The Widening Gyre: Monolines

The underpinnings of the irrational addictive cruel greed fantasy that is global capitalism are crumbling, it’s going to be bad-

A NEW and serious crack in the world’s financial system appeared last week when problems surfaced at a small set of obscure, but vitally important institutions – monoline insurers.

They make money by insuring against loans going wrong. If the issuer of a bond goes bust, they guarantee to step in and make interest payments and repay the principal. This security makes borrowing cheaper for companies.

Though the monolines started out in the 1970s to insure bonds issued by American local authorities, they have jumped on the boom in debt markets to grow explosively in recent years. They are estimated to stand behind bonds worth $2.5-$3.3 trillion.

In America, they have helped fund everything from building power stations to schools and hospitals. In Britain, they played a key role in financing the Channel Tunnel, upgrades to the London Underground, Arsenal’s new stadium and in £5.7 billion of private finance initiative projects.

Now the good times have come to a juddering halt. For many, the crisis has been building for six years after the monolines aggressively expanded into insuring collateralised debt obligations (CDOs) – exotic parcels of debt created by investment banks. It looked like a lucrative business as the debt markets boomed. But it has morphed into a monster that now threatens to consume them.

(Reuters) – An attempt by a New York insurance regulator to bailout monoline bond insurers is coming “too late” to avert ratings downgrades, with a broader multi-faceted regulatory response likely required, CreditSights said on Tuesday.

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Spooked

MI5 has expanded fast, particularly into the regions. New offices were opened in the South East and Wales in 2006/7 – and by 2008, regional stations will house three times the number of staff originally planned, the report reveals.The Secret Intelligence Service (SIS) – or, to use its more popular name, MI6 – grew at a rate of 3.6% in the last year compared to nearly 30% for MI5, but it has still been undergoing significant changes.

In its broadest definition, counter-terrorism now takes up 56% of MI6’s work and that figure is rising.

The committee also looked at the issue of whether the government was justified in saying that there were real national security considerations when it came to halting the Serious Fraud Office’s investigation into BAE Systems’ dealings with Saudi Arabia. Sir John told the committee that if Saudi Arabia had carried out a threat to withdraw counter-terrorist co-operation the results would be serious since it was a ‘an absolutely key country’, although the government declined to show the committee one note from the prime minister on the subject.

The government’s eavesdropping agency, GCHQ, has also been put under pressure with resources increasingly devoted to supporting MI5 operations. Making sure its resources keep pace has not always been easy.

Ooh, regional expansion, so kind of London centric England to give us the chance for more of this. And the spooks are pissed the media is leaked to, by whom though? This creates pressure from them to the government for more state control of the media, nice little circular grift that. Just how believable and independent of political interference are these cloak & dagger merchants…they support the government’s blocking of the fraud investigation of the BAE/Saudi/govt deals/bribes. Apart from y’know, promoting and rewarding the liars of Iraq, still, who wants to end up like David Kelly?

UK ID ‘Coercion’ Document Leak

No 2 ID appeal for the leaked document to be mirrored so here it is on the internet archive (pdf annotated by NO2ID), now spread it around!

The Government is looking at using “coercion” tactics as a way of introducing the controversial ID card scheme, a leaked memo suggests. The Home Office document said that young people could be made to apply for an ID card when they applied for a driving licence.

Gordon Brown has always insisted that ID cards would remain voluntary unless Parliament decided otherwise. But the latest memo – headed Options Analysis – suggests that officials are already thinking about how they can be made compulsory.

It states: “Various forms of coercion, such as designation of the application process for identity documents issued by UK ministers (eg, passports) are an option to stimulate applications in a manageable way.

“There are advantages to designation of documents associated with particular target groups, eg, young people who may be applying for their first driving licence.” (ht2 Andrew & BoingBoing)

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