Europe’s Prospects Brighten As US Fades
July 26, 2010
Reuters
German business confidence is soaring while U.S. consumer sentiment sinks.
Britain’s second-quarter economic growth was almost twice as fast as expected, the strongest in four years.
Meanwhile, economists have steadily marked down forecasts for Friday’s U.S. gross domestic product report.
What happened to Europe being the weak link in the global economic recovery?
Whatever the explanation and despite the divergence, there are signs that both regions will cool down in the second half of the year.
The U.S. “economy entered the second quarter with plenty of momentum but exited with very little,” said IHS Global Insight economist Brian Bethune.
Economists polled by Reuters think U.S. growth slowed to a 2.5 percent annual rate in the second quarter, down from 2.7 percent in the first quarter and 5.6 percent in the final quarter of last year.
Britain’s second-quarter growth was closer to 4.4 percent at an annualized rate.
Dig beneath the headline and the contrast between the United States and Britain looks even sharper. Nearly all the growth in the British economy came from the private sector, led by construction and services. (For a graphic on U.S. and British GDP, see link.reuters. com/bup39m)
Friday’s U.S. GDP report is likely to show a hefty contribution from government spending and a slowdown in consumer spending.
The Commerce Department will also release its annual revisions to the national accounts back to 2007, and Bethune’s firm thinks the tweaks will show the recession was even deeper than thought, leaving a bigger hole to fill.
The same day Britain released its robust growth reading, the Ifo economic think tank reported German business sentiment jumped by a record margin in July to reach its highest level in three years. German consumer sentiment figures are due on Tuesday, and are expected to hold steady.
In contrast, U.S. consumer confidence fell sharply in July.
WHAT NEXT?
The European strength has added a new wrinkle to the transatlantic debate over whether governments ought to rein in spending now or wait until the recovery is more firmly established.
European Central Bank President Jean-Claude Trichet said on Friday it was time to start belt-tightening. But the United States warned Europe that an overly hasty exit could undermine the global economic recovery.
“The European recovery is at risk because of increased uncertainty while government stimulus is withdrawn, and a further slowdown in Europe would pose problems for the rest of the world whose exports to Europe may be reduced,” the White House said in a midsession budget review.
The looming fiscal pullback is one reason why Global Insight thinks the second quarter will be as good as it gets for the British economy “for some time to come.”
Even those German confidence figures may come back down to earth because they were partly due to World Cup fever.
In the United States, the second half of the year looks weaker because government spending programs are winding down, businesses have already replenished inventories and a tax credit that boosted housing demand expired.
“In the absence of further monetary or fiscal juice, it is difficult to see the economy growing much faster than its long-run potential of about 2-1/2 percent in the year ahead as households focus on repairing tattered finances,” said Sal Guatieri, an economist with BMO Capital Markets in Toronto.
North Korea Warns Of A Nuclear Response To All Enemies
July 26, 2010
Bloomberg
By Bomi Lim and Bill Varner
North Korea said it would counter U.S. and South Korean joint naval exercises with “nuclear deterrence” after the Obama administration said the government in Pyongyang shouldn’t take any provocative steps.
North Korea will “legitimately counter with their powerful nuclear deterrence the largest-ever nuclear war exercises to be staged by the U.S. and the South Korean puppet forces,” the National Defense Commission said, according to the Korean Central News Agency.
The maneuvers, which involve 20 vessels and 200 aircraft from the U.S. and South Korea, pose a threat to the country’s sovereignty and security, Ri Tong Il, an official with North Korea’s delegation to the Asean Security Forum, told reporters in Hanoi yesterday.
Ri’s comments came after North Korean Foreign Minister Pak Ui Chun sat in the same room with Secretary of State Hillary Clinton in Hanoi for a security meeting of Asia’s largest powers. Clinton condemned North Korea for being “on a campaign of provocative, dangerous behavior,” urging Kim Jong Il’s regime to change.
Still, the “door remains open for North Korea,” Clinton later told reporters. “We are willing to meet with them, willing to negotiate, to move toward normal relations” if North Korea commits itself to giving up its nuclear weapons program, she said.
U.S. State Department spokesman Philip J. Crowley said in Washington yesterday that North Korea “would be better served by reflecting on the current situation, not taking any further aggressive actions or provocative steps.”
USS George Washington
The U.S. said this week it will intensify sanctions against North Korea and conduct military exercises with South Korea in waters surrounding the peninsula. The USS George Washington, a nuclear-powered carrier, and three destroyers called into South Korean ports this week in a show of force.
“North Korea may very well go ahead with missile launches or even a third nuclear test to show it won’t bend to U.S. pressure,” said Yang Moo Jin, a professor at the University of North Korean Studies in Seoul. “North Korea must have sensed that the U.S. and South Korea are after its regime’s collapse.”
Ri said the George Washington’s presence threatened security on the peninsula, which has been divided for more than half a century. Pak maintained the need for a peace treaty to replace a cease-fire, signed in 1953, to guarantee the peninsula’s security, Ri said.
“It’s no longer the 19th century with gunboat diplomacy,” Ri said. “It is a new century and the Asian countries are in need of peace and development.”
Cheonan Sinking
An international panel concluded that the March 26 sinking of the corvette Cheonan was caused by a torpedo fired from a North Korean mini-submarine. The United Nations Security Council condemned the attack, which killed 46 sailors, without naming a culprit.
The investigation’s results have been “fabricated,” Ri said, adding that North Korea wouldn’t apologize for the incident as demanded by South Korea.
“If anyone should apologize, it should be South Korea, responsible for driving the situation on the Korean peninsula to the brink of an explosion,” Ri said. “We won’t tolerate any attempt to put the blame on us.”
North Korea’s economy has been battered by UN sanctions limiting cross-border financial transactions, imposed after its nuclear tests in 2006 and last year. North Korea is willing to return to the so-called six-party talks on its nuclear weapons program “on an equal footing,” Ri said, repeating demands that the sanctions be removed.
Japan Role
The disarmament talks, also involving China, Japan, Russia, South Korea and the U.S., haven’t convened since December 2008. All members of that forum attended this week’s security meeting in Vietnam.
Japan will send four naval officers to the drills, the government’s top spokesman said today.
Four officers of Japan’s Maritime Self-Defense Force will board a U.S. ship as observers for the joint military exercise from tomorrow to July 28 in the sea between South Korea and Japan, said Yoshito Sengoku, chief cabinet secretary.
“It’s important to promote coordination among Japan, U.S. and South Korea,” Sengoku told reporters in Tokyo.
Top US Officer Warns Afghan War Will Get Worse
July 26, 2010
Reuters
By Jonathon Burch and Sayed Salahuddin
The remarks by Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, on a visit to the country, came as the Taliban said they were holding captive one of two U.S. servicemen who strayed into insurgent territory, and that the other had been killed.
It also comes less than a week since a major international conference in Kabul agreed that the Afghan government should aim to take responsibility for security in all parts of the country by 2014.
Mullen, who called the troops’ disappearance an “unusual circumstance,” said there would be more violent incidents to come, but the U.S. military was doing everything possible to find the missing men, who were both from the Navy.
A spokesman for the NATO-led force declined to comment on the Taliban’s announcement it was holding one of the men.
The Navy described both men as still missing.
“Forces on the ground in Afghanistan are doing everything they can to locate and safely return our missing shipmates,” Admiral Gary Roughead, Chief of Naval Operations, said in a statement.
The Afghan government said on Sunday it was checking reports from villagers that civilians had been killed in a raid by foreign forces in Sangin, in southern Helmand province, on Friday.
The NATO-led force said it was aware of reports of the incident and was investigating, but would not comment further until further details were available. Such incidents have triggered outrage in the past among the population against the international troops whose mission is to protect them.
Elsewhere, Taliban guerrillas captured a remote district from the Afghan government after days of clashes in eastern Nuristan province, officials said on Sunday.
A spokesman for the Interior Ministry said police were working to recapture Barg-i-Matal, a district that has changed hands several times in recent months. U.S. troops pulled out of the remote and mountainous region in line with Washington’s strategy of giving priority to protecting population centers.
Violence in Afghanistan is at its highest of the 9-year war as thousands of extra U.S. troops, dispatched by President Barack Obama in December, step up their campaign to drive insurgents out of their traditional heartland in the south.
Last month was the deadliest for foreign troops since 2001, with more than 100 killed, and civilian deaths have also risen as ordinary Afghans are increasingly caught in the crossfire.
“As we continue our force levels and our operations over the summer … we will likely see further tough casualties and levels of violence,” Mullen told a news conference in Kabul.
Despite the rise in casualties, Mullen said “slow but steady” progress was being made and that Washington’s strategy of reversing the insurgency’s momentum was still obtainable by the end of the year. The next months would be crucial, he added.
“No one is declaring victory but there is progress,” said Mullen. “I believe that goal is still achievable and certainly the proof of that will be what happens over these next many months in what is a very challenging period.”
TALIBAN SAY HOLDING AMERICAN
The two U.S. servicemen were reported missing on Friday after failing to return in a vehicle they had taken from their compound in Kabul, the NATO-led force said.
Rumors circulated in local and international media about the fate of the missing men and how they had managed to stray into an insurgent-controlled area in Logar province, a short but dangerous 100 km (60 miles) drive south of the capital. One provincial official said alcohol was found in their vehicle.
A spokesman for the Taliban said the militant group’s leadership would decide the fate of the surviving captive.
“We have the body of the dead soldier and the other one who is alive. We have taken them to a safe place,” said Zabihullah Mujahid by telephone from an undisclosed location.
The Taliban frequently play down their losses and hype their successes, and independent verification of their reports is usually impossible.
Apart from confirming two servicemen had gone missing, the military has provided very little information to media. Leaflets depicting photos of the pair were distributed in Logar on Sunday and announcements on local radio stations offered a $20,000 reward for information leading to a rescue.
The only other foreign soldier believed held by the Taliban is Idaho National Guardsman Bowe Bergdahl, whose capture in June last year triggered a massive manhunt. His captors have issued videos of him denouncing the war, in what the U.S. military has called illegal propaganda.
Pool Chemicals Linked To Disease
July 26, 2010
Natural News
By: Jonathan Benson
A recent study out of the University of Illinois (U of I) links pool disinfectant chemicals with diseases like asthma and bladder cancer. According to researchers, pool chemicals react with organic matter in the water to form various toxic bonds that can lead to serious health problems.
“All sources of water possess organic matter that comes from decaying leaves, microbes and other dead life forms. In addition to organic matter and disinfectants, pool waters contain sweat, hair, skin, urine, and consumer products such as cosmetics and sunscreens from swimmers,” explained Michael Plewa, a professor of genetics at U of I.
Unlike drinking water, which is exposed to disinfectants once before reaching the public, pool water is exposed to a continuous stream of disinfectants that mix and match with various other chemicals and compounds to form an unknown number of potentially dangerous chemical bonds.
According to researchers, these bonds can cause gene mutation, birth defects, respiratory problems, accelerated aging and even cancer.
“Care should be taken in selecting disinfectants to treat recreational pool water,” urged Plewa. “The data suggest that brominating agents should be avoided as disinfectants of recreational pool water.”
Plewa suggests that public pools be treated with a combination of both chlorine and ultraviolet (UV) radiation rather than these other toxic agents, but other research suggests that UV treatment alone may be effective, at least for home pools.
In his book Bottom Line’s Health Breakthroughs 2007, Dr. Martin Schwellnus suggests that public pools using chlorine keep their chlorine levels below five parts per million (ppm). He also advocates for UV treatment as well.
Click Here For The Full Article
Patients Find Organ Transplants On Facebook
July 26, 2010
Natural News
By: Jonathan Benson
Popular social networking site Facebook is apparently good for a lot more than just chatting with friends and posting pictures. A recent Fox News article explains that many people in desperate need of transplant organs are finding quick matches through their connections on Facebook.
As far-fetched as it may initially sound, finding an organ donor through Facebook is not really all that crazy of an idea. Thousands of businesses, politicians, entrepreneurs, musicians and non-profit groups, use Facebook to network and promote themselves because they recognize the incredible reach and power of the site to spread important news quickly.
According to the report, roughly 84,000 Americans are waiting to receive a kidney transplants, and many have been waiting for years. Unable to find a donor the conventional way, some patients have turned to Facebook and successfully found donors.
Sarah Taylor, a 53-year-old woman diagnosed with renal failure for eight years, decided to post a message on Facebook one night to let people know about her desperate need for a kidney. She received responses from nearly 200 people, and found a great match from a high school friend who lived just two blocks away. The transplant was successful with no complications.
A similar situation occurred when 44-year-old Carlos Sanchez posted a message on Facebook about his need for a kidney transplant due to kidney failure from type-1 diabetes. Within two minutes, the mayor of his town responded to him, saying she would be a donor. The transplant was a success.
There are many other cases of patients who have successfully found organ donors through Facebook rather than conventional waiting lists. And having a live donor is typically far more successful than getting an organ from a cadaver like many transplant patients do.
Click Here For The Full Article
Franken Warns GOP Congress Will Bring ‘Truly Dangerous Agenda’
July 26, 2010
The Hill
By Bridget Johnson
Sen. Al Franken (D-Minn.), addressing a convention of liberal bloggers and activists Saturday evening, implored the left to fight to stay in power in the midterm elections.
“If Republicans take back Congress they’ll implement a truly dangerous agenda,” Franken told the Netroots Nation gathering in Las Vegas. “Everything is on the table from repealing healthcare reform to privatizing Social Security.”
Franken singled out two Republican Senate nominees: Rand Paul in Kentucky, for his questioning of the 1964 Civil Rights Act, and Sharron Angle in Nevada, “who can’t stop bringing up the prospect of armed revolt.”
Franken warned the liberals that Joe Barton, who apologized to BP CEO Tony Hayward in an oil spill hearing, would become chairman of the Energy committee should Republicans take back control of the House, and said “Darrell Issa is promising to double his staff and embark on a witch-hunt in the hopes of bringing down the Obama administration.” Being in the majority, Democrats currently have twice as many staff as Republicans on the Oversight Committee.
Issa (R-Calif.), the ranking member on the House Oversight and Government Reform panel, responded to Franken’s charges in a late-night e-mail statement.
“Obviously, Senator Franken is reading from the same misguided playbook that Speaker Pelosi and shares her belief that a Democratic Congress should give this administration immunity from legitimate questions and appropriate accountability,” Issa said. “Their statements are indicative of the desperate state their Majority is in and if the best case they can make is to caution the American people against the dangers of conducting legitimate and vigorous oversight, they is welcome to make that case.
“The fact of the matter is oversight should be done vigorously and effectively — even if it raises uncomfortable questions for the Obama White House and Democratic congressional leaders.”
Franken said he understood frustration among the left as not all agenda items were being pushed with the vigor they’d like, but told the activists “no matter how frustrated you are, you can’t check out now.”
“We have seen what happens when Republicans take control of Congress with a Democratic president and it ain’t pretty,” the senator said.
Franken said the country was “teetering on the brink of a double-dip recession” and criticized Republicans for eschewing the idea of another stimulus package. “They hide behind big talk about deficits as if deficits suddenly appeared at noon on Jan. 20, 2009,” he said.
Natural Compound In Bananas Prevents HIV Transmission
July 26, 2010
Natural News
By: David Gutierrez
A kind of protein naturally occurring in bananas may hamper the spread of HIV, according to a study conducted by researchers from the University of Michigan and published in the Journal of Biological Chemistry.
The protein, known as BanLec, is in the family known as lectins. Lectins are able to identify and attach to foreign sugars, including those found in the outer coating of the virus that causes AIDS. The researchers found that HIV viruses in the presence of BanLec were blocked as effectively as viruses in the presence of two different modern HIV drugs.
Multiple applications of lectins’ newfound property suggest themselves. For example, the proteins could be incorporated into topically applied vaginal microbicides to reduce women’s risk of HIV infection.
“The explosion of AIDS in poorer countries continues to be a bad problem because of tremendous human suffering and the cost of treating it,” senior author David Markovitz, said. “That’s particularly true in developing countries where women have little control over sexual encounters, so development of a long-lasting, self-applied microbicide is very attractive.”
Researchers also hope to find a way to use lectins to prevent the HIV virus from integrating into host cells even if it does gain entry into the body.
“The problem with some HIV drugs is that the virus can mutate and become resistant, but that’s much harder to do in the presence of lectins,” co-author Michael D. Swanson said. “Lectins can bind to the sugars found on different spots of the HIV-1 envelope, and presumably it will take multiple mutations for the virus to get around them.”
Although AIDS is especially a problem in Third World countries, it also remains a serious health problem in the United States. An estimated 57,000 women in the United States are infected with HIV, along with three times as many men. AIDS is the single biggest killer of African American women between the ages of 35 and 34.
Click Here For The Complete Article
Sweating In The Summer Heat Promotes Good Health
July 26, 2010
Natural News
By: Ethan A. Huff
Summertime heat is an annoyance to some people, but according to Xu Qian, director of the infectious diseases department at the China-Japan Friendship Hospital in Beijing, sweating from the hot, summer heat is a natural part of keeping your body healthy, and avoiding this heat can actually cause health problems.
People typically run their air conditioners throughout the summertime in order to beat the heat, but doing so can actually compromise the immune system.
“People should go with the rules of nature. Summer is the time to sweat. It’s a natural process for the body to respond to the outside environment, and adjust itself through the constricting of blood vessels and nerves. In this sense, air conditioning is a reactive restrain of the body against nature,” Qian explained in a China Daily article.
Excessive sweating without replenishing the body with water, electrolytes and healthy salt, can be a bad thing, but not sweating at all can be even worse. And moving from hot areas to cold areas, and vice versa, on a regular basis throughout the summer can put excessive strain on a person’s health
“Air conditioning might induce infection of the upper respiratory tract, cause colds, throat pain, pharyngitis, and even pneumonia,” said Qian.
Sweating is also an important method by which the skin helps to eliminate toxins from the body.
“One of [the skin's] functions is to eliminate a portion of the body’s toxic waste products through sweating,” explains Phyllis A. Balch, CNC, in her book Prescription for Nutritional Healing, 4th Edition: A Practical A-to-Z Reference to Drug-Free Remedies Using Vitamins, Minerals, Herbs & Food Supplements.
Click Here For The Full Article
Goldman Sachs Admits Bailout Cash Went To Offshore Banks
July 26, 2010 by Duffy
Filed under Government
July 26, 2010
USA Today
By Karen Mracek and Thomas Beaumont, Des Moines Register
Goldman Sachs sent $4.3 billion in federal tax money to 32 entities, including many overseas banks, hedge funds and pensions, according to information made public Friday night.
Goldman Sachs disclosed the list of companies to the Senate Finance Committee after a threat of subpoena from Sen. Chuck Grassley, R-Ia.
Asked the significance of the list, Grassley said, “I hope it’s as simple as taxpayers deserve to know what happened to their money.”
He added, “We thought originally we were bailing out AIG. Then later on … we learned that the money flowed through AIG to a few big banks, and now we know that the money went from these few big banks to dozens of financial institutions all around the world.”
Grassley said he was reserving judgment on the appropriateness of U.S. taxpayer money ending up overseas until he learns more about the 32 entities.
Goldman Sachs (GS) received $5.55 billion from the government in fall of 2008 as payment for then-worthless securities it held in AIG. Goldman had already hedged its risk that the securities would go bad. It had entered into agreements to spread the risk with the 32 entities named in Friday’s report.
Overall, Goldman Sachs received a $12.9 billion payout from the government’s bailout of AIG, which was at one time the world’s largest insurance company.
Goldman Sachs also revealed to the Senate Finance Committee that it would have received $2.3 billion if AIG had gone under. Other large financial institutions, such as Citibank, JPMorgan Chase and Morgan Stanley, sold Goldman Sachs protection in the case of AIG’s collapse. Those institutions did not have to pay Goldman Sachs after the government stepped in with tax money.
Shouldn’t Goldman Sachs be expected to collect from those institutions “before they collect the taxpayers’ dollars?” Grassley asked. “It’s a little bit like a farmer, if you got crop insurance, you shouldn’t be getting disaster aid.”
Goldman had not disclosed the names of the counterparties it paid in late 2008 until Friday, despite repeated requests from Elizabeth Warren, chairwoman of the Congressional Oversight Panel.
“I think we didn’t get the information because they consider it very embarrassing,” Grassley said, “and they ought to consider it very embarrassing.”
The initial $85 billion to bail out AIG was supplemented by an additional $49.1 billion from the Troubled Asset Relief Program, known as TARP, as well as additional funds from the Federal Reserve. AIG’s debt to U.S. taxpayers totals $133.3 billion outstanding.
“The only thing I can tell you is that people have the right to know, and the Fed and the public’s business ought to be more public,” Grassley said.
The list of companies receiving money includes a few familiar foreign banks, such as the Royal Bank of Scotland and Barclays.
DZ AG Deutsche Zantrake Genossenschaftz Bank, a German cooperative banking group, received $1.2 billion, more than a quarter of the money Goldman paid out.
Warren, in testimony Wednesday, said that the rescue of AIG “distorted the marketplace by turning AIG’s risky bets into fully guaranteed transactions. Instead of forcing AIG and its counterparties to bear the costs of the company’s failure, the government shifted those costs in full onto taxpayers.”
Grassley stressed the importance of transparency in the marketplace, as well as in the government’s actions.
“Just like the government, markets need more transparency, and consequently this is some of that transparency because we’ve got to rebuild confidence to make the markets work properly,” Grassley said.
AIG received the bailout of $85 billion at the discretion of the Federal Reserve Bank of New York, which was led at the time by Timothy Geithner. He now is U.S. treasury secretary.
“I think it proves that he knew a lot more at the time than he told,” Grassley said. “And he surely knew where this money was going to go. If he didn’t, he should have known before they let the money out of their bank up there.”
An attempt to reach Geithner Friday night through the White House public information office was unsuccessful.
Grassley has for years pushed to give the Government Accountability Office more oversight of the Federal Reserve.
U.S. Rep. Bruce Braley, a Waterloo Democrat, said he would propose that the House subcommittee on oversight and investigations convene hearings on the need for more Federal Reserve oversight. Braley is a member of the subcommittee.
Braley said of Geithner, “I would assume he would be someone we would want to hear from because he would have firsthand knowledge.”
Braley also noted that the AIG bailout was negotiated under President George W. Bush, a Republican.
He said he was confident that the financial regulatory reform bill signed by President Obama this week would help provide better oversight than the AIG bailout included.
“There was no regulatory framework in place,” Braley said. “We had to put something in place to begin reining them in. I’m confident they will begin to be able to do that.
Goldman Sachs Admits Bailout Cash Went To Offshore Banks
July 26, 2010
USA Today
By Karen Mracek and Thomas Beaumont, Des Moines Register
Goldman Sachs sent $4.3 billion in federal tax money to 32 entities, including many overseas banks, hedge funds and pensions, according to information made public Friday night.
Goldman Sachs disclosed the list of companies to the Senate Finance Committee after a threat of subpoena from Sen. Chuck Grassley, R-Ia.
Asked the significance of the list, Grassley said, “I hope it’s as simple as taxpayers deserve to know what happened to their money.”
He added, “We thought originally we were bailing out AIG. Then later on … we learned that the money flowed through AIG to a few big banks, and now we know that the money went from these few big banks to dozens of financial institutions all around the world.”
Grassley said he was reserving judgment on the appropriateness of U.S. taxpayer money ending up overseas until he learns more about the 32 entities.
Goldman Sachs (GS) received $5.55 billion from the government in fall of 2008 as payment for then-worthless securities it held in AIG. Goldman had already hedged its risk that the securities would go bad. It had entered into agreements to spread the risk with the 32 entities named in Friday’s report.
Overall, Goldman Sachs received a $12.9 billion payout from the government’s bailout of AIG, which was at one time the world’s largest insurance company.
Goldman Sachs also revealed to the Senate Finance Committee that it would have received $2.3 billion if AIG had gone under. Other large financial institutions, such as Citibank, JPMorgan Chase and Morgan Stanley, sold Goldman Sachs protection in the case of AIG’s collapse. Those institutions did not have to pay Goldman Sachs after the government stepped in with tax money.
Shouldn’t Goldman Sachs be expected to collect from those institutions “before they collect the taxpayers’ dollars?” Grassley asked. “It’s a little bit like a farmer, if you got crop insurance, you shouldn’t be getting disaster aid.”
Goldman had not disclosed the names of the counterparties it paid in late 2008 until Friday, despite repeated requests from Elizabeth Warren, chairwoman of the Congressional Oversight Panel.
“I think we didn’t get the information because they consider it very embarrassing,” Grassley said, “and they ought to consider it very embarrassing.”
The initial $85 billion to bail out AIG was supplemented by an additional $49.1 billion from the Troubled Asset Relief Program, known as TARP, as well as additional funds from the Federal Reserve. AIG’s debt to U.S. taxpayers totals $133.3 billion outstanding.
“The only thing I can tell you is that people have the right to know, and the Fed and the public’s business ought to be more public,” Grassley said.
The list of companies receiving money includes a few familiar foreign banks, such as the Royal Bank of Scotland and Barclays.
DZ AG Deutsche Zantrake Genossenschaftz Bank, a German cooperative banking group, received $1.2 billion, more than a quarter of the money Goldman paid out.
Warren, in testimony Wednesday, said that the rescue of AIG “distorted the marketplace by turning AIG’s risky bets into fully guaranteed transactions. Instead of forcing AIG and its counterparties to bear the costs of the company’s failure, the government shifted those costs in full onto taxpayers.”
Grassley stressed the importance of transparency in the marketplace, as well as in the government’s actions.
“Just like the government, markets need more transparency, and consequently this is some of that transparency because we’ve got to rebuild confidence to make the markets work properly,” Grassley said.
AIG received the bailout of $85 billion at the discretion of the Federal Reserve Bank of New York, which was led at the time by Timothy Geithner. He now is U.S. treasury secretary.
“I think it proves that he knew a lot more at the time than he told,” Grassley said. “And he surely knew where this money was going to go. If he didn’t, he should have known before they let the money out of their bank up there.”
An attempt to reach Geithner Friday night through the White House public information office was unsuccessful.
Grassley has for years pushed to give the Government Accountability Office more oversight of the Federal Reserve.
U.S. Rep. Bruce Braley, a Waterloo Democrat, said he would propose that the House subcommittee on oversight and investigations convene hearings on the need for more Federal Reserve oversight. Braley is a member of the subcommittee.
Braley said of Geithner, “I would assume he would be someone we would want to hear from because he would have firsthand knowledge.”
Braley also noted that the AIG bailout was negotiated under President George W. Bush, a Republican.
He said he was confident that the financial regulatory reform bill signed by President Obama this week would help provide better oversight than the AIG bailout included.
“There was no regulatory framework in place,” Braley said. “We had to put something in place to begin reining them in. I’m confident they will begin to be able to do that.
