Tuesday, September 30, 2008

Interview Vice Presidential Candidate Sarah Palin!

Here's a bit of fun - you can pre-interview the lovely Sarah Palin!


16th Amendment - The Sixteenth Amendment Bill Benson Litigation


In this historic 16th Amendment litigation, the Government has sued Bill Benson seeking an injunction prohibiting him from "falsely" telling people the Sixteenth Amendment to the United States Constitution was not ratified and therefore people are not required to file an income tax return. The Government contends it is entitled to an injunction because Benson is promoting an abusive tax shelter, conduct made subject to a penalty per 26 U.S.C. Section 6700. All of the pleadings filed in the case can be found here (quotations around the word falsely added by hANOVER fIST; the only thing being "falsely mentioned" is that the tax burden weighs on WE THE PEOPLE - Bill Benson's research has verified that the fraudulent 16th Amendment was NOT ratified; conversely, the original 13th Amendment was ratified, but was removed in 1860 and replaced with an amendment that places WE THE PEOPLE as slaves to the elected offficials who are OUR representatives).

In 1894 Congress passed an income tax act very similar to the current income tax law. That law was challenged on the basis that a tax on income is a direct tax, the United States Constitution requires direct taxes to be apportioned, and the act passed by Congress was not apportioned. The United States Supreme Court agreed and held the income tax act was unconstitutional in Pollock v. Farmer's Loan & Trust Co., 157 U.S. 429, aff. reh., 158 U.S. 601 (1895).

In 1909 President Taft called a special session of Congress. Taft asked Congress to propose a constitutional amendment to overcome the Supreme Court's Pollock decision. Congress proposed the Sixteenth Amendment, which was then sent to the states for ratification by Secretary of State Knox. Certificates of Ratification were sent back to Knox, but the language on the certificates differed from the 16th Amendment language passed by Congress. Knox sent the certificates to the Solicitor of the United States and asked for a legal opinion as to whether the states had ratified the proposed Sixteenth Amendment.

The Solicitor noted the differences between what Congress proposed and the states ratified, and presumed, that because states do not have the authority to alter a proposed Constitutional amendment, that none did. He concluded, therefore, that the differences in language were nothing more than minor clerical errors in the preparation of the Certificates of Ratification. Knox then declared the 16th Amendment had been ratified.

The legislative journals conclusively establish, that despite not having the power to do so, several states intentionally modified the language of the proposed amendment. The presumption relied upon by the Solicitor was wrong! Benson discovered other discrepancies too. He wrote and published a book on what he discovered, The Law That Never Was, available on his web site at www.TheLawThatNeverWas.com. Benson contends that less than thirty-six states actually ratified the proposed Sixteenth Amendment.

In the absence of the 16th Amendment, the current income tax is an unapportioned direct tax, and is just as unconstitutional today as it was in 1894. Since 1985 Benson tells everyone who will listen about what he found, and urges people to exercise their First Amendment rights to rectify the situation. Benson's message is gaining acceptance in the marketplace of ideas. The Government now seeks to silence him.

Many people ask why, if the 16th Amendment created no new taxing power, as stated by the Supreme Court in Brushaber v. Union Pacific Railroad Co., 240 U.S. 1 (1916), it is necessary to litigate whether the Sixteenth Amendment was ratified? The Supreme Court ruled in Pollock that the income tax enacted by Congress in 1894 was a direct tax, the act passed by congress wasn't apportioned, and therefore the tax was unconstitutional. The decision wasn't unanimous. The court was split five to four. Those in the minority believed a tax on income was not a direct tax, but an indirect, excise tax. One of the dissenters was associate justice White. Notwithstanding the decision was split five to four, the result was that the constitutional requirement that direct taxes be apportioned was upheld. To overcome the holding of Pollock, Congress proposed the 16th Amendment. It was allegedly ratified in 1913.

Subsequent to the alleged ratification of the Sixteenth Amendment, the Supreme Court does not agree on exactly what the 16th Amendment did:

* According to the Supreme Court in Eisner v. Macomber, 252 U.S. 189 (1920), the Sixteenth Amendment removed the requirement of apportionment for the direct income tax. That is, direct taxes still had to be apportioned except the direct tax on income.

* According to Brushaber, written by Justice White who by that time had become the chief justice, the 16th Amendment prevented courts from doing what he claimed the Pollock court did--consider the source of the income to take the tax on that income out of the class of excises, to which he claimed it belonged, and placing it in the class of direct taxes. That is, a tax on income, regardless of the source, is an indirect tax; because the tax is not a direct tax, it does not have to be apportioned.

Whether you agree with Brushaber that the tax is an excise tax that doesn't have to be apportioned, or agree with Eisner that the tax is a direct tax that doesn't have to be apportioned, without the 16th Amendment, the law reverts back to Pollock. The serious student will find my book, Judicial Tyranny and Your Income Tax, an in depth study of the history of the income tax, with two chapters devoted to the issue of direct and indirect taxes, and an extensive analysis of the Pollock and Brushaber cases. If you would like a copy, click here.

The issues in Bill Benson's case, however, transcend whether or not the 16th Amendment was ratified. More important is the issue that the government believes it can take a position and punish someone who disagrees with that position, without affording the person any opportunity to prove the government's position is wrong. The government, unable to refute Bill Benson's facts conclusively establishing less than three-fourths of the states voted to ratify the proposed amendment, objected to the facts on the grounds they were irrelevant, immaterial and scandalous. The court agreed, and issued an order that Bill Benson is not to be allowed to defend based upon the truth. If this posture is allowed to stand, every semblance of justice in America will be trashed. It is inconceivable that the Star Chamber becomes again the type of court justice to be utilized to resolve disputes between the people and the government.

Equally disturbing is the position of the federal government that it has the unfettered right to obtain the names and addresses of any person who so much as ordered Benson's material, read it or possesses it. The pleadings, filed by the government, make it perfectly clear the government intends to obtain the names and investigate any person whose name they obtain.

The issue of taxation and the Sixteenth Amendment is a political question. We, as Americans, supposedly have an inalienable right to the free debate of these issues without government interference. We, as Americans, supposedly have the right to require the government to answer our questions. We, as Americans, supposedly have the right to require the government to prove its allegations against us in Court. We, as Americans, supposedly have the right, when charged with a crime, to present a defense.

To counter the government's efforts to destroy our First Amendment rights, three people have intervened in the Benson litigation. They intervened as John Doe I, John Doe II and Jane Roe to protect their names from the government. They are demanding a protective order preventing the government from obtaining their names, as well as, the names of anyone else involved in this important political debate on the Sixteenth Amendment.

If we don't take a stand, together, we lose. It's that simple. The Bill Benson litigation is, perhaps, the single most important litigation in the court today. The issues affect YOU, just as much as they affect Bill Benson.

I am representing Bill Benson and the three interveners for free. They do not have funds to prosecute and defend their rights in this 16th Amendment litigation. I am asking for your donations to keep me in housing and with food and supplies while this litigation is pending.

Whether you agree with Bill Benson or not, this litigation is not about one of us being right or wrong. This litigation is about preserving YOUR freedom. It is about your right to even have an opinion and express it without fear of government retaliation. Our country is in serious distress, as we now have East German like checkpoints at our airports, and wholesale government disrespect of, and contempt for, our Constitution.

Ben Franklin said during another time of intolerable governmental action: "We must all hang together or, most assuredly, we shall all hang separately." Please support this litigation and make a donation to support those who have taken a front line position to defend liberty for all of us. Click here to Make a Donation. Also, please pass along the link to this case to your family and friends.




The Bill Benson case is now before the Seventh Circuit Court of Appeals. Bill has filed his Opening Brief, the government has filed its Reply and Brief on Cross-Appeal seeking the names of those in association with Bill. Bill has filed his Response and Reply Brief to the Cross-Appeal. The government has filed its Response to Bill's Reply on the Cross-appeal.

The next step is for the Seventh Circuit to set the case for oral argument. Oral argument will be held at the Federal Courthouse, 219 S. Dearborn Street, Chicago, IL 60604. Oral argument will probably be scheduled three to six months from now.

● The critical issues are that the courts are covering up the fact that it has allowed the constitution to be amended by a presumption of the executive rather than actual ratification by the necessary number of states.

● The courts and the executive are attempting to stop the dissemination of public records showing governmental fraud, thereby thrashing the First Amendment right to Freedom of Speech.

● The courts are taking the position that one accused of making false statements regarding government misconduct cannot present evidence in court that his statements are absolutely true, thereby thrashing the Fifth Amendment right to Due Process and the people's right to defend themselves in court.

This conduct will shock the conscious of every American if only it is brought to their attention.

My Call to Arms is to work together to put as much political pressure on the 7th Cir as is humanly possible. To that end, I request your help to accomplish the following:

✓ Distribute Bill's Response and Reply Brief as widely as possible, sending it to everyone you know and publishing it on the Internet on web sites and blogs

✓ Produce and publish YouTube videos

✓ Disseminate the Response and Reply Brief to as many attorneys and CPA as possible

✓ Disseminate the Response and Reply Brief to as many defense bars and First Amendment Groups as possible

✓ Help organize, and attend, a huge protest outside of the 7th Circuit Court of Appeals the day before and the day of the oral argument hearing

✓ Make the date of the hearing before the 7th Circuit known and present the issues to radio stations and newspapers and press releases

✓ Call the television stations and urge them to cover the protest

✓ Set up opinion polls where people text their opinion or call them in to a toll number so we can generate funds

✓ Set up on the Internet a service where for a fee, a letter will be faxed to a person's senators and congressman

✓ E-mail this Call to Arms and Bill's Response and Reply Brief to all of the Ron Paul groups

✓ Help finance a newspaper ad in USA Today a week before the oral argument before the 7th Circuit. Donations may be made on line here

This case represents the best shot we will ever have at ridding ourselves, once and for all, the dreaded federal income tax. It is time to take political action and make our voices heard if we are going to continue to have FREEDOM OF SPEECH and the RIGHT TO DEFEND OURSELVES IN COURTS.


Yours in Freedom,


Let Risk-Taking Financial Institutions Fail (kudos to Travis Kelly)

Let Risk-Taking Financial Institutions Fail

The Administration and Congress have felt compelled to do something about the "financial meltdown," so an inefficient and inequitable "bailout plan" has been rushed through the legislature despite harsh criticism from the right and left. That's unfortunate. Both presidential candidates were stalling by qualifying the plan. Whichever candidate had had the courage to reject outright this proposal would have had the better claim to be President.

Do not be fooled. The $700 billion (ultimately $1 trillion or more) bailout is not predominantly for mortgages and homeowners. Instead, the bailout is for mortgage-backed securities. In fact, some versions of these instruments are imaginary derivatives. These claims overlap on the same types of mortgages. Many financial institutions wrote claims over the same mortgages, and these are the majority of claims that have "gone bad."

Follow the money. Average Joes and Janes are not the holders of the other side of complicated, over-the-counter derivatives contracts. Rather, hedge funds are the main holders. The bailout will involve a transfer of wealth — from the American people to financial institutions engaging in reckless speculation — that will be the greatest in history...

Rescuing financial institutions is not the best solution. Yes, banks are needed to provide capital to businesses. But it is not necessary to spend $1 trillion to maintain liquidity. If the government is to intervene, it should pick and choose which claims to purchase; claims that are directly tied to mortgages would be a good start.

Let financial institutions fail, merge or be bought out. The faltering institutions will see their shares devalued and will be likely to be taken over by stronger institutions — as has already started happening. This consolidation of the financial sector is both efficient and inevitable; government action can only delay the adjustment.

The government should not intervene. It should leave overleveraged financial institutions to default on their derivatives obligations and, if necessary, file for bankruptcy. Much of the crisis has arisen from miscalculating the risks involved in a large book of positions in these derivatives. It is only logical that these institutions pay for their poor management.

Rather than bailing out Wall Street, we propose that the government should buy up the actual mortgages in question and do nothing else. The government should not touch any derivatives; that is, claims that do not directly tie into the actual mortgages. If money becomes too tight, then the Fed can certainly increase its loans to financial institutions.

Let the poorly managed, overly risk-taking financial institutions fail! Always remember that Wall Street and the real economy are not the same thing.

— Ari J. Officer has completed his master of science degree in financial mathematics at Stanford University. Lawrence H. Officer is a professor of economics at the University of Illinois at Chicago.

Monday, September 29, 2008

Who was involved in 9/11? Documentary reveals shocking facts

Who was involved in 9/11? Documentary reveals shocking facts

"Bailout" Update - Round One Goes To WE THE PEOPLE

the bailout...


http://www.gopetition.com/petitions/vote-against-bail-out-supporters-in-congress. html
The following members of the House of Representatives voted FOR the Bail-Out and can be held accountable by voting AGAINST them in the November election:

Bishop (GA)
Bishop (NY)
Bono Mack
Boyd (FL)
Brady (PA)
Brady (TX)
Brown (SC)
Brown, Corrine
Camp (MI)
Campbell (CA)
Cole (OK)
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Tom
Edwards (TX)
Ferguson Fossella
Frank (MA)
Hall (NY)
Hastings (FL)
Inglis (SC)
Johnson, E. B.
King (NY)
Klein (FL)
Kline (MN)
Larsen (WA)
Larson (CT)
Lewis (CA)
Lewis (KY)
Lofgren, Zoe
Lungren, Daniel E.
Mahoney (FL)
Maloney (NY)
McCarthy (NY)
McCollum (MN)
Meek (FL)
Meeks (NY)
Miller (NC)
Miller, Gary
Miller, George
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murtha Nadler
Neal (MA)
Peterson (PA)
Price (NC)
Pryce (OH)
Rogers (AL)
Rogers (KY)
Ryan (OH)
Ryan (WI)
Smith (TX)
Smith (WA)
Van Hollen
Walden (OR)
Walsh (NY)
Wasserman Schultz
Weldon (FL)
Weller (Did Not Vote)
Wilson (NM)
Wilson (OH)
Wilson (SC)

We, the undersigned people of the United States, hereby pledge to vote AGAINST any incumbent Senator or Member of Congress who supports the proposed federal government bail-out of the financial system.

This is a new website organized by journalist Dave Lindorff: Throw Them All Out.

Are You Tired of Being Ripped Off By Congress and the White House?
Is this Wall Street Bailout the Last Straw for You?

The public won the first round! We the People bombarded Congress with calls and emails, actually crashing the Capital website and jamming up the phone system, with "No!" opinions outnumbering backers of a bailout by 999:1.

Now we need to make sure they don't come back and pass the same ripoff handout of $700 billion to the Wall Street gang on Thursday!

Don't let up the pressure! Call Congress today. Call them again tomorrow. Demand that they not be scare-mongered by the Bush administration and the House and Senate leadership (of both parties) or by the two presidential candidates into passing a bill that came to them in the form of two and a half pages of notes from Treasury Secretary Hank Paulson.

Demand that before any rescue bill is considered there must be full hearings into the cause and nature of the crisis, and into the most appropriate solutions. The public and members of Congress need to hear from other experts besides self-interested Wall Street bankers and their lobbyists.

Let us and Congress hear from the Nobel Laureate economists like Joseph Stiglitz and others who are warning that this bailout proposal won't work, that it attacks the wrong thing, and that there are better, cheaper ways of addressing the nation's economic crisis than just throwing money at Wall Street and shifting the bad debts onto the backs of taxpayers.

No bailout without full hearings! We've seen what Congress produces when it is pressured into passing legislation without hearings: The Patriot Act and the War on Iraq. Both have been disasters and have helped to undermine the Constitution and to destroy this nation. A $700-billion or $1-trillion handout of borrowed money to Wall Street, and an unprecedented handing over of congressional power to the secretary of the treasury will be a similar unconstitutional and nation-wrecking atrocity.

We can do this! The key is telling each of our elected representatives--House and Senate--that if they pass this legislative ripoff without first holding full hearings, and if all they do is bailout Wall Street and hand us the bill, we will vote them out off office, giving their seats to whoever happens to be running against them this year, or whenever they face the voters next. That threat is the only one they understand.

Pennsylvania residents have shown the way. We learned that the the state legislature--Republicans and Democrats--had connived in the middle of the night to give themselves a raise in violation of the state constitution, which said raises could only be given to the next cycle of elected officials, not to those in a current term. They got around this bar to self-dealing by declaring the pay increases "undocumented expense reimbursements."

The citizenry rose up and in a leaderless grassroots campaign, they swept out off office many long-time members of the legislature who had voted for the measure, as well as a judge who backed the action (the state's judges get whatever the legislators get)!

If Pennsylvania voters can do this, so can the rest of America.

If you are fed up with having your money (and your kids' money, and their kids' money!) stolen and handed to the greedy, crooked bankers, insurance executives and auto tycoons who have been destroying jobs and undermining the US economy for years while enriching themselves at our expense, then make a pledge to yourself to vote against any member of your congressional delegation, whatever the party, who votes for this latest colossal $700-billion Wall Street bailout!

Vote for a third party candidate, or vote for the incumbent's challenger (a better option if you really want to oust him or her).

No exceptions! It doesn't matter of your senator or representative has done some good things. Voting for this bailout is a travesty that outweighs any other act.

Next (and this is critical!) send this website address:
to everyone you know.

And talk to everyone you know and get them to join this viral campaign to clean out the Capitol of the thieves and corporate whores who are wrecking the country.

Sunday, September 28, 2008

Massachusetts Proposal Would Repeal Income Tax

Great headline - Massachusetts Proposal Would Repeal Income Tax.

Let's get into it...many of the opponents begin with the usual caveats..."oh, we would have to cut services to the elderly and for the poor...", or, "school funding will be disrupted"...to which I say, not if the CORPORATIONS do their bloody job!

The so-called "income tax" that you and I have been paying was not our burden...this tax was rightfully the burden of corporations.

But in 1913, something wicked occurred...in 1913, treasonous legislators went behind the backs of Americans for their thirty pieces of silver, and passed the Federal Reserve Act, the treasonous 16th Amendment, and Woodrow Wilson gave corporations the rights of a "person".

The Federal Reserve Act was the third iteration of a central banking system; the first two were run out of town by Americans - from 1787 to 1913, the United States of America knew unbounded prosperity.

That all changed with the advent of the Federal Reserve.

In 1934, Major Smedley Darlington Butler caught wind of a plan to take over the United States; he turned on those treasonous scumbags and saved America.

Do we not make patriots of that stripe anymore?

The 16th Amendment did NOT provide for any new laws of taxation to the government...so, if the government was NOT able to tax individuals before 1913, why were they then able to tax individuals AFTER 1913?

One word - COLLUSION.

The bankers colluded with the corporate heads and lawyers to remove the tax burden from their shoulders, and then to place that burden upon WE THE PEOPLE.

One thing that would have forestalled this was the Original 13th Amendment, also referred to as the Titles Of Nobility Amendment.

The gist of this amendment is that no one with loyalties other than to the United States of America would be allowed to take employment within the United States Government.

Pretty sound idea, yes?

Obviously, the scumbags who wished to ruin our way of life didn't think so...and so the 13th Amendment was replaced in 1860...though there are researches that state that the original 13th Amendment was ratified, and this would therefore nullify the current 13th Amendment, which, if you read carefully, relegates WE THE PEOPLE to being SERVANTS of our elected officials.

If you don't believe this information, ask yourselves:

Why do our elected officials have FULL HEALTH CARE?

Why are practically all of our elected officials MILLIONAIRES?

Why would one need to contact their elected officials to notify them of the job they were elected to perform? When you shook their hands on the street as they pandered for your vote, you expressed your desires to them...did they WRITE THEM DOWN? Why would you believe that after speaking to hundreds of people a day, that they will remember ANYTHING you said? Hand them a note, or a flyer, make sure that they put it in their coat, or their briefcase, and ask that those issues be addressed...or they can look forward to your vote going to their opponents next election cycle.

There are many more questions that one can come upon, but the point here is...THEY LIVE...WE SLEEP.


I was listening to Earl Caldwell on Friday's Caldwell Chronicle - he had a number of guest speakers on the show, and one of the topics discussed was that of the financial status of Americans. According to the information presented, the average American's standard of living stagnated at 1970, then began to reverse. Employers were able to get more out of employees, without having to increase compensation.

Of course...this does not account for outrageous golden parachutes offered to corporate heads...wouldn't you love a gig that provided you thirteen billion dollars after three weeks?

Yes...it's true

I can go on all day...but you get the point. Once this is realized, some action can be taken; until then - ALL YOUR BASE ARE BELONG TO THEM.

Trojan Horse - How Israeli Backdoor Technology Penetrated the US Government's Telecom System and Compromised National Security - Christopher Ketcham

Trojan Horse - How Israeli Backdoor Technology Penetrated the US Government's Telecom System and Compromised National Security
by Christopher Ketcham

Since the late 1990s, federal agents have reported systemic communications security breaches at the Department of Justice, FBI, DEA, the State Department, and the White House. Several of the alleged breaches, these agents say, can be traced to two hi-tech communications companies, Verint Inc. (formerly Comverse Infosys), and Amdocs Ltd., that respectively provide major wiretap and phone billing/record-keeping software contracts for the US government. Together, Verint and Amdocs form part of the backbone of the government's domestic intelligence surveillance technology. Both companies are based in Israel – having arisen to prominence from that country's cornering of the information technology market – and are heavily funded by the Israeli government, with connections to the Israeli military and Israeli intelligence (both companies have a long history of board memberships dominated by current and former Israeli military and intelligence officers). Verint is considered the world leader in "electronic interception" and hence an ideal private sector candidate for wiretap outsourcing. Amdocs is the world's largest billing service for telecommunications, with some $2.8 billion in revenues in 2007, offices worldwide, and clients that include the top 25 phone companies in the United States that together handle 90 percent of all call traffic among US residents. The companies' operations, sources suggest, have been infiltrated by freelance spies exploiting encrypted trapdoors in Verint/Amdocs technology and gathering data on Americans for transfer to Israeli intelligence and other willing customers (particularly organized crime). "The fact of the vulnerability of our telecom backbone is indisputable," says a high level US intelligence officer who has monitored the fears among federal agents. "How it came to pass, why nothing has been done, who has done what – these are the incendiary questions." If the allegations are true, the electronic communications gathered up by the NSA and other US intelligence agencies might be falling into the hands of a foreign government. Reviewing the available evidence, Robert David Steele, a former CIA case officer and today one of the foremost international proponents for "public intelligence in the public interest," tells me that "Israeli penetration of the entire US telecommunications system means that NSA's warrantless wiretapping actually means Israeli warrantless wiretapping."

As early as 1999, the National Security Agency issued a warning that records of US government telephone calls were ending up in foreign hands – Israel's, in particular. In 2002, assistant US Attorney General Robert F. Diegelman issued an eyes only memo on the matter to the chief information technology (IT) officers at the Department of Justice. IT officers oversee everything from the kind of cell phones agents carry to the wiretap equipment they use in the field; their defining purpose is secure communications. Diegelman's memo was a reiteration, with overtones of reprimand, of a new IT policy instituted a year earlier, in July 2001, in an internal Justice order titled "2640.2D Information Technology Security." Order 2640.2D stated that "Foreign Nationals shall not be authorized to access or assist in the development, operation, management or maintenance of Department IT systems." This might not seem much to blink at in the post-9/11 intel and security overhaul. Yet 2640.2D was issued a full two months before the Sept. 11 attacks. What group or groups of foreign nationals had close access to IT systems at the Department of Justice? Israelis, according to officials in law enforcement. One former Justice Department computer crimes prosecutor tells me, speaking on background, "I've heard that the Israelis can listen in to our calls."

Retired CIA counterterrorism and counterintelligence officer Philip Giraldi says this is par for the course in the history of Israeli penetrations in the US He notes that Israel always features prominently in the annual FBI report called "Foreign Economic Collection and Industrial Espionage" – Israel is second only to China in stealing US business secrets. The 2005 FBI report states, for example, "Israel has an active program to gather proprietary information within the United States. These collection activities are primarily directed at obtaining information on military systems and advanced computing applications that can be used in Israel's sizable armaments industry." A key Israeli method, warns the FBI report, is computer intrusion.

In the big picture of US government spying on Americans, the story ties into 1994 legislation called the Communications Assistance for Law Enforcement Act, or CALEA, which effected a sea-change in methods of electronic surveillance. Gone are the days when wiretaps were conducted through on-site tinkering with copper switches. CALEA mandated sweeping new powers of surveillance for the digital age, by linking remote computers into the routers and hubs of telecom firms – a spyware apparatus linked in real-time, all the time, to American telephones and modems. CALEA made spy equipment an inextricable ligature in our telephonic life. Top officials at the FBI pushed for the legislation, claiming it would improve security, but many field agents have spoken up to complain that CALEA has done exactly the opposite. The data-mining techniques employed by NSA in its wiretapping exploits could not have succeeded without the technology mandated by CALEA. It could be argued that CALEA is the hidden heart of the NSA wiretap scandal.


According to former CIA officer Giraldi and other US intelligence sources, software manufactured and maintained by Verint, Inc. handles most of American law enforcement's wiretaps. Says Giraldi: "Phone calls are intercepted, recorded, and transmitted to US investigators by Verint, which claims that it has to be ‘hands on' with its equipment to maintain the system." Giraldi also notes Verint is reimbursed for up to 50 percent of its R&D costs by the Israeli Ministry of Industry and Trade. According to Giraldi, the extent of the use of Verint technology "is considered classified," but sources have spoken out and told Giraldi they are worried about the security of Verint wiretap systems. The key concern, says Giraldi, is the issue of a "trojan" embedded in the software.

A Trojan in information security hardware/software is a backdoor that can be accessed remotely by parties who normally would not have access to the secure system. Allegations of massive Trojan spying have rocked the Israeli business community in recent years. An AP article in 2005 noted, "Top Israeli blue chip companies…are suspected of using illicit surveillance software to steal information from their rivals and enemies." Over 40 companies have come under scrutiny. "It is the largest cybercrime case in Israeli history," Boaz Guttmann, a veteran cybercrimes investigator with the Israeli national police, tells me. "Trojan horse espionage is part of the way of life of companies in Israel. It's a culture of spying."

This is of course the culture on which the US depends for much of its secure software for data encryption and telephonic security. "There's been a lot discussion of how much we should trust security products by Israeli telecom firms," says Philip Zimmerman, one of the legendary pioneers of encryption technology (Zimmerman invented the cryptographic and privacy authentication system known as Pretty Good Privacy, or PGP, now one of the basic modern standards for communications encryption). "Generally speaking, I wouldn't trust stuff made overseas for data security," says Zimmerman. "A guy at NSA InfoSec" – the information security division of the National Security Agency – "once told me, ‘Foreign-made crypto is our nightmare.' But to be fair, as our domestic electronics industry becomes weaker and weaker, foreign-made becomes inevitable." Look at where the expertise is, Zimmerman adds: Among the ranks of the International Association for Cryptological Research, which meets annually, there is a higher percentage of Israelis than any other nationality. The Israeli-run Verint is today the provider of telecom interception systems deployed in over 50 countries.

Carl Cameron, chief politics correspondent at Fox News Channel, is one of the few reporters to look into federal agents' deepening distress over possible trojans embedded in Verint technology. In a wide-ranging four-part investigation into Israeli-linked espionage that aired in December 2001, Cameron made a number of startling discoveries regarding Verint, then known as Comverse Infosys. Sources told Cameron that "while various FBI inquiries into Comverse have been conducted over the years," the inquiries had "been halted before the actual equipment has ever been thoroughly tested for leaks." Cameron also noted a 1999 internal FCC document indicating that "several government agencies expressed deep concerns that too many unauthorized non-law enforcement personnel can access the wiretap system." Much of this access was facilitated through "remote maintenance."

Immediately following the Cameron report, Comverse Infosys changed its name to Verint, saying the company was "maturing." (The company issued no response to Cameron's allegations, nor did it threaten a lawsuit.) Meanwhile, security officers at DEA, an adjunct of the Justice Department, began examining the agency's own relationship with Comverse/Verint. In 1997, DEA transformed its wiretap infrastructure with the $25 million procurement from Comverse/Verint of a technology called "T2S2" – "translation and transcription support services" – with Comverse/Verint contracted to provide the hardware and software, plus "support services, training, upgrades, enhancements and options throughout the life of the contract," according to the "contracts and acquisitions" notice posted on the DEA's website. This was unprecedented. Prior to 1997, DEA staff used equipment that was developed and maintained in-house.

But now Cameron's report raised some ugly questions of vulnerability in T2S2.

The director of security programs at DEA, Heidi Raffanello, was rattled enough to issue an internal communiqué on the matter, dated Dec. 18, 2001, four days after the final installment in the Cameron series. Referencing the Fox News report, she worried that "Comverse remote maintenance" was "not addressed in the C&A [contracts and acquisitions] process." She also cited the concerns in Justice Department order 2640.2D, and noted that the "Administrator" – meaning then DEA head Asa Hutchinson – had been briefed. Then there was this stunner: "It remains unclear if Comverse personnel are security cleared, and if so, who are they and what type of clearances are on record….Bottom line we should have caught it." On its face, the Raffanello memo is a frightening glimpse into a bureaucracy caught with its pants down.

American law enforcement was not alone in suspecting T2S2 equipment purchased from Comverse/Verint. In November 2002, sources in the Dutch counterintelligence community began airing what they claimed was "strong evidence that the Israeli secret service has uncontrolled access to confidential tapping data collected by the Dutch police and intelligence services," according to the Dutch broadcast radio station Evangelische Omroep (EO). In January 2003, the respected Dutch technology and computing magazine, c't, ran a follow-up to the EO scoop, headlined "Dutch Tapping Room not Kosher." The article began: "All tapping equipment of the Dutch intelligence services and half the tapping equipment of the national police force…is insecure and is leaking information to Israel." The writer, Paul Wouters, goes on to discuss the T2S2 tap-ware "delivered to the government in the last few years by the Israeli company Verint," and quoted several cryptography experts on the viability of remote monitoring of encrypted "blackbox" data. Wouters writes of this "blackbox cryptography":

"…a very important part of strong cryptography is a good random source. Without a proper random generator, or worse, with an intentionally crippled random generator, the resulting ciphertext becomes trivial to break. If there is one single unknown chip involved with the random generation, such as a hardware accelerator chip, all bets are off….If you can trust the hardware and you have access to the source code, then it should theoretically be possible to verify the system. This, however, can just not be done without the source code."

Yet, as Wouters was careful to add, "when the equipment was bought from the Israelis, it was agreed that no one except [Verint] personnel was authorized to touch the systems....Source code would never be available to anyone."

Cryptography pioneer Philip Zimmerman warns that "you should never trust crypto if the source code isn't published. Open source code means two things: if there are deliberate backdoors in the crypto, peer review will reveal those backdoors. If there are inadvertent bugs in the crypto, they too will be discovered. Whether the weaknesses are by accident or design, they will be found. If the weakness is by design, they will not want to publish the source code. Some of the best products we know have been subject to open source review: Linux; Apache. The most respected crypto products have been tested through open source. The little padlock in the corner when you visit a browser? You're going through a protocol called Secure Socket Layer. Open source tested and an Internet standard. FireFox, the popular and highly secure browser, is all open source."


None of US law enforcement's problems with Amdocs and Verint could have come to pass without the changes mandated by the Communications Assistance for Law Enforcement Act of 1994, which, as noted, sought to lock spyware into telecom networks. CALEA, to cite the literature, requires that terrestrial carriers, cellular phone services and other telecom entities enable the government to intercept "all wire and oral communications carried by the carrier concurrently with their transmission." T2S2 technology fit the bill perfectly: Tied into the network, T2S2 bifurcates the line without interrupting the data-stream (a T2S2 bifurcation is considered virtually undetectable). One half of the bifurcated line is recorded and stored in a remote tapping room; the other half continues on its way from your mouth or keyboard to your friend's. (What is "T2S2"? To simplify: The S2 computer collects and encrypts the data; the T2 receives and decrypts.)

CALEA was touted as a law enforcement triumph, the work of decades of lobbying by FBI. Director Louis Freeh went so far as to call it the bureau's "highest legislative priority." Indeed, CALEA was the widest expansion of the government's electronic surveillance powers since the Crime Control and Safe Streets Act of 1968, which mandated carefully limited conditions for wiretaps. Now the government could use coercive powers in ordering telecom providers to "devise solutions" to law enforcement's "emerging technology-generated problems" (imposing a $10,000 per day penalty on non-compliant carriers). The government's hand would be permanently inserted into the design of the nation's telecom infrastructure. Law professor Lillian BeVier, of the University of Virginia, writes extensively of the problems inherent to CALEA. "The rosy scenario imagined by the drafters cannot survive a moment's reflection," BeVier observes. "While it is conventionally portrayed as ‘but the latest chapter in the thirty year history of the federal wiretap laws,' CALEA is not simply the next installment of a technologically impelled statutory evolution. Instead, in terms of the nature and magnitude of the interests it purports to ‘compromise' and the industry it seeks to regulate, in terms of the extent to which it purports to coerce private sector solutions to public sector problems, and in terms of the foothold it gives government to control the design of telecommunications networks, the Act is a paradigm shift. On close and disinterested inspection, moreover, CALEA appears to embody potentially wrong-headed sacrifices of privacy principles, flawed and incomplete conceptions of law enforcement's ends and means, and an imperfect appreciation of the incompatible incentives of the players in the game that would inevitably be played in the process of its implementation." (emphasis mine)

The real novelty – and the danger – of CALEA is that telecom networks are today configured so that they are vulnerable to surveillance. "We've deliberately weakened the computer and phone networks, making them much less secure, much more vulnerable both to legal surveillance and illegal hacking," says former DOJ cybercrimes prosecutor Mark Rasch. "Everybody is much less secure in their communications since the adopting of CALEA. So how are you going to have secure communications? You have to secure the communications themselves, because you cannot have a secure network. To do this, you need encryption. What CALEA forced businesses and individuals to do is go to third parties to purchase encryption technology. What is the major country that the US purchases IT encryption from overseas? I would say it's a small Middle Eastern democracy. What we've done is the worst of all worlds. We've made sure that most communications are subject to hacking and interception by bad guys. At the same time, the bad guys – organized crime, terrorist operations – can very easily encrypt their communications." It is notable that the first CALEA-compliant telecom systems installed in the US were courtesy of Verint Inc.


If a phone is dialed in the US, Amdocs Ltd. likely has a record of it, which includes who you dialed and how long you spoke. This is known as transactional call data. Amdocs' biggest customers in the US are AT&T and Verizon, which have collaborated widely with the Bush Administration's warrantless wiretapping programs. Transactional call data has been identified as a key element in NSA data mining to look for "suspicious" patterns in communications.

Over the last decade, Amdocs has been the target of several investigations looking into whether individuals within the company shared sensitive US government data with organized crime elements and Israeli intelligence services. Beginning in 1997, the FBI conducted a far-flung inquiry into alleged spying by an Israeli employee of Amdocs, who worked on a telephone billing program purchased by the CIA. According to Paul Rodriguez and J. Michael Waller, of Insight Magazine, which broke the story in May of 2000, the targeted Israeli had apparently also facilitated the tapping of telephone lines at the Clinton White House (recall Monica Lewinsky's testimony before Ken Starr: the president, she claimed, had warned her that "a foreign embassy" was listening to their phone sex, though Clinton under oath later denied saying this). More than two dozen intelligence, counterintelligence, law-enforcement and other officials told Insight that a "daring operation," run by Israeli intelligence, had "intercepted telephone and modem communications on some of the most sensitive lines of the US government on an ongoing basis." Insight's chief investigative reporter, Paul Rodriguez, told me in an e-mail that the May 2000 spy probe story "was (and is) one of the strangest I've ever worked on, considering the state of alert, concern and puzzlement" among federal agents. According to the Insight report, FBI investigators were particularly unnerved over discovering the targeted Israeli subcontractor had somehow gotten his hands on the FBI's "most sensitive telephone numbers, including the Bureau's ‘black' lines used for wiretapping." "Some of the listed numbers," the Insight article added, "were lines that FBI counterintelligence used to keep track of the suspected Israeli spy operation. The hunted were tracking the hunters." Rodriguez confirmed the panic this caused in American Intel"It's a huge security nightmare," one senior US official told him. "The implications are severe," said a second official. "All I can tell you is that we think we know how it was done," a third intelligence executive told Rodriguez. "That alone is serious enough, but it's the unknown that has such deep consequences." No charges, however, were made public in the case. (What happened behind the scenes depends on who you talk to in law enforcement: When FBI counterintelligence sought a warrant for the Israeli subcontractor, the Justice Department strangely refused to cooperate, and in the end no warrant was issued. FBI investigators were baffled.)

London Sunday Times reporter Uzi Mahnaimi quotes sources in Tel Aviv saying that during this period e-mails from President Clinton had also been intercepted by Israeli intelligence. Mahnaimi's May 2000 article reveals that the operation involved "hacking into White House computer systems during intense speculation about the direction of the peace process." Israeli intelligence had allegedly infiltrated a company called Telrad, subcontracted by Nortel, to develop a communications system for the White House. According to the Sunday Times, "Company managers were said to have been unaware that virtually undetectable chips installed during manufacture made it possible for outside agents to tap into the flow of data from the White House."

In 1997, detectives with the Los Angeles Police Department, working in tandem with the Secret Service, FBI, and DEA, found themselves suffering a similar inexplicable collapse in communications security. LAPD was investigating Israeli organized crime: drug runners and credit card thieves based in Israel and L.A., with tentacles in New York, Miami, Las Vegas, and Egypt. The name of the crime group and its members remains classified in "threat assessment" papers this reporter obtained from LAPD, but the documents list in some detail the colorful scope of the group's operations: $1.4 million stolen from Fidelity Investments in Boston through sophisticated computer fraud; extortion and kidnapping of Israelis in LA and New York; cocaine distribution in connection with Italian, Russian, Armenian and Mexican organized crime; money laundering; and murder. The group also had access to extremely sophisticated counter-surveillance technology and data, which was a disaster for LAPD. According to LAPD internal documents, the Israeli crime group obtained the unlisted home phone, cell phone, and pager numbers of some 500 of LAPD's narcotics investigators, as well as the contact information for scores of federal agents – black info, numbers unknown even to the investigators' kin. The Israelis even set up wiretaps of LAPD investigators, grabbing from cell-phones and landlines conversations with other agents – FBI and DEA, mostly – whose names and phone numbers were also traced and grabbed.

LAPD was horrified, and as the word got out of the seeming total breakdown in security, the shock spread to agents at DEA, FBI and even CIA, who together spearheaded an investigation. It turned out that the source of much of this black Intel could be traced to a company called J&J Beepers, which was getting its phone numbers from a billing service that happened to be a subsidiary of Amdocs.

A source familiar with the inquiries into Amdocs put to me several theories regarding the allegations of espionage against the company. "Back in the early 1970s, when it became clear that AT&T was going to be broken up and that there was an imminent information and technology revolution, Israel understood that it had a highly-educated and highly-worldly population and it made a few calculated economic and diplomatic discoveries," the source says. "One was that telecommunications was something they could do: because it doesn't require natural resources, but just intellect, training and cash. They became highly involved in telecommunications. Per capita, Israel is probably the strongest telecommunications nation in the world. AT&T break-up occurs in 1984; Internet technology explodes; and Israel has all of these companies aggressively buying up contracts in the form of companies like Amdocs. Amdocs started out as a tiny company and now it's the biggest billing service for telecommunications in the world. They get this massive telecommunications network underway. Like just about everything in Israel, it's a government sponsored undertaking.

"So it's been argued that Amdocs was using its billing records as an intelligence-gathering exercise because its executive board over the years has been heavily peopled by retired and current members of the Israeli government and military. They used this as an opportunity to collect information about worldwide telephone calls. As an intelligence-gathering phenomenon, an analyst with an MIT degree in algorithms would rather have 50 pages of who called who than 50 hours of actual conversation. Think about conversations with friends, husbands, wives. That raw information doesn't mean anything. But if there's a pattern of 30 phone calls over the course of a day, that can mean a lot. It's a much simpler algorithm."

Another anonymous source – a former CIA operative – tells me that US intelligence agents who have aired their concerns about Verint and Amdocs have found themselves attacked from all sides. "Once it's learned that an individual is doing footwork on this [the Verint/Amdocs question], he or she is typically identified somehow as a troublemaker, an instigator, and is hammered mercilessly," says the former CIA operative. "Typically, what happens is the individual finds him or herself in a scenario where their retirement is jeopardized – and worse. The fact that if you simply take a look at this question, all of a sudden you're an Arabist or anti-Semitic – it's pure baloney, because I will tell you first-hand that people whose heritage lies back in that country have heavily worked this matter. You can't buy that kind of dedication."

The former CIA operative adds, "There is no defined policy, at this time, for how to deal with this [security issues involving Israel] – other than wall it off, contain it. It's not cutting it. Not after 9/11. The funeral pyre that burned on for months at the bottom of the rubble told a lot of people they did not need to be ‘politically correct.' The communications nexuses [i.e. Amdocs/Verint] didn't occur yesterday; they started many years ago. And that's a major embarrassment to organizations that would like to say they're on top of things and not co-opted or compromised. As you start to work this, you soon learn that many people have either looked the other way or have been co-opted along the way. Some people, when they figure out what has occurred, are highly embarrassed to realize that they've been duped. Because many of them are bureaucrats, they don't want to be made to look as stupid as they are. So they just go along with it. Sometimes, it's just that simple."


Here's where someone could say: "Well, if you aren't doing anything illegal, what do you have to worry about?"

The problem is that YOU don't get to decide what is legal and what is NOT.

In other news, Paul Newman passed away from cancer at the age of 83.

In tribute to Paul Newman, here's the egg scene from Cool Hand Luke (I recommend the Sting if you've never seen it):

Thursday, September 25, 2008

Non-Acceptance Of The $700 Million Payout To The Monkey King's Cronies Will Result In Martial Law

Here is what I believe the dopey-ass plan is to be:

Ann accord has been made in Congress in regards to the $700 million, so now the threat is that if WE THE PEOPLE do not accept this raping of our pocketbooks so that his cronies don't have to go an hour with sparkling water, he will invoke martial law, having "passed into law" provisions created out of whole cloth by Alberto Gonzales and Michael Mukasey.

Here's the thing: Congress cannot pass any laws that are UNCONSTITUTIONAL, so the nonsense provisions that the Monkey King has attempted to established should be thrown out. For that matter, the entirety of our elected officials (with the exception of Ron Paul, Karen Johnson, Bill Richardson, Dennis Kucinich and Cynthia McKinney) should be voted out of office...it is clear that they do NOT have the interests of WE THE PEOPLE at heart.

George Walker "The Monkey King" Bush may wish to leave office with a shining legacy...but he should have thought of that before he assisted in turning our country into a third-world nation.

Special thanks to Travis Kelly for the timely and appropriate illustration - we just need 529 more of these stocks set up about the perimeter of Washington, D.C. - bring your best rotted GM foods, and have at 'em!

Understand...if you give in and allow these tools to get back to their reindeer games...this will be your fate:

Here's a link to the first draft of the Wall Street Rapefest.

Wednesday, September 24, 2008

Ahmadinejad's Speech To The U.N. Puts His Anti-Semitism On Full Display

Ahmadinejad's Speech To The U.N. Puts His Anti-Semitism On Full Display

New York, NY, September 23, 2008 … The Anti-Defamation League (ADL) said today's speech by Iranian President Mahmoud Ahmadinejad to the United Nations General Assembly "put his anti-Semitism on full display" and shows the true threat that the Iranian regime poses to the West.

In his speech, which concluded with a smattering of applause from U.N. delegates, Ahmadinejad accused "a small but deceitful number of people called Zionists" for dominating financial and political centers in Europe and the U.S. in "a deceitful, complex and furtive manner."

Mr. Ahmadinejad also used the platform afforded him at the U.N. to accuse Jews of playing an "underhanded" role in the crisis in Georgia, and to reiterate his call for the demise of the "Zionist regime" and the establishment of a Palestinian state in all of Israel.

Abraham H. Foxman, ADL National Director, issued the following statement:

Mahmoud Ahmadinejad has once again shown to the world the true threat the Iranian regime poses to Israel, the United States and the West.

It is clear that Ahmadinejad is deeply infected with anti-Semitism. His statements accusing Jews of dominating and controlling finance and government in the United States and Europe, and of working as a cabal to foment conflict around the world, echo the most infamous passages of the "Protocols of the Elders of Zion." These ideas are classic anti-Semitism by any measure, and President Ahmadinejad has put it on full display for the entire world to see.

While presenting the Islamic Republic of Iran as a beacon of moderation and justice and exhorting nations to aspire to higher values of justice and love, the Iranian regime rejects these very values in word and in deed. Iran's appalling record on human rights, its unrelenting pursuit of nuclear weapons, and its repeated calls for the downfall of the United States negate those values and promotes a culture of hate, not of love. With its oft-repeated calls for "death" to America and Israel, the Iranian regime promotes a culture of hatred for the West and a worldview that is hostile to all freedom-loving nations.

Nuclear weapons in the hands of this increasingly irrational and extremist regime would pose an unambiguous threat to the world. It is clear from Mr. Ahmadinejad's remarks that the Iranian regime has no intention to cooperate on any level with nuclear weapons inspectors, and will continue to do anything to promote its zealous pursuit of nuclear weapons and support for extremist ideology and groups.

Read more online on our web site at http://www.adl.org/PresRele/ASInt_13/5361_13


Laughable...if it weren't so sad.

John McCain Kicks Librarian Out of Town Hall Event

All is not well in the McCain campaign, methinks:

By the way, did you know that Rick Davis was on the payroll of Freddie Mac at the tune of $15,000 a month?

That's some good payola...but what did it buy? It bought them lessened restrictions on trading...in other words...they did NOT have to be responsible with their financial transactions.

Because of the non-existent oversight placed on these institutions, we are in the state of looming recession/depression.

The Keating Five scandal was mentioned on FOX News...albeit briefly (kudos to Michael Rivero).

In other news, Michael Moore has released Slacker Uprising as a free download; in fact, he encourages everyone to make copies and distribute!

This is a couple days old...but still funny and sad: GOP delegate's hotel tryst goes bad when he wakes up with $120,000 missing
By David Hanners
Article Last Updated: 09/17/2008 08:32:27 AM CDT

He met her in the bar of the swank hotel and invited her to his room. Once there, the woman fixed the drinks and told him to get undressed.

And that, the delegate to the Republican National Convention told police, was the last thing he remembered.

When he awoke, the woman was gone, as was more than $120,000 in money, jewelry and other belongings.

The thief's take stunned cops.

"It's very, very, very rare," Minneapolis Police Sgt. William Palmer said. "I can think of a couple of burglaries where we had that much stolen, but it's the first time I've heard of this kind of deal."

In a statement released today, Gabriel Nathan Schwartz, 29, of Denver, put the figure at much less.

"It's embarrassing to admit that I was a target of a crime. I was drugged and had about $50,000 of personal items stolen, not the inflated number that the media is reporting from an inaccurate police report," he said.

"As a single man, I was flattered by the attention of a beautiful woman who introduced herself to me. I used poor judgment."

Contacted by the Denver Post Monday, Schwartz declined to speak on the record. In the statement released today, Schwartz said he would decline further interview requests.

The haul included a $30,000 watch, a $20,000 ring, a necklace valued at $5,000, earrings priced at $4,000 and a Prada belt valued at $1,000, police said.

Schwartz is a single attorney and a fixture in Colorado Republican politics. He
was one of the state's delegates to the convention this month in St. Paul.

Reached by phone at his law office Monday, Schwartz said that because the case still was under investigation, "I think at this point, I don't want to make a comment on it."

During the convention, Schwarz wasn't shy about talking to the media. In an Associated Press article about Sen. John McCain's acceptance speech, Schwartz was quoted as saying that as far as oratorical skills go, McCain "has more experience in his little pinkie" than Democratic nominee Barack Obama.

In an interview filmed the afternoon of Sept. 3 and posted on the Web site LinkTV.org, Schwartz was candid about how he envisioned change under a McCain presidency.

"Less taxes and more war," he said, smiling. He said the U.S. should "bomb the hell" out of Iran because the country threatens Israel.

Asked by the interviewer how America would pay for a military confrontation with Iran, he said the U.S. should take the country's resources.

"We should plant a flag. Take the oil, take the money," he said. "We deserve reimbursement."

A few hours after the interview, an unknown woman helped herself to Schwartz's resources.

The theft happened at the Hotel Ivy, a luxury hotel in downtown Minneapolis. (The Colorado delegation was housed at the Four Points Sheraton, several miles away on Industrial Boulevard Northeast.)

The theft occurred early on Sept. 4, hours after Alaska Gov. Sarah Palin gave her speech accepting her party's vice presidential nomination. A police report said Schwartz told officers he met a woman at the bar and took her to his $319-a-night room.

"Victim reported suspect made victim drinks, told him to get undressed, which is the last thing he remembers," a police narrative said. "Upon waking, victim discovered money, jewelry gone; total loss over $120K."

A police report notes the crime occurred between 4:22 and 5:46 a.m., and Palmer said investigators believe Schwartz was drugged, although he declined to discuss details.

Aside from the watch, ring, necklace, earrings and belt, Schwartz also reported a $1,000 purse or wallet, a $1,500 cell phone, $500 in cash and a couple of rings worth $50 had been taken.

Alister Glen, general manager of the Hotel Ivy, called the theft an isolated incident and said no hotel personnel were involved.

"I don't know if I'm at liberty to discuss it," he said. "It's still under police investigation."

Schwartz was a supporter of former New York City Mayor Rudy Giuliani, donating $2,300 — the maximum individual donation allowed by law — to his presidential campaign last year, according to records from the Federal Election Commission.

After Giuliani dropped out, Schwartz switched his allegiance to McCain, and records show he donated $2,300 to the Arizona senator's campaign in April.

In biographical sketches of Colorado's delegates published in the Rocky Mountain News, Schwartz said he was single, didn't have any pets and most admired Colorado Secretary of State Mike Coffman, "as he has served our party for many years and has served in the military."

He said his idea of a "dream ticket" was McCain and Mitt Romney, the former Massachusetts governor.

On the Web site for his Denver law practice, Sandomire & Schwartz, the lawyer describes his experience as a civil and criminal lawyer and points out he is a regular guest on "Colorado State of Mind," a public affairs program produced by Rocky Mountain PBS. The show, according to its Web site, says it gathers "opinionated and passionate people from across the state" to discuss a wide range of issues.

In his interview on LinkTV, Schwartz seemed opinionated and passionate.

He said an attack on Iran was needed to protect Israel, and he offered how it could be accomplished through "strategical airstrikes."

"Hopefully, just bomb the hell out of them from the sky. No troops," he said.

Schwartz was asked if he had a message to the protesters who filled the streets of downtown St. Paul.

"Get a job," he replied.

David Hanners can be reached at 612-338-6516.


Three words...what a TOOL.

Tuesday, September 23, 2008

What Is A Financial Derivative?

It seems that the evil derivative is one of the main causes of our current financial woes.

As you can see by clicking the link above, derivatives make money out of NOTHING. Derivatives produce NOTHING. Derivatives should have the tax burden upon them, not wages...yet, this is what we have.

How did this happen? Someone thought that it was okay to let the foxes run the henhouse...touting their "free market" mantra...but that turned out to be a fantasy - GAMING THE SYSTEM is the rule of law in finance, apparently.

Farmers should be the richest people in America...yet, the Forbes 400 is indunated with slackers, tools and assholes.

Notice, also, how it is that WE THE PEOPLE must be shouldered with this burden, when we were never allowed to share in its profits?

And imagine that some companies wished to continue with foreclosures? Scumbags.

Monday, September 22, 2008

Let It Collapse! -- by Christopher Ketcham

So the tax-payer hand-out will “save” Wall Street from its own predations. Any reasonable man, of course, would wish the pig-fuckers to fry in their own feces. Let the free market carry out their corpses to the gutter. And mine too, perhaps, for as a magazine writer I depend on the thoughtlessness and blind-mole cupidity of credit-card consumerism – the credit system now imploding – to feed the ad-market that feeds the magazines that pay my bills. Without dumb blondes buying Manohlo Blahniks and metrosexuals fawning over prawns in overpriced restaurants, my paycheck turns to dust.

But the fact is that our economic system is a lunatic and suicidal system, and it deserves to go down. Why lunatic and suicidal? It is predicated on the delusion, accepted on every level in every modern society, that unlimited Mahnolo Blahniks are possible on a planet of limited resources. Growth without horizon is simply not possible, but the delusion remains in force, a mass glue-huff and consensus trance hallucination. Endless growth on planet earth is by definition entropic; it implies its own end. Its pursuit is therefore suicidal.

What might replace the current insane system I couldn’t venture to say. Certainly, a lot of people will be hurt if we go down the rat-hole that appears our proper and fitting end. If events trend badly enough, a period of contraction, unemployment, economic depression, homelessness, tent cities, rising crime, boarded up storefronts, abandoned homes will be upon us faster than imaginable – the last five developments are already in our midst in the post-subprime wastelands of suburbia. Perhaps the crisis will bring about the devolution of the American living standard to something like sustainability. Perhaps it will only bring out a lot of pissed-off middle-classers who refuse to accept that the American way of life is sick and crazy and has no future. That kind of infantile resentment historically either leads to reform or fascism.

Gerald Celente, a self-described “trends forecaster” who last year predicted the “Economic 9/11” that hit this week, dropped me an e-mail the other day: “THE PANIC IS ON,” he wrote. “Depression to follow…” Celente, who has famously tended to be right, augurs that the big Wall Street failures will extend far beyond the financial sector. “In the coming weeks, months and years,” writes Celente, “we'll see a steady stream of banks, giant retailers, consumer product companies, manufacturers, leveraged buyout firms and home builders going under. The next economic shoe to drop,” he avers, “will be in the commercial real estate sector.”

Bring it on. I envision a trickle-down benefit here in Brooklyn, which when I was growing up in the 1980s served fine as a natal ground defined by burglaries, homelessness, murder, empty streets, and the pervasive sense that bad things could happen at any time, which tends to raise consciousness to a fever range, the kind of sharp-sword animal consciousness where the coyote and the rat operate. Empty streets, spartan and lean and dark – that’s what I most remember about old Brooklyn. The place had the feeling of desert. It was replete with open spaces. The “maggot called man,” in Nietzche’s memorable phrase, was not swarming in the foreground.

There was very little that was considered upscale – meaning you could afford the restaurants and bars, what few there were, without making $100,000 a year in the salary prisons of corporate Manhattan. When I was 19, in 1992, I rented an apartment in a neighborhood of old brownstones then known as Park Slope – hallucinating realtors in the New York land rush of the last 20 years have since divided the streets into a Babel of sub-markets. I paid $400 a month for two rooms and a bathroom that leaked shit-water and a fridge that shut off periodically to fill with cockroaches (they ate ham while I slept!). My girlfriend at the time, Carole-Anne, with whom I’d later have a daughter, had just gotten off a plane from Paris. One day I came home to find her crying. “A man – no head! La tete, la tete,” she said. She was hysterical. A man had been shotgunned around the corner and Carole-Anne had walked onto the crime scene minutes after the shoot-out, before the cops could sanitize. That was Brooklyn. And it was okay – well, not okay, but it was part of the facts of life in a city that warded off those who weren’t trained in that high keening consciousness to accept it. One night we borrowed my father’s Honda and took a midnight drive into a cliffy forested park at the northern tip of Manhattan, and a car came up behind us in the lightless road and tried to cut us off. A car-jacking. The men in the car screaming out the window, waving guns. Carole-Anne hysterical (poor girl, from the suburbs of Paris!). High-speed chase along the winding roads. The cars screeching. We escaped down a wrong-way road at 70 miles an hour – god save us we didn’t smash into someone coming the other way – and when we were home in Brooklyn, we were alive. Alive and overjoyed and it was a beautiful moment. That was New York.

This is all romanticized drivel, of course, and to be car-jacked or see a man shotgunned is not to be interpreted as normal or fun or desirable. But at least it was affordable. You didn’t have to work 60 hours a week to watch the cockroaches eat your dinner inside the fridge. You worked enough to pay the rent, and no more (I was a bike messenger, she worked as a secretary at a real estate office that I’m convinced was also trafficking narcotics). I think of the accounts I’ve read of primitive societies, in the sea-girt islands, say, of Micronesia, where perhaps three or four hours a day are lost to the work required for daily survival. The balance of waking is dedicated to nothing at all that could be construed as productive, which means it was for playing with the kids, it was for sex, for sleep, for lazing and going back to sleep. A little work, mostly play makes Jack a happy boy.

Today the same shit-house Carole-Anne and I lived in costs $1900 a month, and it probably still has a cockroach problem, but this is considered “character,” and the main avenues all around are swallowed in the caterwauling of commerce by which the newly-ripped-off resident is bombarded with the temptations of more junk than is affordable or desirable. Whereas on 5th Avenue in Park Slope in 1992 I used to be able to find a hooker and cocaine and run away from a fist-fight and learn Puerto Rican Spanish doing it, whereas I used to be able to find nothing at all on the street, no people, no rushing, nothing to buy or sell, just about every storefront today is taken over by the glad-handing smiley-face of the idiot consumer economy gone to its nth-degree madness. There is growth on all sides, it saturates, it feels like hysteria, and like hysteria it will end in collapse. There are too many amenities, there is too much foolery and surfeit disguised as worthiness and bottom-line necessity. The restaurants where crappy food, the same crappy food you might have gotten for a twentieth of the price ten years ago, is proferred as if it’s Jesus’ bread broken in your mouth – as with religious ritual, the profligate consumption bar/restaurant scene is as ritualized and hyperbolic as a funeral. Money is the password to all social relations. Bubble-economics on all sides: How many of the new jobs offered to the newly-rich in Brooklyn are based on anything more than the usual hallucinated sectors of finance, banking, media, fashion? Fashion, that New York engine of silliness, has for its purpose the slathering of rich people in expensive uselessness made by slave-wagers overseas – it is the industry of children playing at dress up. Once upon a time New Yorkers made their own clothing – right there in Manhattan, in the garment districts, where the art galleries of Soho now peddle emptiness on canvas. But emptiness is today our butter: entertainment, the “news cycle,” the so-called “arts,” the ever-increasing pestilence of a media that informs not at all. Are there any jobs in New York City that actually produce something other than a fart in the wind on a website or in the windows of mannequins at Saks Fifth Avenue or in the ledgers of bankers and brokers, the parasitic middlemen?

Which brings me back to the collapsing markets, the product of fart-in-the-wind economics. I can foresee on 5th Avenue in Park Slope a beautiful resurgence of shuttered shops, rotted storefronts, the end of money’s welcome in its hypocrite hug, the end of surfeit, a return to normalcy. No more strawberries in January at the store on the corner – the strawberries were never meant to be eaten in winter anyway. Perhaps we might even see a return to the city of people who manufacture something other than air. I will be driven out first – because this screed is all air! So be it!

Christopher Ketcham writes for Vanity Fair, GQ, Harper’s, and many other magazines. You can contact him at cketcham99@mindspring.com

What's All The Whining About?

The New York Sun reports: Big Protest Rally Taking Shape To Greet Ahmadinejad at U.N.; Haaretz reports on The speech Palin never gave: Ahmadinejad dreams of Final Solution.


This is all a lot of hullabaloo about NOTHING.

Actually, that's not quite true...it is about stifling a voice - that voice belongs to the President of Iran, Mahmoud Ahmadinejad - considering the shoddy treatment that he's received at the hands of our Distraction Media, he is owed an opportunity to clear the air.

For example, he never said these words: "Israel must be wiped off the map"; in fact, he has stated that his disagreements are with the policies of Israel, and not with Israelis. That is a very important distinction to make.

There is a lot of rhetoric rebounding within the halls of power: as it currently stands, we have Iran on one hand, being threatened with either invasion or annihilation, being backed by both Russia and China; on the other hand, we have Israel, who maintains that Iran is a threat to their existence, backed by us, the good ol' United States of America.

Pity us.

Let's see how the whole shebang goes tomorrow.

Sunday, September 21, 2008

Green Jelly - MISADVENTURES OF SHITMAN; Ranting About

This is what we need - a huge hunk of dung to lay the smackdown on John "Songbird" McCain.

What brought this on, you might ask? It was the crapfest, half of which I read on the train going home Thursday evening - McCain Flub? Republican Says He'd Fire SEC Chair as President.

I have a little rant there in the comments section, but I'd rather go on a new rant here...

When I was growing up, I realized the advantages of physical superiority. However, I did not take advantage of them, preferring to use brains over brawn.

It has served me well in life to have been able to obtain and attain what I have and possess, not having to have forced anyone to do so.

But I wonder...is coercion any better than outright thuggery?

I participated in Mock Trial back in my high school days...our team did fairly well, until we went against one of the top schools. I spoke to the judge later on, after the tournament. In theory, he agreed with my premise; however, the opposing team was able to circumvent my arguments; in other words, they were able to COERCE testimony not prevalent in the case, which cost our team the winning judgement.

This was a learning experience...this is when I first discovered that the LAW was not necessarily JUSTICE.

My second opportunity was when we had a lawyer visit us, and we were able to pose to him a multitude of questions.

One of my questions pertained to the stock market crash of 1987. I inquired, "If an individual murders another individual, he is tried for murder...yet, if an unscrupulous broker caused the dissolution of a investor's funds by unsound business practices and simple greed, and this occurs to numerous investors, whose life savings are now gone, wouldn't that be considered mass murder?"

I never really got a satisfactory answer to that question, but I do remember the initial reason offered...it was because they were not FORCED to do so.

I am the guy who, when confronted with a gun to my temple, told the would-be robber that if he wanted my walkman (and this was not an iPod...this was a cassette player!), he could take it from my cold, dead body, but that I wasn't going to give him ANYTHING.

I still have that walkman...but I digress.

Here's the point - I really don't see why criminals should benefit from profitting from more than one victim...but this is exactly what the law entails.

I don't see a real difference in disenfranchising one individual versus entire families...in the end, they are devoid of their valuables, are they not?

I happen to think that not being given the choice to fight for your valuables make the crime more heinous. With a mugging, the perpetrator is right there - you have a face to go with the crime; in the other instance, you stand around, impotent without being able to point a finger concretely.

Ivan Boesky bilked a number of clients. After he served his time (apparently, it wasn't a very long sentence, nor was he subject to the tender mercies of being in general population), he sued his ex-wife. He said that he "couldn't live as a poor man".

Apparently, the judge agreed with him.

So...who says that crime doesn't pay? It certainly bloody worked in this case. He is living on funds diverted to his ex-wife from his ill-gotten gains.

What puzzles me is...why aren't perpetrators of financial crimes not made to return ALL of their ill-gotten gains?

Let's say that I am the guy who made those short sells on American and United Airlines. I have $2.5 million dollars that is owed to me...but do I dare retrieve them? I mean...what's the real penalty? There is the matter of foreknowledge...but that will have to be proven in a court of law. I can always say that I had a dream...or a little birdy told me that those four days would be profitable...meanwhile, I'll pay a tidy fine, and I'll suffer the odd looks from neighbors...but you know what?

I'll probably retain most of that $2.5 million, so WHO CARES?

I'll get new neighbors who appreciate my new art collection as it comes in daily from auctions.

What I am saying here is that in a world where no one cares about MORALS, and everyone is consumed with MONEY, civility does NOT matter.

All's fair in love and war, right?

How do you rehabilitate repeat offenders, when that is the maxim of the world in which they live?

You already know the answer.

Look at our elected officials - they know what the answer is: take as much as you can get, and bugger all to your constituents...after all, who paid for the Maserati you're driving?

Is it a coincidence that practically all of our elected officials are MILLIONAIRES? How do they represent the common man and/or woman?

I'll leave you with this...because I have to go read something funny...If Lifestyles Of The Rich And Famous returned to television...and we DO have a return to the days of the Great Depression...that show will have a spinoff called The Lifestyles Of The Recently Eaten and Dessicated.

Bob Cesca has a good head in this debate.


Wednesday, September 17, 2008

Sarah's Being A Bad Girl; Ethel And Julius Rosenberg Confirmed As Spies!

Oh, dear...is Sarah committing a crime here? There are laws that maintain that political business be conducted using a business account; personal e-mail communications cam be communicated via personal email accounts - but never the twain shall meet.

Unfortunately, such seems to be the case of Vice Presidential nominee Sarah "Mustang" Palin (complete with screenshots).

In other news, Ethel and Julius Rosenberg's son confirms that his parents were spies.

Tuesday, September 16, 2008

Separated At Birth?

Yes...I was a big fan of SPY Magazine (though I've only one copy saved)...one of the best features was their Separated At Birth feature - I still giggle when I think of the juxtaposition of Darryl Strawberry and Dino, Fred's pet dinosaur from the Flintstones...go ahead, laugh...it's a scream!

So...let's see if I can revive the feature - here's Vice Presidential nominee Sarah Palin and the Baroness from G.I. Joe:

Scary, isn't it?

The Law of Supply and Demand Is Dead for Gold and Silver

J. S. Kim

I’m going to preface this article by warning you that this is one of the longest and most important articles I have scripted in many months. During the recent gold and silver correction that began on July 14, 2008 and which perfectly coincided with the miraculous surge higher in the U.S. dollar, there was a massive story unfolding that should have been a lead story in every financial magazine, newspaper and website. Yet the media responded with silence. The story was so big, as a matter of fact, that every economics textbook should now have to remove the Law of Supply and Demand from their pages because if free markets still exist, the recent behavior in gold and silver markets strongly obliterates it.

Before I begin with that story, make no mistake that we have just experienced a steep correction and not the end of the gold and silver bull. Also make no mistake that this recent dollar rally is a miraculous rally because fundamentally nothing has changed about the U.S. dollar that could explain such a quick surge higher. In my last post, though I described calling the bottom of the gold markets a “sucker’s bet” that was a waste of time when markets are so blatantly manipulated, I foolishly took the bet anyway and was wrong about predicting the bottom (I’ve now learned my lesson about taking a sucker’s bet when I know it is one! Still, my subscription members well know my updated position about the short-term direction of gold and silver markets since this last public posting). But on to the meat of this article.

The Law of Supply & Demand is Broken: Demand Soars and Prices Plummet!

Consider the following. As gold and silver prices started to plummet on July 14th, surging physical demand for gold and silver continued to lead gold and silver prices markedly lower. For the first time in history, record demand in a commodity was helpless to stem plummeting prices and in fact, contributed to further price declines. In July, India bought 22 tonnes of gold. In August, according to Reuters, India increased its gold purchases by more than 350%, buying more than 100 tonnes of gold.

This figure also represented a 56% increase in purchases when compared to purchases during the same month from a year prior. In Dubai, demand surged as well.

“We are definitely witnessing a surge in demand for gold in Dubai and physical shortages have been reported by many dealers,” said Ian MacDonald, the Dubai Multi Commodity Center’s executive director for gold and precious metals. “We are also seeing demand being driven by currency concerns in the region as many investors perceive the precious metal as one of the few strong currencies.”

Gold jewelry sales in Abu Dhabi soared 300 percent in volume and almost 250 percent in value in August from a year earlier after the metal dropped to nine-month lows, the emirate’s industry group said on Monday.

“It was the best month the market has seen in almost 30 years and it compensated for any drops we have seen earlier this year,” Abu Dhabi Gold and Jewelry Group Chairman Tushar Patni told Reuters.“We had never expected (emphasis mine) that if gold fell below $800 an ounce we would see a 300 percent increase in volume and 250 percent in value, especially as many buyers are abroad on holiday.”

In the United States, the stories were the same. Many gold and silver bullion and coin dealers reported record sales in August and shortages of supply. I could quote fifty other stories similar to the ones above, but for the sake of brevity, I will not. Global sales of gold and silver would have to be at record levels in August for gold and silver prices to be pushed much higher for that month, and all preliminary indications are that global sales in August for gold and silver were indeed at record numbers. So how can it be that record demand and sales in the physical gold and silver markets would cause gold to plummet from a price of $910 an ounce at the beginning of August to less than $750 an ounce, and silver to plummet from a price of close to $18 an ounce at the beginning of August all the way down to almost $10 an ounce?

When this inexplicable anomaly was pointed out (at least inexplicable according to the supposedly irrefutable Law of Supply and Demand), gold and silver analysts employed by Wall Street to spread disinformation responded only to stories of shortages being reported in the United States and did not address record sales of physical gold in various countries in the Middle East and in Asia. They responded to reported U.S. shortages of bullion and coins by stating that dealers had supply but were simply not being honest about their supply numbers because they did not want to sell any more stock at such depressed prices. This certainly could have been a very reasonable and logical explanation that adequately explains some of the shortages that were reported by gold and silver dealers. However, this was not “mystery solved” as these demagogues employed by Wall Street claimed.

During this Correction, Gold & Silver Steady or Much Higher Many Days in Asia, Down Markedly Lower by Close of New York Markets

How can record sales, the strongest in 30 years, and shrinking supply in other regions of the world like the Middle East and India, cause prices of gold and silver to plummet steeply as well? Clearly, since price is a function of supply and demand, rising record demand for gold in India and the Middle Eastern markets should have stopped the downward slide in gold and silver markets dead in its tracks and led the price higher again. And indeed this is exactly what happened. But it happened only in the futures markets in Asia. Last week MarketWatch reported a story that gold experienced one of its worst months ever in this bull run because August had not one day where gold closed higher in price; however, this article only told half the story as the media so often does. Gold experienced many days in August were it closed higher in Asia and significantly higher, often piling on gains of $5 to $10 an ounce. These gains were only lost once London markets closed and New York markets opened; only then, were gains quickly sold off and then transformed into deep losses within a span of 24 hours.

If one constructs the 24-hour gold and silver charts for every day during this correction, one will discover an overwhelming amount of days when gold and silver were significantly higher in futures markets in Asia, but then were sold off harshly at nearly the exact same time (within a 30 minute time frame) when London markets closed and New York markets opened. How could this have happened? Simple. The price for gold and silver that you see plastered all over financial tickers everyday is established in the paper futures markets and not in physical markets where REAL gold and silver actually exchange hands. In the futures markets, only 1% of all futures contracts are closed out with actual delivery of the physical commodity. Instead 99% of all futures contracts are closed out with the purchase of another paper contract. In the case of gold and silver, futures contracts represent digital bytes of gold and silver flying around in a paper market, not real ounces of gold and silver that exist in the physical market. Thus it is entirely possible to utilize this discrepancy to create two entirely different prices for the same commodity. In other words, if not properly regulated, futures markets provide a gateway to manufacture massively fraudulent prices non-reflective of the buying and selling volumes that are occurring in the physical markets!

Two Parallel Markets For Gold & Silver: Paper Markets & Future Markets

Thus, the world can end up with two parallel markets that act differently: a papers market for gold and silver and a physical markets for gold and silver that establish significantly different prices for the same commodity over short periods of time, odd as this may seem (I say short periods of time because unless perpetually manipulated, free markets will eventually work out such massive distortions over time). The recent actions that were coordinated in the futures markets for gold and silver beginning on July 14th would most likely have been impossible to replicate in the physical world of gold and silver. To any veteran investor in gold and silver, the manufacturing of this correction was as plainly transparent as a two-ton boulder falling out of a clear blue sky. Though I won’t discuss the other mounds of evidence that explain how this correction was manufactured, these other specifics deal with large U.S. institutions that piled on huge short positions in the futures markets for gold and silver in an incredibly compressed period of time around July 15th.

Again, the gold and silver analysts paid by Wall Street to spread misinformation spoke out against the manipulation theories, simply stating that the dollar was overdue for a bounce and gold and silver markets were overdue for a correction. I have stated multiple times myself over the years that bulls never rise straight higher and will correct, and that bears never plummet straight downward and will experience bear market rallies. This much is true. Still, what transpired starting this past mid-July was far beyond the realm of a free-market inspired U.S. dollar bear market rally and a free-market induced gold and silver bull market correction. The meteoric rise of the U.S. dollar since July 15th and the panic inducing slide in gold and silver prices reeks of manipulation and not a natural free-market rally and correction for many reasons.

For instance, try explaining this. I know for a fact that certain gold coins that were selling in the low $700 range when the price of gold bullion was at $680 an ounce a couple of years ago were still being priced at more than $1,100 by gold coin dealers even when gold slid all the way down to $750 an ounce during this current correction. When I inquired as to why the prices of these gold coins had not also slid to $780 or so (as would have been dictated by the spot market price of gold), but were instead still selling for well over $1,100 a coin, the dealers answered that demand, not the spot price of gold in the futures market, was setting the prices of these coins. Since demand was off the charts, the prices did not reflect the monumental drops in price in the futures markets. When I checked the market for silver coins, I discovered the same massive disconnect between prices set in the physical markets for silver and in the silver futures markets (that only comprise “paper” silver). Silver coins were selling at prices sometimes 60% to 70% higher than what would have been indicated by the spot price of silver determined in the futures markets.

Last month it was clear that the Law of Supply and Demand was dead for gold and silver markets. Soaring physical demand for gold and silver were not factored at all into the prices set in the PAPER gold and silver futures markets. Incredibly, soaring physical demand created a greater acceleration of losses in the prices in the PAPER gold and silver markets. One way to interpret this disconnect between physical and paper gold and silver markets that clearly happened last month is this: If a bushel of corn were selling in the September futures market for $1.40, but if you were to go to a farm in Anytown, USA and had to pay $3.10 for a bushel of corn, what would you conclude was the REAL price of corn? This is how you can determine the real price of silver and gold today. Look to the physical markets, not the paper markets, for the real price of gold and silver. Who cares what the paper futures markets are stating as the spot price of silver, if I still have to pay 60% more than this price when buying silver coins in the real world? The price is simply what I have to pay for the real physical silver, period.

The Usual Suspects

The most likely culprits of this manipulation are all members of the U.S. President’s Working Group on Financial Markets (the SEC, the Commodities Futures Trading Commission, the U.S. Treasury, and the U.S. Federal Reserve). A massive disconnect between the price of gold and silver in physical markets and the price in paper futures markets, of the extent that happened last month, either means that the Law of Supply and Demand has just been proven to be invalid, or that massive fraudulent manipulation just occurred. I will let you make this conclusion. However, let me be clear that the evidence of manipulation was so overwhelming this time that it was not just the usual suspects, including yours truly, voicing these opinions. It must have greatly dismayed the mainstream analysts that try to cover up evidence of manipulation in commodity markets, particularly in gold, silver, and oil, that a member of the mainstream investment community attributed the recent gold and silver decline to manipulation.

It also must have dismayed these same analysts that four U.S. Senators who are key members of Congressional energy committees recently stated that the Commodities Futures Trading Commission “obviously knew that underlying data used to prepare the interim report was seriously flawed.” (emphasis mine) (The report referenced by the Senators was a key report distributed to U.S. Congress days before a legislative vote to close commodity trading loopholes that allow massive manipulation of commodity markets. The report stated supply and demand was solely responsible for the recent run up in oil prices to $147 a barrel. The seriously flawed data that was contained in the report, after it was corrected, demonstrated that manipulation was responsible for the run up in oil prices. Based upon the deliberately falsified data provided by the CFTC (the Senator’s words, not mine), Congress voted to keep the loopholes open. Read the whole story here).

Don Coxe, chairman and chief strategist of Harris Investment Management in Chicago, one of the top respected investment groups in the United States, called this recent manipulation of gold and silver markets that broke the Law of Supply and Demand a “brilliant” plan executed by the U.S. Federal Reserve and U.S. Treasury. My reply to Mr. Coxe? Let’s not get carried away. If I was in charge of the U.S. Treasury and could direct the CFTC, the SEC and various Wall Street firms through the President’s Working Group on Financial Markets, I could have pulled this plan off in my sleep. If the plan was executed in the manner that Mr. Coxe speculates, there was nothing brilliant about it. Let’s call the plan for what it was. Fraud and a shameful dismantling of free markets and capitalism. Plain and simple.

But in today’s world fraud is the name of the game. When the Law of Supply and Demand was broken in the gold and silver markets in August, for a comparable story of similar magnitude to exist in the scientific world, the Law of Gravity would have to be disproven. If it was reported that in California, a man ran down the street, threw his hands in the air and flew for a length of 200 meters while 10 meters from the ground, don’t you think that reporters would be scrambling to report this story? Yet gold and silver markets just proved the Law of Supply and Demand to be no longer relevant in August 2008, and ZERO members of the mainstream financial press deemed this story to be newsworthy.

Fannie Mae (FNM) and Freddie Mac (FRE) committed fraud for years and nearly triggered the collapse of the entire U.S. housing market. When their bailouts finally became necessary, people that ingested the force-fed spin that this bailout was “for their own good” and don’t understand the implications, cheered the fraud that allowed the Fannie Mae and Freddie Mac CEOs to retain their tens of millions in salary and bonuses they collected from engineering this fraud. Furthermore, for their roles as architects of this fraud, Freddie Mac CEO Richard Syron and Fannie Mae CEO Daniel Mudd are to respectively receive a severance payout of approximately $6.3 million and $7.3 million, respectively. When Stan O’Neal and Chuck Prince were respectively ousted from Merrill Lynch (MER) and Citigroup (C) for their terrible leadership and participation in creating the most massive financial crisis the U.S. has seen in decades, what were their rewards for leading investors of their stock into financial ruin? A $160 million and a $40 million golden parachute, respectively.

The reason this current story is so important is the following: The very acceptance and nonchalant reactions to this fraud by billions of people worldwide poses an equally serious threat to the health of the U.S. and global economy as the actual perpetrators of these fraudulent actions. Though I’ve never asked any of my readers to take action before, I urge you this time to email the link to this article at my investment blog, theUndergroundInvestor, to every single person that you know that has ever had so much as a ruble, a dollar, a peso, a real, a Swiss franc, a Euro or a pound invested in stock markets. Knowledge is power, and only knowledgeable persons can prevent these same shenanigans from happening in the future. As this financial crisis deepens and we have only seen the very beginning of it, the intensity of disinformation campaigns will increase at an exponential rate. To solve the crisis will require aware and knowledgeable investors, and masses of them. Thus, we must begin spreading awareness today and not a day later.

The Likely End Game: Re-Capitalization of the U.S. Financial Sector at the Expense of the Individual Investor

I’ll conclude this article with my theory of why this manipulative scheme was executed in the gold and silver markets, for I have not seen another analyst give any credence to this theory as of today’s date. This sell-off in gold and silver and the U.S. dollar rally wasn’t engineered just to stem the record rate at which foreign central banks were dumping U.S. Treasuries (another huge story that somehow the entire mainstream financial press somehow missed). Furthermore, this scheme wasn’t hatched solely because it was a necessary step to save the global financial markets as Don Coxe speculated. Both are fine reasons, but ultimately, unlikely to fully explain why this scheme was hatched in July. With the failure of Fannie Mae and Freddie Mac, the failure of Merrill Lynch (just announced Monday), the likely failure of Lehman Brothers (LEH), and the likely failure of a huge U.S. financial institution on the imminent horizon, all these failures are about to place a serious squeeze on the already hemorrhaging balance sheets of some of the world’s largest financial institutions. With foreign interest in increasing ownership in these institutions quickly dissipating and weak share prices unable to translate secondary offerings of stock into significant amounts of capital, some of the largest financial institutions were absolutely desperate to find a channel in which to raise significant amounts of capital (not hundreds of millions, but billions of dollars) very, very quickly. What just happened in the gold, silver and oil markets accomplished this goal, and thus may have been integral in preventing a global financial collapse.

Let me explain. During this recent gold and silver correction, gold and silver markets were higher, and significantly higher in Asia before drastically turning significantly lower in New York almost on a daily basis. The creation of these huge arbitrage opportunities could have been exploited by large financial institutions to reap billions in profits in an incredibly condensed period of time. The type of arbitrage opportunities that existed during this recent correction in gold and silver was absolutely enormous. Unprecedented 2% to 5% swings in the price of gold and silver bullion from their highs in Asian markets to their lows in New York markets happened time and time and time and time and time and time and time again during this recent correction (if you were unaware of this action or don’t believe me, simply search out the 24-hour charts for gold and silver for the entire month of August and you will be absolutely dumbfounded from what you will discover). These swings in prices were so enormous that daily swing trades in futures markets, given these arbitrage opportunities, could have produced hundreds of millions of dollars of profit in a single 24-hour trading day. During the past few weeks, these arbitrage opportunities may have produced profits in the tens of billions of dollars, if not more, for just a small handful of firms.

If I were a large financial institution with a critically hemorrhaging balance sheet due to massive losses created from insane foolish and risky bets on MBS (mortgage backed securities) and CDOs (collateralized debt obligations), and I wanted the quickest way to recapitalize my balance sheet, how would I do it? Through gross manipulation of commodity markets, in particular the gold, silver, oil and agriculture markets. Of course, I would need the help of certain regulatory agencies to achieve this and wouldn’t be able to accomplish this on my own, but I’m going to speculate that this is exactly what just happened. This correction was not only just about shoring up the U.S. dollar and U.S. Treasuries, but also about recapitalizing Wall Street and huge banking institutions. Though I haven’t covered the oil and agriculture futures markets, there is more than ample evidence that the same thing has occurred in these markets as of late as well (and again, the evidence is blatant enough that U.S. Senators have demanded investigations into much of the curious behavior I have delineated in this article). Again, if you are someone interested in putting an end to the regulatory and government schemes that continue to reward CEOs for their incompetence, dishonesty, and disloyalty to shareholders, and you care about the future of the United States, I urge you to forward this article to everyone you know.

URL for this article


Remember the M3 aggregate? This was the published estimate of the entire money supply within our economy, up until a short while ago.

Can you guess as to any reason that this figure would be hidden from the American public?

I'll await your responses, dear readers...