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Von Clausewitz, List, the Bormann Capital Network and the Subjugation of Europe

Martin Bormann

COMMENT: To  come to understand what is taking place in Europe, it is essential to understand the military philosophy of Prussian military theoretician Karl von Clausewitz. In All Honorable Men, James Stewart Martin highlighted an important aspect of von Clausewitz’s philosophy, that war and diplomacy are two sides of the same coin. When diplomacy is no longer effective, the policy goal is pursued through the use of armed force. When war and military power have reached the limits of their effectiveness, diplomacy continues the pursuit of the goal.

Generations of Germans have understood this and incorporated that concept into the methodology of German power structure.

A primary focus of this website is, of course, the Bormann capital network, termed by one banking professional “the largest concentration of money power under a single authority in history.”

Having plundered, pooled and secreted away the liquid wealth of Europe, the network was in excellent position to realize the von Clausewitz gambit of the post-war, explained below.

Beyond that, the Bormann capital network is more than just the fruit of World War II plunder. The organization’s vast wealth derives from corporate power and the business and political brokers that administer that influence. Heavily invested in major corporations (especially American “blue chip” corporations) the group can exert great pressure with little effort.

Of course, when that doesn’t work, the Underground Reich will not hesitate to use deadly force.

19th Century pan-German theoretician Friedrich List foresaw a Germany economically astride Europe as a vehicle for world domination. The Underground Reich has realized the Nazi goal, formalized through the Federal Republic.

All Honorable Men by James Stewart Martin; Little, Brown [HC]; Copyright 1950 by James Stewart Martin; p. 235.

. . . . The end of battle in 1945 had signaled the start of a new kind of war–a  post-war. Germany’s classical  military theorist, von Clausewitz, is famous for having declared that “war is the continuation of diplomacy by other means.”  In dealing with a Germany which had gone to school with von Clausewitz for generations, we knew that, conversely, a post-war is the continuation of war by other means.  Since Bismarck, wars and post-wars have formed a continuous series, changing the quality of the events only slightly from year to year, with no  such thing as a clear distinction between  heat of  battle and calm of  peace.  This  post-war of  the German occupation was  different from the  “cold war”  between the United States and Russia, which broke out at about  the same time. The latter complicated  the  diagnosis, like a man getting typhoid fever and pneumonia at the same time. . . .

COMMENT: In analyzing the debacle of the eurozone crisis and the tragedy of Greece, it is worth noting that unfortunate country is essentially being systematically occupied, economically colonized and enslaved using the von Clausewitz concept of “other means.”

We’ve seen that the provisional Greek “austerity” government includes the Greek neo-Nazi LAOS party, installed with no input whatsoever from the population of “the cradle of democracy.”

“Europe Adrift (1)”; german-foreign-policy.com; 12/21/2011.

. . . Recently, a rightwing extremist party was again made a direct coalition partner in a country’s government – in Greece. The newly installed transitional government – imposed under the supervision of Berlin and Brussels – includes not only the conservative and social democratic parties but also the LAOS Party (Laikós Orthódoxos Synagermés, “Orthodox People’s Alarm”). The LAOS Party musters also partisans of the former military dictatorship and is known for its racist and anti-Semitic invectives. Giorgos Karatzaferis, LAOS Party Chairperson, is quoted to have proclaimed that he is proud “not to be Jewish, homosexual and communist,” which “only few can claim.”[5] He is said to have called out to the Israeli ambassador: “Jew ambassador, watch out where you tread! Let’s discuss the Holocaust, let’s talk about all the fairy tales about Auschwitz and Dachau.”[6] Makis Voridis, a member of the LAOS Party and minister of transportation in the Greek government, imposed by Berlin and Brussels, began his political career as the leader of a youth organization of the party presided over by Georgios Papadopoulos. Papadopoulos had been the military commander of the junta. He founded that party after he had been released from prison, in the aftermath of the overthrow of his dictatorship. The German government evidently considers the LAOS Party helpful for implementing its austerity dictate. . . .

COMMENT: As Greece is being subjected to systematic economic exploitation and looting, with no effective participation by the Greek citizenry, it is important to remember that their problems stem, in part, from the long term German policy of avoiding reparations for the wealth they stole during their occupation of Greece.

The purloined Greek capital, like that of many other Nazi victims, has not  been repaid.

Following a decision made in August of 1944, the Third Reich transferred its vast assets and secreted the wealth into 750 front companies in neutral countries, where it formed the foundation of the Bormann network. That network, in turn, administers “corporate Germany”–the German “core corporations” and their associated financial institutions.

It is also worth noting that the Nazis loss on the battlefield has been reversed during the postwar. Germany lost the war, but won the postwar.

An important, incisive article from german-foreign-policy.com (which feeds along the bottom of the front page of this website) notes the extent of the economic damage done to Greece during both World War II and the post-war, to date.

Note the skilled, decades-long maneuvering by Germany to circumvent repaying wealth looted from Greece and other nations.

“Protectorate-Like”; german-foreign-policy.com; 2/13/2012.

Last night, under strong popular protests, the Greek parliament accepted the latest “austerity package,” that the German government had promoted in the form of an ultimatum. This “austerity package” will lead to a 20 percent cut in private revenue and the minimum wage, therefore also in the public sector wages, which are dependent on the minimum wage. One hundred fifty thousand government employees will be laid off. Criticism of Berlin has become sharper because of its efforts to transform Athens into a de facto EU finance protectorate, using so-called austerity commissioners. Demonstrators burned German flags; Greek parliamentarians have announced an initiative to remind that German World War II reparations are still outstanding. Since 1945, the Federal Republic of Germany has consistently refused not only to pay reparations, but also Nazi debts, even those undisputed by the German Reichsbank at the end of the war. These would amount to more than three billion Euros today. But, the debate continues in the German capital about the suspension of democracy in Greece.

Protests against Berlin
Berlin’s brutal austerity dictate and the German media’s on-going rabble-rousing anti-Greek (“bankrupt Greeks”) propaganda has enflamed Greek protests against Germany for quite some time. Last summer, Greek demonstrators chanted “Germany out of the EU!”, and displayed “Merkel = Nazi” banners at rallies. EU flags with a swastika in the center were occasionally seen. The memory that this is not the first time that Berlin has dictated Athens’s policies, has recently been accompanied by references to Nazi rule in occupied Europe. Last week demonstrators outside of the Greek parliamentary building again chanted “Nazis Out!” while burning a German flag. Trade unionists also occupied the Athenian offices used by the German Horst Reichenbach and his “task force Greece,” monitoring Athens’s austerity measures, in the name of the EU Commission. These protests against Berlin’s hegemonic dictate are defamed in the German media simply as “anti-German propaganda.”

Old Debts
A few days ago, a group of twenty-eight Greek parliamentarians, from various parties, reacted to Berlin’s persistent pressure by tabling a resolution, calling on the parliament to debate Nazi Germany’s plunder of Greece, which has never received indemnities. The indemnities not only refer to reparations in general, but also to the compulsory loans to the Reichsbank’s clearing account. Shortly before the end of World War II, Nazi bankers were still in possession of Greek assets worth 476 million Reichsmark, which has never been repaid by the Federal Republic of Germany. According to experts, this would today amount to 3.4 billion Euros with interests included. Greece is not the only country that has waived Germany’s old Nazi debts without receiving anything in return. As the economist Albrecht Ritschl, who teaches at the London School of Economics, confirmed, Nazi Germany’s unpaid debts to its wartime adversaries would today range between 700 billion and 1.4 trillion Euros with interests included, depending on the method of calculation.[1] This does not even include the reparations for war damages.

Debt Cancelation
Because of the Federal Republic of Germany’s longstanding policy of refusal, even totally indisputable Nazi debts have never been paid. Bonn scored a decisive success in 1953 with the so-called London Debt Agreement, achieving a gigantic debt cancelation, in the framework of which Greece also waived its former occupier’s enormous debts. That agreement permitted the Federal Republic of Germany the expunction of enormous debts, created both before and since World War II. The agreement also stipulated that the question of the payment of Nazi debts and reparations would first be solved with a peace treaty concluded with a “reunited” Germany. [The Federal Republic of] “Germany has been in a very good position ever since, even as other Europeans were forced to endure the burdens of World War II and the consequences of the German occupation,” says the economist Ritschl. This has made the resurgence of the “greatest debt transgressor of the 20th Century,” namely, Germany, possible.[2] . . . .

COMMENT: Just how acute is the situation in Greece? So bad that physical education teachers are excusing children from participating due to the fact that malnutrition prevents them from exercising without becoming dizzy. These children may very well experience long-term effects from their “austere” diet.

This is a textbook example of politics as the continuation of war by “other means”–applied von Clausewitz.

“Greece on the Breadline: Children of Athens too Hungry to Do PE” by Jon Henley; The Guardian; 3/13/2012.

EXCERPT . . . It has been a common secret among PE teachers for some time now that they don’t expect pupils to do PE any more, because many of them are underfed and get dizzy. . . .

COMMENT: The details of the agreement to which the Greeks are being subjected might be politely described as stunning. The country is being used as a vehicle for shoring up weakened European financial institutions!

“Scandal: Greece to Receive ‘Negative Cash’ from ‘Second Bailout’ as It Funds Insolvent European Banks” by Tyler Durden; zerohedge.com; 2/22/2012

Earlier today, we learned the first stunner of the Greek “bailout package”, which courtesy of some convoluted transmission mechanisms would result in some, potentially quite many, Greek workers actually paying to retain their jobs: i.e., negative salaries. Now, having looked at the Eurogroup’s statement on the Greek bailout, we find another very creative use of “negative” numbers. And by creative we mean absolutely shocking and scandalous. First, as a reminder, even before the current bailout mechanism was in place, Greece barely saw 20% of any actual funding, with the bulk of the money going to European and Greek banks (of which the former ultimately also ended up funding the ECB and thus European banks). Furthermore, we already know that as part of the latest set of conditions of the second Greek bailout, an’ ‘Escrow Account” would be established: this is simply a means for Greek creditors to have a senior claims over any “bailout” cash that is actually disbursed for things such as, you know, a Greek bailout, where the money actually trickles down where it is most needed – the Greek citizens. Here is where it just got surreal. It turns out that not only will Greece not see a single penny from the Second Greek bailout, whose entire Use of Proceeds will be limited to funding debt interest and maturity payments, but the country will actually have to fund said escrow! You read that right: the Greek bailout #2 is nothing but a Greek-funded bailout of Europe’s insolvent banks… and the Greek constitution is about to be changed to reflect this! . . .

COMMENT: The European Monetary Union is, as we have seen in many programs and articles, the realization of the stratagem of Pan-German theoretician Friedrich List.

Writing in 1943, Paul Winkler foresaw that Germany would realize its goals through the creation and domination of a German-dominated central European economic union (bearing a striking resemblance to today’s European Monetary Union.) One of the principal influences on List’s thinking was the “continental” concept of Napoleon, who attempted to economically unite Europe under French influence.

“Charles Andler, a French author, summed up certain ideas of List in his work, The Origins of Pan-Germanism, (published in 1915.) ‘It is necessary to organize continental Europe against England. Napoleon I, a great strategist, also knew the methods of economic hegemony. His continental system, which met with opposition even from countries which might have profited from such an arrangement should be revived, but, this time, not as an instrument of Napoleonic domination. The idea of united Europe in a closed trade bloc is no longer shocking if Germany assumes domination over such a bloc—and not France. [Emphasis added.] Belgium, Holland, Switzerland, willingly or by force, will enter this ‘Customs Federation.’ Austria is assumed to be won over at the outset. Even France, if she gets rid of her notions of military conquest, will not be excluded. The first steps the Confederation would take to assure unity of thought and action would be to establish a joint representative body, as well as to organize a common fleet. But of course, both the headquarters of the Federation and its parliamentary seat would be in Germany. [Emphasis added.]”

(The Thousand-Year Conspiracy; by Paul Winkler; Charles Scribner’s Sons [HC]; 1943; pp. 15-16.)

COMMENT: The Listian model was put into effect by the Third Reich, as can be gleaned by read­ing Dorothy Thompson’s analy­sis of Germany’s plans for world dom­inane by a cen­trail­zed Euro­pean eco­nomic union. Ms. Thomp­son was writ­ing in The New York Her­ald Tri­bune on May 31, 1940! Her com­ments are repro­duced by author T. H. Tetens.

. . . . The Ger­mans have a clear plan of what they intend to do in case of vic­tory. I believe that I know the essen­tial details of that plan. I have heard it from a suf­fi­cient num­ber of impor­tant Ger­mans to credit its authen­tic­ity . . . Germany’s plan is to make a cus­toms union of Europe, with com­plete finan­cial and eco­nomic con­trol cen­tered in Berlin. This will cre­ate at once the largest free trade area and the largest planned econ­omy in the world. In West­ern Europe alone . . . there will be an eco­nomic unity of 400 mil­lion per­sons . . . To these will be added the resources of the British, French, Dutch and Bel­gian empires. These will be pooled in the name of Europa Germanica . . .

“The Ger­mans count upon polit­i­cal power fol­low­ing eco­nomic power, and not vice versa. Ter­ri­to­r­ial changes do not con­cern them, because there will be no ‘France’ or ‘Eng­land,’ except as lan­guage groups. Lit­tle imme­di­ate con­cern is felt regard­ing polit­i­cal orga­ni­za­tions . . . . No nation will have the con­trol of its own finan­cial or eco­nomic sys­tem or of its cus­toms. [Emphasis added.] The Naz­i­fi­ca­tion of all coun­tries will be accom­plished by eco­nomic pres­sure. In all coun­tries, con­tacts have been estab­lished long ago with sym­pa­thetic busi­ness­men and indus­tri­al­ists . . . . As far as the United States is con­cerned, the plan­ners of the World Ger­man­ica laugh off the idea of any armed inva­sion. They say that it will be com­pletely unnec­es­sary to take mil­i­tary action against the United States to force it to play ball with this sys­tem. . . . Here, as in every other coun­try, they have estab­lished rela­tions with numer­ous indus­tries and com­mer­cial orga­ni­za­tions, to whom they will offer advan­tages in co-operation with Germany. . . .

Germany Plots with the Kremlin; T.H. Tetens; Henry Schuman [HC]; 1953; p. 92.


25 comments for “Von Clausewitz, List, the Bormann Capital Network and the Subjugation of Europe”

  1. @ Dave: It is a terrific resume of the situation. Have you ever thought about writing a book? You got one right here. Personally, I never miss an occasion on my blog to publish content, videos, articles, anything that encourages Europeans and European countries to think in terms of nation-states instead of “Europe”. Some might think that I go too far on the side of nationalism but I prefer that to the passive submission to the European Union and its institutions, which is nothing less than the killing of a whole culture and of a dozen peoples and/or nationalities. And all this becomes possible because people don’t see soldiers with nazi uniforms walking down the streets. Having a low capacity to detect gambits where they are, they buy into the deception. Charles Andler and Dorothy Thompson were right. If you know how to do it correctly, soldiers are no longer necessary.

    Posted by Claude | February 23, 2012, 8:47 pm
  2. Here’s a great video that describes in under 10 minutes the lunacy of what’s going on in the eurozone and how the it’s being converted into a giant vindictive debtors prison designed to protect the banks and impoverish the public.

    Posted by Pterrafractyl | February 23, 2012, 11:27 pm
  3. Not that it’s surprising at this point, but note that one of the most urgent reforms demands by Greece’s new overlords is a 1.1 billion euro reduction in state spending on pharmaceuticals. Nice priorities:

    Athens Told to Change Spending and Taxes
    Published: Friday, 24 Feb 2012 | 1:50 AM ET

    By: Peter Spiegel, Gerrit Wiesmann & Kerin Hope Financial Times

    European creditor countries are demanding 38 specific changes in Greek tax, spending and wage policies by the end of this month and have laid out extra reforms that amount to micromanaging the country’s government for two years, according to documents obtained by the Financial Times.

    The reforms, spelt out in three separate memoranda of a combined 90 pages, are the price that Greece has agreed to pay to obtain a 130 billion euros second bail-out and avoid a sovereign default that the government feared would throw Greek society into turmoil.

    They range from the sweeping – overhauling judicial procedures, centralising health insurance, completing an accurate land registry – to the mundane – buying a new computer system for tax collectors, changing the way drugs are prescribed and setting minimum crude oil stocks.

    “The program is much, much more ambitious than economic reform,” said Mujtaba Rahman, Europe analyst at the Eurasia Group risk consultancy. “This is state building, as typically understood in traditional low-income contexts.”

    Most urgency is attached to a 10-page list of “prior actions” that must be completed by Wednesday in order for euro zone finance ministers to give a final sign-off to the new bail-out at an emergency meeting scheduled for Thursday.

    The 38 measures are a mix of laws that must be passed by parliament, ministerial decisions and presidential decrees that affect a complete cross-section of Greek economic activity, from health spending to municipal administration to tax collection.

    Only a handful of the measures are listed as passed or in the process of being implemented, including a highly publicised 300 million euros in pension reductions and 325 million euros in other spending cuts. The other reforms are grouped under six categories, though most of the changes fall under spending cuts, bank regulations, and economic reforms.

    Among the measures that must be completed in the next seven days are reducing state spending on pharmaceuticals by 1.1 billion euros; completing 75 full-scale audits and 225 value added tax audits of large taxpayers; and liberalising professions such as beauty salons, tour guides and diet centres.

    Similarly, a delay in reforms of healthcare procurement, which are opposed by doctors, medical suppliers and hospital managers, meant that savings of only 500 million euros were achieved in 2011 against a target of 1 billion euros, leaving the missing amount to be collected this year.

    Mr Rahman said the scale and the speed of the reforms demanded raised questions about whether sceptical euro zone lenders were setting up Greece to fail sometime within the next year.

    “Even if one understands the political imperative, the program is being set up to fail as many of the targets will be impossible to achieve,” he said.

    Posted by Pterrafractyl | February 24, 2012, 9:06 am
  4. The imagined spectacle of auctioning off the Parthenon may or may not take place but what is happening less dramatically in Greece is the loss of private property by the middle class. That process of grinding attrition doesn’t make the news.

    The unification and homogenization of customs was a primary method of German unification in the 19th century. In enforcing that, a subtle kind of martial law was imposed that created modern Germany. That template worked well inside Germany and now outside as well. Empire by bureaucratic and economic encroachment is succeeding for the Reich.

    Posted by Dwight | March 5, 2012, 7:19 am
  5. The CS Monitor has an interesting pair of pieces that attempt to summarize the pro-austerity and anti-austerity arguments. They’re both worth a read. And if the pro-austerity summary is accurate, Europe is pretty screwed because it’s looking more and more like Berlin consensus is increasingly looking like the GOP-style magical thinking that gutted the US’s economy: They have an ideological certainty that national divestment and gutting of the safety-net will definitely work (given enough time), it’s the only option for closing the “competitiveness” gap, and they’re getting tired of all the complaints.

    Posted by Pterrafractyl | March 15, 2012, 10:08 pm
  6. @Pterrafractyl–

    The Germans are losing patience? I find that hard to believe. (Sarcasm).

    Recall that, in keeping with von Clausewitz, you don’t have to machine gun somebody or put them in a gas chamber and drop the Zyklon B pellets.

    Deny them proper employment, nutrition, clothing, shelter, medical care and bingo, the job is done!

    Posted by Dave Emory | March 15, 2012, 11:11 pm
  7. The pro-austerity arguments assume that maximizing digits in a few selected bank accounts, while ignoring human tragedy, is a valid goal. In any sane primitive tribe facing a harsh winter, austerity would mean holding all one’s assets very close and sharing them equally among one’s own. The Greeks just agreed to what amounts to a partial default, even if no one is calling it that. They should default completely and right away, restore their own currency and severely restrict foreign ownership and capital flight. Anything else they can think of that makes a Frankfort or Paris banker scream is automatically the right thing to do.
    Of course, if all that happened, NATO would ‘liberate’ them.

    Posted by Dwight | March 16, 2012, 4:39 am
  8. @Dwight: Yeah, the austerity arguments are like a school teacher dealing with poorly performing students. Approaches like extra homework, tutoring, and addressing malnutrition at home are considered unacceptably “soft”. Instead, the teacher resorts to public humiliation, beatings with a rod AND, just to show the teacher is serious, confiscation of the textbooks with the lingering threat of paper and pencil confiscation if the student doesn’t improve within a semester. I guess there’s maybe 0.1% or so of the populace that might actually improve academically after such treatment, but generally speaking that teacher should be fired because they are destroying those children’s futures.

    Posted by Pterrafractyl | March 16, 2012, 7:56 am
  9. It’s also worth pointing out that Berlin isn’t the only EU capital infested with junk socioeconomic ideologies:

    George Osborne poised to slash top tax rate from 50p to 40p

    Chancellor’s dramatic move to cut top rate of income tax in next week’s budget will delight the Conservative right
    Patrick Wintour, political editor
    guardian.co.uk, Thursday 15 March 2012 17.30 EDT

    George Osborne is poised to slash the top rate of income tax from 50p to 40p in next week’s budget in a dramatic move that will delight business and the Tory right, but risks reinforcing the Conservatives’ reputation as protectors of the super-rich.

    With the four senior ministers in the budget discussions due to speak on Friday and a final meeting scheduled for Monday, the Liberal Democrats appear to recognise that they are not going to be able to block what is Osborne’s key demand for the budget, but are trying to maximise the concessions they can extract in return.

    Government sources say that from the outset the chancellor has seen a cut in the 50p rate as the headline-grabbing measure of the budget, and views it as the simplest single step he can take to show his commitment to an enterprise economy.

    It is understood that the drive to cut the top rate is coming from Osborne as much as David Cameron. The chancellor has, sources say, been intellectually persuaded of the case for a cut in the top rate, a move that will endear him to the Tory right.

    A government source said: “The budget has to strike a balance. It has to show we are all in this together, but it also has to show that as a country we are open for business. We want a top rate that does not put off entrepreneurs or businesses. It is one of the highest top rates worldwide at a time when we need real growth. Above all, real growth is what we need to promote wealth and prosperity.” The source said the deal on the 50p was not yet done and dusted, but was close to being so.

    Posted by Pterrafractyl | March 16, 2012, 9:15 am
  10. @Dave: Sad but so true.

    @Dwight: Perhaps so. I think Voridis might just be the elites’ man in Greece.

    Posted by Steven L. | March 16, 2012, 9:19 am
  11. There’s a NY Times article on the firm that’s apparently become the “SWAT” team for fincially-distressed countries across the globe, including Greece:

    NY Times
    March 19, 2012, 2:02 pmInvestment Banking
    In Greek Crisis, a Little-Known Adviser With Outsize Influnce


    ATHENS — In unmarked offices here on a dusty block choked with strip clubs and burned-out buildings, several dozen employees of a Wall Street firm spent months poring over bank loan portfolios as Greece struggled with its debt crisis.

    They belong to what has become the go-to SWAT team in financial crises. Their employer, BlackRock, may be little known outside financial circles even as it manages a world-leading $3.51 trillion of assets, but the firm is exerting enormous influence as a behind-the-scenes adviser to troubled governments around the globe.

    In Greece, BlackRock is helping determine just how much capital the country’s banks will need to raise in the coming months. It is a crucial step as Greece tries to fix its banking industry and its broader economy, but the task is a risky one.

    Set the capital levels too low and financial firms may not have an adequate cushion to withstand further losses. Set the bar too high and the banks may struggle to find investors willing to come up with the money. In either situation, the government could be forced to step in

    BlackRock knows the stakes. Along with Greece, the financial firm has advised the Irish government and the British Treasury. In Ireland, BlackRock’s findings formed the basis of a bank’s effort to raise an additional $34 billion. The United States Treasury hired BlackRock during the 2008 financial crisis to help value real estate and other assets the government was acquiring as it stepped in to bail out teetering financial firms like the American International Group.

    The executive who leads these efforts, Craig Phillips, keeps a poster of the movie “The Exorcist” in his office, saying that he sees his job as helping governments and companies confront their problems. “We have been conditioned to be ultraresponsive,” he said.

    The appeal of BlackRock is that it has the size, systems and expertise to scour and analyze huge volumes of financial data quickly. In Greece, for example, it reviewed 10 million loans in about three months. Another attraction is that unlike other financial firms — say, Goldman Sachs — BlackRock is not known for making splashy bets that can land it in the headlines. It has largely flown beneath the public’s radar.

    Yet BlackRock is no stranger to controversy. In the United States, the firm — which makes most of its profits by managing money for investors, pension funds, endowments and other institutions — has been criticized for buying and selling some of the same securities that its BlackRock Solutions unit is valuing for the government. Few firms have such access to a vast amount of market-moving information, and that, some critics say, presents a potential conflict of interest.

    “Imagine you consult with Greece and you see the inside issues and you realize with greater certainty it’s going to go a certain way,” said Robert Jarrow, a professor of finance at Cornell University. “How could you not make investment decisions based on that?”

    Eyebrows were raised in Greece when the firm was approached to handle loan valuation work for a friendly merger in Greece between two banks it had just reviewed. BlackRock said it hadn’t made a decision on whether to accept this assignment. Mr. Phillips added that the company had internal guidelines, which are in place to “manage actual and perceived conflicts of interest.”

    To help stabilize the system, the Bank of Greece looked for a firm to review the loan portfolios of 18 financial firms. Bank of Greece asked BlackRock and three other firms, Blackstone, Oliver Wyman and Alvarez & Marsal, to submit a proposal on how each would go about valuing the portfolios.

    In a city at times rocked by violent protests, BlackRock sought a low profile. Employees were not allowed to carry or wear anything bearing the company logo. The firm hired 18 armed security guards to transport employees in vans or, in rare cases, on motorcycles. BlackRock even had a code name: Solar, leading some tenants in its office building to think the team was a solar energy company.

    As part of the assignment, BlackRock gathered information on millions of loans and used the data to create a view of the loss potential on the portfolios. The banks set up data rooms for BlackRock and uploaded information, allowing the firm to see things like collateral and payment history.

    BlackRock and the banks butted heads on some issues. For instance, BlackRock wanted to write all loans backed by third-party guarantees to zero, since they were riskier than those backed by collateral.The banks resisted, but “in the end there was no room for debate,” said George Aronis, also of Alpha Bank. The loans were written down to zero.

    Jessica Tan and Charles Hatami, two of BlackRock’s day-to-day managers in Greece, said that they were surprised by both the quality of the data and the results. Most institutions, they said, did not lend recklessly, as the United States banks did during the real estate boom.

    “The consumer lending market is relatively new in Greece, and they were disciplined in their approach,” Mr. Phillips of BlackRock said. “Unlike other countries, the Greek consumer is not debt laden.”

    Maria Mavridou, alternate director of financial stability at the Bank of Greece, said that BlackRock’s findings were likely to be released in the coming weeks by the government. The report will describe the current state of the Greek banking system and outline additional capital requirements.

    “They didn’t know anything about Greece, but they sure know data and what to do with it,” she said.

    There’s another additional piece of info that one should know about Blackrock’s pedigree: The Blackrock was started as a division of Pete Peterson’s and Steven Schwarman’s asset-management firm Blackstone. This is the same Steven Schwarzman that compared Obama to Hitler over tax increases for the rich and the same Pete “austerity” Peterson that is spending $1 billion of his own fortune to convince the public that we just can’t afford things like social security and medicare unless, of course, we privatize the system and hand it over to the asset-managers. Considering that Schwarzman’s and Peterson’s Blackstone firm is also in the running for this
    type of consulting work, it’s not like the most pro-austerity firm on the planet is being chosen to design distressed banking system overhauls, but still…

    Posted by Pterrafractyl | March 20, 2012, 6:23 pm
  12. Huh, Spain’s political establishment is a little concerned that voters are finding out that the new conservative Prime Minister blatantly lied to the voters about his plans for austerity policies. The concern isn’t about the actual lying…it’s concern about how Spain’s elites are going to have the credibility to con the voters into more austerity in the future:

    Rajoy’s ploys risk stoking cynicism
    By Hugo Dixon
    March 19, 2012

    At a dinner in Madrid earlier this month, the main complaint about Mariano Rajoy was that the new prime minister was treating the electorate like children. Many of the guests, supporters of Rajoy’s Popular Party (PP), understood that Spain had to cut its fiscal deficit and restore its competitiveness. But they didn’t like the fact that the prime minister hadn’t been frank about his plans.

    In advance of last November’s general election, Rajoy said he wouldn’t raise taxes, make it cheaper to fire people or cut the welfare state. But he has now done the first two. After this week’s election in Andalusia, Spain’s largest region, he is expected to do the last.

    Rajoy’s camp doesn’t see any problem in failing to be upfront. It would have been foolish to talk too much about austerity in the general election campaign as that might have frightened the voters. For the same reason, it would be foolish to tell them about reforming the welfare state in advance of the Andalusia election.

    In the long run, the failure to treat the population like adults could cause trouble. But in the short run, the strategy has paid off. The socialist party lost nearly 40 percent of its votes in the general election, not least because it had done a poor job in government. It is now expected to lose control of Andalusia, its last main bastion, according to an opinion poll by Metroscopia.

    Rajoy has already used the absence of any serious opposition – even a general strike called for next week doesn’t pose much threat – to push through one batch of reforms. The most important is of the labour market. He has made it cheaper for companies to fire people and largely dismantled the nationwide system of collective bargaining. The net effect will be that wages, which rose rapidly during the early years of the single currency, will fall – so restoring Spain’s competitiveness.

    This won’t matter if the economy, which the government expects to shrink 1.7 percent this year, stabilises next year. But what if GDP keeps shrinking, unemployment (now 23 percent) continues rising and the deficit remains stubbornly high? Spain would face renewed bond market jitters and further pressure from its euro partners to cut its deficit. Rajoy would then have to sell another dose of austerity to voters that wouldn’t believe him. Having treated them like kids, they might even throw a tantrum.

    Posted by Pterrafractyl | March 20, 2012, 7:15 pm
  13. “Moral decay”. Yeah, that sounds about right:

    EU Treatment of Greece Shows ‘Moral Decay’: Economist

    Published: Tuesday, 20 Mar 2012 | 1:24 AM ET

    By: Katy Barnato
    Assistant Editor, CNBC

    European Union leaders showed “moral decay” in delaying Greece’s bond swap deal in order to minimize the impact on the region’s banks, according to High Frequency Economics’ founder and chief economist, Carl Weinberg.

    In a March report on the global economy, Weinberg said EU leaders had deliberately delayed Greece’s restructuring, to the detriment of its economy, in order to give banks time to prepare for the hit on their debt holdings.

    “Why wasn’t Greece allowed to restructure its debt two years ago, before its economy contracted by 15 percent, and before it was necessary to impose a haircut on private sector borrowers, destabilize the government and the economy, illegally implement retroactive collective action clauses, and trigger credit default swaps?” he asked in the report.

    “It was inconvenient for the banks, that is why,” he said.

    Weinberg added that EU leaders forced Greece to go through severe austerity measures in order to give banks time to deal with the debt.

    Politicians preferred to put a few million Greek citizens through the ringer than ask banks to swallow losses on government bonds before they had time to ‘prepare’… it would seem that it is not just bankers who have entered an era of moral decay, but the governments that want to regulate them as well,” he wrote.

    Of course, for moral “decay” to take place it assumes a given bankster/politician/associated minion would have been unwilling to impoverish their fellow citizens before the financial crisis and weren’t just waiting for the right crisisopportunity to right all the wrongs that emerged over the few centuries (like a middle-class, non-junk economic theories, democratic ideals, etc….). There are some individuals pushing mass austerity that seem like they might have experienced their moral decay a while ago.

    Posted by Pterrafractyl | March 22, 2012, 9:47 pm
  14. […] davantage d’information sur ce sujet, visitez cette page web. This entry was posted in Resistance. Bookmark the permalink. ← Jared Loughner, shooter […]

    Posted by Bienvenue | Lys-d'Or | April 8, 2012, 7:40 pm
  15. Here’s one more article about how a crisis in eurozone crisis isn’t just a crisis. It’s a feature. The fact that the historically low interest rates and other various stimulus measures taken by the ECB are actually helping German firms more than P.I.I.G.S. corporations also highlights another interesting characteristic of eurozone economy: The “internal devaluation” of the P.I.I.G.S.’s economies that the Bundesbank is continually demanding isn’t simply over concerns about “competitiveness” and deficits (as BS-filled as those concerns may be). The jaw-boning about “competitiveness” and the demand that the weaker eurozone economies slash their standards of living and send their economies into a tailspin is also about inflation. The Bundesbank is demanding basically minimal inflation and if you want sustained financial stimulus (like ultra low borrowing rates for corporations and trillions of euros in ECB asset purchases) and basically no inflation, you’re going to have to “internally devalue” a chunk of your economy. If you think of the eurozone members nations as compartmentalized “chunks” of the large eurozone ecosystem, what we’re seeing is a net overall stimulus for the eurozone because the stimulus policies aren’t targetting the economices in crisis but instead the entire eurozone, and in order to hold down overall inflation for the eurozone as a whole the weaker nations are being targetted for massive deflationary policies to act as a sort of “inflation buffer” for the larger eurozone economy. It’s a feature.

    Posted by Pterrafractyl | April 19, 2012, 1:57 pm
  16. Atrios has an relevant question for Pimco’s Mohamed El-Erian about his latest piece in the WaPo: What does “streamlining entitlements” even mean? Will Grandma and Grampa get their social security checks in a fancier, more aerodynamic envelope or is this the the Paul Ryan kind of streamlining?

    Similarly, what exactly did El-Erian mean when he said this:

    PIMCO’s El-Erian: A Global Realignment Our Grandchildren Will Talk About
    Investors must absorb market blows, be agile enough to react quickly
    By John Sullivan, Advisorone

    May 4, 2012

    “Europe understands this list now, but the implementation of its components lags,” El-Erian said. “It went from stable to ‘bimodal’ with fat tails. What will Europe be in a year? There is a high probability there will be a re-founding of Europe using the West and East Germany as a model. There is a lower probability it will fragment. If that happens it will be a total mess for Europe and the world. But it will tip one way or another and either way will be bumpy.”

    The United States is a house in their neighborhood, and therefore Americans should be concerned, he continued.

    Germany needs a partner, which is one reason you see a German chancellor actively campaigning for a French president. That is very unusual but they have a good relationship; basically, Merkel makes the decisions and Sarkozy explains them to the world,” he quipped to laughter from the audience.

    As far as the fourth point, the parallels between Europe and the rest of the world are:

    The robustness of the U.S. economy is facing structural impediments to growth
    The U.S. policy response from the Fed is “tactically smart” but strategically short-sighted
    There is a large and growing dependency on policies that fundamentally change the functioning of the markets
    Outer countries in many other parts of the world are not willing to move to the center
    There is a question of how the global economic system will evolve from here.

    He concluded with the implications for investing, which he called the “Great Escape.”

    “In the short term, investors must escape the world of deleveraging. They must stay in the game as others try to pick their pockets in the market.”

    Comparing investors to Muhammad Ali’s strategy for beating George Foreman in the “Rumble in the Jungle,” he said investors must be able to absorb market blows and be agile enough to react quickly.

    We are living in a global realignment that our children and grandchildren will be talking about. We can’t see it, because we are so close to it, but make no mistake, it’s there.”

    Ok, first off, which are the “Outer” countries of the world that are not willing to “move to the center”. Is this North Korean “outerness” or Icelandic “outerness” because those are two very “outer” countries in the world?

    And secondly, what exactly is the “West and East Germany” model supposed to look like when applied to the eurozone? I mean, I understand that there’s going to be a wave of privatizations of state assets like with what happened during the German reunification. But what about the other side of the coin:

    Study shows high cost of German reunification: report

    BERLIN | Sat Nov 7, 2009 11:30am EST

    (Reuters) – As Germany prepares to celebrate the 20th anniversary of the fall of the Berlin Wall, a new study shows that some 1.3 trillion euros ($1.9 trillion) have been transferred from the west to rebuild the east, a newspaper reported on Saturday.

    The report by the Halle-based IWH research institute showed the net transfers from west to east — a sum equivalent to over half Germany’s total economic output in 2008 — had “risen significantly” in the past decade, weekly Welt am Sonntag said.

    Monday will be the 20th anniversary of the fall of the Wall, which the once-divided city will mark by toppling 1,000 brightly colored dominoes that were being erected on Saturday along a 1.5 kilometer stretch of the Cold War barrier’s original path.

    The east has cast off many shackles from its Communist past, thanks partly to the transfers, but unemployment remains nearly double that of the west and economists say it is still years away from catching up with the richer part of the country.

    So where are the trillions of euros in state aid? Is that supposed to be a surprise gift after the P.I.I.G.S. act like good little plebes or is the German reunification model perhaps not the best analog for this historic global realignment?

    So many awful questions and only awful answers. At least future generations will get to share in the long-term awfulness after this crop of humans is done building a global gulag of corporate rule and knee-capped governments everywhere global realignment, so there’s that. And sharing is a good thing, right?

    Posted by Pterrafractyl | May 4, 2012, 9:11 am
  17. Here’s a free tip to the states and countries that are about to see their revenue-generating infrastructure privatized: Read the fine print.

    Posted by Pterrafractyl | May 4, 2012, 10:02 am
  18. @Pterrafractyl
    I was just catching up with some of your posts and I couldn’t let it go without mention, as I have done in the past, that I work for a company owned in part by Bain Capital…the other part is owned by Blackstone! This very direct connection between Romney and the austerity clerics currently pillaging Europe should come as no surprise, and yet, I am struck nearly dumb at the final realization that my livelihood—such as it is—contributes even a small morsel to their despicable enterprise.

    I must find a new job. Until then, I’m a mole, I’m a mole. Or maybe a cancer within a cancer.

    Posted by GrumpusRex | May 5, 2012, 10:27 am
  19. @GrumpusRex: Any inside information that you have, my friend, might prove to be useful. If you see, read or hear something you think may even be remotely important, might not be a bad idea to keep in touch, IMO. =)

    Posted by Steven L. | May 5, 2012, 6:15 pm
  20. @Grumpusrex: Heh, don’t beat yourself up too much. I think at this point you damn near have to engage in barter to truly avoid enabling an oligarch. Non-oligarch-owned business are handing plenty of profits over the oligarchs. It’s an inevitability woven into the fabric of our economy. The “cost of doing business” that involve buying anything – from basic commodities, intermediate/refined products, or the final consumer good – will somehow involve buying from an oligarch-owned industry. And the less refined the product, the more likely it is that it’s from an oligarch-run sector of the economy (get the first “cut” on the resource). At least, that’s a general pattern I’ve observed: aside from the financial sector, there are just an enormous number of oligarchs that have their empires rooted in the extraction some natural resource (mining/oil/agriculture). That’s especially true for the developing-world oligarchs where natural resource extraction is one of the primary things the country has to trade with the world (so, of course, that wealth from extracted local resources gets extracted by elite assholes, local and global).

    So even if someone isn’t working directly for an oligarch-owned firm nearly all of us are somehow enabling our oligarchs, directly or indirectly, local and global.

    It’s systemically inevitable that you end up with an economy like this when so many industries are allowed to collapsed to handful of core companies. That economic concentration has been a general trend for decades and it’s Romney & Friends that ended up being both the most influential owners (not necessarily biggest, but most influential), and the deal-makers of the transactions that created our newly concentrated economy. Mittens took his millions and made billions that core. and not just due to corruption and intentional rigging. The “Free-markets” that are largely free of anti-trust enforcement are just going to see the existing monopolies/oligopolies just take over more and more industries and create an economy where some group of oligarchs captures the profits all along a growing number of supply chains and sectors. And they’ll be interwoven supply chains and sectors as this goes on over the decades.

    And, in due time, you’ll end up with something awful like the modern economy, where not only are our actions increasingly commoditized in an oligarch-friendly way but now, in the observation-for-profit age, our commoditized actions are being tracked for even more profit. And, not surprisingly, our commercialized actions are increasingly interwoven, both in work and play, at home and out and about. Between Google, Facebook, smartphone/cell activity, general internet tracking, and all our non-cash commercial activity we are creating a world where basic day to day activities are profiting many of our crappiest oligarchs.

    So don’t worry too much about working several degrees removed from Bain. We all are. The world has become a sick version of Six Degrees of Kevin Bacon, but with Mitt as our reality-magnet. And you could swap Mitt out for any of his other oligarch buddies although they might not be as telegenic (although I have to say I’ve been surprised by the gaffe-rate by Romney. He’s not exactly new at this). And most of us are someone working for, directly or indirectly, at least one of those oligarchs. That’s what an oligarchy looks like. And that’s what reality should feel like. That it doesn’t feel like that to everyone – feel your Mittness folks, it courses through your reality – is one of the big challenges of the day.

    As people say: it’s their world, we’re just living in it. Part of what makes Mittens so scary is that he seems to be the front man for the transition to the world where it’s not just their world we’re living in. It’s their world, and we’re just living in it at their discretion. What Mittens did as a corporate raider is what he’s going to do as a president except replace “corporate entities” with “swaths of society/Grandma”. It’s Mitt’s America.

    Posted by Pterrafractyl | May 5, 2012, 9:07 pm
  21. @Pterrafractyl: Well said. I agree.

    Posted by Claude | May 6, 2012, 12:54 pm
  22. Shared sacrifice:

    Rajoy Says He May Use Public Funds to Clean Up Spanish Banks
    By Charles Penty and Emma Ross-Thomas – May 7, 2012 4:22 AM CT

    Spanish Prime Minister Mariano Rajoy opened the door to using public funds to clean up Spanish lenders and said the government will pass a decree this week to bolster confidence in the banks.

    The last thing I want to do is lend public money, as has been done in the past, but if it were necessary to get the credit to save the Spanish banking system, I wouldn’t renounce that,” he said in an interview with radio station Onda Cero today. He didn’t give details on the decree that will be passed on May 11.

    Spain’s government tightened provisioning rules in February to make banks recognize deeper real-estate losses and is now working on a plan to allow lenders to offload written-down assets into separate vehicles. Spain has tried to shield its public finances from the cost of cleaning up the banks and ruled last year that the industry would bear the cost of restructuring failed lenders.

    Rajoy said the government hasn’t decided whether public funds will be used and in any case it wouldn’t affect the deficit, which is the third largest in the euro region. Using public funds would be a “last resort,” he said.

    “I am not in favor of a bad bank,” Rajoy said. “The main aim of the decree is that there should be no doubts about the situation of Spanish banks.”

    Posted by Pterrafractyl | May 7, 2012, 6:46 am
  23. This is a pretty interesting continuation of the German war principle…


    Posted by GW | May 7, 2012, 7:27 am
  24. Winning hearts and minds:

    Germany unmoved by anti-austerity votes in Europe

    Mon May 7, 2012 10:42am EDT

    * Germany shows little flexibility on austerity course

    * French, Greek votes seen as rejection of Merkel approach

    * Hollande speech in Tulle seen as signal in Berlin

    * New French leader due in Berlin next week

    By Noah Barkin and Stephen Brown

    BERLIN, May 7 (Reuters) – Germany is ruling out any substantive shift in its approach to Europe’s debt crisis despite a rising chorus of opposition to Berlin’s austerity policies that reached a crescendo in Sunday’s elections in Greece and France.

    Chancellor Angela Merkel, speaking in Berlin on Monday, rejected the notion that Europe was on the brink of a major policy shift after Socialist Francois Hollande defeated her fellow conservative Nicolas Sarkozy and Greek voters punished ruling parties who slashed spending to secure a foreign bailout.

    Shunned by Merkel, who publicly backed Sarkozy’s campaign, Hollande repeatedly criticised Germany’s focus on budget cuts and labour law reforms as the solution to Europe’s debt crisis. Many saw his victory and the outcome in Greece as heralding a shift in Europe toward higher-spending growth-oriented policies.

    But close Merkel allies made clear within hours that the expectation in Berlin was that it would be Hollande who would be making the lion’s share of the concessions, and rowing back on policy promises made during the French campaign which the Germans view as dangerous for the entire single-currency bloc.

    “The position of the German government is clear. We will continue on our savings path,” said Volker Kauder, parliamentary leader of Merkel’s conservatives and one of her closest allies.

    After another bad night for her Christian Democrats (CDU) in a state election on Sunday, Merkel knows that if she is to win a third term next year she can ill afford to ignore German voters’ demands that she give no more of their cash away to foreigners.

    Pressed repeatedly at a news conference on whether the French and Greek votes might change the policy debate in Europe, Merkel’s spokesman Steffen Seibert insisted the only way forward was growth through structural reform – such as of tax and labour rules aimed at improving trade – not debt-funded stimulus plans.

    Merkel herself made clear that, while there was scope to discuss tactics, the overall strategy EU leaders committed to by agreeing a compact on fiscal consolidation was “not negotiable”.

    “We are in the middle of a debate to which France, of course, under its new president will bring its own emphasis,” she said. “But we are talking about two sides of the same coin – progress is only achievable via solid finances plus growth.”

    Germany has already signaled it is ready to negotiate a “growth pact” with the new French leader. Though its terms may well be vague, that would allow Hollande to claim victory in his push for a more balanced approach to the crisis.

    But bold new initiatives that might give ailing economies like Greece and Spain a substantial boost are unlikely.

    “Boosting growth is fine, but the question is how,” CDU budget expert Norbert Barthle told Reuters. “Our focus remains firmly on structural reforms.”


    On Greece, officials in Berlin and Brussels are also taking a hard line, making clear they see no room for the country to renege on or renegotiate the terms set out in its multi-billion euro rescues by the bloc and the IMF.

    The failure of the big parties that have dominated Greek politics for decades to secure a majority, and a surge in support for extreme parties from the left and right, has raised questions about whether Athens will stick to its commitments and sparked speculation it could be forced out of the euro zone.

    “Either they stick to the programme and receive the financing from member states – or they will have to default,” said a senior euro zone source before the pro-EU Greek Socialist party leader called explicitly for a renegotiated bailout deal.

    “What the default would lead to, I don’t know,” the source said. “But certainly to even more hardship for Greek citizens.”

    Posted by Pterrafractyl | May 7, 2012, 7:56 am
  25. It appears there’s been a major setback for Merkel and co.

    Francois Hollande just won the election in France.

    Greece is still up in the air but hopefully the leftists can get their act together and pull off a victory. Because if the conservatives remain in power, especially if Golden Dawn decides to ally with them(not at all implausible and it could just happen!), they will be in DEEP trouble.

    Posted by Steven L. | May 7, 2012, 1:05 pm

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