Today's Stories

May 22-24, 2009

Alexander Cockburn
How Long Does It Take?

Michael Teitelman
Obama, Torture and John Walker Lindh

Sonia Cardenas /
Andrew Fibbert
Why We Love to Hate Pirates

Clive Hamilton
Biblical Prophesy and the Iraq War: Bush, God, Iraq and Gog

Conn Hallinan
Swine Flu Fallout

Fred Gardner
Sgt. Northcutt's Homecoming

Carlo Cristofori
The Latest AfPak War

Rannie Amiri
King Abdullah's 57-State Solution

Andy Worthington
A Message to Obama: No Military Commissions; No Preventive Detentions

David Macaray
Democrats Betray Labor: Card Check is Pronouced Dead

Nadia Hijab
What Kind of State?

David Ker Thomson
Joy (Or How Hope, the Thing With Feathers, Gets Plucked)

David Rosen
Porn Wars

Mark Weisbrot
Climate Change and Intellectual Property Rights?

Robert Fantina
Gitmo, Democrats and Business as Usual

Heather Gray
Some Positive Directions in Public Health?

May 21, 2009

Jeffrey St. Clair /
Joshua Frank
The Politics of Bait-and-Switch: Obama and the Environment

Paul Craig Roberts
Morphing Dick Cheney

Chris Floyd
In Defense of George W. Bush

Gerald Paoli
Inside Iraqi Kurdistan: Life and Death in the Qandil Mountains

Zach Mason
Something's Gotta Give: Obama and the Hustler

Uri Avnery
A Quarrel on the Titanic

Andy Worthington
Out of Guantánamo

Niranjan Ramakrishnan
India: Two Funerals and a Wedding

Norman Solomon
The Afghanistan Escalation

Dave Lindorff
A Corporate Crime Wave of Labor Law Violations

Website of the Day
Swine Flu: The Panic That Wasn't

May 20, 2009

Michael Hudson
The Toll Booth Economy

Gary Leupp
Courting Hekmatyar: Obama and the Warlord

Michael D. Yates
Work is Hell

Jonathan Cook
Netanyahu Adviser Steps Out of the Shadows

Peter Lee
The World Doesn't Have a Pakistan Nukes Problem ... It Has a David Albright Problem

Binoy Kampmark
The End of the Tamil Tigers?

Peter Zinn
Eulogizing Lawyers

William Loren Katz
Tortured Reasoning; Tortured Results

Gary Lapon
Why Women Need Single Payer

Trudy Bond
Torture, Shrinks and a Groundhog's Day Moment

Website of the Day
Meet the Climate Change Lobby

May 19, 2009

Kristoffer Rehder
Check Point Iraq: a Soldier's Tale

Mike Whitney
The Real Lesson of the Financial Crisis

Ray McGovern
How Colin Powell Got Duped by the CIA

Vijay Prashad
The Indian Elections: a Game Changer?

Mirjam Hadar Meerschwam
Intimidation and Interrogation in Tel Aviv

Mustafa Barghouthi
Is Obama Up to the Challenge of Dealing with Netanyahu?

Andy Worthington
Gitmo: A Prison Built on Lies

Binoy Kampmark
Britain's Speaker Crisis

John Walsh
John Kerry vs. Single-Payer

David Macaray
Alcohol as Metaphor: Zero Tolerance in the Workplace

Website of the Day
So You Think That Veggie Burger is Organic...

May 18, 2009

Dave Lindorff
The US is Using White Phosporous in Afghanistan

Abdul Malik Mujahid
Thirty Years of Tragedy in Afghanistan

Jonathan Cook
How Many Secret Prisons Does Israel Have?

Ben Rosenfeld
Police Violence: How Many Kicks to the Head Does It Take?

Patrick Cockburn
These Killings Will Only Strengthen the Taliban

Ralph Nader
They Want It All: New Tricks From the Old Energy Lobby

Stephen Soldz
Psychologist Bryce Lefever Clarifies Defense of Torture

Eugenia Tsao
On the Devaluation of Labor

Walter Brasch
Cheney's Magical Mystery Media Tour

Roberto Rodriguez
War and Torture

Charlotte Laws
Politics and American Idol

Website of the Day
Disbar the Torture Lawyers

May 15-17, 2009

Alexander Cockburn
King of the Hate Business

Jeffrey St. Clair
The Case of the Missing H-Bomb

David Rosen
Sexual Torture: What is Acknowledged and What Remains Unknown

Mike Whitney
From My Lai to Bala Baluk: Obama Picks Up Where Bush Left Off

Bruce Page
A Real History of Rupert Murdoch

Jeremy Scahill
The Black Shirts of Guantánamo

Fred Gardner
Tortured Reasoning: Judge Bybee Rules Against Brian Epis

Tom Barry
Fighting the Drug War at Homeland Security

Mats Svensson
On the Beach in Tel Aviv

Ramzy Baroud
The Drones Are Coming

Mark Engler
Science Fiction From Below

Mark Weisbrot
Stealth Move by IMF to Get $100 Billion Without Congressional Debate

Farzana Versey
Of Scapegoats and Separatists

Ron Jacobs
It's Up to You to Save Troy Davis

Hannah Wolfe
What to Tell the Children

Cal Winslow
Fresno, the New Ground Zero in the Battle Between the SEIU and NUHW

David Macaray
Labor Needs a Southern Strategy

Christopher Brauchli
Involuntary Baptism

Mark Seth Lender
The Lion Tamer's Story

Robert Fantina
Lapel Pins, Arugula and Mustard

David Ker Thomson
Last Man Walking

Stephen Martin
Lipstick Nightmare for Spin Merchant

Charles R. Larson
Double Exile

Chase Madar
"Angels & Demons" and the Extraordinary Power of Imaginary Heretics

Kim Nicolini
Vaginas From Outer Space! Boldly Sitting Through Star Trek

David Yearsley
Handel's Ghost

Lorenzo Wolff
Killer Virtues

Poets' Basement
Gibbons, Jordan and Moser

Website of the Weekend
Catch F-22

May 14, 2009

Michael Hudson
Where Russia Went Wrong

Andy Worthington
The Poisoned Mosaic: Judge Condemns Guantánamo Evidence

Paul Craig Roberts
The Impotent President

Jonathan Cook
The Pope's Pilgrimage: Legitimizing Netanyahu?

Ray McGovern
See No Evil: Ugly Questions for General Myers

Lance Selfa
The Limits of Liberalism

David Green
The Deportation of Demjanjuk

Dave Lindorff
Obama Channels Cheney

Frida Berrigan
Nuclear Options

Sue Udry
The Bybee Question

Website of the Day
Our Bombs: Tracking US Air Strikes

May 13, 2009

Brian M. Downing
The Road Out of Iraq

Gareth Porter
Gen. McChrystal and Afghanistan

Robert Sandels
Obama and Latin America: No Light, All Tunnel

Ricardo Alarcón
Cuba: Measure of a Revolution

Eric Walberg
NATO in Georgia: Fun and Games

Dave Lindorff
The Sinking of GM: When Captains of Industry Don't Go Down with the Ship

Deepak Tripathi
A Culture of Abuse

William S. Lind
Back to the Balkans: Hillary and the Sleeping Dragon

Kevin Zeese
A Populist Health Care Rebellion

Franklin Lamb
Lebanon: From Perdition to Redemption?

Website of the Day
Beth McIntosh: The Wild Ride

May 12, 2009

Gary Leupp
The Bomb Iran Faction

Richard Neville
The AfPak Blues: Corpses of the Kids by the Truckload

Wajahat Ali
Obama Chooses a Reliable Dictatorship

Dean Baker
The Banker Boys Are Alright! Time to End the Bailouts

Franklin Lamb
What Palestinian Refugees Need From Lebanon's Elections

Norman Solomon
A Progressive Challenge to Jane Harman

Paul Craig Roberts
Beware the Hate Crimes Bill

Lisa M. Hamilton
Let's Grow a New Crop of Farmers

Bob Fitrakis /
Harvey Wasserman:
Why Isn't Obama Turning to Credit Unions?

David Macaray
Wading Through the Grassroots

Website of the Day
Electronic Police States

May 11, 2009

Andrea Peacock
No Justice for Libby

Michael Hudson
Gordon Brown Spills the Beans on the IMF

Patrick Cockburn
Who Killed 120 Civilians?

Ralph Nader
The Single-Payer Taboo

John Kelly
Pseudoscience and Wrongful Convictions in the War on Drugs

Saul Landau
Cuba's Biggest "Crime"

Dave Lindorff
Blaming the Dead Victims

David Michael Green
Get Obama

Anthony Papa
Gov. David Paterson Does the Right Thing

Paul Krassner
Jon Stewart and Truman, the War Criminal

Website of the Day
Generational Homelessness

May 8-10, 2009

Alexander Cockburn
Dead Souls

Jeffrey St. Clair
Echoes of Amchitka: 40 Years After America's Biggest Nuclear Blast, the Damage Continues

Paul Wolf
Obama's Axis of Obedience

Steve Niva
Iraq: The Return of the Suicide Bombers

Neve Gordon
Jailed for Caring

Mike Whitney
Has Bernanke Pulled the Economy Back From the Brink?

Warren Hinckle
DiFi vs. Marilyn Chambers

Serge Halimi
In Praise of Revolutions

Gareth Porter
The Pakistan Conundrum

Sharon Smith
Something Stinks at Whole Foods

Andy Worthington
Obama's New Gitmo Policy: Back to the Bush Era?

Mark Weisbrot
Hillary and Latin America

Rosa Miriam Elizalde Cyber Command and Cyber Dissident: More of the Same?

David Macaray
Recessions and Labor Unions

Missy Beattie
The Real Housewives of War

Ron Jacobs
Mothers and War

Diane Farsetta
About Face on Pentagon Pundits?

Ramzy Baroud
War Without Context

Phelie Maguire
Living Next to Settlers

Robert Fantina
Party of Rush

Kevin Zeese
A Break From the Past in the Drug War?

Margaret Flowers, MD
The Baucus 8: Why We Risked Arrest for Single-Payer

Dave Lindorff
The Joke's on Us

Richard Rhames
Revenge of the Tundra

Ben Sonnenberg
Let the Right One In: A Vampire Visits a Welfare State

Kim Nicolini
Sin Nombre: Giving Faces to People Who Don't Have Names

Stephen Martin
The Riotous Action of the Complete Banker

Charles R. Larson
The Commencement Address You'll Never Hear

David Yearsley
Jean Ferrard, Organist Extraordinary

Lorenzo Wolff
Death Cab for Cutie: Surprisingly Familiar

Poets' Basement
G.S. Heiligschreib and David Farrelly

Website of the Weekend
Zombie Bank

May 7, 2009

Paul Craig Roberts
Criminalizing Criticism of Israel

Chris Floyd
A Full-Court Press for Pakistan War

Andy Worthington
Mixed Messages on Torture

Alan Farago
No Place Like Home: a Stress Test for Land Use, Not Just Banks

Ray McGovern
Deux ex Machina on Torture?

Dave Lindorff
Stain Removal: Impeaching the Torture Judge

Eric Toussaint /
Damien Millet
Why is There Rampant Famine in the 21st Century?

Ana M. Malinow, MD
Why We Need a Single-Payer Health Care System

Jeff Armstrong
Freeing Leonard Peltier: What Would Warren Harding Do?

Norman Solomon
A Green New Deal

Website of the Day
The End of Lake Mead?

May 6, 2009

Doug Peacock
The Fate of the Yellowstone Grizzly

Patrick Cockburn
Afghans to Obama: Get Out, Take Karzai With You

Richard Neville
The Torturer's Apprentice

Manuel Garcia, Jr.
To Power a Nation: Nuclear Bombs or Sunshine?

Winslow T. Wheeler
Of Pork and Baloney: Obama's Defense Budget

Deepak Tripathi
Pakistan in Crisis

Stephen Soldz
A "Natural Reaction": APA Ethics Policy-Maker Endorses Torture

Reuven Kaminer
Nice is Not Enough: Obama vs. Netanyahu and Lieberman

David Macaray
The Chrysler-UAW Deal

Kevin Zeese
Why We Were Arrested at the Senate Finance Committee Hearings

Marjorie Cohn
Stanford Antiwar Alums Call for War Crimes Investigation of Condoleezza Rice

Coalition for an Ethical Psychology
Investigate Psychologist and Health Provider Complicity in Torture

Website of the Day
Who's Behind the Financial Meltdown?

May 5, 2009

William Blum
Torture and Mr. Obama

Uri Avnery
Netanyahu's Plan

Steven Higgs
Autism and Toxic Pollution

Dean Baker
Why Economists Should Learn Arithmetic

Daniel Wolff
The Education of Rachel Carson

Sibel Edmonds
The Broken Congress

Carole King Klein
A New Chance to Save the Northern Rockies

Fidel Castro
Giving One's All

Belén Fernández
Oil and Aguardiente in the Ecuadoran Elections

Dan Bacher
Schwarzenegger's Big Lie About Fish vs. Jobs

Website of the Day
"I Married Isis on the Fifth Day of May"

May 4, 2009

James G. Abourezk
The AIPAC Spy Case

Jeff Leys
Obama's War Budget

Patrick Cockburn
Afghan Ayatollahs Press Marital Rape Law

Andy Worthington
A Start on Guantánamo, But Not Enough

Jaime Avilés
Mexico's Plague-Bringers

David Swanson
An Even Worse Bybee Memo

Paul Craig Roberts
Working with Jack Kemp

P. Sainath
Celeb Crusades and the Death of Politics

Eugenia Tsao
Canada's Obama and the Cult of the Prof

Benjamin Dangl
Protest and Rubber Bullets in Paraquay

Sami Al-Arian
Mourning William Moffitt

Website of the Day
"Soldiers Are Cutting Us Down": Kent State, May 4, 1970

May 1 - 3, 2009

Alexander Cockburn
Game-Changers: Specter Jumps, Souter Quits

Gary Leupp
Dropping the AIPAC Spying Case

Peter Linebaugh
The Key to the Bastille

Jeffrey St. Clair /
Joshua Frank:
Half Life of a Toxic War: Iraq's Wrecked Environment

C. G. Estabrook
Minion of the Long War

Patrick Cockburn
Kabul's New Elite

Mike Whitney
Economy on the Ropes

Pierre Sprey /
Winslow Wheeler
What "Sweeping Overhaul" of the Pentagon?

Andy Worthington
Al-Marri's Plea Deal: Dictatorial Powers Unchallenged

Mairead Maguire
Stand Up to Israeli Apartheid: a Letter to Obama From a Nobel Peace Prize Laureate

Nadia Hijab
The Israel Boycott is Biting

Diane Farsetta
Life, Death and Water Policy

Michael Calderón-Zaks
The Déjà Vu Flu: Why Much of the Discussion About Swine Flu is Racist

Richard Rhames
When Piggies Come Home to Roost: Swine Flu and the Industrial Meat Gulags

Russell Mokhiber
Inside the Beltway Baucus

Ramzy Baroud
Clinton's Unpromising Start

Rannie Amiri
Understanding Lebanon's June Elections

Deb Reich
No Talking, Dammit!

Steven Higgs
Indiana Criminalizes Dissent: Roadblocks on the NAFTA Highway

Brian Cloughley
Malice in Blunderland

David Michael Green
The Party's Over

Farzana Versey
Sex, Swat and Susan Boyle

Jim Goodman
Think Before You Eat: Agriculture and the Environment

Carl Finamore
New Prescription for a Healthy Union Movement

Christopher Brauchli
The Sounds of Silence: the Texas Option

Susie Day
The Real Cause of Unemployment: Employees!

David Yearsley
Nuts Over Beethoven

Lorenzo Wolff
Three Minutes of Perfection

Peter Stone Brown
Dancing with Dylan

Poets' Basement Dominguez, Orloski and Springate

Website of the Weekend
May Day Europe

April 30, 2009

Ellen Cantarow
Obama and "Two States": Seamless Continuity From Bush Time

Dana L. Cloud
The McCarthyism That Horowitz Built

Paul W. Lovinger /
Jeannette Hassberg
A Nation of Laws

Binoy Kampmark
Swine at the Trough: the Business of Pandemics

Brian Downing
The Perils of Modernization in Afghanistan

Frank Snepp
Tortured by the Past

David Swanson
The Wrong Torture Question

Conn Hallinan
The Coming Asian Storm

Ron Jacobs
Not Dead Yet: an Interview with Jerry Gordon on the State of the Antiwar Movement

John Goekler
The Only Path to a Middle East Picnic?

Jasmine L. Tyler /
Anthony Papa
An End to Crack/Powder Cocaine Sentencing Disparity?

Website of the Day
Emergency Petition: Stop Coal Industry Intimidation of Activists

April 29, 2009

Joann Wypijewski
Death at Work in America

Patrick Cockburn
The Taliban's Roads to Kabul

Andy Worthington
Cheney's Twisted World

Chris Floyd
The Specter Diversion

Dave Lindorff
No More Excuses: a Specter is Haunting the Democrats

Jeremy Scahill
The Nuremberg Truth and Reconciliation Commission?

Doug Henwood
Zionist Lobby Targets Another Tenured Professor: an Interview with William Robinson

Michael Hudson
Will Iceland be Handed Over to a New Gang of Kleptocrats?

Russell Mokhiber
My Ron Pollack Problem--And Yours

Eric Toussaint
Ecuador at the Crossroads

Website of the Day
An Interview with Leslie and Andrew Cockburn on "American Casino"

April 28, 2009

Uri Avnery
A Little Red Light: On Israeli Fascism

Jeremy Scahill
Obama's Iraq: the Picture of Dorian Gray

Dean Baker
The Perfect Gift for Wall Street: a Financial Transactions Tax

Michael D. Yates
At the Factory Gate

Conn Hallinan
Georgian Plots? Saakavili's "Order No. 2"

John Stauber
Beyond MoveOn

Tom Barry
The Failed Border Security Initiative

Harvey Wasserman
Who Pays for America's Chernobyl Roulette?

Jeff Nygaard
Pirates, Profits and Propaganda

Frederico Fuentes
Why the U.S. Still Hates Cuba

Website of the Day
The Man Behind the Hood

April 27, 2009

Pam Martens
The Far Right's Plot to Capture New Hampshire

Patrick Cockburn
Torture? It Probably Killed More Americans Than 9/11

Andrew J. Bacevich Guardian of the Status Quo: Obama's Sins of Omission

Mitu Sengupta
The Bloodbath in Sri Lanka

Franklin Lamb
Hillary Does Beirut: The 165-Minute Swoop-In

Firmin DeBrabander
Crimes of Economic Madness

Dave Lindorff
Wide Open to Pandemic?

Russell Mokhiber
How Corrupt is That?

Mike Whitney
Pinter's Message to Obama

Mark Weisbrot
Overhauling the IMF

Rev. José M. Tirado
Iceland's New Dawn: How the Right Got Trounced

Website of the Day
American Casino

April 24-26, 2009

Alexander Cockburn
Putting the Bush Years on Trial

Marjorie Cohn
Torture Used to Try to Link Saddam with 9/11

Andy Worthington
Who Ordered the Torture of Abu Zubaydah?

Jeremy Scahill
Are Leading Democrats Afraid of a Special Prosecutor to Investigate Torture?

Chris Floyd
Top of the Heap: the Democrats' Teachable Moment on Torture

Mike Whitney
A Housing Crash Update

Anthony DiMaggio
Obama and the Housing Crisis

Chris Kromm
Democratic Lobbyists Key to Fight Against Employee Free Choice Act

Saul Landau
Seventeen Months in "the Hole:" an Interview with the Leader of the Cuban Five

Dave Lindorff
Free John Walker Lindh

Greg Moses
The Debt Looters

Joshua Frank
Calling for a Coal Moratorium: an Interview with Ted Nace

Fred Gardner
Collective Farming and the Lynch Case

Manuel Garcia, Jr.
Homework, Testing and Stealth Apartheid in Education

David Michael Green
Of Tea Parties and Teleprompters

Ramzy Baroud
Middle East Spies: a New Front in Gaza's Conflict

Rannie Amiri
Mubarak's Expanding Enemies List

Laura Carlsen
Mr. President, Calderon is Not Mexico

Richard Morse
The Haitian People Need a Lobbyist

Nikolas Kozloff
Protecting the Bald Eagle: a Task Now Falling to ... Hugo Chavez?

Kent Peterson
The Fight to Save Mexico's Mangroves

Robert Bryce
The Ethanol Scammers Rent a General

Niranjan Ramakrishnan The Financial Experts

Ron Jacobs
Torture is More Than Just "Harsh Tactics"

Richard Rhames
Roman Legends, Book Burning and History's Hunt

Stephen Martin
Wherefore Art Thou American Dream?

David Yearsley
Rodgers, Hammerstein, Michener and Nostalgia's Clammy Embrace

Poets' Basement
Khalil and Mankh

Website of the Weekend
Doug and Andrea Peacock on Grizzlies and Edward Abbey

April 23, 2009

Eamonn Fingleton
How the Wall Street Journal and the New York Times Buried the Madoff Scandal for at Least Four Years

Ray McGovern
Obama Plays Hamlet on Torture

Michael Ratner
The Torture Commission Trap

Alan Farago
The Quicksand Economy

Rob Larson
Business Gets Carded

Nadia Hijab
The Real Heroes of Durban

Fawzia Afzal-Khan
Deconstructing the Taliban

Dave Lindorff
Are Members of Congress Being Blackmailed?

Helen Redmond
Selling Out Single-Payer: the "Public Option" Con

Adam Federman
The Battle Over New York's Marcellus Shale

Website of the Day
An Interactive Map of Vanishing Employment Across the Country

April 22, 2009

Chris Floyd
The Fatal Thread: Torture, War and the Imperial Project

Joanne Mariner
Torture Evidence and Terror Blacklists

Vijay Prashad
Obama's Afghan Plan: Fracturing the Antiwar Movement

Gareth Porter
U.S. Lacks Capacity to Win Over Afghans

Dean Baker
The Tyranny of Bad Economics

Peter Morici
Housing Sales and Fixing the Economy

Winslow T. Wheeler
Eliminating Bad Pentagon Habits

Barucha Calamity Peller
The Battle to Take Back the New School

Harvey Wasserman
Chernobyl Could Happen Here

Aisha Brown /
Dedrick Muhammad
White Privilege in the Americas

Teo Ballvé
Obama's Feel Good Meeting with Colombia's Uribe

Website of the Day
Ahmedinejad's Durban Speech: What He Actually Said

April 21, 2009

Randy Rowland
Lindy Blake's Great Escape

Dave Lindorff
Jay Bybee's Conspiracy to Torture

Fidel Castro
The Secret Summit

George McGovern
Pull Out of Iraq This Year

Greg Moses
The Unemployment Channel

Benjamin Dangl
Argentina Remembers

Sonia Nettnin
Saving Lives in Gaza

Frank Barat
The Death of Bassem: a Shooting at the Wall in Bil'n

Binoy Kampmark
Legal Purgatory and John Demjanjuk

John V. Walsh
Code Red for Single Payer

David Macaray
SAG Should be Praised, Not Assailed

Website of the Day
Bonus Man: For Executive Assholes Everywhere

April 20, 2009

Mike Whitney
Housing Bust Comes Roaring Back, Worse Than Ever

Andrea Peacock
Histrionics and Legalisms in Missoula

Henry A. Giroux
Ten Years After Columbine: the Tragedy of Youth Deepens

Liaquat Ali Khan
Drone Attacks on Pakistan's Indigenous Tribes

Fred Gardner
Obama's DoJ Backs Prosecution of Medical Marijuana Providers

Stephen Soldz
Obama, Blair, Panetta and the Torture Memos: Praising Moral Cowards, Ignoring Real Heroes

Nadia Hijab
Obama's Multi-Polar Middle East

Dave Lindorff
The Meeting in Trinidad

P. Sainath
India's Press Nixes "R" Word

Nelson P Valdés
A Modest (Transition) Proposal to Obama

Mark Engler
American Empire Foreclosed?

Belén Fernández
The FARC Can't Dance

Website of the Day
Dear Mr. Buffett...

Weekend Edition
May 22-24, 2009

Credit Default Swaps

The Poison in the System

By MIKE WHITNEY

In a little more than a decade, Credit Default Swaps (CDS) trading ballooned into a lucrative multi-billion dollar industry which has changed the fundamental character of the financial system and  increased systemic risk by many orders of magnitude. CDS, which were originally created to reduce potential losses from defaulting bonds, has turned into a cash cow for the big banks, generating mega-profits. In the case of insurance giant AIG, losses from CDS transactions has already cost the American people $150 billion, and yet, there still has been no serious effort in Congress to ban them once and for all. Even worse, CDS is the root-cause of systemic risk which connects hundreds of financial institutions together in a lethal daisy-chain.

CDS contracts are not cleared on a centralized exchange nor are they government regulated. That means that no one really knows whether issuers of CDS can pay off potential claims or not. It's a Ponzi-insurance racket of the first order. AIG is a good example of a company that gamed the system and then walked away with millions for its efforts. They sold more CDS than they could cover and then --  the debts started piling up around their eyeballs -- they trundled off to the Fed for a multi-billion dollar bailout. Fed chief Bernanke later said that he was furious over the AIG fiasco, but it didn't stop him from shoveling the losses onto the public ledger and making the taxpayer the guarantor for all AIG's bad bets. Keep in mind, that AIG was selling paper that had zero capital backing, an activity is tantamount to counterfeiting. Still, no one has been indicted or prosecuted in the affair. Defrauding clients and then sticking it to Joe sixpack has become de rigueur on Wall Street.

CDS have spider-webbed their way into every corner of the financial system,  lashing together banks and other financial institutions in a way that if one defaults the others go down too. This is what's really meant by "too big to fail"; a euphemism which refers to the tangle of counterparty deals which has been allowed to spread -- regardless of the risk -- so that a handful of banksters can rake in obscene profits. CDS has become the bank cartel's golden goose; a no-risk revenue-generating locomotive that accelerates the transfer of public wealth to high-stakes speculators. If it wasn't for the turbo-charged profits from derivatives transactions, many of the banks would have already gone belly up.   

From Dr. Ellen Brown:

"Credit default swaps are the most widely traded form of credit derivative. They are bets between two parties on whether or not a company will default on its bonds. In a typical default swap, the ‘protection buyer’ gets a large payoff if the company defaults within a certain period of time, while the ‘protection seller’ collects periodic payments for assuming the risk of default...

“In December 2007, the Bank for International Settlements reported derivative trades tallying in at $681 trillion - ten times the gross domestic product of all the countries in the world combined."
("Credit Default Swaps: Evolving Financial Meltdown and Derivative Disaster Du Jour", Dr. Ellen Brown, globalresearch.ca)

The numbers boggle the mind, but they are real just the same, as are the losses, which will be eventually shifted onto the taxpayer. That much is certain.

Treasury Secretary Geithner recently sounded the alarm for more regulation, but it's just another public relations stunt. Geithner is an industry rep whose sole qualification for the job as Treasury Secretary is his unwavering loyalty to the banking establishment. He has no intention of increasing oversight or tightening supervision. All the blather about change is just his way of mollifying the public while he tries to sabotage congressional efforts to re-regulate the derivatives market. In the next few weeks, Geithner will probably roll out a whole new product-line of reforms accompanied with the usual claptrap about free markets, innovation and "protecting the public's interest".  It's all fakery. Fortunately, sad sack Geithner is the world's worst pitchman, which means that every word he utters will be parsed by scores of bloggers trying to figure out what he really means. That will make it especially hard to for him to pull the wool over the public's eyes again.

Swaps originated in the 1980s as a way for financial institutions to hedge against the risk of sudden price movements or interest rate fluctuations. But derivatives trading took an ugly turn after congress passed the Clinton-era Commodity Futures Modernization Act of 2000. The bill triggered a sea-change in the way that CDS were used. Industry sharpies figured out how to expand leverage via complex instruments balanced on smaller and smaller morsels of capital. It's all about maximizing profits with borrowed money. CDS provided the perfect vehicle; after all, with no regulators, it's impossible to know who's got enough money to pay off claims.  Besides, gambling on the creditworthiness of bonds for which one has no "insurable interest" can be fun; like taking out an insurance policy on a rival’s home and waiting for it to burn down.

Still, cleaning up the financial system doesn't necessarily mean a complete ban on all CDS. There is a solution to this mess, and it's not complicated.  There needs to be strict regulatory oversight of all issuers of CDS to make sure they are sufficiently capitalized, and there needs to be a central clearing-platform for all trades. That's it. (Note: There are serious questions about the IntercontinentalExchange, or ICE, due to its close connection to the banks) Geithner is trying to torpedo the nascent reform effort by proposing bogus fixes that preserve the banks’ monopoly on the derivatives issuance. He's the banks main water-carrier. Now we can see why the financial industry is consistently the largest contributor of any group to political campaigns.

"Too big to fail" is a snappy PR slogan, but it's largely a myth. No financial institution is too big for the government to take into conservatorship; to put the bad assets up for auction, replace the management and restructure the debt. It's been done before and it can be done again without damaging the broader system. The real problem is separating healthy financial institutions from insolvent ones now that the whole system is stitched together in a complex net of counterparty deals. Credit default swaps form the bulk of those counterparty transactions, which makes them the main source of systemic risk. To fix the problem, current contracts must be either unwound or allowed to lapse, while new contracts must be traded on a central clearinghouse where regulators can decide whether sellers are adequately capitalized or not.  The Fed's solution -- underwriting the entire financial system to prevent another Lehman Bros. Fiasco -- doesn't address the fundamental problem; it just puts more pressure on the dollar which is already beginning to buckle. The question now is whether Congress will pull its head out of the sand long enough to do the people's work and pass the laws that will re-regulate the system. There is a remedy, but it requires action, and fast. Without course-correction, the prospect of a derivatives meltdown gets bigger by the day.

Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com

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"Difficult Student"
By Tennessee Reed

Waiting for Lightning
to Strike:
The Fundamentals
of Black Politics
Kevin Alexander Gray

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The Inside Story of the Shannon Five's Smashing Victory Over the
Bush War Machine
By Harry Browne

Born Under a Bad Sky:
Notes from the Dark Side
of the Earth
By Jeffrey St. Clair

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Humanitarian Imperialism
By Jean Bricmont