home / subscribe / donate / tower / books / archives / search / links / feedback / events / faq

The New Print Edition of CounterPunch, Only for Our Newsletter Subscribers! One-State Solution for Palestine? Michael Neumann, author of The Case Against Israel, tackles the thorny issue of the One-State Solution for Palestine. Is it a viable alternative or risky illusion? Who's been killing hundreds of girls around Juarez since the 1990s: Satanists, organ traffickers, drug gangs, cops? Debbie Nathan lays bare the political and psychic economy of femicide. PLUS R.F.Blader on why feminists shouldn't vote for Hillary Clinton. Get your copy today by subscribing online or calling 1-800-840-3683 Contributions to CounterPunch are tax-deductible. Click here to make a donation. If you find our site useful please: Subscribe Now! CounterPunch books and gear make great holiday presents. Order CounterPunch By Email for Only $35 a Year !

Today's Stories January 31, 2008 Saul Landau Return to Afghanistan William Loren Katz Waterboarding: Torure or Mystery? January 30, 2008 Cockburn / St. Clair McCain vs. Clinton? Christopher Ketcham The Genius of the Development Industrial-Complex Robert Weissman America By the Numbers: The Shameful State of the Union Neve Gordon An Experiment in Famine Paul Craig Roberts Regulation or Deregulation, Which is Worse? Joanne Mariner How Anti-Terror Laws Threaten Free Speech David Macaray Labor's Only Real Weapon Liaquat Ali Khan Is NATO Committing Genocide in Afghanistan? Raymond J. Lawrence Prankster-in-Chief: Bush's Troubling Non-Verbal Communication Dan Bacher The Collapse of the Central Valley Salmon Website of the Day Onward Through the Fog   January 29, 2008 Franklin C. Spinney Bush's New War Budget: the $70 Billion Hand-Off Mike Whitney The Great Credit Unwind of 2008 Alan Farago Buyer Beware: Florida, the Candidates and the Latin Builders Association Patrick Cockburn "The Americans Bring Us Only Destruction" Gary Leupp "We Can't Afford to Let Them Spill the Beans:" a Sibel Edmonds Timeline R. F. Blader A World Without Abortion: USA v. Romania Ahmad Faruqui Musharraf's Post-Electoral Prospect Fran Shor Obama, the Kennedys and "Change We Can Believe In" Jeremy Scahill Secret Trials and Criminal Convictions: the Ordeal of the Blackwater Protesters Allan Nairn Bush's SOTU: Entitlement, Justice and the War of All Against All Website of the Day The Ghost of Rambo   January 28, 2008 Patrick Cockburn Return to Fallujah Paul Craig Roberts The End of American Liberty Allan Nairn The Breaking of the Gaza Wall Eyad al-Sarraj / Sara Roy Ending the Stranglehold on Gaza Martha Rosenberg Obit for the "Front Page" City Corporate Crime Reporter How They Rip Us Off David Michael Green Kristolizing Iraq: What a Great Freakin' War Jennifer Van Bergen What's Left? Nancy Oden Survival Tips for Hard Times Divya Karnad Saving India's Sea Turtles James L. Secor Pissed About Pistorious: Why the Olympics Needs a Gimp Website of the Day Yellow Journalism?   January 26 / 27, 2008 Uri Avnery Worse Than a Crime JoAnn Wypijewski How the Clintons Lost It, Whatever the Outcome in S. Carolina Ralph Nader Ambition, Power and the Clintons Paul Craig Roberts How Bush Destroyed the Dollar Paul Watson I'm Proud to be a Pirate! John Ross Murder and Cover-Up in Mexico Fred Gardner Ross v. Raging Wire: Employer's Right to Fire Workers Held Sacred by California Supreme Court Allan Nairn Little Hands with Fever: Some Consequences of Poverty Death Joshua Frank Why Bush Wants to Legalize the Nuke Trade with Turkey Binoy Kampmark Société Générale and the Economic Meltdown James T. Phillips America's Sick Comedy: Bringing the War Home Stan Cox The Depressing Truth About Anti-Depressants Eamonn McCann Hillary's Lie: "I Brought Peace to Northern Ireland" Ron Jacobs The Horizons of History: What's at Stake in Bolivia Seth Sandronsky California's Health Care Crisis Ben Terrall The Future is Unwritten Poets' Basement Tripp, Gardner, Gibbons and Davies Website of the Weekend City of Immigrants     January 25, 2008 Douglas Valentine Operation Two-Fold: How the CIA Infiltrated the DEA Patrick Cockburn US Troops Will Be In Iraq for 10 More Years: an Interview with Iraqi Foreign Minister Hoshyar Zebari JoAnn Wypijewski Down to the Wire in South Carolina Heather Gray Are We Seeing a Racial Shift in the South? Conversations with South Carolina Voters Marjorie Cohn Senate Democrats Poised to Fold to Cheney on FISA Erica Rosenberg Environmentalists Out on a Limb: the Perils of Collaboration Alan Farago Jeb Bush Goes Nuclear Robert Weissman Reclaiming Economic Freedom Laura Carlsen Wild Cards: Mining the Hispanic Vote in Nevada Stephen Lendman Israeli Repression in the Hebron Website of the Day The FIX is In   January 24, 2008 JoAnn Wypijewski Obama as Anthologist of Uplift Paul Craig Roberts President Hillary Alexander Cockburn Hillary Wants to Talk About Dirty Legal Dealings? Remember Her Nursing Home Scam? Kathleen Christison One and Two State Solutions and the Myth of International Consensus Jeff Halper Power to the (Palestinian) People! Stanley Heller The Siege of Gaza is Broken George Wuerthner The Moronic Sport: ORVs on the Public Lands Patrick Cockburn Desperate Iraqi Farmers Turn to Opium Jeff Sher Just How "Good" is Your Health Insurance? Patrick Irelan Musharraf, the Steadfast Ally? Charles Modiano Restoring the Anti-War King Website of the Day An Illustrated History of Trepanation   January 23, 2008 David Rosen The Great Disappearing Act: the Presidential Candidates and the Politics of Sex David Isenberg Is It Really So Hard to Believe That Iran Stopped Its Nuclear Weapons Program? Farzana Versey Hillary's Harem Paul Craig Roberts The Empire That Must Be Obeyed Alan Farago Where Did All the Good Times Go? Allan Nairn Indonesian Intelligence Service Threatens to Kill Human Rights Activist Kenneth Couesbouc Another Turn of the Screw Niranjan Ramakrishnan How the West was Re-Sold Michael Donnelly Obama Strikes Back Norman Solomon The Power of Love Website of the Day Rafah Today   January 22, 2008 Paul Craig Roberts Farewell to Old Economic Nostrums JoAnn Wypijewski King Day in Columbia, South Carolina Al Giordano Divide and Conquer Politics: How the Clinton Campaign Armed a Black-Latino Time Bomb in Nevada Felice Pace Power Politics in the Klamath: Water, Dams and Salmon Paul Wolf Bolívar's Sword Robert Weissman Deregulation and the Financial Crisis Dave Lindorff The Bush Dollar Trap Marjorie Cohn Cheney Impeachment Gains Traction Richard Neville Keeping Shakespeare in a Box Don Fitz / Zaki Baruti St. Louis Mayor Booed Off MLK Platform Ben Terrall Cindy Sheehan and the Virtues of Divisiveness Sam Husseini Stoning Martin Luther King, Jr. Website of the Day Defend the Mapuche!     January 21, 2008 Kevin Alexander Gray Playing the Race Card Linn Washington, Jr. Deferring Dreams, Delusions of Democracy Pam Martens How Wall Street Blew Itself Up David Macaray Labor's Grim Dilemma: Do We Need a Labor Party? Uri Avnery Look Who's Talking Omar Barghouti Europe's Collusion in Israel's Slow Genocide Joe DeRaymond Protest and Trial in D.C. B.R. Gowani Why Islam Should Tolerate Images Shepherd Bliss The False U.S. Economy Jean-Guy Allard Philip Agee Versus the CIA Dan Bacher Leaping Steelhead! Website of the Day Destroyed By a Rising Flood January 19 / 20, 2008 Alexander Cockburn The Campaign in Black and White Saul Landau Good Time Charlie's War China Hand Endgame for Pakistan? Conn Hallinan Desert Mirage: What Was the Bombing of Syria Really About? Ron Jacobs No Retreat Dave Lindorff A Tax Rebate Won't Fix This Mess Andy Worthington Canada's Humiliating Double Standard on Torture Paul Armentano What's the Going Price for a Joint? More Than You Might Think Seth Sandronsky High Crimes and Economics Michael Donnelly Dodging Ecocide Patrick Irelan The Ordeal of Dr. Safdar Sarki Martha Rosenberg The Drug Industry Takes Another Hit Sherwood Ross Making the World Safe for Despots: Bush's Global Arms Trade David Michael Green So You Want to be My President, Eh? James Rothenberg Unimpeachable: Under House Protection Daniel Gross Starbucks Shortchanges Dr. King Peter N. Carroll In Memory of Milton Wolff Susie Day Croakin' on Hudson Paul Krassner Woody Allen Meets Tongue Fu Poets' Basement Wolff, Buknatski and Orloski Website of the Day Rocky Mountain Blues   January 18, 2008 Allan Nairn Killing Civilians, Carefully Ralph Nader When the Big Boys Get in Trouble, Who Pays the Ultimate Bill? Joanne Mariner Terrorism and Preventative Detention Alan Farago The Stimulus and the Meltdown P. Sainath Pity the Brahmins R.F. Blader Beyond Steinem's Feminism Andy Worthington A Letter from Guantánamo John Jonik Private Insurance is Bad for Your Health Brian McKenna Where Even Sharing is Prohibited: Notes from Inside a Michigan Women's Prison Daoud Kuttab This Time Next Year? Website of the Day Those South Carolina Voting Machines   January 17, 2008 Paul Craig Roberts Leader and Vassal Christopher Brauchli The FBI's Bills Come Due Robert Fantina Leadership, Bush and the New York Times Patrick Irelan Eternal War Paul A. Moore When the Rich Pay No Taxes Stephen Lendman Institutionalized Spying on Americans Beena Sarwar Bhutto and the "State Within a State" Walter Brasch Buzzwords in the Echo Chamber: Change and the Establishment Brenda Norrell Bush Legacy in Texas Sours Adam Federman End of the Left? Website of the Day Democrats for Romney   January 16, 2008 Jeffrey St. Clair Return of the Native Franklin Lamb The Bombing at Qarantina Julian Sanchez David Weigel Who Wrote Ron Paul's Newsletters? Sharon Smith Ron Paul and the Left: a Slippery Slope? Allan Nairn Economic Indicator: No Free Lunch, No Free Market Ayesha Ijaz Khan How the American Media Enables Bush's Iran Fixation Andy Worthington A Strategic Call to Close Guantánamo Richard Behan Nancy Pelosi, You Must Impeach! Website of the Day Obama the New JFK? He's Not That Bad!   January 15, 2008 Andrea Peacock Breach of Trust in America's Most Toxic Town: How the EPA is Rubbing Poison Into Libby's Wounds Wajahat Ali An Interview with Seymour Hersh on Iraq, Bush Foreign Policy and the Prospects of War with Iran Joe Bageant Getting Out the Bling Vote Ralph Nader The Candidate Taboos John Ross Zero Hour: NAFTA and Mexico's Agrarian Apocalypse Elaine Cassel Jose Padilla vs. John Yoo: Can a National Disgrace be Rectified? Peter Morici The Fed Needs More Than a New Communications Strategy Beena Sarwar Pakistan's Dirty Tricks Brigade Robert Weissman Big Business is Even More Unpopular Than You Thought Binoy Kampmark Going Tata in India Dave Zirin Dennis Brutus Smacks Down the Hall of Fame Website of the Day David Lynch on the iPhone   January 14, 2008 Ishmael Reed Ma and Pa Clinton Flog Uppity Black Man Roger Morris Burials in the Sind Uri Avnery The Hands of Esau Mike Whitney Bush's Voodoo Stimulus Package Allan Nairn General Suharto of Indonesia: One Small Man Leaves a Million Corpses William Blum Oh, By the Way, the Iraqis Don't Really Want Us Alan Farago A Subprime Wake Up Call David Macaray Are Labor Unions Ready for Prime Time? Eva Liddell Getting Drunk with Obama Zoe Blunt Road Kill: New Highway Blocked by Protesting Raccoons Website of the Day Doug and Andrea Peacock on Grizzlies   January 12 / 13, 2008 Andrew Cockburn How the New England Journal of Medicine Undercounted Iraqi Civilian Deaths Saul Landau 60 Years of Empire Corey D. B. Walker Barack Obama and the Crisis of the White Intellectual Col. Dan Smith Bush, Iran and the Magician of the Tarot Eric Toussaint The US Subprime Crisis Goes Global Ron Jacobs Television, Murder and Vietnam Fred Gardner The People vs. Christopher James Chakos Stan Cox Don't Take That Pill! Jacob G. Hornberger The Warfare State Ramzy Baroud The Good, the Bad and the Ugly Joseph Grosso The Anglosphere: a Special Relationship of Elites David Díaz-Arias Imagining An/Other Latin American Left Stacey Warde Before We Move On ... Dan Bacher Pumped to Extinction: the Decline of the Delta Smelt Michael Dickinson Georgie in Jesusland Website of Weekend CounterPunchers Protest Outside NYT Offices   January 11, 2008 Dave Lindorff Did Hillary Really Win New Hampshire? More Questions About Diebold Voting Machines Paul Craig Roberts No Escape from War and Unemployment Andy Worthington Six Years of Guantánamo Kenneth Couesbouc Banking on Thin Ice Jeff Ballinger Inside the Vienna Consensus Christopher Brauchli Lethal Injection, the Supremes and China Manuel Garcia, Jr. Paying No Attention to the Presidential Campaigns Andrew Silverstein Bush's Weepy Visit to Jerasulem Marwan Bishara Bush in the Middle East Robert Weissman The First Amendment Gone Wild Patrick Irelan Damn the Small Boats! Website of the Day Hillary and the Superdelegates: Or Why She Wins Even When She Loses     January 10, 2008 Alexander Cockburn Now Nader Claims He Didn't Endorse Edwards Bob Wing Marqueece Harris-Dawson Race Within the Race: Obama, the NH Vote and the Specter of Tom Bradley Michael Donnelly White Women Gone Wild? David Macaray Three Big Reasons for the Decline of Labor Unions China Hand Bush's Delusional Policy Pushes Pakistan to Brink of Catastrophe Ayesha Ijaz Khan Saudi Arabia and Pakistan: Brotherly, Friendly Countries? Rannie Amiri Obama, Man of Kansas or Kenya? Website of the Day Iranian Video of the Hormuz Incident   January 9, 2008 Cockburn / St. Clair The Empire Strikes Back Dave Lindorff The Bad News from New Hampshire: Death By Triangulation John Chuckman Pardon My Laughter: Watching the US Primaries from Canada James Bovard Stomping Freedom: Inside the Martial Law Act of 2006 Alan Farago As Florida Sinks: the View from the Titanic Russell Mokhiber Why Picket the New York Times in DC on Friday? William S. Lind Kicking the Can Down the Road in Iraq Peter Morici Beyond the Sophistry: Why the Trade Deficit Matters Josh Reubner Sudan vs. Israel: Double Standard on Divestment Mike Roselle The Pursuit of Happiness Website of the Day Bottles of Tears on the Wall: Steve Perry on NH   January 8, 2008 Paul Craig Roberts No Jobs for the New Economy (or the Old) Russell Mokhiber The Black Hillary: Obama is Just Another Political Sedative Robert Fantina The Gulf of Tonkin and the Strait of Hormuz Dave Zirin Butts on Parade Shamako Nobel I Am an Emcee: the Politics of Hip Hop John Ross Zapatista Women Encounter Themselves Brenda Norrell Apaches Defend Homeland from Homeland Security Laura Carlsen Why Bolivia Matters Patrick Irelan Remember the Maine! Evelyn J. Pringle The Holes in Bush's FDA Jonathan M. Feldman After Iowa and New Hampshire: a Strategy for Rebuilding the Peace Movement Michael Dickinson Playing Soldier Website of the Day Sean Hannity on the Run!   January 7, 2008 Chris Floyd There Will Be Blood: But No Justice for Iraq Atrocities John Blair Remove That Man! Creeping Fascism in Indiana Uri Avnery The Case of the White Bird Andy Worthington Who Are the Gitmo Saudis? Binoy Kampmark Needling the Convict: Lethal Injection and the Supreme Court David Macaray Women on Strike Ralph Nader Obamarama: the Politics of the Smooth Mood Michael Donnelly It's the War Vote(s), Stupid! Ron Jacobs Ron Paul's Run: Is Being Against the War Enough? Gideon Levy The Hostile President Dave Lindorff A Real 9/11 Cover-Up? Sibel Edmonds, Turkey and the Bomb Website of the Day Plagues and Pleasures on the Salton Sea   January 5 / 6, 2008 Douglas Valentine Good Guys in Black Hoods Kevin Young The US Occupation and Popular Opinion in Iraq Richard Rhames Saddam Who? Saul Landau Bush Snatches Defeat from Victory Marc Lynch Why Bush's Iran Strategy is Failing Robert Fantina Iowa, Democrats and the Iraq War Donna Volatile Antiwar Soldier: an Interview with Jonathan Hutto, Sr. Jelle Bruinsma Norman Finkelstein in The Netherlands Bob Sutcliffe Remembering Andrew Glyn, Rebel Economist Harvey Wasserman Anti-Nuclear Renaissance Missy Beattie Why Obama Can't Save Us David Swanson Remembering the Separation of Powers Jacob Hornberger The Importance of the Padilla Case Shepherd Bliss Survival Tools from Kokopelli Farms Ron Jacobs Bleeding Kansas Poets' Basement Patti Smith, B.R. Gowani and Peter Buknatski Website of the Weekend Jimmy Dean Sausage Call Complaint   January 4, 2008 Cockburn / St. Clair A Good Night in Iowa Jonathan Cook War Crimes Airbrushed from History Paul Craig Roberts Thinking for Yourself is Now a Crime Stan Goff Ron Paul's Monkeywrench Dave Lindorff Clinton's Iowa Flop Exposes DLC Myths as Frauds Niranjan Ramakrishnan To Pindi Station Allan Nairn U.S. Elections Over Before They Began Joshua Frank The Failures of Sectarianism Peter Morici Economy on the Skids Mary McInnis Iowa Cocky-Us: How to be a Caucus Tease Website of the Day The Return of Obama Girl   January 3, 2008 Fatima Bhutto Farewell to Wadi Bua Pam Martens The Free Market Myth Dissolves into Chaos Joanne Mariner The Presidential Candidates and Torture Zoltan Grossman Remember the '80s: Social Movements Between Woodstock and the Web David Domke The Echoing Press and Huckabee Norman Solomon Edwards Reconsidered Nikolas Kozloff Return of the Faux Liberal Jacob G. Hornberger The Padilla Case and the Future of Habeas Corpus Martha Rosenberg Quit Picking on Huckabee's Son, Michael Vick Russell Means This Property is Condemned: a Notice to Those Occupying Lakotah Lands Website of the Day WolfQuest       Subscribe Online

January 31, 2008 Rate Cut as Dagger America's Teetering Banking System By MIKE WHITNEY Somebody goofed. When Fed chairman Ben Bernanke cut interest rates to 3 per cent yesterday, the price of a new mortgage went up. How does that help the flagging housing industry? About an hour after Bernanke made the announcement that the Fed Funds rate would be cut by 50 basis points the yield on the 30-year Treasury nudged up a tenth of a percent to 4.42 per cent. The same thing happened to the 10 year Treasury which went from a low of 3.28 per cent to 3.73 per cent in less than a week. That means that mortgages, which are priced off long-term government bonds, will be going up too. Is that what Bernanke had in mind; to stick another dagger into the already-moribund real estate market? The Fed sets short-term interest rates (the Fed Funds rate) but long-term rates are market-driven. So, when investors see slow growth and inflationary pressures building up; long-term rates start to rise. Bernanke knew that the price of a mortgage would increase if he slashed rates, but went ahead anyway. How did he know? Because 8 days ago, when he cut rates by 75 basis points, the ten-year didn't budge from its perch at 3.64 per cent. It just shrugged it off the cuts as meaningless. But a couple days later, when Congress passed Bush's $150 stimulus package, the ten year spiked with a vengeance, up 20 basis points on the day. In other words, the bond market doesn't like inflation-generating government handouts. So, why did Bernanke cut rates when he knew it would just add to the housing woes? The fact is, Bernanke had no choice. He's facing a challenge so huge and potentially catastrophic; that cutting rates must have seemed like the only option he had. The banks are "capital impaired" and borrowing at a rate unprecedented in history. The capital that the banks do have is quickly being depleted. Banks are forced to borrow reserves from the Fed in order to keep lending. A careful review of these graphs should convince even the hardened skeptic that the banking system is basically underwater. The sudden and shocking depletion of bank reserves is due to the huge losses inflicted by the meltdown in subprime loans and other similar structured investments. "When US homeowners default on their mortgages en-mass, they destroy money faster than the Fed can replace it through normal channels. The result is a liquidity crisis which deflates asset prices and reduces monetized wealth," says economist Henry Liu. The debt-securitization process is in a state of collapse. The market for structured investments -- MBSs, CDOs, and Commercial Paper -- has evaporated, leaving the banks with astronomical losses. They are incapable of rolling over their short-term debt or finding new revenue streams to buoy them through the hard times ahead. As the foreclosure-avalanche intensifies; bank collateral continues to be down-graded which is likely to trigger bank failures. Henry Liu sums it up like this: "Proposed government plans to bail out distressed home owners can slow down the destruction of money, but it would shift the destruction of money as expressed by falling home prices to the destruction of wealth through inflation masking falling home value." ("The Road to Hyperinflation", Henry Liu, Asia Times) It's a vicious cycle. The Fed is caught between the dual millstones of hyperinflation and mass defaults. The pace at which money is currently being destroyed will greatly accelerate as trillions of dollars in derivatives are consumed in the flames of a falling market. As GDP shrinks from diminishing liquidity, the Fed will have to create more credit and the government will have to provide more fiscal stimulus. But in a deflationary environment; public attitudes towards spending quickly change and the pool of worthy loan applicants dries up. Even at 0 per cent interest rates, Bernanke will be stymied by the unwillingness of under-capitalized banks to lend or over-extended consumers to borrow. He'll be frustrated in his effort to restart the sluggish consumer economy or stop the downward spiral. In fact, the slowdown has already begun and the trend is probably irreversible. The financial markets are deteriorating at a faster pace than anyone could have imagined. Mega-billion dollar private equity deals have either been shelved or are unable to refinance. Asset-backed Commercial Paper (short-term notes backed by sketchy mortgage-backed collateral) has shrunk by $400 billion (one-third) since August. Also, the market for corporate bonds has fallen off a cliff in a matter of months. According to the Wall Street Journal, a paltry $850 million in high-yield debt has been issued for January, while in January 2007 that figure was $8.5 billion---ten times bigger. That's a hefty loss of revenue for the banks. How will they make it up? Judging by the Fed's graphs; they won't! Bernanke's rate cuts sent stocks climbing on Wall Street, yesterday, but by early afternoon the rally fizzled on news that Financial Guaranty, one of the nation's biggest bond insurers, would be downgraded. The Dow lost 37 points by the closing bell. The plight of other major bond insurers, MBIA and Ambac, could be known as early as today, but it is reasonable to expect that they will lose their Triple A rating. According to Bloomberg: "MBIA Inc, the world's largest bond insurer, posted its biggest-ever quarterly loss and said it is considering new ways to raise capital after a slump in the value of subprime-mortgage securities the company guarantee". The insurer lost $2.3 billion in the fourth-quarter. Its downgrading from AAA will "cripple its business and throw ratings on $652 billion of debt into doubt." Many of the investment banks have assets that will get a haircut. The New York State Insurance Department tried to work out a bailout plan but the banks could not agree on the terms (ed note: "They don't have the money") "Bond insurers guarantee $2.4 trillion of debt combined and are sitting on losses of as much as $41 billion, according to JPMorgan Chase & Co. analysts. Their downgrades could force banks to write down $70 billion, Oppenheimer & Co. analyst Meredith Whitney said yesterday in a report." (Bloomberg) The bond insurers were working the same scam as the investment banks. They found a loophole in the law that allowed them to deal in the risky world of derivatives; and they dove in headfirst. They set up shell companies called "transformers", (the same way the investment banks established SIVs; structured investment vehicles) which they use as "off balance" sheets operations where they sell "credit default swaps , which are derivative instruments where one party, for a fee, assumes the risk that a bond or loan will go bad". ("The Bond Transformers", Wall Street Journal) The bond insurers have written about $100 billion of these swaps in the last few years. Now they're all blowing up at once. Credit default swaps (CDS) have turned out to be a gold-mine for the bond insurers and they've given a boost to the banks too, by freeing up capital they use in other ventures. "The banks profited on the interest rate difference between the CDOs (collateralized debt obligations) they bought and the payments they made to transformers...The banks sometimes booked profits upfront on the streams of income they expected to receive." (WSJ) Neat trick, eh? Even now that the whole swindle is beginning to unravel, and tens of billions of dollars are headed for the shredder; industry spokesmen still praise credit default swaps as "financial innovation". "It's too early to say we're going to ban all these products," said Guenther Ruch, administrator for Wisconsin's insurance regulation and enforcement division. (WSJ) Maybe Ruch is right. Maybe it is too early to ban all these dicey financial inventions. But he may change his tune when Wall Street gets a whiff of the billions that'll be lost in downgrades and the markets start to tumble. Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Now Available! How the Press Led the US into War Buy End Times Now! New From CounterPunch Books The Secret Language of the Crossroads: HOW THE IRISH INVENTED SLANG By Daniel Cassidy WINNER OF THE AMERICAN BOOK AWARD! Click Here to Buy! Cassidy on Tour Click Here for Dates & Venues "The Case Against Israel" Michael Neumann's Devastating Rebuttal of Alan Dershowitz Click Here to Buy! Saul Landau's Bush and Botox World with a Foreword by Gore Vidal Click Here to Order!   Grand Theft Pentagon How They Made a Killing on the War on Terrorism           The Occupation by Patrick Cockburn   Humanitarian Imperialism By Jean Bricmont     CITY BEAUTIFUL By Tennessee Reed