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Gunfire pounds anti-Mubarak protest camp in Cairo

Posted by Admin on February 3, 2011

http://news.yahoo.com/s/ap/20110203/ap_on_re_mi_ea/ml_egypt

CAIROHeavy automatic weapons fire pounded the anti-government protest camp in Cairo‘s Tahrir Square before dawn on Thursday in a dramatic escalation of what appeared to be a well-orchestrated series of assaults on the demonstrators. At least three protesters were killed by gunfire, according to one of the activists.

The crowds seeking an end to President Hosni Mubarak’s nearly three decades in power were still reeling from attacks hours earlier in which Mubarak supporters charged into the square on horses and camels, lashing people with whips, while others rained firebombs and rocks from rooftops.

The protesters accused Mubarak’s regime of unleashing a force of paid thugs and plainclothes police to crush their unprecedented nine-day-old movement, a day after the 82-year-old president refused to step down. They showed off police ID badges they said were wrested from their attackers. Some government workers said their employers ordered them into the streets.

The violence intensified overnight, as sustained bursts of automatic gunfire and powerful single shots rained into the square starting at around 4 a.m. and continuing for more than two hours.

Protest organizer Mustafa el-Naggar said he saw the bodies of three dead protesters being carried toward an ambulance. He said the gunfire came from at least three locations in the distance and that the Egyptian military, which has ringed the square with tank squads for days to try to keep some order, did not intervene.

Footage from AP Television News showed one tank spreading a thick smoke screen along a highway overpass just to the north of the square in an apparent attempt to deprive attackers of a high vantage point. The two sides seemed to be battling for control of the overpass, which leads to a main bridge over the Nile.

In the darkness, groups of men hurled firebombs and rocks from the bridge, where a wrecked car sat engulfed in flames. Others dragged two apparently lifeless bodies from the area.

Egypt‘s health minister did not answer a phone call seeking confirmation of the number killed.

Click image to see photos of anti-government protests in Egypt

At daybreak, the two sides were still battling with rocks and flaming bottles of gasoline along the front line on the northern edge of the square, near the famed Egyptian Museum.

Demonstrators took cover behind makeshift barricades of corrugated metal sheeting taken from a nearby construction site and Mubarak supporters seemed to hold their ground on the overpass. Between them stretched a burning no-man’s-land of smoldering cars, hunks of concrete and fires.

The fighting began more than 12 hours earlier, turning the celebratory atmosphere in the square over the previous day into one of terror and sending a stream of wounded to makeshift clinics in mosques and alleyways on the anti-government side. Three people died in the violence on Wednesday and 600 were injured.

Mustafa el-Fiqqi, a senior official from the ruling National Democratic Party, told The Associated Press that businessmen connected to the ruling party were responsible for what happened.

The notion that the state may have coordinated violence against protesters, who had kept a peaceful vigil in Tahrir Square for five days, prompted a sharp rebuke from the Obama administration.

“If any of the violence is instigated by the government, it should stop immediately,” said White House Press Secretary Robert Gibbs.

The clashes marked a dangerous new phase in Egypt’s upheaval: the first significant violence between government supporters and opponents. The crisis took a sharp turn for the worse almost immediately after Mubarak rejected the calls for him to give up power or leave the country, stubbornly proclaiming he would die on Egyptian soil.

His words were a blow to the protesters. They also suggest that authorities want to turn back the clock to the tight state control enforced before the protests began.

Mubarak’s supporters turned up on the streets Wednesday in significant numbers for the first time. Some were hostile to journalists and foreigners. Two Associated Press correspondents and several other journalists were roughed up in Cairo. State TV had reported that foreigners were caught distributing anti-Mubarak leaflets, apparently trying to depict the movement as foreign-fueled.

The scenes of mayhem were certain to add to the fear that is already running high in this capital of 18 million people after a weekend of looting and lawlessness and the escape of thousands of prisoners from jails in the chaos.

Soldiers surrounding Tahrir Square fired occasional shots in the air throughout Wednesday’s clashes but did not appear to otherwise intervene and no uniformed police were seen. Most of the troops took shelter behind or inside the armored vehicles and tanks stationed at the entrances to the square.

“Why don’t you protect us?” some protesters shouted at the soldiers, who replied they did not have orders to do so and told people to go home.

“The army is neglectful. They let them in,” said Emad Nafa, a 52-year-old among the protesters, who for days had showered the military with affection for its neutral stance.

Some of the worst street battles raged near the Egyptian Museum at the edge of the square. Pro-government rioters blanketed the rooftops of nearby buildings and hurled bricks and firebombs onto the crowd below — in the process setting a tree ablaze inside the museum grounds. Plainclothes police at the building entrances prevented anti-Mubarak protesters from storming up to stop them.

The two sides pummeled each other with chunks of concrete and bottles at each of the six entrances to the sprawling plaza, where 10,000 anti-Mubarak protesters tried to fend off more than 3,000 attackers who besieged them. Some on the pro-government side waved machetes, while the square’s defenders filled the air with a ringing battlefield din by banging metal fences with sticks.

In one almost medieval scene, a small contingent of pro-Mubarak forces on horseback and camels rushed into the anti-government crowds, trampling several people and swinging whips and sticks. Protesters dragged some riders from their mounts, throwing them to the ground and beating their faces bloody. The horses and camels appeared to be ones used to give tourists rides around Cairo.

Dozens of men and women pried up pieces of the pavement with bars and ferried the piles of ammunition in canvas sheets to their allies at the front. Others directed fighters to streets needing reinforcements.

The protesters used a subway station as a makeshift prison for the attackers they managed to catch. They tied the hands and legs of their prisoners and locked them inside. People grabbed one man who was bleeding from the head, hit him with their sandals and threw him behind a closed gate.

Some protesters wept and prayed in the square where only a day before they had held a joyous, peaceful rally of a quarter-million, the largest demonstration so far.

Egyptian Health Minister Ahmed Sameh Farid said three people died and at least 611 were injured in Tahrir Square on Wednesday. One of those killed fell from a bridge near the square; Farid said the man was in civilian clothes but may have been a member of the security forces.

Farid did not say how the other two victims, both young men, were killed. It was not clear whether they were government supporters or anti-Mubarak demonstrators.

After years of tight state control, protesters emboldened by the uprising in Tunisia took to the streets on Jan. 25 and mounted a once-unimaginable series of demonstrations across this nation of 80 million. For the past few days, protesters who camped out in Tahrir Square reveled in a new freedom — publicly expressing their hatred for the Mubarak regime.

“After our revolution, they want to send people here to ruin it for us,” said Ahmed Abdullah, a 47-year-old lawyer in the square.

Another man shrieked through a loudspeaker: “Hosni has opened the door for these thugs to attack us.”

The pressure for demonstrators to clear the square mounted throughout the day, beginning early when a military spokesman appeared on state TV and asked them to disperse so life in Egypt could get back to normal.

It was a change in attitude by the army, which for the past few days had allowed protests to swell with no interference and even made a statement saying they had a legitimate right to demonstrate peacefully.

Then the regime began to rally its supporters in significant numbers for the first time, demanding an end to the protest movement. Some 20,000 Mubarak supporters held an angry but mostly peaceful rally on Wednesday across the Nile River from Tahrir, responding to calls on state TV.

They said Mubarak’s concessions were enough. He has promised not to run for re-election in September, named a new government and appointed a vice president for the first time, widely considered his designated successor.

They were bitter at the jeers hurled at Mubarak.

“I feel humiliated,” said Mohammed Hussein, a 31-year-old factory worker. “He is the symbol of our country. When he is insulted, I am insulted.”

The anti-Mubarak movement has vowed to intensify protests to force him out by Friday.

State TV said Vice President Omar Suleiman called “on the youth to heed the armed forces’ call and return home to restore order.” From the other side, senior anti-Mubarak figure Mohamed ElBaradei demanded the military “intervene immediately and decisively to stop this massacre.”

Secretary of State Hillary Rodham Clinton spoke with Suleiman to condemn the violence and urge Egypt’s government to hold those responsible for it accountable, State Department spokesman P.J. Crowley said.

___

AP correspondents Sarah El Deeb, Hamza Hendawi, Diaa Hadid, Lee Keath, Michael Weissenstein and Maggie Michael contributed to this report.

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Where the prescription looks like the laundry list!

Posted by Admin on December 9, 2010

Medicine

Medicine

http://www.thehindu.com/opinion/open-page/article931840.ece?homepage=true

PROF. B. M. HEGDE

“All good is hard. All evil is easy. Dying, losing, cheating, and mediocrity is easy. Stay away from easy.” — Scott Alexander

The foundation of modern medical science is shaky. The gold standard of medical science is only statistical, randomised controlled trials (RCTs) used to test drugs and instruments. In short, if there is a science (I have shown elsewhere that there is no science of man), it is just statistical science and does not meet the strict standards of either science or technology as defined by the National Aeronautics and Space Administration‘s Technology Readiness Levels (NASA-TRL) or modern systems engineering (MSE). I have extensively written about the unscientific base of the RCTs in both my books and articles over the past four decades.

Even the President of NICE, which is the highest body to oversee drug research in the U.K., Sir Michael Rawlins, in his Harveian Oration at the Royal College, had this to say about RCTs: “That randomised controlled trials (RCTs), long regarded as the ‘gold standard’ of evidence, have been put on an undeserved pedestal.” Sir Michael outlines their limitations in several key areas, arguing that a diversity of approaches should be used to analyse the whole evidence base. (Rawlins M. The Harveian Oration of 2008, De Testimonio. On the evidence for decisions about the use of therapeutic interventions. Royal College of Physicians, 2008). This is bad news for the conventional thinkers, coming as it does from the highest level in their own backyard.

Using this kind of science, industry tries to exploit the public to make money with all kinds of chemicals passed off as effective drugs! History tells us that Nujol, the useless byproduct of petroleum extraction, was the first anti-cancer drug; and chlorpromazine, (Largactil), used extensively in psychiatry, is a byproduct of rocket fuel extraction! Many of the present expensive anticancer chemicals have not even gone through the inadequate RCT test! Now my friends who hate me for writing that a routine check of healthy individuals is dangerous will understand why I wrote what I wrote. Check-up means labelling, which is followed by drugging or intervening by other means. Most modalities of treatment, using both drugs and surgery, have no scientific base, although many of them seem to work through a very powerful placebo effect. Corrective surgery is an exception.

Most body parameters do change as there is need for them to do so for reasons unknown to us at the moment. Sugar, cholesterol and blood pressures belong to that category. The surest way to get them back to what we think should be the normal is to change our unhealthy lifestyle. Interventions with drugs have a dubious reputation in this field. Lifestyle change is something that is universally useful. Instead of going for a check-up when one is healthy, it is safer to change one’s lifestyle and try to live as close to nature as is possible, keeping one’s mind filled with universal love, devoid of hatred, greed, jealously and anger.

Heavy smokers and alcoholics need check-ups as their body warning signals of diseases fail anyway. The rest of us could make do with seeing doctors only at the first symptom of any change in our body. Symptoms denote the failure of our inbuilt repair mechanism, the immune guard. This also is due to the wrong lifestyle these days.

The pharma industry could go to any extent to fool even the governments to sell its wares. A recent revelation in the Guardian, London, exposed one such heinous act that could have endangered and/or extinguished many lives already. (http://www.guardian.co.uk/society/2010/nov/17/drugs-companies-exorbitant-profits- nhs). The European Union has defined some diseases as ‘orphan diseases,’ where the drug companies are not interested in finding a cure since the financial return might not be attractive. Companies finding out newer treatments for ‘orphan diseases’ would get special incentives from the governments. Please note that the industry is keen only on imaginary diseases (the so-called silent killers) that need lifelong drug therapy; the latter are their cash cows. Blood pressure, sugar and cholesterol are the three biggest milch cows.

It is now discovered that some companies have repackaged some of the old drugs in a new format and called them new cure for ‘orphan diseases’ and have milked the National Health Service of millions of pounds! The Guardian article gives graphic descriptions of the fraud going on. These so-called new drugscould easily pass the RCT test to qualify them as having evidence base. The tall talk of evidence-based medicine is as hollow as are many of our claims to superiority to all other modalities of treatment such as Ayurveda and homoeopathy. In fact, most of them have a better scientific base than our modern medicine. While U.S. medical schools teach for six months, out of their four-year MD course, the basis of other complementary systems, in India, the cradle of the best medical wisdom, Ayurveda, we seem to be averse to teaching anything other than the unscientific modern medicine.

The result is that most of our graduates become good technicians mastering a couple of interventions to make money. The rest of them become researchers, doing RCTs for western drug companies, making tonnes of money in the bargain through the new CROs. One has only to see one of the prescriptions which reads like a laundry list with one beta blocker, one ACE inhibitor, one blood thinner, one sugar lowering drug, of course, one cholesterol lowering drug and many others for every patient.

There is NO science base for this kind of poly-pharmacy, not even the imperfect RCT to back such practices. Recent studies show that patient compliance with such poly-pharmacy is less than 23 per cent. Seventy seven per cent of the recipients are, therefore, safe as they forget to take those tablets! God alone can save mankind from human greed, which has invaded every sphere of human activity ranging from 2G spectrum to patient care. “Do not make money in the sick room,” wrote Hippocrates. We take our oath in his name when we graduate only to become hypocrites in later life! “It is double pleasure to deceive the deceiver.” — Niccolo Machiavelli

(The writer is a former professor of cardiology, Middlesex Hospital Medical School, University of London, and former Vice-Chancellor, Manipal University. email: hegdebm@gmail.com)

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Papers surface alleging land grab by Deve Gowda family

Posted by Admin on November 26, 2010

The Vidhana Soudha, the seat of Karnataka's le...

Vidhana Soudha(Bengaluru),Karnataka

H.D Deve Gowda(Former Prime Minister of India)

H.D Deve Gowda(Former Prime Minister of India)

http://in.yfittopostblog.com/2010/11/24/papers-surface-alleging-land-grab-by-deve-gowda-family/

HD Kumaraswamy, the JD(S) leader who has been exposing scandal after scandal involving chief minister B S Yeddyurappa, is now in the dock for helping his brother Balakrishne Gowda grab prime land in Bangalore.

Documents surfaced in Bangalore on Wednesday showing the gifting of prime land to Kupendra Reddy, who in turn sold part of the property to former prime minister HD Deve Gowda’s son Balakrishne Gowda.

The Bangalore edition of Deccan Chronicle reports:

In 2007, then chief minister H.D. Kumaraswamy who has been crying foul over BSY’s largesse to his kith and kin, granted an absolute sale deed to an extent of 28 acres of prime land belonging to KIADB on the bustling Sarjapur Outer Ring Road for a mere Rs 14 crore. Its market value today — Rs 850 crore.

Less than two months later, HDK’s brother and other members of the former chief minister’s family received a portion of this very property at a throw away price. Today, Accenture operates out of this office space.

According to documents available with Deccan Chronicle, the prime beneficiary in this deal is H.D. Balakrishne Gowda (HDK’s brother) who has got 25,000 sqft of built up office space for a mere Rs 3.08 crore at less than Rs 1,200 per sqft whereas the value at that time was Rs 4,000 per sqft of built up structure.

Deccan Herald had reported the deal back in 2007:

H D Kumaraswamy may now have to eat his words. A set of documents available with Deccan Herald reveals that his family members, indeed, have  connections with the city-based realtor D Kupendra Reddy, whose house was raided by the I-T department on Tuesday…

A day after the I-T raids, Mr Kumaraswamy had fumed at media reports that Mr Reddy was close to him and stoutly denied any connection with the realtor. The documents also reveal that the entire commercial space sold to Kavitha (Kumaraswamy’s sister-in-law) and her family members was originally owned by State-owned Karnataka Industrial Area Development Board.

Three years on, when the case surfaced again this Wednesday, Kumaraswamy told TV9 that Reddy had got the land from the industrial area development board when S M Krishna was chief minister. He claimed he had no knowledge of the deal involving his brother Balakrishne Gowda.

Earlier in the day, Kumaraswamy said the BJP had acted immorally by letting scandal-tainted Yeddyurappa stay on as chief minister. He said he would take out a yatra in Karnataka to draw the people’s attention to Yeddyurappa’s “misdeeds.” Panchayat elections are due in the state in a month.

 

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Hope fades in search of collapsed Indian building

Posted by Admin on November 16, 2010

By KATY DAIGLE, Associated Press – 1 hr 54 mins ago

NEW DELHI – Anna Halder sat on a patch of packed mud and dialed her cell phone Tuesday, clinging to the hope that her parents or sisters somehow survived under the wreckage of their collapsed apartment building and would pick up.

“It’s ringing,” she said. No one answered. She dialed again.

At least 66 people were killed and 73 were injured after the crude brick building crashed down in a congested New Delhi neighborhood. By Tuesday evening, as rescue workers continued to tear through the pile of broken bricks, twisted iron rods and concrete slabs, hope for finding more survivors was fading.

The building collapsed Monday about the time families were cooking dinner. Halder, 18, had not yet returned from her job as a housekeeper. Her working-class family, like millions of other migrants, moved to New Delhi hoping to get jobs in the growing Indian capital.

They, and many others from West Bengal, found housing in the crude brick building in the Lalita Park neighborhood near the Yamuna River because it was one of the rare homes they could afford amid the skyrocketing real estate prices in the crowded city.

But the building was two floors higher than legally allowed, and its foundation appeared to have been weakened by water damage following monsoon rains. The soil near the river is too weak to support such tall buildings, New Delhi Lt. Gov. Tejendra Khanna said.

Poor construction material and inadequate foundations often are blamed for building collapses in India. In New Delhi, where land is at a premium, unscrupulous builders often break building laws to add additional floors to existing structures.

While the collapse was still being investigated, New Delhi’s top elected official blamed poor construction and maintenance and vowed to punish those who had allowed the extra floors to be built.

“The scale of the tragedy is unprecedented,” Sheila Dikshit said.

Police were hunting the building’s owner, Amrit Singh, who residents said had fled the area. Officials evacuated another of Singh’s buildings next door, after finding its basement was also flooded.

When the building fell, residents said they heard a rumble like thunder. They sprinted to the site and tried to reach those inside by digging with their hands into the piles of concrete, bricks and mortar before police and rescue teams arrived.

“There were so many dead bodies, there was no movement at all,” said Dil Nawaz Ahmed, a 25-year-old journalist who lives nearby. He said he managed to help free five injured residents, but mainly pulled out bodies, which he carried to waiting ambulances. “There were many women and children.”

Rescuers sawed through iron rods and shifted concrete with a bulldozer. Sniffer dogs searched out people. Ambulances parked nearby at the ready. Women crying over lost loved ones were led away.

Malti Halder was still waiting for information about her husband and daughter. She is was not related to Anna Halder; the name is common in West Bengal where many of the residents had come from.

“I did not find them at the hospital. I’ve been searching for them since last night but have not found them,” she said.

M.D. Shahanawaz, a 23-year-old student, teared up as his hopes for a friend who lived in the building dwindled.

“He’s dead,” he said. “Everybody is coming out critical or dead.”

When workers carried a body away from the site on a stretcher, nearby rescuers stopped what they were doing and clasped their hands together in respect for the dead.

One woman whose granddaughter was killed wailed in grief from a nearby roof.

Dozens of black-and-white photographs of the dead hung on the wall outside a mortuary so relatives and friends could identify the bodies of their loved ones.

One man carried away the body of a small boy wrapped in a white sheet.

From another family, Jamuna Halder sat outside on a curb. “My husband is gone. My children are injured in the hospital,” she said.

She lived with her husband and three children in a room for 2,400 rupees ($54) a month after their nearby slum dwelling was demolished. She had been out cleaning houses when the building collapsed. “When I came back, I saw this tragedy had happened.”

___

Associated Press writers Nirmala George and Kevin Frayer contributed to this report.

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Goldman Suchs, truly…

Posted by Admin on April 23, 2010

Goldman Sucks

Goldman Sucks

Something truly extraordinary has happened. The Securities and Exchange Commission (SEC) has charged Goldman Sachs, the greedy, grasping, Midas heart of the Old World Order, with fraud, prompting an immediate slump of over 12% in their share price.

For once, the victims of the evil empire of Goldman Sachs were not the ordinary people, but their own big clients, including the German bank IKB.

This is a momentous hour. Like rats in a sack, the Old World Order have viciously turned on each other. Their united front is disintegrating.

How did it come about? What did Goldman Sachs do that was so outrageous that the SEC could no longer turn a blind eye to the myriad of transactions performed by Goldman Sachs that should have attracted the most serious scrutiny long ago?

What happened was that the hedge fund Paulson & Co, one of the most spectacular beneficiaries of the Credit Crunch, earning billions of dollars while so many other were losing billions, put together a complex portfolio of subprime-mortgage-backed investments that it fully expected to slump in value i.e. it was actually assembling a collection of what it thought were the highest risk, most dubious investments available, and anticipating maximum downside on this portfolio. Its explicit strategy was to bet heavily against this portfolio i.e. to “short” it to the fullest extent. In other words, Paulson & Co regarded this portfolio as utterly toxic, a disaster in the making. This portfolio was “dead man walking” if ever there was one.

Paulson & Co arranged for Goldman Sachs to structure, market and sell this portfolio to its prestigious clients. Goldman Sachs gave it the full, glossy treatment, indicating to many clients that they would be sitting on a potential goldmine if they invested in this portfolio. They completely omitted to mention to all would-be clients that Paulson & Co regarded this portfolio as a collection of the walking dead – a zombie fund heading for the graveyard. Isn’t this a critical piece of information about which every potential client ought to have been made aware? It’s a bit like selling a house for full market value when you know it’s sitting on the edge of a crumbling cliff, a fact that you deliberately fail to tell the purchaser.

In fact, they didn’t mention Paulson & Co at all. They claimed instead that ACA Management, an objective, independent third party with expertise in analyzing risk, had assembled the portfolio. They must have known that if they had admitted the involvement of Paulson & Co, investors might have viewed it entirely differently, given the reputation of hedge funds.

The Goldman Sachs “vice president” at the heart of the scandal is a Frenchman called Fabrice Tourre. In an email sent to a friend a month before he helped to structure the toxic portfolio, Tourre said, “More and more leverage in the system. The whole building is about to collapse anytime now … Only potential survivor, the fabulous Fabrice Tourre … standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implication of those monstrosities!!!”

Tourre was described as a “well-mannered, handsome guy from a very refined family.” He had a reputation for throwing noisy parties in his fashionable block of flats. He was a ‘straight-A’ student at the Lycee Henri IV, one of France’s most elite schools, housed in an exquisite 6th Century abbey in Paris. He then studied mathematics at the Ecole Centrale Paris, a top French university, before completing his elite education with the obligatory trip to the USA where he obtained a master’s degree from Stanford. He worked in a luxurious office in a prime location in London.

Read the rest of this entry »

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Financial Crisis: The Next Big Bank Bailout is on the Way

Posted by Admin on March 24, 2010

Financial Crisis: The Next Big Bank Bailout is on the Way

by Mike Whitney

//
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Global Research, March 17, 2010

Information Clearing House – 2010-03-16

Housing is on the rocks and prices are headed lower. That’s not the consensus view, but it’s a reasonably safe assumption. Master illusionist Ben Bernanke managed to engineer a modest 7-month uptick in sales, but the fairydust will wear off later this month when the Fed stops purchasing mortgage-backed securities and long-term interest rates begin to creep higher. The objective of Bernanke’s $1.25 trillion program, which is called quantitative easing, was to transfer the banks “unsellable” MBS onto the Fed’s balance sheet. Having achieved that goal, Bernanke will now have to unload those same toxic assets onto Freddie and Fannie. (as soon as the public is no longer paying attention)

Bernanke’s cash giveaway has helped to buoy stock prices and stabilize housing, but market fundamentals are still weak. There’s just too much inventory and too few buyers. Now that the Fed is withdrawing its support, matters will only get worse.

Of course, that hasn’t stopped the folks at Bloomberg from cheerleading the nascent housing turnaround. Here’s a clip from Monday’s column:

“The U.S. housing market is poised to withstand the removal of government and Federal Reserve stimulus programs and rebound later in the year, contributing to annual economic growth for the first time since 2006. Increases in jobs, credit and affordable homes will help offset the end of the Fed’s purchases of mortgage-backed securities this month and the expiration of a federal homebuyer tax credit in April. Sales will rise about 6 percent this year, and housing will account for 0.25 percentage point of the 3.6 percent growth, according to forecasts by Dean Maki, chief U.S. economist for Barclays Capital in New York…“The underlying trend is turning positive,” said Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York.”

Just for the record; there has been no “increases in jobs”. It’s baloney. Unemployment is flat at 9.7 percent with underemployment checking-in at 16.8 percent. There’s no chance of housing rebound until payrolls increase. Jobless people don’t buy houses.

Also, while it is true that the federal homebuyer tax credit did cause a spike in home purchases; it’s impact has been short-lived and sales are returning to normal. It’s generally believed that “cash for clunker-type” programs merely move demand forward and have no meaningful long-term effect.

So, it’s likely that housing prices–particularly on the higher end–will continue to fall until they return to their historic trend. (probably 10 to 15% lower) That means more trouble for the banks which are already using all kinds of accounting flim-flam (“mark-to-fiction”) to conceal the wretched condition of their balance sheets. Despite the surge in stock prices, the banks are drowning in the losses from their non performing loans and toxic assets. And, guess what; they still face another $1 trillion in Option ARMs and Alt-As that will reset by 2012. it’s all bad.

The Fed has signaled that it’s done all it can to help the banks. Now it’s Treasury’s turn. Bernanke will keep the Fed funds rate at zero for the foreseeable future, but he is not going to expand the Fed’s balance sheet anymore. Geithner understands this and is working frantically to put together the next bailout that will reduce mortgage-principal for underwater homeowners. But it’s a thorny problem because many of the borrowers have second liens which could amount to as much as $477 billion. That means that if the Treasury’s mortgage-principal reduction plan is enacted; it could wipe out the banks. Here’s an excerpt from an article in the Financial Times which explains it all:

“A group of investors in mortgage-backed bonds dubbed the Mortgage Investors Coalition (MIC) recently submitted to Congress a plan to overhaul the refinancing of underwater borrowers by writing down the principal balances of both first and second mortgages. The confederation of insurers, asset managers and hedge funds hope to break a logjam between Washington DC and the four megabanks with the most exposure to writedowns on second lien mortgages, including home equity lines of credit.

The private sector initiative coincides with House Financial Services Committee Chairman Barney Frank’s open letter dated 4 March to the CEOs of the banks in question – Bank of America, Citigroup, JP Morgan Chase and Wells Fargo – urging them to start forgiving principal on the second lien loans they hold.

But the banks are unlikely to take action until they get new accounting guidance from regulators that would ease the impact of such significant principal reductions on their capitalization ratios.”

(Ed.–“Accounting guidance”? Either the banks are holding out for a bigger bailout or they’re looking for looser accounting standards to conceal their losses from their shareholders. Either way, it’s clear that they’re trying to hammer out the best deal possible for themselves regardless of the cost to the taxpayer.)

Financial Times again: “The four banks in question collectively own more than USD 400bn of the USD 1trn in second lien mortgages outstanding. BofA holds USD 149bn, Citi holds USD 54bn, JP Morgan holds USD 101bn and Wells Fargo holds USD 115bn, according to fourth quarter 2009 10Q filings with the Securities & Exchange Commission.

As proposed, the MIC’s plan entails haircuts to the first and second lien loans to reduce underwater borrowers’ loan to value ratios to 96.5% of current real estate market prices, according to two sources close.

For the program to work, HAMP would place principal balance forgiveness first in the modification waterfall. The associated second lien would take a principal balance reduction but remain intact through the process – ultimately to be re-subordinated to the first lien, the sources close said.

A systemic program to modify second lien mortgages called 2MP does exist but Treasury has stalled on implementation because the banks that hold them can’t afford it, six buyside investors said. The sources all said implementation of the program, called 2MP, would result in “catastrophic” losses for the nation’s four largest banks, which collectively hold more than USD 400bn of the USD 1trn in second lien mortgages outstanding.” (“Mortgage investors push for banks to write down second liens”, Allison Pyburn, Financial Times)

Hold on a minute! Didn’t Geithner just run bank “stress tests” last year to prove that the banks could withstand losses on second liens?

Yes, he did. And the banks passed with flying colors. So, why are the banks whining now about the potential for “catastrophic” losses if the plan goes forward? Either they were lying then or they’re lying now; which is it?

Of course they were lying. Just like that sniveling sycophant Geithner is lying.

According to the Times the banks hold $400 billion in second lien mortgages. But –as Mike Konczal points out–the stress tests projected maximum losses at just “$68 billion. In other words, Geithner rigged the tests so the banks would pass. Now the banks want it both ways: They want people to think that they are solvent enough to pass a basic stress test, but they want to be given another huge chunk of public money to cover their second liens. They want it all, and Geithner’s trying to give it to them. Wanker.

And don’t believe the gibberish from Treasury that “they have no plan for mortgage principal reductions”. According to the Times:

“Treasury continues to tell investors that any day now they will be out with a final program and they will be signed up”….“The party line continues to be they are a week away, two weeks away,” the hedge fund source said. ”

So, it’s not a question of “if” there will be another bank bailout, but “how big” that bailout will be. The banks clearly expect the taxpayer to foot the entire bill regardless of who was responsible for the losses.

So, let’s summarize:

1–Bank bailout #1–$700 billion TARP which allowed the banks to continue operations after the repo and secondary markets froze-over from the putrid loans the banks were peddling.

2–Bank bailout #2–$1.25 trillion Quantitative Easing program which transferred banks toxic assets onto Fed’s balance sheet (soon to be dumped on Fannie and Freddie) while rewarding the perpetrators of the biggest financial crackup in history.

3–Bank bailout #3–$1 trillion to cover all mortgage cramdowns, second liens, as well as any future liabilities including gym fees, energy drinks, double-tall nonfat mocha’s, parking meters etc. ad infinitum.

And as far as the banks taking “haircuts”? Forget about it! Banks don’t take “haircuts”. It looks bad on their quarterly reports and cuts into their bonuses. Taxpayers take haircuts, not banksters. Besides, that’s what Geithner gets paid for–to make sure bigshot tycoons don’t have to pay for their mistakes or bother with the niggling details of fleecing the little people.

The next big bailout is on the way. Prepare to get reamed! Mike Whitney is a frequent contributor to Global Research. Global Research Articles by Mike Whitney

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