NOVANEWS
Federal Reserve Under Fire for Lending Big to Foreign Banks During Financial Crisis
By Stephen Clark
Reuters
The Federal Reserve is under increased scrutiny following new disclosures that the central bank supplied trillions of dollars in emergency loans not just to Wall Street but also foreign-owned banks in 2008 and 2009. (Reuters)
As President Obama’s deficit commission nears a vote on a plan to slash U.S. government spending, the Federal Reserve is under fire after it revealed it gave a big chunk of its multi-trillion dollar Wall Street bailout to companies not based on Wall Street — or even in the United States.
The disclosures, released Wednesday, come as Federal Reserve Chairman Ben Bernanke defends the central bank’s plan to drop another $600 billion into Treasury securities to spur the lending by financial institutions.
While the Federal Reserve helped companies that had never before received Fed assistance, including several U.S. firms that are not financial institutions, the central bank lent billions to foreign banks that operate in the U.S., including Germany’s Deutsche Bank Securities, which got $290 billion in mortgage securities; London-based Barclay’s, which received a $47.9 billion loan; France’s BNP Paribas Securities, Switzerland’s UBS Securities LLC and Daiwa Securities America, a subsidiary of one of Japan’s largest brokerage houses.
Sen. Bernie Sanders, I-Vt., called the disclosure “jaw dropping.” The Federal Reserve was forced to disclose the information under a provision authored by Sanders in the new financial regulatory law.
“We now know that the Fed loaned trillions of dollars at zero or near-zero interest rates not only to the largest financial institutions in the country, but also to many of our largest corporations — including GE, McDonalds and Verizon,” Sanders said in a statement released after the disclosure.
“Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations, including two European megabanks — Deutsche Bank and Credit Suisse,” he said. ”As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”
Among the questions Sanders said must be asked: Has the Federal Reserve of the United States become the central bank of the world?
The revelation was the latest development in the emerging battle over the central bank’s long-standing “dual mandate,” which requires it to give equal weight to fighting inflation and creating jobs when it sets interest rate and other monetary policy.
James Bullard, president of the Federal Reserve of St. Louis, told Fox Business Network on Wednesday that “it would be OK with me” if Congress approved new legislation proposed by Republicans to eliminate the dual mandate.
Bullard seemed to break ranks with the Fed’s board of governors in Washington, which supports maintaining the existing directive.
“The only thing the Fed can do in the long run is control the inflation rate,” Bullard told FBN. “And even though we have a dual mandate, we say that our best contribution to the dual mandate is to provide a stable price backdrop for the economy. Then that gives businesses and households a good platform from which they can make all of their decisions — let markets work. And then you get the best allocation of resources that you can.”
Republican critics say the dual mandate is pushing the Fed to embrace potentially harmful stimulus measures to jumpstart job creation – specifically, a new round of so-called “quantitative easing.” Critics worry the Fed’s moves will lay the foundation for higher inflation, a weaker dollar and global economic instability.
The Fed approved more quantitative easing last month, announcing a plan to purchase up to $600 billion more in Treasury securities to help push interest rates lower on mortgages, auto loans and business loans so as to encourage borrowing. In its announcement, the Fed said economic growth has been “disappointingly slow,” which has helped to keep the unemployment rate “elevated.”
But Rep. Mike Pence, R-Ind., has introduced legislation to limit such Fed moves. His bill would require the Fed to focus “exclusively” on “price stability” — inflation — “and protecting the dollar.” Sen. Bob Corker, R-Tenn., has introduced a similar measure in the Senate.
Supporters of the dual mandate say it has worked to balance Fed actions. On Wednesday, Bernanke told business leaders in Ohio that job creation is “probably the most important economic issue facing America today.”
“At the pace of growth we’re seeing, we’re not growing fast enough to materially reduce the unemployment rate.”
Cable reveals US behind airstrike that killed 21 children in Yemen
By Eric W. Dolan
A diplomatic cable released by WikiLeaks shows that the US military covered up the killing of dozens of civilians during a cruise missile strike in south Yemen in December 2009.
The secret cable from January 2010 corroboratedimages released earlier this year by Amnesty International, implicating the US in the use of cluster bombs. The cable was sent by Yemen’s President Ali Abdullah Saleh to US General David Petraeus, saying his government would “continue saying the bombs are ours, not yours.”
Read it Raw: WikiLeaks.org domain taken down, DNS host cites ‘mass attacks’
According to the cable, this prompted Yemeni Deputy Prime Minister Rashad al-Alimi “to joke that he had just ‘lied’ by telling Parliament that the bombs in Arhab, Abyan, and Shebwa were American-made but deployed by the ROYG [Republic of Yemen Government].”
“The cable appears to confirm Amnesty International’s finding that the Abyan strike was carried out by the US military, not Yemeni government forces,” Philip Luther, a Deputy Director for Amnesty International, said.
On December 17, 2009, an alleged al-Qaeda training camp in Abyan was hit by a cruise missile, killing 41 local residents, including 14 women, 21 children, and 14 alleged al-Qaeda members.
According to the leaked cable, President Saleh praised the strikes, “but said that ‘mistakes were made’ in the killing of civilians in Abyan.” Gen. Petraeus responded that only three civilians, the wife and two children of an al-Qaeda member, were killed.
After the attack, Amnesty International requested information from the Pentagon about US involvement in the missile attack, but received no response. The Pentagon later released a statement saying
that questions on operations against al-Qaeda should be posed to the Yemeni government.
The leaked cable revealed that Gen. Petraeus proposed abandoning the use of cruise missiles and instead using fixed-wing bombers circling outside of Yemeni territory to strike at targets using precision-guided bombs “when actionable intelligence became available.” The proposal was welcomed by President Saleh.
Security assistance to Yemen may substantially increase, if Gen. Petraeus has his way.
“The General told Saleh that he had requested USD 150 million in security assistance for 2010, a substantial increase over the 2009 amount of USD 67 million,” the cable states.
Amnesty International is calling on the US to investigate the use of drones by US forces for targeted killings of individuals in Yemen.
“There must be an immediate investigation into the dozens of deaths of local residents in the Abyan air strike, including into the extent of US involvement,” Luther said. “Those responsible for unlawful killings must be brought to justice.”
US Attorney General Eric Holder said WikiLeaks founder Julian Assange is currently under investigationand would be pursued if he were found to have broken the law.
Republican Congressman Peter King, the incoming chairman of the House Homeland Security Committee, went so far as to say that the website should be deemed a “foreign terrorist organization.”
Rep. King’s call for prosecution was echoed by Sens. Lindsey Graham (R-SC), Clair McCaskill (D-MO) and former State Department official Liz Cheney.
“We’re deeply skeptical that prosecuting WikiLeaks would be constitutional, or a good idea,” Hina Shamsi, Director of the ACLU National Security Project, said. “The courts have made clear that the First Amendment protects independent third parties who publish classified information. Prosecuting WikiLeaks would be no different from prosecuting the media outlets that also published classified documents.”
“Prosecuting publishers of classified information threatens investigative journalism that is necessary to an informed public debate about government conduct, and that is an unthinkable outcome.”
Israel cannot have access to NATO capabilities, Turkish president says
–Editor’s note–Thank God in heaven there is at least one NATO country with the horse sense to see what a dangerous situation it would be for Israel to have access to NATO’s secrets. Given her proclivity to spy on others and destroy whatever order and systems have been established, we can just imagine the havoc Israel could wreak on NATO–possibily leading to yet ANOTHER war for the Jewish state, if she had access to the inner workings of such a poweful military alliance.
NATO capabilities could not be used by Israel, the Turkish president said, reaffirming a condition of the country’s support for the alliance’s United States-led missile defense project.
“Israel is not a member of NATO and any cooperation is not a point in the issue. I explicitly say in principle this is not possible,” President Abdullah Gül told Euronews during an interview Friday.
During talks prior to a recent NATO summit, Turkey said it would only support the defense project if the alliance agreed to the condition it would not share intelligence with non-NATO members. This was a veiled reference to Israel, given the U.S.’ alleged ambition that the project protect that country against a possible attack from Iran. In these most recent comments, Gül has explicitly ruled out the possibility of Israel accessing NATO resources and capabilities.
Asked if Turkey still considers Israel a friend and ally, Gül said the relationship was still strained by the Mavi Marmara incident, when eight Turkish citizens and an American of Turkish origin were killed during an Israeli raid. “The Mavi Marmara has changed a lot of things. The Israeli army attacked a ship in the middle of the Mediterranean that was attempting to deliver humanitarian aid to Gaza and Israel unfortunately killed lots of people,” Gül said.
Gül said any country affiliated with international law could immediately address such a situation by implementing international law. “Israel is yet to compensate for this situation. Accordingly, we cannot forget it,” he said, adding that Israel had lost the friendship of both Turkey and the Turkish people.
Asked if there was a difference between Turkish and Western perceptions regarding Iran, Gül said it was normal for Turkey to be sensitive toward its neighbors, adding that the problems in Iraq were solved through war rather than diplomacy, and then the Iraqi people and neighboring countries paid the cost.
Gül dismissed suggestions that Turkey’s foreign policy has shifted axis. “Turkey has become a junction,” he said, adding that other neighboring countries, such as Germany and France, and the U.S. and Canada, maintained their highest international trade volumes with each other.
US lawmakers blast Brazil’s Palestinian move
US congresswoman Rep. Ileana Ros-Lehtinen |
WASHINGTON — US lawmakers condemned Brazil’s “severely misguided” and “regrettable” decision Friday to recognize a Palestinian state on borders pre-dating Israel’s seizure of the West Bank and Gaza in 1967.
Brazil’s decision “is regrettable and will only serve to undermine peace and security in the Middle East,” charged Representative Ileana Ros-Lehtinen, the top Republican on the House Foreign Affairs Committee.
Ros-Lehtinen, set to chair the panel come January, said “responsible nations” would wait to take such a step until Palestinians return to direct talks with Israel and recognize its “right to exist as a Jewish state.”
Brazilian President Luiz Inacio Lula da Silva announced the decision Friday in a public letter addressed to Palestinian leader Mahmud Abbas and published on the website of Brazil’s foreign ministry.
The international community backs Palestinian demands for a state in most of the Gaza Strip, the West Bank and east Jerusalem, all territories occupied by Israel in the 1967 Six Day War.
But the United States and most Western governments have held back from recognizing a Palestinian state, saying it should be brought about through a negotiated peace agreement with Israel.
Brazil’s decision also drew fire from Democratic Representative Eliot Engel, who said it “is severely misguided and represents a last gasp by a Lula-led foreign policy which was already substantially off track.”
Engel tied the move to Lula’s “coddling” of Iranian President Mahmoud Ahmadinejad and warned that Brazil “wants to establish itself as a voice in the world, but is making the wrong choices as it tries to do so.”
“One can only hope that the new leadership coming into Brazil will change course and understand that this is not the way to gain favor as an emerging power or to become a permanent member of the United Nations Security Council.”
Lula will be stepping down in four weeks’ time and handing power over to
Dilma Roussef, his protegee and former cabinet chief.
“Brazil is sending a message to the Palestinians that they need not make peace to gain recognition as a sovereign state,” said Engel, a co-chair of the US Congress’s Brazil Caucus.
The lawmaker added he remained “a strong supporter of Brazil as a dynamic, diverse democracy which will one day take its place alongside the world’s leading nations.”
Library of Congress Blocks Access To Wikileaks
Inside of the Library of Congress
The Library of Congress has blocked access to the Wikileaks site on its staff computers and on the wireless network that visitors use, two sources tell TPM.
The error message reportedly reads:
Ad or Website blocked by LC DNSBH. Advertisements or websites that may be malicious are blocked. If this message appears in lieu of an advertisement (i.e., on part of the page), the advertisement site may be malicious. However the website is safe to use.
If this message appears on a page by itself, the website is blocked due to potential malicious content.
More information – LC IT Security
A spokesman for the library could not immediately comment, but expects to have a statement shortly.
The library is a governmental institution and serves as the research arm for Congress. It was established in 1800 and, when it was burned down by the British in 1814, Thomas Jefferson donated his own personal library to replace it. (Not for free, though; Congress paid $23,950 for the books.) It has grown ever since and, according to the library, it has “more than 144 million items including more than 33 million cataloged books and other print materials in 460 languages; more than 63 million manuscripts; the largest rare book collection in North America; and the world’s largest collection of legal materials, films, maps, sheet music and sound recordings.”
The State and Commerce departments haves also reportedly told their employees not to look at the Wikileaks cables, while the Department of Education reportedly blocked it entirely.
Late update: The Library of Congress has confirmed that it is blocking Wikileaks. From a statement:
The Library decided to block Wikileaks because applicable law obligates federal agencies to protect classified information. Unauthorized disclosures of classified documents do not alter the documents’ classified status or automatically result in declassification of the documents.
The Committee on House Administration, which oversees the Joint Committee on the Library, also released a statement: “The Library made a decision to block access to Wikileaks because of applicable law obligating federal agencies to protect classified information.”
ADL slams Helen Thomas as ‘vulgar anti-Semite’
Helen Thomas doubled down on the controversial comments that led to the end of her long career during a speech yesterday to an Arab-American group in Dearborn, Mich., prompting a fierce condemnation by the Anti-Defamation League.
“I can call a president of the United States anything in the book, but I can’t touch Israel, which has Jewish-only roads in the West Bank,” Thomas said. “No Americans would tolerate that — white-only roads.”
“We are owned by the propagandists against the Arabs. There’s no question about that. Congress, the White House and Hollywood, Wall Street, are owned by the Zionists. No question in my opinion. They put their money where their mouth is. … We’re being pushed into a wrong direction in every way.”
ADL National Director Abe Foxman issued a statement urging all the journalistic institutions that have honored the former White House correspondent over the years to rescind those awards.
“Helen Thomas has clearly, unequivocally revealed herself as a vulgar anti-Semite,” Foxman said in a statement. “Her suggestion that Zionists control government, finance and Hollywood is nothing less than classic, garden-variety anti-Semitism. This is a sad final chapter to an otherwise illustrious career. Unlike her previous, spontaneous remarks into a camera, these words were carefully thought out and conscious. It shows a prejudice that is deep-seated and obsessive.”
Clinton ‘Regrets’ Trying to Steal UN Chief’s Credit Card
Admission Likely to Damage White House Denials
by Jason Ditz,
www.antiwar.com
When White House Press Secretary Robert Gibbs appeared on the Today Show and angrily denied that Secretary of State Hillary Clinton ordered spying against UN Chief Ban Ki-moon, the credibility was instantly in doubt. After all, the specific order, signed by Secretary Clinton, is now a matter of public record.
But the official denial seemed to convince a lot of people to let the matter drop, at least for the time being. Now we have further evidence of how little the White House Press Secretary’s words are worth, with reports that Secretary Clinton spoke with Ban yesterday and expressed “regret” over trying to steal his credit card, among other things.
The “regret” stopped well short of an apology, according to officials, but seems to at least confirm the authenticity of the order, which really should never have been in doubt in the first place. Spokesmen for Ban had expressed grave concerns about the plans to steal his credit card info, a clear violation of both US and international law.
The bizarre combination of the high profile denial and the immediate, apparently not for domestic consumption pseudo-apology points to an Obama Administration that clearly has not learned its lesson about the consequences of lying to the American public, and if Secretary Clinton was facing calls to resign for ordering the theft, surely Secretary Gibbs must face similar calls now for his failure to tell the truth, which as the press secretary ought to be the only thing one can count on him to do.
German FM’s Chief of Staff Sacked for Being US Informant
Helmut Metzner Admitted He Was US ‘Mole’ Inside FDP
by Jason Ditz,
www.antiwar.com
The Obama Administration’s cables railing about Germany’s Free Democratic Party in general and leader Guido Westerwelle (now Germany’s Foreign Minister) in particular came with references to an unnamed informant the US had on the inside of the FDP who was eager to report on the party’s internal meetings to the US embassy.
Helmut Metzner
According to Helmut Metzner, Foreign Minister Westerwelle’s (now former) chief of staff, he is that informant, and he has been sacked for being a US mole, the direct confirmed firing to come out of the WikiLeaks cables leak.
The Obama Administration was said to have serious reservations about the Free Democratic Party’s commitment to limited government and individual liberty ahead of September 2009′s election, and expressed hope that Chancellor Angela Merkel could be convinced to foil their agenda to protect her “legacy.”
The cables never named Metzner, but referred to him as “a young, up-and-coming party loyalist” who was providing the US embassy with information. Publicly, Westerwelle appeared contented to let the matter drop until Metzner confessed to his role as the mole.
Obama’s Israel Policy: Speak softly and carry a very big carrot
By Maidhc Ó Cathail
