounts of personal debt. But that only works for so long. When the housing bubble burst in 2006, asset prices began to tumble, and the debt-to-equity ratio for millions of households slipped into the red. Now comes the digging out phase.

It is mathematically impossible for the economy to recover without a strong consumer, but consumer spending will continue to fade until household leverage returns to its long-term trend. (Household borrowing is presently 27 percent above normal trend; about $3 trillion) Economists Martin N. Baily, Susan Lund and Charles Atkins have written an invaluable "must read" analysis of the plight of the US consumer for McKinsey Global Institute titled: "Will U.S. Consumer Debt Reduction Cripple the Recovery?". Here's an excerpt:

"Between 2000 and 2007 US households led a national borrowing binge nearly doubling their outstanding debt to $13.8 trillion. The amount of US household debt amassed by 2007 was unprecedented whether measured in nominal terms, as a share of GDP (98 per cent) or as a ratio of liabilities to personal disposable income (138 per cent) But as the global financial and economic crisis worsened at the end of last year, a shift occurred; US households for the first time since WW2 reduced their debt outstanding......We show that the hit to consumption from household debt reduction, or "deleveraging" will depend on whether it is accompanied by personal income growth.

“Over the past decade US household spending has served as the main engine of US economic growth. From 2000 to 2007 US annual personal consumption grew by 44 per cent, from $6.9 trillion to $9.9 trillion--faster than either GDP or household income. Consumption accounted for 77 per cent of real US GDP growth during this period--high by comparison with both US and international experience. The US spendthrift ways have fueled global economic growth as well. The US has accounted for one-third of the total growth in global private consumption since 1990....Powering the US spending spree through 2007 were three strong stimulants; a surge in household borrowing, a decline in saving, and a rapid appreciation of assets." (Martin N. Baily, Susan Lund and Charles Atkins, "Will U.S. Consumer Debt Reduction Cripple the Recovery?" McKinsey Global Institute.. To repeat: "Consumption accounted for 77 per cent of real US GDP growth during this period."..."The US has accounted for one-third of the total growth in global private consumption."

It should be fairly obvious by now that US consumers are undergoing a generational shift and will not be able to lead the way out of the recession as they have in the past. Nor will they miraculously "bounce back" and provide demand for products made abroad. In fact, the export-driven model (Germany, South Korea, Japan, China) is sure to be challenged in ways that were unimaginable just two years ago. With credit lines being cut, and outstanding credit shrinking by trillions in the past year alone, and unemployment nudging 10 per cent (16 per cent in real terms) the consumer will not be the locomotive driving the global economy. Credit destruction, asset firesales, defaults, and foreclosures will continue for the foreseeable future choking off growth and pushing unemployment higher. Consumption patterns are changing dramatically, although their impact won't be fully-felt until government stimulus programs run out. That's when the signs of Depression will reappear once more.

This is why Bernanke should never have been reappointed as chairman. Bernanke understands the issues---underwater banks, overextended consumers, exotic debt-instruments (derivatives), and an out-of-control financial system--but he's refused to do anything about them. He's made no effort to re-regulate the financial system, but (oddly enough) wants Congress to reward his inaction by elevating him to "Chief Regulator". Go figure? He's also done nothing to determine which institutions can be saved and which should be taken into conservatorship and have their assets put up for auction. Instead, he's given a blanket guarantee to every brokerage house on Wall Street; their garbage paper can be easily traded for US Treasuries or liquidity at any of the Fed's handy-dandy lending facilities. That's not a sign of sound judgment; it's a sign of "regulatory capture". Bernanke is a push-over; Chairman Milquetoast. That's why Wall Street loves him; he gives them cheap capital with one hand and a pat on the back with the other.

It's no secret what's wrong with the economy; the banks are struggling and consumers are broke. But there are remedies, they simply require fresh thinking about regulation and how to maintain aggregate demand. (A boost in pay would be a good start) The real problem is the institutional bias of the Fed itself. The Central Bank's policies are shaped by its allegiance to its constituents, particularly the big banks. Anything that doesn't advance the objectives of the financial establishment, is just not on the Fed's radar. That's why Bernanke's lame efforts to revive the economy will continue to sputter, because we've gone as far as we can without fixing household balance sheets and purging the excessive debt from the system.

The Fed is an obstacle to change, which is why more and more people are starting to figure out that the Fed has got to go.

Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com



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