EDITORIAL

The American People Can Defeat Obama Again, To Stop a Worse Than 2008 Crash

Oct. 2 (EIRNS)—What shall we do to bring Wells Fargo and Wall Street to justice, before they bring us again to mass unemployment and impoverishment?

The nearly unanimous Congressional override of President Obama’s attempt to veto the Justice Against Sponsors of Terrorism Act (JASTA) was a great blow for justice. It was a severe defeat for a dangerous president, whose Administration is publicly threatening to target Russia with terrorism or even with nuclear weapons.

Use the experience of JASTA to remind yourself of what the people of the United States can do of their own will, as they did in rising up and achieving that override. Recall how a similar uprising stopped Obama in 2013, when following the disastrous Libya war he was in the act of throwing U.S. forces into Syria and multiplying the disaster.

Both times, the aimless and dissembling Congress was transformed by popular mobilization into a serious Constitutional body, when the moral survival and dignity of the nation.

We are facing a banking system headed for a new collapse which, if we do not change to the Glass-Steagall policy fast, will impoverish the peoples of Europe and the United States beyond anything the 2008 crash did. The big banks of Europe and America are all one London-centered, Wall Street-centered mess, committing immoral acts and crimes without end and threatening, again, to implode into chaos.

Deutsche Bank is the world “leader” in derivatives gambling and is now “leading” the trans-Atlantic banking system into another crash.

Wells Fargo was one of the very biggest, claimed to be “the cleanest,” and has been exposed as one of the worst. Justice demands that Wells Fargo, and the other giants of Wall Street be broken up, their derivatives casino operations written off, their managements replaced. Justice, in the case of Wall Street, means Glass-Steagall justice.

And we must make the Congress do this fast.

Fundamentally at stake is economic progress, the prospect of returning to investment in technological advance and real productivity growth.

It goes back to the proposed adoption of “Four Laws” for long-term progress, spelled out by EIR Founding Editor Lyndon LaRouche in statements of May-June 2014.

The first is a restored Glass-Steagall Act, provoking immediate follow-on adoption in European nations as well. The second is the issuance of national credit for production through a Hamiltonian national bank or Rooseveltian Reconstruction Finance Corporation. Third, to guide investment of that credit, is definition of the most advanced infrastructure projects which will add the greatest degree of new productivity to our population, including a greatly revived program of Moon and deep space exploration in cooperation with China in particular. Fourth is—finally—to adopt a true crash program for fusion power and fusion technologies.

That approach will determine the actual capacity for progress of the economy, productive employment, productivity. And the work on it since May-June 2014 has made it possible, that Glass-Steagall is the number-one issue of economic justice and progress of the United States right now.

COLLAPSING WESTERN FINANCIAL SYSTEM

Deutsche Bank Not Alone in Leaking Liquidity Now

Oct. 2 (EIRNS)—Deutsche Bank is only the currently most dangerous float chamber on the Titanic. Undercapitalization, even insolvency, is one thing: Now, serious liquidity problems are beginning to manifest themselves. Deutsche Bank has comparatively a lot of liquidity, compared to much thinner RBS, Citibank, Goldman Sachs, for examples; so far only a small run on its $700 billion in deposits has begun. But when counterparties start withdrawing from derivatives deals and/or wholesale time deposits, it both reduces the bank’s liquidity and increases the pressure on remaining liquidity, threatening a stampede.

Zero Hedge reported a JPMChase analytical note on European banks, issued Sept. 30: They suddenly drew $6.35 billion in U.S. dollars from the ECB (putting up collateral) based on a Federal Reserve currency swap with ECB. Previous end-of-quarter dollar draws by European banks had been in the $500 million-$1 billion range for years.

But Deutsche Wirtschaftsnachrichten, in an article today, notes that French banks were the neediest in this sudden need for dollar (i.e., derivatives) liquidity.

Morgan: “In our opinion it is not so much funding issues but rather derivatives exposures that are more likely to trouble markets going forward if Deutsche Bank concerns continue. This is especially true if these concerns propagate into a confidence crisis inducing more rapid unwinding of derivative contracts.”

A cautious way of speaking of rope in the house of the about-to-be-hanged derivatives banks of the trans-Atlantic.

The Pam and Russ Martens “Wall Street on Parade” column for Oct. 1 looked at why certain banks’ stocks immediately tanked on Friday along with those of Deutsche Bank, once the news of potential liquidity leaks/sudden withdrawals at Deutsche Bank got out. Not surprisingly, they were the banks with the largest exposure to over-the-counter (opaque, uncleared) derivatives as a proportion of their total asset books. These were Goldman Sachs, Morgan Stanley and Citigroup. This was market recognition that the derivatives blowout threatens the liquidity of many large banks and therefore their ability to stay open.

Deutsche Bank representatives are coming to the United States this week to negotiate down the bank’s huge fine for mortgage-backed securities fraud; but they have also just been charged in Italy with derivatives crimes. German banks/markets are closed Monday for Reunification Day; watch London, French and Italian banks.

Wells Fargo Crimes Demand Glass-Steagall Justice

Oct. 2 (EIRNS)—For Wall Street crimes like those exposed of Wells Fargo Bank, “Glass-Steagall justice” is thorough but enlightened—compared to the “Judge Roy Bean justice” millions of Americans would now like to see executed on that bank. Glass-Steagall justice is also much better for the U.S. economy and the nation’s future productivity. Don’t hang them; break them up and bankrupt all the casino operations, fire the management; give us back banks that can invest in industrial and scientific progress.

There is more yet to come out on this Wall Street champion, the “low-derivatives bank,” the “Warren Buffett bank,” claiming to be the only really solvent Wall Street giant. Unmanageable; criminal; dominated by its investment bank’s “culture”; caught defrauding hundreds of thousands of depositors, caught stealing from soldiers in its military loan program; sharing some characteristics of Bernie Madoff’s infamous operation, as a report just coming out will show.

At the hearings of the House Financial Services Committee Sept. 28, Janet Yellen was repeatedly asked about Glass-Steagall, by Committee members who oppose Glass-Steagall, but who acknowledged that “it’s being discussed everywhere.”

At the hearing on Sept. 29, Ranking Democrat Rep. Maxine Waters, who has been against Glass-Steagall, and had had repeated arguments and exchanges with Glass-Steagall activists since the Wells Fargo crimes were exposed, “broke out” on breaking up Wall Street banks. As American Banker covered her: “ ‘I have come to the conclusion that Wells Fargo should be broken up. It is too big to manage,’ ” the California Democrat said. ‘I am moving forward to break up Wells Fargo Bank.’…

“After the hearing, Waters told reporters that she plans on drafting legislation to break up Wells Fargo specifically, but other banks may be too big as well.

“ ‘We have to go through a process by which to design this legislation and go forward with it, but what you need to know is I am committed to breaking up Wells Fargo and if that leads us to a conclusion that all the big banks should be broken up… They are too big to manage, said Waters, who added that [CEO John] Stumpf’s inability to answer lawmakers questions during the hearing led her to the determination. ‘He doesn’t know what is going on in this bank,’ Waters said.”

Other Committee members appeared to want Stumpf flogged and thrown in prison for life, reserving the death penalty—but EIR representatives have fought for Glass-Steagall justice, now, using LaRouche PAC leads and EIR material as well as other useful ammunition like Cornell Prof. Robert Hockett’s column in The Hill. Representative Waters had been made aware that even the Federal Reserve is now telling Congress to take hedge fund, private equity fund, and commodity operations away from banks.

Waters’ announced route to breaking up Wells, or Wall Street, is next to impossible. She knows Wall Street and Obama say, “Whatever you do, never again Glass-Steagall.” But Glass-Steagall is the justice the banksters’ crimes demand.

STRATEGIC WAR DANGER

‘Nuclear Ash’ Carter Rattles His Saber At China

Oct. 1 (EIRNS)—On the second part of his tour across the western U.S., Secretary of Defense Ash Carter told sailors aboard the aircraft carrier USS Carl Vinson, yesterday, that the rebalance of U.S. forces to the Pacific would ensure that the U.S. “remains the region’s strongest military and security partner of choice.” Carter said that the focus on the region, which will come with a raft of military investment, will see strike capability and support beefed up as well as “large new investments” in cyber, electronic warfare, and space capabilities, reported CNN. As for the Pacific region itself, Carter said that it was experiencing “historic change” where “China is rising, which is fine, but behaving aggressively, which is not.”

“Beijing sometimes appears to want to pick and choose which principles it wants to benefit from and which it prefers to try to undercut,” Carter ranted. “For example, the universal right to freedom of navigation that allows China’s ships and aircraft to transit safely and peacefully is the same right that Beijing criticizes other countries for exercising in the region,”—an obvious reference to U.S. freedom-of-navigation provocations. “But principles are not like that. They apply to everyone, and every nation, equally.”

Carter then traveled to Hawaii where he met with ASEAN defense ministers in an informal meeting. During his press conference, afterwards, he didn’t reference China explicitly, but it likely figured in the meeting. He reported that he briefed the ministers on the U.S. military rebalance to Asia and on U.S. counter-terrorism efforts. On the first, he said that “we all recommitted our militaries to keeping the region’s waterways open and secure and to help all our nations see more, share more and do more in Southeast Asia’s vital waterways.”

Russia Will Take into Account U.S. Nuclear Saber Rattling

Sept. 30 (EIRNS)—Russia has taken notice of U.S. Secretary of Defense Ash Carter’s remarks in Minot, North Dakota on Sept. 26, in which he charged that an “aggressive” Russia is engaged in “nuclear saber rattling.” The Russian Foreign Ministry issued a statement Sept. 29 saying that the Russian government is “troubled” by Carter’s remarks, because it indicates “that the United States is prepared to use its nuclear capabilities in the event of an armed conflict involving Russia in order to prevent it from using nuclear weapons to repel aggression.” Carter claimed, during his remarks, that the provision in Russia’s military doctrine, published at the end of 2014, is evidence of Russia’s “aggressive” nuclear posture.

“To be clear, the doctrine addresses aggression against Russia, not Russia attempting to find ‘a way out of failed conventional aggression’ to which Mr. Carter is referring,” the Ministry statement reads. “This outrageous distortion of an official Russian document shows that the U.S. Defense Secretary is either relying on an incorrect translation or planning to start a dangerous game.”

“The Pentagon chief’s bellicose rhetoric goes a long way toward explaining the goal of the U.S. policy to modernize its nuclear weapons and their delivery vehicles, about which he proudly talked at Minot Air Force Base,” the Ministry statement goes on. The planned modernization of all three legs of the nuclear triad is intended to give the United States “means of nuclear attack for decades to come,” and this is to be combined with missile defense, as Carter indicated. “Thus, the strategy of exerting military pressure on Russia, which in the logic of the Pentagon’s ‘planners’ apparently implies nuclear brinkmanship, will receive an upgraded and even more dangerous military-technical component.”

U.S. POLITICAL AND ECONOMIC

Obamacare Looting U.S. Treasury To Bail Out Insurers

Sept. 30 (EIRNS)—The Obama Administration has broken the law, charged the Government Accountability Office (GAO), the Congressional investigatory watchdog, in a case regarding Obamacare: The GAO ruled Sept. 29 that the Obama Administration had violated Federal law by paying insurance companies more than allowed under the Affordable Care Act (ACA), reported the New York Times. The issue is a feature of the ACA that arranged for insurance companies that made large profits to pay into a fund in the Department of Health and Human Services; after the money was collected, the funds would compensate insurance companies that lost money because they were insuring people with greater medical needs. But the White House had violated that law, the GAO found, by overpaying the insurance companies, and failing to collect the required money from the insurance companies.

Seven Republican Members of Congress had asked for the legal opinion and welcomed the decision. “The Obama administration can no longer take money from taxpayers to bail out Obamacare,” said Sen. John Barrasso (R-WY).

But, despite the GAO decision, “bailing out Obamacare” is exactly what the administration is planning to do by dipping into an “obscure fund” called the Treasury Judgment Fund to pay the insurance companies for claims dating back to 2014, reported the Washington Post Sept. 30. This looting of the Judgment Fund which was created to settle claims in lawsuits against the government could amount to $2.5 billion if Obama has his way, said the Post. And, it is unclear if the Obamacare cases even qualify under the Judgment Fund’s statutory authority.

“It’s an end run on the clear … intent of Congress,” said Rep. H. Morgan Griffith (R-VA) who was quoted in the Post. In the past decade the Judgment Fund has been used in HHS cases—but only for $18 million in ten years, the Post reported.

Washington Post Admits Obama Is Wrong; Russia Is In No ‘Quagmire’ in Syria

Oct. 2 (EIRNS)—In its lead article on Oct. 1, “No Sign of Obama’s Predicted ‘Quagmire’ as Russia’s Engagement in Syria Escalates,” the Washington Post’s Liz Sly wrote that since Russia had begun air strikes in Syria a year ago, President Bashar Assad’s hold on power in Damascus is no longer seriously challenged by the five-year-old rebellion. Russian President Putin, wrote Sly, is achieving his objectives.

“Russia’s role as a regional and global power, a vital player in any effort to resolve the Syrian war, has also been assured,” the article said. It emphasizes that “There is no suggestion yet that Russia is finding itself in the ‘quagmire’ President Barack Obama predicted would ensue when the intervention first got underway a year ago, nor is Moscow showing any sign of tiring of the military engagement.”

Sly highlighted Kremlin Presidential spokesman Dmitry Peskov’s Sept. 30 statement that Putin never put a timeline on the Russian intervention. “If you remember exactly, Russian Supreme Commander-in-Chief and President Putin never voiced any tentative time frameworks after he made the decision to begin this operation of the Russian Aerospace Forces,” Peskov told a conference call with reporters. The intervention has worked, Peskov said, because the terrorist groups the Islamic State and the al-Qaeda affiliate formerly known as Jabhat al-Nusra have not succeeded in capturing the capital, Damascus, the Post reported.

Ironically, China’s national news service Xinhua ran an editorial comment the next day on the same subject as the Washington Post piece, drawing exactly the same conclusions.

SCIENCE AND INFRASTRUCTURE

China’s Lunar Missions To Be International, Space Official States

Oct. 2 (EIRNS)—China has opened its lunar exploration programs to international cooperation, and is planning ground-breaking missions in its multi-stage exploration of the Moon, Wu Yanhua, vice administrator of China’s National Space Administration, reported on Sept. 26, at the International Astronautical Conference in Guadalajara, Mexico.

Speaking on a panel of heads of space agencies, Wu reiterated China’s offer of the capabilities of the relay satellite that will be placed into lunar orbit to support the 2018 Chang’e-4 lunar far side mission, to other nation’s missions at the Moon. The orbiter is needed to relay data to and from the lander with Earth. “The communications satellite will be used not only for the Chang’e-4 mission, but also for supporting future manned and unmanned lunar exploration missions to the far side, and cis-lunar activities,” Wu said.

He reported that so far, “we have confirmed that four of the payloads, from Germany, from Sweden, from the Netherlands, as well as from Italy, will be flying on board the Chang’e-4 mission.” He explained that “Chang’e-4’s science suite will collect data on the Moon’s seismic activity, survey underground geologic layers with a ground-penetrating radar, and observe the universe with a Very Low Frequency receiver, exploiting the pristine radio environment on the lunar far side, for astronomical research.”

Wu also announced that if the Chang’e-5 sample return mission next year is successful, the back-up spacecraft can be used later for another sample return mission, possibly on the far side of the Moon. He also reiterated that the Chinese government has approved a robotic mission to Mars, to launch in 2020. This year, China will release its third White Paper on space policy. These papers, in English, are meant to make accessible to the international community, China’s goals and missions in space.

Meanwhile, the Chang’e-3 lander, which has been on the lunar surface since late 2013, has continued its astronomical observations. Andrew Jones reported Sept. 28th in GBTimes media that during a four-hour lunar eclipse on Sept. 16th, the Ultraviolet Telescope on the lunar lander snapped 232 high-quality images. The telescope, which he reports is the only instrument still working from the mission, has observed galaxies, binary stars, and galactic nuclei, which cannot be observed from Earth.

THE NEW GLOBAL ECONOMIC ORDER

India Opts for Bulk Order of Nuclear Reactors from Abroad

Oct. 2 (EIRNS)—An official of a company that manufactures equipment for India’s Department of Atomic Energy and Public Sector Units said India will henceforth opt for ordering nuclear reactors in bulk from abroad, and not “piecemeal,” the nation’s PTI news agency reported today. “This is a significant policy shift and it gives us an assured guarantee for the investments that we are making,” said the senior executive with whose company, negotiations are on to build reactors.

India is now in the process of negotiating purchase of six 1650 MW reactors from Areva and 6 AP-1000 reactors from Westinghouse. In addition, India is also considering purchase of six GE-Hitachi 1520 MW ESBWR (Economic Simplified Boiling Water Reactors). Sources told PTI that initially India’s plan was to negotiate for two reactors at a time, but the government later decided to go for all six. The bulk purchase in one go helps both the buyer and the seller. It stabilizes the price and also ensures the manufacturer a substantial sell that brings down the prices a notch.

Meanwhile, Japan’s Mainichi Shimbun newspaper reported today that Japan and India are likely to sign a civil nuclear cooperation pact during Indian Prime Minister Narendra Modi’s visit to Japan in mid-November. Since both Westinghouse and GE-Hitachi forge their reactor vessels in Japan, India needs civil nuclear cooperation agreement for Japan to allow Japan-forged nuclear reactors to get installed in India.

OTHER

Duterte: The CIA Has Plan To Kill Me

Oct. 1 (EIRNS)—Philippine President Rodrigo Duterte told Filipino workers in Vietnam on Sept. 29 that he had learned that the CIA had a plan to assassinate him. According to the Sun Star (a Philippines newspaper), a man arrested for smuggling guns into the Philippines from the United States told police of the plan. In speeches to the military and police, Duterte regularly calls on them to continue the war on drugs if he should die.

U.S. Defense Secretary Ashton Carter, who held an informal meeting with ASEAN defense ministers in Hawaii on Sept. 30 (including Philippine Defense Secretary Delfin Lorenzana), was asked about the massive press hype claiming that Duterte had compared his war on drugs to Hitler’s extermination of Jews. Adding his voice to the “Big Lie” propaganda campaign, Carter said that “speaking personally for myself, I find those comments deeply troubling.”

Carter knows the story is false. Duterte was explicitly ridiculing the often-repeated comparison of himself to Hitler in the Western press. Saying he had been “portrayed or pictured to be a cousin of Hitler,” he pointed out that Hitler had killed innocent Jews. In his usual sarcastic and hyperbolic manner he then said he wants to kill the estimated 3 million addicts in the Philippines. He has repeatedly said that the warnings against drug dealers and users are meant to force them to give themselves in, as more than 700,000 have already done, and that he does not condone or allow extrajudicial killings. His policy has reduced the drug traffic on the streets of the nation by 80-90%, according to the chief of the national police.

China has pledged full support for his war on drugs, as many of the drug suppliers are in China. The Philippine police on Sept. 22 discovered a sophisticated factory with totally modern equipment, hidden in a rural area, for the production of shabu (methamphetamine hydrochloride—the most common drug in the Philippines) which could produce 100 kg of shabu per day. It was set up by Chinese nationals living in the Philippines, who are now under arrest, and it was ready to begin production.