If you live on one side of the interest rate apartheid wall, your cost of capital is zero, and in some cases (like when Wall St. banks lend to the Fed), less than zero. Wall St. and City bonuses are paid based on aggregate debts created; financed with interest-free money.There is no practical reason the US should carry $15 trillion in debt on the books with an additional $50 trillion off the books. There is no practical reason JP Morgan should carry $90 trillion in debt off the books. There is no practical reason Japan is carrying over 200 per cent of their GDP in debt on the books.The real reason these debts exist is because the bankers who created them are paid as a percentage of gross debts forced through the system. A 1 per cent fee on a $500 billion tranche of debt is bigger than a 1 per cent fee on a $5 billion tranche and this simple calculation of ‘more = more’ is why bankers create so much debt in the first place.But there’s a hook. Debt has interest costs attached. Therefore, for these bonuses to be paid the base rate, set by the central bank (the Fed), needs to be as close to zero as possible. ‘Deflation’ or fear of deflation has nothing to do with it. And as long as ‘price signals’ from exchanges are manipulated by these same bankers then inflation’s not a problem either. The Fed complains about deflation as justification for lowering rates while never mentioning the cost of ‘shopping cart’ goods is up more than 8 per cent this year.Need money for a new house in the Hamptons? Well, if you’re a friend of the Fed you borrow at 1 per cent or less. Shopping for a new chateau in Provence? If you’re a friend of the Fed, you borrow at 1 per cent. The fees to bankers from creating trillions in non-essential debt – aided by 0 per cent interest rates – and regulators who, as Eric Holder’s office said (America’s attorney general) – ‘We have no power to prosecute crimes on Wall St. due to potential systemic risk’ – are enormous.What about those living on the other side of the interest rate apartheid wall, ‘the epithets’ I’ll call them. This is you, me and everyone else (who is not a partner on Wall St. or the City). What do we pay?The rate charged to epithets (that’s you, buddy) starts at 3 per cent for mortgages and 15 per cent for credit cards, but rise quickly to imputed rates of 20-30 per cent as soon as you get entrapped by a bank’s ‘missed payment’ scam they hard-wire into the system. The interest rate rises again for payday loans where annualized rates of interest can come in at 2,000 per cent and higher.Consumer interest rates used to be tied to the creditworthiness, but no more. Simply paying off interest and principle on time is no longer a guarantee of lower interest costs. You have to be politically compliant in ways that help banksters if you want to get the good rates. This means looking the other way when Wall St. banks repeal Glass-Steagall and other regulatory impediments to larceny. You must look the other way when banks are caught laundering money for drug cartels; rigging LIBOR, energy markets, Credit Default Swaps, and gold and silver markets.You only get the ‘white man’s’ (non-epithets) rate if you don’t complain about Apple’s avoiding $9 billion in taxes by allowing Wall St. to float $50 billion in new debt – allowing the company to play accounting games as well as enriching the same debt-spinning bankers who increase debt needlessly for a living.You must learn to be a good epithet, brother and don’t get too uppity and challenge what the ‘masser’ is doing on the global debt plantation. You can shop at Walmart, the company store (and buy stuff made by slaves living on the same side of the interest rate apartheid wall) and if you’re lucky you’ll end up spending the rest of your days in a privately owned American prison financed of course with 0 per cent money pledged against a deal with municipalities across America to keep these privately-owned prisons 98 per cent full of epithets who had the gall to not look the other way while Wall St. raped and pillaged a nation for no money down. … Read More
Why Are People with Health Insurance Going Bankrupt?
Dr. Margaret Flowers and Kevin Zeese: Obama care will not put an end to medical bankruptcies – 80% of people going bankrupt due to healthcare costs had insurance … Read More
Gazprom no longer world’s most profitable company
The company’s net income fell to 1.18 trillion roubles ($38 billion) from 1.3 trillion in 2012, a Gazprom corporate statement released on Tuesday said. Gazprom is now in third place behind ExxonMobil with $44.88 billion and Apple with $41.75 billion. Growth in gas market prices helped to compensate for the drop in sales, and contributed to the growth in revenue to 4.76 trillion roubles ($152 billion). However the company was also sensitive to rising operating expenditure. Spending jumped 18 percent to 3.48 trillion roubles ($111 billion) because of a jump in oil and gas purchases, the mineral extraction tax, and staff costs, Bloomberg reports. Exports to Russia’s main LNG buyers in Europe dropped by 3.6 percent last year. Sales also fell in the domestic market and the CIS countries. The full-year net income drop has previously been posted by the Russian gas giant over a decade ago in 2001.Recently Gazprom has been facing increasing pressure from domestic rival Rosneft, which has significantly boosted its gas assets, especially following the purchase of TNK-BP, and a controlling stake in Itera. Rosneft has already declared its intention to boost gas production to 100 million cubic meters per year. Gazprom produced 478 cubic meters in 2012. Recent reports said the Rosneft claims natural gas deposits also targeted by Gazprom. Previously Gazprom and Rosneft interests did not cross, with Gazprom focused on gas production and Rosneft getting licenses for oil fields. … Read More
Solution to Student Debt is to Get the Banks Out of the Education Business
Michael Hudson: Crippling student debt, which is also a drag on the whole ecnonomy, developed as
governments pushed the burden of higher education costs onto students and pushed them into the arms
of the banks … Read More
Window into Big Bang: World’s largest ground-based telescope can see the birth of stars (PHOTOS)
ALMA stands for Atacama Large Millimeter/submillimeter Array,and it is the largest ground-based astronomy project. It’s the mostexpensive one too, with construction costs going up to $1.3billion. ALMA’s been devised and built by the joint efforts ofscientists from European, East Asian and North American countriesfor more than a decade.It consists of 66 huge antennas and a supercomputer installed ina 10-mile (16 km) diameter area on a high-altitude plateau inChile. A lower-ground operating support facility is connected tothe complex by some 15 km of cables.Upon completion, the cutting edge telescope will become the mostpowerful in the world, with resolution ten times higher thanthe Very Large Array (VLA) and five times finer than the HubbleSpace Telescope.Scientists compared the array’s working principle to how weperceive sound by two ears. Each of ALMA’s antennas, ranging from 7to 12 meters in diameter, gathers radio waves from space, and theircombined result is processed through the supercomputer.Height is one of the key factors of ALMA’s incredible power, aswater vapor absorbs radio waves nearer to sea level and obscuresobservations. This is the reason the $1.3 billion complex had to bemounted at an altitude of 5,000 meters amidst the arid Chileandesert, with construction workers having to use supplementaloxygen, and the science team having to operate in the 2,900 metershigh support facility.But for astronomers these are negligible costs when compared tothe perspectives, which the ALMA project is said to be opening.“The scientific community wants to use ALMA in its researchon star formation, the birth of planets and not just what ishappening in our solar system, but also on how the system wascreated after the Big Bang,” ALMA director Thijs de Graawsaid.According to Big Bang theory, the origin of our universeoccurred about 13.77 billion years ago.“It is a revolution in the history of the universe in therealm of millimetric and sub-millimetric waves, which can lookthrough clouds of dust and focus on the formation of starsthemselves. Telescopes cannot see what is happening inside theseclouds. With ALMA, we can. And that is like opening a newwindow,” he added.“It will have a view of the universe that we can’t evenimagine even now,” Wolfgang Wild, ESO’s European ALMA projectmanager also told SPACE.com.Not only will ALMA bring about a new picture of the universe’sformation, it could also make a breakthrough in the study of alienworlds.Astronomers would be able to detect the effects of young planetsthe size of Earth, SPACE.com quoted James Ulvestad, director of theUS National Science Foundation’s astronomical sciencesdivision.“ALMA already has seen dust rings around stars that are verynarrow, and by modeling… you can infer the dust ring has planetsinside and outside the ring. Even though you can’t see the planet,you can see the effects of the planet. That would be thepredominant way that ALMA will study extra-solar planets,”Ulvestad explained. … Read More
ObamaCare-Friendly States Prepare For Health Insurance “Rate Shock”
The L.A. Times
warns that even in states where politicians have
enthusiastically embraced President Obama’s health care law, many
officials — especially the young — are bracing for unexpectedly
high health insurance premiums when the law’s major coverage
provisions kick in next year:
Exactly how high the premiums may go won’t be known until later
this year. But already, officials in states that support the law
have sounded warnings that some people — mostly those who are young
and do not receive coverage through their work — may see
considerably higher prices than expected.
That is because of new requirements in the law aimed at making
insurance more comprehensive and more affordable for older, sicker
consumers.
Insurance regulators in California, which has enthusiastically
embraced the law, cautioned the Obama administration in a recent
letter about “rate and market disruption.”
Oregon’s insurance commissioner, another supporter of the law,
said new regulations could push up premiums for young customers by
as much as 30% next year. He urged administration officials to slow
enactment of the new rules.
A leading advocate for consumers in their 20s, Young
Invincibles, sounded a similar caution, suggesting in a letter to
administration officials that additional steps may be needed to
protect young people from rising premiums. Young Invincibles
mobilized in 2010 to help pass the healthcare law.
It is interesting to see state officials continue to support the
law despite clearly acknowledging that it will raise some premiums
and disrupt insurance markets. This suggests that Democrats, who
sold the law on promises that it would lower health costs (or at
least hold them in check) and allow individuals to keep plans and
providers they already liked, are not actually all that concerned
about those effects. ;
Still, it’s not surprising considering how the law was designed.
Higher premiums for many are baked into the law for a variety of
reasons, including community rating rules that effectively force
the young and healthy to subsidize the old and sick, coverage
mandates that add to the cost of individual market policies,
accounting requirements that incentivize insurers to charge higher
up front premiums, a multibillion dollar new annual tax on health
insurance that the Congressional Budget Office warned would be
mostly be passed on to consumers.
The law’s supporters sometimes try to shrug off the hikes by
noting that consumers will be paying more, but also getting more in
return thanks to the coverage mandates and other regulations. No
doubt some consumers will appreciate having more robust coverage.
But others almost certainly won’t. ObamaCare offers the latter
group very little. It institutionalizes a preference for more
expansive, more expensive coverage. And many of those who don’t
share that preference are going to have pay for it
anyway. ; … Read More
Cheesy Whinings About Seniors at The New York Times
What are some of the “brutal” hardships that seniors are
enduring in a tough economy? According to the wine-and-cheese
crowd at the New York Times, it is that some seniors
are being forced to consume more — err — wine and
cheese. Here, in the words of the Times reporter
Catherine Rampell, is the predicament of a 62-year-old,
Cleveland-based, freelance writer, Susan Zimmerman:
None of the three part-time jobs she has cobbled together pay
benefits, and she says she is counting the days until she becomes eligible for
Medicare.
In the meantime, Ms. Zimmerman has fashioned her own regimen of
home remedies — including eating blue cheese instead of taking
penicillin and consuming plenty of orange juice, red wine, coffee
and whatever else the latest longevity studies recommend — to
maintain her health, which she must do if she wants to continue
paying the bills.
Setting aside the unpleasant side effect on one’s waistline of
blue cheese, a quick Google
search suggests that a 60-cap bottle of penicillin (enough for
several infections) for the uninsured costs $28 or 50 cents a
pill — less if it’s reimported from a foreign country. Maybe
Cleveland is different, but in most places a daily dose of wine and
cheese would cost a lot more. Would someone let Ms. Rampell
know?(Do we really need The Onion when The Times
does such a good job of self-parody?) … Read More
