Friday, February 10, 2012
An assassination attempt against Pope Benedict XVI may be carried out before November 2012, Italian Il Fatto Quotidiano daily reported on Friday, citing a confidential document that was delivered to the Holy See in January by Colombian Cardinal Dario Castrillon Hoyos.
The letter, written in German, cites Cardinal Paolo Romeo, the Archbishop of Palermo, who said during his visit to China in November 2011 that “the Pope will die” in the next 12 months, Il Fatto Quotidiano said.
It is not known who stands behind the letter, the daily said.
Father Federico Lombardi, the Director of the Holy See Press Office on Friday denounced the media report, calling it “ramblings that cannot be taken seriously.”
The previous Pope, John Paul II, survived a 1981 assassination attempt, although he was shot and gravely wounded by his attacker, Turkish national Mehmet Ali Agca.
In 2006 an Italian parliamentary commission accused former Soviet leaders and the Bulgarian secret service of being behind the assassination plot.
Ali Agca was released in 2010 from jail after almost 30 years in Italian and Turkish prisons.
The U.S. Postal Service said it lost $3.3 billion in the quarter ended Dec. 31 -- typically its strongest -- and that it expects to run out of cash in October unless Congress agrees to cuts in facilities and employees.
“If the Postal Service is unable to reduce its operating costs by $20 billion a year by 2015, we may not be able to return to profitability,” Postmaster General Patrick Donahoe said at a board meeting in Washington today. “We may become a long-term burden to the taxpayers if we are not able to make these reductions quickly.”
The ninth consecutive quarter of losses may increase pressure on Congress from the Postal Service and customers to approve legislation intended to return it to solvency.
“We have a Postal Service that essentially is living from paycheck to paycheck, which is a very risky proposition for the American economy and the 8 million private-sector workers whose jobs rely on the mail,”Art Sackler, coordinator of the Coalition for a 21st Century Postal Service, said in an e-mail. “Each day Congress fails to enact postal reform, this problem grows more difficult and perhaps more expensive to resolve.”
The coalition’s members include Bank of America Corp. (BAC) andFedEx Corp. (FDX)
The Postal Service last year reached its $15 billion borrowing limit from the U.S. Treasury and has forecast a record $14.1 billion loss for this fiscal year. The service wants to eliminate as many as 220,000 jobs and close as much as 12 percent of its post offices, among other changes, to cut $20 billion annually in expenses by 2015.
Raising the debt limit would be a mistake because a business of the service’s size shouldn’t take on more debt, Chief Financial Officer Joseph Corbett told reporters on a conference call today. Increasing the limit would be the “absolutely wrong way to go,” he said.
As the service cut 8 million work hours in the quarter, compared with a year earlier, compensation spending fell 1 percent to $9.6 billion. Benefits costs remained $3.8 billion, the same as a year earlier. Those expenses won’t decline unless Congress allows the service to take over its own health-care plan, which is now managed by the U.S. government, and rescinds a requirement that it pay now for future retirees’ health benefits, Corbett said on the call.
The loss for the period that includes the Christmas season widened from $329 million in the year-earlier period. Revenue fell 1.1 percent to $17.7 billion as mail volume declined 6 percent, Corbett told the board.
The service reported a $200 million operating profit in the quarter. Corbett said he doesn’t see that happening again unless it can make cuts it wants to make.
The $3.3 billion net loss was primarily the result of $3.1 billion accrued to pay for future retiree health benefits. The Postal Service is required to prefund those costs by a 2006 law with $12.1 billion for payments deferred from last year and due this year.
“These results reveal the need for Congress to remove the crushing burden of the prefunding payments, which the USPS is compelled to make, as its press release notes, ‘at rates not assessed any other entity in the United States,’” National Association of Letter Carriers President Fredric Rolando said in a statement. “Congress created this problem, and Congress can fix it. We urge lawmakers to address the prefunding issue.”
The service’s daily operating costs are $220 million, or $1.3 billion for a six-day work week. Cash on hand will fall below one week’s expenses by August and run out, without help from Congress, after it makes a workers-compensation payment to the U.S. Labor Department in October, Corbett said.
The projections assume the service doesn’t pay any of its retiree health benefits pre-funding requirement.
An ideal level of cash on hand for the service would be $7 billion, Corbett said, citing an analysis it did of liquidity at companies including Wal-Mart Stores Inc., FedEx and United Parcel Service Inc. That’s about twice the amount it had at the end of December.
The cash position would temporarily improve after October and then run out again by October 2013, according to a presentation at the meeting.
The Postal Service predicted in November the amount of mail it will deliver in fiscal 2012 will fall about 6 percent, exceeding the drop of about 2 percent a year earlier, for a decline of more than 20 percent in the past five years. Revenue will probably decline to $64 billion in the year ending Sept. 30 from $65.7 billion in 2011, Corbett said at the time.
Eurozone finance ministers have given Greece six days to cough up another €325 million in spending cuts, pass the austerity program through parliament and give "strong" political guarantees it will stick after elections.
"Despite considerable progress in the last days, not all elements were on the table for us to agree today," eurogroup chief Jean-Claude Juncker said during a press conference at the end of the meeting in Brussels on Thursday (9 February).
Several things need to happen for Athens for it to get the €130 billion rescue package and for private investors to write off a big chunk of its debt next Wednesday, he added: Greek MPs must pass the laws that implement the latest cuts and the €325 million funding gap must be "rapidly covered in order to ensure the deficit target is achieved."
EUobserver understands the gap still refers to supplementary pensions - Greek political parties were unable to agree on further cuts in this area earlier in the week.
The parties on Thursday morning agreed an extra €300 million cut for 2012. But could not pin down the final €325 million for 2013.
Juncker also noted that: "Strong political assurances from parties are needed for the smooth implementation of the programme after the upcoming general elections [in April] ... There will be no disbursement before implementation. We cannot go on with a system where promises are made and repeated and implementation measures are too weak."
The first EU bail-out, in 2010, saw reforms delayed for weeks as political promises evaporated.
Dutch minister Jan Kees also lectured Athens: "Greece still has homework to do, we are not there yet. That's why we gave them time until Wednesday, and the €325 million are part of the homework."
In addition, the EU will step up its presence in Athens to "monitor" the government.
EU economics commissioner Olli Rehn said ministers endorsed this move which is "in line" with laws on strengthened economic governance of the eurozone. He noted that this does not mean a commissioner to rule over Greece - as Germany had more-or-less suggested - but more experts in the EU commission's "task force" which will give advice and keep a close eye on privatisations, tax collection and spending of EU funds.
He added that ministers are giving "serious" consideration to the Franco-German idea of an escrow account for Greece because it could "ensure the implementation of the programme." Under the plan, the Greek government would not have access to the money, which would ensure part of the bail-out goes to pay back the lenders.
Meanwhile, Rehn's staff is preparing a new study on how large Greece's funding gap is compared to last October when the €130bn bail-out was agreed. Inofficial estimates currently speak of €15 extra billion that will have to be covered either by EU governments or private investors taking a higher haircut.
Another option for helping Greece - for the European Central Bank to give up its profits on €50 billion worth of Greek bonds - was not discussed on Thursday, EU sources said. But ECB chief Mario Draghi earlier that day signalled this may be done.
For his part, Greek finance minister Evangelos Venizelos said the ball is now in the court of the Greek political parties who have a "historic responsibility" to keep the country in the euro.
"If we see the future of our country within the euro zone, within Europe, we should do what we have to do for the programme to be approved and for the PSI to be concluded on time before major bonds expire in March."
With the coalition holding 252 out of 300 seats in parliament, the austerity bill is expected to pass in a vote on Sunday. But activists plan street protests and another strike at the weekend.
The agreement between Greek politicians was initially heralded as the breakthrough to unlock a €130bn (£109bn) international bail-out package to avoid Greek bankruptcy.
However, the chairman of a meeting of the 17 eurozone finance ministers last night said fresh conditions will have to be met before the bail-out is endorsed.
Jean-Claude Juncker, head of the eurogroup, said an extra €325m (£273m) in savings for 2012 will be needed. The Greek parliament will also have to agree the deal on Sunday and politicians will have to promise to stick with the package after elections in May.
“We did not yet have all necessary elements on the table to take decisions today,” Mr Juncker, the Luxembourg prime minister, said. “In short: no disbursement before implementation.”
The European finance ministers will meet again next Wednesday if the conditions are met, he added.
Greece needs international help to repay a €14.5bn bond due on March 20.
Evangelos Venizelos, the Greek finance minister, said earlier in the day: "After a long and fraught period of negotiations we have finally a staff level agreement with the troika for a new strong and credible programme."
He added that Greece had agreed on the "basic parameters" of a deal with its private creditors in what could be the biggest ever sovereign bond restructuring. "We need now the political endorsement of the eurogroup for the final step," he said.
Stockmarkets edged higher: the German Dax closed up 0.6pc; the French CAC climbed 0.4pc; in London the FTSE 100 rose 0.3pc.
The deal which includes a raft of spending cuts, pension reforms and public sector job losses, was agreed between Greece's coalition partners and the troika - members of the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF).
It faces an even tougher hurdle to get passed in the Greek parliament on Sunday. The dominant Pasok party has seen its electoral support plunge from a powerful 47pc to just 8pc, according to a recent poll.
Greece is braced for 48-hour strike starting on Friday as trade unions denounced the debt deal as the "tombstone of Greek society".
The Hellenic Statistical Authority announced that Greece's manufacturing output contracted by 15.5pc in December from a year earlier and industrial output fell 11.3pc, having fallen 7.8pc in November.
Unemployment jumped to 20.9pc in November, up from 18.2pc in October - a rise of 14pc in a month. Greece's youth unemployment has reached 48pc - surging past Spain's for the first time.
Economists warned that further austerity measures could plunge Greece into further political and financial chaos.
Mario Draghi, the boss of the ECB, added to fears when he rejected that reports that the central bank would step in to ease Greece's burdens through a complicated debt swap. He said the view that the ECB would take losses on Greek bonds was "unfounded."
But, confirming that Lucas Papademos, the Greek prime minister, had called to say a deal had been reached, he said he was "quite confident that all the pieces would fall in the proper places" concerning the rescue package for Athens.
At a press conference where he announced interest rates would stay at 1pc, Mr Draghi said that "frankly" the ECB's governing council "didn't discuss any prospective or current change in interest rates."
He added that the economic outlook was subject to risks that "notably relate to tensions in euro area debt markets and their potential spillover to the euro area real economy."
(Note: The following article was written in May of 2011, but publication was delayed until now, as the situation had not yet progressed to the point that readers might have considered the pattern of events described below as even being within the realm of possibility. As the situation discussed in this article is now getting closer, the projections below may seem less fanciful.)
In high school history class, the Great Depression was explained. We were taught, essentially, that in 1929 there was a stock market crash, and after that, lots of people were desperately poor. Whilst this is true, the explanation is overly simplified to the point that there is no practical lesson we can learn from it.
Here’s what actually happened: In the autumn of 1929, the first in a series of waves occurred in the stock market — a downward wave. It was followed by a rally (upward wave), then a much deeper and longer downward wave. This third wave, in turn, was followed by a series of smaller upward and downward waves until the market hit bottom in 1932-33.
In studying these waves (Elliot Wave Theory), it becomes apparent that the same waves occur in any major market fluctuation, and the degree of downside is always relative to the degree of upside. The third wave is always the most extreme.
I anticipate that the third wave in the present series is imminent. It will be deeper and longer than the downward wave of 2008. The others will be smaller, but ultimately, together they will be more severe than the series of fluctuations from 1929-1932.
On the surface, it seems unlikely that financial downturns would behave predictably, but Elliott Wave Theory is based upon human nature. In any era, the reactions to events will be similar, as human nature remains the same, regardless of the era we live in. The presentunraveling of the American Empire is remarkably similar to that of the Roman Empire and other empires in the interim.
A Little History
In 1933, the Glass-Steagall Act was passed in Congress. Its purpose was to create banking reforms to control speculation by banks, a root cause of the Great Depression. Ever since that time, economists and Congressmen alike have said, “Depressions are no longer a concern. There can be no more depressions.” They stuck to that position, while forgetting that the control of possible depressions was directly linked to the continued existence of Glass-Steagall.
Beginning in the 1980s, the major banks began work to eliminate the Glass-Steagall Act in order to recreate the opportunity for enormous profit, similar to what occurred in the late 1920s. Although their efforts met with resistance, then Chairman of the Federal Reserve Alan Greenspan helped to convince the government of the day to vote in favour of the repeal. The premise was that America was positioned to create a housing boom of historic proportions, making possible home ownership for millions of people who previously would not have qualified for a loan. It was further suggested that banks could not fulfill this opportunity without the repeal of Glass-Steagall.
Conservative Congressmen saw the benefits to both commerce and the banking industry in this concept. Liberal Congressmen saw the hope for millions of average people to have homes. Glass-Steagall was repealed with everyone’s blessing.
Unfortunately, few, if any, of those Congressmen who voted for this repeal bothered to learn why Glass-Steagall had been drafted in the first place, and the stage was now set for the Greater Depression.
A small minority of prognosticators have been harping on the prediction of a “Greater Depression” since the late 1990s. We anticipated that a housing bubble would develop, followed by a massive crash, and that the stock market would then also begin its crash. I believed that the warning sign that this was on the verge of occurring would be that “Teflon Alan” would resign as Chairman of the Fed at least one year prior to the disaster, as he would want to distance himself from it. This he did in 2006, leaving Ben Bernanke to hold the bag.
We also predicted that the crash would not come all at once; that, as always in history, it would be a series of waves. However, the majority of people would follow what they had been told by their high school history books. As soon as there was a rally of significant proportions (second wave), they would believe that recovery had arrived. They would believe this in spite of the fact that the massive debt still existed and, like a cancer, still required elimination before real prosperity could follow.
If we are correct, and the Greater Depression is in its first stages, the worst (by far) is yet to come.
What Goes Up Must Come Down
When a small bull market crashes, the crash is small. When a large bull market crashes, the crash is big. This concept is a simple one that anyone will accept. So, what happens when the largest bull market in over 300 years crashes?
And if the current rally, presently being described as a recovery, were to behave like the 1929-1930 upward wave, when would it end? When would we know that it is not a recovery, and is just a rally similar to the 1930 rally?
The answer, in my belief, is very soon.
The third wave in the collapse could have occurred as early as mid-2010, but the economy was artificially propped up by Quantitative Easing (QE). This type of action can postpone the eventual third wave, but not eliminate it. In fact, postponement only assures a deeper drop when the third wave does occur.
With the ending of QE2, many have been holding their breath to see what will happen next. They will not have to wait long, and the fall off the mountain will be directly proportional to the climb up the mountain. The market peak is imminent, and, based on Elliot Wave Theory, the subsequent fall (should it begin soon) may take six years, ending in 2018.
Why, Historically, a Large Collapse is Likely
Very few people who are alive today were around in 1929, so, understandably, the very concept of such a debacle seems like the work of overly-active and overly-pessimistic minds. For that reason, a further examination is needed as to what has led up to this occurrence.
- The mania up until 2008 was the biggest since the 1720-1784 mania. It should therefore result in a deeper decline than in 1929-1933.
- Declines following manias always carry below the starting point of the mania. The crashes following the Tulip Mania of the 1630s, the South Sea Bubble of the early 1700s and the Roaring Twenties bull market, all brought prices to below the level of the bull markets’ starting points. In this case, the mania-style bull market started in 1974.
- Thanks to the great rise in positive social mood during our present mania, the stock market remains historically overvalued in terms of dividends and earnings. (When people without jobs are provided with loans to buy multiple houses, with no money down, it becomes reasonable to believe that pigs have wings.)
- The greatest extreme in positive social mood in centuries has led to the greatest expansion of credit in history. This level of outstanding debt is unsustainable and will be unserviceable and unpayable. The trend toward negative social mood that has begun, and which is about to accelerate, will continue to curtail lending, leading to a tidal wave of defaults and a major deflation in equities.
- The trend toward negative social mood, concurrent with a collapse of the market, will lead to an economic contraction. Small bear markets lead to recessions; big bear markets lead to depressions. The recent mania was the biggest in nearly 300 years, so the depression will be correspondingly deep.
- As a by-product, this trend of major negative social mood will bring a frightening degree of social unrest. Under such conditions, people who, for years, had seen only increases in entitlements and suddenly find those entitlements disappearing, will not accept diminished entitlements quietly. If they do not receive what they had been promised, many will choose to take what they want from whomever they can. An inkling into this trend can presently be viewed by us from afar by examining a similar, more minor situation playing out in the streets of Europe.
- People will desire what they consider to be money, not stocks. A concurrent gold mania will occur. Gold, silver and other traditional, dependable commodities will become the basis of wealth, and fiat currency will decline in value dramatically.
This outlook is extreme and is difficult even to imagine. As mentioned previously, no one alive has ever seen anything like it, and it is understandable for us to say to ourselves, “It can’t possibly be that bad. At worst, we might have a double-dip recession, but we’ll get past it.”
However, all the above is based upon historical occurrences and consistent patterns.
It will be a ragged decline. The banking system will not deteriorate all at once; the crisis will occur piecemeal, with some events more devastating than others. Some communities will be harder hit than others. Those who are more independent of commerce (ranchers, small farmers) will not be as affected, as long as they can continue to produce. Those in or near large inner cities will feel the effects most greatly, particularly food shortages and crime.
As extreme as this prediction is, if it is correct, it may well begin within a year. If it does, it will be wise to be prepared to act as soon as possible for self-preservation.
There will be three factors that will be key to self-protection in such conditions:
- Become as liquid as possible.
- Keep your money in a form that will not inflate, such as precious metals, and in a location in which it will not be taken away by collapsing governments.
- Prepare a geographical location to escape to that is as unlikely to be affected as possible.
In Kansas, when there is a twister on the horizon, the family goes down into the storm cellar. Unfortunately, in disastrous economic times, the storm on the horizon is invisible, so it is human nature to hesitate.Storm’s a-comin’. If you do not have the three preparations above taken care of now, it is already nearly too late. The reader would be well-advised to put these in place immediately to avoid losing what he has, and ending up as a casualty of the storm.
War is a Crime