The Ultimate World Economic Scorecard

The values are % of GDPs

When you are out this evening at your cocktail party, discussing the state of the world, how everyone should be buying GOOG on the dips, how AAPL looks cheap (and the mini-iPad is coming soon), all that cash-on-the-sidelines, and how sentiment is so low; perhaps this handy little global economic scorecard will help bring a sense of reality back to the conversation. Barclays' Julian Callow provides everything you need to know about financial balances and economic performance (but were afraid to look) in one handy table.

Dr Rowan Williams accept Pope as “Holy Father”

The Anglican Archbishop was invited to the Roman Catholic Synod of Bishops for the new evangelization, to express his views on the Second Vatican Council. Rowan Williams addressed the Pope as “You holiness”, and underlined the need for full Church unity.

The Anglican head bow and kiss the ring of the Pope. A sign of submission.

“Praying together isn’t just a casual thing, a marginal activity,” he said.

When divided Christians “share the prayer of the Church”, even if they cannot share the fullness of that prayer in the Eucharist, they are placing themselves before God together and showing the world what it means to be Christian.

Preparing to retire, he said he obviously was disappointed that efforts to promote full, visible Christian unity had not progressed further, but no one could deny that Christians pray and work together today in a way that would have been unimaginable in the 1950s.

This is the exact words of Williams, in his address to the Pope:

” I am deeply honoured by the Holy Father’s invitation to speak in this gathering: as the Psalmist says, ‘Ecce quam bonum et quam jucundum habitare fratres in unum’ [How good and how pleasant it is when brethren dwell together in unity].The gathering of bishops in Synod for the good of all Christ’s people is one of those disciplines that sustain the health of Christ’s Church”.


News that Matters

China's naval exercises in East China Sea send warning to regional rivals

China held naval exercises in the East China Sea today in a robust show of military force intended to warn regional rivals against escalating territorial disputes.

China regularly holds maritime drills in the fall, but "sources close to the military" said the drills were related to a territorial dispute that has been the source of recent flare-up between China and Japan, the Financial Times reports.

Japan and China have long been at odds over a string of islands known as the Senkaku in Japan and the Diaoyu in China, but tensions ratcheted up last month when the Japanese government agreed to buy three of the islands that were privately owned by a Japanese businessman. The incident brought relations between the countries to a 40-year low and prompted the cancellation of celebrations planned for last month to fete the 40th anniversary of diplomatic relations, as The Christian Science Monitor reported in an in-depth report on the dispute last month.

"Relations are worse than they have ever been in 40 years," Liu Jiangyong, a professor of Japanese politics at Tsinghua University in Beijing, told the Monitor. "I don't see much chance of a war; but I think Japan is preparing for one, and we should, too."

The Japanese government said that the intent was not to challenge China, but to prevent the islands' sale to the governor of Tokyo, a vocal nationalist who might have used them to antagonize China. The explanation did not quiet Chinese anger.

The exercises also come on the heels of visits earlier this week by Japanese opposition leader Shinzo Abeas well as two cabinet ministers to the controversialYasukuni shrine. The shrine, which honors Japan's war dead – among them 14 class A war criminals convicted after World War II – is seen in China as a "symbol of Japan's military atrocities" during its decades-long occupation of much of the region until Japan's defeat in 1945, Bloomberg reports.

Chinese news agency Xinhua said the officials' visit "would further poison bilateral ties" and "added insult to injury," according to Bloomberg.

Drills like those held today are a routine event, but military sources told the Financial Times "this drill could only be read as directed at the island crisis."

“This exercise will simulate a situation where foreign law enforcement vessels obstruct and interfere with our maritime surveillance and fisheries administration vessels on a mission to safeguard maritime rights and enforce the law,” said state media, referring to a statement from the East Sea Fleet which is participating in the drill.

According to the statement, the simulated scenario includes a collision in which the Chinese ships are damaged and some patrol staff are hurt and fall into the water. The East Sea Fleet then “sends a frigate, a hospital ship, a tugboat, advanced fighters and helicopters for support, cover and emergency rescue.”

“With this content, this drill must be seen in the context of the Diaoyu Islands,” said a source familiar with the military’s intentions.

According to Xinhua, the Navy held the exercises with the fishery administration and marine surveillance agency in order to "improve coordination" and their ability to respond to emergencies. Eleven vessels and eight aircraft were involved in the effort.

The Associated Press reports that Japan plans to hold similar drills with the US later this year centered around a theoretical challenge of "taking a remote island back from a foreign intruder."

Multiple experts interviewed by the Monitor said that they don't think either country wants to go to war. The real cause for concern is that it would take little to tip the countries into open conflict with tensions at a slow boil for so long, and both taking steps to intimidate the other.

So far, hostilities have been limited to water-cannon duels, as happened Sept. 24 between Japanese and Taiwanese Coast Guard vessels. But "when you have that many boats sailing around, the potential for mishap is quite high," points out Bonnie Glaser, a senior fellow at the Center for Strategic and International Studies in Washington.

The danger, adds Valérie Niquet, a China analyst at the Foundation for Strategic Research, a think tank in Paris, is that a collision, a sinking, or a fatality "could start something that would be difficult to stop," especially since China and Japan have no procedures in place to handle maritime crises.

CSmonitor

United States should be paying over $1 trillion a year in welfare benefits

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Thursday, the 18th of October.

It’s hard to believe or even fathom that the United States should be paying over $1 trillion a year in welfare benefits. This is an unsustainable number by anyone’s math.

Because of this massive expenditure, we’re going to see gold skyrocket as paper money becomes worth less and less when reality sets in.

If you were around in the 70′s and thought inflation was bad then, it’s going to pale in comparison to what’s coming up. The only value will be held in land, gold, and raw commodities that can be traded on a barter system.

I hate to sound so negative, but the reality is we did this to ourselves and have no one else to blame.

Let me put this whole scenario in perspective: If you had spent $1 million dollars a day, every day since the time of Jesus Christ, you would not have spent even close to $1 trillion. I think that illustrates just how much money we are in the hole for.

Even the president of Iran is predicting the impending downfall of the US empire. His analysis is based on the collapse of the country’s massive debt. Here is his direct quote: “How long can a government with a $16 trillion foreign debt remain a world power?”

Like it or not, the situation the US is facing now is dire. We must get real, we cannot listen to pie-in-the-sky politicians anymore.

INO.com

Obama to Israel: Iran is piling up fissile material for 4-6 bombs

President Barack Obama this week clued Prime Minister Binyamin Netanyahu in on the latest US intelligence input confirming that Iran will have enough enriched uranium for 4-6 bombs by March 2013,DEBKAfile reports from its Washington and intelligence sources. His update, which took place in the framework of quiet US-Israeli intelligence-sharing on the state of Iran’s nuclear program, was Obama’s first acknowledgment that sanctions and diplomatic pressure are not having any effect on that program.

It is now clear to his administration that Iran’s leader Ayatollah Ali Khamenei will press on toward a nuclear weapon capacity at any price - even if faced with a military threat. No pause is to be expected in Iran’s drive to accumulate enough enriched uranium to fuel a nuclear bomb arsenal, while advancing at the same time along a second track toward a plutonium bomb.
This updated US intelligence included three more data:

1. Most of the enriched uranium for the 4-6 nuclear bombs is scattered in 20-percent grade form among different caches. When vice-presidential candidate Paul Ryan revealed Iran’s possession of enough fissile material for five nuclear bombs during his debate with VP Joe Biden on Oct. 10, Biden waved the revelation away with contempt.

It is now confirmed by his boss, the president.
2. After completing the transfer of advanced centrifuges to the fortified underground site at Fordo, Iran is now ready to expand uranium enrichment at Natanz by doubling the number of centrifuges working there to 6,000. The new annex to house them, on which building began in March 2011, is almost finished.

3. The technological infrastructure for the rapid conversion of 20-percent enriched uranium to the 90-percent weapons grade is now in place. It is estimated in Washington that no more than two to three weeks will elapse between a Khamenei order for the conversion to begin, to the production of enough weapons-grade material for Iran to build its first nuclear bombs.
The US intelligence experts keeping track of Iran’s program are sure they will know when that order is given.

Notwithstanding all the facts and figures from his own intelligence experts on the imminence of a nuclear Iran, President Obama is still leaning hard on Netanyahu to hold off a preemptive strike until after the Nov. 6 presidential election. He promises that, shortly after the vote, if he is reelected, he will put before Tehran the endgame document prepared by a White House team in the form of an ultimatum with a deadline for response.
But Obama is still not saying how he will respond to an Iranian rejection of the document’s main points, or whether he will again agree to return to the negotiating table while Iran is allowed to forge ahead on its bomb program. This had been the standard diplomatic format under his watch.

DEBKAfile’s Washington sources disclose that a large group of former high-placed US diplomats, ex-officials and elder statesmen – Democrats and Republicans alike - has come forward to warn the Israeli prime minister to give up any expectation, ever, of Barack Obama’s cooperation on the Iranian nuclear issue. These former top Washingtonians all harbor strong reservations about the president’s foreign policy, especially on Iran.

Some have called Netanyahu in person and warned him that the White House instituted an intelligence-sharing dialogue with Israel only as a device for delaying an Israeli attack on Iran. If reelected, they say, he will weasel out of his repeated pledges to prevent Iran attaining a nuclear weapon and certainly not countenance preventive military action by Israel.

This is no secret to Tehran. Counting on Obama maintaining this posture and Israel’s compliance, the Iranians are certain they can go full speed ahead toward their nuclear goal without fear of interference.
Our sources also disclose that three questions on Iran will be put to the president and his Republican challenger Mitt Romney in their third and last debate at Lynn University in Boca Raton, Florida, Monday, Oct. 22.




DEBKAfile

Dragon Flood A Policy of Propaganda

Joseph Herrin




Gustave Le Bon

One of the pioneers of the modern use of propaganda to manipulate the masses was Gustave Le Bon, a French social psychologist. Le Bon lived between the years 1841 and 1931 and wrote a number of books on the subject of the psychology of the group mind. His writings influenced many of those who became key players in institutionalizing the use of propaganda in America. Le Bon saw the necessity of controlling “the crowd,” for he believed that true democracy would lead to chaos and ruin. Le Bon contended that an aristocracy of advanced thinkers was needed to guide society and preserve civilization.

Throughout history, Le Bon professed, civilization had always been “created and directed by a small intellectual aristocracy, never by crowds.” Now in an era in which the “voice of the masses” was “preponderant,” this aristocracy (social scientists) must explore the crowd mind to develop techniques by which mass hypnosis might be employed.
[Source: PR! A History of Spin, Stuart Ewen]

Le Bon wrote:

Crowds have always undergone the influence of illusions. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.
[Source: The Crowd, Gustave Le Bon]

Another way to express this concept is that people can be controlled through deception, and they have always been susceptible to control through deception. Such a statement finds support in the Bible. Satan from the very beginning employed deception to direct the actions of mankind. He deceived Eve, and she ate of the fruit that Yahweh had forbidden mankind to eat.

It is interesting to note that Satan did not use threat of violence, or some other influence, to coerce Eve to eat of the fruit of the tree of the knowledge of good and evil. Satan has found mankind to be highly susceptible to deception. Lies and deceit are always his chief instruments for controlling the thoughts and actions of mankind. Satan’s disciples have adopted the same practices. Le Bon further stated:

To know the art of impressing the imagination of crowds is to know at the same time the art of governing them...

We must become a cult, write our philosophy of life in flaming headlines, and sell our cause in the market. No matter if we meanwhile surrender every value for which we stand, we must strive to cajole the majority into imagining itself on our side... It is numbers, not values that count - quantity not quality.
[Source: Ibid]

The immorality of those who adopt Satan’s policies is observed in the above quotations by Gustave Le Bon. To such men the end justifies the means. No matter if lies, deception, and atrocities, even the murder of innocent men and women, are the instruments used to control and shape the public mind, all is justified in their thinking that the greater good of civilization might be gained.

One man who adopted Le Bon’s theories wholeheartedly was Ivy Lee, the son of a Methodist Minister from Georgia.




Ivy Lee

Lee’s public relations work reflected a newly emerging variation on the theme that “truth happens to an idea...” Something asserted might become a fact, regardless of its connection to actual events.
[Source: PR! A History of Spin, Stuart Ewen]

This son of a Methodist minister was greatly awed by the mighty men of his day. He idolized men of power and wealth. Ivy Lee became a highly effective tool wielded by men of power to accomplish their purposes. One of the men Lee worked for was John D. Rockefeller, Jr.. In 1914, miners went on strike at one of the Rockefeller mine interests in Colorado, the Colorado Iron and Fuel Company. Rockefeller hired thugs to attack the striking miners. 14 miners, their wives, and children were viciously murdered in what became known as the Ludlow Massacre of 1914.

The Rockefeller name was already highly despised by the public, but the outcry over the slaughter of the miners and their family members fanned public outrage to a fever pitch. This resulted in public hearings being instituted to look into the matter.

The Rockefeller family denied any involvement in the decision to send in militiamen, but as countervailing evidence began to surface, proving their complicity in the massacre, John D. Rockefeller, Jr., was convinced that something had to be done. Ivy Lee was hired by the Rockefeller family to “secure publicity for their views...”

Lee’s work following Ludlow consisted of producing a series of circulars entitled “Facts Concerning the Strike in Colorado for Industrial Freedom.” Between June and September 1914, these nationally distributed broadsides came out every four to seven days...

Lee’s dispatches, for example, routinely exaggerated the salaries received by union organizers - the bulletins were designed to simulate objective evidence, proving that the pillage at Ludlow was the work not of the mine operators and their armies, but of “well paid agitators sent out by the union.”

One bulletin presented distorted documentation purporting to demonstrate that editorial sentiment in Colorado’s newspapers was overwhelmingly against the strikers. Disregarded in this report was the fact that those editors who were surveyed all worked for papers run by the coal companies.

Another bulletin offered an authentically couched report from Helen Grenfell, identified simply as the “Vice President of the Law and Order League of Colorado.” Her apparently first hand account certified that the battle at Ludlow was initiated by the strikers... Unmentioned in the report were the facts that Grenfell was not, in fact, an eyewitness to events at Ludlow and that she was the wife of a railroad official whose company profited from carrying Colorado coal.
[Source: PR! A History of Spin, Stuart Ewen]

People of God, such reports are not exceptional. They are the norm in the media today. Stories are reported in such a way that critical information is withheld from the public, and that which is reported is biased, and often filled with distortions of the truth. So pervasive is the false reporting of the media that the masses of men and women have lost all sense of reality. They believe the world is what is portrayed before them on television, in newspapers and magazines, on the Internet and radio.

The invisible government, those whom Edward Bernays, Gustave Le Bon, and Ivy Lee referred to as an “intellectual aristocracy,” consists of immensely wealthy bankers and corporate tycoons such as the Rockefellers, and the Rothschilds. The practices that proved so effective in defending their corporate interests generations ago are now employed on a national and even global scale. The major media is owned by a close knit group of global power brokers who employ its massive influence to create illusions of reality, and to thereby govern and control the masses.

Those who own the media do not wait for news stories to come along, and then merely spin the accounts to serve their own interests. They manufacture the news events.

As Bernays explained it, “the engineer of consent must create news.” He must orchestrate public occurrences so they will be noticed and will harvest the acquiescence necessary to sustain the desired outcome...

“Newsworthy events, involving people, usually do not happen by accident. They are planned deliberately to accomplish a purpose, to influence our ideas and actions.”
[Source: PR! A History of Spin, Stuart Ewen]

Since the advent of television, the manipulation of mankind has risen to new heights. Not only are words used to shape thoughts and stir men to action, but images are skillfully crafted to manipulate the masses. It seems symbolic that the center for America’s television industry is a city named Hollywood. Holly was a wood sacred to ancient druids and is used by witches to craft their magic wands. In the massively popular Harry Potter series, the lead character’s wand was made out of Holly wood. The television is an instrument of bewitchment. The masses are spellbound by its power.

A recent example of a manufactured news event that bears striking resemblance to the reports Ivy Lee crafted for the Rockefeller family comes from the Persian Gulf War in 1991.

Some months before, during the fall of 1990, a particularly alarming story began to be circulated by American news agencies. Following the Iraqi invasion of Kuwait, the report affirmed, Iraqi soldiers entered hospitals in Kuwait City and removed hundreds of premature infants from incubators, leaving them to die on cold hospital floors. Appearing again and again in the American news media, the story attested to the profound cruelty of the invasionary force.

The source of this story was an anonymous fifteen-year-old Kuwaiti girl, called Nariyah, who had testified to the horrific events before the Congressional Human Rights Caucus on October 10, 1990. According to her story, she was a “hospital volunteer” and a firsthand witness to the purported barbarism. To ensure her continued safety, the head of the caucus announced, the girl’s true identity be kept secret.

Only much later, after the Persian Gulf War was fading into the historical record, did it turn out that “Nariyah” was in fact, Nariyah al-Sabah, daughter of the Kuwaiti ambassador to the United States. Her actual whereabouts, at the time the alleged cruelties had taken place, were questionable; she had been witness to no such events.

Beyond the dubiousness of her tale, it also turned out that the meeting of the Congressional Human Rights Caucus itself had been the brainchild of Gary Hymel, a vice-president of Hill and Knowlton, one of the largest public relations firms in the world. Hymel had graciously provided the caucus with all the witnesses that it heard. Hymel and Hill and Knowlton were on the payroll of the Kuwaiti royal family in exile and had been given the assignment of manufacturing public support for the U.S. military intervention.

Nariyah’s shocking testimony was but one created circumstance in an involved plan to inflame American public outrage. Within a few months, tales such as hers had readied the public mind and led the nation into war.
[Source: PR! A History of Spin, Stuart Ewen]

http://www.youtube.com/watch?v=LmfVs3WaE9Y

If you watch the video of this girl’s testimony and do not realize that the entire event was manufactured by one of the world’s largest PR firms and paid for by the Kuwaiti royal family, you would surely be moved to outrage at the testimony given. This is the profound power of television and the media to shape public opinion. It is stated that “seeing is believing.” Yet, no one actually saw the Iraqi soldiers committing these atrocities. They only saw a teenage girl testifying that such things had occurred.

Consider the shrewdness of selecting an attractive young Kuwaiti girl to tell this story. People are predisposed to believe children. They do not typically associate adolescent girls with cunning and deception. Had the adult men who wrote the script actually delivered the words, it would have had a very different effect.

A similar deception was foisted upon the American public during the second Gulf War when public support for the conflict began to wane. A story of American heroism was needed to rekindle support. The story of a young, attractive female soldier caught in an ambush, served this purpose. The Jessica Lynch story was front page, and prime time fodder for all of the news agencies.




Jessica Lynch - People Magazine

It was reported that Jessica fought alongside her ambushed comrades, firing her gun until she ran out of ammunition. She was then taken captive by the Iraqis, sexually assaulted, and treated horribly despite her many wounds. Her ordeal ended when she was dramatically rescued in a daring raid by American special forces troops. Personal details of Jessica Lynch’s life, such as her desire to become a school teacher, were touted repeatedly to make her appear to be the all-American girl, full of virtue, brave, and willing to sacrifice for her country.

For weeks the story played across all the major media outlets and a patriotic fervor gripped America. Support for President Bush and the war in Iraq surged. Much later it was disclosed that the entire description of events was immensely hyped.

[From a CBS New Report by David Martin]
Jessica’s testimony before Congress
A couple days after her rescue, The Washington Post had reported that before she was captured by the Iraqis she "fought fiercely and shot several enemy soldiers...firing her weapon until she ran out of ammunition." According to the Post account, which was based on anonymous sources citing battlefield reports, Lynch kept firing "even after she sustained multiple gunshot wounds." By her own account, none of that happened. She never fired her weapon and was knocked unconscious when her vehicle crashed, waking up hours later in an Iraqi hospital. As she put it in her testimony today, the story depicted her as "the little girl Rambo from the hills of West Virginia who went down fighting. It was not true." She blamed the media for perpetuating the myth. "They should have found out the facts before they spread the word like wildfire."

In 2007 Jessica was called before Congress to give testimony about her experiences and she stated, “I am still confused as to why they chose to lie and tried to make me a legend.” In actuality, after being captured Jessica was turned over to Iraqi medical personnel who gave her the best care they possibly could. When the special forces invaded the hospital compound, it was nearly deserted. There were no enemy soldiers to fight off, though dramatic images of troops repelling into the compound on ropes, and flying Jessica out on helicopter, were conveniently taken to be splashed across the media throughout America.

Not only was the story of Jessica’s ordeal manufactured so that it bore no resemblance to the truth, but her moral character was greatly whitewashed to make her appear like America’s darling. It was later revealed that Jessica engaged in a sexually debauched party with fellow soldiers before shipping out to Iraq. Pictures of her cavorting topless with male soldiers surfaced, and Larry Flynt, publisher of Hustler Magazine reportedly paid a six figure price for the photos, but was pressured to not publish them.

With the media and the government both fully in the power of the invisible government, one must truly wonder what can be believed today. If you are forming your world view by what you see, hear, and read in the news, then you are surely deceived. From America’s birth in the Green Dragon Tavern, to the present day, she has been a Luciferian nation. Her policies are Luciferian. The government deliberately seeks to deceive the citizens of the nation, to hide from them their true motives and actions, while proclaiming pleasant lies intended to obtain their consent.




One of the biggest deceptions of the moment, being played out across the media, is the fiction that Barack Obama and Mitt Romney are duking it out as adversaries with opposing views, wanting to lead America down different paths. An examination of the twenty largest monetary contributors to the Obama and Romney campaigns reveals that both campaigns are being financed by the same banking and corporate interests. The following is extracted from the Progressive Leadership Conference website. Major banks are highlighted.

Top 20 Mitt Romney Campaign Contributors

Goldman Sachs $891,140
Bank of America $667,139
JPMorgan Chase & Co $662,719
Morgan Stanley $649,847
Credit Suisse Group $554,066
Citigroup Inc $418,263
Wells Fargo $412,250
Barclays $403,800
Kirkland & Ellis $393,667
Deloitte LLP $355,390
HIG Capital $338,000
PricewaterhouseCoopers $333,600
Blackstone Group $313,725
UBS AG $308,130
Elliott Management $281,175
Bain Capital $268,470
EMC Corp $252,250
General Electric $214,450
Ernst & Young $212,025
Sullivan & Cromwell $197,150

Top 20 Barack Obama Campaign Contributors for 2008 and 2012

University of California $1,648,685
Goldman Sachs $1,013,091
Harvard University $878,164
Microsoft Corp $852,167
Google Inc $814,540
JP Morgan Chase & Co $808,799
Citigroup Inc $736,771
Time Warner $624,618
Sidley Austin LLP $600,298
Stanford University $595,716
National Amusements Inc $563,798
WilmerHale LLP $550,668
Columbia University $547,852
Skadden, Arps et al $543,539
UBS AG $532,674
IBM Corp $532,372
General Electric $529,855
US Government $513,308
Morgan Stanley $512,232
Latham & Watkins $503,295
[Source: http://intertheory.org/plcblog/2012/10/01/obama-and-romney-so-hot-for-us/]

NOTE: The organizations themselves did not donate, rather the money came from the organizations' PACs, their individual members or employees or owners, and those individuals' immediate families. Organization totals include subsidiaries and affiliates.

It doesn’t matter which candidate is elected. They both serve the same masters.

People of God, you and I are living in an hour when the deceptive principles of Satan are being practiced as a matter of course by nations, and those who guide them, whether seen or unseen. Like a flood, lies and distortions of the truth are being poured out, and the masses are being swept along with the swiftly moving current. The prudent Christian will perceive what is occurring and deliver themselves from peril. 

Joseph Herrin

Spain banks’ worst-case scenario turning real

Spain’s banks face more loan losses as the pace of an economic slump risks turning a worst-case scenario dismissed in stress tests into reality.

Bad loans as a proportion of total lending jumped to a record 10.5% in August from a restated 10.1% in July as 9.3-billion euros (US$12.2-billion) of loans were newly classified as being in default, according to data published by the Bank of Spain on its website Thursday. The ratio has climbed for 17 straight months from 0.72% in December 2006, before Spain’s property boom turned to bust.

Spanish bank stress tests by management consultants Oliver Wyman have factored in an economic contraction totaling 6.5% from 2012 to 2014 in an adverse scenario that the government and Bank of Spain said has a probability of about 1%. Analysts at Nomura and Citigroup Inc. disagree, saying spending cuts and economic conditions mean the worst-case outcome already looks feasible.

“You can’t attach a 1% probability to a scenario that already looks realistic,” Silvio Peruzzo, a European area economist at Nomura in London, said in a telephone interview Wednesday. Spain’s gross domestic product will shrink by 6.2% from 2012 to 2014, he estimated.

Spain Downgrade

Spain’s request for 100-billion euros of European Union financial aid to shore up its banks is increasing concern about the nation’s growing liabilities. Standard & Poor’s downgraded the country’s debt rating by two levels to BBB-, one step above junk, from BBB+ on Oct. 10, saying it wasn’t clear who will bear the cost of recapitalizing banks.

It cut the ratings of 11 lenders including Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA, Spain’s largest, two days ago, citing the sovereign downgrade.

Spanish banks fell Thursday. Santander declined 1.4% to 6.04 euros by 4:11 p.m. in Madrid trading, while BBVA slipped 0.6% to 6.62 euros.

Lending in Spain’s banking system fell 1.1% in August from July and 5% from the same month a year earlier, the Bank of Spain said. Deposits dropped 1.1% in the month and 8.7% from a year ago.

Economic Growth

Under Oliver Wyman’s worst-case projection, an economic contraction of 4.1% in 2012, 2.1% in 2013 and 0.3% in 2014 would contribute to 270-billion euros of credit losses and a 59.3-billion-euro capital shortfall for banks. The base case foresees shrinkage of 1.7% this year, 0.3% in 2013 and an expansion of 0.3% in 2014. A deeper recession poses the risk that banks will have to raise more capital to cover losses.

Oliver Wyman won’t comment on estimates laid down in the stress tests, an official at Llorente y Cuenca, a Madrid public-relations firm representing Oliver Wyman, said in a telephone interview Wednesday.

Spain commissioned the review as part of terms for its European bailout. Oliver Wyman said in its report on the stress tests that a steering committee that included the European Central Bank and the International Monetary Fund had deemed its adverse scenario conditions to be “appropriately conservative” relative to Spanish macro-economic indicators over 30 years.


Spanish banks’ loan losses will continue to grow because of the deteriorating economic outlook and rising unemployment, said Ebrahim Rahbari, a London-based economist at Citigroup. He predicted a 5.8% contraction for Spain’s economy between 2012 and 2014.

Adverse Scenario

“The adverse scenario of the test looks closer to a forecast of economic performance over the next three years than a stress case,” Rahbari said in a phone interview. “That surely has consequences for loan-loss rates and the one we are most concerned about is household mortgages.”

Deutsche Bank AG says the economic slump in Spain will be less pronounced, predicting a 1.7% decline in GDP over the period. The economy will grow 0.7% in 2014 after a 2.6% slump this year and in 2013, the bank said.

In a Bloomberg survey of 37 analyst estimates for Spanish economic growth, the average forecast is for a drop of 1.6% in GDP this year and 1.4% in 2013, followed by growth of 0.2% in 2014.

“A contraction of 2.6% over two years is still a hell of a contraction,” Gilles Moec, Deutsche Bank’s co-chief European economist in London, said by telephone Tuesday. A pledge by European Central Bank President Mario Draghi to help bring down Spanish borrowing costs will probably help Spain avoid being sucked into a recessionary “spiral,” he said.

Rising Defaults

The default rate for 604-billion euros of Spanish home mortgages stood at 3.2% in June, according to the Bank of Spain. Banco Santander Chief Executive Officer Alfredo Saenz said in April that anyone saying mortgage defaults are a problem for Spanish banks was “saying something stupid.”

“I think this drop of 6.5% is a number that isn’t going to happen,” said Maria Dolores Dancausa, chief executive officer of Spain’s Bankinter SA, referring to the adverse macro- economic stress test scenario at a Madrid news conference Thursday.

Loans newly-classed as in default fell in the third quarter for Bankinter, said Chief Financial Officer Gloria Ortiz on a webcast for analysts Thursday after the bank published earnings. “We cannot say this is a trend,” she said. “The economic situation is complex so I would be prudent and expect further deterioration of the book next quarter and throughout 2013.”

Jobless Rate

Bad loans and the jobless rate are bound to increase as Spain attempts to cut its budget deficit to 2.8% of GDP in 2014 from 9% at the end of last year, Simon Maughan, a financial industry strategist at Olivetree Securities in London, said last week by telephone.

In the worst case scenario, Oliver Wyman’s stress tests predict unemployment of 25% this year rising to 27% in 2014. The rate will peak at 26% in 2013, according to the average estimate in a Bloomberg survey of 13 analysts.

It may be wrong to suggest, as the Spanish authorities do, that the higher rates of economic contraction estimated by Oliver Wyman are a remote possibility, said Daragh Quinn, a Madrid-based banks analyst at Nomura.

“I think that talk of 1% probability is going to come back to haunt them,” Quinn said in a phone interview.

The bad loans data published Thursday by the Bank of Spain restated the bad loans ratio for July to 10.1% from a previously published 9.86%. The amount of bad loans for July was restated to 173.2-billion euros from a previously published 169.3-billion euros.

Financial Post

Gerald Celente - The Fanny Kiefer Show

More Believe In Space Aliens Than In God According To U.K. Survey

Some said they have seen UFOs (demons) and because of that people believe.... I prefer to trust GOD.

Blessed [are] they that have not seen, and [yet] have believed.

John 20:29

More than 33 million U.K. citizens believe in extraterrestrial life, compared to just over 27 million -- less than half the country -- who believe in God.

That's the result of an online survey of 1,359 adults who were asked a variety of questions ranging from belief in alien visits to Earth, suspicions of UFO cover-ups, belief in extraterrestrials vs. belief in God, and whether or not men actually landed on the moon.

The survey, conducted by Opinion Matters, revealed the following statistics among those surveyed:

• 52 percent believe UFO evidence has been covered up because widespread knowledge of their existence would threaten government stability.
• 44 percent believe in God.
• One in 10 people has reported seeing a UFO.
• A quarter more men than women claim to have seen UFOs.
• 20 percent of respondents believe UFOs have landed on Earth.
• More than five million British citizens believe the Apollo moon landings were faked.

While the survey was conducted as part of a tie-in with a new video game, "XCOM: Enemy Unknown," it was a legitimate sampling of opinions that can be taken to represent the population of the U.K., according to the agency that conducted the survey.

"Yes, it has been done with an independent panel through a bonafide research company," said Karen Brooks, managing director of Opinion Matters, a well-known market research agency that created the survey.

"Surveys can be done face-to-face, over the telephone and online. This one was a U.K. adult sample, which is quite broad, and doing it online is a quick, effective way of getting to that audience," she continued. "We make sure that all of the questions are compliant from a research perspective."

But some are skeptical of the results, including Alistair Macdonald-Radcliff, an Anglican priest and director general of the World Dialogue Council, a group that promotes better relations between the West and Islamic cultures.

"Having done a certain amount of work with statistics on religion, I am inherently skeptical about what these statistics tell you, and particularly if there's a narrow, selective base. Something with about 1,000 people does set off alarm bells," Macdonald-Radcliff told HuffPost.

"I really do think the failure to define what they're asking people to believe here is a fairly critical failure for the survey," Macdonald-Radcliff said. "Because you've already set out quite a variety of possibilities as to what they might or might not suppose UFOs to be. I certainly think sliding extraterrestrial and UFO together is a particularly messy thing to do."

Macdonald-Radcliff suggested that people are "less inclined to be participants in traditional churches," which might represent a shift of general beliefs that they have about God and extraterrestrials.

"There may be some correlation there," he noted. "But I have to say the actual hard data has yet to be found. There may be a relationship between people becoming more credulous in UFOs and less credulous in traditional religion."

The results of the survey are not surprising to Nick Pope, a former U.K. Ministry of Defense UFO investigator. "It's important to bear in mind that people who believe in alien life don't necessarily think it's visiting us," Pope said in an email to HuffPost.

"The recent upsurge in the discovery of extra-solar planets may be a factor here; as we close in on 'shadow Earths,' people are more likely to think that if Earth isn't unique, neither is life," he added.

Pope also noted that many of the doubts people might have about religion or about extraterrestrial life are rooted in a similar problem: lack of hard evidence.

"In the case of religion, we have only faith -- faith based on some ancient texts where, despite the claims, no divine origin can be proven," Pope said. "Even where people claim to have had a first-hand experience, why should we believe accounts of miracles and visions any more or less than UFO sightings or claims of alien abduction?"

Huffingtonpost

HSBC Is the Latest Attack Victim

HSBC Holdings, a British multinational bank with U.S. headquarters in Mettawa, Ill., on Oct. 18 became the 10th bank in recent weeks to suffer online outages as a result of a distributed denial of service attack.

The $317.5 billion institution reported that its websites worldwide were knocked out of service as a result of the attack.

"The denial of service attack did not affect any customer data, but did prevent customers from using HSBC online services, including Internet banking," Neal McGarity, a company spokesman, told BankInfoSecurity the afternoon of Oct. 18. "We are taking appropriate action, working hard to restore service. We are pleased to say that some sites are now back up and running."

HSBC is cooperating with law enforcement authorities on an investigation and is working with other organizations that have been similarly affected by attacks, McGarity said.
Recent Attacks

HSBC apparently is the latest victim in a series of attacks by the hacktivist group Izz ad-Din al-Qassam Cyber Fighters.

On Oct. 17, BBT Corp., a Winston-Salem, N.C.-based bank, acknowledged that its website suffered from intermittent outages related to a DDoS attack. And Capital One experienced its second DDoS attack on Oct. 16.

An Oct. 16 post on Pastebin claiming to be from Izz ad-Din al-Qassam said more attacks against U.S. banks would be waged between Oct. 16 and Oct. 18. Unlike its previous attack threat announcements, the group said it would not name in advance the banks to be targeted.

Izz ad-din Al Qassam said it would continue to target U.S. institutions until a YouTube movie trailer believed by the group to be anti-Islam is removed from the Internet. Experts, however, question whether that outrage is just a front for some more nefarious motive.

Bank Info Security

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