Monday, April 26, 2010
Fight the Derivatives Cancer with a Wall Street Sales Tax, Plus Bans on Hedge Funds, Credit Default Swaps, and Synthetic CDOs
The Obama administration has been posturing this week about the life and death issue of Wall Street reform. Obama’s predicament is that of a Wall Street puppet who has been put into the White House thanks among other things to almost $1 million of contributions from the infamous Goldman Sachs – but who now needs to make a show of fighting his own Wall Street patrons for political reasons. Of course, Obama’s health-care reform was largely a bailout of insurance companies, which are themselves a key part of Wall Street. But Obama is now pretending to quarrel with Wall Street to shore up his waning credibility, partly because many House Democrats are desperately seeking anti-banker, economic populist street creds in order to avoid defeat in November. So far, the results have been largely feckless and inadequate.
The urgent problem raised by all this is the $1.5 quadrillion derivatives bubble. The financial crisis which struck the United States and the world in September and October 2008 was in fact a world a derivatives panic. This panic marked the first phase of a world economic depression caused by derivatives speculation. The second phase of this depression, which is now beginning, can also be attributed in large part to derivatives, since derivatives are the main tool being used in the speculative attacks on Greece, Spain, Portugal, Italy, Ireland, and other nations, building up towards a chaotic collapse of the euro.
Derivatives are the Cause of the World Depression of Our Time
Far from being some arcane or marginal activity, financial derivatives have come to represent the principal business of the financier oligarchy in Wall Street, the City of London, Frankfurt, and other money centers. A concerted effort has been made by politicians and the news media to hide and camouflage the central role played by derivative speculation in the economic disasters of recent years. Journalists and public relations types have done everything possible to avoid even mentioning derivatives, coining phrases like “toxic assets,” “exotic instruments,” and – most notably – “troubled assets,” as in Troubled Assets Relief Program or TARP, aka the monstrous $800 billion bailout of Wall Street speculators which was enacted in October 2008 with the support of Bush, Henry Paulson, John McCain, Sarah Palin, and the Obama Democrats.
Derivatives can be defined as any financial paper which is based on other financial paper. In other words, they are financial instruments whose value depends upon or is derived from the value of other financial instruments. Any kind of securitization results in the creation of derivatives. If individual mortgages are wrapped up and packaged together as a mortgage-backed security (MBS), that is a derivative. Any asset-backed security (ABS), be it based on car loans, credit card debt, or anything else, also qualifies as a derivative.
Beyond this, there are generally speaking two kinds of derivatives. The first type includes the derivatives which are traded more or less openly on exchanges like the Chicago Board Options Exchange, etc. These include options, futures, and indices, plus all the combinations of these. These are what expire in each quadruple witching hour in the markets. This type of derivative has generally amounted to about $600 trillion of speculation in recent years.
Then there are the so-called over-the-counter (OTC) derivatives, otherwise known as structured notes, counterparty derivatives, or designer derivatives. These often take the form of contracts which are kept secret by the counterparties, and which are often not included on the balance sheets of banks and other institutions which enter into these contracts. This type of derivative is currently not reportable to any regulatory agency. This secrecy is a result of the successful effort by Robert Rubin, Larry Summers, and Alan Greenspan to block the modest proposal of Brooksley Born of the Commodity Futures Trading Commission to bring the OTC derivatives into the sunlight during the second Clinton administration. Since these derivatives are not reportable at the present time, we must guess at their amount, and the best guess is that OTC derivatives make up almost $1 quadrillion of ultra-toxic speculation.
CDOs, CDS, and SIVs
OTC derivatives include collateralized debt obligations (CDOs),which often represent the packaging together of large numbers of mortgage backed securities, along with other debt instruments. A CDO can also be concocted out of other CDOs, in which case it qualifies as a synthetic CDO or CDO squared (CDO²). Notice that a synthetic CDO is not really an investment, but rather a form of gambling, in which a speculator in effect places a bet on the performance of some other financial instruments. This fact exposes the big lie inherent in the widespread reactionary myth that the current depression was caused by poor people taking out subprime mortgages on slum properties and then defaulting on these loans, thus bringing down the US and British banking systems. This fantastic story ignores the fact that derivatives were only a wager placed by speculative bettors from afar on mortgage backed securities which included some subprime notes.
Credit default swaps represent bets on whether a given asset or company will go bankrupt or not. As such, they can be used as insurance against such an eventuality, or else they can be used to make money on the insolvency. CDS are therefore a form of insurance, but they are issued by counterparties who have not registered as insurance companies and who have not met the legal and capital requirements which are necessary to function as an insurance company. It ought therefore to be clear that CDS have been totally illegal all along, and have flourished only because of an outrageous failure by state insurance regulators to enforce applicable laws against the privileged class of financiers.
Structured investment vehicles (SIVs) are another type of derivative, commonly used to wrap up masses of CDOs and synthetic CDOs and then to park them off-balance sheet, where they can be hidden from regulatory and public scrutiny.
All Derivatives Illegal under the New Deal, 1936-1982
All kinds of derivatives, be they exchange traded or over-the-counter, were strictly banned and outlawed in the United States between 1936 and 1982 thanks to a wise measure enacted under the New Deal of President Franklin D. Roosevelt. In the wake of several attempts by predatory and sociopathic speculators to manipulate the prices of wheat and corn during the First Great Depression, the Commodities Exchange Act of 1936 outlawed the selling of options on agricultural products. This law had the effect of blocking most derivative speculation, until the counterattack of free-market fanatics gathered steam under the presidency of Ronald Reagan, an ideological zealot of the Austrian and Chicago schools. The very existence of derivatives today and their resulting ability to bring on a new world depression are thus directly attributable to the reckless and irresponsible dismantling of the New Deal regulatory regime. It should be added that derivatives were also banned in many states as a result of laws prohibiting gambling or forbidding bucket shops, which were betting parlors in which side bets could be placed on stock market fluctuations.
If Obama wants to pretend to have something in common with Franklin D. Roosevelt, he ought to be proposing measures to ban at least the most poisonous types of derivatives, and to discourage the others. Notice that he does nothing of the kind. Obama’s Cooper Union speech of April 22, 2010 approvingly cites Warren Buffett’s remark that derivatives represent financial weapons of mass destruction. But Obama then says that derivatives nevertheless have an important and legitimate role to play. So which is it? Some years back, French President Jacques Chirac rightly referred to derivatives as “financial AIDS.” What useful purpose can these toxic instruments possibly serve?
Again: in his 1936 re-election speech in Madison Square Garden in New York City, Franklin D. Roosevelt famously noted that the forces of organized money hated him, and that he welcomed their hatred. Obama, in sharp contrast, called on the Wall Street predators to join him in his efforts, compounding this with the monstrous thesis that Wall Street and Main Street are in the same boat. Nothing could be farther from the truth. The recent Goldman Sachs scandal has underlined once again that the Wall Street investment houses serve no useful social purpose whatsoever. They exist solely for the purpose of pursuing speculative profits through a process of looting and pillaging the rest of the economy. The Wall Street zombie banks are monopolizing US credit, while Main Street goes broke.
Thanks no doubt to the efforts of certain House Democrats, the reform bill is likely to contain two points which can qualify as positive half measures.
Force Derivatives Out in the Open
The first is the effort to end the secrecy of OTC derivatives by forcing these instruments to be traded on public exchanges or through clearing houses. This is a step in the right direction. But this provision needs to be strengthened by making all derivatives of any type whatsoever reportable to a central regulatory authority. This would include, for example, the derivatives held by hedge funds. In 1998, the Connecticut-based hedge fund Long-Term Capital Management went bankrupt with more than $1 trillion worth of derivatives, blowing a huge hole in the international banking system, and causing Greenspan to rush in with a crony bailout. Nobody has any idea of the amount of derivatives held by hedge funds today. Highly leveraged hedge funds are perfectly capable of causing a worldwide systemic crisis with derivatives, so they must emphatically be made to report their holdings.
This reporting requirement should also include the derivatives held by non-financial corporations, whose shareholders deserve to know if and when management is dabbling in these toxic instruments. Some years back, the Gibson Greeting Card Company took a huge loss on derivatives, so this is no theoretical danger.
In addition, all derivatives must henceforth be clearly listed ON the balance sheets of banks and all other financial institutions. The intolerable practice of hiding derivatives off-balance-sheet must be immediately brought to an end.
The other positive half measure which might survive Obama’s usual quest for a “bipartisan” sellout is the so-called Volcker Rule, which specifies that commercial banks with insured deposits are not allowed to engage in proprietary speculation with their own money. Depending on how this is worded, this may include a long overdue ban on derivatives speculation by commercial banks. Senator Blanche Lincoln of Arkansas, the chair of the Senate Agriculture committee—who is fighting for her political life against a primary challenge this spring—has been backing a provision that would explicitly prohibit commercial banks from engaging in derivatives speculation. These ideas go in the right direction. But we need to do much more. We need to go back to the full New Deal regulations embodied in the Glass-Steagall Act. This law stated that a financial institution could be either or a commercial bank, or an investment house, or an insurance company, but never more than one of these. In other words, the suicidal folly of the Gramm-Leach-Bliley Act of 1999, which repealed Glass-Steagall, must be rolled back.
Outlaw Credit Default Swaps
Beyond this, we must urgently address the catastrophic effects and obvious illegality of credit default swaps. More than a year ago, Senator Warner of Virginia asked Fed boss Bernanke about the advisability of creating a “bright line prohibition” against these CDS. Remember that CDS are already illegal, because they always involve an investor masquerading as an insurance company without having fulfilled the legal and capital requirements that would be demanded from a real insurance company. Credit default swaps have cost the US taxpayer almost $200 billion in the case of AIG alone, because of the bankruptcy of the AIG London-based hedge fund which had issued more than $3 trillion of derivatives – a total greater than the gross domestic product of France.
Credit default swaps are also a clear and present danger today, since they are the principal tool being used by wolf packs of banks and hedge funds against Greece and other nations, accelerating the arrival of the dreaded second wave of the world economic depression. Unless credit default swaps are banned now, they will be increasingly used for speculative attacks against the bonded debt of American states like California, New York, Illinois, and all the others. Before long, credit default swaps will be used by international speculators to attack the value and integrity of United States Treasury securities, threatening our country with the calamity of national bankruptcy. If the United States fails to shut down credit default swaps with timely legislation now, credit default swaps will be used to help destroy the United States and human civilization in general.
Ban Synthetic CDOs
The synthetic CDO or CDO² must also be outlawed. These are the toxic instruments which brought down Bear Stearns, Merrill Lynch, and Lehman Brothers in the great derivatives panic of 2008. What are we waiting for to ban this kind of highly destructive derivative? Such a ban is easy to formulate: “Any collateralized debt obligation which contains other collateralized debt obligations is hereby prohibited.” End of story. This language recalls the approach of the very successful Public Utility Holding Company Act of the New Deal. One layer of CDO is more than enough risk, and it must not be further compounded.
Another ban which is long overdue and which should be included in the current legislation is the outlawing of the Adjustable Rate Mortgage (ARM). The ARM is another catastrophic innovation of recent decades which inherently carries with it an intolerable risk for any homeowner. No American family should be deprived of a roof over their heads because of the unpredictable and volatile fluctuations of interest rates over the life of a mortgage. These ARMs shift an unacceptable risk to the mortgage buyer. Fixed-rate mortgages should be the only legal kind, and any reset or change in interest rates on a residential mortgage should be strictly outlawed. While we are at it, we also need to outlaw the high-interest payday loan, a type of devastating usury to which the poorest and most defenseless parts of our population are now exposed. The outlawing of payday loans should take the form of a de facto federal usury law establishing an upper limit of no more than 10% on any promissory note or credit card. This was the limit traditionally set by state usury laws before the coming of the Volcker 22% prime rate three decades ago, and it should be restored. This simple prohibition of adjustable rate mortgages and payday loans will be far more effective than the proposed creation of an inefficient and unwieldy consumer protection bureaucracy, especially one that is located inside the Federal Reserve. The Federal Reserve has repeatedly struck out when it comes to recognizing systemic risk, when it comes to preventing financial bubbles, and when it comes to protecting ordinary Americans. The Federal Reserve failed in the run-up to the crash of 1929, in the run-up to the banking crisis of 1933, in the run-up to the stock market crash of 1987, in preventing the dot com bubble of 1999-2000, and in regard to the financial derivatives which caused the banking panic of 2008. Locating any consumer protection bureaucracy inside the privately owned Federal Reserve is simply to guarantee that such a bureaucracy will be subject to regulatory capture by Wall Street at the earliest possible moment.
Wall Street Sales Tax of 1% on All Financial Transactions
Derivatives which escape prohibition under these blanket bans on credit default swaps and synthetic CDOs must then be subjected to their fair share of the tax burden. In a time when haircuts, bowling alleys, and restaurants are threatened with new taxation, it is simply inconceivable that the financial turnover of US financial markets should remain immune to all taxation, rather like the French aristocrats of the pre-1789 old regime. Rather than crush the US economy under an ill-advised and oppressive Value Added Tax (VAT) or national sales tax, we must institute a Wall Street sales tax of 1% on all financial transactions and turnover, including derivatives. This is the levy known as the Tobin tax, the Wall Street sales tax, the financial transactions tax, the trading tax, the securities transfer tax, or the Robin Hood tax. A low-ball conservative estimate of US financial turnover (including derivatives) in any given year might be about one quadrillion dollars. In that case, a 1% Wall Street sales tax would yield $10 trillion, $5 trillion of which could be used to confront the federal budget deficit, the costs of entitlements, and the various unfunded liabilities of the federal government. The other $5 trillion would be available for revenue sharing with the states, who could use these funds to deal with their own budget crises, which currently threaten police, firemen, health services, and other indispensable parts of the fabric of civilization itself. One of the main causes for budget deficits of all levels of government in the United States is the glaringly obvious exemption of financial turnover from all taxation, while financial speculators use various tricks to escape paying the corporate income tax. The proceeds from such a Wall Street sales tax would almost certainly decline as speculation became less attractive, but in the meantime they would provide much-needed relief for the public treasury. Needless to say, any idea of paying the proceeds of such a tax to the International Monetary Fund is out of the question. Many other countries are in the process of instituting a Tobin tax on financial turnover, so the inevitable objection that a Wall Street sales tax would represent a crippling competitive disadvantage for US financial markets is increasingly untenable.
Additional Safeguards: Bankruptcy Triage, Reserve Requirement, Hedge Fund Ban
Further safeguards against the derivatives plague are also in order. Current bankruptcy law gives special privileged treatment to derivatives. These poisonous instruments continue to exact their claims even when protection against other creditors has been provided by the federal courts. This abusive and unwarranted favoring of derivatives must be reversed. Derivatives must be made to wait their turn in bankruptcy court, and sent to the end of the line after all other creditors and claims have been satisfied. If bankruptcy triage becomes necessary, it should be at the expense of derivatives.
Another needed measure is the establishment of a reserve requirement for anyone issuing derivatives. We have seen how Goldman Sachs is accused of designing their notorious ABACUS 2007-AC1 CDO, colluding with hedge fund speculator John Paulson to load this CDO with all kinds of super-toxic paper with the intent of designing an instrument which would have the best possible chances of going bankrupt in the short run. A reserve requirement for those issuing derivatives would mean that they would have to buy and hold on their own books for the life of the investment at least 20% of any derivatives they issued. This would represent an additional deterrent against the deliberate concocting of toxic derivatives with the intention of then allowing a speculator to short them with the help of credit default swaps.
A final necessary change involves the grave risk inherent in the existence of hedge funds. Despite their name, the main business of hedge funds is pure predatory speculation. Hedge funds are currently allowed to fly below the radar of the Securities and Exchange Commission, escaping regulation because they have only a limited number of super-rich investors. It is high time that this loophole came to an end. Once a hedge fund is regulated, it is no longer a hedge fund, so the call to regulate hedge funds is for all practical purposes a call for their abolition. Hedge funds should have been subject to regulation no later than the immediate aftermath of the Long-Term Capital Management debacle of 1998. The hedge fund loophole in the SEC rules must be closed now.
Seize and Liquidate the Zombie Banks
Obama’s $50 billion resolution fund for bankrupt banks is unnecessary. What we need most of all is to have the Federal Deposit Insurance Corporation, the Comptroller of the Currency, and other regulators enforce the applicable laws. Every Friday, Sheila Bair of the FDIC shuts down a number of small town banks because of insolvency. In her interview yesterday on CNBC, Ms. Bair blatantly admitted that she has no intention of enforcing these same public laws against the large Wall Street and other money center banks. She covers this malfeasance and nonfeasance with her opinion that bankruptcy does not work for the big banks. But there is little doubt that, if their massive derivatives holdings were priced according to mark to market rules, J.P. Morgan Chase, Citibank, and Bank of America would all be thoroughly insolvent candidates for Chapter 7 liquidation. Unless and until this is done, these zombie banks will continue to block any real economic recovery in the United States. Ms. Bair’s policies showed the destructive folly of the current administration’s illegal policies, which are all based in the final analysis on the discredited doctrine of Too Big to Fail.
Any Wall Street reform bill should also deal with the public scandal of the ratings agencies – Standard & Poor’s, Fitch, and Moody’s. These agencies enjoy a quasi-governmental status when it comes to certifying the quality of certain investments. But the failure of these agencies to provide timely warnings during the onset of the derivatives panic was nothing short of spectacular. During that crisis, the ratings agencies were certifying investments as AAA investment-grade until mere hours before they collapsed. Senator Carl Levin’s investigation of the ratings agencies has now unearthed horror stories of corruption and incompetence. The ratings agencies need to be stripped of any special role in relation to the United States government. Senator Levin’s findings merit criminal referrals to the Justice Department for prosecution of these agencies and their executives. In short, the United States government should take this opportunity to shut down these rating agencies, before these corrupt entities join in the looming speculative assault on the US Treasury, which is being prepared by George Soros and the other hedge funds.
Wall Street speculators will certainly howl that the measures outlined here represent a vindictive policy of discrimination against derivatives, which they will attempt to portray as a beneficial innovation serving the public interest. But no serious analysis of the banking panic of 2008 can ignore the obvious role of financial derivatives as one of the principal causes of this disaster. As for the charge of discrimination, it should be clear that the proposals made here generally represent nothing more than ending the privileged special treatment which has been granted to derivatives so far. Derivatives have been exempted from the gambling laws. Derivatives have been given special status in bankruptcy proceedings. Derivatives have been made non-reportable, and carrying them off balance sheet has been allowed. Derivatives have been exempted from the usual laws governing the operations of insurance companies. Hedge funds have been exempted from the scrutiny of the Securities and Exchange Commission. Wall Street derivatives banks have been exempted from the usual bankruptcy laws and probably from the antitrust laws as well. Finally, derivatives, like all financial instruments, have been exempted from state sales taxes. This distorted treatment amounts to a systematic pattern of facilitating and fostering derivatives speculation under US laws and regulations. This pattern might be defensible if derivatives represented a public good. But all experience shows that derivatives are just the opposite – they are a public menace which now threatens to destroy our civilization and way of life.
Wednesday, April 21, 2010
BRASILIA, Brazil, April 20, 2010 (ENS) - Today's bidding for electricity generated by Brazil's planned Belo Monte Dam in the Amazon rainforest has been marked by protests and legal confusion. A court injunction issued late Monday suspended the dam auction overnight, throwing the bidding process into a state of chaos.
Just moments before the auction was set to begin, a second injunction overturned Monday's suspension, reinstating the auction by the Brazilian Electricity Regulatory Agency, ANEEL. The auction is being conducted electronically from the agency's headquarters in the capital, Brasilia.
When the bidding was concluded, the tender was awarded to Norte Energia, a consortium led by the utility Cia. Hidro Eletrica do Sao Francisco, CHESF, a subsidiary of the state electricity company, Electrobras. The consortium also includes eight private companies.
The generating capacity of the R$19 billion Belo Monte dam would be the world's third greatest behind China's Three Gorges dam and the Itaipu dam on the Brazil-Paraguay border. ANEEL says energy is expected to start flowing from the Belo Monte dam in 2015.
In Brasilia, Greenpeace and indigenous peoples today blockaded the main entrance of the ANEEL office building to protest the dam.
The most recent round of legal battles over the Belo Monte Dam on the Xingu River took a new twist on Friday, April 16, when a regional appellate court overturned an April 14 decision by Federal Judge Antonio Carlos de Almeida Campelo to suspend the preliminary license for the dam and cancel the auction.
Sitting in the city of Altamira, which will be partly flooded by the dam's reservoir, Judge de Almeida ruled that the dam project presents a "danger of irreparable harm."
Judge de Almeida's decision is based on the lack of a specific law allowing the use of hydraulic potential on Indian lands as required by the Brazilian Constitution.
"It remains proven unequivocally that the Belo Monte hydroelectric will exploit the hydro energetic potential in areas occupied by indigenous people who will be directly affected by the construction and development of the project," Judge de Almeida wrote in his decision.
Today, as the auction proceeded in Brasilia, indigenous, environmental and social groups organized protests in more than nine cities in eight Brazilian states.
Thousands of people including indigenous people, the Brazilian Movement of Dam-Affected People, the Landless Workers Movement, and environmentalists are engaged in simultaneous protest actions in the state capitals of Fortaleza, Florianopolis, Porto Alegre, Porto Velho, Belo Horizonte, Belem, Campina Grande, and the city of Altamira.
Boatloads of indigenous people are arriving on the proposed dam site located on Pimental Island on the Xingu River's Big Bend to establish a permanent village to block dam construction.
In Belem, 700 local people occupied the offices of Electronorte. And near the town of Altamira, the Landless Workers Movement and the Movement of Dam-Affected People blockaded the TransAmazon Highway.
"The Lula government is clearly pressuring the courts to approve Belo Monte against the rights and interests of indigenous people and the local populations of the Xingu, and it's our lives at stake," said Sheyla Yakarepi Juruna of the Juruna people, who met with judges on Monday urging the President of the Appellate Court for Region 1, Jirair Meguerian, to uphold the injunction.
"Even so, the people affected by this dam are united and determined to stop the project, we will not give up this fight," Juruna said.
The Belo Monte controversy attracted worldwide attention earlier this month when "Avatar" director James Cameron and actors Sigourney Weaver and Joel David Moore visited the Volta Grande area of the Xingu River and joined protests by indigenous and locally affected populations in Brasilia against the dam project.
After that visit, Cameron wrote a letter to Brazilian President Lula in which he said, "I met with 80 leaders representing 13 different Indigenous communities that are directly or indirectly threatened by the dam in the Lower Xingu. These leaders had traveled for up to five days by boat to meet at an Arara village on the Volta Grande, and I was privileged to hear their concerns first hand."
"They deeply fear the impact this dam will have on their lives, and are certain that it will end their way of life. They are prepared to do whatever they can to fight the dam, including lay down their lives if necessary. It was a highly emotional meeting, and I felt compelled, from that moment on, to do what I could to prevent the dam from being built," Cameron wrote.
The Belo Monte dam will inundate over 500 square kilometers of land, and divert nearly the entire flow of the Xingu River through two artificial canals to the dam's powerhouse. This river diversion will leave indigenous and traditional communities along a 100 kilometer (60 mile) stretch of the Volta Grande without water, fish, or a means of river transport. Conservationists and indigenous communities fear that if the dam is built, the rainforests in this region would be completely destroyed.
"The violation of indigenous rights is a matter of national and international concern. Brazil doesn't need the Belo Monte Dam. By investing in energy efficiency Brazil could avoid the need for as many as 14 Belo Monte dams and save billions of dollars in the process. Belo Monte Dam just doesn't make sense," said Aviva Imhof, campaigns director of International Rivers, a nonprofit organization based in California.
Two consortia vied for the rights to build the project: Norte Energia, which includes the state-owned CHESF and eight private companies; and Belo Monte Energia, which includes the state-owned Eletrosul, in addition to five private companies, including mining giant Vale.
To build Belo Monte, the winning consortium would dig two canals that would involve moving more earth than was dug for the Panama Canal to divert water from the river to an artificial reservoir.
Atossa Soltani of Amazon Watch, who accompanied Cameron and the Avatar actors in Brazil, says if the river diversion takes place, the Big Bend or Volta Grande, home to the Paquicamba indigenous territory of the Juruna people and the Arara people, would be dried out, gravely affecting the livelihoods of indigenous and riverine families who depend on the water for subsistence.
In total, some 45,000 people are directly affected by the either flooding or diversion of the river.
International groups, such as Amazon Watch and International Rivers, support their counterparts in Brazilian civil society in pressuring the Brazilian government to suspend Belo Monte, as organizations and individuals around the world called local Brazilian embassies to protest the government's plan to build the project despite widespread violations of indigenous rights.
Financially, the conservationists say the Belo Monte Dam is a risky project, which will generate only 10 to 30 percent of its 11,233 megawatts installed capacity during the dry season, and an annual average of 4,462 MW.
To make the project viable in a context of financial uncertainties and pressure from private investors to lower the auction's price ceiling, the government has had to draw from public pension funds and issue US$4 billion of credit from the public Brazilian National Development Bank.
The conservationists warn that to meet the project's 11,233 MW generating capacity, additional costly dams would need to be built further upstream, "threatening a vast area of tropical rainforests and affecting many of the 24 indigenous groups along the Xingu River."
(NaturalNews) Mainstream health care isn't based on "health" or "caring." It's actually based on an engrained system of medical mythology that's practiced -- and defended -- by those who profit from the continuation of sickness and disease. This system of medical mythology might also simply be called "lies", and today I'm sharing with NaturalNews readers the top ten lies that are still followed and promoted under mainstream health care in America today.
Lie #1) Vaccines make you healthy
Vaccines have emerged as the greatest and most insidious mythology yet fabricated by western medicine. The idea that vaccines protect you from infectious disease is blatantly false in the long term because this year's flu shot actually makes you more susceptible to next year's influenza (http://www.naturalnews.com/028538_s...).
On top of that, even the theoretical short-term effectiveness of vaccines is dwarfed by the far more effective protection offered by vitamin D and other immune-modulating nutrients. (http://www.naturalnews.com/027385_V...)
Lie #2) Pharmaceuticals prevent disease
The big push by Big Pharma is now focused on treating healthy people with drugs as if pharmaceuticals were nutrients that could somehow prevent disease. This is the new push with cholesterol drugs: Give 'em to everyone, whether they have high cholesterol or not!
But pharmaceuticals don't prevent disease, and medications are not vitamins. Your body has no biological need for any pharmaceuticals at all. People who believe they need pharmaceuticals have simply been the victims of "fabricated consent" engineered by Big Pharma's clever advertising and P.R. spin.
Lie #3) Doctors are experts in health
Doctors don't even study health; they study disease. Modern doctors are taught virtually nothing about nutrition, wellness or disease prevention. Expecting a doctor to guide you on health issues is sort of like expecting your accountant to pilot a jet airliner -- it's simply not something he or she has ever been trained in.
That's not to say doctors aren't intelligent people. Most of them have high IQs. But even a genius can't teach you something they know nothing about.
Lie #4) You have no role in your own healing
Doctors, drug companies and health authorities all want you to believe that your health is determined by their interventions. If you believe them, you have virtually no role in your own health or healing -- it's all managed by their drugs, their screening, their surgeries and their interventions.
Lie #5) Disease is a matter of bad luck or bad genes
Western medicine wants you to believe in the mythology of spontaneous disease -- disease that strikes without cause. This is equivalent to saying that disease is some sort of voodoo black magic and that patients have no way to prevent disease through their own diets or lifestyle choices.
It's funny, actually: Western medicine claims to be driven by scientific, rational thinking, and yet the entire industry still fails to acknowledge that chronic disease always has a cause and that most of the time, that cause has everything to do with nutritional deficiencies, exposure to toxic chemicals and a lack of exercise.
Disease is almost never a matter of bad luck or bad genes.
Lie #6) Screening equals prevention
Western medicine doesn't believe in disease prevention. Rather, the industry believes in screening while calling it prevention. But screening isn't prevention by even the wildest stretch of the imagination. In fact, virtually all the popular screening methodologies actually promote diseases.
Mammography, for example, emits so much radiation that it causes breast cancer in tens of thousands of women each year (http://www.naturalnews.com/027558_m...). Imaging dyes used in radiological scans can cause horrific side effects, and psychiatric "disorder" screening is little more than a thinly-disguised patient recruitment scheme disguised as medicine.
Real prevention of disease must involve disease prevention through nutrition, patient education about the causes of disease and lifelong changes in eating habits. Yet western medicine teaches absolutely none of these things. Heck, it doesn't even believe in such ideas.
Lie #7) Health insurance will keep you healthy
This is a favorite lie of those who recently pushed for the Big Pharma-sponsored health care reform that has swept across America. The lie supposes that merely having health insurance will provide some sort of magical protection against disease. But in reality, health insurance doesn't make you healthy! It is only YOU and your choices about foods, exposures to toxic chemicals, pursuit of exercise and time in nature that can make you healthy.
Health insurance is, in effect, a wager that you will get sick. How does gambling on your sickness provide any protection whatsoever for your health? It doesn't. Personally, I'd rather bet on health than sickness, and the way to do that is to invest in nutritional supplements, organic produce, superfoods, physical fitness and non-toxic personal care products.
Lie #8) Hospitals are places of health and healing
If you want to stay healthy or get healthy, a hospital is the very last place you want to find yourself: They are unhappy, unhealthy places that are infested with antibiotic-resistant superbugs. Hospitals usually serve disease-promoting foods and lack health-enhancing sunlight, and potentially deadly mistakes with pharmaceuticals or surgical procedures now appear to be frighteningly common in U.S. hospitals.
Certainly, emergency rooms in hospitals play an important role in urgent care for injuries and accidents -- and emergency room physicians do an amazing job saving lives -- but for people with chronic, degenerative disease, a hospital is a very dangerous place to be. Unless you really need immediate critical care, try to avoid hospitals.
Lie #9) Conventional medicine is "advanced" state-of-the-art medicine
Even though doctors and health authorities try to pass off western medicine as being "advanced" or "modern," the whole system is actually pathetically outdated and stuck in the germ theory of disease. Western medicine has yet to even acknowledge the role of nutrition in preventing disease -- something that has been scientifically documented for at least the last several decades. Western medicine fails to acknowledge mind-body medicine and hilariously believes the mind plays virtually no role in healing.
Neither does western medicine acknowledge the bio energy field of living systems, nor that organ transplants carry memories, nor that living food is qualitatively different from dead food. Seriously: Conventional doctors still believe that dead food is exactly the same as living food! (And the USDA food pyramid still makes no distinction between the two...)
"Modern" medicine isn't so modern, it turns out. It is, in fact, hopelessly outdated and desperately needs to upgrade its approach to health and wellness if it hopes to survive the next hundred years.
Lie #10) More research is needed to find "cures"
This lie is especially hilarious because western medicine does not believe in any "cure" for any disease. They aren't even looking for cures! This lie has been repeated since the 1960's, when cancer scientists claimed they were only a few years away from curing cancer. Today, four decades later, can you think of a single major disease that western medicine has cured? There aren't any.
That's because drug companies make money from sick people, not cured people. A patient cured is a patient lost. It is far more profitable to keep patients sick and pretend to "manage" their disease through a lifetime of pharmaceuticals. So when drug companies and disease non-profits claim to be searching for a "cure," what they're really doing is taking your money to fund more drug research to patent more medications that don't actually cure anything.
Remember this the next time you're asked to donate to some search for "the cure." The cures already exist in nutrition, herbal remedies and naturopathic medicine, but Big Pharma and the conventional medicine cartel isn't interested in real cures -- they only want to promote the idea of a cure while pumping patients full of drugs that don't cure anything.
Beyond the ten lies
When it comes to western health care, there are more than 10 lies, of course, but these big 10 lies are perhaps the most relevant to your own health decisions. By avoiding being suckered in by these lies, you can take charge of your own health and avoid the health care scam by staying healthy!
Staying healthy isn't as difficult as you think, and it doesn't require health insurance or disease screening. It only requires making informed, intelligent decisions about what to eat, what to put on your skin and how to get more sunshine and physical exercise. Once you do these basic things, you'll find that you are no longer held victim by a western medicine health care system based on lies and outdated medical mythology.
It's time for a revolution in medicine... a revolution that finally advances past the mental roadblock of a system of medical mythology stuck in the 1940's. Don't get me wrong, 1940's medicine was great in the 1940's. But this is no longer the 1940's, and the germ theory of disease is hopelessly outdated when it comes to the primary diseases that are striking the population today. Yet the profiteers of our dishonest, outmoded health care system are doing everything in their power to keep us all stranded in the past, a past based on treating the body like a chemical battleground and attacking every disease with a patented pharmaceutical.
That whole approach to health care is so far outdated that it's hilarious it can still be pushed with a straight face. No wonder doctors only spend an average of two minutes with patients these days. That's the limit of how long they can hold their faces without breaking out in laughter at how stupid this whole "treat the symptoms and forget the causes" approach to health care really is. Even they know it! That's why most doctors actually eat superfoods and take vitamins themselves, even if they never dare suggest it to patients.
True fact: It is illegal in every U.S. state for a doctor to recommend any vitamin, nutrient or food for the prevention or treatment of any disease. Doing so can cause a doctor to have his medical license permanently revoked. How crazy and outdated is that?
Monday, April 19, 2010
I just discovered on The Dreamcast Junkyard blog spot that the brand new, independently developed, Sega Dreamcast game - Rush Rush Rally Racing has completely sold out on Play-Asia.com. The only copies that are left for purchase there are the deluxe limited edition sets.
I couldn't help feeling that this is very reminiscent of another independently developed Sega Dreamcast game from 2009 called Wind & Water Puzzle battles. This game also sold out at Play-Asia.com on it's first print. What this means to me and I assume many others as well is that there is a very healthy Sega Dreamcast fan base out around the world that refuses to allow the little white wonder to go quietly into the night. It truly moves me that there are so many great people out there that share the same amount of respect for older consoles and independent developers. I for one am sick and tired of seeing newer games that are all flash and cut scenes but contain little to no entertainment value.
As I stated in my previous posts about Retro-Gaming, I believe wholeheartedly that gamers young and old are rebelling against the status quo, the social norm, and the established paradigm. I feel that more and more gamers will break free from this expensive and wasteful treadmill and go on to spend their cash and time on games that are actually fun and require some kind of skill to beat.
(NaturalNews) Did you ever wonder how health insurance companies drum up future business? It's easy: Just invest in companies whose products cause chronic degenerative disease, driving people towards more health care needs and therefore more health insurance.
And that's exactly what the health insurance industry is doing. A new article published in the American Journal of Public Health reveals that U.S. and Canadian health insurance giants own nearly $2 billion worth of stock in fast food giants like McDonald's, Burger King, KFC, Taco Bell and others.
So profits made by health insurance companies are reinvested in industries that make people sick and diseased, bringing them back to buy more health insurance down the road. It's a pretty clever business model for an industry that seems focused on the almighty dollar and obviously has no concern whatsoever for the actual health status of its customers. If anything, these health insurance companies hope you get sicker!
Corporate conspiracy to keep you sick and diseased
These unholy alliances among corporate giants that conspire to keep you sick are more common than you think. In addition to health insurance companies owning billions of dollars worth of shares in fast food companies, pharmaceutical companies now own major shares of popular vitamin companies -- the ones that produce the cheap, useless chemical vitamin supplements sold at places like Wal-Mart and Walgreens.
Investors in the mainstream media are some of the same companies that own medical imaging equipment manufactures that produce mammography machines and CT scans, too. And did you know that the American Dental Association owns patents on materials used in mercury fillings, which is one of the reasons why the ADA continues to push for installing toxic mercury into the mouths of children? (http://pnwf.org/Dentistry_Mercury_C...)
This ownership of fast food companies by the health insurance corporate giants demonstrates a deeply disturbing fact about the entire sick-care industry: It really is about profits rather than health. If they can make an extra buck feeding you the very junk foods that are causing cancer, heart disease, diabetes and strokes, they will absolutely jump on that profit bandwagon no matter what the cost in human lives, pain and suffering.
The bigger picture: What are YOU invested in?
There's an even bigger story to all this, by the way. While it seems altogether contradictory that health insurance companies would invest in fast food chains, the disturbing truth is that many institutional investors hold billions of dollars worth of shares in pharmaceutical companies. Your very own mutual funds may hold large positions in Big Pharma. Even your employer may be investing your pension funds in vaccine-pushing corporations.
Right now might be a good time, in fact, to review whatever investments you might have and make sure you're not inadvertently investing in the types of corporations whose actions you oppose.
Personally, I don't have a single dime invested in any drug company, oil company, junk food company or fast food chain. I prefer to focus on "green" investments that support the things I believe in: Renewable energy, nutrition companies, etc. Did you know that Cyanotech, the Hawaii company that makes spirulina, is a public company? You can actually own stock in Cyanotech (I don't, but only because I don't want a conflict of interest when I write about them). Vitacost.com is also a public company, as are many companies in the natural products space.
If you own mutual fund shares, you might be surprised to find out where your money is being invested. You actually have to research it a bit to find out where these mutual funds redirect your money. Most of them invest in Big Pharma in one way or another.
Remember that every dollar pumped into the pharmaceutical industry is another dollar that will be used to further expand the medical enslavement of the population through vaccines, medications, chemotherapy and other dangerous chemical treatments. The best way to protect the health of future generations is to starve Big Pharma of investment dollars and revenue by refusing to buy their products or stock shares.
Friday, April 9, 2010
ARLINGTON, Virginia, April 8, 2010 (ENS) - Millions of sea turtles are thought to have died over the past 20 years because they were caught accidentally in fishing nets or snagged on longlines, according to the first ever global study of unintended capture on marine turtle populations.
Unintended capture of non-target species, called bycatch, happens when fisheries use gear such as longlines with thousands of baited hooks, or nets that kill animals other than those they are intended to catch.
As a result, six of the world's seven species of marine turtles now are categorized as Vulnerable, Endangered, or Critically Endangered on the authoritative Red List of Threatened Species complied by the International Union for the Conservation of Nature, IUCN.
They are loggerheads, leatherbacks, hawksbills, olive ridleys, Kemp's Ridleys and green sea turtles. The conservation status of the seventh marine turtle species, the flatback, endemic to Australia, is currently unclear due to lack of data.
These ancient species, believed to have become distinct from all other turtles at least 110 million years ago, are now being wiped out by irresponsible fishing practices, the study shows.
(NaturalNews) Proposed updates to the Diagnostic and Statistical Manual of Mental Disorders (DSM) are prompting many to question whether or not the psychiatric profession itself has gone crazy. The latest additions to the alleged "mentally ill" could include hoarders, people who get angry every now and again, lazy people, and even those who get outraged over things like sex and violence on television.
Since its first publication back in 1952, the DSM has grown exponentially larger with each subsequent edition. Many people are lambasting the American Psychiatric Association (APA) for trying to establish virtually all behavior as some sort of mental disorder that should be treated with psychiatric drugs.
"For this latest revision they've set up a special task force to decide if behaviors like bitterness, extreme shopping or overuse of the internet should be included," explained Professor Christopher Lane to a reporter from the the U.K.'s Daily Mail. "The science underlying all this is very shaky to non-existent."
Dr. David Kupfer, chairman of the APA's special task force, has come out in defense of the additions. He claims that each one is grounded in science, despite the fact that no biological markers can definitely identify any of the additions as actual disorders. In order to identify things like excessive shopping and extreme laziness as mental disorders, the team will simply call them as such and provide a description of the each one's symptoms.
If the additions themselves are not loony enough, the APA is actually recommending the inclusion of what it calls "risk syndromes", or early warning signs that could lead to one of its supposed mental disorders. By catching these "risk syndromes" early, doctors can begin prescribing medication for conditions that people do not even have.
The entire DSM charade is a ploy to characterize an ever-increasing segment of the population as being "sick" and in need of pharmaceutical drugs. There can be no variations in personality and individual characteristics; if a person does not live, think, and react in prescribed fashion, then he or she is sick and in need of treatment, according to the APA.
The latest DSM draft, which is set to be published in 2013, has already been posted on the internet for public viewing. Since being posted, there has been widespread outcry against many of the proposed additions. It remains to be seen what will be included in the final edition and whether or not people will continue to take the DSM and the APA seriously.