Showing posts with label IMF. Show all posts
Showing posts with label IMF. Show all posts
Sunday, April 7, 2013
The Great Cyprus Bank Robbery
The Great Cyprus Bank Robbery Shows That No Bank Account, No Retirement Fund And No Stock Portfolio Is Safe
Michael, on March 18th, 2013
http://theeconomiccollapseblog.com/archives/the-great-cyprus-bank-robbery-shows-that-no-bank-account-no-retirement-fund-and-no-stock-portfolio-is-safe
The global elite have now proven that when the chips are down they are going to go after any big pile of money that they think they can get their hands on. That means that no bank account, no retirement fund and no stock portfolio on earth is safe. Up until now, most people assumed that private bank accounts were untouchable and that deposit insurance actually meant something. Now we see that there is no pile of money that is considered "off limits" by the global elite and deposit insurance means absolutely nothing. The number one thing that any financial system depends on is faith. If people do not have faith in the safety and stability of a financial system, it will not work. Well, the people that rule the world have just taken a sledgehammer to the trust that we all had in the global financial system. They have broken the unwritten social contract that global banking depends on. So now we will see a run on the banks, and this will not just be limited to a few countries in southern Europe. Rather, this will be worldwide in scope. Yoda may have put it this way: "Begun, the global bank run has." All over the world, frightened people are going to start pulling money out of the banks. A lot of that money will go into gold, silver and other hard assets. And as money starts coming out of the banks, this could cause many of the large banks that have been teetering on the edge of disaster to finally collapse.
Many of you may not believe that they would ever come after bank accounts, retirement funds or stock portfolios in the United States.
Many of you may be entirely convinced that the Great Cyprus Bank Robbery could never happen in America.
Well, where do you think this whole plan was dreamed up?
It was the IMF that reportedly pushed the hardest for the wealth tax in Cyprus, and the IMF is headquartered right in the heart of Washington D.C.
Almost every nation on the planet has to deal with the IMF. It is an organization that is dominated by the United States and that is always involved when there is an international debt crisis.
If the IMF thinks that it is a great idea to steal from bank accounts to solve a financial crisis in Cyprus, why wouldn't they impose a similar solution in other countries in the future?
And if bank accounts are no longer safe, are there any truly safe places to put your money?
You can trust the politicians when they tell you that an unannounced "wealth tax" will never happen where you live if you want, but that is the exact same lie that the politicians in Cyprus were telling their people until the day that it happened. The following is from an article in the Cyprus Mail...
And after all, President Anastasiades had emphatically declared in his inauguration speech that “absolutely no reference to a haircut on public debt or deposits will be tolerated,” adding that “such an issue isn’t even up for discussion.” Finance Minister Michalis Sarris made similarly reassuring statements, arguing that it would be lunacy for the EU to impose such a measure because it would threaten the euro system.
At this point, politicians in Cyprus have been given two very unappealing options. Either they vote yes on the wealth tax and destroy all faith in the banking system of Cyprus, or they vote no and they are forced out of the eurozone. In either case, we will probably see the financial system of Cyprus collapse and their economy plunge deep into depression.
At this point, the vote has been delayed until Tuesday. Apparently some additional "arm twisting" was required to get the needed votes.
And there have been proposals to change the terms of the wealth tax. Reportedly, some politicians want to impose a maximum rate of up to 15 percent on bank accounts of over 500,000 euros so that the rate on smaller accounts can be decreased.
It has also been announced that the earliest that banks in Cyprus will reopen will be Thursday.
But what is happening in Cyprus is small potatoes compared to how this will affect the rest of the world. The entire planet is watching this unfold, and as a recent article by Lucas Jackson described, faith in the global financial system is being greatly shaken...
It would be hard to over-emphasize how significant the Cyprus situation is. The EU demonstrated under no uncertain circumstances that they will destroy the rule of law to maintain their own power. It was a recognition of tyranny that many of us have always assumed was the case but yesterday became reality.
The damage done here is not related to the size of the haircut - currently discussed between 3 and 13% - but rather that the legal language which each and every investor on the planet must rely on in order to maintain confidence in the system has been subordinated to the needs of the powerful elite. To the power elite making the major decisions in DC, London, Berlin, France, Brussels, et. al., laws are like ice cream, easily melted.
Which begs the question, who is next? Will it be Portugal? Greece? Spain? Italy? France???
Will they impose a “one-time” tax on your bank account? Your house? Your stocks and bonds? Retirement accounts?
The global elite have declared open season on all large piles of money, and now many people all over the world will consider taking money out of the bank to be the rational thing to do. This will especially be true in countries in southern Europe since they would probably be the next to have wealth confiscated.
This is so abundantly clear that even Paul Krugman of the New York Times understands this...
It’s as if the Europeans are holding up a neon sign, written in Greek and Italian, saying “time to stage a run on your banks!”
Tomorrow and the days immediately following should be very interesting.
The global elite have truly "crossed the Rubicon" by going after private bank accounts. It is almost as if they purposely chose the most damaging solution possible to the financial crisis in Cyprus.
Many in the financial world are absolutely stunned by all of this. For example, David Zervos is describing this move as a "nuclear war on savings and wealth"...
All of us should really take a moment to consider what the governments of Europe have done. To be clear, they initiated a surprise assault on the precautionary savings of their own people. Such a move should send shock waves across the entire population of the developed world. This was not a Bernanke style slow moving financial repression against risk free savings that is meant to stir up animal spirits and force risk taking. This is a nuclear war on savings and wealth - something that will likely crush animal spirits. This is a policy move you expect from a dictatorial regime in sub-Saharan Africa, not in an EMU member state. If the European governments can clandestinely expropriate 7 to 10 percent of their hard working citizen's precautionary savings after the close of business on a Friday night, what else are they capable of doing? Why even hold money in a bank account? Are they trying to start a bank run?
So what motivated the global elite to do this?
According to CNBC, one of the motivations was to go after the Russians that had been using the banking system of Cyprus to launder money...
Indeed, the IMF is reported to have been keen on the levy as a way to stem the flood of Russian money into the island over the last few years which has prompted concerns over money laundering.
Russian money accounts for about 25 percent of all money in the banking system of Cyprus, and obviously the Russians are quite upset by what the IMF and the EU have decided to do. Even Vladimir Putin is loudly denouncing this move...
Russian President Vladimir Putin called the tax “unfair, unprofessional and dangerous,” according to a statement posted on the Kremlin website. Russian companies and individuals have $31 billion of deposits in Cyprus, according to Moody’s.
And you haven't heard a lot about this in the western media, but the Russians have actually stepped forward and have offered to help Cyprus out of this jam. For example, there are reports that Russian investors are interested in buying the two banks that were the primary cause of this bailout...
Officials have also said Russian investors are interested in buying a majority stake in Cyprus Popular Bank and increasing their holdings in Bank of Cyprus - the two biggest banks on the Mediterranean island.
And according to Sky News, Gazprom has offered Cyprus a very large sum of money for the right to explore their offshore gas reserves that have not been developed yet...
The uncertainty comes as Russia's finance minister said his country would consider restructuring its loans to Cyprus.
Russian energy giant Gazprom has also reportedly offered financial assistance to Cyprus in exchange for access to the island's gas reserves.
So far the government of Cyprus has rejected the help of the Russians, but could they change their mind at some point? Apparently the Russians are offering enough money to completely fund the bank bailout...
According Greek Reporter, Gazprom made an offer over the weekend to the Cypriot government to fund the bank restructuring planned under the Cypriot bailout (which is set to cost up to €10bn) in exchange for exclusive exploration rights for Cypriot territorial waters. How reliable this story is remains to be seen, but it does hint at the geopolitical tension which we have been warning about.
Gazprom is known to be very close to the Russian government and despite Russian President Vladimir Putin overtly slamming the deposit tax - calling it "unfair, unprofessional and dangerous" - it is unlikely that they would let this opportunity pass untouched. Fortunately, the Cypriot government is said to have rejected the deal off the bat, but if displeasure towards the eurozone and the EU grows, the Russian option may become increasingly appealing.
It will be very interesting to see what happens.
Meanwhile, some European officials are already suggesting that other nations in southern Europe should have a "wealth tax" imposed upon them. The following comes from an article by Paul Joseph Watson...
Joerg Kraemer, chief economist of the German Commerzbank, has called for private savings accounts in Italy to be similarly plundered. “A tax rate of 15 percent on financial assets would probably be enough to push the Italian government debt to below the critical level of 100 percent of gross domestic product,” he told Handelsblatt.
A "tax" of 15 percent on all financial assets?
Could you imagine if you woke up one morning and the government had decided to suddenly steal 15 percent of all the money that you had in bank accounts, retirement funds and stock portfolios?
If I had a bank account in Italy I would be very nervous right about now.
Under normal circumstances these kinds of things don't happen, but governments will use an "emergency" to justify all kinds of things. I recently came across an article that included a great quote by Herbert Hoover that put this beautifully...
"Every collectivist revolution rides in on a Trojan horse of ‘emergency’. It was the tactic of Lenin, Hitler, and Mussolini. In the collectivist sweep over a dozen minor countries of Europe, it was the cry of men striving to get on horseback. And ‘emergency’ became the justification of the subsequent steps. This technique of creating emergency is the greatest achievement that demagoguery attains."
This is what the elite love to do.
They love to create order out of chaos.
And this is just the beginning. The Great Cyprus Bank Robbery was just a beta test for what is coming next.
As the global financial system crumbles, the global elite are going to target our bank accounts, our retirement funds and our stock portfolios. You might want to start thinking about how you will protect yourself.
Wednesday, October 31, 2012
Austerity is much worse for the economy
IMF: Austerity is much worse for the economy than we thought
Brad Plumer on October 12, 2012
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/12/imf-austerity-is-much-worse-for-the-economy-than-we-thought/
Earlier this week, the International Monetary Fund made a striking admission in its new World Economic Outlook. The IMF’s chief economist, Olivier Blanchard, explained that recent efforts among wealthy countries to shrink their deficits — through tax hikes and spending cuts — have been causing far more economic damage than experts had assumed.
How did the IMF figure this? That was the tricky part. Blanchard could have just plotted a simple graph showing that countries undertaking heavy austerity measures, such as Greece and Portugal, are faring more poorly than their peers. But that doesn’t actually prove anything—perhaps those countries are undertaking austerity because they’d run into economic trouble.
So, instead, Blanchard did something more subtle. He studied the IMF’s previous economic forecasts. If a country is already struggling for other reasons, the forecasters are likely to have taken that into account. And what Blanchard found was surprising: IMF forecasts have been consistently too optimistic for countries that pursued large austerity programs. This suggests that tax hikes and spending cuts have been doing more damage to those economies than policymakers expected. (Conversely, countries that engaged in stimulus, such as Germany and Austria, did better than expected.)
This all comes down to a long-standing debate over what’s known as the “fiscal multiplier.” Economists tend to agree that tax increases and spending cuts hurt growth. The question is how much they hurt growth—a variable that usually changes at different points in time.
This matters a lot for policy. If tax hikes and spending cuts only hurt growth a little bit, then a government with debt problems will want to enact some austerity measures. If a tax increase, on average, raises $10 in revenue but reduces output by $6, that might be painful, but it will ultimately shrink the deficit. (Indeed, those are basically the numbers that policymakers in Britain and elsewhere had been using.)
But if tax hikes and spending cuts hamper growth significantly, then austerity could be ill-advised. Indeed, if the fiscal multiplier is really, really high in certain situations—such as during a downturn—then austerity could prove counterproductive. Those higher taxes and severe spending cuts will cripple growth so much that the nation will end up with an even bigger deficit than it started out with.
Blanchard is now arguing that the fiscal multiplier appears to have been much higher over the past few years than policymakers, including the IMF, had assumed. It’s not 0.6. It’s somewhere between 0.9 or 1.7. If true, then countries in Europe and the United States should have been pursuing stimulus measures to boost growth—and not insisting on budget cuts. (Not surprisingly, Paul Krugman is claiming vindication, since this was his view all along.)
Yet it’s worth noting that not everyone is convinced by the IMF’s results. Over at the Financial Times, Chris Giles tried to replicate Blanchard’s calculations and found that the analysis was heavily skewed by Greece and Germany. That is, austerity appears to have kneecapped Greece much more forcefully than anyone expected over the past few years. And Germany seemed to get an exceptional boost from its stimulus programs. But if you remove those two countries from the equation, the results are murkier:
For the countries where the full data is available on the IMF website, the results lose statistical significance if Greece and Germany are excluded.
Moreover, the IMF results are presented as general but are limited to the specific time period chosen. The 2010 forecasts of deficits are not good predictors of errors in growth forecasts for 2010 or 2011 when the years are analysed individually. Its 2011 forecasts are not good predictors of anything.
So there are some caveats here. Fiscal multipliers can change over time. Keynesians have often said as much: Stimulus is a good idea when the economy is weak, but the returns diminish when the nation is at full employment. Similarly, as Blanchard notes, economists still need a much better understanding of when, exactly, stimulus is effective and when austerity can help shrink the deficit. How does monetary policy factor in? Does the price of oil and other commodities matter? And so on.
For now, though, as both Kate McKenzie and Matt Yglesias point out, it’s quite significant that the IMF has shifted its stance on austerity so dramatically. In the 1990s, the fund was famous (or infamous, if you prefer) for ordering countries with debt troubles to tighten their belts. But now the IMF is urging countries in the euro zone, such as Netherlands and France, to loosen up a bit. True, those countries do have high debts. But with Europe still facing weak growth, budget-cutting might not be the answer just yet. For the IMF, that’s a big change in attitude.
Thursday, December 1, 2011
What Really Happened to Strauss-Kahn?
December 22, 2011
Edward Jay Epstein
http://media.nybooks.com/strauss.html
May 14, 2011, was a horrendous day for Dominique Strauss-Kahn, then head of the International Monetary Fund and leading contender to unseat Nicolas Sarkozy as president of France in the April 2012 elections. Waking up in the presidential suite of the Sofitel New York hotel that morning, he was supposed to be soon enroute to Paris and then to Berlin where he had a meeting the following day with German Chancellor Angela Merkel. He could not have known that by late afternoon he would, instead, be imprisoned in New York on a charge of sexual assault. He would then be indicted by a grand jury on seven counts of attempted rape, sexual assault, and unlawful imprisonment, placed under house arrest for over a month, and, two weeks before all the charges were dismissed by the prosecutor on August 23, 2011, sued for sexual abuse by the alleged victim.
He knew he had a serious problem with one of his BlackBerry cell phones—which he called his IMF BlackBerry. This was the phone he used to send and receive texts and e-mails—including for both personal and IMF business. According to several sources who are close to DSK, he had received a text message that morning from Paris from a woman friend temporarily working as a researcher at the Paris offices of the UMP, Sarkozy’s center-right political party. She warned DSK, who was then pulling ahead of Sarkozy in the polls, that at least one private e-mail he had recently sent from his BlackBerry to his wife, Anne Sinclair, had been read at the UMP offices in Paris.1 It is unclear how the UMP offices might have received this e-mail, but if it had come from his IMF BlackBerry, he had reason to suspect he might be under electronic surveillance in New York. He had already been warned by a friend in the French diplomatic corps that an effort would be made to embarrass him with a scandal. The warning that his BlackBerry might have been hacked was therefore all the more alarming.
At 10:07 AM he called his wife in Paris on his IMF BlackBerry, and in a conversation that lasted about six minutes told her he had a big problem. He asked her to contact a friend, Stéphane Fouks, who could come to his home on the Place des Vosges and who could arrange to have both his BlackBerry and iPad examined by an expert in such matters. He had no time to do anything about it that morning. He had scheduled an early lunch with his twenty-six-year-old daughter Camille, a graduate student at Columbia, who wanted to introduce him to her new boyfriend. After that, he had to get to JFK Airport in time to catch his 4:40 PM flight to Paris.
He had finished packing his suitcase just before noon, according to his own account, and then took a shower in the bathroom, which is connected to the bed in the suite by an interior corridor. According to the hotel’s electronic key records, which were provided to DSK’s lawyers, Nafissatou Diallo, a maid, had entered the presidential suite (room 2806) between 12:06 and 12:07 PM (such records are only accurate to the nearest minute).2 Ordinarily, cleaning personnel do not enter a room to clean when a guest is still in it. According to DSK’s account, his bags were visible in the foyer when he emerged naked from the bathroom into the interior corridor. At this point, according to his account, he encountered the maid in the corridor by the bathroom. (The maid, for her part, says she encountered him coming out of the bedroom.) Phone records show that by 12:13 PM he was speaking to his daughter Camille on his BlackBerry. The call lasted for forty seconds.
What took place between DSK and the maid in those six to seven intervening minutes is a matter of dispute. DNA evidence found outside the bathroom door showed her saliva mixed with his semen. The New York prosecutor concluded that a “hurried sexual encounter” took place and DSK’s lawyers have admitted as much, while claiming that what happened was consensual. The maid has brought a civil suit claiming he used force. It is not clear when she left the room since key card records do not show times of exit. What is known is that DSK called his daughter on his IMF BlackBerry at 12:13 to tell her he would be late.
After DSK completed his call, he dressed and put on his light black topcoat. He carried with him only one small overnight bag and a briefcase (which contained his iPad and several spare phones) and took the elevator to the lobby. At 12:28 PM the hotel security cameras show him departing. He had to go eight blocks to the McCormick & Schmick’s restaurant on Sixth Avenue between 51st and 52nd Street. He was delayed by heavy traffic on Sixth Avenue. The restaurant camera shows that he arrived at 12:54.
Camille was with her new boyfriend. They had a quick meal, and at 2:15 PM, according to the restaurant’s surveillance cameras, DSK got in another taxi to go to the airport. Almost immediately, he discovered that his IMF BlackBerry was missing. It was the phone he had arranged to have examined for bugs in Paris and it was the phone that contained the earlier text message warning him about the interception of his messages. At 2:16 PM he called Camille, who had also just left the restaurant, on his spare BlackBerry and had her go back to the restaurant to search for it. Camera footage at the restaurant shows her crawling under the table. At 2:28 PM she sent him a text message saying that she could not find it. So DSK continued on to the airport.
Back at the Sofitel, meanwhile, Nafissatou Diallo, the maid he had encountered in the presidential suite, had told hotel security that she had been sexually assaulted by a client in that suite. A thirty-two-year-old immigrant from Guinea, she had been working at the Sofitel for three years. At 2:30 PM she was shown a photograph of DSK by the hotel’s security people. According to the official bill of particulars—the statement of the basic facts of the case filed by the prosecutors—the police had apparently not yet fully taken over the case, even though the encounter between DSK and Diallo had occurred over two hours earlier.
Part of the delay in bringing in the police may have been the result of Diallo’s not immediately voicing her complaint. After she had left DSK in the presidential suite around 12:13 PM—the time of his call to Camille—she remained on the VIP floor. The hotel’s electronic key records indicate that at 12:26 PM she entered 2820, another VIP suite on the same floor that she had already entered several times earlier that morning. Then, one to two minutes later, she went back to the now empty presidential suite. A few minutes after that, she encountered another housekeeper, her supervisor, in the corridor. In the course of their conversation, Diallo asked the supervisor what would happen if a hotel guest took advantage of a hotel employee. Initially, Diallo told her that this was only a hypothetical question; but then, when pressed further, she said that she had been assaulted by the guest in the presidential suite. The supervisor then brought her to the head of housekeeping, Renata Markozani, who reentered the presidential suite with Diallo at 12:42, according to the key records, and notified the hotel’s security and management personnel. At 12:52 PM, Diallo is seen arriving at the hotel’s security office on the ground floor, located near the 45th Street entrance. She is wearing a beige uniform, and is accompanied by Renata Markozani, whom she towers over. (She is five feet ten inches tall.)
Shortly thereafter the hotel’s own security team was augmented by John Sheehan, a security expert who is identified on LinkedIn as “director of safety and security” at Accor, a part of the French-based Accor Group, which owns the Sofitel. Sheehan, who was at home in Washingtonville, New York, that morning, received a call from the Sofitel at 1:03 PM. He then rushed to the hotel. While en route, according to his cell phone records, he called a number with a 646 prefix in the United States. But from these records neither the name nor the location of the person he called can be determined. When I called the number a man with a heavy French accent answered and asked whom I wanted to speak with at Accor.3
The man I asked to talk to—and to whom I was not put through—was René-Georges Querry, Sheehan’s ultimate superior at Accor and a well-connected former chief of the French anti-gang brigades, who was now head of security for the Accor Group. Before joining Accor Group in 2003, he had worked closely in the police with Ange Mancini, who is now coordinator for intelligence for President Sarkozy. Querry, at the time that Sheehan was making his call to the 646 number, was arriving at a soccer match in Paris where he would be seated in the box of President Sarkozy. Querry denies receiving any information about the unfolding drama at the Sofitel until after DSK was taken into custody about four hours later.
Another person at the Accor Group whom Sheehan might have alerted was Xavier Graff, the duty officer at the Accor Group in Paris. Graff was responsible that weekend for handling emergencies at Accor Group hotels, including the Sofitel in New York. His name only emerged five weeks later when he sent a bizarre e-mail to his friend Colonel Thierry Bourret, the head of an environment and public health agency, claiming credit for “bringing down” DSK. After the e-mail was leaked to Le Figaro, Graff described it as a joke (it resulted, however, in his suspension as director of emergencies by the Accor Group). Even jokes can have a basis. In this case the joke was made by the person who was directly responsible for passing on information to his superiors, including the head of security at Accor, René-Georges Querry—information that, if acted on by informing the American authorities, could have helped destroy DSK’s career. But like Querry, Graff denied receiving any calls or messages from New York until later that evening, telling a French newspaper that the failure to inform him was an “incredible miss” (“loupé”).
By the time Sheehan was called by the hotel at 1:03 PM, Diallo was seated on a bench in the hotel’s ground floor service area, just off the service entrance on 45th Street. Behind her was a “Dutch door,” with the upper half opened, that led to the hotel’s security office. Surveillance camera footage shows her entering the area with a tall unidentified man at 12:52 PM. She remains there until 2:05 PM. At 12:56, she is joined there by Brian Yearwood, the large, heavy-set man who is the hotel’s chief engineer. Yearwood had just come down from the presidential suite on the twenty-eighth floor, which he had entered at 12:51, according to the key records. Yearwood remained close to Diallo as she spoke to Adrian Branch, the security chief for the hotel, who remained behind the half-shut door of the security office. She can be seen gesturing with her hands for about four minutes, pointing to different parts of her body over and over again, suggesting she was telling and retelling her story.
At 1:28, Sheehan, still on the way to the hotel, sent a text message to Yearwood. And then another text message to an unidentified recipient at 1:30. At 1:31—one hour after Diallo had first told a supervisor that she had been assaulted by the client in the presidential suite—Adrian Branch placed a 911 call to the police. Less than two minutes later, the footage from the two surveillance cameras shows Yearwood and an unidentified man walking from the security office to an adjacent area. This is the same unidentified man who had accompanied Diallo to the security office at 12:52 PM. There, the two men high-five each other, clap their hands, and do what looks like an extraordinary dance of celebration that lasts for three minutes. They are then shown standing by the service door leading to 45th Street—apparently waiting for the police to arrive—where they are joined at 2:04 PM by Florian Schutz, the hotel manager.
A minute later, at 2:05 PM, the footage shows two uniformed police officers arriving and then accompanying Diallo to an adjoining office. It is unclear if the police officially took over the case at this time or later. There is so far no explanation for why the security staff had delayed the call to the NYPD that would lead to a scandal involving the possible future president of France. What is clear is that they did so just three minutes after receiving a message from Sheehan. Nor is it clear why the two men were celebrating.
The police arrived, according to the hotel’s security camera footage, at 2:05 PM. They then can be seen escorting Diallo to a room across from the security office. There is an unexplained discrepancy here concerning the information in the bill of particulars, which says that at approximately 2:30 PM, “a photograph of the defendant was shown to the witness [i.e., Diallo] by hotel security without police involvement.” If so, even after leaving the bench (and video surveillance) and going to a room with the police, she remained in the custody of Sofitel security. I asked both Deputy Commissioner Paul Browne and Deputy Inspector Kim Royster why, according to the bill of particulars, the police were not officially involved at this point, but they declined to comment.
More than an hour later, at 3:28 PM, the police took her to St. Luke’s Hospital, where she was medically examined and they then formally interviewed her. She described to them a brutal and sustained sexual attack in which DSK locked the suite door, dragged her into the bedroom, and then dragged her down the inner corridor to a spot close to the bathroom door—a distance of about forty feet—and, after attempting to assault her both anally and vaginally, forced her twice to perform fellatio. After that, she fled the suite. As has been seen, according to the electronic key information, and to the record of DSK’s call to his daughter showing him speaking to her at 12:13, we can reasonably conclude that any such actions could have taken place only within a period of six or seven minutes, between 12:06–07 and 12:13, when he called his daughter.
At 3:01 PM, as DSK was approaching the airport, he was still attempting to find his missing phone. He attempted to call it from his spare but received no answer. What he did not know was that at 12:51, according to the records of the BlackBerry company, it had been somehow disabled. At 3:29 PM, evidently unaware of what was happening at the Sofitel, he called the hotel from the taxi, saying, according to the police transcript, “I am Dominique Strauss-Kahn, I was a guest. I left my phone behind.” He then said he was in room “2806.” He was asked to give a phone number, so that he could be called back, after 2806 was searched for his phone.
When he was called back thirteen minutes later, he spoke to a hotel employee who was in the presence of police detective John Mongiello. The hotel employee falsely told him that his phone had been found and asked where it could be delivered. DSK told him that he was at JFK Airport and that “I have a problem because my flight leaves at 4:26 PM.” He was reassured that someone could bring it to the airport in time. “OK, I am at the Air France Terminal, Gate 4, Flight 23,” DSK responded. So the police rushed to the airport. At 4:45 PM, police called DSK off the plane and took him into custody.
DSK was then jailed and indicted by a grand jury on seven counts, including attempted rape, sexual abuse, and unlawful imprisonment. The court eventually dropped all the charges against him because the prosecutors found that the complainant, Diallo, had proven to be an untruthful witness. They wrote in the motion for dismissal that “the nature and number of the complainant’s falsehoods leave us unable to credit her version of events beyond a reasonable doubt.” They said that she “has given irreconcilable accounts of what happened,” and had lied not only to the prosecutors but under oath to the grand jury about her whereabouts after the encounter. She stated that she had hid in the hall after leaving the presidential suite, and entered no other room on the twenty-eighth floor until she told another maid about the attack (which was approximately fifteen minutes later).
When asked why she had not used her pass key to go into another room, she said they all had “Do Not Disturb” signs on the door. After her grand jury testimony, prosecutors discovered that this was false when the hotel belatedly provided them with the electronic key records showing that Diallo had entered room 2820 at 12:26 PM, after her encounter with DSK. The same record also showed that she had also entered room 2820 prior to her encounter with DSK at a time when the occupant had not checked out and may have been in the room. Why she concealed visiting 2820 was “inexplicable” to the prosecutors, who noted in their motion for dismissal that if she had mentioned her visits to 2820, it would have been declared part of the crime scene and searched by the police. But she did not do so.
Nor were DSK’s lawyers able to find an explanation. When they attempted to learn the identity of the occupant of 2820, Sofitel refused to release it on grounds of privacy. Given Diallo’s conflicting accounts, all that we really know about what happened in the nearby room 2820 is that Diallo went there both before and after her encounter with DSK and then omitted the latter visit from her sworn testimony to the grand jury. We still do not know if there was anyone in 2820 when she entered it again following the encounter with DSK or if, prior to the police arriving, anyone influenced her to omit mention of room 2820.
The Sofitel electronic key record, which the hotel did not turn over to the prosecutors until the next week, contained another unexplained anomaly. Two individuals, not one, entered DSK’s suite between 12:05 and 12:06 PM while he was showering. Each used a different key card entry. The key card used at 12:06 belonged to Diallo; the key card used at 12:05 belonged to Syed Haque, a room service employee who, according to his account, came to pick up the breakfast dishes. If he did so, he would have turned left and gone to the dining room. But Haque has refused to be interviewed by DSK’s lawyers, so his precise movements have not been made public. Since the key cards do not register the time of exit, it cannot be determined from them if both parties were in the room at the same time or, for that matter, at the time of Diallo’s encounter with DSK.
DSK’s BlackBerry, with its messages, is still missing. Investigations by both the police and private investigators retained by DSK’s lawyers failed to find it. While DSK believed he had left it in the Sofitel, the records obtained from BlackBerry show that the missing phone’s GPS circuitry was disabled at 12:51. This stopped the phone from sending out signals identifying its location. Apart from the possibility of an accident, for a phone to be disabled in this way, according to a forensic expert, required technical knowledge about how the BlackBerry worked.
From electronic information that became available to investigators in November 2011, it appears the phone never left the Sofitel. If it was innocently lost, whoever found it never used it, raising the question of by whom and why it was disabled at 12:51. In any case, its absence made it impossible for DSK to check—as he had planned to do—to see if it had been compromised. Nor was it possible to verify from the phone itself the report he received on May 14 that his messages were being intercepted. So we cannot confirm the warning to DSK that he was under surveillance on that disastrous day.
One vexing mystery concerns the one-hour time gap in reporting the alleged attack on Diallo. After she said that she had been the victim of a brutal and sustained sexual assault, it is hard to understand how the security staff would have ruled out that she might require immediate medical attention. But as has been seen, until 1:31, several minutes after receiving a message from Sheehan, the security staff did not make the 911 call. She did not arrive at St. Luke’s Hospital until 3:57 PM, nearly four hours after the alleged attack. We do not know what decisions were made during that one-hour interval or how they influenced what was to later unfold with such dramatic impact.
By the time the 911 call was finally made, the hotel’s management was presumably aware of the political explosion and scandal DSK’s arrest would cause. DSK could no longer be a challenger to Sarkozy. Such considerations, and the opportunities they presented, may have had no part whatever in the hotel’s handling of the situation, but without knowing the content of any messages between the hotel managers in New York and the security staffs in New York or Paris, among others, we cannot be sure. Meanwhile, several mysteries remain. Was there anyone in room 2820 besides Diallo during and after the encounter with DSK? If so, who were they and what were they doing there; and why, in any case, did Diallo deny that she’d gone to the room? Because she denied it, the police, according to the prosecutor’s recommendation for dismissal, did not search 2820 or declare it a crime scene. And where, if it still exists, is the BlackBerry that DSK lost and feared was hacked?
All we know for sure is that someone, or possibly an accident, abruptly disabled it from signaling its location at 12:51 PM. DSK himself has not explained why he was so concerned about the possible interception of his messages on this BlackBerry and its disappearance. According to stories in Libération and other French journals on November 11, 2011, DSK sent text messages on a borrowed cell phone to at least one person named in the still-unfolding affair involving the Carlton Hotel in Lille, a scandal in which corporations allegedly provided high-class escort women to government officials. (DSK denies that he was connected to the prostitution ring.) If DSK sent these messages, may he also have received embarrassing messages back on his own BlackBerry that could have been damaging to his reputation and political ambitions? Or his concern could also have proceeded from other matters, such as the sensitive negotiations he was conducting for the IMF to stave off the euro crises. Whatever happened to his phone, and the content on it, his political prospects were effectively ended by the events of that day.
1 These statements, along with others in this article, were confirmed by sources who prefer to remain anonymous but are known to the author, who has shared his information with the editors.
2 For this article, along with court and other legal documents, I had access to Sofitel electronic key swipe records, time-stamped security camera videotapes, and records for a cell phone used on the day of May 14 by John Sheehan, a security employee of Accor, the company that owns the Sofitel hotel.
3 I had access to the record of only one cell phone used by the Accor Group's security man, John Sheehan. Neither Sheehan nor the hotel's security director, Adrian Branch, returned my calls. Through an assistant Brian Yearwood, the hotel's chief engineer, said he had no comment.
Thursday, September 29, 2011
Bad policy decisions could push the US into a 'lost decade'
Bad policy decisions could push the US into a 'lost decade' and put the eurozone into recession, warns IMF
Philip Aldrick, Economics Editor
20 Sep 2011
http://www.telegraph.co.uk/finance/financialcrisis/8777693/Bad-policy-decisions-could-push-the-US-into-a-lost-decade-and-put-the-eurozone-into-recession-warns-IMF.html
Cutting its global forecasts sharply, the world's economic watchdog said the global economy had entered a "dangerous new phase" and urged policymakers to tread a careful line between aggressive deficit reduction and growth. Central banks should stand ready to restart the printing presses to aid the recovery, it added in its twice-yearly World Economic Outlook.
"The recovery has weakened considerably. Strong policies are needed to improve the outlook and reduce the risks," Olivier Blanchard, the IMF's chief economist, said. "Markets have clearly become more sceptical about the ability of many countries to stabilise their public debt. Fear of the unknown is high."
Europe's leaders came under scathing criticism over the escalating debt crisis. "Europe must get its act together," Mr Blanchard said, adding that there was "widespread perception policymakers are one step behind the action". Urging a speedy implementation of the July 21 agreement to bolster the single currency area's €440bn bail-out fund, he said: "The eurozone is a major source of worry. This is a call to arms."
The warning came as Portugal's prime minister Pedro Passos Coelho said his country may need fresh aid if Greek defaults.
"In the case of a default of Greece, this aid could be necessary and it is important that our partners are convinced that it is worth helping Portugal, and in this case, Ireland, too," he said.
Weaker than expected growth in the US, the persistence of Europe's "sovereign debt and banking sector problems", high oil prices and the Japanese tsunami conspired to dramatically worsen the outlook since June. Global growth for this year has been revised down from 4.5pc to 4pc in the past three months – led by a one percentage point downward revision in US growth for this year to 1.5pc.
The UK was downgraded sharply, from June's 1.5pc prediction to just 1.1pc for this year and from 2.3pc to 1.6pc for 2012. Canada and much of Europe saw even bigger downgrades.
However, the forecasts were based on the assumption that President Barack Obama's $447bn jobs plan is approved and the eurozone crisis is resolved with no more than the small voluntary default on Greek debt already agreed. A worse outcome is a "distinct possibility", the IMF warned.
Under the IMF's "downside scenario" – a "shock" to European banks' capital, higher bad debts in the US and Asia, and slower US growth – "the US and the euro area would fall back into recession, with output in 2012 more than 3pc below projections".
Such a devastating hit would drag the UK back into recession, as the US and the Euro area are Britain's major trading partners. "It would be very difficult to see why the UK should be exempt from that as we don't have any ammunition to withstand it," Jürgen Michels, European economist at Citi, said.
Departing from its previous deficit-cutting mantra, the IMF stressed that countries must be careful not to choke off the recovery by cutting too hard too fast. Even the UK should consider back-ending George Osborne's £110bn austerity plan, by delaying spending cuts, if growth turns out to be "substantially" less than the 1.1pc expected this year, the IMF said.
"Countries with more fiscal space could choose a more back-loaded profile should the macroeconomic environment deteriorate substantially," it said. "In the systemically-important advanced economies, activity and confidence are still fragile. If fiscal consolidation were suddenly stepped up further at the expense of the disposable income of people with a high marginal propensity to consume, these economies could be thrown back into stagnation."
In the US, the IMF warned, if income tax relief and unemployment benefit are not extended and if Capitol Hill cannot agree a longer-term strategy for dealing with the $14.3 trillion public debt, "the result could be a lost decade for growth".
In Europe, policymakers must deal with the mushrooming banking crisis by "injecting new capital and restructuring weak but viable banks while closing others". If banks cannot raise funds privately, politicians "must make the case for injecting public funds". Allowing banks time to shrink their loan books would only further damage the recovery by prolonging the credit crunch, Mr Blanchard warned.
To keep the global ship afloat, the IMF called on central banks – particularly the Federal Reserve in the US – to restart money printing and keep interest rates low for longer. "Unconventional policies should continue until there is a durable reduction in financial stress," it said.
Philip Aldrick, Economics Editor
20 Sep 2011
http://www.telegraph.co.uk/finance/financialcrisis/8777693/Bad-policy-decisions-could-push-the-US-into-a-lost-decade-and-put-the-eurozone-into-recession-warns-IMF.html
Cutting its global forecasts sharply, the world's economic watchdog said the global economy had entered a "dangerous new phase" and urged policymakers to tread a careful line between aggressive deficit reduction and growth. Central banks should stand ready to restart the printing presses to aid the recovery, it added in its twice-yearly World Economic Outlook.
"The recovery has weakened considerably. Strong policies are needed to improve the outlook and reduce the risks," Olivier Blanchard, the IMF's chief economist, said. "Markets have clearly become more sceptical about the ability of many countries to stabilise their public debt. Fear of the unknown is high."
Europe's leaders came under scathing criticism over the escalating debt crisis. "Europe must get its act together," Mr Blanchard said, adding that there was "widespread perception policymakers are one step behind the action". Urging a speedy implementation of the July 21 agreement to bolster the single currency area's €440bn bail-out fund, he said: "The eurozone is a major source of worry. This is a call to arms."
The warning came as Portugal's prime minister Pedro Passos Coelho said his country may need fresh aid if Greek defaults.
"In the case of a default of Greece, this aid could be necessary and it is important that our partners are convinced that it is worth helping Portugal, and in this case, Ireland, too," he said.
Weaker than expected growth in the US, the persistence of Europe's "sovereign debt and banking sector problems", high oil prices and the Japanese tsunami conspired to dramatically worsen the outlook since June. Global growth for this year has been revised down from 4.5pc to 4pc in the past three months – led by a one percentage point downward revision in US growth for this year to 1.5pc.
The UK was downgraded sharply, from June's 1.5pc prediction to just 1.1pc for this year and from 2.3pc to 1.6pc for 2012. Canada and much of Europe saw even bigger downgrades.
However, the forecasts were based on the assumption that President Barack Obama's $447bn jobs plan is approved and the eurozone crisis is resolved with no more than the small voluntary default on Greek debt already agreed. A worse outcome is a "distinct possibility", the IMF warned.
Under the IMF's "downside scenario" – a "shock" to European banks' capital, higher bad debts in the US and Asia, and slower US growth – "the US and the euro area would fall back into recession, with output in 2012 more than 3pc below projections".
Such a devastating hit would drag the UK back into recession, as the US and the Euro area are Britain's major trading partners. "It would be very difficult to see why the UK should be exempt from that as we don't have any ammunition to withstand it," Jürgen Michels, European economist at Citi, said.
Departing from its previous deficit-cutting mantra, the IMF stressed that countries must be careful not to choke off the recovery by cutting too hard too fast. Even the UK should consider back-ending George Osborne's £110bn austerity plan, by delaying spending cuts, if growth turns out to be "substantially" less than the 1.1pc expected this year, the IMF said.
"Countries with more fiscal space could choose a more back-loaded profile should the macroeconomic environment deteriorate substantially," it said. "In the systemically-important advanced economies, activity and confidence are still fragile. If fiscal consolidation were suddenly stepped up further at the expense of the disposable income of people with a high marginal propensity to consume, these economies could be thrown back into stagnation."
In the US, the IMF warned, if income tax relief and unemployment benefit are not extended and if Capitol Hill cannot agree a longer-term strategy for dealing with the $14.3 trillion public debt, "the result could be a lost decade for growth".
In Europe, policymakers must deal with the mushrooming banking crisis by "injecting new capital and restructuring weak but viable banks while closing others". If banks cannot raise funds privately, politicians "must make the case for injecting public funds". Allowing banks time to shrink their loan books would only further damage the recovery by prolonging the credit crunch, Mr Blanchard warned.
To keep the global ship afloat, the IMF called on central banks – particularly the Federal Reserve in the US – to restart money printing and keep interest rates low for longer. "Unconventional policies should continue until there is a durable reduction in financial stress," it said.
Wednesday, July 20, 2011
Strauss-Kahn Saga Exposes Flaws in Euro Debt-Crisis Management
July 11 (Bloomberg) -- Greece’s budget was unraveling, Germany and the European Central Bank were at odds over the fix, revelations of secret meetings and cover-ups were sapping confidence in Europe’s crisis management -- and then came the encounter between Dominique Strauss-Kahn and the maid.
Strauss-Kahn’s May 14 arrest on charges of sexual assault left a void atop the International Monetary Fund, busting the one thing that had gone consistently right in the handling of the euro-area debt crisis: cooperation between European leaders and the Washington-based IMF. The fund’s contribution to Greece’s next loan was no longer a sure thing, said two European officials with direct knowledge of the talks who declined to be identified because the deliberations were private.
Confusion over the IMF share was part of a catalogue of missteps and miscommunication by Europe’s political elite that has scarred their effort to prevent Greece from slipping into the financial abyss. With Athens clinging to a lifeline opposed by taxpayers in Germany and Finland, the margin of error is narrowing and the crisis shows no sign of ebbing as it heads toward year three.
“It’s now not just a Greek, Irish or Portuguese problem: it’s a euroland problem,” said William Rhodes, a senior adviser to Citigroup Inc. whose new book “Banker to the World” recounts three decades of work on debt restructurings. “What’s happening in Europe has been hit and miss from one day to the next and the real danger down the road is contagion. All this squabbling spooked the markets, which now move in nanoseconds.”
IMF Payment
The IMF’s approval July 8 to release a 3.2 billion-euro ($4.6 billion) installment for Greece plugged one hole in the rescue strategy just as others are opening up: talks with bondholders over rolling over Greek debt have prompted credit-rating companies to threaten default. Portugal was downgraded to junk by Moody’s Investors Service last week, leading bonds to slump in Ireland, Spain and Italy.
Work on a new Greek package to follow last year’s 110 billion-euro pledge continues at a meeting of finance ministers in Brussels today, with final decisions put off until September.
“No more short-term gimmicks,” Jeffrey Sachs, a Columbia University professor, told Bloomberg Television’s Tom Keene on July 5. European leaders “are treating this as a very short- term set of operations -- get through the next three months, get through the next six months. That won’t work. We need a bigger structure.”
‘On Track’
Short-termism appeared to be working as late as Feb. 11, when the IMF and European authorities certified that Greece was “broadly on track” to rebuild its finances and started paving the way for the March loan installment. On April 1, with the yield on Greece’s 10-year government bond at 12.8 percent, then- Finance Minister George Papaconstantinou predicted a possible return to markets this year.
That went by the boards with the April 26 disclosure that Greece fell short of its deficit-cutting objectives in 2010, forcing it to look for more savings and pushing the 10-year yield to 16.2 percent. Simultaneous talks over a 78 billion-euro aid package for Portugal ate up more policymaking energy.
A private May 6 brainstorming session at Luxembourg’s secluded Senningen Castle captured the tension. A core group of finance ministers and ECB President Jean-Claude Trichet discussed Greece’s shortfall and German-driven talk of a debt restructuring, said Luxembourg Prime Minister Jean-Claude Juncker.
When German magazine Der Spiegel reported that the inner circle was discussing Greece’s exit from the euro, the currency tumbled the most against the dollar in a year. Juncker denied the meeting was taking place -- a line, he said a week later, that “immediately prevented further speculation on the markets.”
Solitary
Ten days after that, deficits, deceit and restructuring formed the backdrop for a euro finance meeting that unfolded with Strauss-Kahn in solitary confinement in New York’s Rikers Island jail. John Lipsky, the fund’s second-ranking official, stayed in Washington to organize the stopgap IMF management.
Off to Brussels went Nemat Shafik, a deputy managing director barely a month at her post -- a technocrat specializing in the Middle East and Africa instead of the politically connected Frenchman. She reminded the Europeans that the IMF needed a 12-month funding program before committing its own money.
Greece was caught in the middle as it became increasingly clear that a 12 billion-euro disbursement due for July was the only thing standing between the debt-stricken country and default.
‘Lack of Leadership’
The absence of Strauss-Kahn, 62, who as French finance minister from 1997 to 1999 had played a role in setting up the euro, made itself felt. On the heels of the Brussels meeting, European Union President Herman Van Rompuy urged the IMF to quickly appoint a new full-time chief, saying on May 19 there was “a lack of leadership in solving the Greek crisis -- even the last days it was very clear.”
Lipsky came to his interim position aware of market doubts about Greece and European political solidarity. Investors “want to see delivery,” he told Bloomberg Radio on April 15. “They’re skeptical, they’re worried and now it’s up to the Greek authorities to carry through the rest of their European partners to provide the support.”
A former JPMorgan Chase & Co. economist nearing the end of a five-year term as the IMF’s first deputy managing director, Lipsky, 64, said two days before the arrest that he wouldn’t seek reappointment after his term expires in August.
‘By the Book’
Lipsky “played it by the book: he was staff-led,” said Peter Ludlow, a Brussels-based historian and author of “The Making of the New Europe.” “Strauss-Kahn was much more of a political animal who felt himself, and indeed was, above the book.”
European policy makers had operated on the understanding that Strauss-Kahn would deliver the IMF’s share, said the two EU officials. It soon dawned on them that, in his caretaker role, Lipsky couldn’t steer the IMF board in the way Strauss-Kahn could, they said.
More miscalculations followed. Lipsky didn’t spell out the assurances the IMF required to release its share of the July loan, first saying Europe needed to come up with a new three- year program for Greece, then that it didn’t, the EU officials said.
The IMF rejects suggestions of inconsistency. “The fund’s position on Greece has not changed,” Conny Lotze, an IMF spokeswoman, said in an e-mailed response to questions. “The fund has worked closely with the Greek authorities and the European partners in supporting Greece’s economic program. The success of Greece’s program has always been and still is the primary objective.”
‘Reprofiling’ Talk
Europe, meanwhile, was manufacturing its own distractions. Fueled by Juncker’s May 16 proposal of a “reprofiling” or “soft restructuring,” speculation swirled that Germany would force an extension of Greece’s debt-repayment schedule, leading to a formal default.
Greek debt continued to get hammered, with the yield on 10- year bonds reaching 17 percent on May 23.
Debt-restructuring speculation contributed to the worsening market psychology, EU Economic and Monetary Commissioner Olli Rehn said. “There was some distortion of attention to a discussion on debt restructuring and too little focus on program implementation,” he said in a July 1 interview.
Germany, which as Europe’s biggest economy is the main underwriter of the bailouts, faced pressure from all sides. The French government and ECB pressed for a “voluntary” bond rollover. President Barack Obama told Chancellor Angela Merkel at the White House that it was her job to halt an “uncontrolled spiral of default.”
Merkel’s Retreat
While Merkel’s abandonment on June 17 of a forced restructuring bettered Greece’s long-term prospects, its chances of escaping default in July still hinged on the euro zone and IMF reading from the same script.
The two sides met again on June 19 in Luxembourg, with the EU’s Rehn forecasting an IMF green light after 10-year yields reached almost 18 percent. It didn’t happen. The European side was unable to commit to another Greek funding program until Greece passed a new, 78 billion-euro set of savings measures.
The IMF, in turn, wouldn’t move until Europe did. “The assurances that we need are typical,” Lipsky said June 21. The budget cuts squeaked through the Greek parliament a week later.
It took European government leaders, together tackling the crisis again after a three-month hiatus, to break out of the loop. Even then, they weren’t sure whether a June 24 pledge to set up the “main parameters of a new program” would bring the IMF on board.
‘Credibility Issues’
And on July 2, a day after Strauss-Kahn was released from home confinement and New York prosecutors told a judge the case had been hurt by “substantial credibility issues” with the accuser, euro-area finance ministers approved their share of the 12 billion-euro payment to Greece, providing a lifeline to September.
“We’re entering a more critical phase because now the important decisions have to be made how the debt will be financed over the next three or four years,” said Christopher Pissarides, a Nobel Prize-winning economist who teaches at the London School of Economics. “So there is a lot more uncertainty in the market.”
To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
Strauss-Kahn’s May 14 arrest on charges of sexual assault left a void atop the International Monetary Fund, busting the one thing that had gone consistently right in the handling of the euro-area debt crisis: cooperation between European leaders and the Washington-based IMF. The fund’s contribution to Greece’s next loan was no longer a sure thing, said two European officials with direct knowledge of the talks who declined to be identified because the deliberations were private.
Confusion over the IMF share was part of a catalogue of missteps and miscommunication by Europe’s political elite that has scarred their effort to prevent Greece from slipping into the financial abyss. With Athens clinging to a lifeline opposed by taxpayers in Germany and Finland, the margin of error is narrowing and the crisis shows no sign of ebbing as it heads toward year three.
“It’s now not just a Greek, Irish or Portuguese problem: it’s a euroland problem,” said William Rhodes, a senior adviser to Citigroup Inc. whose new book “Banker to the World” recounts three decades of work on debt restructurings. “What’s happening in Europe has been hit and miss from one day to the next and the real danger down the road is contagion. All this squabbling spooked the markets, which now move in nanoseconds.”
IMF Payment
The IMF’s approval July 8 to release a 3.2 billion-euro ($4.6 billion) installment for Greece plugged one hole in the rescue strategy just as others are opening up: talks with bondholders over rolling over Greek debt have prompted credit-rating companies to threaten default. Portugal was downgraded to junk by Moody’s Investors Service last week, leading bonds to slump in Ireland, Spain and Italy.
Work on a new Greek package to follow last year’s 110 billion-euro pledge continues at a meeting of finance ministers in Brussels today, with final decisions put off until September.
“No more short-term gimmicks,” Jeffrey Sachs, a Columbia University professor, told Bloomberg Television’s Tom Keene on July 5. European leaders “are treating this as a very short- term set of operations -- get through the next three months, get through the next six months. That won’t work. We need a bigger structure.”
‘On Track’
Short-termism appeared to be working as late as Feb. 11, when the IMF and European authorities certified that Greece was “broadly on track” to rebuild its finances and started paving the way for the March loan installment. On April 1, with the yield on Greece’s 10-year government bond at 12.8 percent, then- Finance Minister George Papaconstantinou predicted a possible return to markets this year.
That went by the boards with the April 26 disclosure that Greece fell short of its deficit-cutting objectives in 2010, forcing it to look for more savings and pushing the 10-year yield to 16.2 percent. Simultaneous talks over a 78 billion-euro aid package for Portugal ate up more policymaking energy.
A private May 6 brainstorming session at Luxembourg’s secluded Senningen Castle captured the tension. A core group of finance ministers and ECB President Jean-Claude Trichet discussed Greece’s shortfall and German-driven talk of a debt restructuring, said Luxembourg Prime Minister Jean-Claude Juncker.
When German magazine Der Spiegel reported that the inner circle was discussing Greece’s exit from the euro, the currency tumbled the most against the dollar in a year. Juncker denied the meeting was taking place -- a line, he said a week later, that “immediately prevented further speculation on the markets.”
Solitary
Ten days after that, deficits, deceit and restructuring formed the backdrop for a euro finance meeting that unfolded with Strauss-Kahn in solitary confinement in New York’s Rikers Island jail. John Lipsky, the fund’s second-ranking official, stayed in Washington to organize the stopgap IMF management.
Off to Brussels went Nemat Shafik, a deputy managing director barely a month at her post -- a technocrat specializing in the Middle East and Africa instead of the politically connected Frenchman. She reminded the Europeans that the IMF needed a 12-month funding program before committing its own money.
Greece was caught in the middle as it became increasingly clear that a 12 billion-euro disbursement due for July was the only thing standing between the debt-stricken country and default.
‘Lack of Leadership’
The absence of Strauss-Kahn, 62, who as French finance minister from 1997 to 1999 had played a role in setting up the euro, made itself felt. On the heels of the Brussels meeting, European Union President Herman Van Rompuy urged the IMF to quickly appoint a new full-time chief, saying on May 19 there was “a lack of leadership in solving the Greek crisis -- even the last days it was very clear.”
Lipsky came to his interim position aware of market doubts about Greece and European political solidarity. Investors “want to see delivery,” he told Bloomberg Radio on April 15. “They’re skeptical, they’re worried and now it’s up to the Greek authorities to carry through the rest of their European partners to provide the support.”
A former JPMorgan Chase & Co. economist nearing the end of a five-year term as the IMF’s first deputy managing director, Lipsky, 64, said two days before the arrest that he wouldn’t seek reappointment after his term expires in August.
‘By the Book’
Lipsky “played it by the book: he was staff-led,” said Peter Ludlow, a Brussels-based historian and author of “The Making of the New Europe.” “Strauss-Kahn was much more of a political animal who felt himself, and indeed was, above the book.”
European policy makers had operated on the understanding that Strauss-Kahn would deliver the IMF’s share, said the two EU officials. It soon dawned on them that, in his caretaker role, Lipsky couldn’t steer the IMF board in the way Strauss-Kahn could, they said.
More miscalculations followed. Lipsky didn’t spell out the assurances the IMF required to release its share of the July loan, first saying Europe needed to come up with a new three- year program for Greece, then that it didn’t, the EU officials said.
The IMF rejects suggestions of inconsistency. “The fund’s position on Greece has not changed,” Conny Lotze, an IMF spokeswoman, said in an e-mailed response to questions. “The fund has worked closely with the Greek authorities and the European partners in supporting Greece’s economic program. The success of Greece’s program has always been and still is the primary objective.”
‘Reprofiling’ Talk
Europe, meanwhile, was manufacturing its own distractions. Fueled by Juncker’s May 16 proposal of a “reprofiling” or “soft restructuring,” speculation swirled that Germany would force an extension of Greece’s debt-repayment schedule, leading to a formal default.
Greek debt continued to get hammered, with the yield on 10- year bonds reaching 17 percent on May 23.
Debt-restructuring speculation contributed to the worsening market psychology, EU Economic and Monetary Commissioner Olli Rehn said. “There was some distortion of attention to a discussion on debt restructuring and too little focus on program implementation,” he said in a July 1 interview.
Germany, which as Europe’s biggest economy is the main underwriter of the bailouts, faced pressure from all sides. The French government and ECB pressed for a “voluntary” bond rollover. President Barack Obama told Chancellor Angela Merkel at the White House that it was her job to halt an “uncontrolled spiral of default.”
Merkel’s Retreat
While Merkel’s abandonment on June 17 of a forced restructuring bettered Greece’s long-term prospects, its chances of escaping default in July still hinged on the euro zone and IMF reading from the same script.
The two sides met again on June 19 in Luxembourg, with the EU’s Rehn forecasting an IMF green light after 10-year yields reached almost 18 percent. It didn’t happen. The European side was unable to commit to another Greek funding program until Greece passed a new, 78 billion-euro set of savings measures.
The IMF, in turn, wouldn’t move until Europe did. “The assurances that we need are typical,” Lipsky said June 21. The budget cuts squeaked through the Greek parliament a week later.
It took European government leaders, together tackling the crisis again after a three-month hiatus, to break out of the loop. Even then, they weren’t sure whether a June 24 pledge to set up the “main parameters of a new program” would bring the IMF on board.
‘Credibility Issues’
And on July 2, a day after Strauss-Kahn was released from home confinement and New York prosecutors told a judge the case had been hurt by “substantial credibility issues” with the accuser, euro-area finance ministers approved their share of the 12 billion-euro payment to Greece, providing a lifeline to September.
“We’re entering a more critical phase because now the important decisions have to be made how the debt will be financed over the next three or four years,” said Christopher Pissarides, a Nobel Prize-winning economist who teaches at the London School of Economics. “So there is a lot more uncertainty in the market.”
To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
Listen to the IMF, America
Even the International Monetary Fund now admits that total deregulation of financial markets was a mistake. The U.S. should take heed.
Joseph E. Stiglitz
Thursday, May 5, 2011
http://www.slate.com/id/2293114
Robalini's Note: Here's an article by economist Joseph Stiglitz before the framing of DSK which tells you the level of radical change he had begun to institute at the IMF...
The annual spring meeting of the International Monetary Fund was notable in marking the fund's effort to distance itself from its own long-standing tenets on capital controls and labor-market flexibility. It appears that a new IMF has gradually, and cautiously, emerged under the leadership of Dominique Strauss-Kahn.
Slightly more than 13 years ago, at the IMF's 1997 Hong Kong meeting, the fund had attempted to amend its charter in order to gain more leeway to push countries toward capital-market liberalization. The timing could not have been worse: The East Asia crisis was just brewing—a crisis that was largely the result of capital-market liberalization in a region that, given its high savings rate, had no need for it.
That 1997 push had been advocated by Western financial markets—and the Western finance ministries that serve them so loyally. Financial deregulation in the United States was a prime cause of the global crisis that erupted in 2008, and financial and capital-market liberalization elsewhere helped spread that "made in the USA" trauma around the world.
The crisis showed that free and unfettered markets are neither efficient nor stable. They also did not necessarily do a good job at setting prices (witness the real-estate bubble), including exchange rates (which are merely the price of one currency in terms of another).
Iceland showed that responding to the crisis by imposing capital controls could help small countries manage its impact. And the U.S. Federal Reserve's "quantitative easing" made the demise of the ideology of unfettered markets inevitable: Money goes to where markets think returns are highest. With emerging markets booming, and America and Europe in the doldrums, it was clear that much of the new liquidity being created would find its way to emerging markets. This was especially true given that America's credit pipeline remained clogged, with many community and regional banks still in a precarious position.
The resulting surge of money into emerging markets has meant that even finance ministers and central-bank governors who are ideologically opposed to intervening believe that they have no choice but to do so. Indeed, country after country has now chosen to intervene in one way or another to prevent their currencies from skyrocketing in value.
Now the IMF has blessed such interventions—but, as a sop to those who are still not convinced, it suggests that they should be used only as a last resort. On the contrary, we should have learned from the crisis that financial markets need regulation, and that cross-border capital flows are particularly dangerous. Such regulations should be a key part of any system to ensure financial stability; resorting to them only as a last resort is a recipe for continued instability.
There is a wide range of available capital-account management tools, and it is best if countries use a portfolio of them. Even if they are not fully effective, they are typically far better than nothing.
But an even more important change is the link that the IMF has finally drawn between inequality and instability. This crisis was largely a result of America's effort to bolster an economy weakened by vastly increased inequality, through low interest rates and lax regulation (both of which resulted in many people borrowing far beyond their means). The consequences of this excessive indebtedness will take years to undo. But, as another IMF study reminds us, this is not a new pattern.
The crisis has also put to the test long-standing dogmas that blame labor-market rigidity for unemployment, because countries with more flexible wages, such as the U.S., have fared worse than northern European economies, including Germany. Indeed, as wages weaken, workers will find it even more difficult to pay back what they owe, and problems in the housing market will become worse. Consumption will remain restrained, while strong and sustainable recovery cannot be based on another debt-fueled bubble.
As unequal as America was before the Great Recession, the crisis—and the way it has been managed—has led to even greater income inequality, making a recovery all the more difficult. America is setting itself up for its own version of a Japanese-style malaise.
But there are ways out of this dilemma: strengthening collective bargaining, restructuring mortgages, using carrots and sticks to get banks to resume lending, restructuring tax and spending policies to stimulate the economy now through long-term investments, and implementing social policies that ensure opportunity for all. As it is, with almost one-quarter of all income and 40 percent of U.S. wealth going to the top 1 percent of income earners, America is now less a "land of opportunity" than even "old" Europe.
For progressives, these abysmal facts are part of the standard litany of frustration and justified outrage. What is new is that the IMF has joined the chorus. As Strauss-Kahn concluded in his speech to the Brookings Institution shortly before the fund's recent meeting: "Ultimately, employment and equity are building blocks of economic stability and prosperity, of political stability and peace. This goes to the heart of the IMF's mandate. It must be placed at the heart of the policy agenda."
Strauss-Kahn is proving himself a sagacious leader of the IMF. We can only hope that governments and financial markets heed his words.
Joseph E. Stiglitz
Thursday, May 5, 2011
http://www.slate.com/id/2293114
Robalini's Note: Here's an article by economist Joseph Stiglitz before the framing of DSK which tells you the level of radical change he had begun to institute at the IMF...
The annual spring meeting of the International Monetary Fund was notable in marking the fund's effort to distance itself from its own long-standing tenets on capital controls and labor-market flexibility. It appears that a new IMF has gradually, and cautiously, emerged under the leadership of Dominique Strauss-Kahn.
Slightly more than 13 years ago, at the IMF's 1997 Hong Kong meeting, the fund had attempted to amend its charter in order to gain more leeway to push countries toward capital-market liberalization. The timing could not have been worse: The East Asia crisis was just brewing—a crisis that was largely the result of capital-market liberalization in a region that, given its high savings rate, had no need for it.
That 1997 push had been advocated by Western financial markets—and the Western finance ministries that serve them so loyally. Financial deregulation in the United States was a prime cause of the global crisis that erupted in 2008, and financial and capital-market liberalization elsewhere helped spread that "made in the USA" trauma around the world.
The crisis showed that free and unfettered markets are neither efficient nor stable. They also did not necessarily do a good job at setting prices (witness the real-estate bubble), including exchange rates (which are merely the price of one currency in terms of another).
Iceland showed that responding to the crisis by imposing capital controls could help small countries manage its impact. And the U.S. Federal Reserve's "quantitative easing" made the demise of the ideology of unfettered markets inevitable: Money goes to where markets think returns are highest. With emerging markets booming, and America and Europe in the doldrums, it was clear that much of the new liquidity being created would find its way to emerging markets. This was especially true given that America's credit pipeline remained clogged, with many community and regional banks still in a precarious position.
The resulting surge of money into emerging markets has meant that even finance ministers and central-bank governors who are ideologically opposed to intervening believe that they have no choice but to do so. Indeed, country after country has now chosen to intervene in one way or another to prevent their currencies from skyrocketing in value.
Now the IMF has blessed such interventions—but, as a sop to those who are still not convinced, it suggests that they should be used only as a last resort. On the contrary, we should have learned from the crisis that financial markets need regulation, and that cross-border capital flows are particularly dangerous. Such regulations should be a key part of any system to ensure financial stability; resorting to them only as a last resort is a recipe for continued instability.
There is a wide range of available capital-account management tools, and it is best if countries use a portfolio of them. Even if they are not fully effective, they are typically far better than nothing.
But an even more important change is the link that the IMF has finally drawn between inequality and instability. This crisis was largely a result of America's effort to bolster an economy weakened by vastly increased inequality, through low interest rates and lax regulation (both of which resulted in many people borrowing far beyond their means). The consequences of this excessive indebtedness will take years to undo. But, as another IMF study reminds us, this is not a new pattern.
The crisis has also put to the test long-standing dogmas that blame labor-market rigidity for unemployment, because countries with more flexible wages, such as the U.S., have fared worse than northern European economies, including Germany. Indeed, as wages weaken, workers will find it even more difficult to pay back what they owe, and problems in the housing market will become worse. Consumption will remain restrained, while strong and sustainable recovery cannot be based on another debt-fueled bubble.
As unequal as America was before the Great Recession, the crisis—and the way it has been managed—has led to even greater income inequality, making a recovery all the more difficult. America is setting itself up for its own version of a Japanese-style malaise.
But there are ways out of this dilemma: strengthening collective bargaining, restructuring mortgages, using carrots and sticks to get banks to resume lending, restructuring tax and spending policies to stimulate the economy now through long-term investments, and implementing social policies that ensure opportunity for all. As it is, with almost one-quarter of all income and 40 percent of U.S. wealth going to the top 1 percent of income earners, America is now less a "land of opportunity" than even "old" Europe.
For progressives, these abysmal facts are part of the standard litany of frustration and justified outrage. What is new is that the IMF has joined the chorus. As Strauss-Kahn concluded in his speech to the Brookings Institution shortly before the fund's recent meeting: "Ultimately, employment and equity are building blocks of economic stability and prosperity, of political stability and peace. This goes to the heart of the IMF's mandate. It must be placed at the heart of the policy agenda."
Strauss-Kahn is proving himself a sagacious leader of the IMF. We can only hope that governments and financial markets heed his words.
Was it a Political Conspiracy?
Prosecutors Back Off From Their ‘Iron-Clad’ Case Against Strauss-Kahn
Paul Craig Roberts
July 2, 2011
The New York prosecutor has had to tell the judge that the police and prosecutors have lost confidence in their sexual assault case against former IMF chief Dominique Strauss-Kahn. The judge has released DSK from house arrest and returned his bail and bond money.
The prosecutors say that the immigrant hotel maid lied to the police about the incident and about other things, and the police have revealed that the “victim” discussed with an imprisoned man the possibility of turning the case into extortion. According to the New York Times, the maid’s jailed confidant was among a number of people who had made multiple cash deposits totaling $100,000 to the maid’s bank account. The police now suspect that the maid has connections to illegal drugs and money laundering.
The prosecutor says that he will continue to investigate the case. What that means is that the prosecutor, a politically ambitious Cy Vance, is going for a misdemeanor plea from DSK to save the prosecutor’s face from injudiciously being drawn into an extortion/reputation-destroying plot against the man who French polls indicated was the public’s favorite in the upcoming French presidential election in which President Sarkozy, Washington’s puppet, is seeking reelection. The prosecutor is sending DSK’s legal team the message that the case is being kept open and could be reinstated unless DSK’s attorneys secure DSK’s permission to negotiate a deal on a minor charge, which essentially has no punishment, but saves the faces of the NY prosecutor and police.
We will probably never know whether the maid thought the scheme up on her own or whether it came from Sarkozy’s operatives and their US allies. One indication that DSK’s political enemies are implicated is the fact, made public by the French press, that Sarkozy’s political team in France knew about DSK’s arrest before the NY police announced it. This fact did not stop the NY prosecutor and police from painting DSK as guilty in numerous public statements and in unethical if not illegal leaks to reporters.
When police and prosecutors convict a suspect in the media before he is even charged, it typically means that there is no evidence against him and that demonization is serving as the substitute. Conviction is what is important to the system, not a determination of innocence or guilt.
On numerous Internet sites, I pointed out the problems with the case against DSK. For informing people of the obvious, I was denounced by the right-wing and the left-wing.
The right-wing gave me the finger for doubting the word and integrity of police and prosecutor. Didn’t I know that these are the honorable guardians who protect the public from crime? How dare I question anything the police and prosecutor did or do. What was I, some kind of pinko-liberal-commie?
The left-wing also gave me the finger and said that I had revealed my real self as nothing but an apologist for the rich and powerful and for men who seduce women. How much was I paid for my service to the rich and powerful and seducers of innocent women?
The feminist left denounced me as a misogynist. Only a woman-hater could take the side of a rapist against his victim.
It is all so tiresome to endure the stupidity of people. Little wonder they are losing their liberty, their jobs and incomes, and their country and self-respect.
With DSK’s reputation in tatters and DSK knocked out of the French presidential election and removed from the IMF, where he was beginning to raise questions about the establishment’s use of the IMF to bail out rich bankers on the backs of poor peasants, the “justice system” has done its work. It is now safer for the authorities to release him than to risk a trial. The shrill bleating of the maid’s legal team signifies their agony at having lost their share of the hoped-to-be extorted millions now that a monetary settlement would clearly indicate obstruction of justice and prison for them all.
Those few who actually care about justice, not only for DSK and everyman, but also for the Greek, Spanish, Irish, and Portuguese people, can find comfort in the fact that apparently DSK had come to New York in order to speak with Nobel economist Joe Stiglitz about a more humane and democratic way to resolve the sovereign debt crisis in Europe than the one imposed by the private creditor banks.
Obviously, anyone who would consult with Stiglitz is perceived by the rich and powerful as a threat to their interest.
However, this obvious fact has made no impression on the left-wing, which has issued its shrill cries that, once again, the money of the rich and powerful has prevailed over law and justice.
Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously the editor of the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.
Paul Craig Roberts
July 2, 2011
The New York prosecutor has had to tell the judge that the police and prosecutors have lost confidence in their sexual assault case against former IMF chief Dominique Strauss-Kahn. The judge has released DSK from house arrest and returned his bail and bond money.
The prosecutors say that the immigrant hotel maid lied to the police about the incident and about other things, and the police have revealed that the “victim” discussed with an imprisoned man the possibility of turning the case into extortion. According to the New York Times, the maid’s jailed confidant was among a number of people who had made multiple cash deposits totaling $100,000 to the maid’s bank account. The police now suspect that the maid has connections to illegal drugs and money laundering.
The prosecutor says that he will continue to investigate the case. What that means is that the prosecutor, a politically ambitious Cy Vance, is going for a misdemeanor plea from DSK to save the prosecutor’s face from injudiciously being drawn into an extortion/reputation-destroying plot against the man who French polls indicated was the public’s favorite in the upcoming French presidential election in which President Sarkozy, Washington’s puppet, is seeking reelection. The prosecutor is sending DSK’s legal team the message that the case is being kept open and could be reinstated unless DSK’s attorneys secure DSK’s permission to negotiate a deal on a minor charge, which essentially has no punishment, but saves the faces of the NY prosecutor and police.
We will probably never know whether the maid thought the scheme up on her own or whether it came from Sarkozy’s operatives and their US allies. One indication that DSK’s political enemies are implicated is the fact, made public by the French press, that Sarkozy’s political team in France knew about DSK’s arrest before the NY police announced it. This fact did not stop the NY prosecutor and police from painting DSK as guilty in numerous public statements and in unethical if not illegal leaks to reporters.
When police and prosecutors convict a suspect in the media before he is even charged, it typically means that there is no evidence against him and that demonization is serving as the substitute. Conviction is what is important to the system, not a determination of innocence or guilt.
On numerous Internet sites, I pointed out the problems with the case against DSK. For informing people of the obvious, I was denounced by the right-wing and the left-wing.
The right-wing gave me the finger for doubting the word and integrity of police and prosecutor. Didn’t I know that these are the honorable guardians who protect the public from crime? How dare I question anything the police and prosecutor did or do. What was I, some kind of pinko-liberal-commie?
The left-wing also gave me the finger and said that I had revealed my real self as nothing but an apologist for the rich and powerful and for men who seduce women. How much was I paid for my service to the rich and powerful and seducers of innocent women?
The feminist left denounced me as a misogynist. Only a woman-hater could take the side of a rapist against his victim.
It is all so tiresome to endure the stupidity of people. Little wonder they are losing their liberty, their jobs and incomes, and their country and self-respect.
With DSK’s reputation in tatters and DSK knocked out of the French presidential election and removed from the IMF, where he was beginning to raise questions about the establishment’s use of the IMF to bail out rich bankers on the backs of poor peasants, the “justice system” has done its work. It is now safer for the authorities to release him than to risk a trial. The shrill bleating of the maid’s legal team signifies their agony at having lost their share of the hoped-to-be extorted millions now that a monetary settlement would clearly indicate obstruction of justice and prison for them all.
Those few who actually care about justice, not only for DSK and everyman, but also for the Greek, Spanish, Irish, and Portuguese people, can find comfort in the fact that apparently DSK had come to New York in order to speak with Nobel economist Joe Stiglitz about a more humane and democratic way to resolve the sovereign debt crisis in Europe than the one imposed by the private creditor banks.
Obviously, anyone who would consult with Stiglitz is perceived by the rich and powerful as a threat to their interest.
However, this obvious fact has made no impression on the left-wing, which has issued its shrill cries that, once again, the money of the rich and powerful has prevailed over law and justice.
Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously the editor of the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.
Saturday, July 9, 2011
NEXT QUESTION ON STRAUSS-KAHN: Was He Set Up?
Henry Blodget | Jun. 30, 2011
http://www.businessinsider.com/was-strauss-kahn-set-up-2011-6
"Not guilty," he said, and not a soul believed him.
Following the extraordinary news that the maid who brought rape charges against former IMF head and French presidential candidate Dominique Strauss-Kahn may have lied about the incident, the next question is...
Did someone set Strauss-Kahn up?
If so, who? One of his political rivals in France?
Could this be the biggest political scandal in history?
According to the New York Times, prosecutors now think the hotel maid who says Strauss-Kahn raped her is lying about some of what happened.
They have also found that the woman has received $100,000 in cash from an incarcerated drug-dealer over the past two years, and that she called him the day after the incident to discuss whether she should press charges. (There is a tape of this call.) The woman also apparently owned 5 cell phones after telling prosecutors she only had one and has lied in an application for political asylum.
Now, you can have lied in the past and still get raped, so to consider dropping the charges (which they are), prosecutors must also now think the woman is lying about the event.
And, if she is lying about the incident, the cash and the cell phones raise the question of why she is lying--and whether she was working for someone. And if so, who?
Before he was arrested in New York, Strauss-Kahn himself suggested that his biggest weakness as a presidential candidate was his fondness for women. Specifically, he suggested, someone might be able to set him up.
So did someone set him up?
Could this be the biggest political scandal in history?
http://www.businessinsider.com/was-strauss-kahn-set-up-2011-6
"Not guilty," he said, and not a soul believed him.
Following the extraordinary news that the maid who brought rape charges against former IMF head and French presidential candidate Dominique Strauss-Kahn may have lied about the incident, the next question is...
Did someone set Strauss-Kahn up?
If so, who? One of his political rivals in France?
Could this be the biggest political scandal in history?
According to the New York Times, prosecutors now think the hotel maid who says Strauss-Kahn raped her is lying about some of what happened.
They have also found that the woman has received $100,000 in cash from an incarcerated drug-dealer over the past two years, and that she called him the day after the incident to discuss whether she should press charges. (There is a tape of this call.) The woman also apparently owned 5 cell phones after telling prosecutors she only had one and has lied in an application for political asylum.
Now, you can have lied in the past and still get raped, so to consider dropping the charges (which they are), prosecutors must also now think the woman is lying about the event.
And, if she is lying about the incident, the cash and the cell phones raise the question of why she is lying--and whether she was working for someone. And if so, who?
Before he was arrested in New York, Strauss-Kahn himself suggested that his biggest weakness as a presidential candidate was his fondness for women. Specifically, he suggested, someone might be able to set him up.
So did someone set him up?
Could this be the biggest political scandal in history?
Tuesday, June 21, 2011
French minister resigns after being accused of sexual assault
Georges Tron denies allegations made by two women who worked for him at town hall in Draveil, near Paris Kim Willsher in Paris
guardian.co.uk, Sunday 29 May 2011
http://www.guardian.co.uk/world/2011/may/29/french-minister-reisgns-accused-sexual-assault
A French minister has resigned from Nicolas Sarkozy's government after he was put under investigation for allegedly sexually assaulting two women who worked for him.
The departure of the civil service minister, Georges Tron – who denies the allegations – was announced by the prime minister, François Fillon, on Sunday.
French prosecutors were in the preliminary stages of investigating accusations of sexual aggression and rape against Tron, whose lawyer, Olivier Schnerb, said were "pure defamation" and "balderdash".
The investigation comes two weeks after the arrest of the former IMF head and Socialist presidential hopeful, Dominique Strauss-Kahn, who is facing sexual assault charges in New York.
Tron's position became untenable after the foreign minister, Alain Juppé, told a television show that although his colleague was "presumed innocent", he should consider resigning because "government ministers had to be above all suspicion."
The two women, aged 34 and 36, have lodged complaints with the public prosecutor, claiming Tron assaulted them between 2007 and 2010 while they worked at the town hall in Draveil, south of Paris, where he is the mayor.
The women claim the assaults started after Tron, who says he is a qualified reflexologist, offered to give the women foot massages. They say it was the arrest of Strauss-Kahn that encouraged them to come forward. "When I see that a little chambermaid is capable of taking on Dominique Strauss-Kahn, I told myself I did not have the right to stay silent," one of them told a French newspaper.
"Other women have perhaps suffered what I have suffered. I have to help them. We have to smash this omerta."
The Strauss-Kahn affair has triggered soul-searching in France about sex and power. After the shock and disbelief of the arrest of the man nicknamed the Great Seducer, French pundits have been questioning whether strict privacy laws and alleged media complicity have enabled politicians and celebrities to get away with unacceptable behaviour. Sunday's edition of the Journal du Dimanche wrote of a "before and an after DSK" (as Strauss-Kahn is known in France).
Strauss-Kahn had already been forced to apologise for a "lack of judgment" after an affair with a junior colleague at the IMF shortly after he took up his post in 2007.
Tristane Banon, a journalist, claimed in 2007 that Strauss-Kahn sexually assaulted her in 2002, but her claims were largely ignored by the mainstream French press and her mother, a Socialist politician and friend of the Strauss-Kahn family persuaded her not to go to the police.
Last week a women's association said one of the women, claiming she had been attacked by Tron, had come forward in November with a "credible" complaint against the 53-year-old minister.
In a statement, the European Association Against Violence Against Women at Work said: "Her credibility is not in question from our point of view."
Tron claims the women have a vendetta against him after being sacked from their jobs. "I am not naive – they are trying to echo an affair taking place the other side of the Atlantic," he told Reuters last week. In an interview prior to his resignation, he said: "The accusations against me are fantasy."
guardian.co.uk, Sunday 29 May 2011
http://www.guardian.co.uk/world/2011/may/29/french-minister-reisgns-accused-sexual-assault
A French minister has resigned from Nicolas Sarkozy's government after he was put under investigation for allegedly sexually assaulting two women who worked for him.
The departure of the civil service minister, Georges Tron – who denies the allegations – was announced by the prime minister, François Fillon, on Sunday.
French prosecutors were in the preliminary stages of investigating accusations of sexual aggression and rape against Tron, whose lawyer, Olivier Schnerb, said were "pure defamation" and "balderdash".
The investigation comes two weeks after the arrest of the former IMF head and Socialist presidential hopeful, Dominique Strauss-Kahn, who is facing sexual assault charges in New York.
Tron's position became untenable after the foreign minister, Alain Juppé, told a television show that although his colleague was "presumed innocent", he should consider resigning because "government ministers had to be above all suspicion."
The two women, aged 34 and 36, have lodged complaints with the public prosecutor, claiming Tron assaulted them between 2007 and 2010 while they worked at the town hall in Draveil, south of Paris, where he is the mayor.
The women claim the assaults started after Tron, who says he is a qualified reflexologist, offered to give the women foot massages. They say it was the arrest of Strauss-Kahn that encouraged them to come forward. "When I see that a little chambermaid is capable of taking on Dominique Strauss-Kahn, I told myself I did not have the right to stay silent," one of them told a French newspaper.
"Other women have perhaps suffered what I have suffered. I have to help them. We have to smash this omerta."
The Strauss-Kahn affair has triggered soul-searching in France about sex and power. After the shock and disbelief of the arrest of the man nicknamed the Great Seducer, French pundits have been questioning whether strict privacy laws and alleged media complicity have enabled politicians and celebrities to get away with unacceptable behaviour. Sunday's edition of the Journal du Dimanche wrote of a "before and an after DSK" (as Strauss-Kahn is known in France).
Strauss-Kahn had already been forced to apologise for a "lack of judgment" after an affair with a junior colleague at the IMF shortly after he took up his post in 2007.
Tristane Banon, a journalist, claimed in 2007 that Strauss-Kahn sexually assaulted her in 2002, but her claims were largely ignored by the mainstream French press and her mother, a Socialist politician and friend of the Strauss-Kahn family persuaded her not to go to the police.
Last week a women's association said one of the women, claiming she had been attacked by Tron, had come forward in November with a "credible" complaint against the 53-year-old minister.
In a statement, the European Association Against Violence Against Women at Work said: "Her credibility is not in question from our point of view."
Tron claims the women have a vendetta against him after being sacked from their jobs. "I am not naive – they are trying to echo an affair taking place the other side of the Atlantic," he told Reuters last week. In an interview prior to his resignation, he said: "The accusations against me are fantasy."
Vlad Putin on DSK Conspiracy
From CNBC.com:
Russian Prime Minister Vladimir Putin has hinted that there is more to Dominique Strauss-Kahn’s arrest on charges of sexual assault than meets the eye, according to various media reports.
Putin told Interfax news agency that he finds it hard to believe the controversial charges against the Frenchman and is worried that he may have fallen victim to a shadowy plot to discredit him, various UK newspapers reported.
"It is hard for me to evaluate the real political underlying reasons and I do not even want to get into that subject, but I cannot believe that everything is as it seems and how it was initially presented," the Daily Telegraph quoted him as saying. "It does not sit right in my head."
Mere days ago, a French politician alleged that Strauss-Kahn said that Putin was planning to oust him days before his arrest.
"He said the Russians and notably Putin had allied themselves with France to try to have him fired from the IMF to stop him running for (French) president," Claude Bartolone, a socialist politician, said according to the Telegraph...
Putin Hints at Conspiracy Over Strauss-Kahn
Monday, 30 May 2011
Catherine Boyle
http://www.cnbc.com/id/43214487
Russian Prime Minister Vladimir Putin has hinted that there is more to Dominique Strauss-Kahn’s arrest on charges of sexual assault than meets the eye, according to various media reports.
Putin told Interfax news agency that he finds it hard to believe the controversial charges against the Frenchman and is worried that he may have fallen victim to a shadowy plot to discredit him, various UK newspapers reported.
"It is hard for me to evaluate the real political underlying reasons and I do not even want to get into that subject, but I cannot believe that everything is as it seems and how it was initially presented," the Daily Telegraph quoted him as saying. "It does not sit right in my head."
Mere days ago, a French politician alleged that Strauss-Kahn said that Putin was planning to oust him days before his arrest.
"He said the Russians and notably Putin had allied themselves with France to try to have him fired from the IMF to stop him running for (French) president," Claude Bartolone, a socialist politician, said according to the Telegraph...
Putin Hints at Conspiracy Over Strauss-Kahn
Monday, 30 May 2011
Catherine Boyle
http://www.cnbc.com/id/43214487
A tale of two rape charges
May 23, 2011
Naomi Wolf
http://blogs.reuters.com/great-debate/2011/05/23/a-tale-of-two-rape-charges
With the arrest of Dominique Strauss-Kahn, then Managing Director of the International Monetary Fund, New York City has abruptly become the scene of two very different official approaches to investigating sex-crime cases, one traditional and one new. The new approach so far appears to be reserved for Strauss-Kahn alone.
Consider the first case: the ongoing trial of two police officers, Kenneth Moreno and Franklin Mata, charged in the rape of a 27-year-old Manhattan woman. She was drunk, and, after helping her to enter her apartment, Moreno and Mata allegedly made a false emergency call so that they could return to her. At that point, the woman says, she woke periodically out of her intoxicated state to find herself being raped, face down, by Moreno, as Mata stood guard.
The alleged rape of a citizen by a police officer — and the alleged collusion of another officer — is surely a serious matter. But the charges and trial have followed an often-seen pattern: the men’s supporters have vociferously defended their innocence (the presumption of which has been scrupulously upheld in the press); the victim’s pink bra has been the subject of salacious speculation, and her intoxication has been used to undermine her credibility. As the wheels of justice grind unglamorously forward, Mayor Michael Bloomberg has made no public statement supporting the victim’s side.
Moreover, Moreno and Mata have not been asked to strip naked for “evidence” photos, were not initially denied bail, and were not held in solitary confinement, and are not being strip-searched daily. Their entire case has followed the usual timetable of many months, as evidence was gathered, testimony compiled and arguments made.
Then there is the Strauss-Kahn approach. After a chambermaid reportedly told her supervisor at the elegant Sofitel hotel that she had been sexually assaulted, the suspect was immediately tracked down, escorted off a plane just before its departure, and arrested. High-ranking detectives, not lowly officers, were dispatched to the crime scene. The DNA evidence was sequenced within hours, not the normal eight or nine days. By the end of the day’s news cycle, New York City police spokespeople had made uncharacteristic and shockingly premature statements supporting the credibility of the victim’s narrative — before an investigation was complete.
The accused was handcuffed and escorted before television cameras — a New York tradition known as a “perp walk.” The suspect was photographed naked, which is also unusual, initially denied bail and held in solitary confinement. The Police Commissioner has boasted to the press that Strauss-Kahn is strip-searched now multiple times a day — also unheard-of.
By the end of the second day’s news cycle, senior public officials had weakened the presumption of innocence, a cornerstone of any civilized society’s justice system. Treasury Secretary Timothy Geithner was calling for Strauss-Kahn’s resignation from the IMF, and Bloomberg remarked, in response to objections to Straus-Kahn’s perp walk, “don’t do the crime.” Whatever happened in that hotel room, Strauss-Kahn’s career, and his presumption of innocence, was effectively over — before any legal process had even begun.
If Strauss-Kahn turns out, after a fair trial, to be a violent sex criminal, may his sentence be harsh indeed. But the way in which this case is being processed is profoundly worrisome. In 23 years of covering sex crime — and in a city where domestic workers are raped by the score every month, often by powerful men — I have never seen the New York Police Department snap into action like this on any victim’s behalf.
Harriet Lessel, executive director of the New York City Alliance Against Sexual Assault, agrees that this case has seen “a very quick and targeted response,” and points out that rape is “a grossly underreported crime” in New York. Worse, she says, many victims under other circumstances believe that the criminal justice system is unresponsive to their needs and more oriented toward ensuring that the innocent are not convicted.
While Lessel is quick to add that New York has “some great police officers and prosecutors who really care,” she says that the police do not normally issue public statements supportive of victims’ credibility, let alone early on, as they did with Strauss-Kahn’s accuser. Nor has she ever heard of someone being photographed naked as part of the evidence.
So what is happening here?
We now live in a world in which men like former New York Governor Eliot Spitzer, who was investigating financial wrongdoing by the insurance giant AIG, WikiLeaks founder Julian Assange and Strauss-Kahn — whose efforts to reform the IMF gained him powerful opponents — can be, and are, kept under constant surveillance. Indeed, Strauss-Kahn, who had been the odds-on favorite to defeat Nicolas Sarkozy in next year’s French presidential election, probably interested more than one intelligence service.
This does not mean that Strauss-Kahn is innocent or that he is guilty. It means that policy outcomes can be advanced nowadays, in a surveillance society, by exploiting or manipulating sex-crime charges, whether real or inflated.
In other words, ours is increasingly an age of geopolitics by blackmail. Why, after all, were U.S. operatives asked to secure the “biometrics” and DNA of subjects abroad, as some of the U.S. diplomatic cables released by WikiLeaks were revealed?
After Strauss-Kahn’s arrest, a caller to a New York radio talk show, who identified herself as a domestic worker in a New York luxury hotel, reported that “every week” a man in a towel accosts her, seeking sex. Another caller, a hotel manager, confirmed that this is a common way for male hotel guests to solicit sex. The New York Times flagged on its front page a report that hotel domestic workers are often targeted with clients’ requests for sex in exchange for money.
Are these men disgusting predators soliciting desperate, underpaid women? Yes. Is knowing about this economy relevant to the charges against Strauss-Kahn? Maybe.
Unfortunately, such questions may never be investigated, much less answered, for this is not being treated as a typical New York City sex-crime case. The authorities, perhaps with their own agenda, have publicly asserted a foregone conclusion; and that kind of intervention ultimately diminishes the chance of any one of us being able to rely on what used to be real American due process of law.
Naomi Wolf
http://blogs.reuters.com/great-debate/2011/05/23/a-tale-of-two-rape-charges
With the arrest of Dominique Strauss-Kahn, then Managing Director of the International Monetary Fund, New York City has abruptly become the scene of two very different official approaches to investigating sex-crime cases, one traditional and one new. The new approach so far appears to be reserved for Strauss-Kahn alone.
Consider the first case: the ongoing trial of two police officers, Kenneth Moreno and Franklin Mata, charged in the rape of a 27-year-old Manhattan woman. She was drunk, and, after helping her to enter her apartment, Moreno and Mata allegedly made a false emergency call so that they could return to her. At that point, the woman says, she woke periodically out of her intoxicated state to find herself being raped, face down, by Moreno, as Mata stood guard.
The alleged rape of a citizen by a police officer — and the alleged collusion of another officer — is surely a serious matter. But the charges and trial have followed an often-seen pattern: the men’s supporters have vociferously defended their innocence (the presumption of which has been scrupulously upheld in the press); the victim’s pink bra has been the subject of salacious speculation, and her intoxication has been used to undermine her credibility. As the wheels of justice grind unglamorously forward, Mayor Michael Bloomberg has made no public statement supporting the victim’s side.
Moreover, Moreno and Mata have not been asked to strip naked for “evidence” photos, were not initially denied bail, and were not held in solitary confinement, and are not being strip-searched daily. Their entire case has followed the usual timetable of many months, as evidence was gathered, testimony compiled and arguments made.
Then there is the Strauss-Kahn approach. After a chambermaid reportedly told her supervisor at the elegant Sofitel hotel that she had been sexually assaulted, the suspect was immediately tracked down, escorted off a plane just before its departure, and arrested. High-ranking detectives, not lowly officers, were dispatched to the crime scene. The DNA evidence was sequenced within hours, not the normal eight or nine days. By the end of the day’s news cycle, New York City police spokespeople had made uncharacteristic and shockingly premature statements supporting the credibility of the victim’s narrative — before an investigation was complete.
The accused was handcuffed and escorted before television cameras — a New York tradition known as a “perp walk.” The suspect was photographed naked, which is also unusual, initially denied bail and held in solitary confinement. The Police Commissioner has boasted to the press that Strauss-Kahn is strip-searched now multiple times a day — also unheard-of.
By the end of the second day’s news cycle, senior public officials had weakened the presumption of innocence, a cornerstone of any civilized society’s justice system. Treasury Secretary Timothy Geithner was calling for Strauss-Kahn’s resignation from the IMF, and Bloomberg remarked, in response to objections to Straus-Kahn’s perp walk, “don’t do the crime.” Whatever happened in that hotel room, Strauss-Kahn’s career, and his presumption of innocence, was effectively over — before any legal process had even begun.
If Strauss-Kahn turns out, after a fair trial, to be a violent sex criminal, may his sentence be harsh indeed. But the way in which this case is being processed is profoundly worrisome. In 23 years of covering sex crime — and in a city where domestic workers are raped by the score every month, often by powerful men — I have never seen the New York Police Department snap into action like this on any victim’s behalf.
Harriet Lessel, executive director of the New York City Alliance Against Sexual Assault, agrees that this case has seen “a very quick and targeted response,” and points out that rape is “a grossly underreported crime” in New York. Worse, she says, many victims under other circumstances believe that the criminal justice system is unresponsive to their needs and more oriented toward ensuring that the innocent are not convicted.
While Lessel is quick to add that New York has “some great police officers and prosecutors who really care,” she says that the police do not normally issue public statements supportive of victims’ credibility, let alone early on, as they did with Strauss-Kahn’s accuser. Nor has she ever heard of someone being photographed naked as part of the evidence.
So what is happening here?
We now live in a world in which men like former New York Governor Eliot Spitzer, who was investigating financial wrongdoing by the insurance giant AIG, WikiLeaks founder Julian Assange and Strauss-Kahn — whose efforts to reform the IMF gained him powerful opponents — can be, and are, kept under constant surveillance. Indeed, Strauss-Kahn, who had been the odds-on favorite to defeat Nicolas Sarkozy in next year’s French presidential election, probably interested more than one intelligence service.
This does not mean that Strauss-Kahn is innocent or that he is guilty. It means that policy outcomes can be advanced nowadays, in a surveillance society, by exploiting or manipulating sex-crime charges, whether real or inflated.
In other words, ours is increasingly an age of geopolitics by blackmail. Why, after all, were U.S. operatives asked to secure the “biometrics” and DNA of subjects abroad, as some of the U.S. diplomatic cables released by WikiLeaks were revealed?
After Strauss-Kahn’s arrest, a caller to a New York radio talk show, who identified herself as a domestic worker in a New York luxury hotel, reported that “every week” a man in a towel accosts her, seeking sex. Another caller, a hotel manager, confirmed that this is a common way for male hotel guests to solicit sex. The New York Times flagged on its front page a report that hotel domestic workers are often targeted with clients’ requests for sex in exchange for money.
Are these men disgusting predators soliciting desperate, underpaid women? Yes. Is knowing about this economy relevant to the charges against Strauss-Kahn? Maybe.
Unfortunately, such questions may never be investigated, much less answered, for this is not being treated as a typical New York City sex-crime case. The authorities, perhaps with their own agenda, have publicly asserted a foregone conclusion; and that kind of intervention ultimately diminishes the chance of any one of us being able to rely on what used to be real American due process of law.
Tuesday, May 31, 2011
Was Dominique Strauss-Kahn Trying to Torpedo the Dollar?
Mike Whitney
Global Research, May 19, 2011
http://www.globalresearch.ca/index.php?context=va&aid=24867
It's all about perception management. The media is trying to dig up as much dirt as they can on Dominique Strauss-Kahn so they can hang the man before he ever sees the inside of a courthouse. It reminds me of the Terry Schiavo case, where devoted-husband Michael was pegged as an insensitive slimeball for carrying out the explicit wishes of his brain-dead wife. Do you remember how the media conducted their disgraceful 24 hour-a-day Blitzkrieg with the endless coverage of weepy Christian fanatics on the front lawn of the hospital while Hannity, Limbaugh and O' Reilly fired away with their sanctimonious claptrap?
And now you're telling me that that same media is just "doing their job?"
Give me a break.
Whoever wants to nail IMF chief Dominique Strauss-Kahn has really pulled out all the stops. Their agents have been rummaging through diaries, hotel registries, phone records, yearbooks, yada, yada, yada. The UK Telegraph even paid a visit to a high-priced DC knocking shop to get a little dirt from Madame Botox; whatever it takes to make a randy banker look like the South Hill rapist. And they're doing a pretty good job, too. The cops have made sure that the "Great Seducer" always appears handcuffed and dressed in a "pervie" raincoat with 3-days stubble before they parade him in front of the media. On Wednesday--more grist for the mill--they released his mug-shot, an unflattering, deadpan photo that makes him look like Jack-the-Ripper. Was that the intention?
And, that's not the half of it. The Big Money is exhuming every woman he's ever had contact with for the last 30 years hoping they can glean some damning tidbit of information that will convince the doubters that beneath that sophisticated manner and $25,000 suit lurks a closet Bluebeard ready to snap up your daughters and defile your wives. Next thing you know, they'll be trotting out Paula Jones and Tanya Harding claiming they spent a torrid night with the Marquis de Kahn in a trailerpark outside Winamucca.
Where does it stop? Or does it stop? Are we in for another year-long Clinton-Lewinski feeding frenzy where everyday we hear more lurid details about the sexploits of people who don't really interest us at all?
Aren't you at all curious about who's behind this "lynching by media" scam? This is an all-out, no-holds-barred, steel-cage, take-down. The big boys save that kind of action for the worst offenders, that is, for the insiders who have broken "Omerta" or wandered off the reservation. I mean, they locked him up on Riker's Island without bail, for Chrissake. What does that tell you? Even Bernie Madoff was allowed to stay in his $7 million Park Avenue penthouse while he waited for trial, but not Straus-Kahn. Oh, no. He get's the royal treatment, even though he has no criminal record and nothing but the sketchy accusations of a chambermaid against him, he's carted off to the state slammer where he can mingle with hardened criminals while dining on corn flakes and Wonder Bread.
You call that justice?
Can I tell you what this is all about? It's about the dollar. That's right. Strauss-Kahn was mounting an attack against the dollar and now the wrath of the Empire has descended on him like ton-of-bricks. Here's the scoop from the UK Telegraph:
"Dominique Strauss-Kahn, managing director of the International Monetary Fund, has called for a new world currency that would challenge the dominance of the dollar and protect against future financial instability.....
He suggested adding emerging market countries' currencies, such as the yuan, to a basket of currencies that the IMF administers could add stability to the global system....Strauss-Kahn saw a greater role for the IMF's Special Drawing Rights, (SDRs) which is currently composed of the dollar, sterling, euro and yen, over time but said it will take a great deal of international cooperation to make that work." ("International Monetary Fund director Dominique Strauss-Kahn calls for new world currency", UK Telegraph)
So, Strauss-Kahn finds himself in the same crowd as Saddam Hussein and Libyan leader Muammar Gaddafi, right? You may recall that Saddam switched from dollars to euros about a year before the war. 12 months later Iraq was invaded, Saddam was hanged, and the dollar was restored to power. Gaddafi made a similar mistake when "he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar." ("Libya: All About Oil, or All About Central Banking?" Ellen Brown, Op-Ed News) Libya has since come under attack by US and NATO forces which have armed a motley group of dissidents, malcontents and terrorists to depose Gaddafi and reimpose dollar hegemony.
And now it's Strauss-Kahn's turn to get torn to shreds. And for good reason. After all, DSK actually poses a much greater threat to the dollar than either Saddam or Gaddafi because he's in the perfect position to shape policy and to persuade foreign heads of state that replacing the dollar is in their best interests. And that is precisely what he was doing; badmouthing the buck. Only he was too dense to figure out that the dollar is the US Mafia's mealticket, the main way that shifty banksters and corporate scalawags extort tribute from the poorest people on earth. Strauss-Kahn was rocking the boat, and now he's going to pay.
Here's a clip from CNN Money:
"The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.
The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system....SDRs represent potential claims on the currencies of IMF members.....The IMF typically lends countries funds denominated in SDRs. While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.
"Over time, there may also be a role for the SDR to contribute to a more stable international monetary system," he said.
The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy.
In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks' dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs." ("IMF discusses dollar alternative", CNN Money)
Wow. So DSK was zeroing in on US Treasuries as well as the dollar? That's the whole shooting match.
So, what type of progress was he making in converting USDs to SDRs? According to Reuters: "The IMF general resources credit outstanding increased to 65.5 billion Special Drawing Rights, or SDRs, ($104 billion) on May 12 from 6.0 billion SDRs at December 2007. The so-called new arrangement to borrow, which came into effect on April 1, increased the IMF's available lending resources to 269 billion SDRs on May 12 from 120 billion SDRs on March 31." (http://in.reuters.com/article/2011/05/17/idINIndia-57083920110517?type=economicNews)
Not a bad start for such an ambitious project. It looks like DSK's dream of dethroning the dollar as the de facto "international currency" was beginning to gain momentum. But didn't he know that his actions would anger some very powerful and well-connected people?
Well, if he did; he never let on. In fact, he started mucking around in other stuff, too, like when he intervened on behalf of Irish taxpayers, trying to protect them at the expense of foreign bondholders. That's a big "No no" in banker's world. They keep a list of "people who count", and taxpayers are not on that list. Here's an excerpt from the Irish Times:
"Ireland’s Last Stand began less shambolically than you might expect. The IMF, which believes that lenders should pay for their stupidity before it has to reach into its pocket, presented the Irish with a plan to haircut €30 billion of unguaranteed bonds by two-thirds on average. (Irish finance minister) Lenihan was overjoyed, according to a source who was there, telling the IMF team: “You are Ireland’s salvation.”
The deal was torpedoed from an unexpected direction. At a conference call with the G7 finance ministers, the haircut was vetoed by US Treasury Secretary Timothy Geithner who, as his payment of $13 billion from government-owned AIG to Goldman Sachs showed, believes that bankers take priority over taxpayers. The only one to speak up for the Irish was UK chancellor George Osborne, but Geithner, as always, got his way. An instructive, if painful, lesson in the extent of US soft power, and in who our friends really are.
The negotiations went downhill from there. On one side was the European Central Bank, unabashedly representing Ireland’s creditors and insisting on full repayment of bank bonds. On the other was the IMF, arguing that Irish taxpayers would be doing well to balance their government’s books, let alone repay the losses of private banks." ("Ireland's future depends on breaking free from bailout", Morgan Kelly, Irish Times)
So, Strauss-Kahn stuck up for Irish taxpayers over the banks, the bondholders, the ECB, and the US Treasury. Naturally, that made him persona non grata among the ruling throng.
And, there's more, too, because Strauss-Kahn's vision was not limited to currency alone, but involved broad structural changes to the IMF itself that would have reversed decades of neoliberal policies. DSK had settled on a new approach to policymaking; one that would abandon the worst elements of globalization and put greater emphasis on social cohesion, cooperation and multilateralism. Here's an excerpt from the speech titled "Human Development and Wealth Distribution" he gave in November 2010:
"....Adam Smith—one of the founders of modern economics—recognized clearly that a poor distribution of wealth could undermine the free market system, noting that: “The disposition to admire, and almost to worship, the rich and the powerful and…neglect persons of poor and mean condition…is the great and most universal cause of the corruption of our moral sentiments.”
This was over 250 years ago. In today’s world, these problems are magnified under the lens of globalization....globalization also had a dark side. Lurking behind it was a large and growing chasm between rich and poor—especially within countries. An inequitable distribution of wealth can wear down the social fabric. More unequal countries have worse social indicators, a poorer human development record, and higher degrees of economic insecurity and anxiety. In too many countries, inequality increased and real wages stagnated—failing to keep up with productivity—over the past few decades. Ominously, inequality in the United States was back at its pre-Great Depression levels on the eve of the crisis....
An immediate task is to end the scourge of unemployment....Progressive taxation can also promote equity through redistribution, and this should be encouraged....“Inequality is corrosive” ....“it rots societies from within…it illustrates and exacerbates the loss of social cohesion…the pathology of the age and the greatest threat to the health of any democracy.” ("Human Development and Wealth Distribution", Dominique Strauss-Kahn, IMF)
Can you believe it? DSK is lecturing bankers about redistribution? That's not what they want to hear. What they want to hear is why ripping off poor people actually makes the world a better place. DSK's speech just shows that he wasn't drinking the Koolaid anymore. He was becoming a nuisance and they needed to get rid of him.
Does that mean he didn't rape the woman who was in his hotel room?
Of course not. In fact, he could be guilty. But he deserves a fair trial, and someone's making damn sure he doesn't get one.
Global Research, May 19, 2011
http://www.globalresearch.ca/index.php?context=va&aid=24867
It's all about perception management. The media is trying to dig up as much dirt as they can on Dominique Strauss-Kahn so they can hang the man before he ever sees the inside of a courthouse. It reminds me of the Terry Schiavo case, where devoted-husband Michael was pegged as an insensitive slimeball for carrying out the explicit wishes of his brain-dead wife. Do you remember how the media conducted their disgraceful 24 hour-a-day Blitzkrieg with the endless coverage of weepy Christian fanatics on the front lawn of the hospital while Hannity, Limbaugh and O' Reilly fired away with their sanctimonious claptrap?
And now you're telling me that that same media is just "doing their job?"
Give me a break.
Whoever wants to nail IMF chief Dominique Strauss-Kahn has really pulled out all the stops. Their agents have been rummaging through diaries, hotel registries, phone records, yearbooks, yada, yada, yada. The UK Telegraph even paid a visit to a high-priced DC knocking shop to get a little dirt from Madame Botox; whatever it takes to make a randy banker look like the South Hill rapist. And they're doing a pretty good job, too. The cops have made sure that the "Great Seducer" always appears handcuffed and dressed in a "pervie" raincoat with 3-days stubble before they parade him in front of the media. On Wednesday--more grist for the mill--they released his mug-shot, an unflattering, deadpan photo that makes him look like Jack-the-Ripper. Was that the intention?
And, that's not the half of it. The Big Money is exhuming every woman he's ever had contact with for the last 30 years hoping they can glean some damning tidbit of information that will convince the doubters that beneath that sophisticated manner and $25,000 suit lurks a closet Bluebeard ready to snap up your daughters and defile your wives. Next thing you know, they'll be trotting out Paula Jones and Tanya Harding claiming they spent a torrid night with the Marquis de Kahn in a trailerpark outside Winamucca.
Where does it stop? Or does it stop? Are we in for another year-long Clinton-Lewinski feeding frenzy where everyday we hear more lurid details about the sexploits of people who don't really interest us at all?
Aren't you at all curious about who's behind this "lynching by media" scam? This is an all-out, no-holds-barred, steel-cage, take-down. The big boys save that kind of action for the worst offenders, that is, for the insiders who have broken "Omerta" or wandered off the reservation. I mean, they locked him up on Riker's Island without bail, for Chrissake. What does that tell you? Even Bernie Madoff was allowed to stay in his $7 million Park Avenue penthouse while he waited for trial, but not Straus-Kahn. Oh, no. He get's the royal treatment, even though he has no criminal record and nothing but the sketchy accusations of a chambermaid against him, he's carted off to the state slammer where he can mingle with hardened criminals while dining on corn flakes and Wonder Bread.
You call that justice?
Can I tell you what this is all about? It's about the dollar. That's right. Strauss-Kahn was mounting an attack against the dollar and now the wrath of the Empire has descended on him like ton-of-bricks. Here's the scoop from the UK Telegraph:
"Dominique Strauss-Kahn, managing director of the International Monetary Fund, has called for a new world currency that would challenge the dominance of the dollar and protect against future financial instability.....
He suggested adding emerging market countries' currencies, such as the yuan, to a basket of currencies that the IMF administers could add stability to the global system....Strauss-Kahn saw a greater role for the IMF's Special Drawing Rights, (SDRs) which is currently composed of the dollar, sterling, euro and yen, over time but said it will take a great deal of international cooperation to make that work." ("International Monetary Fund director Dominique Strauss-Kahn calls for new world currency", UK Telegraph)
So, Strauss-Kahn finds himself in the same crowd as Saddam Hussein and Libyan leader Muammar Gaddafi, right? You may recall that Saddam switched from dollars to euros about a year before the war. 12 months later Iraq was invaded, Saddam was hanged, and the dollar was restored to power. Gaddafi made a similar mistake when "he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar." ("Libya: All About Oil, or All About Central Banking?" Ellen Brown, Op-Ed News) Libya has since come under attack by US and NATO forces which have armed a motley group of dissidents, malcontents and terrorists to depose Gaddafi and reimpose dollar hegemony.
And now it's Strauss-Kahn's turn to get torn to shreds. And for good reason. After all, DSK actually poses a much greater threat to the dollar than either Saddam or Gaddafi because he's in the perfect position to shape policy and to persuade foreign heads of state that replacing the dollar is in their best interests. And that is precisely what he was doing; badmouthing the buck. Only he was too dense to figure out that the dollar is the US Mafia's mealticket, the main way that shifty banksters and corporate scalawags extort tribute from the poorest people on earth. Strauss-Kahn was rocking the boat, and now he's going to pay.
Here's a clip from CNN Money:
"The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.
The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system....SDRs represent potential claims on the currencies of IMF members.....The IMF typically lends countries funds denominated in SDRs. While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.
"Over time, there may also be a role for the SDR to contribute to a more stable international monetary system," he said.
The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy.
In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks' dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs." ("IMF discusses dollar alternative", CNN Money)
Wow. So DSK was zeroing in on US Treasuries as well as the dollar? That's the whole shooting match.
So, what type of progress was he making in converting USDs to SDRs? According to Reuters: "The IMF general resources credit outstanding increased to 65.5 billion Special Drawing Rights, or SDRs, ($104 billion) on May 12 from 6.0 billion SDRs at December 2007. The so-called new arrangement to borrow, which came into effect on April 1, increased the IMF's available lending resources to 269 billion SDRs on May 12 from 120 billion SDRs on March 31." (http://in.reuters.com/article/2011/05/17/idINIndia-57083920110517?type=economicNews)
Not a bad start for such an ambitious project. It looks like DSK's dream of dethroning the dollar as the de facto "international currency" was beginning to gain momentum. But didn't he know that his actions would anger some very powerful and well-connected people?
Well, if he did; he never let on. In fact, he started mucking around in other stuff, too, like when he intervened on behalf of Irish taxpayers, trying to protect them at the expense of foreign bondholders. That's a big "No no" in banker's world. They keep a list of "people who count", and taxpayers are not on that list. Here's an excerpt from the Irish Times:
"Ireland’s Last Stand began less shambolically than you might expect. The IMF, which believes that lenders should pay for their stupidity before it has to reach into its pocket, presented the Irish with a plan to haircut €30 billion of unguaranteed bonds by two-thirds on average. (Irish finance minister) Lenihan was overjoyed, according to a source who was there, telling the IMF team: “You are Ireland’s salvation.”
The deal was torpedoed from an unexpected direction. At a conference call with the G7 finance ministers, the haircut was vetoed by US Treasury Secretary Timothy Geithner who, as his payment of $13 billion from government-owned AIG to Goldman Sachs showed, believes that bankers take priority over taxpayers. The only one to speak up for the Irish was UK chancellor George Osborne, but Geithner, as always, got his way. An instructive, if painful, lesson in the extent of US soft power, and in who our friends really are.
The negotiations went downhill from there. On one side was the European Central Bank, unabashedly representing Ireland’s creditors and insisting on full repayment of bank bonds. On the other was the IMF, arguing that Irish taxpayers would be doing well to balance their government’s books, let alone repay the losses of private banks." ("Ireland's future depends on breaking free from bailout", Morgan Kelly, Irish Times)
So, Strauss-Kahn stuck up for Irish taxpayers over the banks, the bondholders, the ECB, and the US Treasury. Naturally, that made him persona non grata among the ruling throng.
And, there's more, too, because Strauss-Kahn's vision was not limited to currency alone, but involved broad structural changes to the IMF itself that would have reversed decades of neoliberal policies. DSK had settled on a new approach to policymaking; one that would abandon the worst elements of globalization and put greater emphasis on social cohesion, cooperation and multilateralism. Here's an excerpt from the speech titled "Human Development and Wealth Distribution" he gave in November 2010:
"....Adam Smith—one of the founders of modern economics—recognized clearly that a poor distribution of wealth could undermine the free market system, noting that: “The disposition to admire, and almost to worship, the rich and the powerful and…neglect persons of poor and mean condition…is the great and most universal cause of the corruption of our moral sentiments.”
This was over 250 years ago. In today’s world, these problems are magnified under the lens of globalization....globalization also had a dark side. Lurking behind it was a large and growing chasm between rich and poor—especially within countries. An inequitable distribution of wealth can wear down the social fabric. More unequal countries have worse social indicators, a poorer human development record, and higher degrees of economic insecurity and anxiety. In too many countries, inequality increased and real wages stagnated—failing to keep up with productivity—over the past few decades. Ominously, inequality in the United States was back at its pre-Great Depression levels on the eve of the crisis....
An immediate task is to end the scourge of unemployment....Progressive taxation can also promote equity through redistribution, and this should be encouraged....“Inequality is corrosive” ....“it rots societies from within…it illustrates and exacerbates the loss of social cohesion…the pathology of the age and the greatest threat to the health of any democracy.” ("Human Development and Wealth Distribution", Dominique Strauss-Kahn, IMF)
Can you believe it? DSK is lecturing bankers about redistribution? That's not what they want to hear. What they want to hear is why ripping off poor people actually makes the world a better place. DSK's speech just shows that he wasn't drinking the Koolaid anymore. He was becoming a nuisance and they needed to get rid of him.
Does that mean he didn't rape the woman who was in his hotel room?
Of course not. In fact, he could be guilty. But he deserves a fair trial, and someone's making damn sure he doesn't get one.
Regime Change at the IMF: The Frame-Up of Dominique Strauss-Kahn?
Prof. Michel Chossudovsky
Global Research, May 19, 2011
http://www.globalresearch.ca/index.php?context=va&aid=24866
The arrest of IMF Managing Director Dominique Strauss-Kahn has all the appearances of a frame-up ordered by powerful members of the financial establishment, in liaison with France's Nicolas Sarkozy, whose presidency has served the interests of the US at the expense of those of France and the European Union. While there is for the moment no proof of a plot, the unusual circumstances of his arrest and imprisonment require careful examination.
Immediately following Strauss Kahn's arrest, pressures were exerted by Washington to speed up his replacement as Managing Director of the IMF preferably by a non-European, an American or a handpicked candidate from an "emerging market economy" or a developing country.
Since the founding of the Bretton Woods institutions in 1945, the World Bank has been headed by an American whereas the IMF has been under the helm of a (Western) European.
Strauss-Kahn is a member of elite groups who meet behind closed doors. He belongs to the Bildeberger. Categorized as one of the world's most influential persons, he is an academic and politician rather than a banker. In contrast to his predecessors at the IMF, he has no direct affiliation to a banking or financial institution.
But at the same time he is the fall guy. His "gaffe" was to confront the Washington-Wall Street Consensus and push for reforms within the IMF, which challenged America's overriding role within the organization.
The demise of Strauss-Kahn potentially serves to strengthen the hegemony of the US and its control over the IMF at the expense of what former Defense Secretary Donald Rumsfeld called "Old Europe".
Blocking Strauss-Kahn, the Presidential Candidate
In recent years, a major shift has occurred in Europe's political landscape. Pro-American governments have been elected in both France and Germany. Social Democracy has been weakened.
Franco-American relations have been redefined, with Washington playing a significant role in grooming a new generation of European politicians.
The presidency of Nicolas Sarkozy has, in many regards, become a de facto US "client regime", broadly supportive of US corporate interests in the EU and closely aligned with US foreign policy.
There are two overlapping and interrelated issues in the DSK frame-up hypothesis.
The first pertains to regime change at the IMF, the second to Strauss-Kahn as a candidate in France's forthcoming presidential elections.
Both these processes are tied into the clash between competing US and European economic interests including control over the euro-currency system.
Strauss-Khan as a favorite of the Socialist Party, would have won the presidential elections leading to the demise of "Our Man in Paris" Nicolas Sarkozy. As documented by Thierry Meyssan, the CIA played a central undercover role in destabilizing the Gaullist party and supporting the election of Nicolas Sarkozy (See Operation Sarkozy: How the CIA placed one of its agents at the presidency of the French Republic, Reseau Voltaire, September 4, 2008)
A Strauss-Kahn presidency and a "Socialist" government would have been a serious setback for Washington, contributing to a major shift in Franco-American relations.
It would have contributed to weakening Washington's role on the European political chessboard, leading to a shift in the balance of power between America and "Old Europe" (namely the Franco-German alliance).
It would have had repercussions on the internal structure of the Atlantic Alliance and the hegemonic role of the US within NATO.
The Eurozone monetary system as well as Wall Street's resolve to exert a decisive influence on the European monetary architecture are also at stake.
The Frame-Up?
Fifty-seven percent of France's population, according to a May 17 poll, believe that Strauss-Kahn was framed, victim of a set-up. He was detained on alleged sexual assault and rape charges based on scanty evidence. He was detained based on a complaint filed by the Sofitel hotel where he was staying, on behalf of the alleged victim, an unnamed hotel chamber-maid:
The 32-year-old maid told authorities that she entered his suite early Saturday afternoon and he attacked her, New York Police Department spokesman Paul J. Browne. She said she had been told to clean the spacious $3,000-a-night suite, which she thought was empty.
According to an account the woman provided to police, Strauss-Kahn emerged from the bathroom naked, chased her down a hallway and pulled her into a bedroom, where he began to sexually assault her. She said she fought him off, then he dragged her into the bathroom, where he forced her to perform oral sex on him and tried to remove her underwear. The woman was able to break free again and escaped the room and told hotel staff what had happened, authorities said. They called police.
http://www.chron.com/disp/story.mpl/business/7565485.html#ixzz1MfFWFlnY
Challenging the Washington Consensus
What is at stake in the immediate wake of Strauss Kahn's demise is "regime change" at the IMF.
The Obama administration has demanded his replacement by a more compliant individual. U.S. Treasury Secretary Timothy Geithner, former CEO of the New York Federal Reserve Bank is pushing for the replacement of Dominique Strauss-Kahn, "suggesting he can no longer perform his duties" as IMF Managing director.
"Geithner called for greater formal recognition by the IMF board that John Lipsky, the fund's second-in-command, will continue serving as temporary managing director for an interim period. Although Strauss-Kahn has yet to resign, sources say the IMF is in touch with his legal counsel to discuss his future at the organization."
What lies behind the frame-up scenario? What powerful interests are involved? Geithner had a close personal relationship with Strauss-Kahn.
On the floor of the US Senate (May 18), Senator Mark Kirk of Illinois, called for the resignation of DSK while calling upon the IMF's deputy managing director John Lipsky to "assume full responsibility of the IMF" as interim managing director. The process of "permanent replacement should "commence at once," he said. John Lipsky is a well connected Wall Street banker, a former Vice Chairman at JPMorgan Investment Bank.
While the IMF is in theory an intergovernmental organization, it has historically been controlled by Wall Street and the US Treasury. The IMF's "bitter economic medicine", the so-called Structural Adjustment Program (SAP), imposed on countless developing countries, essentially serves the interests of creditor banks and multinational corporations.
The IMF is not the main architect of these devastating economic reforms which have served to impoverish millions of people, while creating a "favorable environment" for foreign investors in Third World low wage economies.
The creditor banks call the shots. The IMF is a bureaucratic entity. Its role is to implement and enforce those economic policies on behalf of dominant economic interests.
Strauss Kahn's proposed reforms while providing a "human face" to the IMF did not constitute a shift in direction. They were formulated within the realm of neoliberalism. They modified but they did not undermine the central role of IMF "economic medicine". The socially devastating impacts of IMF "shock treatment" under Strauss-Kahn's leadership have largely prevailed.
Dominique Strauss Kahn arrived at the helm of the IMF in November 2007, less than a year prior to September-October 2008 financial meltdown on Wall Street. The structural adjustment program (SAP) was not modified. Under DSK, IMF "shock treatment" which historically had been limited to developing countries was imposed on Greece, Ireland and Portugal.
Under the helm of DSK as Managing Director, the IMF demanded that developing countries remove food and fuel subsidies at a time of rising commodity prices on the New York and Chicago Mercantile exchanges.
The hikes in food and fuel prices, which preceded the September-October 2008 Wall Street crash, were in large part the result of market manipulation. Grain prices were boosted artificially by large scale speculative operations. Instead of taming the speculators and containing the rise in food and fuel prices, the IMF's role was to ensure that the governments of indebted developing countries would not in any way interfere in the "free market", by preventing these prices from going up.
These hikes in food prices, which are the result of outright manipulation (rather than scarcity) have served to impoverish people Worldwide. The surge in food prices constitutes a new phase of the process of global impoverishment.
DSK was complicit in this process of market manipulation. The removal of food and fuel subsidies in Tunisia and Egypt had been demanded by the IMF. Food and fuel prices skyrocketed, people were impoverished, paving the way towards the January 2011 social protest movement:
Fiscal prudence remains an overarching priority for the [Tunisian] authorities, who also see the need for maintaining a supportive fiscal policy in 2010 in the current international environment. Efforts in the last decade to bring down the public debt ratio significantly should not be jeopardized by a too lax fiscal policy. The authorities are committed to firmly control current expenditure, including subsidies,... (IMF Tunisia: 2010 Article IV Consultation - Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Tunisia)
"[The IMF] encouraged the [Egyptian] authorities to press further with food and fuel subsidy reforms, and welcomed their intention to improve the efficiency and targeting of food subsidy programs. [meaning the selective elimination of food subsidies].
"Consideration should be given to introducing automatic adjustment mechanisms for domestic fuel prices to minimize distortions [meaning dramatic increases in fuel prices without State interference], while strengthening cash-based social programs to protect vulnerable groups. (IMF Executive Board Concludes 2008 Article IV Consultation with the Arab Republic of Egypt Public Information Notice, PIN No. 09/04, January 15, 2009)
Under the helm of DSK, the IMF also imposed sweeping austerity measures on Egypt in 2008, while supporting Hosni Mubarak's "efforts to broaden the privatization program".(Ibid)
The Frank G. Wisner Nicolas Sarkozy Connection
Strauss-Kahn was refused bail by Judge Melissa Jackson, an appointee and protégé of Michael Bloomberg, who in addition to his role as Mayor is a powerful figure on Wall Street.
Manhattan District Attorney Cyrus Vance Jr. charged (using scanty evidence) Strauss-Kahn "with seven crimes, including attempted rape, sexual abuse, forcible touching and unlawful imprisonment".
Who is Cyrus Vance Jr.?
He is the son of the late Cyrus Vance who served as Secretary of State in the Carter administration.
But there is more than meets the eye. Nicolas Sarkozy's step father Frank G. Wisner II, a prominent CIA official who married his step mother Christine de Ganay in 1977 served as Deputy Executive Secretary of State under the helm of Cyrus Vance Senior, father of District Attorney Cyrus Vance Junior.
Is it relevant?
The Vance and Wisner families had close personal ties. In turn Nicolas Sarkozy had close family ties with his step father Frank Wisner (and his half brothers and sisters in the US and one member of the Wisner family was involved in Sarkozy's election campaign).
It is also worth noting that Frank G. Wisner II was the son of one of America's most notorious spies, the late Frank Gardiner Wisner (1909- 1965), the mastermind behind the CIA sponsored coup which toppled the government of Mohammed Mossadegh in Iran in 1953. Wisner Jr. is also trustee of the Rockefeller Brothers Trust.
While these various personal ties do not prove that Strauss-Kahn was the object of a set-up, the matter of Sarkozy's ties to the CIA via his step father, not to mention the ties of Frank G. Wisner II to the Cyrus Vance family are certainly worth investigating. Frank G, Wisner also played a key role as Obama's special intelligence envoy to Egypt at the height of the January 2011 protest movement.
Did the CIA play a role?
Was Strauss-Kahn framed by people in his immediate political entourage including President Obama and Secretary of the Treasury Tim Geithner?
Fair Trial?
Innocent before proven guilty? The US media has already cast its verdict. Will the court procedures be manipulated?
One would expect that Strauss-Kahn be granted a fair trial, namely the same treatment as that granted to thousands of arrests on alleged sexual aggression charges in New York City.
How many similar or comparable alleged sexual aggressions occur on a monthly basis in New York City? What is the underlying pattern? How many of these are reported to the police? How many are the object of police follow-up once a complaint has been filed?
What is the percent of complaints submitted to police which are the object of police arrest? How many of these arrests lead to a judicial procedure? What are the delays in court procedures?
How many of these arrests lead to release without a judicial procedure?
How many of the cases submitted to a judicial procedure are dismissed by the presiding judge?
How many of the cases which are not dismissed are refused bail outright by the presiding judge? What is the basis for refusing bail?
How many are granted bail? What is the average amount of bail?
How many are imprisoned without bail based on scanty and incomplete evidence?
How many of those who are refused bail are sent to an infamous maximum security prison on Rikers Island on the orders of Michael Bloomberg.
Diplomatic Immunity
Press reports state that full diplomatic immunity does not apply to officials of the United Nations and the Bretton Woods institutions, namely that the US did not ratify the protocol.
"U.N. convention on privileges and immunities for international agencies that most countries have ratified. It gives the heads of U.N. agencies broad immunity in the countries where they are based. But the U.S. government never became a party to that treaty. Employees of international agencies are covered by a U.S. statute that gives only limited immunity."
The relevant question is how has this limited immunity provision been applied in practice? Namely how many people with limited immunity (UN officials, officials of the Bretton Woods institutions) have been arrested and sent to a high security prison?
Has Strauss Kahn been given the same treatment as those arrested under the provisions of "limited immunity"?
Does the Strauss Kahn arrest fit the pattern? Or is Strauss Kahn being treated in a way which does not correspond to the normal (average) pattern of police and judicial procedures applied in the numerous cases of persons arrested on alleged sexual assault charges?
Without a frame-up instrumented by very powerful people acting in the background, the head of the IMF would have been treated in an entirely different way. The mayor of New York Michael Bloomberg and Timothy Geithner would have come to his rescue. The matter would have been hushed up with a view to protecting the reputation of a powerful public figure. But that did not happen.
Global Research, May 19, 2011
http://www.globalresearch.ca/index.php?context=va&aid=24866
The arrest of IMF Managing Director Dominique Strauss-Kahn has all the appearances of a frame-up ordered by powerful members of the financial establishment, in liaison with France's Nicolas Sarkozy, whose presidency has served the interests of the US at the expense of those of France and the European Union. While there is for the moment no proof of a plot, the unusual circumstances of his arrest and imprisonment require careful examination.
Immediately following Strauss Kahn's arrest, pressures were exerted by Washington to speed up his replacement as Managing Director of the IMF preferably by a non-European, an American or a handpicked candidate from an "emerging market economy" or a developing country.
Since the founding of the Bretton Woods institutions in 1945, the World Bank has been headed by an American whereas the IMF has been under the helm of a (Western) European.
Strauss-Kahn is a member of elite groups who meet behind closed doors. He belongs to the Bildeberger. Categorized as one of the world's most influential persons, he is an academic and politician rather than a banker. In contrast to his predecessors at the IMF, he has no direct affiliation to a banking or financial institution.
But at the same time he is the fall guy. His "gaffe" was to confront the Washington-Wall Street Consensus and push for reforms within the IMF, which challenged America's overriding role within the organization.
The demise of Strauss-Kahn potentially serves to strengthen the hegemony of the US and its control over the IMF at the expense of what former Defense Secretary Donald Rumsfeld called "Old Europe".
Blocking Strauss-Kahn, the Presidential Candidate
In recent years, a major shift has occurred in Europe's political landscape. Pro-American governments have been elected in both France and Germany. Social Democracy has been weakened.
Franco-American relations have been redefined, with Washington playing a significant role in grooming a new generation of European politicians.
The presidency of Nicolas Sarkozy has, in many regards, become a de facto US "client regime", broadly supportive of US corporate interests in the EU and closely aligned with US foreign policy.
There are two overlapping and interrelated issues in the DSK frame-up hypothesis.
The first pertains to regime change at the IMF, the second to Strauss-Kahn as a candidate in France's forthcoming presidential elections.
Both these processes are tied into the clash between competing US and European economic interests including control over the euro-currency system.
Strauss-Khan as a favorite of the Socialist Party, would have won the presidential elections leading to the demise of "Our Man in Paris" Nicolas Sarkozy. As documented by Thierry Meyssan, the CIA played a central undercover role in destabilizing the Gaullist party and supporting the election of Nicolas Sarkozy (See Operation Sarkozy: How the CIA placed one of its agents at the presidency of the French Republic, Reseau Voltaire, September 4, 2008)
A Strauss-Kahn presidency and a "Socialist" government would have been a serious setback for Washington, contributing to a major shift in Franco-American relations.
It would have contributed to weakening Washington's role on the European political chessboard, leading to a shift in the balance of power between America and "Old Europe" (namely the Franco-German alliance).
It would have had repercussions on the internal structure of the Atlantic Alliance and the hegemonic role of the US within NATO.
The Eurozone monetary system as well as Wall Street's resolve to exert a decisive influence on the European monetary architecture are also at stake.
The Frame-Up?
Fifty-seven percent of France's population, according to a May 17 poll, believe that Strauss-Kahn was framed, victim of a set-up. He was detained on alleged sexual assault and rape charges based on scanty evidence. He was detained based on a complaint filed by the Sofitel hotel where he was staying, on behalf of the alleged victim, an unnamed hotel chamber-maid:
The 32-year-old maid told authorities that she entered his suite early Saturday afternoon and he attacked her, New York Police Department spokesman Paul J. Browne. She said she had been told to clean the spacious $3,000-a-night suite, which she thought was empty.
According to an account the woman provided to police, Strauss-Kahn emerged from the bathroom naked, chased her down a hallway and pulled her into a bedroom, where he began to sexually assault her. She said she fought him off, then he dragged her into the bathroom, where he forced her to perform oral sex on him and tried to remove her underwear. The woman was able to break free again and escaped the room and told hotel staff what had happened, authorities said. They called police.
http://www.chron.com/disp/story.mpl/business/7565485.html#ixzz1MfFWFlnY
Challenging the Washington Consensus
What is at stake in the immediate wake of Strauss Kahn's demise is "regime change" at the IMF.
The Obama administration has demanded his replacement by a more compliant individual. U.S. Treasury Secretary Timothy Geithner, former CEO of the New York Federal Reserve Bank is pushing for the replacement of Dominique Strauss-Kahn, "suggesting he can no longer perform his duties" as IMF Managing director.
"Geithner called for greater formal recognition by the IMF board that John Lipsky, the fund's second-in-command, will continue serving as temporary managing director for an interim period. Although Strauss-Kahn has yet to resign, sources say the IMF is in touch with his legal counsel to discuss his future at the organization."
What lies behind the frame-up scenario? What powerful interests are involved? Geithner had a close personal relationship with Strauss-Kahn.
On the floor of the US Senate (May 18), Senator Mark Kirk of Illinois, called for the resignation of DSK while calling upon the IMF's deputy managing director John Lipsky to "assume full responsibility of the IMF" as interim managing director. The process of "permanent replacement should "commence at once," he said. John Lipsky is a well connected Wall Street banker, a former Vice Chairman at JPMorgan Investment Bank.
While the IMF is in theory an intergovernmental organization, it has historically been controlled by Wall Street and the US Treasury. The IMF's "bitter economic medicine", the so-called Structural Adjustment Program (SAP), imposed on countless developing countries, essentially serves the interests of creditor banks and multinational corporations.
The IMF is not the main architect of these devastating economic reforms which have served to impoverish millions of people, while creating a "favorable environment" for foreign investors in Third World low wage economies.
The creditor banks call the shots. The IMF is a bureaucratic entity. Its role is to implement and enforce those economic policies on behalf of dominant economic interests.
Strauss Kahn's proposed reforms while providing a "human face" to the IMF did not constitute a shift in direction. They were formulated within the realm of neoliberalism. They modified but they did not undermine the central role of IMF "economic medicine". The socially devastating impacts of IMF "shock treatment" under Strauss-Kahn's leadership have largely prevailed.
Dominique Strauss Kahn arrived at the helm of the IMF in November 2007, less than a year prior to September-October 2008 financial meltdown on Wall Street. The structural adjustment program (SAP) was not modified. Under DSK, IMF "shock treatment" which historically had been limited to developing countries was imposed on Greece, Ireland and Portugal.
Under the helm of DSK as Managing Director, the IMF demanded that developing countries remove food and fuel subsidies at a time of rising commodity prices on the New York and Chicago Mercantile exchanges.
The hikes in food and fuel prices, which preceded the September-October 2008 Wall Street crash, were in large part the result of market manipulation. Grain prices were boosted artificially by large scale speculative operations. Instead of taming the speculators and containing the rise in food and fuel prices, the IMF's role was to ensure that the governments of indebted developing countries would not in any way interfere in the "free market", by preventing these prices from going up.
These hikes in food prices, which are the result of outright manipulation (rather than scarcity) have served to impoverish people Worldwide. The surge in food prices constitutes a new phase of the process of global impoverishment.
DSK was complicit in this process of market manipulation. The removal of food and fuel subsidies in Tunisia and Egypt had been demanded by the IMF. Food and fuel prices skyrocketed, people were impoverished, paving the way towards the January 2011 social protest movement:
Fiscal prudence remains an overarching priority for the [Tunisian] authorities, who also see the need for maintaining a supportive fiscal policy in 2010 in the current international environment. Efforts in the last decade to bring down the public debt ratio significantly should not be jeopardized by a too lax fiscal policy. The authorities are committed to firmly control current expenditure, including subsidies,... (IMF Tunisia: 2010 Article IV Consultation - Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Tunisia)
"[The IMF] encouraged the [Egyptian] authorities to press further with food and fuel subsidy reforms, and welcomed their intention to improve the efficiency and targeting of food subsidy programs. [meaning the selective elimination of food subsidies].
"Consideration should be given to introducing automatic adjustment mechanisms for domestic fuel prices to minimize distortions [meaning dramatic increases in fuel prices without State interference], while strengthening cash-based social programs to protect vulnerable groups. (IMF Executive Board Concludes 2008 Article IV Consultation with the Arab Republic of Egypt Public Information Notice, PIN No. 09/04, January 15, 2009)
Under the helm of DSK, the IMF also imposed sweeping austerity measures on Egypt in 2008, while supporting Hosni Mubarak's "efforts to broaden the privatization program".(Ibid)
The Frank G. Wisner Nicolas Sarkozy Connection
Strauss-Kahn was refused bail by Judge Melissa Jackson, an appointee and protégé of Michael Bloomberg, who in addition to his role as Mayor is a powerful figure on Wall Street.
Manhattan District Attorney Cyrus Vance Jr. charged (using scanty evidence) Strauss-Kahn "with seven crimes, including attempted rape, sexual abuse, forcible touching and unlawful imprisonment".
Who is Cyrus Vance Jr.?
He is the son of the late Cyrus Vance who served as Secretary of State in the Carter administration.
But there is more than meets the eye. Nicolas Sarkozy's step father Frank G. Wisner II, a prominent CIA official who married his step mother Christine de Ganay in 1977 served as Deputy Executive Secretary of State under the helm of Cyrus Vance Senior, father of District Attorney Cyrus Vance Junior.
Is it relevant?
The Vance and Wisner families had close personal ties. In turn Nicolas Sarkozy had close family ties with his step father Frank Wisner (and his half brothers and sisters in the US and one member of the Wisner family was involved in Sarkozy's election campaign).
It is also worth noting that Frank G. Wisner II was the son of one of America's most notorious spies, the late Frank Gardiner Wisner (1909- 1965), the mastermind behind the CIA sponsored coup which toppled the government of Mohammed Mossadegh in Iran in 1953. Wisner Jr. is also trustee of the Rockefeller Brothers Trust.
While these various personal ties do not prove that Strauss-Kahn was the object of a set-up, the matter of Sarkozy's ties to the CIA via his step father, not to mention the ties of Frank G. Wisner II to the Cyrus Vance family are certainly worth investigating. Frank G, Wisner also played a key role as Obama's special intelligence envoy to Egypt at the height of the January 2011 protest movement.
Did the CIA play a role?
Was Strauss-Kahn framed by people in his immediate political entourage including President Obama and Secretary of the Treasury Tim Geithner?
Fair Trial?
Innocent before proven guilty? The US media has already cast its verdict. Will the court procedures be manipulated?
One would expect that Strauss-Kahn be granted a fair trial, namely the same treatment as that granted to thousands of arrests on alleged sexual aggression charges in New York City.
How many similar or comparable alleged sexual aggressions occur on a monthly basis in New York City? What is the underlying pattern? How many of these are reported to the police? How many are the object of police follow-up once a complaint has been filed?
What is the percent of complaints submitted to police which are the object of police arrest? How many of these arrests lead to a judicial procedure? What are the delays in court procedures?
How many of these arrests lead to release without a judicial procedure?
How many of the cases submitted to a judicial procedure are dismissed by the presiding judge?
How many of the cases which are not dismissed are refused bail outright by the presiding judge? What is the basis for refusing bail?
How many are granted bail? What is the average amount of bail?
How many are imprisoned without bail based on scanty and incomplete evidence?
How many of those who are refused bail are sent to an infamous maximum security prison on Rikers Island on the orders of Michael Bloomberg.
Diplomatic Immunity
Press reports state that full diplomatic immunity does not apply to officials of the United Nations and the Bretton Woods institutions, namely that the US did not ratify the protocol.
"U.N. convention on privileges and immunities for international agencies that most countries have ratified. It gives the heads of U.N. agencies broad immunity in the countries where they are based. But the U.S. government never became a party to that treaty. Employees of international agencies are covered by a U.S. statute that gives only limited immunity."
The relevant question is how has this limited immunity provision been applied in practice? Namely how many people with limited immunity (UN officials, officials of the Bretton Woods institutions) have been arrested and sent to a high security prison?
Has Strauss Kahn been given the same treatment as those arrested under the provisions of "limited immunity"?
Does the Strauss Kahn arrest fit the pattern? Or is Strauss Kahn being treated in a way which does not correspond to the normal (average) pattern of police and judicial procedures applied in the numerous cases of persons arrested on alleged sexual assault charges?
Without a frame-up instrumented by very powerful people acting in the background, the head of the IMF would have been treated in an entirely different way. The mayor of New York Michael Bloomberg and Timothy Geithner would have come to his rescue. The matter would have been hushed up with a view to protecting the reputation of a powerful public figure. But that did not happen.
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