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07.21 Greta Thunberg: ‘They see us as a threat because we’re having an impact’ [We love a sane smarty-pants! Trump, you won't understand any of this, so just go off and tweet or chant, or whatever...]

07.20 Until Emissions Drop, Nothing Has Been Accomplished: The Climate Resistance Handbook Is Here. [Trump can't be bothered as the world turns into a large cinder. His laser focus is on personal greed.]

07.20 Cargo ships are emitting boatloads of carbon, and nobody wants to take the blame [1:19 video; Governments must commission to fight deadly shipping emissions, previously omitted in climate summit agreements....]

07.20 Babies Born Near Oil and Gas Wells Are Up to 70% More Likely to Have Congenital Heart Defects, New Study Shows

07.20 Giving 'Upper Hand to Corporate Polluters,' EPA Drops Surprise Inspections

07.20 With Petition to Congress, 100,000+ People Demand Green New Deal 'That Fixes Our Food System' [Realtime proactive response to reality—now and threatening—doesn't get attention in this greed focused administration]

07.19 Trump administration won't ban pesticide tied to childhood brain damage [There is no truth to the persistent rumor that chlorpyrifos pesticide was heavily used at Trump's childhood home in Queens]

07.19 'Unprecedented' Decline of Plants and Animals as Global 'Red List' Reveals Nearly One-Third of Assessed Species Under Threat

07.17 ‘Off-the-charts’ heat to affect millions in U.S. in coming decades

07.17 Planned Parenthood president Leana Wen forced out by board [Given that states have lost abortion rights on political grounds recently, Wen's philosophical approach to protect abortion rights based on ‘health care’ was smarter – therefore it was that smarter strategy that was killed at the secret meeting.]

07.17 Billions of air pollution particles found in hearts of city dwellers

07.17 What is happening in America's Cancertown is tragic, immoral and evil [Niggardly white government policies could change to produce better students, better jobs and net revenue instead of costs. But it seems they enjoy more cruelty—like Trump.]

07.16 US aid cuts to UN agency will hurt vulnerable women and children, critics say

07.16 Trump abortion restrictions in effect for taxpayer-funded clinics

07.15 The response to DRC’s Ebola crisis isn’t working. Here’s what we need to do

07.15 Extinction Rebellion protests block traffic in five UK cities [Non-corporate human animals make their annoying bleating sounds...]

07.14 A Glacier the Size of Florida Is Becoming Unstable. It Has Dire Implications for Global Sea Levels [The willfully ignorant needn't read more, Trump]

News Media Matters

07.19 Fox News’s star names excuse the inexcusable after Trump's latest racist attack

07.18 In Sinclair's New 'Must-Run' Segment, Former Trump Adviser Tries to Defend Racist Attacks on 'the Squad'

Daily: FAIR Blog
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US Politics, Policy & 'Culture'

07.21 Of course Donald Trump is a racist – and his Wall Street enablers know it

07.21 A court ruled it was legal for guards to strip search female inmates and force them to remove their tampons in front of male officers for a 'training exercise' [The frequency and degree of immorality and degradation being reported in the media is very disturbing, as if society has been reprogrammed overnight to be more like the worst behavior of Nazi Germany]

07.21 THE DEMOCRATIC PARTY IS GETTING CRUSHED IN FUNDRAISING: “THEY NEED TO GET THEIR SHIT TOGETHER” [Since so-called moderate Democrats will prostitute themselves in many conceivable ways (offering that special quid pro quo) they have effectively become competitively ANTI-PUBLIC, like Republicans. Whereas progressive Democrats must promise not to take corporate donations at all as an effective litmus-test. The DNC refuses to raise funds for moderate and progressives separately, and thus donations fall short. Which is it to be: 1) Will the DNC change? or 2) Must progressive Democrats become corporate whores too? or 3) Maybe you don't need corporate contributions at all if your policies are fantastic?]

07.21 State and Local Taxes Are Worsening Inequality

07.21 State and Local Taxes Are Worsening Inequality

07.21 We're no longer in Brave New World. We're back in 1984. [1:35 video; Our despicable President is at it again]

07.21 BALTIMORE'S FILTHIEST HOODS [7:38 video. Ask your governments, why are our cities so much worse than Europe's? Why is our healthcare worse and so much more expensive? And why are our Billionaires so much richer? Ask if those results of bad government are all related, and why? Are they all caused by a power-elite with greed-obsessed immorality?]

07.21 Nancy Pelosi's Dem Socialist Challenger Shahid Buttar: "We're Gonna Win" | Full Interview [5:43 video]

07.21 Jon Stewart goes viral excoriating Rand Paul after blocking vote [9:02 video]

07.21 Nicolle Wallace Refuses to Broadcast Trump Live [5:43 video]

07.21 Sassy Bernie Sanders Sh*ts on Jeff Bezos on His Home Turf... Numerous Times [17:22 video]

07.20 Puerto Rico: top US politicians join chorus calling for governor's resignation

07.20 Fact check: Trump says Puerto Rico got $92 billion. They've seen only a fraction [If he opens his mouth, Trump's lying.]

07.20 "Trump Says Go Home, Ilhan's Community Says Welcome Home": Rep. Omar Greeted With Cheers of Love and Support in Return to Minnesota

07.20 WATCH: Amid Extreme Anti-Refugee Push, Trump Displays Neither Interest Nor Knowledge of Asylum Seekers' Plight in Oval Office Meeting

07.20 Trump Denies Being at North Carolina Rally [Not sure if Trump supporters 'get' satire, but here goes....]

07.19 Are progressives working on a climate plan for 2021? You bet.

07.19 House Democrats demand Hope Hicks clarify testimony after Cohen document dump

07.19 The 51 most outrageous lines from Donald Trump's repugnant North Carolina rally

07.19 The Real Meaning of ‘Send Her Back!’

07.18 Alexandria Ocasio-Cortez on Breaking up Homeland Security

Justice Matters

07.19 UN urged to act over 'purge' of Turkey's lawyers by Erdogan

07.19 DOJ Releases Strong Evidence of Trump’s Campaign Finance Violations But No Explanation of No Charges [The statement]

High Crimes vs. Human Rights

07.19 Conscientious objectors of first world war – their untold tales [The record proves they were morally right by avoiding violent early deaths of their cousins and themselves]

Economics & Corrupt Capitalism

07.18 Corporate tax cuts blocked at least 15,000 affordable homes in California. Here’s how

International & Futurism

07.21 Millions face hardship as Zimbabwe comes close to ‘meltdown’

07.21 Spain set for socialist-led government after Iglesias deal [Some loaded drama going on here...]

07.20 US to deploy troops to Saudi Arabia in face of 'credible' regional threats [Working with Osama bin Laden's godfathers, Trump wants to profit like Erik Prince (for-profit education secretary Betsy DeVos' brother) of Blackwater infamy (hurriedly renamed ‘Academi’), the U.S. taxpayer to pay inflated costs while Trump siphons off long-term emolument largesse]

07.20 Iran on 'dangerous path' with seizure of Stena Impero, says UK [Which is this, a tit or a tat?]

07.20 'Dark satanic mills': Tony Abbott continues his crusade against wind turbines [Too much CO2 air pollution makes you stupid, and turns your country into an “Idiocracy” (1:36 video clip)]

07.20 Bolsonaro declares 'the Amazon is ours' and calls deforestation data 'lies' [Lazy and willfully stupid whenever it serves his purpose, just like Trump. “And the rest of you can all go to hell.” Again, just like Trump. Has your country turned into an “Idiocracy”? (1:36 video clip)]

07.19 U.N.'s Bachelet says Congresswomen opposing Trump are 'fantastic'

07.19 Iran makes 'substantial' nuclear offer in return for US lifting sanctions [Was barbaric Saudi Arabia—whose citizens were more involved in the 9-11 attacks—the wrong ally all along?]

07.19 “The Task Ahead Is Enormous, and There Is Not Much Time” [Read this and learn. Or read Donald J. Trump (@realDonaldTrump) | Twitter and/or President Trump (@POTUS) | Twitter. Are you serious? Or are you in hideously criminal denial?]

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  Print view: Basel III: Tightening The Noose On Credit
READY, FIRE, AIM:

Basel III: Tightening The Noose On Credit

The Basel III capital requirements were ostensibly designed to prevent a repeat of the 2008 banking collapse, but the new rules fail to address its real cause.

by Ellen Hodgson Brown, J.D.
Originally posted on Ms. Brown's WebOfDebt.com website on August 16th, 2010

The stock market shot up on September 13, after new banking regulations were announced called Basel III. Wall Street breathed a sigh of relief. The megabanks, propped up by generous taxpayer bailouts, would have no trouble meeting the new capital requirements, which were lower than expected and would not be fully implemented until 2019. Only the local commercial banks, the ones already struggling to meet capital requirements, would be seriously challenged by the new rules. Unfortunately, these are the banks that make most of the loans to local businesses, which do most of the hiring and producing in the real economy.
Why Basel III Misses the Mark

Two years after the 2008 bailout, the economy continues to struggle with a lack of credit, the hallmark of recessions and depressions. Credit (or debt) is issued by banks and is the source of virtually all money today. When credit is not available, there is insufficient money to buy goods or pay salaries, so workers get laid off and businesses shut down, in a vicious spiral of debt and depression.

We are still trapped in that spiral today, despite massive “quantitative easing” (essentially money-printing) by the Federal Reserve. The money supply has continued to shrink in 2010 at an alarming rate. In an article in The Financial Times titled “US Money Supply Plunges at 1930s Pace as Obama Eyes Fresh Stimulus,” Ambrose Evans-Pritchard quoted Professor Tim Congdon from International Monetary Research, who warned:

“The plunge in M3 [the largest measure of the money supply] has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly.”

In a working paper called “Unconventional Monetary Policies: An Appraisal”, the Bank for International Settlements concurred with Professor Congdon. The authors said, “The main exogenous [external] constraint on the expansion of credit is minimum capital requirements.” (“Capital” means a bank’s own assets minus its liabilities, as distinguished from its “reserves,” which apply to deposits and can be borrowed from the Federal Reserve or from other banks.)

The Bank for International Settlements (BIS) is “the central bankers’ central bank” in Basel, Switzerland; and its Basel Committee on Banking Supervision (BCBS) is responsible for setting capital standards globally. The BIS acknowledges that pressure on banks to meet heightened capital requirements is stagnating economic activity by stagnating credit. Yet in its new banking regulations called Basel III, the BCBS is raising capital requirements. Under the new rules, the mandatory reserve known as Tier 1 capital will be raised from 4 percent to 4.5 percent by 2013 and will reach 6 percent in 2019. Banks will also be required to keep an emergency reserve of 2.5 percent.

Why Is the BCBS Raising Capital Requirements When Existing Requirements Are Already Squeezing Credit?

Concerns about the credit-tightening effects of Basel III were reported in a September 13 Huffington Post article by Greg Keller and Frank Jordans, who wrote:

“Bankers and analysts said new global rules could mean less money available to lend to businesses and consumers. . . .

“European savings banks warned that the new capital requirements could affect their lending by unfairly penalizing small, part-publicly owned institutions.

“‘We see the danger that German banks’ ability to give credit could be significantly curtailed,’ said Karl-Heinz Boos, head of the Association of German Public Sector Banks.

“Insisting that French banks were ‘among those with the greatest capacity to adapt to the new rules,’ the country's banking federation nevertheless said they were ‘a strong constraint that will inevitably weigh on the financing of the economy, especially the volume and cost of credit.’

Juan Jose Toribio, former executive director at the IMF and now dean of IESE Business School in Madrid, said the rules could hamper the fragile recovery.

“‘These are regulations and burdens on bank results that only make sense in times of monetary and credit expansion,’ he said.”

For smaller commercial banks and public sector banks (government-owned banks popular in Europe), the credit-constraining effects of Basel III are a serious problem. But larger banks, said Keller and Jordans, “were quick to praise the agreement and insisted they would meet the required reserves in time.” The larger banks were not worried, because “The largest U.S. banks are already in compliance with the higher capital standards demanded by Basel III, meaning their customers won't be directly affected.” Their customers, of course, are mainly large corporations. “Small businesses that rely on borrowing from community banks,” on the other hand, “may be more affected . . . . They will try to make up for the higher capital requirements by lending at higher rates and stiffer terms.”

If the big banks that brought you the current credit crisis can already meet the new requirements, what exactly does Basel III achieve, beyond shaking down their smaller competitors? As David Daven remarked in a September 13 article called “Biggest Banks Already Qualify Under Basel III Reforms”:

“Indeed, on the day Lehman Brothers collapsed, THEY would have been in compliance with the Basel III standards.”

Punishing Your Local Bank for Wall Street’s Misdeeds

What precipitated the credit crisis and bank bailout of 2008 was not that the existing Basel II capital requirements were too low. It was that banks found a way around the rules by purchasing unregulated “insurance contracts” known as credit default swaps (CDS). The Basel II rules based capital requirements on how risky a bank’s loan book was, and banks could make their books look less risky by buying CDS. This “insurance,” however, proved to be a fraud when AIG, the major seller of CDS, went bankrupt on September 15, 2008. The bailout of the Wall Street banks caught in this derivative scheme followed.

The smaller local banks neither triggered the crisis nor got the bailout money. Yet it is they that will be affected by the new rules, and that effect could cripple local lending. Raising the capital requirements on the smaller banks seems so counterproductive that suspicious observers might wonder if something else is going on. Professor Carroll Quigley, an insider groomed by the international bankers, wrote in Tragedy and Hope in 1966 of the pivotal role played by the BIS in the grand scheme of his mentors:

 “[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”

The BIS has now become the apex of the system as Dr. Quigley foresaw, dictating rules that strengthen an international banking empire at the expense of smaller rivals and of economies generally. The big global bankers are one step closer to global dominance, steered by the invisible hand of their captains at the BIS. In a game that has been played by bankers for centuries, tightening credit in the ebbs of the “business cycle” creates waves of bankruptcies and foreclosures, allowing property to be snatched up at fire sale prices by financiers who not only saw the wave coming but actually precipitated it.


Ellen Brown

Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she shows how the Federal Reserve and "the money trust" have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.

Ms. Brown's stories are republished in the Baltimore Chronicle with permission of the author.



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This story was published on September 19, 2010.
 



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