Euro mediation bid in Caspian pipelines stand-off, as EU requires ever more Gas....

Euro mediation bid in Caspian pipelines stand-off, as EU requires ever more Gas...., given Switzerland's and Germany's phasing out their Nuclear reactors ASAP!!!

Robert M Cutler

Momentum for the Nabucco pipeline project to transport gas from Turkmenistan and Azerbaijan to southeast and east central Europe via Turkey has increased following an absence of apparent progress developing from a Brussels conference this spring dedicated to the rival South Stream gas pipeline project.... http://eegas.com/toc.htm

The European Commission is now seeking authorization from the European Union's member states to mediate between Azerbaijan and Turkmenistan concerning plans for a natural gas pipeline to be laid on the Caspian seabed (Trans-Caspian Gas Pipeline, TCGP), according to a Dow Jones report from Baku. The two Caspian littoral countries have already been holding meetings to discuss the matter in Brussels.

The development is in line with a Bloomberg report last August that the EU's energy regulator had made available a non-binding document to Azerbaijan and Turkmenistan as a proposed basis for discussion for the project of building "at least one" pipeline under the Caspian Sea. Turkmenistan has also reportedly sought advice from the United Nations in New York concerning international legal issues in the framework of an energy transit agreement with an unnamed partner country.

In fact, the issues of international law have all been examined and resolved at the technical level by experts. The solution involves building the pipeline without trying first to resolve competing claims by the two Caspian littoral states over certain subsoil resources under the seabed. This is the procedure followed by Norway and the United Kingdom over exploration and development of certain deposits in the North Sea. What is now involved is the construction of the precise form of language that permits that solution to be integrated with the expressed political will on the part of the two governments' political executive to move forward with the execution of the TCGP project.

The document in question is reported to incorporate, insofar as possible, the competitiveness requirements of the third EU energy liberalization package, on which the EU had also insisted to Russia in respect of its South Stream project, which would pipe Russian gas under the Black Sea to either Bulgaria or Romania.

In particular, Azerbaijan and Turkmenistan would agree on a list of entities that could offer gas for transit through Nabucco, and the pipeline's owners would have to operate it in an optimal fashion under market conditions - meaning they would have to make information about unused capacity transparently available, and they would not be able to refuse offers to use any available capacity from the listed entities. Also, the pipeline would be so constructed as to allow gas transit in either direction, that is, west to east as well as east to west.

Such matters of equitable access to the pipeline were at issue at the March 25 South Stream conference in Brussels, mentioned above, on South Stream, which could well be seen in retrospect as the final nail in the coffin of the Russian-sponsored project.

At the conference, sponsored by Russia's Gazprom, EU Energy Commissioner Guenther Oettinger resisted pressure from Moscow on several fronts while promising the South Stream project equitable treatment in its administrative and regulatory applications to the requisite EU instances.

However, he was candid in declaring that "South Stream is not our top priority". Indeed, in light of the European decision for a Southern Gas Corridor (SGC) project in May 2009 he could not have pretended otherwise.

The SGC names the Azerbaijan-Greece-Romania Interconnector (AGRI), Trans-Adriatic Pipeline (TAP), and White Stream projects in addition to Nabucco.

Indeed, the most widely quoted passage in Oettinger's speech may have been the one in which he lays out the concerns that prevent South Stream from being taken seriously: "What we know is that the gas in South Stream will leave Russia, cross the Black Sea and arrive in Europe. Beyond that, there are a number of questions. Where will the gas actually come from? Where will it arrive? How will it arrive, by ship or by pipeline? Will it divert gas from Ukraine? Once it gets to Europe, what will happen? Most importantly, who can ship gas in the project? Is it only Gazprom, or also other players?"

None of the speakers from the Russian side really addressed any of these questions in the detail required for a serious pipeline project. It is even possible that Russian Prime Minister Vladimir Putin knew that things would turn out poorly. Despite his personally touting the project earlier in the year on a visit to Brussels with a full complement of ministers from his government, ostensibly to discuss EU-Russia energy cooperation in the perspective of the next four decades, nevertheless it was Russian President Dmitry Medvedev, rather than Putin, who made the trek to Brussels for the South Stream conference.

There are two more interesting recent developments around this complex of issues. First, the Russian news agency Novosti quoted Vitaly Beilyarbekov, a deputy vice chairman of the State Oil Company of the Azerbaijani Republic, as commenting that Russia had would not participate in Baku's talks with Ashgabat over the TCGP. (An earlier version of the article, now scrubbed from the site, had said that Russia had "declined an invitation" to participate.)

Novosti further attributes to Beilyarbekov the view that Russia "will not create obstacles on this project". This runs counter to recent protests in the press by Russia's ambassador to Azerbaijan, and the fact that the report was carried by any Russian news agency is in itself significant.

Second, the Bloomberg News reference to "at least one" trans-Caspian pipeline signifies that the EU is discussing not only Nabucco but also White Stream with Azerbaijan and Turkmenistan. White Stream would transport natural gas from the Caspian region to Romania and Ukraine with further supplies to Central Europe.

Further according to Beilyarbekov, construction of the (first) TCGP will begin within two years. This is the first time that an industry figure in the region has publicly assigned a date to the project's construction. Gas from Turkmenistan (or Iraq) is necessary, because the 31 billion cubic meter per year pipeline will be only about one-third supplied by Azerbaijan, and it will be built in one stage despite earlier talk of a two-stage construction and entry into force.

The necessary conclusion would appear to be that the EU has rejected the view that the SGC is best developed slowly and first of all with Russian gas, and that it has actually taken specific steps towards realizing the project as originally intended. Oettinger correctly spoke in March about the possibility of finally moving forward with creation of the Caspian Development Corporation, an instrumentality of the SGC foreseen two years ago by the May 2009 summit that originally decided in the SGC's favor.

Switzerland moves swiftly to toughen bank rules...

Switzerland moves swiftly to toughen bank rules.....while the CH phases out its Nuclear Reactors ASAP.


http://coveringdelta.wordpress.com/category/gold/

Swiss central bank highlights franc concerns.

http://article.wn.com/view/2010/11/26/Switzerlands_super_rich_could_lose_tax_breaks/

ZURICH – Swiss legislators have moved to drastically toughen capital requirements on big banks Credit Suisse and UBS amid concerns their failure in a crisis could drag down the Alpine country's economy.

Lawmakers in the upper chamber of parliament, the Council of States, approved the measures expected to cost each bank $90 billion in a preliminary vote late on Tuesday and were due to cast a final vote on Thursday.

The measures would require the banks to hike their high-quality core common equity -- which can be converted into cash quickly -- to 10 percent of assets, plus hold another nine percent in bonds that could be converted if needed.

The measures are considerably tougher than the Basel III international standards under which banks are to raise their high-quality core common equity to 7.0 percent of assets from the current 2.0 percent.

UBS has criticized the measures which it says will put it at a competitive disadvantage.

Credit Suisse meanwhile has voiced support for the regulations, with its chief executive Brady Dougan declaring that the bank is an "early adopter" of more stringent rules.

In February, the bank raised $6 billion by issuing convertible bonds to Qatar Holding and Saudi Arabia's Olayan Group, in order to get ahead with meeting the new capital requirements.

"The capital requirements are strict but will be achievable for the bank," a Credit Suisse spokesman said on Wednesday.

The lower house of parliament will not take up the government-proposed bill until after the summer break, according to a spokesman.

The measures were proposed by experts last year after a government rescue of UBS during the 2008 global financial crisis.

Last year, a commission of experts advised the government to adopt measures tougher than the Basel III standards as Credit Suisse and UBS are regarded as "too big too fail" because of their size and influence on the Swiss economy.

Beyond tougher capital rules, the government also wants oversight on the remuneration policies of large banks that have had to be bailed out using federal funds.

Under the proposed bill, banks which require state aid could be subject to adjustments on their wage policies, including a complete ban on bonuses or other forms of variable remuneration.

UBS had to be shored up during the financial crisis by a multi-billion dollar state rescue package.

The measures would also require the two banks to keep a 30-day liquidity reserve on hand in case markets seize up, as happened during the financial crisis, and prove they would be able to keep vital services running in case of bankruptcy.

If the banks were to take state aid in the future, they would not be able to pay bonuses without government approval.

The Swiss central bank estimated last year the measures, which would come into force by 2019, would cost each bank around 76 billion Swiss francs ($90 billion, 60 billion euros).

"The new regulations are not excessive," the central bank's Vice President Thomas Jordan said in an interview with the Neue Zuercher Zeitung last month.

"I am convinced that the competitiveness of Swiss banks is not being threatened," he added.

In Britain, finance minister George Osborne was expected to endorse on Wednesday a call for British banks to ring-fence their retail business from their investment arms to avoid another financial crisis.

UBS shares closed 1.62 percent lower and Credit Suisse was off 0.96 percent while the broader stock-market finished down 0.92 percent....

Gangster Banksters from TBTF Banks Twist Facts to Justify Continued Ponzi split second Speculations...

Gangster Banksters from TBTF Banks Twist Facts to Justify Continued Ponzi split second Speculations...


Business Insider's Courtney Comstock has a great summary of former IMF chief economist Simon Johnson's evisceration of the giant banks' arguments regarding capital requirements:

[Johnson's] argument in a nutshell: bankers from the big 6 are outright lying so that they can continue to take on risk and keep their profitable trading operations running.

The issue: BASEL III regulations (originated in Switzerland, written by all of the world's Central Banks) require banks to have a capital requirement of 7% of equity, which is high enough as far as banks are concerned, but not high enough as far as U.S. regulators are concerned. U.S. regulators want to tack on an extra 3%. (Or maybe just 2% to 2.5%, according to a rumor on CNBC last week.)

Bankers do not want capital requirements to be too high for many reasons, a couple of which are laid out by a banker who emailed us here, and 4 others which Reuters detailed last week:

1. “Holding capital hostage” will hurt the struggling economy because it will mean fewer loans at a time when lending is already depressed.
2. Establishing huge capital buffers is an admission by regulators that last year’s Dodd-Frank financial overhaul does not accomplish its goal of reducing risk.
3. If banks hold onto more capital and make fewer loans, borrowers will turn to the “shadow banking sector” – hedge funds, for example — which has little or no oversight.
4. Tough standards in the United States would create a competitive disadvantage vis à vis other countries.

All of these are wrong, according to Simon Johnson, who blasted each of them using the following arguments:

1. Capital requirements are a restriction on the liability side of the balance sheet — they have nothing to do with the asset side (in what you invest or to whom you lend).
2. During the Dodd-Frank debates last year, [everyone] said it would be a bad idea for Congress to legislate capital requirements and should leave them to be set by regulators after Basel III... Now the banks want to say that this is not his job as authorized by Dodd-Frank. This argument will impress only lawmakers looking for any excuse to help the big banks.
3. The “shadow banking sector” — hedge funds, for example — grew rapidly in large part because it was a popular way for very big banks to evade existing capital requirements before 2008, even though those standards were very low... It would be a disaster if this were to happen again.
4. [Just because your friend says it's a good idea to jump off a bridge...] If China, India or any other country wants to produce electricity using a technology that severely damages local health, why would the United States want to do the same?

As government's policies discourage lending to Main Street and the little guy....

And Comstock goes on to note:

Making all of this more interesting is an op-ed written by a regional bank CEO a couple of days ago. Right now, regional banks are subject to the same regulations as the big 6, but they are totally different beasts.

Bob Wilmers, M&T Bank CEO, writes that the Big 6 should be subject to stricter regulations like higher capital requirements because they trade so much, and it's risky, but smaller banks, like his, should not be subject to such high capital requirements because they actually use the free capital on their balance sheets to lend to entrepreneurs, etc....

I can think of a better rebuttal of point No 1 than Simon Johnson produces.

He claims that the liability side of banks’ balance sheet has “nothing to do” with the asset side. Strikes me that if banks are forced to hold more capital per dollar that they lend, that does raise the cost of lending as the banks rightly claim.

A better rebuttal is the point that borrowing from a bank is not the only way of funding a business or house purchase: equity is another way. I.e. if government clamps down on bank lending, that in itself slows economic growth as the banks rightly claim, but government can perfectly well make up that by channeling stimulus or “hard cash” in household pockets.

The beauty of equity finance is that there is practically zero chance of taxpayers having to come to the rescue when a business or set of businesses fail. So just to ensure we have a level playing field, the chance of a systemic bank collapse should be reduced to near zero. And that can be done via a stinking great increase in banks’ capital requirements....

Plans to undermine American resistance are mostly in the form of economic warfare....?

These Nazi/banker/Communism revelations are nothing new, but they are nearly forgotten, since the former "conservative movement" abandoned their anti-Imperial educational efforts to inform their countrymen of this treason, in a huge compromise of their beliefs. They chose money over country and sided with the Rockefeller Republicans, whom they had formerly worked so hard to expose. This was the unholy alliance which gave us both Bushes. Before the Reagan Revolution, and during its initial stages, those patriotic Americans who called themselves "conservative" went all-out, to expose these nefarious bankers and their bankrolling of every "enemy" we have faced since the early Twentieth Century, but since then, they have abandoned the path of truth to become partners with the money-lenders and power-brokers, and their Imperial plans for world conquest, which are now unfolding around us.

The latest plans to undermine American resistance are mostly in the form of economic warfare, as they now secretly back Chinese and Asian competitors to the flat-on-its-back American economy, seeking to provoke violent reactions by the fading former Empire that will thin-out the Asian "useless eaters."

Professor Sutton led the way in exposing the treacherous duplicity of America's financial and political leaders. Never before in history has mankind produced national leadership in any country which allowed the financial powers to manufacture and strengthen enemies, to wage war against their own countrymen. Sutton documented this, producing detailed research which implicated the international bankers, especially those with American citizenship, even though he endured public charges of "anti-Semitism" for daring to expose powerful Ziocon Jewish interests.

Further investigations by Dr. Sutton into American secret societies like the Skull & Bones, and shadowy organizations like the Trilateralists shone light where none had been before, from his insider positions in academia. His work showed us that America's secret leaders have been sowing subversion and creating America's own enemies long before today's "Islamists" came along. We need more insiders like him to dig through the real records of the infinite crimes committed in their quest for a global empire....

THE WARREN REPORT: 'LIQUIDATE THE BANKS & FIRE THE EXECUTIVES'

By Mike Whitney
Apr 14, 2009

Last Tuesday, a congressional panel headed by ex-Harvard law
professor Elizabeth Warren released a report on Treasury Secretary
Timothy Geithner's handling of the Troubled Assets Relief Program
(TARP). Warren was appointed to lead the five-member Congressional
Oversight Panel (COP) in November by Senate majority leader Harry Reid.
From the opening paragraph on, the Warren report makes clear that
Congress is frustrated with Geithner's so-called "Financial Rescue Plan"
and doesn't have the foggiest idea of what he is trying to do.

Here are the first few lines of "Assessing Treasury's Strategy:
Six Months of TARP": "With this report, the Congressional Oversight
Panel examines Treasury's current strategy and evaluates the progress it
has achieved thus far. This report returns the Panel's inquiry to a
central question raised in its first report: What is Treasury's
strategy?" Six months and $1 trillion later, and Congress still cannot
figure out what Geithner is up to. It's a wonder the Treasury secretary
hasn't been fired already.<<<<<

From the report: "In addition to drawing on the $700 billion
allocated to Treasury under the Emergency Economic Stabilization Act
(EESA), economic stabilization efforts have depended heavily on the use
of the Federal Reserve Board's balance sheet. This approach has
permitted Treasury to leverage TARP funds well beyond the funds
appropriated by Congress. Thus, while Treasury has spent or committed
$590.4 billion of TARP funds, according to Panel estimates, the Federal
Reserve Board has expanded its balance sheet by more than $1.5 trillion
in loans and purchases of government-sponsored enterprise (GSE)
securities.

The total value of all direct spending, loans and guarantees
provided to date in conjunction with the federal government's financial
stability efforts (including those of the Federal Deposit Insurance
Corporation (FDIC) as well as Treasury and the Federal Reserve Board)
now exceeds $4 trillion."

So, while Congress approved a mere $700 billion in emergency
funding for the TARP, Geithner and Bernanke deftly sidestepped the
public opposition to more bailouts and shoveled another $3.3 trillion
through the back door via loans and leverage for crappy mortgage paper
that will never regain its value. Additionally, the Fed has made a deal
with Treasury that when the financial crisis finally subsides, Treasury
will assume the Fed's obligations vis-a-vis the "lending facilities,"
which means the taxpayer will then be responsible for unknown trillions
in withering investments.

From the report: "To deal with a troubled financial system, three
fundamentally different policy alternatives are possible: liquidation,
receivership, or subsidization.
To place these alternatives in context, the report evaluates historical
and contemporary efforts to confront financial crises and their relative
success.
The Panel focused on six historical experiences:
(1) the U.S. Depression of the 1930s;

(2) the bank run on and subsequent government seizure of
Continental Illinois in 1984;

(3) the savings and loan crisis of the late 1980s and
establishment of the Resolution Trust Corporation;

(4) the recapitalization of the FDIC bank insurance fund in 1991;

(5) Sweden's financial crisis of the early 1990s;

and (6) what has become known as Japan's "Lost Decade" of the
1990s. The report also surveys the approaches currently employed by
Iceland, Ireland, the United Kingdom, and other European countries."

This statement shows that the congressional committee understands
that Geithner's lunatic plan has no historic precedent and no prospect
of succeeding.
Geithner's circuitous Public-Private Investment Program (PPIP) -- which
is designed to remove toxic assets from bank balance sheets -- is an
end-run around "tried-and-true" methods for fixing the banking system.
In the most restrained and diplomatic language, Warren is telling
Geithner that she knows that he's up to no good.

From the report: "Liquidation avoids the uncertainty and
open-ended commitment that accompany subsidization. It can restore
market confidence in the surviving banks, and it can potentially
accelerate recovery by offering decisive and clear statements about the
government's evaluation of financial conditions and institutions." The
committee agrees with the vast majority of reputable economists who
think the banks should be taken over (liquidated) and the bad assets put
up for auction.

This is the committee's number one recommendation. The committee
also explores the pros and cons of conservatorship (which entails a
reorganization in which bad assets are removed, failed managers are
replaced, and parts of the business are spun off) and government
subsidization, which involves capital infusions or the purchasing of
troubled assets.

Subsidization, however, carries the risk of distorting the market
(by keeping assets artificially high) and creating a constant drain on
government resources. Subsidization tends to create hobbled banks that
continue to languish as wards of the state. Liquidation, conservatorship
and government subsidization; these are the three ways to fix the
banking system.
There is no fourth way. Geithner's plan is not a plan at all; it's
mumbo-jumbo dignified with an acronym, PPIP.

The Treasury secretary is being as opaque as possible to stall for
time while he diverts trillions in public revenue to his scamster
friends at the big banks through capital injections and nutty-sounding
money laundering programs like the PPIP.
From the report: "Treasury's approach fails to acknowledge the
depth of the current downturn and the degree to which the low valuation
of troubled assets accurately reflects their worth. The actions
undertaken by Treasury, the Federal Reserve Board and the FDIC are
unprecedented. But if the economic crisis is deeper than anticipated, it
is possible that Treasury will need to take very different actions in
order to restore financial stability."

This is a crucial point; the toxic assets are not going to regain
their value because their current market price -- 30 cents on the dollar
for AAA mortgage-backed securities -- accurately reflects the amount of
risk they bear. The market is right and Geithner is wrong; it's that
simple. Many of these securities are comprised of loans that were issued
to people without sufficient income to make the payments.

These "liar's loans" were bundled together with good loans into
mortgage-backed securities. No one can say with any certainty what they
are really worth. Naturally, there is a premium for uncertainty, which
is why the assets are fetching a mere 30 cents on the dollar. This won't
change no matter how much Geithner tries to prop up the market. The well
has been already poisoned. Also, according to this month's Case-Schiller
report, housing prices are falling at the fastest pace since their peak
in 2006.

That means that the market for mortgage-backed securities (MBS)
will continue to plunge and the losses at the banks will continue to
grow. The IMF recently increased its estimate of how much toxic
mortgage-backed paper the banks are holding to $4 trillion. The banking
system is underwater and needs to be resolved quickly before another
Lehman-type crisis arises, sending the economy into a protracted
Depression. Geithner is clearly the wrong man for the job.

His PPIP is nothing more than a stealth rip-off of public funds
which uses confusing rules and guidelines to conceal the true objective,
which is to shift toxic garbage onto the public's balance sheet while
recapitalizing bankrupt financial institutions.

So, why is Geithner being kept on at Treasury when his plan has
already been thoroughly discredited and his only goal is to bail out the
banks through underhanded means?

That question was best answered by the former chief economist of
the IMF, Simon Johnson, in an article which appeared in The Atlantic
Monthly: "The crash has laid bare many unpleasant truths about the
United States. One of the most alarming . . is that the finance
industry has effectively captured our government -- a state of affairs
that more typically describes emerging markets, and is at the center of
many emerging-market crises.

If the IMF's staff could speak freely about the U.S., it would
tell us what it tells all countries in this situation; recovery will
fail unless we break the financial oligarchy that is blocking essential
reform. And if we are to prevent a true depression we're running out of
time." (The Atlantic Monthly, May 2009, by Simon Johnson)

The banks have a stranglehold on the political process. Many of
their foot soldiers now occupy the highest offices in government. It's
up to people like Elizabeth Warren to draw attention to the silent coup
that has taken place and do whatever needs to be done to purge the
moneylenders from the seat of power and restore representative
government. It's a tall order and time is running out.....

http://www.antonysutton.com/

http://www.reformed-theology.org/html/books/best_enemy/

http://aangirfan.blogspot.com/2011/06/secret-backers.html

http://www.antonysutton.com/suttonbibliography.html

The Money Masters - How International Bankers Gained Control of America

Money As Debt

Greece, source of western culture, is leading the greedy Western banking system to brink of Systemic Implosion....

Greece, source of western culture is leading the western banking system to systemic implosion...., Time for good old Islamic Banking...!!!!

Il y a des chamelles au FMI qui méritent de se faire Fischer jusqu'à la garde !

A Quick Guide To Who Gets Crushed when Greece Defaults...., in short: Everyone!

The situation in Greece is deteriorating this morning, with eurozone leadership unable to come to a decision on a second bailout, which has now been pushed back to July.

Protests are ongoing in Athens, where leaders are trying to come to a deal on a second round of austerity measures, including privatizations and budget cuts.

The longer they take, however, the more public support swells against them, and greater the potential for Central European states to say no to a second bailout.

If no second bailout comes, Greece will likely be unable to pay its bills, and will default on its debt.

Four of Greece's largest banks have been downgraded by S&P today.

From Financial Mirror:

The rating agency said Wednesday that the financial profiles of National Bank of Greece, EFG Eurobank, Alpha Bank and Piraeus Bank “are exposed to significantly heightened risks as a result of deterioration in Greece's creditworthiness and Greek depositors' perceptions of a possible government debt restructuring.”

Moody's has put the three banks on review for a possible downgrade. That's because they are exposed to both the Greek domestic economy, in terms of sovereign debt and/or to the country's banking sector.

From Moody's:

Paris, June 15, 2011 -- Moody's Investors Service has today placed the standalone financial strength ratings and long-term debt and deposit ratings of three French banking groups -- Credit Agricole SA (CASA), BNP Paribas SA (BNPP), and Societe Generale SA (SocGen) on review for possible downgrade.

The primary focus of all three reviews will be the banks' credit exposures to Greek government debt and the Greek private sector and the potential for inconsistency between the impact of a possible Greek default or restructuring and current rating levels. The review of SocGen will also assess the likelihood of future government support since our systemic support assumption is currently higher than the average for the French banking system.

Moody's also noted that exposures to Greece are to be included within the ongoing review for possible downgrade of Dexia Group's core operating banks.

Romania and Bulgaria's private sectors, and their public sectors, are exposed to the Greek banking sector. If Greece's banking sector is slammed in a default, the result could be a lack of funding for the Romanian and Bulgarian sovereigns, private enterprises, or worse, according to Nomura.

From Nomura:

- A new Vienna Initiative: Despite an event in the Greek banking system those same banks are still required to maintain capital exposure into Emerging Europe. EBRD and EU provide support and other incentives to make this happen. Such a move however would be difficult and impose additional burdens on an already highly stressed Greek banking sector.

- Business slowdown (least bad outcome): Greek banks severely constrain lending in domestic subsidiaries as parent company funding crowds out domestic business. This is anti-growth for Romania and Bulgaria, though arguably it has already started to occur.

- Greek bank consolidation (bad outcome): Greek banks are forced to consolidate, perhaps into some form of good bank/bad bank set-up. Consolidation causes asset sales in Bulgaria and Romania. With limited foreign interest likely, government or domestic money would be needed, meaning net currency outflow. If a sale was not possible capital withdrawal would then be likely.

Capital withdrawal (very bad outcome): Greek banks are forced to draw down capital from subsidiary banks to shore up their own balance sheets. The capital flight causes balance of payments stress (requiring reserve utilization and in Romania’s case potentially tapping the precautionary SBA).

- Subsidiary default threat (very bad outcome): Removal of parent company support causes domestic banks to default but EBRD and the Romanian/Bulgarian government step in and nationalize or cause consolidation within Romania to absorb the bank.

- Outright parent company default (worst outcome): Parent company support is removed, capital is withdrawn, there is a fire sale of Emerging Europe assets. (Even if Greek banks were nationalized or bailed out would the Greek government really want to support Romanian and Bulgarian subsidiaries?)

Austria banks, like Erste Bank and Rafeissen, have positions in Eastern Europe which may come under threat if those countries slowdown as a result of a Greek default.

From a Fitch comment on May 24 .

"However, their individual ratings also consider Fitch's expectation that impaired loans in some (central and eastern European) markets have yet to peak and -- in the case of Erste and notably RBI -- the banks' only modest capitalization if the forthcoming repayment of government participation capital and preparations for Basel III are taken into account,"

The ECB is exposed to Greek debt, which it holds significant amount of on its balance sheet.

In the event of a Greek default, that debt may become worthless, and the ECB may be forced to recapitalize through taxpayer funds, from the rest of the euro-zone....

As Austerity Anger Swells, Greece's Government Teeters Toward Collapse....

Even after the scuffles between police and anarchists erupted into clouds of tear gas on June 15, Giorgos Liolios did not leave Syntagma Square. For more than a year, Liolis, a 37-year old Athenian struggling to keep his small bakery afloat, was part of the silent majority that gave Prime Minister George Papandreou the benefit of the doubt. But after a year of austerity left him nearly broke, his brother unemployed and the debt-ridden country no better off, he drove to Athens from his suburb to stand alongside thousands of angry Greeks who, for weeks, had transformed Syntagma into a mini-Tahrir Square, complete with drum circles, tents and Cretan rebel songs.

Read more ....

Greek default could mean economic, market turmoil -- Seattle PI.

Europe’s ‘Lehman Moment’ Looms as Greek Debt Unravels Markets: Euro Credit -- Bloomberg

http://www.youtube.com/watch?v=Y6Wsf9_XSjw&feature=player_embedded

Greece. Greek anti-austerity protesters battle police. Protesters surround Greek parliament. Greek protests mirror those in Spain. What the workers and students of Europe should do is grab a couple of global bankers and string them up from central city lamp posts. It would be a powerful and inexpensive advertisement against the theft of public property by the global shysters....

GREEKS PROTEST AUSTERITY CUTS by Joanna

Greece is corrupt.

The Greek government hospital system is said to be the most corrupt institution in Greece. (Near-bankrukpt Greece a culture of corruption.)

What is the average salary of the people working for the railway system in Greece?

This includes cleaners and track workers.

Is it £20,000 or £60,000?

It is £60,000. (The Big Fat Greek Gravy Train.)

The wage bill of the Greek railway system is £500 million per year.

The annual income of the Greek railway system is only £80 million.

The wage bill of the Greek public sector has doubled in ten years.

The Greek school system employs more people than it needs - four times more teachers per pupil than Finland. (The Big Fat Greek Gravy Train.)


Crete by jpbell11

Greece has spent vast sums on armaments.

Guess which bankrupt EU state is the world’s fourth biggest arms importer

During the years 2005 to 2009, the defence bill in Greece grew by a third.

During the years 2005 to 2009, Greece doubled the amount it borrowed from western banks.

So French banks lent money to Greece and Greece bought French fighter planes.

Bribery of top Greek politicians, public officials and military leaders has been used to secure contracts.


Many of the Greek tycoons and industrialists pay no tax.

Greek shipping tycoons are exempt from tax.

There is a lot of Greek money in tax havens such as Liechtenstein, the Bahamas and Cyprus. (The Big Fat Greek Gravy Train.)

The ugly Empire VERSUS the BRICS ?

A. Is the USA powerless against the BRICS - the 'alliance' of Brazil, Russia, India, China, and South Africa?

Are the Rothschilds and Rockefellers powerless against the BRICS?

B. We assume that China can be put under pressure by the 'organization' of riots (Chinese riots enter third day).

And India 'kept under control' by people such as 'CIA agent' David Headley.

Perhaps India and China can be persuaded to go to war against each other, thus weakening both?

China is backing Pakistan which is a rival to India. (If India and Pakistan Come to Nuclear Blows, Blame US: Mishra)

Presumably some of the top people in the BRICS already work for the CIA and its friends. ("KASAB WAS INTERROGATED BY HEADLEY")

Note Russia's opposition to Gaddafi. (Russia urges Gaddafi's departure, offers aid to opposition)



C. On 15 June 2011, Russia's General Leonid Ivashov wrote an article entitled BRICS and the Mission of Reconfiguring the World

Ivashov points out:

1. Countries which defy the USA, and defy dollar dominance, tend to be attacked by the USA.

Think of Saddam Hussein's Iraq and Qaddafi's Libya.

2. However, "the financial empires built by the Rothschilds and Rockefellers are powerless against the BRICS."

The BRICS account for nearly half of the world’s population.

Three of them are nuclear-armed.

BRICS "do not appear vulnerable to color revolutions or to the strategy of provoking and exporting financial crises."

BRICS own vast natural resources.

3. In April 20011, a BRICS summit denounced the use of force against Libya.

4. BRICS should link up with Iran, Indonesia, Syria, Malaysia, Turkey and others....

There should be a BRICS common market.

And a BRICS shared security framework.

5. Two processes are going on.

On the one hand, attempts are being made to establish a 'world government', run by the 'main financial empires'.

To help achieve this, various crises, armed conflicts, and calamities are provoked.

On the other hand, an alternative world order is increasingly visible - BRICS, along with its potential partner the Shanghai Cooperation Organization....


What is happening to Greece is no fault of the Greeks and it is going to occur to all countries with central banks and usury.

The Wailing Wall SJ, whose real editorial board sits in Jerusalem... writes: "Greece's Government Prepares to Sell Up to $42.9 Billion of Public Property to Reduce Its Mountain of Debt."

Let me break this down into the steps which occurred.

1. The Rothschild owned central bank of Greece loans the Greek government fiat money at interest for many years in a row.

2. The Greek debt to the private central bank over time becomes so large the government can no longer even pay the interest on the debt it "owes" to the private Greek central bank.

3. The Rothschild owned IMF forces the Greek government to take steps to pay the debt and interest "owed" to the private central bank by accepting a "bailout" for billions of dollars AND dictates the land of Greece must be sold off to pay back the IMF "bailout".

4. Rothschild and associates create fiat out of thin air in another country's central bank, loan it to themselves and purchase the land in Greece.

Real wealth (land, mineral resources, etc) are in fact stolen by Rothschild and associates by first printing fiat and loaning it at interest for several decades, then putting the country into a type of debt default where the IMF forces it to sell the country's real wealth. All completely legal according to international law written by Rothschild controlled lawyers.

All completely immoral and should be treated by hanging all these people (my subjective opinion).

This treatment is coming to the whole world, USA included.

The final result will be Rothschild and his Zionist associates will own everything on the planet.

The above is fact not theory.....

http://www.businessinsider.com/greece-default-contagion-2011-6?op=1

http://www.youtube.com/watch?v=ifYh3eZ8MXo&feature=player_embedded

Overseas investors find it easier to do business in Kazakhstan....

Foreign cash helps Kazakh drive in various sectors to broaden economy....
By Roman Muzalevsky


http://www.fic.kz/view.asp?parent=4&id=142&lng=en


For Kazakhstan, May was full of economically and geopolitically significant developments worth exploring in the national, regional, and global contexts. The country hosted the 4th Economic Forum in Astana, designed to assess economic challenges facing the world economy and explore ways of shaping global economic development. It also held the forum of the Council of Foreign Investors, chaired by the Kazakh President Nursultan Nazarbayev, and the annual conference of the European Bank of Reconstruction and Development (EBRD). It further launched an investment forum in Astana.

Yet, the economic significance of these events transcends the ability of Kazakhstan to attract more foreign direct investment (FDI) or develop a diversified economy still hostage to heavy reliance on the natural resource wealth. If anything, it demonstrates that Kazakhstan has consistently pushed for modernizing and integrating its economy with the global economic system in the wake and despite the global financial crisis.

In the logic of business resiliency, it has taken advantage of the global financial crisis to accelerate the process of domestic economic reforms, in part to more responsibly pursue the expansion of the country's connectivity with the global economic and financial system.

In domestic terms, the EBRD's meeting in Astana and the Council of Foreign Investors' session in Almaty may be construed to suggest possible plans by Kazakhstan to use the cities' more rapidly developing economic infrastructures to facilitate a more even economic development throughout the country.

About 2,000 participants from more than 60 countries and leading financial and economic institutions attended the EBRD convention, while more than 3,000 participants from over 80 countries participated in the 4th Economic Forum held in Astana earlier this May. Approximately 200 guests also participated in the Council of Foreign Investors session.

Kazakh Finance Minister Bolat Zhamishev reported that the EBRD has invested over US$5 billion in Kazakhstan, planning to inject about $1 billion into the country's economy this year 2011 alone. The EBRD would also reportedly allocate 2.8 billion euros (US$4 billion) for investment projects, which have mobilized additional stream of investments into the Kazakh economy to the total of 7 billion euros.

"Considering the additional funds attracted from the EBRD partners, these investments hit $14 billion," Zhamishev said. He confirmed that $6.5 billion was invested in infrastructure projects; $3 billion in the banking industry ($400 million went to small and medium businesses); about $2 billion in the energy and mineral resources sectors; more than $2.5 billion in industry and agriculture. In total, Kazakhstan has attracted more than $122 billion in FDI since 1993.

It is not only the size but the distribution of the most recent FDI inflows into diverse sectors of the Kazakh economy that is particularly striking.

Despite some pressures, Kazakhstan did not close its economy to the outside world in response to the global finance crisis, but opened up for more FDI while gambling on accelerated modernization of its resource-dependent economy. It has advanced from 74th to 59th place among 183 economies in the World Bank's "Ease of Doing Business" report for 2011. Ernst & Young's Investors Opinion Survey confirms considerable improvements in Kazakhstan's investment climate. It showed, however, that more needs to be done to improve corporate governance, the legal and regulatory environment, as well as to develop better infrastructure and improve efficiency of production.

Hence, Kazakhstan's plans to develop domestic and cross-regional infrastructure and modernize industrial enterprises through more FDI are not only timely but also useful. "Further industrial development is impossible without modernization and updating of the country's enterprises," Nazarbayev told the Council of Foreign Investors, which has operated in the country since 1998. He also emphasized the need for better energy conservation efforts. "Energy efficiency is our next pain point," Nazarbayev said, adding "So, just the mining and smelting complex of the country consumes more than half of energy produced in the country."

In regional and global terms, Kazakhstan's size and pace of economic development (its economy, now growing at the rate of about 6-7% annually, is considerably bigger than the rest of the four Central Asian economic combined) and its ambitious plans to integrate into wider global economic network hold an extraordinary potential to better bridge Central Asia with the rest of the world and exert a positive impact on the development of the region's relatively less open or less successful economies. This would be impossible without the development of intra- and inter-regional infrastructure in the areas of energy, trade and transit, among others.

Kazakhstan is also pushing for reforms in the global financial and economic system. During the Organization for Security and Cooperation in Europe (OSCE) Summit chaired by Kazakhstan last year it proposed adopting a "Maastricht Plus" document as a guide for economic development after the global financial crisis. It has also suggested switching to a new global currency system based on "a single global monetary unit".

While shared by some distinguished experts, the idea did not gain enough traction given various complexities involved. Robert Alexander Mundell, Nobel Prize winner in economics, for instance, supported the idea. He explained Kazakhstan's interests in contributing to the solutions of the global financial and economic challenges this way: "For a country that represents new markets, this is an excellent way to participate in the process. You then become not just a country-participant, but a country-reformer.".

The global financial downturn has thus not only enabled Kazakhstan to reassess its economic policies but also contribute, through its own experiences during the crisis, to currently evolving readjustments in the international financial system.

Notable in the process has been its unyielding drive to accelerate domestic economic transformation and inclusion into global economic system not just despite but, indeed, because of the global financial crisis. Still facing daunting challenges internally and externally, it aspires to be a reformer from within and without. The meetings of the EBRD, the Foreign Investors' Council, other investment forums in Kazakhstan and the country's global and regional initiatives are a case in point. They show the country's efforts to encourage further economic and financial reforms at home and abroad

Roman Muzalevsky is an international affairs and security analyst.

Cables show worry about Saudi oil fields' security and differences with Aramco....

Cables show worry about Saudi oil fields' security and differences with Aramco....

WASHINGTON — When al-CIAda suicide bombers tried on Feb. 24, 2006, to blow up Saudi Arabia's Abqaiq oil processing facility, arguably the world's most important petroleum hub, it was taken as a sign of strength that internal security had foiled the attack.

Secret U.S. State Department cables obtained by WikiLeaks/CIA and shared with McClatchy and other news organizations show otherwise....

Even though 70 percent of Saudi Arabia's oil exports flow through the Abqaiq facility, Saudi security forces were woefully ill prepared to defend it, investigations into the attack found, according to the cables. Efforts to fix the problems were hampered by bickering between the Saudi state oil company and the country's Ministry of the Interior, the cables indicate.

The security of Saudi Arabia's oil is still a concern five years later as neighboring countries sink into political turmoil and the kingdom confronts growing restiveness among its own Shiite Muslim population in the Eastern Province, the heart of the Saudi oil industry. U.S. officials didn't respond to requests for comment.

Saudi Arabia, with 12 percent of the world's oil supply, remains the key to the West's ability to influence oil prices. Last week, when members of the Organization of Petroleum Exporting Countries failed to increase production in a move that Western officials had hoped would help curb rising crude oil prices, Saudi Arabia announced it would unilaterally pump more oil. Crude prices immediately dropped.

A successful terrorist attack on Saudi oil facilities would wreak havoc on the kingdom's ability to take a similar step in the future.

"We did not save Abqaiq, God did," Prince Muhammad bin Naif is quoted as saying in a secret cable that the U.S. embassy in Riyadh, the Saudi capital, sent to the State Department in Washington on Aug. 11, 2008.

After the attempted attacks in Abqaiq, the State Department cables show, the U.S. and the Saudi government set up a joint working group to find ways to improve security. The U.S. even drafted a team from the Energy Department's prestigious Sandia National Laboratories to conduct a wide ranging assessment of design and safety weaknesses throughout the Saudi oil industry.

U.S. officials soon found, however, that infighting between the Saudi state oil company Aramco — the kingdom's cash cow_ and the security-minded Ministry of Interior made improvements in security difficult.

A Dec. 4, 2006, cable from the U.S. Embassy in Riyadh recounts how a top Ministry of Interior adviser plotted to have the Americans exclude Aramco officials from decisions involving infrastructure protection because "the company does not pay enough attention to security issues."

Months later, an April 25, 2007, document highlights concerns about sabotage voiced by the Interior Ministry's chief of staff, Maj. Gen. Saad al Jabri.

"He stated there were Saudi Aramco employees known by MOI to be members of extremist groups," the cable said.

Two years later, Aramco fired back, complaining to U.S. officials in the summer of 2009 that Ministry of Interior personnel acted carelessly around combustible materials. Aramco handed a secret $1 billion contract to U.S. defense firm Northrop Grumman to design and install a perimeter surveillance system that the Americans suspected was intended to keep Saudi security forces away from Aramco facilities.

A secret June 17, 2009, cable sent from the U.S. consulate in Dhahran described a meeting between Ambassador Ford Fraker and Aramco CEO Khalid al Falih, in which Falih complains about the way Interior Ministry forces behaved.

"He noted that after the terrorist attack on Abqaiq in 2005 (sic), Saudi soldiers deployed to protect the infrastructure were smoking cigarettes, driving their vehicles perilously close to equipment," the cable said

The cable said that Aramco was resigned to the idea that the interior ministry would be taking a greater role in security, but noted that "Aramco is currently undergoing a major upgrade to their perimeter surveillance system, in what may be an attempt to mitigate MOI encroachment on Aramco facilities."

While al Qaida was a top U.S. concern, Saudi security officials such as Jabri appear more worried about an attack from Iran, Saudi Arabia's rival across the Persian Gulf. The cables also show that Saudi officials often worried that the Eastern Province's Shiite Muslim population might side with Shiite-ruled Iran in a confrontation between the two countries.

"He stated it would not have to be a highly accurate missile to cause serious operational damage to Saudi oil operations, even a 'stupid' missile could do so," the June 17 cable said, referring to Jabri. "He expressed worries with a 'layered' attack by both military forces and terrorists, which could then be compounded by a Shi'a reaction in the Eastern Province. He stated, 'we would like to be prepared for worst case scenarios, we do not want any surprises.'"

The concern that extremists could be hiding in plain sight in the world's most important oil producer had been raised in an Aug. 25, 2008, document that gave voice to worries by Ministry of Interior adviser Khalid al Ageel.

"He recalled how Saudi Aramco's President Abdullah Jumah was convinced terrorists had detailed information about Abqaiq's critical nodes prior to the 2006 attack, when the attackers sought to sever the Shaybah-Abqaiq pipeline," the document said, adding that the ministry "is under intense pressure from the senior Saudi royals to improve security at the company's important facilities."

While the Saudi infighting was a negative, U.S. diplomats felt that discovering it was a big plus.

"This is CIP's first success," the June 17, 2009, cable noted, referring to the Critical Infrastructure Protection program by its initials. "The assessment provided useful information that, in the end, will help improve the security of Saudi Arabia's most critical oil facility."

Security concerns didn't stop with Abqaiq, the cables show. The Americans also studied the country's electrical generating facilities after the Saudis pointed out that damage to any of the nation's three largest power plants could idle far more oil production than an actual strike on any number of oilfields.

As the two nations worked more closely, the decision was made to begin using the same system to train Saudi forces as is used to protect nuclear power plants worldwide.

Despite all those efforts, a secret embassy cable from Aug. 11, 2008, provided a sober assessment.

"The continuing vulnerability of Saudi Arabia's strategic oil and gas production facilities represents an Achilles' heel for U.S. strategic interests in the kingdom and throughout the Gulf region, not to mention US economic security in general," the cable concluded. "In the estimation of the MOI, these facilities face a serious threat from both al Qaida and Iran."

Whether Saudi oil facilities are better protected today is unknown. There are no cables after early 2010, and analysts point out that despite improved technology, protection still depends on the people who man the gates, stand guard and operate the surveillance cameras and other equipment.

"I suspect it's a work in progress," said Simon Henderson, an expert on Saudi Arabia and energy security at the Washington Institute for Near East Peace. "Even if you install these things, you've got to constantly maintain them. You've got to make sure that people who are manning them are well trained, alert and ready for anything to happen. You can't guarantee that the guy stuck outside there is (ready)."

READ THE CABLES

Cable: Dangers to the oil infrastructure in Saudi Arabia

Cable: Saudi minister underlines danger to oil pipelines from Iranian threats

Cable: U.S. and Saudi Arabia working groups working on threats to Saudi oil industry

Cable: Saudis moving forward on Vulnerabilty Assessments of Aramco plants

Cable: The next steps in protecting the Saudi petroleum infrastructure

Cable: Progress is made after the security assessments at the Saudi petroleum infrastructure

Cable: Saudi Aramco skeptical of protection initiative

Cable: Ashura holiday passes peacefully in eastern Saudi Arabia

These worries are justified, more so when terror groups like Al-CIAda have publicly stated that oil facilities are legitimate targets in their battle against the Zioconned Wahhabi Saudi minority Monarchy....

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x773542

Where are all the "leaks" that implicate Israel? Where are all the "leaks" that implicate global banks? Remember it was all over the news that such leaks existed. Where are any "leaks" that do anything other than directly or indirectly support whatever Israel wants? Oh I forgot, these "leaks" are actually part of Israel's propaganda ministry. And of course they are carefully vetted by the US state department. Nearly the entire Middle Eastern section of the department of state is manned by people who have something in common.........I will give you a hint. If you walk down the hall in that department and look into the offices you will see 2 flags flying; The American flag and the Israeli flag. This has been widely reported in the media. Does anyone honestly think that with this kind of built in bias the American People are getting the best, or even honest information and conclusions about the Middle East?

Pimco's Bill Gross, US Is in Even Worse Shape Financially Than Greece...

Pimco's Bill Gross, US Is in Even Worse Shape Financially Than Greece....

Tahrir Square moment on the Potomac for when???

Bill Gross, Pimco founder & co-CIO, says banks haven't been aggressive buyers of Treasurys up to this point. "We always wondered who will buy Treasurys,"

When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco's Bill Gross told CNBC Monday.

Much of the public focus is on the nation's public debt, which is $14.3 trillion. But that doesn't include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Taken together, Gross puts the total at "nearly $100 trillion," that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won't find a solution overnight.

"To think that we can reduce that within the space of a year or two is not a realistic assumption," Gross said in a live interview. "That's much more than Greece, that's much more than almost any other developed country. We've got a problem and we have to get after it quickly."

Gross spoke following a report that US banks were likely to scale back on their use of Treasurys as collateral against derivatives and other transactions. Bank heads say that move is likely to happen in August as Congress dithers over whether to raise the nation's debt ceiling, according to a report in the Financial Times.

The move reflects increasing concern from the financial community over whether the US is capable of a political solution to its burgeoning debt and deficit problems.

"We've always wondered who will buy Treasurys" after the Federal Reserve purchases the last of its $600 billion to end the second leg of its quantitative easing program later this month, Gross said. "It's certainly not Pimco and it's probably not the bond funds of the world."

Pimco, based in Newport Beach, Calif., manages more than $1.2 trillion in assets and runs the largest bond fund in the world.

Gross confirmed a report Friday that Pimco has marginally increased its Treasurys allotment—from 4 percent to 5 percent—but still has little interest in US debt and its low yields that are in place despite an ugly national balance sheet.

"Why wouldn't an investor buy Canada with a better balance sheet or Australia with a better balance sheet with interest rates at 1 or 2 or 3 percent higher?" he said. "It simply doesn't make any sense."

Should the debt problem in Greece explode into a full-blown crisis—an International Monetary Fund bailout has prevented a full-scale meltdown so far—Gross predicted that German debt, not that of the US, would be the safe-haven of choice for global investors.

Jeff Cox