U.S. Economic/Financial News
London-Linked Bankers Move To Perpetrate Another Fraud
Sept. 11 (EIRNS)In keeping with the demands made at the April 2 London G20 finance ministers meeting by British Prime Minister Gordon Brown and U.S. Treasury Secretary Timothy Geithner, that the G20 countries continue to employ a stimulus programi.e., a policy of unlimited bailout of the bankrupt financial systemthe American Bankers Association (ABA) sent a letter to Geithner and Federal Reserve chairman Ben Bernanke demanding that they use the upcoming G20 meeting in Pittsburgh, to curb efforts by the Financial Accounting Standards Board (FASB) to change present accounting methods used to determine the value of the toxic debt on the books of banks and financial institutions. The FASB has called for a return to mark-to-market accounting, by which banks must value assets on their books at present market value, rather than at artificial values determined by mathematical models.
The FASB has been under pressure from the banks, and has been wavering in its demand for a return to mark-to-market accounting, postponing the adoption of new rules until the end of 2010. While this gives the bankrupt financial institutions another year to prop up their dead assets, through demands for trillions more dollars in hyperinflationary bailouts, this is not enough for the looters, who demand the right to continue to carry worthless assets on their books, and to buy and sell them with funds provided at taxpayer expense, with no intervention by any regulatory agency.
If the FASB proposal for a return to mark-to-market accounting were applied, trillions of dollars of financial paper currently held by financial institutions would have to be wiped from their books. This is why the ABA insisted that Geithner and Bernanke act on their behalf. The adoption of the FASB proposal, the ABA stated in their letter, would undermine the G20's efforts to strengthen the financial system (!). ABA president Edward Yingling went further, arguing that expansion of mark-to-market accounting would reduce lending. (Lending continues to be minimal, at best.)
The ABA is arguing that the present model, so-called mark-to-model accounting, should be maintained, as it is essential for the smooth functioning of financial markets. Under this model, assets on the books of banks and financial institutions can be held at the value ascribed to them by the mathematical model which created them. It is these mathematical models which produced the financial bubble in derivatives trading that led to the biggest financial crash since the collapse of the Lombard banking system in the 14th Century.
The biggest defender of these models has been former Fed chairman Alan Greenspan, but the decision, by former Treasury Secretary Hank Paulson, aided by Bernanke and Geithner, in September 2008, to prop up this bubble, at taxpayer's expenseagainst the advice of Lyndon LaRouche, and against the wishes of the American peoplehas accelerated the collapse of the physical economy. This crash has exposed the fraudulent nature of these models, and has forced serious economists to take up the call by LaRouche for bankruptcy reorganization, and treating the creation of the bubble as a criminal matter, rather than merely a cause for regulation.
LaRouche denounced the efforts of the ABA as an attempt to perpetuate a gigantic fraud. Everyone knows these banks are bankrupt, he said. Any effort to protect the worthless debt on their books should be treated as a criminal matter. He added that any effort, by Geithner or Bernanke, to back up this fraud, makes them complicit in these criminal acts.
Obama's 'All Youth Left Behind' Sends Jobless Rate Soaring
Sept. 6 (EIRNS)The rate of unemployment for workers aged 16 to 19, soared to 25.5% in August, the highest recorded level since the Bureau of Labor Statistics began keeping track of such data in 1948. At the onset of the Obama Presidency in January 2009, the unemployment rate for this age group was 20.8%.
This represents merely the massaged official unemployment rate; when the number of those aged 16 to 19 who are working part-time for economic reasons, and those who have left the labor force, is factored in, the rate is likely 40%. The official unemployment rate for workers in the 20-to-24 age range has surged to officially 15.1% under Obama, but in reality, it is much higher.
This constitutes Obama's "All Youth Left Behind" program. During the Presidential race, he cynically pitched his campaign to young Americans. Compare what Obama has done, to President Franklin Roosevelt's Civilian Conservation Corps, which provided work, skills, social orientation, and hope, to millions of youth.