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Elliot Wave Theorists Claim Pandemics Always Happen In a Bear Market

Elliot Wave International has just written an article entitled "Swine Flu and Elliot Wave Analysis", claiming that pandemics only happen in bear markets.

Their theory seems to be that a downbeat social mood leads to both a bear market and susceptibility to disease.

I will leave it to the technical market analysts and the epidemiologists to decide whether the theory is right or wrong.

Note: At least some people have tried to blame the plague on the 1340 economic depression. U.S. Swine Flu Death Was of Mexican - Not U.S. - Resident

The sole person to die outside of Mexico of the swine flu was a resident of Mexico, not the U.S.

Specifically, the child was a Mexican citizen whose family was visiting relatives in the United States. "The family had traveled to South Texas. The child became ill and they transported the child to Houston for medical care," said a Houston health department official.

Authorities do not currently even know what part of Mexico the child was from.

I'm not sure why all of the deaths so far have been of Mexican residents, but this seems to be the case to date. Instead of Deleveraging, Companies are INCREASING Leverage, Putting the Economy at Heightened Risk

As I have repeatedly tried to point out, the problem is too much leverage, and what is needed to fix the economy is for the financial players to deleverage.

But instead of encouraging orderly deleveraging, the government has done everything it can to prop up and even increase leverage.

The Wall Street Journal has confirmed the problem in a new article:

Deleveraging? What deleveraging? Since the start of the credit crunch, corporate leverage has risen at a faster rate than it did at the peak of the boom, even as firms work hard to reduce borrowings. Companies that once embraced leverage in the name of shareholder value now find their debt piles balanced precariously on shrinking earnings. Absent a swift recovery, leverage is likely to rise even higher...

The picture is more worrying for companies where deleveraging should be the top priority: those bought by private-equity firms. For example, look at chip maker Freescale Semiconductor. When taken private in December 2006, it had leverage of just over 5 times, but relentless earnings pressure has pushed that figure ever higher. Analysts now forecast leverage will peak at more than 10 times earnings before interest, tax, depreciation and amortization, despite an exchange offer that cut debt by $1.9 billion.

Meanwhile, among the most aggressive European LBOs, leverage is standing still or rising, according to Fitch Ratings...

None of this bodes well for credit ratings. Even if total debt outstanding is stabilizing or falling in some cases, the ratings agencies focus on metrics such as asset-backing and interest cover. In the first quarter, Standard & Poor's downgraded 523 companies and upgraded just 38, giving a record downgrade ratio of 93%. That will make it harder for companies to refinance at attractive rates, leaving many running hard just to stand still.

Way to go Geithner, Bernanke and Summers. Instead of insisting that a couple of levels be taken off the top of the house of cards, you've encouraged the gamblers to add new, ever-flimsier layers. The Swine Flu Might Be Less Deadly Than the Average Winter Flu

The headlines have been scary.

For example, the headline from the Telegraph says:

"Swine flu: 'All of humanity under threat', WHO warns"

That sounds extremely dire, indeed.

And every new case of swine flu is being treated as a breaking news alert.

However, the World Health Organization quote was taken out of context. And science actually paints more a reassuring picture.

For example, as the Los Angeles times notes today:

Scientists studying the virus are coming to the consensus that this hybrid strain of influenza -- at least in its current form -- isn't shaping up to be as fatal as the strains that caused some previous pandemics.

In fact, the current outbreak of the H1N1 virus, which emerged in San Diego and southern Mexico late last month, may not even do as much damage as the run-of-the-mill flu outbreaks that occur each winter without much fanfare.

The LA Times goes on to provide useful detail:

Mounting preliminary evidence from genetics labs, epidemiology models and simple mathematics suggests that the worst-case scenarios are likely to be avoided in the current outbreak.

"This virus doesn't have anywhere near the capacity to kill like the 1918 virus," which claimed an estimated 50 million victims worldwide, said Richard Webby, a leading influenza virologist at St. Jude Children's Research Hospital in Memphis, Tenn...

"There are certain characteristics, molecular signatures, which this virus lacks," said Peter Palese, a microbiologist and influenza expert at Mt. Sinai Medical Center in New York. In particular, the swine flu lacks an amino acid that appears to increase the number of virus particles in the lungs and make the disease more deadly...

We expect to see more cases, more hospitalizations, and, unfortunately, we are likely to see more deaths from the outbreak," Health and Human Services Secretary Kathleen Sebelius told reporters Wednesday on her first day at work.

But certainly nothing that would dwarf a typical flu season. In the U.S., between 5% and 20% of the population becomes ill and 36,000 people die -- a mortality rate of between 0.24% and 0.96%...

And a pandemic doesn't necessarily have a high fatality rate...

Though scientists have begun to relax about the initial toll, they're considerably less comfortable when taking into account the fall flu season. They remain haunted by the experience of 1918, when the relatively mild first wave of flu was followed several months later by a more aggressive wave.

The longer the virus survives, the more chances it has to mutate into a deadlier form.

"If this virus keep going through our summer," Palese said, "I would be very concerned."

And while Vice President Biden advised people not to travel by plane or subway, the head of the CDC said such travel was safe:

"I think flying is safe. Going on the subway is safe. People should go out and live their lives," Richard Besser, acting director of the Centers for Disease Control and Prevention, told reporters.

"In terms of flights, if you have a fever and flu-like symptoms, you should not get on an airplane," he said.

But Besser added that officials involved in public health "should put in context what the risk is."

The bottom line is that while this flu is certainly spreading worldwide, and many folks will likely catch it - in the same way that many catch the normal flu every winter.

The real question is how dangerous it is.

While it could mutate into something extremely lethal, right now it is fairly mild.

Note: Precautions, such as frequent hand-washing, should certainly be undertaken. And studies note that Vitamin D can help ward off flus or reduce their severity. There is also some evidence that certain probiotics do the same. Does Goldman Sachs Run the Government?

Everyone agrees that Goldman Sachs pretty much runs the government's economic and financial agencies.

As the New York Times explained last October in a must-read 4 page article, the presence of Goldman Sachs alumni in virtually all of the top government financial posts is so great that their team is dubbed "Government Sachs":

Indeed, Goldman’s presence in the [Treasury] department and around the federal response to the financial crisis is so ubiquitous that other bankers and competitors have given the star-studded firm a new nickname: Government Sachs.

The Times points out that Goldman alums include:

And there are many more Goldman alums who have been - or are soon to be - appointed. For example, Obama has named Gary Gensler to head the Commodity Futures Trading Commission. And Geithner named Mark Patterson as his top aide last January

As Glenn Greenwald writes today:

Here is just one random item this week announcing a couple of standard personnel moves:

Goldman Sachs' new top lobbyist was recently the top staffer to Rep. Barney Frank, D-Mass., on the House Financial Services Committee chaired by Frank. Michael Paese, a registered lobbyist for the Securities Industries and Financial Markets Association since he left Frank's committee in September, will join Goldman as director of government affairs, a role held last year by former Tom Daschle intimate, Mark Patterson, now the chief of staff at the Treasury Department. This is not Paese's first swing through the Wall Street-Congress revolving door: he previously worked at JP Morgan and Mercantile Bankshares, and in between served as senior minority counsel at the Financial Services Committee.

So: Paese went from Chairman Frank's office to be the top lobbyist at Goldman, and shortly before that, Goldman dispatched Paese's predecessor, close Tom Daschle associate Mark Patterson, to be Chief of Staff to Treasury Secretary Tim Geithner, himself a protege of former Goldman CEO Robert Rubin and a virtually wholly owned subsidiary of the banking industry. That's all part of what Desmond Lachman -- American Enterprise Institute fellow, former chief emerging market strategist at Salomon Smith Barney and top IMF official (no socialist he) -- recently described as "Goldman Sachs's seeming lock on high-level U.S. Treasury jobs."

And the Independent wrote last July:

The New York Times columnist David Brooks noted that Goldman Sachs employees have given more money to Barack Obama's campaign for president than workers of any other employer in the US. "Over the past few years, people from Goldman Sachs have assumed control over large parts of the federal government," Brooks noted grimly. "Over the next few they might just take over the whole darn thing."

In March, Geithner was questioned by Congresswoman Maxine Waters about the appearance of conflict of interest by Goldman Sachs insiders:

"I am just asking the questions," Waters said, "because the talk is...that this small group of decision makers at the center of it is Goldman Sachs and that's what's causing a lot of the distrust, because people are thinking or believing that Goldman Sachs, because of the connections, have had a lot to do with the decisions that are being made."

Geithner responded: "I think it's deeply unfair to the people who are part of these decisions to suggest that they were making judgments that in their view were not in the best interest of the American people."

What is interesting is that Geithner did not deny that Goldman players were at the center of the government's financial decisions, only that their decisions were not bad ones.

So has Government Sachs made selfless decisions for the benefit of the American people? Or has it engaged in some self-dealing?

Well, as Time magazine notes:

Among the biggest beneficiaries of the AIG pass-through, at $12.9 billion, was Goldman Sachs, the investment-banking house that has been the single largest supplier of financial talent to the government. Critics have been quick to note — and not favorably — the almost uncanny influence of former Goldman executives. Initial phases of the rescue were orchestrated by ex–Goldman chairman Hank Paulson, who was recruited as Treasury Secretary in part by former White House chief of staff and Goldman senior exec Josh Bolten. Goldman's current boss, Lloyd Blankfein, was invited to participate in meetings with the Fed. AIG's Liddy is a former Goldman director and an ex-CEO of Allstate. Another alum, Mark Patterson, once a Goldman lobbyist, serves as chief of staff at the Treasury, while Neel Kashkari, who runs TARP, was a Goldman vice president.

Goldman has repeatedly declared that its exposure to AIG was "immaterial" and fully hedged. But some rivals point to the fact that Goldman had uncharacteristically piled into contracts with a single counterparty. "I am shocked that Goldman had this much exposure [with AIG]," says an analyst at a competing bank. "This was a major failing, but they got bailed."

Goldman got bailed twice: first on its CDS exposure and a second time, to the tune of $4.8 billion, for another AIG fiasco, losses on its securities-lending business.

Indeed, Goldman's current CEO, Lloyd C. Blankfein, apparently participated in several of the important meetings determining which companies the government would save and which would fail.

And Marketwatch columnist Paul Farrell literally says that Goldman "rules the world":

"Obama's victory and Geithner's appointment are the completion of Goldman's meticulously crafted plan to become a superpower. The firm now has the clout to impose its will on the financial markets, and the world."

GOP or Dems? Conservatives or liberals? It doesn't matter. We'll all controlled by "The [Goldman] Conspiracy." So why not surrender, let them have the power? The truth is, through their lobbyists and surrogates in Washington, they already rule America.

(and he said it again here).

Indeed, Goldman's influence reaches abroad, as well. For example, the head of the World Bank, Robert Zoellick, was formerly Goldman's managing director. See also this.

The New York post also claims that Goldman is gaming the stock market.

And Rolling Stone has shown that Goldman gamed the oil market as well. 
Spanish Judge Opens NEW Torture Investigation of BIGGER Fish

The Spanish Judge who went after Pinochet has opened a new torture investigation of bigger fish.

The first one was just against the lawyers who wrote torture memos.

The new one includes Cheney, Rice and perhaps other leading authors of the torture policy.

At least someone still thinks the rule of law should be upheld. Update on Swine Flu

Contrary to wide-spread initial reports that the swine flu included bird, pig and human flu strains, doctors are now saying that the flu is solely made up from 2 strains of pig flu.

And while earlier reports put the number of confirmed cases in Mexico well above 100, the World Health Organization (WHO) is now giving the following update, revising the number of cases in Mexico sharply downwards:

As of 18:00 GMT, 29 April 2009, nine countries have officially reported 148 cases of swine influenza A/H1N1 infection. The United States Government has reported 91 laboratory confirmed human cases, with one death. Mexico has reported 26 confirmed human cases of infection including seven deaths.

The following countries have reported laboratory confirmed cases with no deaths - Austria (1), Canada (13), Germany (3), Israel (2), New Zealand (3), Spain (4) and the United Kingdom (5).

WHO advises no restriction of regular travel or closure of borders.

That's too good news.

The bad news is that - from what a doctor tells me - it appears that the horse is already out of the barn, the flu really is spreading worldwide, and there is no way to stop its spread.

Obama has said that schools where any children have confirmed infections may need to be closed temporarily. And it should be obvious that WHO will declare it a pandemic within the next day or so.

Here is a current list of swine flu cases by states (in the U.S.), and here is the latest official health guidance. Larry Summers is a Big Fat Idiot

Many people inside the Washington beltway - including, unfortunately, President Obama - think that Larry Summers is a genius.

Of course, Summers was one of the people most responsible for gutting the Depression-era banking laws which helped protect our economy, allowing the big financial institutions to speculate and gamble using insane amounts of leverage, and insisting that toxic derivatives be left completely unregulated.

Arianna Huffington, Naomi Klein and others have argued that - even if smart - his ideas are toxic.

But Friday, Summers proved that he's really not that smart. On Friday, Summers basically said we should continue to do the exact same things which got us into this mess because:

All crises must end. The “self-equilibrating” nature of the economy will ultimately prevail, although that may take massive one-off government actions. Such a crisis happens only ”three or four times” per century, so taking on huge amounts of government debt is fine; implicitly, we will grow out of that debt burden.

Um . . . sorry to break it to you there Larry, but a group of economics professors has recently demolished the "self-equilibrating economy" theory:

The implicit view behind standard models is that markets and economies are inherently stable and that they only temporarily get off track. The majority of economists thus failed to warn policy makers about the threatening system crisis and ignored the work of those who did. ...

The confinement of macroeconomics to models of stable states that are perturbed by limited external shocks and that neglect the intrinsic recurrent boom-and-bust dynamics of our economic system is remarkable. After all, worldwide financial and economic crises are hardly new and they have had a tremendous impact beyond the immediate economic consequences of mass unemployment and hyper inflation. This is even more surprising, given the long academic legacy of earlier economists’ study of crisis phenomena ... This tradition, however, has been neglected ...

And when economist James Galbraith spoke at a recent panel on the causes of the financial crisis, the first thing he listed as the main cause of the crisis was "The idea that capitalism ... is inherently self-stabilizing."

Summers a genius? Will the Swine Flu Get the Same Response as the Financial Crisis - Protect the Status Quo without Really Changing Anything?

Even though we've suffered the worst economic crisis since the Great Depression, Obama, Summers and Geithner are not really changing anything, but are instead doing everything they can to keep the status quo intact. Instead of breaking up the insolvent banks in an orderly fashion, the "too big to fail" financial players are being allowed to keep on gambling using our money.

Is the same thing happening with swine flu and industrial meat facilities?

As William Engdahl writes:

It has been widely documented and subject of US Congressional reports that large-scale indoor animal production facilities such as that of Granjos Carroll are notorious breeding grounds for toxic pathogens.

The Pew study notes, ‘The diversified, independent, family-owned farms of 40 years ago that produced a variety of crops and a few animals are disappearing as an economic entity, replaced by much larger, and often highly leveraged, farm factories. The animals that many of these farms produce are owned by the meat packing companies from the time they are born or hatched right through their arrival at the processing plant and from there to market.’

The study emphasizes that application of ‘untreated animal waste on cropland can contribute to excessive nutrient loading, contaminate surface waters, and stimulate bacteria and algal growth and subsequent reductions in dissolved oxygen concentrations in surface waters.’...

Avian Flu was traced back to huge chicken factory farms in and other parts of whose products were shipped across the world. Instead of a serious investigation into the sanitary conditions of those chicken factory farms, the Bush Administration and WHO blamed ‘free-roaming chickens’ on small family farms, a move that had devastating economic consequences to the farmers whose chickens were being raised in the most sanitary natural conditions. Tyson Foods of Arkansas and CG Group of reportedly smiled all the way to the bank. 
Gallows Humor

How it started? Decorated swine flu surgical mask in Mexico: Jimmy Kimmel spoof on protecting yourself: Now Or Never for Torture Prosecutions: Conyers and Nadler Request a Special Prosecutor for Torture

John Conyers, Jerold Nadler and others on the House Judiciary Committee today asked Attorney General Holder to appoint a special prosecutor for torture:

Holder Letter 042809
Publish at Scribd or explore others: Law & Government Business & Law holder prosecutor
Holder is required by law to prosecute violations of the Geneva Convention such as torture. And this is not supposed to be a decision based upon politics.

Unfortunately, Holder will likely do whatever Obama tells him to do. Therefore, it is now or never to call Obama and demand prosecution. Industrial Hog Farming Is Just Like Wall Street

One theory about the swine flu which is quickly gaining traction is that the flu was spread by flies swarming around the hog manure ponds at the giant Granjas Carrol hog farm in Vera Cruz, Mexico. Granjas Carrol, which is partly owned by Smithfield Foods - the world's largest hog company - raises 950,000 hogs per year at the facility.

On these industrial-scale hog farms, pigs are jammed together so tightly that they can barely turn around. There are so many of them that they produce many tons of manure, which is just dumped into giant open ponds.

This is the Wall Street of hog farming. On both Wall Street and at giant meat production farms, the hogs feed at the public trough.

On hog farms, as with Wall Street:

As one blogger wrote:

Agribusiness needs to be held accountable. They are following the same rules as bankers; keep the profits and dump losses (in the form of mad cow or now swine flu) on the public. Factor in a few million dead and maybe locally produced food from small farms is not so expensive after all. Former Senior Intelligence Officer Dismantles Arguments for Covering Up CIA Torture

Melvin Goodman is a former high-level intelligence officer. He was the Division Chief of the CIA’s Office of Soviet Affairs, who served as Senior Analyst from 1966 - 1990. He also served as Professor of International Security at the National War College from 1986 - 2004.

Goodman says that the arguments for covering up the extent of torture by the CIA are all bogus:

[Advocates for keeping the information classified] argue that foreign intelligence services will not share sensitive intelligence with the United States and the CIA because of the declassification and release of the torture memoranda. That is nonsense!

European liaison services as well as other intelligence services have tempered their cooperation with the CIA because of the use of torture and abuse as well as the extraordinary rendition of innocent individuals from their countries to intelligence services in the Middle East. The CIA’s extra-legal activities have complicated and undermined the task of maintaining credible relations with our allies in the battle against terrorism...

[The torture apologists also] argue that, because of the release of the memos, CIA clandestine operatives will keep their heads down and avoid assignments that carry political risk, and that the decline in CIA “morale and effectiveness” will harm American national security. More nonsense! CIA operatives and analysts are professionals who pride themselves on service to the country and their oath to the Constitution.

Very few of them took part in the corruption of intelligence on Iraqi weapons of mass destruction and very few participated in the policies of torture and abuse. They know that the law should not be broken and they want to get these issues behind them so that they can continue to serve the national interests of the United States. They know that painful truths must be acknowledged and that some price must be paid by all for the chicanery of a few.

If Agency personnel were permitted to share their opinions about torture and abuse with the press, a large majority would oppose the practices. Unfortunately, only those officers seeking to cover-up their own activities have the temerity to talk to reporters. The notion that the declassification of these memoranda have given the “enemy invaluable information about the rules by which we operate” is particularly ludicrous.

The enemy has had this information for more than five years, ever since every major newspaper in the world published the unconscionable images from Abu Ghraib. General officers who have served in Iraq and Afghanistan have testified that these images are the most important recruitment tool in the hands of terrorists and fundamentalists and have contributed to the deaths of many American men and women.

Goodman's article is worth reading in full. 
The Bush Administration Used Communist Intimidation and Torture Tactics

The communist tyrant launches an "investigation" into a nuclear accident in his country.

But to make sure that nothing critical is said about the way the government operated the nuclear power plant or how it responded to the accident, the government places "minders" in every interview.

The minders loom over the witnesses in an intimidating fashion, tell the witnesses that everything they say will be reported to the central government, and they even jump in an answer some of the questions directed at the witnesses.

Would the Western nations accept the results of the investigation that the government "could not have known" of the dangers from the nuclear power plant, and that the government did everything it could to minimize the damage?


For example, 9/11 Commission chair Thomas Kean points out that if "minders" had been present during the Commission's investigation, that would have been intimidation, which would have stemmed the flow of testimony from the witnesses:

I think the commission feels unanimously that it’s some intimidation to have somebody sitting behind you all the time who you either work for or works for your agency. You might get less testimony than you would.

However, that's exactly what happened to Kean's own 9/11 Commission.


A recently released 9/11 Commission memo [released in January 2009 from the Commission to the National Archives; referenced in the The National Commission on Terrorist Attacks Upon the United States, Finding Aid: Series Descriptions and Folder Title Lists, page 52, "Memo Concerning Minders Conduct" *] highlights the role of government “minders” who accompanied witnesses interviewed by the commission. It was added to the National Archives’ files at the start of the year and discovered there by History Commons contributor paxvector.

The memo, entitled “Executive Branch Minders’ Intimidation of Witnesses,” complains that:

The memo was drafted by three staffers on the commission’s Team 2, which reviewed the overall structure of the US intelligence community. One of the drafters was Kevin Scheid, a senior staffer who led the team. His co-writers were Lorry Fenner, an air force intelligence officer, and lawyer Gordon Lederman. The complaint was sent to the commission’s counsels, Daniel Marcus and Steve Dunne, in October 2003, about halfway through the commission’s 19-month life.

The memo makes clear that the problems were not occurring only with witnesses talking to Team 2, but also in “other teams’ interviews.” A hand-written note on a draft of the memo says, “not one agency or minder – also where we’ve sat in on other Teams’ interviews.”

According to the memo, some minders merely policed prior agreements between the commission and their parent agency about what the commission could ask witnesses, and others were simply there to make a list of documents the commission might want based on a witness’ testimony. However, some minders saw their role differently.

Intimidation through Physical Positioning

The three staffers argued minders should not answer questions for witnesses because they needed to understand not how the intelligence community was supposed to function, but “how the Intelligence Community functions in actuality.” However: “When we have asked witnesses about certain roles and responsibilities within the Intelligence Community, minders have preempted witnesses’ responses by referencing formal polices and procedures. As a result, witnesses have not responded to our questions and have deprived us from understanding the Intelligence Community’s actual functioning and witnesses’ view of their roles and responsibilities.”

The memo also describes the minders’ conduct in detail: “… [M]inders have positioned themselves physically and have conducted themselves in a manner that we believe intimidates witnesses from giving full and candid responses to our questions. Minders generally have sat next to witnesses at the table and across from Commission staff, conveying to witnesses that minders are participants in interviews and are of equal status to witnesses.”

The staffers also worried about minders taking “verbatim notes of witnesses’ statements,” as they thought this “conveys to witnesses that their superiors will review their statements and may engage in retribution.” They believed that “the net effect of minders’ conduct, whether intentionally or not, is to intimidate witnesses and to interfere with witnesses providing full and candid responses.”

Another problem with the verbatim notetaking was that it “facilitates agencies in alerting future witnesses to the Commission’s lines of inquiry and permits agencies to prepare future witnesses either explicitly or implicitly.”


In response to this, the three staffers proposed not that minders be banned from interviews, but a set of rules governing minders’ conduct. For example, minders were to keep a “low profile,” sit out of witnesses’ sight, not take verbatim notes and not answer any questions directed at the witnesses.

Perhaps the most remarkable proposal is that the number of minders be limited to one per witness. The memo indicates that where an interviewee had served in multiple agencies, more than one minder would accompany the witness. The memo therefore requests, “Only one minder may attend an interview even if the witness served in multiple agencies,” meaning a witness would at least not be outnumbered by his minders.

As the Family Steering Committee (made up of 9/11 victims' family members) wrote in 2003:

The FSC [Family Steering Committee] is shocked with the use of “minders” in the interrogatory process. And, despite the Commissioner's similar objection to “minders”, as stated at the last press conference, “minders” continue to be present during witness examination and questioning. The FSC does not want “minders” present during any witness examination and questioning; it is a form of intimidation and it does not yield the unfettered truth.

Indeed, even 9/11 Commission co-chair Lee Hamilton admitted that "it is very difficult to tell when a witness is being intimidated by a minder."

Not only did the Bush administration adopt Communist torture techniques geared towards extracting false confessions, it also appears to have adopted Communist intimidation tactics.
 Witness Who Fingered 9/11 "Mastermind" Was Himself Crazy

I have previously pointed out that the self-confessed 9/11 "mastermind" Khalid Sheikh Mohammed also falsely confessed to crimes he didn't commit.

However, a second witness - Abu Zubaida - fingered Khalid Sheikh Mohammed as the 9/11 mastermind (Zubaida was subsequently severely tortured for many months. But he initially identified KSM even before being tortured).

So we have independent confirmation that KSM was the chief architect of 9/11, right?

Well, the New Yorker notes this week:

The F.B.I.’s point man on the Abu Zubaydah interrogation, Daniel Coleman, had read Zubaydah’s diaries and concluded that he “had a schizophrenic personality.” Former FDIC Chair Isaac Says Bank Stress Tests Backfired, Rattled Markets

Former FDIC chairman William Isaac says that the stress tests have backfired, and only succeeded in rattling markets.

This is not surprising, given that the stress tests were a sham. 
Good Mainstream Sources of Swine Flu Information

The following are some good sources of information about the swine flu epidemic:

The Centers for Disease Control: 

I'm away for most of the weekend.

So post your comments and tell me what's on your mind. Wild New Discoveries about the Universe

Ethyl formate is the chemical compound which gives raspberries their flavor (and rum its smell).

Scientists now say that the center of our Milky Way galaxy is high in ethyl formate. In other words, an astronaut visiting the center of our galaxy - if he took off his helmet - would smell a rum smell and taste a raspberry taste.

Not weird enough for you?

Scientists say they have discovered a black hole in a distant galaxy that spouted water in a powerful jet: 
John Kerry is Half-Right About Torture

In an interview today with Huffington Post, Senate foreign relations committee chairman John Kerry said that he was concerned the release of photos depicting the abusive treatment of detainees in U.S. custody could become a "propaganda tool" for terrorist organizations.

It is true that photos of barbarian acts of torture could be used by terrorists to promote anti-American sentiments.

But only to the extent that those who ordered torture go unpunished.

If Bush, Cheney, Rumsfeld, Rice and the others who ordered torture are allowed to go free, then that says loud and clear to the world:


But if the sickos who ordered torture are brought to justice, then the world will look at these acts as an unfortunate chapter in America's history that has been closed.

We will be looked on as a people who strayed, but have returned to our roots and to stand up for human rights and justice.

Terrorists would not be able to use the torture pictures as a recruiting tool if the U.S. political and justice systems and the American people stand up and shout "THIS IS NOT WHO WE ARE!", and if we admitted our errors. Stress Tests Prove that Credit Default Swaps Still Pose a Huge Risk to the Economy

The stress tests reveal that credit default swaps and other credit derivatives still pose a huge risk to the economy.

The Financial Times today notes that:

US banks could be forced to hold more equity than initially expected after it emerged that "stress tests" organised by regulators take into account risks not commonly understood to be included in the assessment.

In addition to looking at potential losses on loans and securities, bank examiners are looking at so-called "counterparty risk" on derivative contracts - the chance that the party on the other end of a derivatives deal might default, depriving the bank of a payment that is due.

They want to be sure each bank has enough capital to cover this potential source of loss as well as its more traditional lending risks.

In the past regulators have focused on traditional lending risks that form the basis of bank capital requirements. The stress test provides a more rounded assessment of the amount of equity a bank needs in order to be considered well capitalised relative to the risks it is running.

This means banks that have incurred large counterparty risks in their trading books could be forced to hold more capital.

(references to "counterparty risks" usually mean that credit default swaps are involved).

And economist Martin Weiss notes (as summarized today by leading economist Nouriel Roubini in a discussion of the stress tests):

OCC [Office of the Comptroller of the Currency] data show that as of Q4, the total credit exposure with derivatives as % of risk-based capital was: 179% for Bank of America, 278% for Citibank, 382% for JPMorganChase; 1056% for GoldmanSachs. "Moreover, since JPM holds half of all the derivatives in the U.S. banking industry, JPMorgan is ground zero in the debt crisis."

In other words, contrary to what lobbyists in the credit default swap industry say, the risk of losses from CDS is still very real. Former Chief Accountant for the SEC: Bernanke and Paulson Broke the Law and Should be Prosecuted

The New York Attorney General says that Bernanke and Paulson forced Bank of America to buy Merill Lynch:

Cuomo Letter

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American Public Radio interviewed the former chief accountant at the SEC, who said this was illegal and should be prosecuted:.

Reporter: If Henry Paulson and Ben Bernanke really told the CEO of Bank of America to keep quiet about losses at Merrill Lynch, they were probably breaking the law. That’s according to Lynn Turner, former chief accountant at the SEC.

Lynn Turner: If these allegations are proven true, both Bernanke and Paulson should be prosecuted by the SEC to the fullest extent of the law.

Will they be prosecuted? Or will it be yet another example of the high-and-mighty being above the law? Fed Admits "Stress Tests" Are a Sham

The "stress tests" were supposed to triage those banks worth saving from those which were already too far gone to save.

But as Nouriel Roubini, FDIC chief Sheila Bair, Nobel economist Paul Krugman, former senior S&L regulator William Black and many others said, the "stress tests" are a sham.

Well, they've been proven right.

The Fed said today that - instead of letting the insolvent banks fail - which is what virtually all of the independent experts are recommending (see this for example), the Fed will rescue all banks which fail the stress test.

Indeed, the Fed itself says:

Even if the tests showed a bank needs more capital, that "is not a measure of the current solvency or viability of the firm," the Fed said in Friday's announcement about the test methodology.

So the stress tests have nothing to do with solvency or viability, the advertised purpose behind the tests.

As the above-linked article from Huffington Post points out:

The announcement reinforced the Fed's view that major financial firms are "too big to fail," and that the government must do whatever is necessary to save them, said former Fed examiner Mark Williams.

"It appears 'too big to fail' is a fundamental philosophy _ it's a philosophical principle," said Williams, a finance professor at Boston University.

In extreme cases, a rescue could include a government-backed merger, similar to what regulators did in helping Bank of America to buy Merrill Lynch and JPMorgan Chase & Co. to buy Bear Stearns.

Critics say that policy has put taxpayer money at risk to give banks billions in government bailouts and guarantees. Torture REDUCES National Security

Torture REDUCES, rather than protects, American national security:

"The administration’s policies concerning [torture] and the resulting controversies ... strengthened the hand of our enemies."

As Andrew Sullivan writes:

We have expended enormous resources in fighting threats that are not there, while failing to expend the necessary resources and time to figure out accurately what exact threats we do face. When you hear of the intelligence extracted by torture, remember that it was the intelligence that "proved" that Saddam and WMDs and links to al Qaeda.

Guess what one of the major causes of the economic crisis was? According to a Nobel prize-winning economist, the head of JP Morgan and others, the Iraq war and the war on terror in general were huge factors in destroying our economy.

The Senate Armed Services Committee concluded that creating a link between Al Qaeda and Iraq was one of the main purposes of the torture program. And the fake connection between Al Qaeda and Iraq was - in fact - one of the main justifications for the Iraq war. 
Pelosi Feigns Ignorance of Torture

Nancy Pelosi said today:

The Bush administration did not inform Congress that it had waterboarded detainees in classified briefings, after the agency had already done so...

Pelosi told reporters that the administration officials only told her and those in a classified briefing in the fall of 2002 that they believed they had the legal authority to do so, based on Office of Legal Counsel memos which have recently been released by the Obama administration.

"In that or any other briefing...we were not, and I repeat, were not told that waterboarding or any of these other enhanced interrogation techniques were used," said Pelosi. "What they did tell us is that they had some legislative counsel...opinions that they could be used, but not that they would."

However, that is likely untrue.

As noted by the above-linked article at Huffington Post:

Her assertion contradicts a recently released Senate committee report that cited CIA records to claim that senior members of Congress in both parties were briefed on the waterboarding, which had already been done to detainee Abu Zubaydah.

Moreover, the Washington Post wrote in 2007: Top Interrogation Experts Agree: Torture Doesn't Work

Apologists for torture say that it was a "necessarily evil" to stop future terror attacks.

However, the top interrogation experts all say torture that doesn't work:

Many governments that have routinely tortured to obtain information have abandoned the practice when they discovered that other approaches actually worked better for extracting information. Israel prohibited torturing Palestinian terrorist suspects in 1999. Even the German Gestapo stopped torturing French resistance captives when it determined that treating prisoners well actually produced more and better intelligence.

Still don't believe it? These people also say torture doesn't produce usable intelligence:
Many other professional interrogators say the same thing (see this, this, and this).

In fact, one of the top interrogators in Iraq got information from a high-level Al Qaeda suspect not through torture, but by giving him cookies.

And top American World War 2 interrogators got more information using chess or Ping-Pong instead of torture than those who use torture are getting today.

And the head of Britain's wartime interrogation center in London said:

“Violence is taboo. Not only does it produce answers to please, but it lowers the standard of information.”

Indeed, one of the top military interrogators said that torture does not work, that it has resulted in hundreds or thousands of deaths of U.S. soldiers, and that torture by Americans of innocent Iraqis is the main reason that foreign fighters started fighting against Americans in Iraq in the first place (in fact, the experts agree that torture reduces national security).

And - according to the experts - torture is unnecessary even to prevent "ticking time bombs" from exploding (see this, this and this). Indeed, a top expert says that torture would fail in a real 'ticking time-bomb' situation