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Monday, June 30, 2008

"...McCain is mentally unstable and out of control..."

by Bo Jangles
Daily Kos
June 29, 2008

This November, for the first time, McCain's name will appear on a national ballot. While Arizona residents know a lot about McCain's political history, the nation, as a whole, knows relatively little. His national image is largely a fantasy created by his public relations machine. It is time now that the nation learns the facts about McCain. What better place to begin than in his home state with his fellow Republicans?

Bo Jangles's diary :: ::

Many Arizona Republicans are upset with McCain because they feel that he is not sufficiently conservative. This is particularly true about McCain's statements and positions regarding illegal immigration and illegal immigrants.

Bob Haney, the Republican state committee chairman in Arizona's 11th District, has described the situation to Max Blumenthal this way:

"People would be calling in to [state committee] headquarters every week, absolutely enraged, threatening to leave the party because of some comments McCain made," Haney told me. "The guy has no core, his only principle is winning the presidency. He likes to call his campaign the 'straight talk express.' Well, down here we call it the 'forked tongue express.'"

In response to complaints by Republicans in his district, Haney introduced a resolution to censure McCain for "dereliction of his duties and responsibilities as a representative of the citizens of Arizona."

The resolution easily passed in the 11th District and was then brought before the county GOP.

What was McCain's response to this?

Not content to let the purely symbolic resolution stand, McCain recruited a slate of candidates to oust Haney and his allies in last November's state committee elections. McCain supporters formed a political action committee, Grassroots Arizona PAC, to bankroll this effort. Forty percent of Grassroots Arizona's funds were provided by two Democratic donors from San Francisco apparently enraptured with McCain and his "maverick" image, Gregory and Lisa Wendt, which added fuel to the flames of Haney's revolt. McCain's slate was formidable, including Fife Symington, a former Arizona governor coaxed out of retirement to come to the rescue of his old friend. So worried was McCain about being rebuked by his own party that he threw his own hat into the race, announcing that he would run for state committeeman. When the votes were counted, McCain and his entire slate were resoundingly defeated.

What do Arizona Republicans think of how McCain handled this situation? According to Max Blumenthal:

McCain's botched revenge has solidified his reputation in Arizona's Republican circles as a divisive, untrustworthy and even dangerous figure. Haney hopes the general public meets this side of McCain before his penchant for angry reprisals is invested with the powers of the presidency. "This just shows that McCain is mentally unstable and out of control and vindictive," Haney told me. "If he is determined to go through that much trouble to attack a district committee chairman, what does that say about his ability to handle real political problems?"

Points well taken, Mr. Haney! Now let's see if we can make the entire electorate of this nation aware of how Senator McCain has operated in his home state of Arizona!


Sunday, June 29, 2008

Guess What "Surprise" Republicans Yearn For

McCain adviser hints terrorist attack on U.S. soil would be a "big advantage"

By Alexander Cockburn
June 29, 2008

Everybody knows it, but it took a tacky Republican operator to come right out and say it. Charlie Black, John McCain’s campaign adviser, recently let drop to Fortune magazine that another terrorist attack on U.S. soil would be a "big advantage" for the Republican presidential candidate.

Of course McCain lost no time in distancing himself from Black’s remark, with the same bogus moral outrage with which he decries racist slurs on his opponent.

"I cannot imagine why he would say it. It's not true. I've worked tirelessly since 9/11 to prevent another attack on the United States of America. My record is very clear."

Black duly threw on some sackcloth and echoed McCain: "I deeply regret the comments. They were inappropriate. I recognize that John McCain has devoted his entire adult life to protecting his country and placing its security before every other consideration.”

Now, Black is no novice in campaign tactics.

Nearly 40 years ago he helped put Jesse Helms in the US senate, and has been an innovative dirty trickster ever since.

He knew exactly what he was doing when he let drop that remark to Fortune, just as McCain no doubt approved the indiscretion. Both men know that McCain’s last best hope of beating Barack Obama in the November election is to rattle the nation’s teeth with vivid evocations of national emergency, and stampede the fearful voters into putting a “war hero” into the Oval Office.

Both men also know that almost seven years after the Trade Towers went down, the possibility of a terrorist attack is not the prime source of disquiet for most Americans, who can barely afford to drive to work or pay the mortgage on their homes.

The signs that the “war on terror” is losing its political edge are manifold.

In the months after the 9/11 attack the Bush administration faced no serious opposition in trampling the US constitution under foot in the name of national security. The Patriot Act shot through Congress with just one senatorial “No” vote, from Russ Feingold of Wisconsin. The symbol of U.S. “resolve” around the world became the prison at Guantanamo, filled to this day with men against whom no formal charges had been laid, subjected to appalling tortures and denied the right to legal counsel.

This month the U.S. courts have delivered two resounding rebuffs to the White House’s efforts to say that prisoners haled to Guantanamo had no rights under U.S. law.

On June 12 , in the case of Boumediene v. Bush, the US Supreme Court ruled, 5-4, that Lakhdar Boumediene, a Bosnian citizen seized in October 2001, was entitled to habeas corpus – i.e., the right under the US constitution to have an independent court of law review the legality of his detention. Justice Anthony Kennedy stated ringingly in his draft of the majority opinion, “The laws and Constitution are designed to survive, and remain in force, in extraordinary times.”

The right erupted in fury, denouncing “the Boumediene Five”.

The Wall Street Journal bellowed in an editorial that the majority justices had signed the death warrants of American soldiers fighting terror overseas. At a town hall meeting in Pemberton, N.J., McCain called it “one of the worst decisions in the history of this country.”

For his part Obama reiterated his "firm belief that we can track terrorists, we can crack down on threats against the United States, but we can do so within the constraints of our Constitution."

Then, this last Monday, a three-judge federal court in Washington followed swiftly in the tracks on the June 12 ruling, declaring that Hozaifa Parhat, a 33-year-old Uighur Muslim from the oppressed Xinjiang province of China, seized in Turkmenistan in 2001, had the right to seek release immediately through a writ of habeas corpus.

Thus, in the space of less than a fortnight, the US courts sliced away what Bush and his lawyers have insisted for seven years to be the vital right to hold terrorists indefinitely, without charges or rights of any sort.

Judges mostly rule in tune with the temper of the times, and the decisions this month are no exception.

The surmise of those who dream, like Black, of a new terrorist attack, is that if one had rocked America on June 1 of this year the judges might well have held their hand.

David Addington, senior aide to vice president Dick Cheney was quoted last year by Jack Goldsmith, a former Justice Department lawyer, as having said yearningly that "we’re one bomb away from getting rid of that obnoxious court,” referring to the secret and in fact compliant FISA court that oversees clandestine wiretapping.

Almost every presidential election sees allegations of an imminent “October surprise”. There’s zero doubt what sort of surprise McCain and the desperate Republicans are yearning for.


Saturday, June 21, 2008

Iran says Israel a 'dangerous regime'

UN chief warns against strike on Iran

Gulf News
June 21, 2008

Tehran: A military strike against Iran could turn the Middle East into a "ball of fire" and push Iran to a more aggressive stance on its nuclear program, the head of the UN nuclear watchdog said."In my opinion, a military strike will be the will turn the Middle East to a ball of fire," International Atomic Energy Agency chief Mohamad Al Baradei told Al Arabiya television.

It also could prompt Iran to press even harder to seek a nuclear program, and force him to resign, he said.

Iran also called Israel a "dangerous regime" on Saturday, after a US report that the Jewish state had carried out a large military rehearsal for a potential bombing of Iran’s nuclear facilities.

"It demonstrates the Islamic Republic of Iran's view that this [Israel] is a dangerous regime and an impediment to peace and calm in the region and world," Iranian government spokesman Gholamhossein Elham said.Western powers suspect Iran is seeking to develop nuclear bombs.

Israel has described Iran's nuclear programme as a threat to its existence. Earlier this month, Israeli Transport Minister Shaul Mofaz told an Israeli newspaper an attack on Iran looked "unavoidable" if it continues its nuclear programme.


Tuesday, June 10, 2008

Kucinich's Articles of Impeachment, with New Orleans Focus

Last night Rep. Dennis Kucinich was on the floor of the House of Representatives reading 35 Articles of Impeachment against George W. Bush, broadcast live on C-Span. It was covered by Thomas D'Antoni, and the full transcript is available at AfterDowningStreet.

That giant sucking sound you hear is the lack of coverage from many major media outlets.

The resolution ranged from the march to war to disregarding environmental concerns.

Article 31 was timely given John McCain's claim in a New Orleans suburb last week to have supported the two 8/29 investigations that he voted against.

This is what Rep. Kucinich had to say about the bungled handling of Hurricane Katrina.

This is a condensed version of his New Orleans resolution:

A FEMA warning for worst possible disasters in 2001 included a terrorist attack in New York, and a major hurricane hitting New Orleans. The hurricane was listed first. An earlier preparedness exercise demonstrated that thousands of indigent residents would need substantial assistance to evacuate New Orleans. Despite this study, George Bush cut budgets and denied grants to the Gulf Cost. The Army Corps levee budget was cut in 2004.

By 2005, it was slashed by 44 percent. As a result, the Army Corps was forced to suspend repair work on the levees. The President was given multiple warnings that the storm could be catastrophic. The day before the storm hit, the National Weather Service issued an alert that devastating damage was expected. This was printed in all capital letters.

It detailed that most of the area would be uninhabitable for weeks, if not longer, and at least half of well constructed homes would be destroyed. Power outages and water shortages "would make human suffering incredible by modern standards." Homeland Security was also briefed.

According to The New York Times, a Homeland Security report issued hours before storm said that severe flooding and/or levee breaching was probable. These briefs "clearly contradict that such devastation could not have been predicted."

Rep. Kucinich repeated Bush's statement, "I don't think anyone anticipated the breach of the levees," comment on Sept. 1 2005, and listed the response as "Criminally delayed, indifferent and inept."

The only top FEMA official posted in New Orleans in the immediate aftermath emailed Michael Brown on Aug. 31st regarding the conditions that were past critical. He said that without immediate help, "Many will die within hours."

Brown replied, "Thanks for the update. Anything specific I need to do or tweak?" Kucinich noted that Homeland Security's Michael Chertoff "Seemed to not know what happened on ground until reporters told him."

The Saturday before the storm Governor Kathleen Blanco asked the President to declare a Federal State of Emergency. The Sunday before the levees beached, New Orleans Mayor Ray Nagin declared a state of emergency and mandatory evacuation.

Kucinich summed up Article 31 with, "This shows that local authorities knew how bad the destruction was going to be, and anticipated being overwhelmed. The failure to act demonstrates gross negligence."

He added in the next Article that, "George Bush knew the expected results of climate change and the role of human activity in climate change."

That ties in to the extremely warm waters of the Gulf as the hurricane gained strength that summer. As a Katrina relocatee I paid particular attention to every fact listed in Article 31, which would already have been uncovered in the 8/29 investigation McCain voted down twice.

This information has now been entered into the Congressional Record the hard way, and it is sure to find a second life on YouTube:


Monday, June 09, 2008

Rome food summit calls for in-depth study on bio-fuels

By Chandra Shekhar
PTI Press Trust of India
June 6, 2008

The World Food Security summit today closed with a call for an in-depth study to ensure production of fuels from farm products does not affect global food supply - a demand that has also been raised by India.

"We are convinced that in-depth studies are necessary to ensure that production and use of biofuels is sustainable in accordance with the three pillars of sustainable development," said the declaration adopted by 180 countries.

The study on bio-fuels should be done in the backdrop of need to achieve and maintain global food security, said the draft which was approved after much deliberations and opposition by the Latin American countries.

Making a strong case for examining the use of bio-fuels as alternative fuels, Agriculture Minister Sharad Pawar had said "if we decided to convert all of world's grain into motor fuel we will still need to use lots of oil and we would not be having anything to eat".

The Minister further said, "Conversions of food grain and oil seeds for producing bio-fuel, prima facie appears to be fraught with food security concerns as is evident already."

The world leaders met for three days in Rome to devise strategies to deal with the global food crisis and soaring prices, which are hitting the poor the hardest.

Several leaders, especially Brazilian President Luiz Lula da Silva defended the use of bio-fuel by pointing out, "Biofuels are not the villain menacing food security in poor countries, we must therefore clear away the smoke screens raised by powerful lobbies who try to blame ethanol production for recent price inflation in food prices."


Saturday, June 07, 2008

Iraq Lawmakers Want US Forces Out as Part of Deal

June 4, 2008

by: Reuters

Washington - A majority of the Iraqi parliament has written to Congress rejecting a long-term security deal with Washington if it is not linked to a requirement that U.S. forces leave, a U.S. lawmaker said on Wednesday.

Rep. William Delahunt, a Massachusetts Democrat and Iraq war opponent, released excerpts from a letter he was handed by Iraqi parliamentarians laying down conditions for the security pact that the Bush administration seeks with Iraq.

The proposed pact has become increasingly controversial in Iraq, where there have been protests against it. It has also drawn criticism from Democrats on the presidential election campaign trail in the United States, who say President George W. Bush is trying to dictate war policy after he leaves office.

"The majority of Iraqi representatives strongly reject any military-security, economic, commercial, agricultural, investment or political agreement with the United States that is not linked to clear mechanisms that obligate the occupying American military forces to fully withdraw from Iraq," the letter to the leaders of Congress said.

The signatures represented just over half the membership of Iraq's parliament, said Delahunt, a House Foreign Affairs subcommittee chairman.

Two Iraqi lawmakers whose parties were listed as signatories testified to Delahunt's panel on Wednesday that U.S. troops should leave Iraq, and that talks on the long-term security pact should be postponed until after they are gone.

"What are the threats that require U.S. forces to be there?" asked Nadeem Al-Jaberi, a co-founder of the al-Fadhila Shi'ite political party, speaking through a translator.

"I would like to inform you, there are no threats on Iraq. We are capable of solving our own problems," he declared. He favored a quick pullout of U.S. forces, which invaded the country in 2003 and currently number around 155,000.

A Sunni Iraqi lawmaker, Khalaf Al-Ulayyan, founder of the National Dialogue Council, said bilateral talks on a long-term security deal should be shelved until American troops leave -- and until there is a new government in Washington.

"We prefer to delay until there is a new administration in the United States," he said. The United States elects a new president in November; Democrat Barack Obama, who clinched his party's nomination this week, is among senators sponsoring a bill requiring any long-term pact with Iraq be submitted to Congress for approval.

A senior U.S. official said in Baghdad earlier this week that the United States still hopes to reach a new security agreement with Iraq by July, even though officials in the government of Prime Minister Nuri al-Maliki say negotiations are at an early stage.


Monday, June 02, 2008

Bush at Center of Intelligence Leak

By Jason Leopold
The Intelligence Daily
May 31, 2008

Attorneys and current and former White House officials close to the investigation into the leak of covert CIA operative Valerie Plame Wilson said Thursday that President Bush gave Vice President Dick Cheney the authorization in mid-June 2003 to disclose a portion of the highly sensitive National Intelligence Estimate to Washington Post reporter Bob Woodward and former New York Times reporter Judith Miller.

These current and former White House officials are among the 36 witnesses who have testified before a grand jury and have been cooperating with the special counsel's probe since its inception.

The officials, some of whom are attorneys close to the case, added that more than two dozen emails that the vice president's office said it recently discovered and handed over to leak investigators in February show that President Bush was kept up to date about the circumstances surrounding the effort to discredit former Ambassador Joseph Wilson.

The sources indicated that the leak probe is now winding down, and that soon, new information will emerge from the special counsel's office that will prove President Bush had prior knowledge of the White House campaign to discredit Plame Wilson's husband, former Ambassador Joseph Wilson, who accused the administration of "twisting" intelligence on the Iraqi threat in order to win public support for the war.

The new information that surfaced late Wednesday places President Bush at the center of the probe for the first time since the investigation into the leak began more than two years ago and raises new questions as to whether Bush knew in advance the lengths to which senior White House officials went to discredit Wilson.

In the court filing, Special Prosecutor Patrick Fitzgerald wrote that Cheney's former chief of staff, I. Lewis "Scooter" Libby, "testified that he was specifically authorized in advance of the meeting to disclose the key judgments of the classified NIE to [former New York Times reporter Judith] Miller on that occasion because it was thought that the NIE was 'pretty definitive' against what Ambassador Wilson had said and that the Vice President thought that it was 'very important' for the key judgments of the NIE to come out."

"Defendant further testified that he at first advised the Vice President that he could not have this conversation with reporter Miller because of the classified nature of the NIE. Defendant testified that the Vice President later advised him that the President had authorized defendant to disclose the relevant portions of the NIE," the filing further states.

"Defendant testified that he also spoke to David Addington, then Counsel to the Vice President, whom defendant considered to be an expert in national security law, and Mr. Addington opined that Presidential authorization to publicly disclose a document amounted to a declassification of the document. Defendant testified that he thought he brought a brief abstract of the NIE's key judgments to the meeting with Miller on July 8. Defendant understood that he was to tell Miller, among other things, that a key judgment of the NIE held that Iraq was 'vigorously trying to procure' uranium. Defendant testified that this July 8th meeting was the only time he recalled in his government experience when he disclosed a document to a reporter that was effectively declassified by virtue of the President's authorization that it be disclosed. Defendant testified that one of the reasons why he met with Miller at a hotel was the fact that he was sharing this information with Miller exclusively."

In October 2003, three months after Plame Wilson's CIA status and identity were unmasked in print by columnist Robert Novak, President Bush said publicly that it was unlikely that the individual who leaked her name would ever be found.

"I mean this is a town full of people who like to leak information," Bush said during a press conference on Oct. 7, 2003. "And I don't know if we're going to find out the senior administration official. Now, this is a large administration, and there's lots of senior officials. I don't have any idea."

Details of President Bush's involvement in the effort to counter the former ambassador's claims came in a court document filed late Wednesday evening in US District Court in Washington by Special Prosecutor Patrick Fitzgerald, which was first reported by the New York Sun newspaper.

President Bush retained a private attorney when he was interviewed in the leak probe two years ago, specifically about whether he knew about it or had authorized it.

According to four attorneys who over the past two days have read a tran scri pt of the President Bush's interview with investigators, Bush did not disclose to either investigators or the special counsel that he had authorized Cheney or any other administration official to leak portions of the NIE to Woodward and Miller or any other reporter. Rather, these people said the president said he frowned upon "selective leaks."

Bush also said during the interview two years ago that he had no prior knowledge that anyone on his staff had been involved in a campaign to discredit Wilson or that individuals retaliated against the former ambassador by leaking his wife's undercover identity to reporters.

The 39-page court document Fitzgerald filed late Wednesday included previously unreported testimony given to a grand jury by Cheney's former chief of staff, I. Lewis "Scooter" Libby. Libby was indicted in October on five-counts of perjury, obstruction of justice, and lying to investigators about how he discovered Plame Wilson's identity.

Libby testified that Cheney had received explicit instruction from President Bush to declassify a portion of the October 2002 NIE that said Iraq tried to purchase 500 tons of yellowcake uranium ore from Niger and share that information with reporters like Miller and Woodward, whose previous work proved to be sympathetic to the administration and would help to discredit Wilson, according to the court document and attorneys and current and former administration officials close to the investigation.

Libby's "participation in a critical conversation with Judith Miller on July 8 (discussed further below) occurred only after the Vice President advised defendant that the President specifically had authorized defendant to disclose certain information in the NIE," the Fitzgerald's filing states.

"Defendant testified that the circumstances of his conversation with reporter Miller - getting approval from the President through the Vice President to discuss material that would be classified but for that approval - were unique in his recollection."

"Defendant further testified that on July 12, 2003, he was specifically directed by the Vice President to speak to the press in place of Cathie Martin (then the communications person for the Vice President) regarding the NIE and Wilson," the court filing states. "Defendant was instructed to provide what was for him an extremely rare "on the record" statement, and to provide "background" and "deep background" statements, and to provide information contained in a document defendant understood to be the cable authored by Mr. Wilson."

On June 27, 2003, two weeks before Libby's meeting with Miller and disclosing to her portions of the NIE, Libby met with Woodward, the Pulitzer Prize-winning reporter, and leaked the portion of the NIE that dealt with Iraq's attempt to acquire uranium from Niger, which was first reported by this reporter in March.

A week or so earlier, Woodward met with two other government officials, one of whom told him in a "casual" and off-handed manner that Wilson's wife worked for the CIA.

Woodward said the meeting with Libby and the other government officials had been set up simply as "confidential background interviews for my 2004 book 'Plan of Attack' about the lead-up to the Iraq war, ongoing reporting for the Washington Post and research for a book on Bush's second term to be published in 2006."

Woodward wrote a first-person account for the Washington Post after he gave a sworn deposition to Fitzgerald about information he had learned about Valerie Plame Wilson. It was a shocking revelation at the time. Woodward had publicly discounted the importance of the Plame Wilson leak and had referred to Fitzgerald as a "junkyard dog" prosecutor. He then revealed in November that he had been told about Plame Wilson's CIA employment in June 2003 - before any other journalist.

The Watergate-era journalist wrote that when he met with Libby on June 27, 2003, "Libby discussed the October 2002 National Intelligence Estimate on Iraq's alleged weapons of mass destruction, mentioned "yellowcake" and said there was an effort by the Iraqis to get it from Africa. It goes back to February '02. This was the time of Wilson's trip to Niger."

The information in the NIE about Niger was still considered highly classified and extremely sensitive, and although Woodward had been the recipient of classified information on other occasions during the course of gathering material for his books, the data he was provided with concerning the NIE had been authorized by Cheney in order to rebut Wilson. Woodward never wrote a story for the Post about the intelligence information he was given.

President Bush signed an executive order in March 2003 authorizing Cheney to declassify certain intelligence documents. The executive order was signed on March 23, 2003, four days after the start of the Iraq war, and two weeks after Wilson first appeared on the administration's radar.

Jason Leopold's Website -- Visit The Public Record!


Sunday, June 01, 2008

The Great Oil Swindle
How much did the Fed really know?

by Mike Whitney
Smirking Chimp
May 31, 2008

The Commodity Futures and Trading Commission (CFTC) is investigating trading in oil futures to determine whether the surge in prices to record levels is the result of manipulation or fraud.

They might want to take a look at wheat, rice and corn futures while they're at it. The whole thing is a hoax cooked up by the investment banks and hedge funds who are trying to dig their way out of the trillion dollar mortgage-backed securities (MBS) mess that they created by turning garbage loans into securities.

That scam blew up in their face last August and left them scrounging for handouts from the Federal Reserve. Now the billions of dollars they're getting from the Fed is being diverted into commodities which is destabilizing the world economy; driving gas prices to the moon and triggering food riots across the planet.

For months we've been told that the soaring price of oil has been the result of Peak Oil, fighting in Iraq, attacks on oil facilities in Nigeria, labor problems in Norway, and (the all-time favorite)growth in China. It's all baloney. Just like Goldman Sachs prediction of $200 per barrel oil is baloney.

If oil is about to skyrocket then why has G-Sax kept a neutral rating on some of its oil holdings like Exxon Mobile? Could it be that they know that oil is just another mega-inflated equity bubble---like housing, corporate bonds and stocks—that is about to crash to earth as soon as the big players grab a parachute?

There are three things that are driving up the price of oil: the falling dollar, speculation and buying on margin.

The dollar is tanking because of the Federal Reserve's low interest monetary policies have kept interest rates below the rate of inflation for most of the last decade. Add that to the $700 billion current account deficit and a National Debt that has increased from $5.8 trillion when Bush first took office to over $9 trillion today and it's a wonder the dollar hasn't gone “Poof” already.

According to a January 4 editorial in the Wall Street Journal: “If the dollar had remained 'as good as gold' since 2001, oil today would be selling at about $30 per barrel, not $99. (today $126 per barrel) The decline of the dollar against gold and oil suggests a US monetary that is supplying too many dollars.” Wall Street Journal 1-4-08

The price of oil has more than quadrupled since 2001, from roughly $30 per barrel to $126, WITHOUT ANY DISRUPTIONS TO SUPPLY. There's no shortage; it's just gibberish.

As far as “buying on margin” consider this summary from author William Engdahl:

“A conservative calculation is that at least 60% of today’s $128 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government’s Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today's price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme “leverage” of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population.”

So the investment banks and their trading partners at the hedge funds can game the system for a mere 8 bucks per barrel or 16 to 1 leverage. Not bad, eh?

Is it possible that gambling on oil futures might be a temptation for banks that are already underwater from a trillion dollars worth of mortgage-related deals that have “gone south” leaving the banking system essentially bankrupt?

And if the banks and hedgies are not playing this game, then where is the money coming from? I have compiled charts and graphs that show that nearly two-thirds of the big investment banks' revenue came from the securitization of commercial and residential real estate loans. That market is frozen. Besides, this is not just a matter of “loan delinquencies” or MBS that have to be written off. The banks are "revenue starved".

How are they filling the coffers? They're either neck-deep in interest rate swaps, derivatives trading, or gaming the futures market. Which is it?

Of course, there is one other possibility, but if that possibility turned out to be right than it would cast doubt on the legitimacy of the entire financial system. In fact, it would prove that the system is being rigged from the top-down by our friends at the Banking Politburo, the Federal Reserve.

Here goes:

What if the investment banks are trading their worthless MBS and CDOs at the Fed's auction facilities and using the money ($400 billion) to drive up the price of raw materials like rice, corn, wheat, and oil?

Could it be? Could the Fed really be looking the other way so it can bail out its banking buddies while they drive prices skyward?

If it is true; (and I suspect it is) it hasn't done much good. As the Associated Press reported yesterday:

The Federal Reserve announced Thursday that it will make a fresh batch of short-term cash loans available to squeezed banks as part of an ongoing effort to ease stressed credit markets. The Fed said it will conduct three auctions in June, with each one making $75 billion available in short-term cash loans. Banks can bid for a slice of the available funds. It would mark the latest round in a program that the Fed launched in December to help banks overcome credit problems so they will keep lending to customers.”

Another $225 billion for the bankers and not a dime for the struggling homeowner!

The Fed is bankrupting the country with their permanent rotating loans to keep reckless speculators from going under. So much for moral hazard.

As far as speculation, there is ample evidence that the system is being manipulated. According to MarketWatch:

Speculative activity in commodity markets has grown "enormously" over the past several years, the Homeland Security and Governmental Affairs Committee said in a news release. It pointed out that in five years, from 2003 to 2008, investment in the index funds tied to commodities has grown by 20-fold -- to $260 billion from $13 billion.”

And here's a revealing clip from the testimony of Michael W. Masters of Masters Capital Management, LLC, who addressed the issue of “Commodities Speculation” before the Committee on Homeland Security and Governmental Affairs this week:

“Today, Index Speculators are pouring billions of dollars into the commodities futuresmarkets, speculating that commodity prices will increase. ...In the popular press the explanation given most often for rising oil prices is the increased demand for oil from China. According to the DOE, annual Chinese demand for petroleum has increased over the last five years from 1.88 billion barrels to 2.8 billion barrels, an increase of 920 million barrels.8 Over the same five-year period, Index Speculatorsʼ demand for petroleum futures has increased by 848 million barrels."


Index Speculators have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years.

Today, in many commodities futures markets, they are the single largest force. The huge growth in their demand has gone virtually undetected by classically-trained economists who almost never analyze demand in futures markets.

As money pours into the markets, two things happen concurrently: the markets expand and prices rise.

One particularly troubling aspect of Index Speculator demand is that it actually increases the more prices increase. This explains the accelerating rate at which commodity futures prices (and actual commodity prices) are increasing.


The CFTC has granted Wall Street banks an exemption from speculative position limits when these banks hedge over-the-counter swaps transactions.

This has effectively opened a loophole for unlimited speculation. When Index Speculators enter into commodity index swaps, which 85-90% of them do, they face no speculative position limits.... The result is a gross distortion in data that effectively hides the full impact of Index Speculation.” (Thanks to Mish's Global Economic Trend Analysis; the one “indispensable” financial blog on the Internet)

Masters adds that the CFTC is pressing to make “Index Speculators exempt from all position limits” so they can make “unlimited” bets on the futures which are wreaking havoc on the global economy and pushing millions towards starvation. Of course, these things pale in comparison to the higher priority of fatting the bottom line of the parasitic investor class.

Brimming oil tankers are presently sitting off the coasts of Iran and Louisiana. The Strategic Petroleum Reserve has been filled. Demand is flat.

The world's biggest consumer of energy (guess who?) is cutting back .

As CNN reports:

At a time when gas prices are at an all-time high, Americans have curtailed their driving at a historic rate. The Department of Transportation said figures from March show the steepest decrease in driving ever recorded. Compared with March a year earlier, Americans drove an estimated 4.3 percent less -- that's 11 billion fewer miles, the DOT's Federal Highway Administration said Monday, calling it "the sharpest yearly drop for any month in FHWA history." (CNN)

The great oil crunch is another fabricated crisis; another "smoke and mirrors" fiasco; another Enron-type shell-game engineered by banksters and hedge fund managers.

Once again, the bloody footprints can be traced right back to the front door of the Federal Reserve. Don't expect help from the regulators either; they've all been replaced with business reps like Harvey Pitt or Hank Paulson. The only time anyone in the Bush administration finds their conscience is when they're offered a multi-million dollar “tell all” book deal.

Can you hear me, Scotty?