Thursday, May 6, 2010

If Only One Forecast Came True?

Bob Chapman
First 6 months of 2010, Americans will continue to live in the 'unreality'...the period between July and October is when the financial fireworks will begin. The Fed will act unilaterally for its own survival irrespective of any political implications ...(source is from insider at FED meetings). In the last quarter of the year we could even see Martial law, which is more likely for the first 6 months of 2011. The FDIC will collapse in September 2010. Commercial real estate is set to implode in 2010. Wall Street believes there is a 100% chance of crash in bond market, especially municipals sometime during 2010. The dollar will be devalued by the end of 2010.


Gerald Celente
Terrorist attacks and the "Crash of 2010". 40% devaluation at first = the greatest depression, worse than the Great Depression.


Igor Panarin
In the summer of 1998, based on classified data about the state of the U.S. economy and society supplied to him by fellow FAPSI analysts, Panarin forecast the probable disintegration of the USA into six parts in 2010 (at the end of June – start of July 2010, as he specified on 10 December 2000


Neithercorps
Have projected that the third and final stage of the economic collapse will begin sometime in 2010. Barring some kind of financial miracle, or the complete dissolution of the Federal Reserve, a snowballing implosion should become visible by the end of this year. The behavior of the Fed, along with that of the IMF seems to suggest that they are preparing for a focused collapse, peaking within weeks or months instead of years, and the most certain fall of the dollar.


Webbots
July and onward things get very strange. Revolution. Dollar dead by November 2010.


LEAP 20/20
2010 Outlook from a group of 25 European Economists with a 90% accuracy rating- We anticipate a sudden intensification of the crisis in the second half of 2010, caused by a double effect of a catching up of events which were temporarily « frozen » in the second half of 2009 and the impossibility of maintaining the palliative remedies of past years. There is a perfect (economic) storm coming within the global financial markets and inevitable pressure on interest rates in the U.S. The injection of zero-cost money into the Western banking system has failed to restart the economy. Despite zero-cost money, the system has stalled. It is slowly rolling over into the next big down wave, which in Elliott Wave terminology will be Super Cycle Wave Three, or in common language, "THE BIG ONE, WHERE WE ALL GO OVER THE FALLS TOGETHER."


Joseph Meyer
Forecasts on the economy. He sees the real estate market continuing to decline, and advised people to invest in precious metals and commodities, as well as keeping cash at home in a safe place in case of bank closures. The stock market, after peaking in March or April (around 10,850), will fall all the way down to somewhere between 2450 and 4125 during the next leg down.


Harry Dent (investor)
A very likely second crash by late 2010. The coming depression (starts around the summer of 2010). Dent sees the stock market--currently benefiting from upward momentum and peppier economic activity--headed for a very brief and pleasant run that could lift the Dow to the 10,700-11,500 range from its current level of about 10.090. But then, he sees the market running into a stone wall, which will be followed by a nasty stock market decline (starting in early March to late April) that could drive down the Dow later this year to 3,000-5,000, with his best guess about 3,800.

Sheeple: Are You A Member Of The Herd?

Millions of people from countries across the world have begun to wake up to the very real threat of repressive and engineered Globalism, or what the financial elite and the politicians who work for them often refer to as “The New World Order”. The movement against this centralization of economic and social power has gained traction in nearly every sphere, to the point where even the mainstream media has been forced on occasion to acknowledge its existence and prevalence. Those of us who have been working more than a few years in this activist organization, what many of us call the “Patriot Movement”, or the “Liberty Movement”, have seen incredible leaps and bounds in the fight against disinformation and the spread of unadulterated truth. Our work has gone viral, and our membership has skyrocketed, however, the task of diluting ignorance in the overall populace is far from over.
Every researcher, writer, and filmmaker who tackles the New World Order issue will suffer the unfortunate experience of running into people who are almost criminally uninformed, and this will happen on a regular basis. For a long time, our frustration was magnified by our inability to specifically define what it was that made these people the way they were. Were some just mentally inadequate, and unable to effectively process the facts? Were they so indoctrinated by the MSM that there was no turning back? Was there an innate difference in intuitive faculties that made some people quick in picking out a lie, and others slow? Many theories abound, but one thing was certain; in our quest to inform the masses, there were always going to be those who were incapable of hearing or understanding what we had to say, no matter how factual, rational, and refined our arguments. We now call these wonders of intellectual rustication “Sheeple”…
Sheeple can be found in every country, every ethnic background, every religious organization, and every subculture.

John Williams: A Hyper-Inflationary Great Depression Coming

Pick a financial fire and you can be sure the U.S. government will hose it down with gallons of money. AIG, General Motors, Chrysler, insolvent states, FDIC, Fannie, Freddie and all the banks are just a few of the blazes Uncle Sam has sprayed money on.
Now, the Federal Reserve is printing up another $105 billion to send to Greece to help with its debt problem. Is the bailout cycle getting ready to take another turn bailing out the Banks? You know, the ones we were told had little exposure to sour European debt? Check out this article from Bloomberg last week: JPMorgan Chase & Co., the second- biggest U.S. bank by assets, has a larger exposure than any of its peers toPortugal, Italy, Ireland, Greece and Spain, according to Wells Fargo & Co. JPMorgan’s exposure to the five so-called PIIGS countries is $36.3 billion, equating to 28 percent of the firm’s Tier-1 capital, a measure of financial strength, Wells Fargo analysts including Matthew Burnell wrote today. Morgan Stanley holds $32.4 billion of debt in the region, which equates to 69 percent of its Tier 1 capital, Burnell wrote.”
I guess now we know why Ben Bernanke is supplying Greece with $105 billion in bailout money. It looks like he actually is bailing out U.S. Banks—again! I wrote about the Fed admitting to massive money creation 3 weeks ago in a post called “Bernanke Admits Printing $1.3 Trillion Out Of Thin Air.” It also looks like we are not going to stop this money printing train wreck because the bailouts seem to be never ending. This is the main reason we are facing a head-on collision with very big inflation.
In the latest report from John Williams of shadowstats.com, the inflation picture looks dire and definite. Williams wrote, My outlook for a hyperinflationary great depression in the United States is unchanged; all that is unfolding now is some of the detail that should lead to that ultimate financial/economic disaster. Gold remains the best long-term hedge here, along with some silver, and cash outside the U.S. dollar and the United States. I still like the Canadian and Australian dollars and the Swiss franc. Again, the outlook is for the long haul, irrespective of any near-term extreme volatility in the various markets. As to the U.S. stock market, the term “insanity” comes to mind as I watch some of the day-to-day movements.”

Tuesday, May 4, 2010

Mexico’s illegals laws tougher than Arizona’s

Mexican President Felipe Calderon denounced as “racial discrimination” an Arizona law giving state and local police the authority to arrest suspected illegal immigrants and vowed to use all means at his disposal to defend Mexican nationals against a law he called a “violation of human rights.”

But the legislation, signed April 23 by Arizona Gov. Jan Brewer, is similar to Reglamento de la Ley General de Poblacion — the General Law on Population enacted in Mexico in April 2000, which mandates that federal, local and municipal police cooperate with federal immigration authorities in that country in the arrests of illegal immigrants.

Under the Mexican law, illegal immigration is a felony, punishable by up to two years in prison. Immigrants who are deported and attempt to re-enter can be imprisoned for 10 years. Visa violators can be sentenced to six-year terms. Mexicans who help illegal immigrants are considered criminals.

The law also says Mexico can deport foreigners who are deemed detrimental to “economic or national interests,” violate Mexican law, are not “physically or mentally healthy” or lack the “necessary funds for their sustenance” and for their dependents.

"This sounds like the kind of law that a rational nation would have to protect itself against illegal immigrants — that would stop and punish the very people who are violating the law," said Rep. Steve King of Iowa, ranking Republican on the House Judiciary subcommittee on immigration, citizenship, refugees, border security and international law.

"Why would Mr. Calderon have any objections to an Arizona law that is less draconian than his own, one he has pledged to enforce?" Mr. King said.

Sen. Jon Kyl of Arizona, the ranking Republican on the Senate Judiciary subcommittee on terrorism and homeland security, described Mr. Calderon's comments as "hypocritical to say the least."

"I would have expected more from Mr. Calderon," said Mr. Kyl, who serves as the Senate minority whip. "We are spending millions of dollars to help Mexico fight the drug cartels that pose a threat to his government, and he doesn't seem to recognize our concerns. He ought to be apologizing to us instead of condemning us."

Mr. Kyl, along with fellow Arizona Republican Sen. John McCain, has introduced a 10-point comprehensive border security plan to combat illegal immigration, drug and human smuggling, and violent crime along the southwestern border. It includes the deployment of National Guard troops, an increase in U.S. Border Patrol agents and 700 miles of fencing, along with other equipment and funding upgrades.

He said skyrocketing violence on the border, including the recent killing of an Arizona rancher by an illegal immigrant he had gone to assist, has not gone unnoticed by the public, adding that until the federal government provides the necessary funding and manpower to adequately secure the southwestern border, Arizona will not long remain the only state to pass legislation to do it on its own.

Exclusive: Oath Keepers founder slams conservative media ‘hypocrisy’

In a time of crisis, who can the people trust? Their political leadership, or fellow citizens?

Concerned the answer to that question might be turning into “neither,” Yale-educated ex-soldier and former Ron Paul organizer Stewart Rhodes hatched an idea that’s grown beyond his wildest imagination.

Now a darling of the conservative media for his military and law enforcement activist group “Oath Keepers,” Rhodes is pursued by fawning tea party organizers and promoted by people like Glenn Beck, Matt Drudge, Rush Limbaugh, Pat Buchanan and even Watergate burglary planner G. Gordon Liddy.

Though the newfound love from right-leaning pundits is certainly not lost on him, it’s not reciprocated. For as much as they laud Rhodes, push stories about Oath Keepers and link their materials, he just sees “hypocrisy” — and was not ashamed to tear down his recent promoters in an interview with RAW STORY.

Take, for example, Glenn Beck, who eagerly followed Matt Drudge in promoting Oath Keepers late last year for their pledge to “prevent dictatorship.” Though Oath Keepers is cosponsoring a Beck-organized 9/12 rally in Washington, D.C. later this year, that doesn’t mean Rhodes agrees with or even likes the flamboyant Fox TV star.

“I’m not sure where he’s at, he kinda jumps around,” Rhodes said of Beck. “He was, early on during the Ron Paul campaign, horrible to Ron Paul. He even suggested that some of his followers were potential domestic terrorists and wanted to use the military against them. So, he seems kind of erratic.”

http://www.prisonplanet.com/exclusive-oath-keepers-founder-slams-conservative-media-‘hypocrisy’.html

Bloomberg Smears Anti-Obamacare Activists As Terrorists

Despite the arrest of a Pakistani-American who authorities have been trailing for two days as the prime suspect behind the botched Times Square car bombing, New York Mayor Michael Bloomberg wasted little time in smearing anti-Obamacare activists as terrorists during an appearance on CBS News last night, implying that the attack was the work of a Tea Party activist.

“If I had to guess 25 cents, this would be exactly that, somebody who’s homegrown, maybe a mentally deranged person or someone with a political agenda that doesn’t like the health care bill or something, it could be anything,” Bloomberg told Katie Couric.

Without knowing the full explanation behind the motivations of the man arrested in connection with the bombing, it seems unlikely to us that a man of Pakistani origin named Faisal Shahzad would have much to do with conservatives or Tea Party activists, which makes Bloomberg’s smear all the more insidious.

Authorities had been tracking Shahzad as the prime suspect for two days before his arrest at JFK Airport, after they discovered it was he who bought the 1993 Nissan Pathfinder from a Connecticut man about three weeks ago.

Bloomberg had to be aware of the fact that the prime suspect was a Pakistani and not a stereotypical white American anti-Obamacare activist, so why even invoke health care as a potential motivating factor behind the botched attack?

As Kurt Nimmo reported yesterday, before the identity of the culprit behind the bombing had even been hinted at, so-called “progressive” blogs and statist news websites staunchly pushed the explanation that the attack was planned by Tea Party conservatives and opponents of big government.

http://www.prisonplanet.com/bloomberg-smears-anti-obamacare-activists-as-terrorists.html

Economy To Collapse Due To Oil Spill?

NOTE: Map of closed fishing area (left)
David Kotok of Cumberland Advisors is out with some very gloomy comments about the economic ramifications of the Deepwater Horizon oil spill, and what it will cost. First he notes the ugliest case scenario:
This spew stoppage takes longer to reach a full closure; the subsequent cleanup may take a decade. The Gulf becomes a damaged sea for a generation. The oil slick leaks beyond the western Florida coast, enters the Gulfstream and reaches the eastern coast of the United States and beyond. Use your imagination for the rest of the damage. Monetary cost is now measured in the many hundreds of billions of dollars.
As for numbers:
Usually, the first estimates in any crises are too low. That is true here. 1000 barrels a day is now 5000, and some estimates of spillage are trending higher. No one knows exactly. The containment and boom mechanism is subject to weather cooperation as we can see this weekend. Soon we are entering the hurricane season. The thoughts of a storm stirring up the Gulf, hampering any cleanup or remediation drilling effort and creating a huge 10,000 square mile black stew is frightening to every professional in the business.

This will be a financial
calamity for many firms, not just BP and its partners and service providers. Their liabilities are immense and must not be underestimated. The first estimate of $12.5 billion is only a starter.
As for the economy beyond BP...
Thousands of small and independent businesses as well as larger public companies in tourism are hurt here. This is not just about the source of half the nation’s shrimp. That is already a casualty. It’s also about the bank loans for the $200,000 shrimp boat and the house the boat owner and/or his employees live in and the fact that this shock piles on a fragile financial systemthat is trying to recover from a three-year financial crisis. Case study, my fishing guide in the Everglades splits his time between Florida and Louisiana. His May bookings in LA have cancelled. His colleagues lost theirs and their lodge will be empty. They are busy trying to find work in the clean up. For him, his wife and eleven year old daughter, his $600 a day guide fees just went “poof”. When I asked him if he thought he had a legal claim on BP, he said he hadn’t thought about it yet but it gave him pause. As we suggested above, the $12.5 billion loss estimate is only a starter.
And the taxpayer...
Federal deficit spending will certainly rise by tens, and maybe hundreds, of billions as emergency appropriations are directed at larger and larger efforts to clean up this mess. At the same time, federal and state revenues tied to Gulf-region businesses will fall. My colleague John Mousseau will be discussing the impact on state and local government debt in a separate research commentary.

We expect that the Federal Reserve will extend the timeframe that we have come to know as the “extended period” in the making of its monetary policy. We do not expect the Fed to raise interest rates at all for the rest of this year, and maybe well into next year. We expect to see the deterioration of the economic statistics for the US to reveal the onset of this oil-slick crisis in May, and the negative impact will intensify during the summer months. A “double-dip” recession probably has been made more likely by this tragedy.

Find Out How Much The Greek Bailout Is Costing The World

The Greek bailout has yet to be approved by the government's involved, but the costs for the citizens of each country are starting to settle.
Spoiler alert: Germans get a bargain, but a debt-ridden Ireland has to face heavy per household costs.
Households across the globe are going to have to help with the Greek bailout over the next three years, and through the IMF portion of the deal, some of those costs will be passed on to Americans as well.


United States (IMF Stake): $345.82 per U.S. household
Slovakia: $617.99 per household
Slovenia: $684.17 per household
Portugal: $707.33 per household
Germany: $745.19 per household
Malta: $769.54 per household
Spain: $776.03 per household
Finland: $776.95 per household
Cyprus: $789.92 per household
Italy: $803.16 per household
France: $877.02 per household
Belgium: $845.40 per household
Austria: $861.13 per household
Netherlands: $866.96 per household
Ireland: $1084.69 per household
Luxembourg: $1675.41 per household

Hotel Industry: Worst Decline Since the 1930's

ATLANTA, May 3 /PRNewswire/ -- According to survey results in the recently released Trends® in the Hotel Industry report issued by PKF Hospitality Research (PKF-HR), the average U.S. hotel suffered a 35.4 decline in profits in 2009. This is the greatest annual fall-off in the bottom line since PKF-HR began tracking the industry in the 1930s.

"Declines in revenues make the headlines, but the bottom line is where the rubber meets the road for owners," said R. Mark Woodworth, president of PKF-HR. "The 35.4 percent decline in profits realized in 2009 has severely stressed borrower/lender relationships throughout the country as delinquencies, defaults, foreclosures, and bankruptcies continue to escalate."

"2009 was such a singular year in terms of hotel expenses and profits," he added. "As the industry approaches a turn, all parties with a vested interest in the bottom line should be measuring their performance against that of comparable facilities to insure that optimum operational efficiency is being realized. Because of these extraordinary times, the detailed 2010 Trends®data is more valuable than ever."

http://www.prnewswire.com/news-releases/bottoms-down-hotel-profits-decline-record-354-percent-according-to-pkf-report-92662089.html

Dollar Inevitable Demise: US Government Needs 117 Trillion

Consider these figures. The current size of the American economy is roughly $14 trillion. As of this writing, the federal government's total public debt stands at nearly $13 trillion.

In its first midsession review, the White House Office of Management and Budget estimated that at the end of 2010, the national debt will breach the $14-trillion mark. This means that America's sovereign debt will be soon equal to the annual output of our economy. In other words, our national debt will shortly reach 100 percent of GDP. History and experience show that most governments that assume such levels of debt are ultimately not able to contain them. In most cases, this kind of situation eventually leads to the disintegration of the country's monetary regime and the collapse of its currency.

This outcome is not inevitable, given that -- in theory, at least -- a debt of 100 percent of GDP is still manageable. But to bring things under control would require strict fiscal discipline. Unfortunately, there no indication that our federal government can muster any. Quite the contrary. Last year the federal budget deficit reached a record $1.4 trillion. At nearly 10 percent of GDP, this was the highest peacetime deficit in history. Despite the numerous assurances that the 2009 shortfall was a one-off event brought on by the financial crisis, this year's deficit will go even higher. According to theanalysis submitted by the Congressional Budget Office last month, it will climb to $1.5 trillion. This will amount to 10.3 percent of GDP.

There is every reason to believe that the deficit will grow even faster in the years to come, as the federal government further increases its involvement in health care. The estimates by the Office of the Management and Budget which we quoted above do not factor in the costs associated with the recently passed health care reform. Even the more conservative estimates project that the legislation will cost well over one trillion during the program's first ten years. It is almost certain, however, that this figure is grossly understated, as government programs have a tendency to exceed their initial cost projections by grotesque multiples.

This, however, is not the worst of it, because the national debt represents only a relatively small portion of our government's total financial obligations. The far greater bulk is made up of long-term liabilities inherent in entitlement programs. According to the latest estimates by the Dallas Federal Reserve, the combined liabilities of Medicare, Social Security, and Medicaid amount to an astounding $104 trillion.

When we add the national debt and entitlements together, we get a figure of some $117 trillion. This figure represents the amount of money the federal government will have to come up with in the years ahead in order to discharge its obligations.

Tuesday, April 27, 2010

ACORN & Chuck Schumer beat hipsters & firemen Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/blogs/beltway-confident

I’ve written in the past about the development of the Nets (basketball) new arena in Brooklyn — a development that has involved eminent domain, subsidies, and race-baiting. This week, we get the news that the final holdout, and the loudest voice against the development, has accepted the theft of his house and his eviction, pocketed a $3 million settlement, and moved out.

The story intrigued me because it was big intramural battle on the Left. On the winning side are Chuck Schumer, developer Bruce Ratner, and ACORN. On the losing side are liberal, ill-shaven, bespectacled hipsters (including some of my friends).

The dividing line isn’t color or political affiliation. It’s people with access to government might vs. people without access to government might.

And as Ratner’s bulldozer shifts into high gear, Politico gives us this gem:

So, there Schumer was Monday morning, introducing Reid to the big-money developers of the New Jersey Nets’ new $4.9 billion facility in Brooklyn. Schumer told the developers that he and Reid had been “through war together,” and he called the Nevadan his “foxhole buddy,” according to someone who was there.

“He is beloved by our caucus, from the most conservative to the most liberal,” Schumer told the fundraisers on Monday, the source said. “He does a great job of bringing together 59 Democrats of such broad philosophical and geographic diversity. And the egos are not small. What Harry does is amazing.”

Monday’s fundraiser was headlined by Bruce Ratner, the real estate mogul who owns the Nets — and who has donated more than $127,000 to Democrats in recent years.

While Schumer’s office won’t say how much money the event raised for Reid, cash poured in from a number of developers and real estate types. The event came just hours before a procedural vote on a plan to rewrite the rules for Wall Street, but Reid’s office stressed that the donors who turned out Monday weren’t bankers or Wall Street officials — and that, in fact, many work for Ratner’s company as well as for electrical and construction companies.

This is what big government does.



Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/acorn--chuck-schumer-beat-hipsters--firemen-92246274.html#ixzz0mLk4ApFV

This Earth Day, Thank a Hunter

‘In 1970, a Senator from Wisconsin named Gaylord Nelson raised his voice and called on every American to take action on behalf of the environment,” reads President Obama’s Earth Day proclamation. “In the four decades since, millions of Americans have heeded that call and joined together to protect the planet we share.”

Well, I’ve got news for our President. Millions of Americans who had never heard of Gaylord Nelson “took action on behalf of the environment,” decades before the good Senator “raised his voice.” More newsworthy still, most of these belonged to those insufferable rustics who “cling to guns and bibles.” To wit:

The Pittman-Robertson Act (1937) imposed an excise tax of 10 per cent on all hunting gear. Then the Dingell-Johnson act (1950) did the same for fishing gear. The Wallop-Breaux amendment (1984) extended the tax to the fuel for boats. All of this lucre goes to “protect the environment” in the form of buying and maintaining National Wildlife Refuges, along with state programs for buying and maintaining various forms of wildlife habitat.

Sunday, April 25, 2010

Senators postpone climate bill unveiling

WASHINGTON (Reuters) – Monday's unveiling of a compromise Senate climate bill was postponed on Saturday, Democratic Senator John Kerry said, after a dispute arose over unrelated immigration reform legislation.

Republican Senator Lindsey Graham said earlier on Saturday he would have to pull out of the bipartisan climate change effort because of concerns Democrats would push forward with a debate on immigration reform, rather than the climate change bill, in the Senate.

Kerry said he hoped to keep working for passage of a climate bill.

He said that after more than six months of detailed meetings with Graham and independent Senator Joseph Lieberman, "we believe that we had reached" an agreement on the details of a bill to reduce smokestack emissions of carbon dioxide and other greenhouse gasesassociated with global warming.

They were planning to outline those details at a news conference on Monday that would have been attended by some environmental and industry representatives.

"But regrettably, external issues have arisen that force us to postpone only temporarily" the Senate's work on the climate bill that also would have expanded U.S. nuclear power generation and offshore oil drilling.

The wide-ranging climate bill already faced an uphill battle in the Senate, even before it became enmeshed in a partisan battle between Democrats and Republicans over immigration reform.

But with only a few months left before November's congressional elections, senators are trying to determine where their efforts should be focused, with the elections playing an important role in their decision.

Earlier on Saturday, The Washington Post reported that Graham wrote a letter to his colleagues informing them that unless Democrats stepped back from plans to move ahead with immigration reform rather than the climate change bill, the South Carolina Republican would drop out of the three-senator working group.

Without Graham on board, efforts to pass climate control legislation could be doomed as he was expected to work to win more Republican support for the bill.

Senate Majority Leader Harry Reid issued a statement on Saturday that immigration and climate change were both important to Americans.

"They expect us to do both, and they will not accept the notion that trying to act on one is an excuse for not acting on the other," Reid said.

State reps want to fight violence with National Guard's help

Two state representatives called on Gov. Pat Quinn Sunday to deploy the Illinois National Guard to safeguard Chicago's streets.

Chicago Democrats John Fritchey and LaShawn Ford said they want Quinn, Mayor Richard Daley andChicago Police Supt. Jody Weis to allow guardsmen to patrol streets and help quell violence. Weis said he did not support the idea because the military and police operate under different rules.

"Is this a drastic call to action? Of course it is," Fritchey said. "Is it warranted when we are losing residents to gun violence at such an alarming rate? Without question. We are not talking about rolling tanks down the street or having armed guards on each corner."

What he envisions, Fritchey said, is a "heightened presence on the streets," particularly on the roughly 9 percent of city blocks where most of the city's violent crimes occur.

Weis previously identified those "hot spots" and said he plans to create a 100-person team made up of selected and volunteer police personnel to respond to crime there. If guardsmen were to assist police, they could comprise or contribute to that force, Fritchey said.

So far this year, 113 people have been killed across Chicago, the same number of U.S. troops killed in Iraq and Afghanistan combined in the same period, Fritchey said.

"As we speak, National Guard members are working side-by-side with our troops to fight a war halfway around the world," Fritchey said. "The unfortunate reality is that we have another war that is just as deadly taking place right in our backyard." While the National Guard has been deployed in other states to prevent violence related to specific events and protests, the Chicago legislators said they are unaware of guardsmen being deployed to assist with general urban unrest.

Weis countered that the only scenario in which the National Guard would be helpful is in the situation of a tornado, earthquake or flood. If the military were brought in to help with city violence, they wouldn't answer to police command -- creating a "major disconnect" in mission and strategy.

Alluding to the 1970 Kent State University incident where the National Guard was called in and protestors and students were shot, Weis said having guardsmen handle crime could be "disastrous." But he said if the Daley suggested it, he would consider the option.

"I'm open to anything that reduces violence. But I have concerns when you mix law enforcement and the military," Weis said.

But Fritchey and Ford said prompt action is needed because summer is right around the corner and with the warm weather comes an increase in violence.

Fritchey and Ford serve two different constituencies, representing the North Side and the West Siderespectively. "One half of this city views this as a part of daily life," Fritchey said. "Another part of the city doesn't care because it doesn't affect them." Yet the lawmakers said they are coming together because gun violence should be a priority to all Chicagoans.

"No help is too much help" Ford said. "This is not just about the murders. It's about the crime. It's about people being stabbed, robbed and in the hospital on life support."

Fritchey said he spoke to representatives from Quinn's office about deploying guardsmen and they "seemed open to the idea." The lawmakers had yet to speak to Weis or the mayor's office.

"I don't anticipate the governor implementing it over the objection of the mayor," Fritchey said.

"I hope this doesn't become a territorial issue. I hope this doesn't become an ego issue. This isn't about public relations or politics. This is about reclaiming our communities."

US prepares to push for global capital rules

By Tom Braithwaite

Published: April 25 2010 17:24 | Last updated: April 25 2010 17:24

The US is preparing to pivot from domestic regulatory reform to a push for a tough new international capital regime after the weekend’s G20 and International Monetary Fund meetings glossed over differences between leading economies.

Tim Geithner, US Treasury secretary, met Mario Draghi, chairman of the Financial Stability Board, on Sunday to discuss the contours of a system that would decide the safety and profitability of banks for decades to come and could eclipse the arguments over bank taxes and regulation.

But the different positions of senior central bank and government officials from several countries expressed to the Financial Times on the sidelines of the G20 meetings in Washington suggested that a final international agreement remains a challenge.

The G20 communiqué on Friday said: “We recommitted to developing by end-2010 internationally agreed rules to improve both the quantity and quality of bank capital and to discourage excessive leverage.”

But participants said little time was spent on the issue and that officials were gearing up for a battle at the June meeting over the direction of the new standards, which would prevent banks from relying on short-term funding and disqualify some assets from counting towards core regulatory capital, the highest-quality loss-absorbing part of the capital structure.

The most important fault line runs between a bloc of countries that includes the US, the UK and Switzerland and one that includes Germany, France and Japan.

The first group is enthusiastically behind a substantial increase in capital ratios coupled with a more conservative assessment of what counts as capital, tough liquidity rules and a new simple leverage ratio.

The second group is more attached to the pre-eminence of the current risk-based approach and wants the leverage ratio to have a much less important role in governing banks’ balance sheets.

Officials in the US and Europe are now starting to discuss the quantity of an increase in ratios among themselves. Some want a dramatic increase in the minimum level of capital over risk-weighted assets – perhaps to as much as 25 per cent from 8 per cent today – to be on the table while others want a more modest revision of capital rules.

“In the US right now there’s an absolute paranoia about a future bail-out,” said Douglas Elliott, fellow at the Brookings Institution think-tank. “In Germany and France, where they haven’t had to do this to the same extent and there’s more of a feeling that the state should be involved in the banking system, they’re not as concerned. The more you’re comfortable with the public sector as the potential backstop, the less private capital you need.”

Initial proposals from the Basel committee that sets capital rules met a robust response from banks which complain – with the sympathy of some officials in France and Germany – that some proposals are too unsophisticated to take account of the real asset risk, and credit would become scarcer and more expensive as a result of a move towards tangible equity capital and an increase in capital ratios.

JPMorgan Chase, in a response to a request for consultation, said: “To maintain the same level of profitability, pricing on products would have to increase by 33 per cent.”

One participant at a US Federal Reserve meeting this month to discuss the new regime said “full and frank” did not do justice to the furious response from some industry delegates.

The reaction from capital hawks was that a blunt backstop might be better than an overreliance on the sophistication of risk models and regulators. They also said banks would be given plenty of time to adjust to the new system, perhaps several years, to minimise the immediate impact on credit provision.

Technocrats said they were stepping up the pace of their work, drawing up impact assessments for new regimes. But they were under contradictory pressures, not only over content but also timing, with countries including France recommending a slower, more deliberative approach while the US urges more speed.

For all the technical work, there is an increasing belief that governments and central banks will supersede the Basel officials in the next few months and engage in contentious meetings over the summer.