democracy incompatible with debt collection

Video - The Greek debt scandal has also pitted U.S. banking interests against France, Germany and other European powers. "The Americans are putting immense pressure on Europe saying, 'We will wreck your economy if you don't wreck Greece's economy,'" says economic analyst Michael Hudson on Democracy Now! Nov. 3. President Obama is "basically telling Europe, 'Don't go the democratic route, support Wall Street.'"

MichaelHudson | AMY GOODMAN: And what does it mean if Papandreou is out?

MICHAEL HUDSON: It could mean a number of things. Either it means that other members of his party—the finance minister, who is against the referendum—will come in and not hold a referendum at all, and try to keep Greece on the austerity plan, or there will be a fall in the government, a no-confidence vote, and people will presumably vote for the Conservative Party, which is very much like the Republican Party in the United States.

The reason there have been all of these demonstrations is the same reason that the Occupy Wall Street movement is in New York and the rest of the United States. The frustration is not only at the financial overhead, the debt overhead; it’s at the political fact that there is no choice. Both the Conservative Party and the Socialist Party in Greece, just like the Republicans and Democrats here, are both taking the side of the banks. So people don’t even have a chance to express a democratic alternative to essentially being ground down by debt peonage and letting the economy polarize even further between creditors and debtors.

AMY GOODMAN: And the significance of President Obama being there, and what this means—the meeting of the G20, what is happening in Greece—for the United States?

MICHAEL HUDSON: He’s making the threat that Europe has to cut its own throat in order to save the United States hedge funds and banks from taking a loss on the Greek bonds that they’ve insured. One of the reasons that people have been willing to buy Greek bonds is they bought credit insurance. And the European banks, mostly—maybe not Barclays or Deutsche Bank, but most banks—are not willing to write credit insurance, because everybody at the Böckler Foundation conference here in Berlin, every single economist says there is no conceivable way in which Greece can pay its debts. But the American hedge funds and bankers have come in and said, “We’ll write a guarantee.” Then they lean on President Obama and Tim Geithner to tell the Europeans: “You have to make Greece pay, so that we win the bets that we’ve made, because if we lose the bets, then we go under and the stock market crashes, and a lot of people can’t collect on their money market funds.” So this is just naked brute force that Mr. Obama is doing. He’s basically telling Europe, “Don’t go the democratic route. Support Wall Street.”

AMY GOODMAN: Michael Hudson, economist, president of the Institute for the Study of Long-Term Economic Trends, distinguished research professor of economics at University of Missouri, Kansas City, author of Super Imperialism: The Economic Strategy of American Empire.

We’re going to go to break. When we come back, we’re going to talk about a related issue. What happened with MF Holdings? How is related to Greece and to the United States? Its head, Jon Corzine, was both a senator and governor from New Jersey. Stay with us.

–

AMY GOODMAN: I wanted to bring Michael Hudson, the economist, back in to relate what we’re seeing with MF Global to what’s happening in Greece and in Europe right now. Michael?

MICHAEL HUDSON: I was discussing that earlier this morning with a German investment banker, and their belief is that, so far on Wall Street, Wall Street’s been able to have the attorney general they want, Eric Holder, who has refused to prosecute any financial crime on Wall Street at all, as my colleague Bill Black has pointed out. But now, the investment banker told me, it’s very much like The Godfather. Even the Mafia once in awhile has to get rid of one of its own members and sacrifice its own members for the common good. And the European told me that in Europe, it’s really a no-no to use customer funds for your own—to gamble with that at all, that this is so criminal that if there is no criminal prosecution of Corzine, if it turns out that he did take the money, then that is going to lead the European capital markets to withdraw their money from the American capital markets, because the whole — the whole of Wall Street would turn out to be gangsters, without any prosecution, without any rule of law at all.

So, this is the moment of decision.

Is Mr. Holder going to continue to refuse to prosecute any financial criminal and saying, “Crime is us,” or is he finally going to do—enforce the rule of law on America? Nobody knows over here.

AMY GOODMAN: William Cohan, your response?

WILLIAM COHAN: Well, I think Professor Hudson is a little extreme in comparing Wall Street to the Mafia and gangsters.

MICHAEL HUDSON: I didn’t compare it. That was the Wall — that was the German banker.

AMY GOODMAN: And Michael Hudson, we just got this word, breaking news, that the Greek prime minister, George Papandreou, is expected to offer his resignation within the next half-hour of this broadcast, sources in Athens have just told the BBC. Your response?

MICHAEL HUDSON: Well, I think the issue is—

AMY GOODMAN: We’ve got five seconds.

MICHAEL HUDSON: —what the man just said: what kind of capitalism are we going to have? Will it be industrial capitalism—

the corzine wall st. ag holder vampire squid gangster bankster backstory

Video - In a major banking scandal, the commodities and derivatives brokerage house MF Global filed one of the largest bankruptcies in American corporate history, with almost $40 billion in liabilities. It was the largest failure on Wall Street since the collapse of Lehman Brothers in 2008. The chairman and chief executive officer of MF Global is Jon Corzine, a former New Jersey governor and U.S. senator. Corzine is also the former CEO of Goldman Sachs. The firm is the biggest U.S. casualty so far of the European debt crisis.

Democracy Now | AMY GOODMAN: We’re going to go to Oakland to find out about this first general strike since 1946. But first, from the economy in Europe, we turn now to a major banking scandal here in the United States. On Monday, the commodities and derivatives brokerage house MF Global Holdings filed one of the largest bankruptcies in American corporate history, with almost $40 billion in liabilities. It’s the largest failure on Wall Street since the collapse of Lehman Brothers in 2008.

The chair and the chief executive officer of MF Global Holdings is Jon Corzine, the former New Jersey governor, U.S. senator. Corzine is also the former CEO of Goldman Sachs.

MF Global is also the biggest U.S. casualty so far of the European debt crisis. MF Global filed for bankruptcy in part because of risky bets on debt issued by Italy, Portugal and Spain. MF Global shocked markets last week after disclosing a $191 million quarterly loss. This saw its shares fall by two-thirds and its credit rating cut exponentially. The firm had made big bets on sovereign bonds issued by European countries, but the unsteady future of the eurozone meant investors downgraded the firm’s prospects.

Yesterday, regulators noted MF Global did not separate its customers’ money from its own funds, although required to do so by law. They also said the firm may have transferred hundreds of millions of dollars in customer funds to avoid detection by authorities. In a Bloomberg article called "Others Pay Price for Corzine’s Risky Revenge," journalist William Cohan writes, "More than three years after the collapse of Lehman Brothers and the onset of the financial crisis, we don’t have in place anything close to necessary regulations to try to prevent companies like MF Global from exploding."

So we’re going to William Cohan right now. He lives right here in New York City. He’s in our studio, contributing editor to Vanity Fair, author of several books, including Money and Power: How Goldman Sachs Came to Rule the World.

William Cohan, welcome to Democracy Now!

WILLIAM COHAN: Thank you, Amy. Nice to be here.

AMY GOODMAN: The significance of this bankruptcy?

WILLIAM COHAN: Well, I mean, it’s extraordinary—that’s the thing—because it didn’t have to happen. You have a former CEO of Goldman Sachs, albeit he left in 1999, and between now and then he was a senator from New Jersey and a governor from New Jersey, as you pointed out. He hadn’t done, himself, a trade since 1986, so he was somewhat removed. But this was all about his own psychological need for redemption, to get back what he lost by getting canned from Goldman Sachs in 1999, his desire to be a major player again on Wall Street. He decided to swing for the fences, make a huge bet on these European bonds, which, by the way, may turn out to be correct. We don’t know yet, because as you were saying in your previous reports, you know, this is all in flux. However, the markets, once they heard about the size of the bet—and Corzine should have known better, because he’s lived through 2008—once they heard about the size of the bets, they realized that this is essentially a house of cards, and they had lost total confidence in his leadership and his ability to pay their debts when they became due.

AMY GOODMAN: The FBI is now investigating?

WILLIAM COHAN: The FBI is investigating because, you know, one of the no-nos on Wall Street is using your customers’ funds for your own corporate needs. Those are supposed to be segregated. It’s unclear still—I mean, let’s not jump to too many conclusions here. They’re investigating it. It’s unclear. It could be bad accounting. It could be bad reconciliation of those accounts. But at the moment, it’s looking like funds are missing and that they were used—customer funds were used to try to shore up their own internal problems.

AMY GOODMAN: You interviewed Jon Corzine in MF Global, right?

WILLIAM COHAN: Yes, at his offices. He had one—he took over the old offices, and then he moved them to new offices, to Park Avenue Plaza on East 52nd Street, which is a, you know, sort of notorious Wall Street building. And basically, his whole strategy—he was very clear—

AMY GOODMAN: You mean, Occupy encampment is in the wrong place?

WILLIAM COHAN: Well, I would say yes. That’s a whole 'nother subject, but yes. Wall Street is in midtown, not downtown anymore. But Corzine was—we were talking about Goldman Sachs, obviously, in the course of my book, but he was very clear about what he was going to do at MF Global. He was going to take basically a sleepy, backwater—basically a clearing operation and really juice it in terms of risk taking. And this was all a plan. I mean, he, in his—he was brought into MF Global by another former Goldman Sachs senior partner, a guy by the name of Chris Flowers, who is now a private equity—a successful private equity investor, who had been a colleague of Jon Corzine's at Goldman when Corzine was the CEO. This fellow, Flowers, owns about a 10 percent stake in MF Global. He’s one of its biggest investors. And so, he thought bringing Corzine in would, again, help change the strategy, juice the strategy, and encourage the firm to take more risk.

AMY GOODMAN: And what’s Corzine’s relationship with Goldman right now?

WILLIAM COHAN: Well, he’s just an ex-senior partner who, you know, benefited to the tune of something like $300 or $400 million in Goldman Sachs stock when Goldman went public in 1999.

AMY GOODMAN: What about the $700 million that are missing?

WILLIAM COHAN: Well, that number seems to be shifting all the time. But again, that’s the customer accounts. In other words, if I was doing business with MF Global, and I now wanted to get my money out, they’re telling me, "Oh, either your account is blocked, or we can’t get that to you. We don’t know where that money is." Well, that is a major no-no on Wall Street, and probably criminal if it’s found out that they intentionally did this to cover their own losses on these investments that they made in these bonds.

greek governance exceedingly fluid about now...,

Video - Greek military and police had joined riots earlier this summer.

AthensNews | Tuesday's changes in top roles of the country's military had been scheduled since early October, were not extraordinary and were based on objective criteria, the defence minister said on Wednesday, responding to intense opposition party criticism.

Opposition parties had reacted with outrage to the sacking of the country's military chiefs, calling it a bid to stack the armed forces with party loyalists before a possible government collapse over the country's debt crisis.

Speaking to an Athens radio station, Panos Beglitis said that the army, navy and air force chiefs of staff and the chief of the general staff had completed their term in their individual posts and were thus replaced.

He also underlined that the procedure could have taken place in August but was postponed as a result of the crisis in the southeastern Mediterranean, referring to Turkey's threats against Cyprus over the latter's decision to begin drilling for hydrocarbons.

Beglitis accused opposition parties of hypocrisy and petty party politicking.

He also pointed out that the outgoing military leadership was appointed in August 2009 by the previous New Democracy government, just before the Octover 4 general elections, in what he said was a move unprecedented in the country’s postwar history.

In a surprise move, on Tuesday evening the defence minister replaced the country’s top brass. An extraordinary meeting of the Government Council of Foreign Affairs and Defence (Kysea), which comprises the prime minister and other key cabinet members, accepted Defence Minister Panos Beglitis' proposal that the following changes be made to army, navy and air force and the general staff:

* General Ioannis Giagkos, chief of the Greek National Defence General Staff, to be replaced by Lieutenant General Michalis Kostarakos
* Lieutenant General Fragkos Fragkoulis, chief of the Greek Army General Staff, to be replaced by lieutenant general Konstantinos Zazias
* Lieutenant General Vasilios Klokozas, chief of the Greek Air Force, to be replaced by air marshal Antonis Tsantirakis
* Vice-Admiral Dimitrios Elefsiniotis, chief of the Greek Navy General Staff, to be replaced by Rear-Admiral Kosmas Christidis

Governments have exerted tight control over the armed forces since the collapse of the junta in 1974. Army chiefs are often selected on the basis of party loyalty as part of a deeply-entrenched system of political patronage.

The move to replace the military chiefs may have also been hastened by a Greek protest at austerity measures that halted a major national parade last week.

The annual military parade in the northern city of Thessaloniki is one of the most symbolic events in Greece's political calendar and it was the first time it had been cancelled.

Opposition reactions

The decison drew strong reaction from opposition parties. Main opposition New Democracy (ND) defence spokesman Margaritis Tzimas spoke of "an undemocratic act which is directed against national interest", adding that "at the time when the Pasok government is collapsing, it is proceeding with ... changes in the leadership of the country's armed forces". He said that his party would not accept the decisions.

The Communist Party of Greece (KKE) called on the minister and the government to give clear explanations to the people on why they replaced the armed forces leadership under these conditions.

The Popular Orthodox Rally (Laos) termed the appointments "politically indecent and morally unacceptable" and added that "a few hours before the government's fall, the leadership of the armed forces has been broken up in its entirety."

Lastly, a Radical Left Coalition (Syriza) official said it was unacceptable for the defence minister to decide on such an important issue at a time when the government is facing collapse.

dayyum..., papandreou picked up the soap

Globe and Mail | George Papandreou, the Greek Prime Minister, has, if nothing else, succeeded in provoking Angela Merkel, Nicolas Sarkozy and other European leaders into almost threatening to expel Greece from the euro zone – not that there is any known procedure for doing so. Their previous insistence that the euro could never be withdrawn from a country may have encouraged the Greeks to think they could drag their feet on structural reform and austerity – or worse, march and riot.

The response to Mr. Papandreou’s now abandoned referendum proposal has had some influence on Greek politicians. The Minister of Finance, Evangelos Venizelos, openly dissented. But the changed position of Antonis Samaras, the leader of the New Democracy, the main opposition party, which is traditionally regarded as conservative, is more significant. He has taken an unconstructive stance toward the government’s quasi-insolvency and the attempts of the euro zone group to deal with it. Yesterday, however, Mr. Samaras – who happens to have been a roommate of Mr. Papandreou at an American university – has proposed a transitional national-unity government, with a cabinet largely composed of non-partisan “technocrats,” to manage the restructuring of the country’s government and economy.

Mr. Papandreou reacted to this idea with stony silence, pending a doubtful vote of confidence on Friday, but his mutability has been amply demonstrated in the past few days. Mr. Samaras has now shown some welcome, and overdue, flexibility. The Greek people, it seems, do not want to lose the use of the euro and go back to the drachma – still less do they wish to suffer from a run on the Greek banks, if those banks’ large holdings of Greek government bonds become nearly worthless.

Among the few people who spoke favourably of Mr. Papandreou’s ill-timed, short-lived referendum idea was Mark Carney, the Governor of the Bank of Canada, who, in speaking to the House of Commons finance committee, said (in answer to a question) that painful economic restructurings need broad democratic support – which is quite true. Inept as the Greek Prime Minister has been (unless there is method in his madness), he may have helped build consensus.

The prospect of economic shock therapy, to paraphrase Samuel Johnson, concentrates the mind wonderfully. Greece may yet co-operate.

levels of symbiotic cooperation previously unknown...,

Hotspots in the top right triangle, which compares all gene transfer events, shows microbes that live in the same niche more readily exchange genetic material. Looking at antibiotic resistance genes (bottom left triangle), however, paints a more complex and nuanced portrait of genetic transfer. (Nature)

Wired | Researchers have discovered an underworld of genetic exchange among bacteria, one more vast than previously imagined.

A comparison of thousands of bacterial genomes from around the world found genes flowing easily between species separated by hundreds, even thousands of miles. Whether the bacteria were related or not didn’t matter — a fascinating phenomenon on its own, but disturbing when the genes involved could turn pathogens into drug-resistant superbugs.

“We should have done this study and asked these questions five years ago,” said microbiologist Eric Alm of MIT, leader of a study published online Oct. 30 in Nature. “The significance was off the charts.”

Bacteria readily exchange DNA between closely related species, and much less frequently across unrelated lineages. This so-called horizontal gene transfer fuels adaptation, allowing for rapid adjustments to local pressures. Its full extent, however — especially in bacteria associated with humans, including those in our bodies, where bugs outnumber cells by 10 to 1 — are unknown.

To get a global picture of horizontal gene transfer, Alm, two graduate students and other collaborators compared 2,235 different bacterial genomes. “I was hoping to find five to 10 examples of recent gene transfers,” he said. “My students came back in a week with 10,000 different genes that had been transferred.”

The researchers compared transfers in several ways: first by the microbes’ genetic similarities, and then by geographic distance separating the locations of their collection. Neither followed a predictable pattern, but patterns did emerge when the researchers analyzed ecological niches.

Instead of swapping genes with microbes genetically related to them, or near them, bacteria seem to be swapping with microbes fulfilling similar roles. Alm’s team also found that genes especially important to humans — those found in our stomach flora, for example, or genes conveying antibiotic resistance — are particularly good at long-distance swaps.

In the future, Alm hopes to look more closely at gene transfer in virulent microbes, such as those that cause meningitis. Tracking genes that are especially likely to flow could help identify new disease-battle targets. Alm also wants to find out exactly how business is conducted in what he called a genetic “black market.” DNA can travel on dead cell fragments, viruses, and other sub-cellular vehicles, and the exact routes remain unknown.

“It could be almost anything,” he said. “We have no idea. I would love to know.” Fist tap Dale.

an educated mind depends on a properly trained behind...,

Video - A word about corporal punishment

Royal Society | Understanding how societies resolve conflicts between individual and common interests remains one of the most fundamental issues across disciplines. The observation that humans readily incur costs to sanction uncooperative individuals without tangible individual benefits has attracted considerable attention as a proximate cause as to why cooperative behaviours might evolve. However, the proliferation of individually costly punishment has been difficult to explain. Several studies over the last decade employing experimental designs with isolated groups have found clear evidence that the costs of punishment often nullify the benefits of increased cooperation, rendering the strong human tendency to punish a thorny evolutionary puzzle. Here, we show that group competition enhances the effectiveness of punishment so that when groups are in direct competition, individuals belonging to a group with punishment opportunity prevail over individuals in a group without this opportunity. In addition to competitive superiority in between-group competition, punishment reduces within-group variation in success, creating circumstances that are highly favourable for the evolution of accompanying group-functional behaviours. We find that the individual willingness to engage in costly punishment increases with tightening competitive pressure between groups. Our results suggest the importance of intergroup conflict behind the emergence of costly punishment and human cooperation. Here's the full paper.

the return to feudalism

Synearth | The consumption of fossil fuels took about 200 years to go through the first half of the supply. The second half will disappear much faster because the energy consumption per person keeps increasing. Market forces keep driving this consumption continuously upward.

The fossil fuels not only supplied our energy, they supplied most of the raw materials for the production of goods for our society. Imagine a world without our current plastics, many of our drugs, current construction materials (like asphalt and paint), clothing material and the list goes on. Virtually the entire chemical production system will have to be reinvented to cope with these changes. This new system is likely to be based upon biochemistry.

The transformation of the infrastructure to satisfy future needs will be even larger than the infrastructure created from 1800 to the present. It took 200 years for our old system to evolve. We do not have that much time for the future reconstruction. A realistic estimate is about 50-100 years.

There is another lesson from history. This lesson is that the more complicated that governments or societies become, the greater is the strain upon the resources available to that ruling body. All of the ancient empires fell because of this problem. The Egyptian, Sumerian, Greek and Roman empires are examples. They all became larger or more complicated than their resources could sustain. This problem is now facing the entire world not just a single government.

Cooperation

In order to transform the infrastructure of the world, the governments of the world (at least the major governments) are going to be forced into scientific cooperation as never before. There may be healthy competition between the scientists of various countries but the “best” work must be shared by all the countries. To do otherwise is to invite more wars. The monopolization of resources and new technology must be avoided at all cost. There are no “free market” entities that can accomplish projects of these magnitudes. Research and development must be conducted on a “wartime” basis like the Manhattan Project. Time is the enemy.

Whatever the new infrastructure is going to be, it must stay in balance with nature. The systems proposed here attempt to sustain carbon, nitrogen, oxygen and water “neutrality”. This should help prevent us from killing ourselves. Doing nothing to create a new infrastructure will guarantee that most of humanity will die in a struggle for survival.

The route to overcoming the loss of fossil fuels will eventually involve the politics of many countries. It is sad to say that this may be the greatest impediment to success. Programs enormously larger than the space programs and the Manhattan Project will be involved. Research and development will require worldwide cooperation. Financing these endeavors is beyond the scope of private enterprise or a single government. Mankind may not be capable of such cooperation. Nationalism may destroy success.

The outline presented here for creating an exhausted fossil fuel world infrastructure is certainly not the only one possible. More ingenious solutions may exist. The route to these solutions must not be decided upon by political or economic methods but by scientific ones. Politicians are not likely to accept these restrictions of their power. Business leaders are also not good choices for directors of such projects. Military leaders would be problematic also.

The time allowed to complete a restructure of our old infrastructure will be measured in decades and not centuries. An overarching program of this magnitude has never been attempted. Such things are accomplished in Science Fiction but not in the real world. The end result of doing nothing is to return to the feudalism of the past. Living in a new world based upon the old paradigm of “one man, one mule, one plow, one gun” is not a happy consideration.

It is hoped that mankind will begin to take action now to replace our entire fossil fuel based system. This not only decreases global warming, it actually preserves some of our irreplaceable resources. Population control will also have to be initiated. Population expansion is limited by the resources from the sun.

consent needed for debt repayments

Video - Michael Hudson: Peoples of countries indebted without their consent should refuse to repay odious debts

MichaelHudson | PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. In Europe, people in many countries are saying no to paying for the crisis and bailing out banks. And to a large extent leading the way have been people in Iceland, who have said no at the ballot box and on the streets. Now joining us to talk about that is Michael Hudson. He teaches economics at the University of Missouri-Kansas City. Thanks for joining us again, Michael.

MICHAEL HUDSON, PROF. ECONOMICS, UMKC: Thank you, Paul.

JAY: So you have colleagues you’re in touch with in Iceland a lot. What’s going on there now?

HUDSON: Well, as many people know, there was a bank failure, and Iceland’s currency plunged and then sort of fell off the pages in the paper. What people don’t realize is that what happened in Iceland has been used as a test case for what’s happening in Greece and what’s happening in Europe, and maybe what happens in the United States. When the three big crooked banks failed, they were sold out to vulture banks, basically, at $0.10 on the dollar. The vulture banks came in and are moving to begin evicting huge amounts of Icelanders from their homes. Ninety percent have their own homes. Three hundred thousand Icelanders have moved to Norway to get work. The country’s been plunged into a depression. Earlier this week, the Social Democratic prime minister gave a speech saying, essentially, we want to give away the country and the banks. They’re backing me. I’ve given the country away to the banks. Now, what do the population do [incompr.] the public opinion polls show that the fascist party there–they call themselves Social Democrats, but they call them fascists–have a 10 percent approval rating. That means a 90 percent disapproval. What they did was get together outside of Parliament with about 20 huge oil drums, and at the point where the prime minister began to speak in Parliament, they all begin banging the huge oil drums and any other noise makers they had in order to make it impossible to hear even the speech, so that any recording of the speech would have this huge din of noise going on. And they did that for the same reason that the people in Occupy Wall Street are gathering. They’re there to say, look, whatever deal this right-wing reactionary prime minister lady makes with Europe, we’re not going to obey it. As soon as we can throw these thieves out of power, we’re going to come in and we’re going to have another government, and we’re not going to pay, because if a government gives away to–the country to foreign bankers and foreign creditors and we don’t have a say in it, that’s not democracy. That’s [crosstalk]

JAY: Right. So they had a referendum about whether or not to do this, you know, use public money to pay off and bail out the banks. They voted no. Then what happened? I mean, it sounds like a lot of this is happening anyway.

HUDSON: The referendum was not whether to pay off the banks. The prime minister, again, had wanted to pay off Gordon Brown in England and the Dutch government–nothing to do with banks at all–for Icesave debt that the governments had to pay and did pay to bail out their own banks. The prime minister, Sigurdardottir, wanted to pay the money to finance England and Netherlands, essentially doing their own bank bailout, for which Iceland didn’t owe a penny. And the president, who normally is like a notary public and has to sign off, says, wait a minute, if we’re going to agree to pay debts that are going to plunge the economy into a decade of depression and force most Icelanders to leave the country to find work, they at least get to vote on it. That’s international law. So they voted no. And then the government said, oh, let’s have another vote, and finally a year later put the referendum again. The people voted no again. That referendum was against bailing out Gordon Brown and the British Labour Party and the Dutch government. It had nothing to do with the banks. This is yet another bank giveaway. The Social Democratic Party, not only in Iceland but throughout Europe, is basically the party of the bank lobbyists. And the other people are saying, wait a minute, we want an election to throw these guys out. They’ve been bought out. They’re crooks. And the government says, we’re not going to let you vote. Whatever we say, we’re going to do. There is no democracy here. And that’s why–.

JAY: And is there a party in Iceland that reflects this that isn’t going to be a right-wing alternative that does the same thing, or another form of right-wing alternative, if you want?

HUDSON: In the past, the only alternative to the Social Democrats were the neoliberal party that gave away the store to the banks to begin with. So they’re in the process of founding a new party. But without letting people vote, when you stop, when you just suspend voting and you won’t let people have any voice in government, no party can function, because there’s no vote, no chance to have a ballot. So the government is–essentially, the Social Democrats have imposed the dictatorship in Iceland that they’re trying to impose in Greece under the socialist government there and in other social democratic governments throughout Europe.

JAY: Thanks for joining us, Michael.

HUDSON: Thanks.

the achilles heel of the eurozone

LATimes | The Greek drama is heightening by the day. Last week, Europe's leaders came up with a $180-billion rescue package for its most troubled member, Greece. Like previous efforts, the plan combines bailout funds with demands for continued austerity in an attempt to isolate Greece and leave the rest of Europe economically intact. This week, in response, a call by Greece's prime minister for a national referendum on the proposal surprised the world.

The referendum may accelerate the inevitable fall of the Greek government. And it only emphasizes that a belief in the latest deal as a "Euro success story" — that it solves Greece's problems and prevents a larger Eurozone crisis — is pure fantasy. Whatever the referendum results turn out to be, we are still heading toward the unraveling of an economically united Europe, a union that, despite its many downsides, is in the best interests of the continent's countries — rich and poor — and the global economy.

That the European Union finally recognizes the need to push forward on Greece's solvency problem is a positive development, even though the latest fix basically amounts to providing it with some new breathing room. Greece's payments on its debt principal will be postponed, and interest rates will be lowered. This might, in 2013, begin to bring its deficit under control. The price, though, will include a very high unemployment rate. And, most significantly, the underlying problem of an economy without growth has not been addressed.

Greece lacks both an industrial base and the widespread availability of technology. It simply can't be productive enough to compete with neighbors such as Germany, France or the Netherlands. It's in deep recession and doesn't have the resources to grow out of it, even with an easing of its still-enormous debt level.

Most of the austerity measures and reforms in place — and calls to continue or increase them — won't work. Raising taxes in a society distinguished by flagrant tax evasion has only boosted the shadow economy. Wage and pension cuts are further reducing tax receipts. Worse, these measures are depressing both demand and retail sales, resulting in more unemployment and civil disturbances.

A quarantine of the disaster isn't possible. Europe's banks and nations are too closely entwined. Financial institutions in the Eurozone have made large loans to Greece's government and private sector, as well as to other distressed European nations.

The core European banks hold hundreds of billions of euros in debt issued by Greece, Portugal, Ireland, Italy and Spain, all struggling nations. Banks within these nations hold tens of billions more. Add in losses at the European Central Bank, where incoming President Mario Draghi is providing only lukewarm support for an active role by the bank. Greece still could collapse, provoking a rush to the exits that would trigger bank insolvencies across the continent.

The effects extend beyond Europe. The U.S. and Japan would not be immune from the turmoil. And at least two-thirds of lending to emerging markets originates in European banks. If European institutions start calling back these loans, markets around the globe will be destabilized.

Greece’s bailout referendum gambit: grave error or glimpse of greatness?

Toronto Star | Greek Prime Minister George Papandreou’s call for a referendum on a massive bailout package has all but swept away hopes of finally stemming his country’s massive debt crisis.

Now it looks like his own government will be pulled under by the same current.

A man who spent a decade fighting for the prime minister’s post, and whose name carries the resonance of America’s beloved Kennedys in his own country, Papandreou shocked political allies and enemies alike with his call to take the European bailout plan to the voters.

Some see the referendum call as a reckless move by a cornered politician who refuses to shoulder the legacy of brutal cost-cutting measures. Others charge it is a brilliant, gutsy strategy designed to silence his critics and ultimately garner the support the bailout needs to be successful.

Is Papandreou saving his career at the expense of the global economy — or is that the only way to save it?

Now his government is teetering on the verge of collapse. It faces a confidence vote at the end of this week.

Stock markets swooned and European leaders scrambled following Monday night’s Greek bombshell, which threatens to undo 18 months of negotiations by the European Union to ease the debt emergency.

Working deep into the night last week, eurozone countries agreed to a package to cut Greek’s public debt by half and strengthen banks’ balance sheets to guard against a continentwide banking crisis.

“The summit last week was to deal with the uncertainty in the eurozone . . . and this grenade is thrown in just a few short days later,” groused Lucinda Creighton, Ireland’s minister of European affairs.

With the EU deal now in doubt in the fast-moving political situation in Athens, world leaders face the possibility of a disorderly debt default by Greece, which could spread financial chaos to other countries such as Spain and Italy.

That would in turn raise the possibility of another global banking calamity that could prompt a repeat of the 2008 recession. Also at stake is the future of Greece within the EU, the credibility of the euro as a 17-nation currency and, in the worst scenario, the survival of the half-century-old EU itself.

Antonis Samaras, leader of Greece’s opposition New Democracy Party, hissed that his party would never accept “reckless adventurism.”

“Mr. Papandreou, in his effort to save himself, has presented a divisive and extortionate dilemma,” Samaras said.

Papandreou said that he needs wider political backing for deep spending cuts tied to the new €130 billion aid deal.

He wanted Greek voters “to take a position, to see the choice before us in its starkness, hoping they will back the lesser of two evils, instead of letting irate reactions in the streets dominate the debate,” one adviser to the prime minister told The New York Times.

greek prime minister wins backing for referendum

Guardian | 8.20am: So what happened at last night's cabinet meeting? We know that it ran for seven hours (after starting late), finally finishing at 3am Greek time (1am GMT).

According to government spokesman Ilias Mossialos, government ministers expressed "total support for the initiatives taken by the prime minister." That doesn't exactly chime with the growing mood of opposition among the Pasok party yesterday.

George Papandreou's office has released a statement, showing the prime minister insisted that the Greek people must give their approval to the next stage of austerity:

The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro.

No one will be able to doubt Greece's course within the euro.

Only if you win, though, Prime Minister....

According to Associated Press, Papandreou also insisted that the rules of democracy must be observed:

We will not implement any program by force, but only with the consent of the Greek people.

This is our democratic tradition and we demand that it is also respected abroad.

8.00am: Good morning, and welcome to another day of drama in the European debt crisis.

We said yesterday that George Papandreou had a history weathering political crises. Well, the great survivor has done it again – after a marathon cabinet meeting, he has persuaded his cabinet that Greece should indeed hold a referendum on the eurozone rescue plan.

We'll be following all the developments from Greece, where the parliament is expected to start debating a confidence vote this afternoon.

World leaders are also heading to Cannes, ready for the G20 which begins on Thursday. Angela Merkel, Nicolas Sarkozy and other key players are due to meet with Papandreou late tonight to discuss the situation.

Global Economy Threatened As World Oil Production Stalls For Seventh Year

ASPO | An array of energy experts gathered in front of the headquarters for the U.S. Department of Energy (DOE) today to criticize the agency for what they called “dangerously unrealistic” oil and natural gas production forecasts. Calling for "truth in energy," they delivered a letter to Secretary of Energy Steven Chu seeking greater transparency in how the agency formulates its energy projections and urging development of a plan to address the growing possibility of near-term oil supply disruptions and persistent, long-term oil shortages.

“Despite rising demand and a large increase in oil prices, world oil supply has been on a plateau; it has stayed relatively constant since 2005,” said Robert L. Hirsch, co-author of The Impending World Energy Mess. “Simultaneously, production from existing world oil fields is declining at a high rate. Both of these developments are unprecedented, yet DOE and EIA [Energy Information Administration] have dismissed them as not being of major concern.”

Hirsch added, “Many oil production analysts believe that in a relatively few years, total world oil production will go into decline. That may sound like we have time to react, but our 2005 study for the DOE clearly demonstrated that we now have essentially no time to effectively react. This is because of the huge amount of oil consumed worldwide and the fact that a relatively few percent oil production decline will be difficult, expensive and time-consuming to make up.”

“The Department of Energy’s optimistic forecasts for future supply are dangerously unrealistic,” said Jim Baldauf, president and co-founder of the Association for the Study of Peak Oil & Gas-USA (ASPO-USA). “The risk/benefit ratio is out of balance. If these exuberant predictions are wrong, the consequences could be catastrophic. We need to be conservative in planning for the future. We can’t bet America’s economy and national security on Pollyanna predictions.” Baldauf added, “We are not running out of oil. But we appear to be running out of oil that we can afford.”

the 99% have lost out beyond occupy wall street's wildest imagining..,

Video - an exploration of the inordinate power that corporations exercise in our democracy.

truthout | "Property is theft," French anarchist Pierre-Joseph Proudhon famously declared in 1840 - a judgment clearly shared by many of those involved in the occupations in the name of the 99 percent around the country, and especially when applied to Wall Street bankers and traders. Elizabeth Warren also angrily points out that there "is nobody in this country who got rich on his own. Nobody." Meaning: if the rich don't pay their fair share of the taxes which educate their workers and provide roads, security and many other things, they are essentially stealing from everyone else.

But this is the least of it: Proudhon may have exaggerated when, for instance, we think of a small farmer working his own land with his own hands. But we now know that he was far closer to the truth than even he might have imagined when it comes to how the top 1 percent really got so rich, and why the 99 percent lost out. The biggest "theft" by the 1 percent has been of the primary source of wealth - knowledge - for its own benefit.

Knowledge? Yes, of course, and increasingly so. The fact is, most of what we call wealth is now known to be overwhelmingly the product of technical, scientific and other knowledge - and most of this innovation derives from socially inherited knowledge, at that. Which means that, except for trivial amounts, it was simply not created by the 1 percent who enjoy the lion's share of its benefits. Most of it was created, historically, by society - which is to say, minimally, the other 99 percent.

Take a simple example: In our own time, over many decades, the development of the steel plow and the tractor increased one man's capacity to farm, from a small plot (with a mule and wooden plow) to many hundred acres. What changed over the years to make this possible was a great deal of engineering, steelmaking, chemistry and other knowledge developed by society as a whole.

Another obvious example: Many of the advances that have propelled our high-tech economy in recent decades grew directly out of research programs financed and, often, collaboratively developed, by the federal government and paid for by the taxpayer. The Internet, to take the most well-known example, began as a government defense project, the Advanced Research Projects Agency Network (ARPANET), in the 1960s. Today's vast software industry rests on a foundation of computer language and operating hardware developed, in large part, with public support. The Bill Gateses of the world might still be working with vacuum tubes and punch cards were it not for critical research and technology programs created or financed by the federal government after World War II.

The iPhone is another example: Its microchips, cellular communication abilities and global positioning system (GPS) all flowed from developments traceable to significant direct and indirect public support from the military and space programs. The "revolutionary" multi-touch screen was developed by University of Delaware researchers financially supported by the National Science Foundation and the CIA. It is not only electronics: of the 15 modern US-developed "blockbuster" drugs with over $1 billion in sales, 13 received significant public research and development support.

But taxpayer-financed government programs (including, of course, all of public education!) are only the tip of the iceberg. And here we are not talking rhetoric, we are talking the stuff of Nobel prizes. Over the last several decades, economic research has begun to pinpoint much more precisely how much of what we call "wealth" society in general derives from long, steady, century-by-century advances in knowledge - and how much any one individual at any point in time can be said to have earned and "deserved."

Recent estimates indicate, for instance, that national output per capita has increased more than twentyfold over the 200-plus years since 1800. Output per hour worked has increased an estimated fifteenfold since 1870 alone. Yet the modern person is likely to work each hour with no greater commitment, risk or intelligence than his counterpart from the past. The primary reason for such huge gains is that, on the whole, scientific, technical and cultural knowledge has grown at a scale and pace that far outstrips any other factor in the nation's economic achievement.

A half-century ago, in 1957, economist Robert Solow showed that nearly 90 percent of productivity growth in the first half of the 20th century alone, from 1909 to 1949, could only be attributed to technical change in the broadest sense. The supply of labor and capital - what workers and employers contribute - appeared almost incidental to this massive technological "residual." (Solow received the Nobel Prize for this and related work in 1987.) Another leading economist, William Baumol, calculated that "nearly 90 percent ... of current GDP [gross domestic product] was contributed by innovation carried out since 1870."

The truly central and demanding question is obviously this: If most of what we have today is attributable to knowledge advances that we all inherit in common, why, specifically, should this gift of our collective history not more generously benefit all members of society? The top 1 percent of US households now receives far more income than the bottom 150 million Americans combined. The richest 1 percent of households owns nearly half of all investment assets (stocks and mutual funds, financial securities, business equity, trusts, nonhome real estate). A mere 400 individuals at the top have a combined net worth greater than the bottom 60 percent of the nation taken together. If America's vast wealth is mainly a gift of our common past, how, specifically, can such disparities be justified?

a simple three item agenda...,

oftwominds | There are really only three ways to cripple Wall Street's democracy-killing concentration of wealth and power: take our money out of Wall Street and the TBTF banks, eliminate private money from elections and abolish Wall Street's dealer, the Federal Reserve.

There are only three things--and only these three--that will cripple Wall Street's democracy-killing concentration of wealth and power:

1. Transfer the 99%'s money out of Wall Street and the Too Big To Fail Banks

2. Remove campaign contributions from our democracy in a way that the corporate legalist lackeys in the Supreme Court cannot overturn, i.e. entirely publicly financed elections

3. Abolish Wall Street's dealer, pusher and protector, the Federal Reserve.

My reasoning is very simple:

Everything else people want to see happen cannot happen if:

1) Wall Street and the SDI (systemically dangerous institutions) a.k.a. too big to fail banks, control most Americans' financial assets and debts

2) The Federal Reserve exists to enable and protect the SDI's wealth and power via Primary Dealers, the discount window and other pusher/dealer mechanisms

3) Wall Street and the other SDIs can use the billions of dollars they skim from our accounts, IRAs, 401Ks and pensions to buy political influence and protection from regulation and competition.

Therefore these are the necessary foundations of any real change.

treasury secretary up for auction and goldman sachs the highest bidder...,

Video - David DeGraw, Bill Black and Dylan Ratigan discussing Occupy Wall Street and prosecution of banking fraud.

is the environmental crisis caused by the 7 billion or the 1%?

The Grist | The United Nations says that the world's population will reach 7 billion people this month.

The approach of that milestone has produced a wave of articles and opinion pieces blaming the world's environmental crises on overpopulation. In New York's Times Square, a huge and expensive video declares that "human overpopulation is driving species extinct." In London's busiest Underground stations, electronic poster boards warn that 7 billion is ecologically unsustainable.

In 1968, Paul Ehrlich's bestseller The Population Bomb declared that as a result of overpopulation, "the battle to feed humanity is over," and the 1970s would be a time of global famines and ever-rising death rates. His predictions were all wrong, but four decades later his successors still use Ehrlich's phrase -- too many people! -- to explain environmental problems.

But most of the 7 billion are not endangering the earth. The majority of the world's people don't destroy forests, don't wipe out endangered species, don't pollute rivers and oceans, and emit essentially no greenhouse gases.

Even in the rich countries of the Global North, most environmental destruction is caused not by individuals or households, but by mines, factories, and power plants run by corporations that care more about profit than about humanity's survival.

No reduction in U.S. population would have stopped BP from poisoning the Gulf of Mexico last year.

Lower birthrates won't shut down Canada's tar sands, which Bill McKibben has justly called one of the most staggering crimes the world has ever seen.

Universal access to birth control should be a fundamental human right -- but it would not have prevented Shell's massive destruction of ecosystems in the Niger River delta, or the immeasurable damage that Chevron has caused to rainforests in Ecuador.

Ironically, while populationist groups focus attention on the 7 billion, protestors in the worldwide Occupy movement have identified the real source of environmental destruction: not the 7 billion, but the 1%, the handful of millionaires and billionaires who own more, consume more, control more, and destroy more than all the rest of us put together.

In the United States, the richest 1% own a majority of all stocks and corporate equity, giving them absolute control of the corporations that are directly responsible for most environmental destruction.

we really need a widespread, bottom-up social movement

Stanford | Stanford biologist Paul Ehrlich still sees runaway population growth as a threat to the planet, but is hopeful that humans can avoid the first catastrophic collapse of a global civilization.

The United Nations projects that world population will reach 7 billion this month and could top 10 billion by the end of the century.

In his 1968 book, The Population Bomb, Stanford biologist Paul Ehrlich warned of the threat of unchecked human population growth. Over the past four decades, the book has brought attention to the question of how many individuals our planet can sustain.

As we approach Oct. 31, the United Nations' symbolic day of 7 billion, Ehrlich discusses post-Population Bomb growth with the Stanford News Service.

Global population has more than doubled since you wrote The Population Bomb. What major consequences of that growth do we see today?

We are seeing climate disruption leading to rising food prices, loss of biodiversity, deteriorating ecosystem services, increased chances of vast epidemics and nuclear resource wars and a general reduction in the odds of avoiding the first catastrophic collapse of a global civilization.

Have any of your prescriptions from The Population Bomb been followed to success in the last 40 years?

There has been a cheering reduction in birth rates, but sadly not far enough in rich countries such as the United States and Australia, and not sufficiently widespread.

Will the additional 2 billion people projected to arrive by 2050 have the same environmental impact as adding the last 2 billion?

No, they won't. People are smart. Farmers didn't first till marginal soils where water was scarce, but rather the most productive, well-watered soils they could find. To support 2 billion more, it will be necessary to farm ever poorer lands, use more dangerous and expensive agricultural inputs, win metals from ever-poorer ores, drill wells deeper or tap increasingly remote or more contaminated sources to obtain water, and then spend more energy to transport that water ever greater distances. All this will require vastly more energy than is now used. As a result, the next 2 billion people probably will do disproportionately much more damage to our life-support systems than did the last 2 billion. Of course, if humanity got serious about protecting the environment, and now especially the atmosphere, the next 2 billion could do less damage.

Sometimes we hear reference to a "cluster bomb" of growth rather than a "population bomb." What does this mean?

Sadly, this howler slipped through the refereeing system at Science, the world's premier science journal, in a recent issue on population. The "cluster bomb" focuses on the population plight of a cluster of poor countries that struggle with rapid population growth and increasing hunger, without looking at the role of rich countries in worsening that plight. More importantly, it doesn't look at the role of wealthy countries in contributing to the most important population-related problems that are global: climate disruption, toxification of the entire planet, the possibly insurmountable challenge of transitioning rapidly away from fossil fuels, looting of the seas, and increasing the risks of pandemics and nuclear war.

How do you respond to the statement that we should focus on overconsumption, not population growth?

Most of humanity's environmental problems trace to too much total consumption, but that consumption is a product of population size and per-capita consumption. Population and consumption are no more separable in producing environmental damage than the length and width of a rectangle can be separated in producing its area – both are equally important.

Can individuals with high per-capita consumption make a difference by changing their behaviors, or do we need to look to systematic changes?

Individual changes can help, but we really need a widespread, bottom-up social movement such as the one which Millennium Alliance for Humanity and the Biosphere (MAHB) is trying to generate. The MAHB is an outfit you can join if you want to help figure out how society can avoid a collapse. Political action is essential.

cities doing it right; respecting occupy's right to free speech and assembly

Video - Putting Occupy Wall Street into perspective

Washingtonsblog | Given all of the police brutality in Oakland, Denver and New York City (here, here, here, here, here, here and here), it is important to give credit to the cities which are respecting the protesters’ rights to free speech and assembly.

As Occupy Orange County reported Wednesday;

Late last night after a 5 and-a-half hour marathon city council meeting [in Irvine, Orange County, in Southern California], in which 72 speakers took the floor to express the need for the Occupy OC Tent Village to be accepted as a form of free speech, the city council passed an emergency motion to add the needs of “The 99%” to their official agenda. This was a feat which, according to one more conservative Councilman, he had never seen in 7 years of service.

The council members each spoke in turn to the civility, articulateness and peaceful process represented by the Irvine Occupation , at contrast with the several other Occupational Villages in California, which were, at that very moment being tear-gassed. The general sentiment of the officials being: “This is quite clearly the model. And the occupation most in tune with city needs.”

One councilman stated clearly, “I disagree with most of what you’re saying. But you’ve clearly shown that this is an issue of free speech. So if you need to sleep on our lawn,… by all means,… sleep on our lawn.”

Shortly after, a motion was brought to the council to grant license to the occupiers to occupy the public space overnight citing the unusual form of the movement. (Another first in council history.)

It was then passed unanimously to the sound of thunderous applause.

Shortly thereafter, the City Council was invited to attend the General Assembly of the People. (Which takes place each night in the Occupation Village at 7:00 PM.)

On a personal note,… I myself was stopped by the Mayor on my way up the hall, when he said, “You know what concerns me?” “What’s that”, I asked. Expecting him to cite a civil code. “Do you have enough blankets? Or should I get you some?” He asked.

And while they might not be as respectful of the Constitution (even when they disagree with the protesters’ beliefs) as Irvine, other cities have at least handled the protests better than the cities who have sent in the riot police.

For example, AP notes, in a story entitled “Occupy Wall Street: Many Cities Leaving Protesters Alone“

occupy richmond converts rightwing blogger...,

Video - Rightwing blogger's Richmond Occupy Wall Street conversion experience.

VARight | Going perhaps a bit undercover I wandered down to Kanawha Plaza in downtown Richmond this afternoon to get a few pictures and gauge the people of whom I have been so critical first hand, up close and personal.

It was a cold and rainy afternoon with a snow storm moving in to our west and north. Pellets of sleet intermittently mixed with the light drizzle and the temperature hovered in the low 40′s. Cold and nasty.

I expected exactly what I had heard and seen on the news. Trash, filth, drugs, human excrement and terrible odors. And obnoxious people demanding handouts.

In fact, that is what I went down there to document.

But a strange thing happened on the way to expose these greedy freeloaders for the vermin we believe them to be.

When I drove by yesterday, the tents and signs and scraggly people confirmed my impression of the place. From the outside looking in, everything appeared to be exactly as I had seen in the media and read on the internet.

But that was on the outside looking in.

I parked the car, put 50 cents in the meter, and headed into the modern day version of Sodom and Gomorrah.

And I was stunned at what I saw.

There were tents, hand painted signs, almost child-like art work in poster paint reminiscent of the 60′s. Love. Peace.

I was politely greeted by several as I snapped pictures and looked around. I came upon a medical tent and was greeted by a young African-American man named Chris. I asked him a few questions and then asked his permission to record him as he gave me the grand tour. I really hadn’t expected to find a clean camp, let alone a medical tent – one of two!

There are supply rents with clothes, food and gloves. The port-a-pottys were at the far end of the park, away from the food area and they had hot food available all the time. 24 hours.

Chris told me about their “PA” system as a few people walked by shouting “Mic Check!” Chris explained that they use this system to make announcements around the camp. One makes the announcement and the others repeat the message around the encampment. An efficient system to say the least.

He also explained the Democratic Government they had established. To pass “legislation” requires 90% approval.

I spoke with a young woman who was in the Legal Tent. I didn’t ask her name or “qualifications” but she did tell me that the group applied for a permit 9 days ago and had heard nothing.

By biggest problem with this movement has been their disregard for the law. But it seems that they are at least making an effort to comply with the law and the City of Richmond is actually dragging their feet. I have no reason to believe this woman was not being truthful, which means that the City and local media has been less than candid about the Occupy Richmond group’s efforts to do things the right way.

Shame on Mayor Jones. While I criticized Jones earlier today in a post for not evicting the scofflaws who refuse to abide by the law and obtain the proper permits, it seems that the criticism of Jones was deserved, but not because he failed to remove this group who is unlawfully assembled, but because his administration has failed to either approve or disapprove the permit.

My camp guide Chris, speaking for himself (and not the group) said he believed that the Richmond TEA Party should be refunded their money. The Public Park is free.

data on oil speculation shows that more traders are betting on higher prices.

Telegraph | Releasing 60m barrels of reserves was meant to dampen the high price of $113 per barrel, attributed to lost ouput from war-torn Libya and worries that the Arab Spring could spread to more oil producers.

The International Energy Agency (IEA) made no secret of the fact it was worried that oil above $100 was unsustainable and damaging to the global economy.

Since then, the world's financial outlook has considerably worsened and about 430,000 barrels of Libyan oil have returned to the market.

Surely, amid the doom and gloom, plus extra production, the natural direction of oil ought to be down?

However, the price, though volatile, has remained stubbornly above the $100 level. And last Monday, Brent crude even returned to the $113 per barrel level seen before the emergency release of supplies.

Data on oil speculation also shows that more traders are betting on higher prices. At the end of last week, data from the US Commodities and Futures Trading Commission (CFTC) showed an increase in long positions in oil futures.

From a macro viewpoint, such continued support for oil doesn't appear to make sense given the number of predictions that the world is on the brink of another recession, tipped over the edge by a volatile eurozone.

From America to Europe, countries are struggling with sovereign debt. And even China is not immune, with demand for oil at its lowest level so far this year.

There is no doubt that the pace of consumption is slowing. Opec, the cartel of producers, the IEA, the Energy Information Agency and numerous companies all say the economic downturn is taking its toll on world oil demand.

This leaves the most plausible explanation for such high prices as tight supply, counteracting the economic gloom.

According to Bank of America Merrill Lynch, the extra culprits on top of Libya's lower output are North Sea maintenance and pipeline attacks in Nigeria.

Its analysts refer to "a string of supply shocks affecting Libyan, North Sea and Nigerian light sweet barrels. Some of the recent supply losses may reverse in the next few months, but only a global double-dip recession will be able to remove medium-term tightness in the seaborne crude oil markets."

Angola, a recent addition to the Opec cartel, has not been producing anywhere near the 1.85m barrels it pumped last year, with technical problems at some fields.

And Adam Sieminski of Deutsche Bank also mentions "slower than expected ramp-up of new production and unplanned outages" from non-Opec producers.

There is a similar picture in America, where stockpiles of its benchmark WTI crude are remarkably low. This has turned out to be a function of lower imports rather than increased consumption.

While supply remains problematic, only one thing is going to cause a collapse in prices – even lower demand in the face of a full blown economic crisis. It appears that the market is not pricing this in just yet.