CRISIS COVERAGE REPORT
BAILOUTS, MERGERS, CORRUPTION
EXTENDED BREAKDOWN ANALYSIS

* Critical Tidbits
* Gulf Strongarm Legal Tactics
* Gulf Oil Rig Mechanics
* Gulf of Mexico Ecosystem Ruin
* Gulf Disaster Speculation
* Tame Financial Regulation Reform


HAT TRICK LETTER
Issue #76
Jim Willie CB, 
“the Golden Jackass”
14 July 2010

 

"This debt is like a cancer. It is truly going to destroy the country from within." Erskine Bowles (former White House Chief of Staff in Clinton Admin)

"Greetings from the decaying and dying City of London where the trained eye can witness the end of 300 years of Anglo global domination. They will not let go without a fight so the fight is being carried to them in full force." -- Banker & Consultant

"The definition of insanity is doing the same thing over and over again and expecting different results." -- Albert Einstein (who never knew Greenspan, Rubin, Dimon, or Geithner)

CRITICAL TIDBITS

◄$$$ BANKERS ARE PART OF THE USDOLLAR DEFENSE. PARADIGM SHIFT IS A PART OF THE CURRENCY WARS IN A LATE STAGE, THE REJECTION PHASE. JESSE BOLDLY ADDS MEAT TO MY CLAIM THAT THE USDOLLAR IS DEFENDED BY MILITARY MIGHT, NOT ONLY ECONOMIC POWER. HE EXPECTS THE AMERICAN BANKSTERS TO BECOME FUGITIVES FROM JUSTICE, AND FOR THE DEATHS TO BEGIN. $$$

The Paradigm Shift has not stopped or been de-railed, only gone quiet. Let Jesse speak his words, since they are so pointed and well focused. His views on the edge of radical, but almost all events in the last two or three years have been extremely extreme. He wrote, "As I noted last year, the [IMF] Special Drawing Right recalibration would be a focal point for the BRIC's to attempt to dislodge the dollar hegemony. The US and UK are fighting it with their bag of financial tricks. This is why Obama refused to touch the gangs of New York in his so-called reforms. The big banks and hedge funds are as much an instrument of US foreign policy as is its military. Europe is learning this lesson, and it is taking measures to protect itself. This is part of the long range forecast, and is known as the Currency Wars. I will not be surprised at all if in the next ten years certain US officials and those who claim to have been acting on its behalf, merely following orders, become fugitives from justice. But there may be some suicides and tragic airplane accidents among the weaker links first, if things get dodgy. And of course the usual scapegoats, fall guys and patsies." See the Cafe Americain article (CLICK HERE). My best European banker source has repeated his expectation that in due time, a Nuremberg type trial of Western bankers, in particular the American and British bankers, will occur on European soil. The International Court in the Hague is actively pursuing justice right now. He has seen arrest warrant lists by Interpol. Delivery of such warrants is where the battles will be explosive. Timing is everything. How about at a Davos Meeting??


◄$$$ A TITANIC STRUGGLE IS TIED TO THE PARADIGM SHIFT AWAY FROM THE USDOLLAR SPECIFICALLY AND FIAT CURRENCY GENERALLY. NEW YORK AND LONDON ARE TO SLIDE INTO OBSCURITY AND BACKWATERS, WHICH SOME APTLY DESCRIBE AS MOVING TOWARD THE THIRD WORLD. $$$

A global banker with heavy gold and international consulting experience shared a note recently that was chilling. It speaks to the Paradigm Shift, the displacement of the USDollar, and the slide from grace that has befallen New York and London. Profound bond fraud was their calling card, and USDollar rejection will be their wages. The revisited Tale of Two Cities recognizes them no longer as power centers, but of fraud centers, where desperate market manipulation continues to the end. The deep source wrote from London, whose changes are perceived by him over time. He wrote, "They can slice and dice it whichever way they like. However, someday before long their corrupted financial system will inevitably collapse since the entire system is about to implode. The current power struggle that goes on at the highest level is unprecedented. The gloves are off and no prisoners are being taken. Paradigm change at its finest, as the plugs on the holograms are being pulled that will only allow those to survive and succeed who have a well honed inner compass and absolutely no dependences on any one group. The art of using power is that everyone at the table knows you have power but no one really wants to find out how much and what happens to him/her once you decide to direct your power against them. There are only a very few who are battling it out and each player in that battle knows that he/she might not belong to those who will survive. If looked at from a sportive point of view, one can even see an entertaining aspect to it all. Greetings from the decaying and dying City of London, where the trained eye can witness the end of 300 years of Anglo global domination. They will not let go without a fight. So the fight is being carried to them in full force. Once all is said and done, the City of London is ready to become a subsidiary of Disney Corporation. Be strong, be safe, be prepared, and you will come out on top."

This adept insightful and well-placed contact implies the survival path involves exiting debt and investing in gold & silver, even platinum. He has consistently advocated this path for the full three years of our contact. His Disney comment is a usual barb, of being more a carefully crafted movie production than a subset of reality. My rejoinder is to prepare for shocking events as the United States and the monarchy in England that spawned a feisty but tethered colony both enter the Third World. Nasty events will occur much like tumbling down, or being tossed down, the staircase into the dark cellar. England never lost control of the United States, but rather maintained it via the US central bank and JPMorgan, the giant bank. The US has been either tied at the hip, or controlled by puppet strings, by the older UK bankers more experienced in brinksmanship. The nations will share the same fate.

◄$$$ AFGHAN BALES OF CASH ARE LEAVING THE NATION. THE STORY MAKES AN ABSOLUTELY MOCKERY OF THE WAR. THE STORY RECEIVES NO FOLLOW THROUGH ON COVERAGE IN THE UNITED STATES, BESIDES THE ORIGINAL BREAKING NEWS. ACTIONS BY AFGHANY LEADERS ARE NOT CENTRAL TO THE OBJECTIVE OF THE WAR, NAMELY NARCOTICS. THE ENTIRE THEATER IS OUT OF CONTROL. THE INTRIGUING RESPONSE WILL COME FROM THE USCONGRESS THAT FUNDS THE TRAVESTY. THEY ARE OUTRAGED, BUT WATCH HOW HELPLESS THEY ARE. IT IS NOT THEIR WAR. THEY ONLY PAY THE COSTS. $$$

The Wall Street Journal broke the story, and the Der Spiegel filled in more details about the corrupt Afghan leaders. Massive amounts of cash are leaving the capital of Kabul, much heading for Dubai in the Persian Gulf. In the summer of 2009, the international security company Global Strategies Group assumed duties for providing security at Kabul's airport. Its submitted reports on money transfers were sent to the Afghan domestic intelligence service until September, after which time senior local officials no longer desired them. One key question in my mind is whether the cash is counterfeit, from the handy CIA templates stolen straight from the USDept Treasury. Maybe not, maybe just crisp uncirculated bills from CIA 'Walking Around Money' useful in greasing the palms of Afghan government officials. This story is so ugly. It is worse than any Fannie Mae fraud story, or Wall Street extortion of TARP Funds, except the amounts are much smaller from bales of cash than electronic entries of hundreds of $billions known to WashingtonDC. One can conclude that the USGovt exported freedom to the tiny war-torn country located strategically between Pakistan and Iran. Its leaders sold out their country every bit as much as the US leaders sold out theirs. The Afghan leaders in charge have decided to leave town with a lot of money, probably bribery money or shared narcotics profits. USGovt money management is worse than a crime syndicate, since it laces in corruption with poor cost control. If truth be told, vast sums, much greater sums of money have left the United States to foreign accounts by USGovt and Wall Street officials via wire transfers. An eerie parallel is in occurrence.

USGovt politicians have temporarily cut off aid to the Afghan government. That is a start, but let's see if any follow through occurs. The corruption in Afghanistan is unspeakable. Heck, it matches that of the United States, except the smaller nation cannot conceal it so effectively. The money is being siphoned as formerly secretive shipments out of Kabul to the United Arab Emirates by well-connected Afghans. Word has it that they are buying luxury villas in Dubai, but surely the Persian Gulf banks will swell a bit. Some USCongressional members expressed outrage, when they should be flogged for ignorance, blindness, and gullibility for over eight years since the Great Narcotics Monopoly War was launched. Anger hides their shame.

Brigadier General Mohammed Asif Jabarkhel operates the security checkpoint with airport customs inspections at Kabul Intl Airport. All of his many attempts to stop this cash flight have failed, despite the efforts. He admits honestly, "Of course I know what is going on here. But in this country, who is allowed to speak the truth? The central bank has reached an agreement with the government that makes these kinds of transfers supposedly legal. And whenever we try to look into where the money is coming from, pressure comes from the very top. A couple phone calls are made, and the person [loaded with cash] can carry on." Well, the same goes for the US, where truthers are mocked, whistle blowers are fired, organized groups are attacked as unpatriotic, and troublesome insider bank officials are suicided. Jabarkhel has been helpless to halt the huge amounts of money regularly being secreted out of Afghanistan by plane in boxes and suitcases. The cash smuggling has taken place during the last three years, a strong signal that either Afghan leaders believe the war with the Taliban is a useless endeavor or these same leaders would rather live the good life with beach views, martinis, an entertainment budget, and a better diet, like a glimpse of the other side from planet earth. According to some estimates, at least $3 billion (=2.4 billion Euros) in cash has been airlifted from the country. Bank wire transfers are not a common option used. The identified destination for these funds has been reported to be Dubai. No justification for the volume makes any sense except siphoned US war funds, given the tiny Afghan GDP of $13.5 billion. Sometimes American observers who have been wise to the corruption in both nations all this time simply respond with "I told you so" or react with more dismay or hope for termination of funds or perhaps basic disgust of a broken nation, ours.

Since the war began in 2001, complete with false blame that the Taliban were accomplices in the World Trade Tower attacks, the United States alone has invested almost $300 billion in military and reconstruction. Minimal progress has occurred, as a significant portion of the million$ meant for reconstructive efforts were siphoned off, just like in Iraq. Those who benefit from the USGovt funds are clearly the Afghan leaders, their families, their friends, their bankers, and anyone else useful in continuing the game. Names are not important. Come one, come all. To find an honest Afghan leader might be as diffucult as finding a virgin in a Turkish brothel, or an honest investment banker on Wall Street. The estimated $3 billion in exiting funds is probably a gross under-estimate. Important politicians and business executives can take advantage of the airport's special VIP area without being searched before boarding. Any suspected improper baggage loaded to the gills with cash caught by customs officials usually suffers only a mild delay, enough for timely action by a connected official, like a quick visit, a phone call, or a bribe. The fortunes gained often have come to people related to members of the government, who have access to the those in charge, those dealing with the USMilitary and the US contractors. They typically use the hawala method of transaction, an Islamic tradition for transfers based on honor and faith, not receipts and invoices. Tracing the money is impossible. The parallel again is painfully evident with the US narcotics smuggling, done by CIA incoming flights that do not require customs checks, and often by numerous defense contractors using the same bypass procedures, in both the United States sites and NATO airbases.

US politicians have responded, at least a reasonable initial action. A panel approved a freeze on the $3.9 billion in aid for the Afghan Govt within the 2011 USGovt budget. Nita Lowey serves as chair of the foreign aid appropriations subcommittee to the US House of Representatives. She said angrily, "I do not intend to appropriate one more dime for assistance to Afghanistan until I have confidence that US taxpayer money is not being abused to line the pockets of corrupt Afghan government officials, drug lords and terrorists." Expect her to receive assurances from the Pentagon soon, with additional calls from the CIA and National Security Council. If that fails to thaw the freeze, Lowey should expect to lose her post, lose her Congressional seat, or lose her life. Maybe she will be caught red handed with child pornography on her work computer, or resign suddenl, or be the subject of a smear campaign during the re-election process. Others in the way of progress, like the CFO of Freddie Mac, have decided to accept assistance in suicide. With $350 to $370 billion in annual profits from the Afghan narcotics sources, far too much profit will be abandoned without telltale syndicate responses, a combination of violence and subtle pressure. See the Spiegel article (CLICK HERE) and the Wall Street Journal article (CLICK HERE).

GULF STRONGARM LEGAL TACTICS

◄$$$ THE VENERABLE US SENATE HAS ATTEMPTED TO SHIELD THE CORPORATION FROM LIABILITY RISK. AS USUAL, THE USCONGRESS IS BEHOLDEN TO CORPORATIONS, NOT THE CITIZENS. $$$

As a preface to the coverage of the BP oil volcano and the consequent destruction of the Gulf of Mexico from toxic agents of myriad sources, consider the actions of the USCongress. Before the July Fourth weekend, an unreported maneuver in the US Senate took place, designed to protect British Petroleum and the USGovt from liability in the Gulf disaster. It apparently did not succeed. See the gutsy feisty BrassCheckTV video (CLICK HERE).

◄$$$ HARMED GULF WORKERS CAN HAVE BENEFITS SLASHED IF THEY REFUSE TO WORK FOR BRITISH PETROLEUM. SIGN UP OR SUFFER!! B.P. FOUND A FEDERAL LOOPHOLE FOR DEVIOUS USAGE. $$$

Whistleblower news reveals that relief payments from affected workers to the Gulf oil clean-up project are to be be slashed if the fishermen refuse to work for BP. The same applies to other professions with wrecked businesses. It is all very legal. The giant oil firm, the great offender, BP will deduct money from individual payments on claims for lost income if the claimant refuses to work in assisting the spill response. Gulf resident Kindra Arnesen has converted to whistleblower and full-time activist. Reading from a letter received from BP, she quoted the company's line which wrote "BP will continue its efforts to pay legitimate claims for losses incurred due to the Deepwater Horizon incident. However, federal law clearly provides for adjustments for all income resulting from the incident, all income from alternative employment or businesses undertaken [...] and potential income from alternative employment or businesses not undertaken but reasonably available." BP actually reduces claims by income taken from non-BP sources, even is small, a devious ploy. In other words, if you are a fisherman who was put out of work by BP and you do not elect to work in their employ, but you still file a claim for losses over the Deepwater Horizon disaster, that claim could be significantly less than the actual damages incurred. All because a different minimal job was taken instead. See the Raw Story article (CLICK HERE).

Grotesque distortions and deceptions are being committed by British Petroleum. The Truth in Gold website has a running commentary on details of value. One person made the following statement. He said, "As for the Gulf oil situation. I was chatting with a friend who is originally from New Orleans today, and she said that her people down there are saying that everything being reported about the BP effort is complete BullShxx. She said that no claims are being paid, and BP seems to be going to minimal effort and expense to work on cleaning the mess. She said they told her not to believe anything being reported in the media about BP's efforts, that it is a total media whitewash. She was recently in Pensacola Florida and said the beaches are getting decimated with oil, and that the oil is now hitting the beaches further east of Pensacola." It would seem reasonable that putting out a steady stream of television public relations advertisements would be illegal, some sort of misrepresentation, fiduciary failure, or financial fraud case. See the Truth in Gold website (CLICK HERE).

◄$$$ BRITISH PETROLEUM SECURITY IS DIRECTED AGAINST PHOTOGRAPHERS, WHICH CARRIES A $40K FINE AND/OR JAIL TIME. THE FIRST AMENDMENT HAS BEEN OVERRIDED FOR PUBLIC SAFETY REASONS. MINIMUM DISTANCES MUST BE MAINTAINED, AND ACTUAL TAKING OF PHOTOS HAS BEEN DECLARED ILLEGAL BY EXECUTIVE DECREE. REACTION HAS BEEN TAME SO FAR, EXCEPT FOR C.N.N. REPORTER ANDERSON COOPER. $$$

The World Socialist Website has revealed a shocking development. The First Amendment has been apparently altered by some executive decree. Journalists who willfully defy the White House order to stay clear of the oil blob, spill, slick, and marshes, beaches, and coastline could be prosecuted as Class D felons and face up to five years in prison and a $40,000 fine. Refer to the recently instituted Beyond First Amendment, where freedom of the press now carries a heavy fine and/or incarceration. The transparent motive for the decree alleges and professes to protect the safety of clean-up workers, when in reality it is intended to prevent the population from viewing the devastation caused by the BP oil blowout and being properly warned about health risks. The White House is worried that clean-up workers might reveal something about the dangerous conditions under which they work and the real scale of the environmental devastation. True to syndicate tactics, British Petroleum has imposed a gag order, but with unclear authority. Perhaps hundreds, maybe even thousands of workers have become sick from exposure to oil and toxic dispersants. They surely, not possibly, will face a lifetime of chronic ailments. Independent Claims Facility administrator Kenneth Feinberg has declared that BP's $20 billion dollar settlement fund will be off limits to the large segments of the public, such as businesses in the tourism industry, fishermen who operate on a cash basis, and Gulf coast homeowners whose property values will plunge. The company propaganda is just that, intended to shape public opinion and distort reality.

MSNBC reported a case of arrest threats to a photographer standing on public property. Consider it a casualty to the news blackout decree, administered under the cloak of safety. A photographer taking pictures of a BP refinery in Texas was detained by a BP security official, by local police, and by a man from the USDept Homeland Security. The story was originally cited by ProPublica, a non-profit US news organization. The photographer, Lance Rosenfield, said he was stopped after arriving in Texas City to work on a story in collaboration between Public Broadcast System (PBS) and ProPublica. Rosenfield was released after officials looked through the pictures he had taken and took down his date of birth, Social Security number, and other personal information. The information was turned over to the BP security guard who claimed standard procedure. Rosenfield, a Texas-based freelance photographer, said he was followed by a BP employee after taking a picture on a public road near the refinery, and then cornered by two police cars at a gas station. The officials told Rosenfield they had the right to look at the pictures taken near the refinery and if he did not comply he would be taken in (threat of arrest). See the World Socialist Website article (CLICK HERE). The person who took this photo is subject to arrest and fines. All these workers will likely be dead before year 2020, maybe much sooner!!

The Pensacola Daily Reveille offered a glimpse of the economic damage. Fewer people have been willing to spend their summers at the beach. Cancellations have come in waves, with similar damage as the waves of ocean water mixed with toxic agents. One hundred cancellations were made in the city in the second week of the spill, according to a local hotelier. Schroeder reported that on June 10th, the day the first tar balls hit the beaches, another 1000 cancellations struck. The telephones have stayed ominously silent as new reservations have dried up. He said, "It is pretty safe to say about 75% of our reservations that have been on the books are gone. Some condos and hotels are 100 percent cancelled." Here is where the blackout decree comes in. The newspaper wrote, "Yet it is becoming increasingly impossible to actually witness this, since as we reported, there is now a legally imposted distance barrier of 65 feet between any reporter and locations with oil booms, which are rapidly becoming virtually all. And not 24 hours after first reporting on this, did some reporter already find just how serious the administration is in withholding this brand new rule."

So British Petroleum and the Obama Admin have replaced the First Amendment, or re-written it, altering it for modern day application in a fascist state. They have imposed a $40,000 fine and Class D felony for violations. From CNN, Anderson Cooper decided to shine a bright light on the situation, if not the oil blobs. He reported from New Orleans, "The Coast Guard today announced new rules keeping photographers, reporters, and anyone else from coming within 65 feet of any response vessel or booms, out on the water or on beaches. In order to get closer, you need to get direct permission from the Coast Guard captain of the Port of New Orleans. Shots of oil on beaches with booms... stay 65 feet away. Pictures of oil soaked booms uselessly laying in the water because they have not been collected like they should. You cannot get close enough to see that. And believe me, that is out there. But you only know that if you get close to it, and now you cannot without permission. Violators could face a fine of $40,000 and class D felony charges. The Coast Guard tried to make the exclusion zone 300 feet before s caling it down to 65 feet.... We [the press] are not the enemy here, those of us down here trying to accurately show what is happening down here, we are not the enemy. If we cannot show what is happening, warts and all, no one will see what is happening, and that makes it very easy to hide failure and hide incompetence." Cooper does not mention the necessary warning about health risks to the people, even to the clean-up workers. See the Zero Hedge article (CLICK HERE).

Cooper needs to wake up. The people are the enemy to the ruling elite, whose bankers are the visible part of the syndicate. The press working in public interest are even greater enemies. The Jackass long ago saw a national deterioration, an economic death experience, an inevitable march to the Third World, complete with the attendant chaos, coming way back in January 2007, and got the hell out. The sequence of events is not very surprising. What people are witnessing is a combination of national breakdown toward systemic failure, wreckage caused by corruption & mismanagement, gutting the system by certain leaders, some crossfire between global adversaries, and possibly some examples of parasites killing the host. The intense light of the press will not be held back. Enter zoom lenses, hidden cameras, and anonymous reporting, even YouTube exposures, which the USGovt and BP will not be able to stop. The Jackass is not advocating it, only expecting it.

GULF OIL RIG MECHANICS

◄$$$ BP PLEDGES TO STOP THE OIL VOLCANO BY END JULY, BUT THE DAMAGE IS PROFOUND TO THE DEEPLY BURIED CASING STRUCTURE. BESIDES, THE LEAKS ARE COUNTLESS IN A 5 TO 10 MILE RADIUS ALL ALONG THE SEABED FLOOR. THAT IS EVIDENCE OF THE BROKEN CASING ITSELF, DEEP IN THE EARTH CRUST. $$$

Embattled British energy giant BP has promised loosely to stop the leaking Gulf oil well by July 27th, ahead of its earlier target of mid-August. That is the due date to report Q2 earnings, complete with interviews granted to investors. They live in a fantasy land. The head of BP Gulf Coast restoration unit Bob Dudley told the Wall Street Journal, "In a perfect world with no interruptions, it is possible to be ready to stop the well between July 20 and July 27." He hedged with mention of the approaching hurricane season, giving himself an excuse. The WSJournal said BP was laying a series of backup plans in case its current operations go awry. It gets worse. Citing company and Obama Admin officials, the journal reported on a BP plan to connect the rogue well to existing pipelines in two nearby underwater oil & gas fields. In my non-expert view, that wouuld put the neighboring pipelines at risk of breakdown as well, as a major expansion of the leak. The enormous pressures on the broken pipes must be contained before any possible connections can be securely made. That is not engineering, but common sense. Think about a broken street fire hydrant being connected to neighborhood pipelines. Any connection of a pipeline out of control to another would quickly apply stress to the other pipeline. See the UK Telegraph article (CLICK HERE)

◄$$$ THE INTERIOR STRUCTURE OF THE SUBMERGED OIL WELL CASING HAS BEEN DESTROYED. IT DID NOT JUST CRACK. IT EXPLODED AND SHATTERED THE ENTIRE UPWARD STRUCTURE FROM DEEP UNDER THE SEABED FLOOR IN THE EARTH CRUST. $$$

The USDept Energy has confirmed that segments of the BP Deepwater Horizon oil well casing were violently ejected upwards into the Blowout Preventer. The explosion originated from deep within the structure, like over a mile beneath the seafloor, as a methane bubble rose and was ignited. Hence, experts acknowledge what the public has not been told. The entire leaking structure cannot be capped, cannot be stopped from leaking, since the damage is enormous and deep down. The casing is a thick metal tube, subjected to great pressure. When broken beneath the seafloor, the leak disseminates in all directions at many different depths, and under great pressure. It is, plainly stated, far out of control and not repairable. Imagine a fire hose spewing water all around, with people trying to grip the nozzle, attempting to contain the water, but the entire length of the thick hose has numerous torn parts in it. Oil industry expert Matt Simmons has warned for several weeks that the well casing was destroyed by the initial explosion at the Deepwater Horizon rig. Few wished to listen, as BP deceived with press announcement after press announcement of a stupid Top Hat followed by a series of cockamamey plans, all of which accomplished zippo, zero, nothing, nada. Simmons has been ridiculed, since evidence of broken well casing had not been spotted on the seafloor. At the same time, the industry has been complaining about extreme challenges at such great depth, where it is dark, pressure is huge, and maneuverability is near nil. The USDept Energy has endorsed the view of Simmons about a destroyed well casing structure, thus championing his view. Exonerate is a strong word, since not charged with anything but frigthening people. In today's world in the United States, telling the truth about bad situations earns attacks and ridicule.

Here are some details reported by the Los Angeles Times, with comments interjected. The Energy Dept, using gamma ray imaging equipment and other sophisticated tools, detected not one but two drill pipes, side by side, inside the wreckage of the broken Blowout Preventer stuck on the bottom of the Gulf of Mexico. BP officials said it was impossible, but they are both corrupt and morons, the most criminally involved and most incompetent in the industry, with an established track record. BP used a single pipe in the drill site, which is unwise given the depths and pressures (both water pressure and energy deposit pressure). The Deepwater Horizon rig bored 13,000 feet below the ocean floor, with pipe segments attached end to end. When the wreckage was cut to install a containment cap this month, they found two pipes. The discovery implies immediately that the force of the explosion from the depths below, based upon methane, contained such energy with such violence on April 20th that it sent pipe segments hurtling into the blowout preventer, like derailing freight cars twisting the locomotive. Energy Secretary Steven Chu is working overtime to determine what exactly happened, so that capping efforts can be more effectively carried out. The BP clowns and USGovt sponsors are groping in the dark, as the massive leak continues.

A BP insider has sent a message through the internet to the public, which contains some honest assessment, or more graphic depiction of the disaster. The anonymous person wrote, "BP has opened up Pandora's Box on the seafloor one mile deep. It has no chance whatsoever of containing the situation and bringing this disaster (of their making) under control. The well pressure at MC252 is in the region of 30,000 psi (pounds per square inch) and the oil industry does not have the knowhow and technology to deal with blowouts under this pressure 20,000 feet below the seabed. This oil and gas will leak for months and possibly years. There are hundreds of millions of barrels of oil and enormous quantities of methane in this field. BP Plc is finished. They have no political friends in Washington and their cash pockets are not deep enough for the bills they will have to pay. This is especially true for the clean-up costs after a hurricane covers the whole area with oil and poison rain. This is only a matter of time before we see this happen." The latest BP development is the supposedly successful placement this week of a truly gigantic cap over the well head leak. They are attempting to stop the leak and recover the oil. However, given the condition of the explosion site, the area probably has 100 to 500 spots where leaks are seeping through and exiting the seafloor in a 5 to 10 mile radius. My belief is that BP efforts are futile and a waste of time and hope. Later on, BP will likely try to lay blame on other oil rigs, not theirs.

GULF OF MEXICO ECOSYSTEM RUIN

◄$$$ PORTIONS OF THE GREAT OIL GLOB HAVE BEEN SPOTTED OFF THE NORTH CAROLINA COAST ON THE ATLANTIC SIDE. WITNESS THE GREATEST CONTAMINATION CASE AND COLLUSION TO COVER UP IN NATIONAL HISTORY. $$$

ROFFS Oil Tracking shows the BP Gulf combination oil blob, oily pools, and oil slick traveling up the entire east coast of Florida. Be careful though, since it caught photographing it, you might be arrested. Alexander Higgins runs an intrepid weblog. He wrote, "I recently wrote that oil from the BP Gulf Oil Spill may be as far north as North Carolina, based on satellite data and reports of oil off the Florida keys reported June 9th by a University of South Florida professor. The Federal Government however appears to be complacent with continuing to hide the location of the spill from the public. The misleading of the public about the safety of public beaches and the location of the oil is even causing an uproar by local Florida residents." Failure to warn the public exposes them to nasty health risks without preparation. See the Alexander Higgins weblog article (CLICK HERE).


◄$$$ ALMOST ALL EXXON VALDEZ CREW MEMBERS IN CHARGE OF CLEAN-UP ON ALASKAN SHORES FROM 1989 ARE DEAD. ALMOST ALL EXXON VALDEZ CLEAN-UP WORKERS DIED IN THE FOLLOWING FEW YEARS AFTER DOING THE DIRTY WORK, FROM HEAVY EXPOSURE TO TOXICITY. B.P. CLEAN-UP WORKERS ALREADY ARE MADE VERY SICK. SOME WILL DIE SOON. $$$

Last month in the interest of balance, a positive element was reported in the Crisis Coverage Report. The Corexit short 28-day half life might not be much consolation, since they are still spraying it into the Gulf, thus replenishing it rapidly. The methane and other poisonous gases might be the worse threat. The Exxon Valdez oil wreck on the Alaskan shores occurred in March 1989. Its story is long, twisted, devious, ugly, complete with murder, reversed court awards, ruined businesses, and ruined lives. Be sure that the workers probably signed waivers to eliminate compensation from the risk accepted. Many scientists have warned of the many health dangers from this oil spill, even without a toxic dispersant added to the mix. CNN has dutifully reported that the vast majority of those who worked to clean up the Exxon Valdez oil spill in Alaska are now dead. To repeat, almost all of them are dead. More details, an expert on CNN cited that the life expectancy for those who worked to clean up the Exxon Valdez oil spill is only about 51 years. Considering the fact that the oil spill in the Gulf of Mexico is 30 times more extensive than the Exxon Valdez disaster, the clean-up crew will surely suffer perhaps thousands of deaths. Workers made sick are being replaced by new workers. The linked article shows an absolutely stunning news clip from CNN. Beware of any participation. This is why evacuation plans might be the next course before the general public is affected, apart from the clean-up crews.

The facts are horrible. The Gulf of Mexico has turned into a Toxic Soup of crude oil, methane, benzene, hydrogen sulfide, other toxic gases, and poisonous chemical dispersants such as Corexit 9500. To be sure, some health damage has been seen already, but the reality is that the true health toll of this oil spill will not be known for decades. See the Business Insider article (CLICK HERE) and the YouTube video (CLICK HERE). Some news items reported:

  • Already, a large number of workers cleaning up the BP oil disaster in the Gulf of Mexico report that they are suffering from flu-like symptoms.
  • According to another new report, exposure to the oil disaster in the Gulf of Mexico has resulted in 162 cases of illnesses reported to the Louisiana state health department.
  • In addition, according to one local Pensacola news source, "Some 400 people have sought medical care for upper or lower respiratory problems, headaches, nausea, and eye irritation after trips to Escambia County beaches."

◄$$$ BP OIL VOLCANO SPILL CONTAINS TOXIC AGENTS FOUND IN THE ECOSYSTEM ALREADY. THE MAIN CULPRIT IS PROPYLENE GLYCOL (SIMILAR TO CAR ANTI-FREEZE). MARINE LIFE WILL VANISH SOON FROM AN ASSORTMENT OF POISON AND TOXIC LEVELS OF GASES. $$$

A motivated citizen James C Fox has provides a contribution on the toxic agents to the Gulf of Mexico. In his own words, "Oil and water samples were taken from both the Shores of Grand Isle and from 20 miles out [from the Louisiana coast]. The preliminary analysis was done at an academic analytical chemistry laboratory. Looking for the likely pollutants from the deep water Horizon Oil spill. It was focused on the detection of benzene and propylene glycol. Benzene and other highly toxic contaminants were very low. However, the concentration of propylene glycol was between 360 and 440 parts per million. Just 25 parts per million is know to kill most fish and propylene glycol is just one of many ingredients found in Corexit. In short, the Gulf is being poisoned by BP's usage of the dispersants even after the EPA asked them to stop back in May. We are willing to provide ANY respected known laboratory these samples or provide them with more. This is very serious to all people and marine life in and around the Gulf." The account here does not even mention the toxic threat to marine life from methane, which the Crisis Coverage Report mentioned last month. Cox should be careful, since he might risk arrest and stiff fines for his efforts. See the Zero Hedge article (CLICK HERE).

◄$$$ COREXIT IS A VERY NASTY CHEMICAL INTRODUCED BROADLY INTO THE GULF COAST ECOSYSTEM WITH FULL KNOWLEDGE OF ITS TOXIC POTENTIAL, WITH CLEAR INTENTION, EVEN AGAINST USGOVT URGING. THE CHEMICAL HAS INCREDIBLY HARMFUL EFFECTS TO THE HUMAN BODY. $$$

Toxicologists have pitched in to provide details on the effects of Corexit to the human body, or any other creature with cellular structures for that matter. Corexit not only disperses the oil in water, it disperses and penetrates the entire human body thoroughly. It causes a rupture of red blood cells, and causes internal bleeding. It even goes so far as to allow crude oil to penetrate into the cells and every internal organ. Two toxicologists have come forward to claim that Corexit is much more harmful to human health and marine life than we have been told. Gulf toxicologist Dr Susan Shaw, Founder and Director of the Marine Environmental Research Institute, examined the chemicals present. Reporting to CNN, she talked about shrimpers throwing their nets into water. Water is then splashed onto the fishermen's skin. One man experienced a headache that lasted three weeks, complete with heart palpitations, muscle spasms, and bleeding from the rectum. She explained how Corexit ruptures red blood cells, causes internal bleeding, and results in liver and kidney damage. She said, "Corexit is very toxic and goes right through skin. The reason this is so toxic is that these solvents [from dispersant] that penetrate the skin of anything that is going through the dispersed oil takes the oil into the cells, takes the oil into the organs& This stuff is toxic to every organ system in the body."

In a similar message, marine biologist and toxicologist Dr Chris Pincetich, who has an extensive background in testing the affects of chemicals on fish, says that Corexit disrupts cell membranes. He accuses the EPA toxicity testing for Corexit to be woefully inadequate, since EPA testing for mortality usually only requires a 96-hour time frame. His doctoral research found that fish that were alive at 96 hours after exposure to pesticide were dead at the two week mark, yet the EPA concluded the chemicals were considered non-lethal for the purposes of the test. Shaw and Pincetich are wildlife conservationists. The industry scientists working for Exxon and the manufacturer of Corexit itself admit that the stuff is toxic. They had better be careful for possible arrest and stiff fines, the reward for their warnings and work. See the Washington Blog article (CLICK HERE).

## GULF DISASTER SPECULATION

◄$$$ MANY OUTRAGEOUS THEORIES HAVE BEEN FLOATED, WITH MUCH SUSPICION, GUESSWORK, AND RAISED THEORIES. SIMPLY CONSIDER A NUMBER OF THEORIES. SOME WILD THEORIES MIGHT HAVE SOME REALITY AND SUBSTANCE BEHIND THEM. A COMPLICATED STORY MIGHT SOMEDAY BE TOLD, DEPENDING UPON THE DIRECTION OF THE NATION. IT MIGHT BE HARD TO BELIEVE THE EXPLOSION AND CONTAMINATION IS NOT CONNECTED TO OTHER GLOBAL EVENTS AND FACTORS. $$$

As preface, my personal view is not important, and besides, my opinions and suspicions will not be elaborated upon on this extremely dangerous topic. The entire story is a tragedy, and it contains much hidden intrigue, for sure. Maybe my views are biased, having been threatened twice, once by USGovt security agency and another by a European banker. My list of taboo high risk topics grows. Here are several theories, almost all of which place the United States Southern Gulf Coast as victim or squarely within the crossfire. All will be couched as possible explanations, with no evidence offered. Just thinking out loud, so to speak. Readers are free to do research, discuss with friends, and think for themselves.

A) A few months ago, the release by Great Britain of the Lockerbie bomber enraged many people. The prisoner was from Libya, convicted of the crime that killed all 243 passengers and 16 crew members. Since that time, British Petroleum signed a significant contract with Libyan leader Qaddafi for extensive off-shore oil drilling from the Libyan coast. The entire sequence sparked anger, perhaps enough to cause a response against BP. Qaddafi has many enemies.

B) British Petroleum is a major oil product supplier to Iran, a nation with many enemies. Halliburton was known to be on the Deepwater Horizon oil rig platform hours before its explosion, even with men not looking like oil roughneck workers. Halliburton has been charged with countless criminal violations in Iraq, seemingly a willing partner in crime if the incentive is present. Afterwards, Iranian supplies of gasoline and diesel have turned acutely low, a development more effective than sanctions.

C) With all the downward price pressures on assets and commodities, Big Oil interests had a motive to attempt to prevent the crude oil from heading much lower. The oil price descended from a $140 per barrel down to $35 after the Wall Street death experience in late 2008 and early 2009. If the entire Gulf of Mexico oil drilling is halted, and all output halted, then support for the crude oil price comes. All Gulf of Mexico oil rigs are currently shut down, even those compliant with safety regulations. The oil price has been closer to $80 per barrel in recent weeks than to $70. Oil company profits are out of danger.

D) In last month's Hat Trick Letter report, the theory was explained on exploitation of a crisis to bring about political change. The Obama Admin is determined to win passage of the lunatic Cap & Trade legislation that taxes carbon emissions and requires costly home inspection stickers. Whether advocates caused the oil rig explosion or simply exploit the situation as effect in its wake, that is unknown.

E) With contamination of beaches, shorelines, and marshes, business is shattered and workers are idle. The negativity public sentiment is thick from the general public against BP specifically, and maybe against oil companies generally. Timing is ripe to make a national turn of direction away from petroleum, an American mainstay prevalent and strong for 50 years. The entire sentiment can be turned to provide a catapult for renewal energy initiatives, its acceptance, and funding. Check the largest investors in green technology.

F) The USDept Interior licensing process is extraordinarily careless. The Bush-Cheney team loosened requirements for off-shore drilling in the Gulf of Mexico. Many projects and processes were fast tracked. Safety regulations and satisfaction of them were routinely run roughshod, ignoring the process. In fact, several licenses have been granted by the same inept team at Interior, even after the explosion and massive leak from the Deepwater Horizon rig.

G) The rivalry between US oil firms and the British national oil firm has been growing. An unclear agenda by US oil firms could be to wreck the British oil firm. They could conceivably seize the BP Americas assets, shift the liability to the broken USGovt debt structure, and declare victory. The steps would be complicated, but Wall Street firms might offer their expertise, for a fee. Some US oil service firms are at the heart of the syndicate with deep criminal motives. Relations between the two nations have been strained ever since the Wall Street death experience, coupled with a London bank death experience. The usual cooperation is no longer evident. The UKGovt has a new ruling coalition, after the reluctant Bush Ally departed, namely Gordon Brown. The loyalty of David Cameron might be very unclear, even adversarial. Tony Blair was much more a Bush Ally, a partner in numerous shady enterprises.

H) The HAARP weapons have come into the alternative news sources with a notable splash. They are blamed by some for causing certain earthquakes, maybe even the greater earthquake and tsunami that struck Indonesia and Thailand in 2005. The HAARP telltale signal is an earthquake 5 to 10 kilometers below the earth's surface. The earthquake in Haiti aroused more suspicions, since the Caribbean is not a zone with tremor history. Some acquaintances met a group of Saudis last week, who contend that the formed oil volcano was caused by the USMilitary, and BP is more a fall guy than a perpetrator. The Deepwater Horizon rig site is loaded with fields of discarded antiquated weapons.

People should not expect justice to prevail. Whether accidental from negligence, or the site of a planned explosion, we will probably never know. The important objective is to stop the massive leak. A better objective would be to remove BP from any responsible position to repair the Blowout Preventer or clean up the gulf, even the beaches. They are incompetent. The goal should be to halt the process underway, which appears to be toward extermination of the Southern Shores. BP Americas will never survive. Its assets will surely be seized. The next bond offering will expose a mortal wound, and make clear its death. Besides, the seized assets will not come close to covering the clean-up costs, the lawsuits, and fines. Courts will be full of BP claims for a decade, maybe longer.

Perhaps diabolical sinister forces conspired to wreck the Gulf of Mexico in order to cripple the USEconomy. A combination of negligence, criminal behavior, market profit potential, and powerful enemies make for a deadly mix. The perpetrators might be inside the US leadership and corporate leadership, the very real Fascist Business Model at work. Their goal might be martial law, as second stage to 911 in a grand plan. Evacuation of the Gulf Coast could be the initial exercise of the martial law advocates. The United States has been the host for a few key parasites whose names are best not mentioned. The primary frauds and gutting of the national finances are nearly finished, like the Wall Street bond fraud, the housing wreckage, and the Black Holes officially adopted (Fannie Mae & AIG). The usual course of action, the deep pathogenesis, is for the parasite to kill the host. Given the extreme lack of global popularity of the USMilitary, some foreign parties see a means to dislodge the military from its powerful perch by snuffing out the USEconomy. The USGovt is incapable of prosecuting grand criminals near the helm. Foreign forces might be at work. Lastly, never to be overlooked, the Greenspan tenure was all about ruin of the United States in my opinion. He took two paychecks, one from Swiss bankers.

◄$$$ RELOCATION & EVACUATION PLANS OF THE GULF COAST AND COASTAL FLORIDA ARE IN PLACE, AGREED UPON. THE DESTINATIONS MIGHT INCLUDE CANADA. LARGE SECTIONS OF THE GULF COAST WILL SOON BECOME UNINHABITABLE. THE COASTAL ECONOMY WILL DEGRADE INTO A WRECK ZONE. THE SUPPORT SYSTEMS FOR FOOD & SUPPLIES ARE TO FACE RUIN ALSO. RAIN WATER WILL CONTAMINATE MUCH OF THE LAND ECOSYSTEMS, BUT THE NEXT HURRICANE WILL ESCALATE THE DAMAGE. $$$

At least two different sources inform about concrete plans to relocate a few million people from the Gulf Coast states, maybe over ten million people. One came from a fellow with USMilitary experience and connections. Another came from a Canadian fellow with connections to their government, who has a solid friend who attended one of the USGovt meetings with Canadian officials. At least these are contingency plans. Americans living on the coasts along Louisiana, Mississippi, Alabama, and Florida might soon find their environment uninhabitable and their local economies a total wreck. They will go north, some perhaps to Canada. The Atlantic coast has yet to report ecosystem and economic destruction. That comes next, but to a smaller degree of damage.

In some places, birds are falling dead from the sky, marshland creatures are dying in droves, and rain water has created yellow spots on crops inland. Clean-up crew workers are sick by the dozens. The toxic rain from oil and dispersant is hitting the land. The devastation process is proceeding. News censorship cannot succeed, but will be attempted. A hurricane is inevitable eventually. With a hurricane or without one, the Gulf Coast ecosystem is under siege and at great risk of becoming uninhabitable. At the same time, the hotels and coastal workers are shut down. The Gulf Coast economy is under siege also, as ghost towns should be expected to develop.

◄$$$ A NATIONAL TRAGEDY IS UNFOLDING. THE DECISION TO USE COREXIT IN MY VIEW INDICATES A MOTIVE TO KILL THE COASTAL ECOSYSTEM AND ECONOMY WITH PREMEDITATION. $$$

In my view, the really important critical clue was widespread usage of the Corexit oil dispersant. Its usage proved they did NOT want to collect the oil with skimmer vessels effectively. Its usage proved they wanted INSTEAD for the oil to remain below the water surface, where it would kill marine life. Its usage proved their goal was contamination of the water system, both sea and airborne. Their excuse was to prevent oil from hitting the shore, which was certain to happen with or without a dispersant. Toxic rain is already falling on the coastal areas, killing the ground level green life. The toxic rain will render great harm to farm land and crop output, much more to come. The food supply from fish, crustaceans, and farm crops will be contaminated. People will die from eating such food. Rivers and tributaries are soon to close for all vessels since they contain oil on the hulls. Cities & towns are soon to close down electricity generators since water intakes contain oil. Any hurricane activity will turn a nightmare into a national tragedy. Much more to this story, to be left for conjecture. As with Watergate, follow the money, like stock investments, shorting activity, and communications before the Deepwater Horizon explosion. Any serious investigation will find certain Wall Street firms and certain Major Oil Service firms in a position to exploit the situation, BEFORE it occurred. Some of my opinion will be kept private, not shared. One thing is clear, that the Southern coastline is taking on firm Third World traits, and USGovt officials resemble Third World leaders in their official negligent response.

TAME FINANCIAL REGULATION REFORM

◄$$$ FINREG DISAPPOINTS, LARGELY RETAINING POWER TO THE BANKERS. NUMEROUS AGENCIES AND COMMISSIONS ARE TO BE CREATED. MOST WILL QUICKLY BECOME SUBSERVIENT TO THE WALL STREET FIRMS AND THEIR DOMINANT SYNDICATE. SOME POSITIVES COME FOR WATCHDOGS AND CONSUMER ADVOCACY. A MORE CYNICAL VIEW WOULD CONCLUDE THAT FINREG IS DEAD, AS IS ENTIRE REFORM MOVEMENT. $$$

Overhaul of financial regulation has swept the land. It is safe to say that the big banks and the US Federal Reserve indeed dodged a series of bullets, as compromises were struck, and surely backroom haggling come with strong illicit pressures. The new legislation to overhaul financial regulation will help limit to some extent risk-taking and improve capital buffers. Lending will be curtailed, but it should be, since so reckless in the past. Be sure to know that the new regulations will NOT fundamentally reshape Wall Street firms or prevent another crisis. The fraud kings are still in charge, and the lunatic asset bubbles will continue to appear. The bill did nothing to prevent 0% credit for the system, where the elite have the best access. This is the primary cause for the asset bubbles & busts cycle. The endless House and Senate conferences completed compomises and diluted provisions from the tougher preceding versions like an earlier Senate Bill, limiting rather than prohibiting the ability of federally insured banks to trade derivatives and invest in hedge funds or private equity funds. The USFed will not be subjected to the harsh light of monetary decision disclosures, nor a steady stream of independent financial audits. Limits will be placed on potentially risky activities such as proprietary trading and Over-The-Counter derivatives. Regulators will carry new powers to seize and wind down large, complex institutions if needed. But the Liquidation Power can also be used to eliminate Wall Street rivals, and eliminate big firms that attempt to reveal Wall Street criminal activity. Vast abuse of this power has been created, something to watch closely. The overhaul will do nothing to reduce the size of banks deemed Too Big To Fail. The overhaul will do nothing to force disclosure of criminal bond fraud with multiple players in collusion. The outcome is far from satisfying, accomplishes a few objectives, but gives the criminal banking syndicate a reprieve.

Dean Baker from the Center for Economic & Policy Research put it best. He said, "[The legislation is] largely a fig leaf. Given where we were when this process was started, I would have to imagine the Wall Street firms are pretty happy." Benjamin Wallace is an analyst at Grimes & Co in Massachusetts. He said, "There is going to be some adaptation, but I do not think there is going to be any colossal impact. There is going to be a capital raise, but the analysis we have seen suggests we are talking in the pennies in terms of dilution [per share of big banks]." See the comprehensive Business Week article (CLICK HERE).

My view is that the heavily revised Financial Regulatory Bill is 75% of what was anticipated on my end. Almost no power was removed from the Wall Street firms. Almost no tight scrutiny is given for USFed audits, although more sunlight will come inside, a start of the process. They did not touch Fannie Mae & AIG, only made rules to avoid creating new such monstrosities. The curve ball is limit to fuzzy proprietary trading, which Wall Street firms will manage to work around, lie through, and coerce a blind eye. They will rely upon offshore subsidiaries and mislabeled client accounts. It is amazing how the most important parts of the original plan were excluded, in bringing justice to major bond fraud by Wall Street firms working closely with the USFed, even collusion with credit agencies. This is a major victory for Wall Street and the financial syndicate.

◄$$$ FINANCIAL REGULATORY OVERHAUL HAS MANY PROVISIONS. ONE BY ONE, ITS CATEGORIES ARE SUMMARIZED. IT IS A DECENT REVIEW, HARDLY COMPLETE. $$$

VOLCKER RULE FUNCTIONAL SEPARATION

The so-called Volcker Rule was intended to prohibit the big banks from proprietary trading, but it was diluted and weakened in the end. Practicality met basic bank pressure in compromise. Some Wall Street firms have stated feebly that such trading cannot be separated from overall activity, which is nonsense. Banks will be allowed to invest in private equity and hedge funds. Limits have been placed at 3% of any individual target fund capital, and 3% of bank Tier 1 capital as investor. No return even remotely will come to the Glass-Steagall Act that separates banks, brokerage, and insurance. Volcker was shot down and over-ruled. Even his second volley was largely gutted.

OTC CREDIT DERIVATIVES

A regulatory structure for the $615 trillion of Over The Counter credit derivatives market has been established for the first time. Banks must push a portion of their Swaps trading into subsidiaries, in separation from depositary institutions. That way, access to the Federal Reserve discount lending window is limited. Banks will be able to maintain their trading operations so long as they are used to hedge risk or trade interest rate or foreign exchange swaps. Federally insured banks will be given up to two years to send Credit Default Swaps yet to clear off to a separately capitalized subsidiary. A gigantic bloat of CDSwaps have yet to clear after over a year. Most OTC derivatives will be sent through third party clearinghouses onto regulated exchanges or similar electronic systems, thus making them easier for regulators to track. Regulators also will be required to impose heightened capital requirements on companies with large swaps positions, and would be given the authority to limit the number of contracts a single trader can hold. Exceptions for the Big Four Cartel price control artisans are certain to be revealed in time, perhaps for national security reasons. See JPMorgan and Interest Rate Swaps that help manage the USTreasury Bond complex.

CONSUMER BUREAU

A Consumer Bureau will be created, a consumer financial protection outfit located at the USFed to police banks and financial services businesses for credit card and mortgage lending abuses. It will have independent authority though, led by a director appointed by the President and confirmed by the Senate. It will enforce those rules for banks and credit unions with more than $10 billion in assets. Credit card lenders might be required to reduce interest rates and fees. Mortgage lenders might be subject to stricter disclosures to borrowers about loan terms. Decisions by this bureau are subject to override by the new Financial Stability Oversight Council, should the panel identify any threatened safety, soundness, or stability of the US financial system.

CREDIT CARD MANAGEMENT

Credit cards and debit card fees would be put under the USFed for oversight. Interchange swipe fees paid by merchants would be limited. Retailers will be permitted to refuse credit cards for purchases under $10 and offer discounts based on the form of payment. New rules will be issued to permit merchants to route debit card transactions on more than one network, for increased competition. Majors like VISA and MASTERCARD set interchange rates and pass the money collected to card issuers including big banks. Interchange is the largest component of the fees US merchants pay to accept the two majors for debit cards. The fees totaled $19.7 billion and averaged 1.63% of each sale last year, according to the Nilson Report. Slightly different treatment come to debit cards, since they tap existing accounts and do not involve loans.

OVERSIGHT COUNCIL

The Financial Stability Oversight Council will be established as a super-regulator that will monitor Wall Street's largest firms and other market participants to spot and respond to emerging systemic risks. The USDept Treasury will lead the panel, which includes regulators from other agencies. Expect a Wall Street pedigree to occupy the post. The objective is to monitor the interconnection of highly leveraged financial firms. With a two thirds vote, the council can impose higher capital requirements on lenders or place broker dealers and hedge funds under the authority of the USFed. The council also will have authority to force companies to divest holdings if their structure poses a grave threat to US financial stability. Abuse is likely to become rampant as the council can liquidate any firm that poses a threat to the Wall Street syndicate, and cite any credible diversionary justification. The nine member council will include regulators from the USFed, Securities & Exchange Commission, Federal Housing Finance Agency, Commodity Futures Trading Commission, and other agencies. State securities, insurance, and banking regulators and credit unions won non-voting seats. The Federal Home Loan Banks system, a financing co-operative for mortgage lenders, is exempt.

BANK CAPITAL RULES

Bank capital rules will prohibit bank holding companies from keeping less capital than their bank subsidiaries. That will have an impact on the use of trust preferred securities, known as TruPS, but with a transition period for large firms and grandfathering of the securities for smaller lenders. The industry must in time replace TruPS with valid equity capital. Banks with assets of at least $15 billion will be given five years to replace TruPS with common stock or other securities that count as capital. Community banks that have raised cash through TruPS since year 2000 will be given 20 years to make the switch because most of the securities have 30 year maturities. Around $45 billion of the $150 billion in TruPS issued by US banks have been packaged into Collateralized Debt Obligations. TruPS will count toward equity when calculating capital ratios. Some bank officials expect lending to be restricted by as much as $1.5 trillion as result. US-based holding companies of overseas banks must comply to the same capital rules as domestic lenders.

US FEDERAL RESERVE LIMITATIONS

The US Federal Reserve will maintain broadened supervisory scope but be subject to the most transparency in its 96-year history. All claims of threats to its political autonomy and bank oversight powers were rejected. Rejections are based upon nothing but continued desired darkness to syndicate activity. Chairman Bernanke will have a seat on a newly created Financial Stability Oversight Council. That board will encharge the USFed to set tougher standards for disclosure, capital, and liquidity. The USFed must endure a one-time audit of emergency loans and other actions taken to combat the financial crisis since 2007. Much of the dirty evidence will be deleted or obscured. After a two year delay, firms will be identified that borrow through its Discount Window and participate in USFed purchases or sales of assets, such as mortgage bonds. No removal of the USFed's 1978 monetary shield will come from examinations of interest rate decisions. Fed governance will prohibit commercial banks from involvment in the selection of all 12 regional USFed chiefs.

CREDIT RATING AGENCIES

Credit rating agencies (Moodys, S&P, Fitch) will continue to choose the asset backed securities they wish to provide official ratings. Liability provision will continue to make it difficult to sue these agencies. Language redefined what investors must show to prevent the dismissal of a lawsuit against a credit rater. The SEC must conduct a two year study on whether to create a board to decide who rates asset backed securities. The regulators will be challenged to arrive at a better alternative. The SEC will be in charge of monitoring the fiduciary duty on brokers once the regulator completes a six month study, regarding conflict of interest declaration.

PRIVATE EQUITY FIRMS & LARGE HEDGE FUNDS

Private Equity firms and large hedge funds must register with the SEC, subjecting them to mandatory federal oversight for the first time. Their oversight will be more lenient than for banks. Venture capital funds were exempted from the registration rule, due to their enterprise risk role. The PE firms and hedge funds are subjected to periodic inspections by SEC examiners. Any firm with $150 million or more in assets will be covered by the law. Funds also must hire a chief compliance officer and set up policies to avoid conflicts of interest. They must report information to the SEC about their trades and portfolios for the purpose of assessing systemic risk posed by a private fund. All data will be kept confidential, but can be shared with the Financial Stability Oversight Council. Registration rule compliance might cost $500 million to the firms/funds in the first year, said Judith Gross of JG Advisory Services. Any fund that grows too large or is too risky would be placed under USFed supervision.

UNWIND OF FAILED FIRMS

Failed firms will continue to be unwound and liquidated by the FDIC. Their reach would now go beyond failed commercial banks, with full power to unwind large failing financial firms whose collapse would roil the economy. My ongoing suspicion is that the FDIC will be subject to Wall Street pressures to eliminate rivals, however. They have proven with past cozy asset deals with major Wall Street firms to act as their dedicated harlots. No protection exists for this criminal factor. If such authority existed in September 2008, then AIG and Lehman Brothers might have been unwound theoretically. A caveat though, since their unwound would have brought about the collapse of the US banking system. The costs of unwinding failing firms will be borne by the financial industry through fees imposed after a firm collapses. The bill explicitly bars the use of taxpayer funds to rescue failing financial companies.

RISK STAKE RETENTION

Lenders, with the exception of some mortgage providers, must maintain at least a 5% stake in debt they package or sell. The provision is designed to prevent loan origination in reckless fashion, only to ship off the tainted loan products to an unsuspecting investor. The rule will affect credit card debt, car loans, mortgages, and other securitized debt. Overall lending will be curtailed, but with better lending standards. Lenders must keep a stake in mortgages, an exception, which contain risky features like negative amortization, interest only payments, and balloon payments. Loans guaranteed by the Federal Housing Admin, the USDept Agriculture, and USDept Veterans Affairs also will be exempt from retaining risk.

INSURANCE INDUSTRY OVERSIGHT

A new Federal Insurance Office within the USDept Treasury will be created to monitor insurance firms. A study will come to issue recommendations toward further overhaul of industry regulations. Prevention of AIG meltdowns is the motive, from unchecked credit derivative counter-party acceptance in contracts. Insurers, regulated by states, must contend with a national watchdog. Great confusion is assured, between state insurance commissioners and federal oversight, with multiple officials involved. However, a national regulator may coordinate agreements with counterparts in other countries. And a national regulator can identify systemic risks. Of course, a national regulator can assist the Wall Street syndicate in covering up the insurance games with credit derivatives.

Thanks to the following for charts StockCharts,  Financial Times,  UK Independent,  Wall Street Journal,  Northern Trust,  Business Week,  Merrill Lynch,  Shadow Govt Statistics.