#Turkey struggling to avoid international financial #blacklist over #MoneyLaundering

January 27, 2013

Turkey, which has become a money laundering capital of the world, is on the verge of being placed on an international blacklist (Hat Tip: Joshua I).

Turkey is scrambling to push through a long-awaited anti-terrorism financing law before a deadline next month to avoid being expelled from an international watchdog and placed on its blacklist alongside Iran and North Korea.

Turkey is already on a “grey list” of countries drawn up by the 36-member Financial Action Task Force (FATF), a money-laundering watchdog, for not implementing the legislation required by its members despite pressing Ankara for years.

The FATF has warned Turkey if it does not pass the necessary legislation, which would allow alleged “terrorist” accounts to be frozen without a court order, by Feb. 22, it will be expelled as a member of the group and blacklisted.

Such a move could restrict foreign activity with Turkish banks, hamper Turkey’s ability to raise funds abroad and could affect its credit rating, which received a boost last year when Fitch raised the country to investment grade.

“Potentially, this would be a crippling blow to Turkish banks as they look to be more international in outlook, and have been active in seeking to finance themselves increasingly offshore in recent months,” said Timothy Ash at Standard Bank.

On Friday, a parliamentary commission passed the draft bill, which has been stalled since 2011, after two days of debates. Despite strong resistance from the country’s main opposition party, Turkish officials have voiced confidence that the legislation would be adopted by next month’s deadline.

Part of the reason the bill has been held up is Turkey’s existing terrorism legislation. Opposition lawmakers fear the law could be used to wrongly label people as terrorists.

Turkey has one of the highest arrest rates in the world for terrorism charges and faces increasing criticism from the United Nations and rights groups over what they see as poorly-defined and broad-based laws which are regularly abused.

The biggest problem with Turkey is not what is going on illegally, but rather what is going on legally, like its trading gold for oil with Iran.


prosecuting greedy Wall Street fat cats responsible for the financial crisis rather than ideologically overzealous hackers like Aaron Swartz

January 23, 2013

(Aaron Swartz beat prosecutors by increasing political support for open access. – Slate Magazine) …it is both ironic and apt that Swartz’s defenders argue that the government should be prosecuting greedy Wall Street fat cats responsible for the financial crisis rather than ideologically overzealous hackers like Swartz. Ironic because the same populist outrage against dimly understood behavior motivates the call for prosecutions of hackers and the call for prosecution of bankers. Apt because the argument shows how much prosecutorial discretion both influences social policy and is in turn subject to political pressure.

As Orin Kerr has pointed out, this is a generic complaint about our criminal justice system. Lawmakers pass extremely broad and vaguely worded statutes that criminalize vast swaths of behavior then leave it to prosecutors to decide who to target and who to spare. The major constraint on prosecutors is limited resources, so they threaten defendants with draconian punishments to coerce them into plea bargains. Judges and juries remain backstops against the worst injustices, but because trials themselves are ruinously expensive and can end in long prison terms, defendants often forgo the protections they offer.


vague laws against “disorderly conduct” and “loitering” and “breach of the public peace,” which enable police to arrest whoever they want.(MORE)

American Colleges Are Over $205 Billion in Debt, Harvard is $6 Billion in Debt

December 23, 2012

(Daniel Greenfield) The Student Loan Bubble is bad, but interestingly enough, as this New York Times article points out, the loan problem extends all the way up the ladder to the institutions of higher education who never seem to have enough money.

Remember that our financial experts come out of a system that is this deep underwater and they have a heavy investment is bailing it out.

Overall debt levels more than doubled from 2000 to 2011 at the more than 500 institutions rated by Moody’s, according to inflation-adjusted data compiled for The New York Times by the credit rating agency. In the same time, the amount of cash, pledged gifts and investments that colleges maintain declined more than 40 percent relative to the amount they owe.
While Harvard is the wealthiest university in the country, it also has $6 billion in debt, the most of any private college, the data compiled by Moody’s shows.
At the Juilliard School, which completed a major renovation a few years ago, debt climbed to $195 million last year, from $6 million in inflation-adjusted dollars in 2002. At Miami University, a public institution in Ohio that is overhauling its dormitories and student union, debt rose to $326 million in 2011, from $66 million in 2002, and at New York University, which has embarked on an ambitious expansion, debt was $2.8 billion in 2011, up from $1.2 billion in 2002, according to the Moody’s data.
The pile of debt — $205 billion outstanding in 2011 at the colleges rated by Moody’s — comes at a time of increasing uncertainty in academia. After years of robust growth, enrollment is flat or declining at many institutions, particularly in the Northeast and Midwest. With outstanding student debt exceeding $1 trillion, students and their parents are questioning the cost and value of college. And online courses threaten to upend the traditional collegiate experience and payment model.

Student debt turns out to be only 5 times as high as the accumulated college debt, and that’s only at the colleges rated at Moody’s. What would happen if we added up the entire pile of debt for all institutions of higher education in the country? Somehow I think we would arrive at some very scary numbers.
The system is broken and spending its way deeper into debt. Tuition costs have risen dramatically and hardly made a dent in the tremendous piles of debt accumulated over the last decade.
It would seem as if Academia’s brokenness amplifies the brokenness of its graduates. It acts as a predictor for the entire broken system. Academia is a deadbeat metaphor turning out deadbeat students in a deadbeat nation.

Harvard borrowed $1.5 billion to pay its bills rather than selling off assets at a sharp discount. Its interest expense more than doubled from fiscal 2008 to fiscal 2011, to nearly $300 million.

“The financial crisis has acted like a tidal wave that, as it receded, exposed certain vulnerabilities with a new clarity,” Harvard officials said in the November annual report.

That’s a fancy way of saying, “We’re morons.”

Turkey’s economic lie

September 18, 2011
Op-ed: Turkey no economic powerhouse, Erdogan’s credit bubble will soon explode

Guy Bechor
Israel Opinion
Some refer to him as “the Middle East’s new sultan in a neo-Ottoman empire” – yet the truth about Erdogan’s kingdom is utterly different. We are not facing an economic power, but rather, a state whose credit bubble will be bursting any moment now and bringing down its economy.
The budget deficit of the collapsing Greece compared to its GDP stands at some 10%, and the world is alarmed. At the same time, Turkey’s deficit is at 9.5%, yet some members of the financial media describe the Turkish economy as a success story (for comparison’s sake, Israel’s deficit stands at some 3% and is expected to decline to 2% this year.)
While Turkey’s economy grew by some 10% this year, this was merely the result of financial manipulation.
So how does the system work? The banks in Erdogan’s Turkey handed out loans and mortgages to any seeker in recent years, offering very low interest rates; this was in fact a gift. As the interest rate was so low, Turkish citizens used more and more credit, mostly for consumption.

And how did Turkey’s Central Bank finance this credit party? Via loans: Erdogan’s bank borrowed money in the world and handed it out to its citizens. However, Turkey’s deficit kept growing because of it, until it reached a scary 8% of GDP; by the end of the year the figure is expected to reach 10%.

Turkey’s external debt doubled itself in the past 18 months, which were election campaign months. Only a small part of the deficit (15%) was financed by foreign investment. The rest constitutes immense external debts.

Now it’s clear that Erdogan’s regime bought the voters in the recent elections. Most of the Turkish public elected him not because of Islamic sentiments, but rather, because he handed out low-interest loans to everyone. I will provide you with cheap money so you can become addicted to shopping, and you shall elect me.

The Israel diversion
This created Turkey’s credit bubble, which may explode any day now, because the date for returning the loans approaches. Will the Saudis help Erdogan as he hopes? This is highly doubtful. Nobody is willing to pay for attacks on Israel, and the West is annoyed by Erdogan’s thuggery. Why should they help him?

Moreover, Turkey’s unemployment rate is 13% and the local currency continues to plummet vis-à-vis the dollar – it reached its lowest levels since the 2009 global crisis. With a weak currency and with a stock exchange that lost some 40% of its value in dollars in the last six months, Erdogan wants to be the Middle East’s ruler?

Once the bubble explodes, the score with Erdogan will be settled, by the journalists his government ordered to arrest, by army officers charged with imaginary accusations, by the restrained scientists, the politicians, and mostly the general public, which shall be facing an economic disaster.

And this is where Israel comes into the picture. Why talk about the approaching economic catastrophe? Why talk about this disgrace, when it’s better to create an artificial crisis vis-à-vis Israel, a spin that the whole world will be talking about instead of talking about the sinking Turkey? After all, the Marmara raid happened more than a year ago, why did it emerge again now? Is it only because of the Palmer Report?
We shall wait a few more months, and then we shall see what really happens in the new sultan’s kingdom.

Eric Cantor fights the TAX HIKE

June 23, 2011
Washington Post so called blog sez that:

Eric Cantor pulled out of the debt ceiling talks this morning,
citing unbridgeable differences over the Dem insistence on tax hikes as part of a deal…

C’mon, how hard is it to link to this press release? Boker Tov!

Both Greg Sargent at this WashPo “blog” and Jennifer Steinhauer at a NY Liberal Times “blog” lack this rudimentary courtesy.

image from H Ken of International Business Times


November 16, 2010

Nov. 15 (Bloomberg) — Jeremy Stretch, executive director of foreign-exchange strategy at Canadian Imperial Bank of Commerce, talks about the outlook for China’s monetary policy and the dollar. He speaks with Maryam Nemazee on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

The Group of 20 meeting in Seoul was a debacle in many respects. But it had a big winner: China.
This was the summit where the world was supposed to come together to unwind global imbalances. There are many of them at the moment, but the most important is China’s persistent trade surplus. This has led to the accumulation of foreign-exchange reserves of $2.65 trillion, a stash more than twice as large as any other country’s. The government in Beijing recycled its reserves into foreign markets, and this resulted in the excess liquidity that contributed to the global slump in 2008.
Chinese officials say they aren’t pursuing trade surpluses — a point that Premier Wen Jiabao made in an interview with CNN’s Fareed Zakaria in September — yet the nation continues to beat expectations with its trade numbers. In October, the surplus widened 13 percent compared with a year earlier.
The surprisingly large surplus seemed to give impetus to U.S. efforts to get the Chinese to release their iron grip on the value of the yuan. An obviously undervalued currency is, to a large extent, contributing to the surpluses. Yet the G-20 ultimately shied away from adopting meaningful measures to get China to float the yuan.
China adopted many tactics to deflect criticism at the meeting in Seoul, but one of the more effective was a pledge — another one of them — to spur domestic consumption as a means of increasing imports. President Hu Jintao last week outlined specific steps to get China’s citizens into the shops. He said the central government, over the next five years, would try to raise the minimum wage, increase consumer credit, adjust income distribution, and develop infrastructure, among other things.
Empty Promises
Hu’s list, though vague and lacking ambition, was a start. Yet Chinese leaders for at least a half decade have been promising to shift away from investment and exports and toward consumption, whose role in the economy has dropped from China’s historical average of about 60 percent to about 30 percent, one of the lowest rates in the world.
Statistics from the recent quarters show a similar decline. Closely watched urban consumption is increasing this year less than 1.5 percent in quarter-on-quarter terms, down from more than 2 percent in 2008 and 2009. So at a time when the economy is still expanding at a fast pace — gross domestic product in the third quarter grew 9.6 percent — consumption’s contribution to growth is stalling.
Common Sense
Analysts love to say that China is making the transition to a consumer-led economy. But such assertions aren’t consistent with the facts or common sense. The steps that the central government is taking to create trade surpluses — such as holding down the value of its currency — inevitably discourage consumption. The government’s stimulus program, which focuses on building infrastructure and industrial production, is also, by definition, anti-consumption.
The overriding reality is that consumption can’t become significant until Chinese officials, in fact and not just in words, abandon the current investment-led strategy. We need to recognize that low consumption is the inevitable result of China’s growth model, not merely a remediable feature of it, so consumption’s role won’t increase much until the government takes painful measures to change its approach.
What steps are needed? China will have to let the yuan float, permit banks to compete for deposits by offering market interest rates, allow labor to organize and demand higher wages, and provide a better safety net, especially in health care.
Risk-Averse Leaders
Model-changing is inherently risky, and Chinese leaders are especially risk-averse these days. Before a major transition, when the so-called Fourth Generation leaders are scheduled to give way to the Fifth at the end of 2012, China’s political system won’t be able to implement any radical plans.
The period of political paralysis won’t end when the Communist Party unveils China’s next supremo at the 18th Party Congress. It generally takes a new leader at least two years to consolidate his position. So the wrenching transition to a consumption-based economy is on hold until the middle of the decade. In the meantime, we can expect Chinese leaders to do all they can to maintain their control over the yuan’s value.
Will they be successful? In Seoul, Chinese officials managed to damp criticism of their distortive currency policies, so the pressure to liberalize is off for now.
After his 80-minute meeting with U.S. President Barack Obama last week, Hu said, in comments relayed by Foreign Ministry spokesman Ma Zhaoxu, the reform of his country’s currency required “a very sound external environment.”
We should realize that in the unusually benign post-Cold War period China didn’t undertake many of the changes that Hu has now promised to implement in the coming years. In those years, the external environment will be anything but sound, so we shouldn’t expect fundamental changes that he has eschewed in far less difficult circumstances.

The irony is that many of the things the world believes Obama is doing is exactly what the world has been doing wrong. Perhaps a devalued currency might be a dirty bandaid, but it can cause an infection. I do not deny the GOP would do the same, but at least the Republicans would lie to the world and make them think otherwise. Obama is causing a panic. Not only is he doing wrong… but he brags about it. If a country is not playing fair then America should not trade with it. There is plenty of cheap labor outside of China


November 4, 2010