-------- Original Message --------
| Subject:
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Davos: World Leaders Called to Emergency Action |
| Date:
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Wed, 20 Jan 2010 09:46:43 -0800 |
| From:
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"Stephen M. Apatow" <s.m.apatow@humanitarian.net> |
| To:
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"Pascal Lamy, World Trade Organization" <Pascal.Lamy@wto.org> |
| CC:
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International Bar Association Human Rights
Institute <hri@int-bar.org> |
20 January 2010
Dear Colleagues:
The international community is now engaged in the systemic collapse of
Haiti, following the devastating earthquake, this last week. As the
world struggles to respond to this humanitarian emergency, the cost of negligence
and neglect of the worlds severely impoverished populations, [1]
is finally being grasped by world leaders. In the United States, we
are watching the entire State of California (7th largest economy in the world,
currently in an economic emergency) enter into a deeper potential crisis,
this time due to another natural disaster associated record rains and floods.
The world exists one natural disaster away from a systemic global economic
collapse, due to a refusal to contain the factors that caused the market crash
in 2008.
It is from this vantage point, that a call is being presented to world
leaders in Davos, to advance immediate emergency actions that include (1)
separation of commercial banks, investment banks and insurance operations
and (2) 100 transparency of OTC derivatives transactions, with full review
of OTC transactions coordinated post repeal of Glass-Steagall in 1999 and
deregulation of the OTC derivatives market. In conjunction with this
request, is the need to engender the support of corporate executive leaders
with the development of measures to minimize the impact of these actions.
UN
member countries have been devastated due to hyperinflation and market distortions
caused by elimination of regulatory protections from the world financial
markets. Regarding Haiti, an appeal has been presented for relief of the
$890 Million international debt, [2] representing a pre-emptive measure that
can be extended to all countries currently in a state of emergency (including
the United States).
Note: In conjunction with Ben Bernanke's appeal for a GAO review of AIG,
a request has also been presented for review of Glass-Steagall repeal and
deregulation of OTC derivatives.
References:
- HRI: UNArts - Haiti - Hope For Humanity Global Campaign:
Humanitarian Resource Institute, 19 January 2010. www.unarts.org/news/hopeforhumanity_1202010.html
- Haiti
Emergency Appeal to Countries in Region: Humanitarian
Resource Institute, 16 January 2009. Url: www.unarts.org/news/haiti_1162010.html
In the hope of progress,
Stephen Michael
Apatow
Founder, Director of Research and Development
Humanitarian Resource Institute
Phone: (203) 668-0282
Url: www.humanitarian.net
Email: s.m.apatow@humanitarian.net
United Nations Arts Initiative
Arts Integration Into Education
Url: www.unarts.org
Twitter: unarts
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14 January 2010
This morning on CNBC, Elizabeth Warren, director of the TARP Oversight
committee, shared that the access of low interest central bank loans by
investment banks was distorting the entire interlinked global financial
system. These same distortions encompass the unregulated abuses that
caused the market crash in 2008. Two years into this crisis, special
interest groups have shut down the capacity of UN leaders (including the
White House) to implement regulatory controls. Today, the global financial
system remains at risk of systemic collapse, for example if a 7.0 earthquake
devastated the a major city in a G-7 country or the state of California (7th
largest economy in the world).
During the
second round of hearings held by the Financial Crisis Inquiry Commission
(FCIC) in Washington January 14, Denise Voigt Crawford, Texas Securities
Commissioner and president of the North American Securities Administrators
Association (NASAA), told the federal investigative panel in her testimony
that three actions should occur to prevent further potential crisis.
First,
restore provisions of Glass–Steagall, the 1933 law that created a wall between
commercial and investment banking. In fact, a bipartisan bill recently introduced
by Senators Maria Cantwell (D-Washington), John McCain (R-Arizona), Russ
Feingold (D-Wisconsin), and others would do just that by prohibiting commercial
banks from affiliating in any manner with investment banks. “By separating
the commercial banks from the investment banks, the Cantwell-McCain bill
would end speculation with depositors’ money and return stability and confidence
to Main Street,” Crawford said. -- NASAA President Tells Crisis
Investigators To Take Three Steps, Investment Advisor, 14 January 2009.
Humanitarian
Resource Institute has set forward a global grassroots appeal for citizens
to join Nobel Laureates, in a request to elected officials and leaders to
mandate immediate separation of commercial banks, investment banks and insurance
corporations.
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12 January 2010
Nobel Laureates asked to request financial market intervention by leaders
in UN countries.
Stephen Michael Apatow, Founder, Humanitarian Resource
Institute and United Nations Arts Initiative is asking Nobel Laureates to
facilitate financial market intervention by leaders in UN countries. For
every UN member country, this encompasses an immediate separation of commercial
banks, investment banks and insurance corporations, as was mediated by the
Pecora Commission
in the 1930's, with a transition of emergency funds to the grassroots level
for economic stabilization.
In a global effort to restore these legal protections, we are asking
citizens on the grassroots level in every UN country to contact their elected
officials and leaders with a request for immediate action:
----------------------------------
January 2010
Humanitarian Resource Institute
Phone: (203) 668-0282
Url: www.humanitarian.net
United Nations Arts Initiative
Arts Integration Into Education
Url: www.unarts.org
Twitter: unarts
Financial Market Legitimacy Critical for Sustainable
Global Recovery
by Stephen Michael
Apatow, Founder, Humanitarian Resource Institute and United Nations
Arts Initiative
In 1999, with the support of the directorate level at the Federal Emergency
Management Agency (FEMA), Humanitarian Resource Institute facilitated
the formation of the International Disaster Information Network (IDIN)
[1]. IDIN interlinked corporate, intergovernmental, non-governmental,
United Nations, community action, interfaith leaders and media in 192
United Nations member countries, [2] for risk management and contingency
planning for the Year 2000 conversion [3]. The focus of this effort, was
critical infrastructure analysis and contingency implementation to prevent
potential disruptions. [4,5]
The Year 2000 conversion was a historical event, with the knowledge
that significant financial resources were needed to address potential technology
challenges in every UN member country. Central banks were to increase
liquidity [6], prompting an opportunity to optimize exploitation of these
funds. In a well calculated move to eliminate regulatory controls,
we observed the repeal of the Glass-Steagall Act [7,8] and deregulation
of Over the Counter Counter (OTC) Derivatives market [9]. Brooksley
Born, chairperson of the Commodity Futures Trading Commission (CFTC), warned
Congress and the President of the need to regulate financial instruments
known as over the counter (OTC) derivatives, but her warnings were disregarded
and she was forced to resign. [10,11,12]
Following the market crash of 1929, the emergency infusion of central
bank funds for stabilization, flowed directly into trading activities inflating
another speculative bubble and a deeper collapse. On July 8, 1932,
the Dow reached its lowest level of the 20th century and did not return
to pre-1929 levels until November 1954.
[13]. Glass-Steagall was the regulatory mechanism that closed the
loophole that allowed banks and non-bank financial institutions to function
as single entities, facilitating exploitation of central bank liquidity
for use in trading activities in the stock and commodities markets. For
70 years, global financial markets functioned without a 1929 level crash,
but in 1999 these protections were removed in conjunction the most advanced
technological period in history, facilitating a systemic collapse of the
global financial system.
At the end of June 1999, the total estimated notional amount of outstanding
OTC contracts stood at $81.5 trillion [14]. The repeal of Glass-Steagall
and deregulation of OTC derivatives facilitated a leveraged expansion of
outstanding OTC contracts to $1.4 Quadrillion ($1400 Trillion) in 2006:
As a result, we have become the largest post-trade infrastructure
organization in the world with our three major subsidiaries receiving Standard
& Poors’ highest credit rating, AAA/A-1+. Last year, just to give you
some idea of the scale of our operations, the value of securities settled
through DTCC was over $1.4 quadrillion, 26% growth from the prior year.
In the American counting scheme, a quadrillion is a one followed by 15 zeros.
To grasp how many parts there are to a quadrillion, take a shovel with
you the next time you’re on the beach in Bermuda – they have nice fine
sand. Dig yourself a trench in the sand one foot (or a third of a meter)
wide, one foot deep and one mile (or 1,600 meters) long. Then stop and have
yourself a big, cold drink, because you’ll have to dig 99 more just like
that before you shovel a quadrillion grains of sand. (161 km x ⅓m x ⅓m)
of sand = 1 quadrillion grains. -- Remarks by Jill Considine: At the
joint European Central Bank/Federal Reserve Bank of Chicago Conference on
“Issues Related to Central Counterparty Clearing,” April 4, 2006. [15]
Infrastructure analysis and contingency planning for a sustainable recovery
on the critical infrastructure level, encompasses nothing short of reversing
the hyperinflationary systemic damage associated with $1.3 Quadrillion
(of OTC derivatives instruments) that should never been in the system.
To the extent that banks and non-bank financial institutions were
allowed to combine operations, retroactive FDIC banking rules, that include
capitol adequacy standards should be applied as our reference point for
the identification of fraud and recovery.
The focus of the Global Glass-Steagall Restoration Initiative [16] is
restoration of integrity and legitimacy to the global financial system,
that includes reversal of the systemic hyperinflationary damage that has
devastated the global humanitarian needs landscape, providing a compensatory
mechanism to assist with stabilization and sustainable recovery.
In a publication released on 4 January 2010, the Association
of Chartered Certified Accountants (ACCA) has come out in favour of dividing
banks into retail and investment arms after the American model adopted
in 1933. The so-called Glass-Steagall Act, adopted by the US Congress four
years after the Wall Street crash, aimed to divert risk by separating companies
that issue securities from those that engage in commercial lending. The
act was repealed in 1999. -- Global accounting body suggests splitting
up large banks: Europolitics, 4 January 2009.
[17]
References:
- International
Disaster Information Network: Humanitarian Resource Institute. Url:
http://www.humanitarian.net/idin
- Humanitarian Resource
Institute: Url: http://www.humanitarian.net/
- Year
2000 Problem: Wickpedia: Url: http://en.wikipedia.org/wiki/Year_2000_problem
- Contingency
Planning: Year 2000 Conversion: Global Infrastructure Analysis, Humanitarian
Resource Institute. Url: http://www.humanitarian.net/contingency.html
- Y2K options
and the liquidity premium in Treasury bond markets: Url: http://ideas.repec.org/p/fip/fednsr/266.html
- Critical infrastructure: Wickpedia: http://en.wikipedia.org/wiki/Critical_infrastructure
- Banking Act of 1933: P.L. 73-66, 48 STAT. 162: : FDIC:
Important Banking Legislation. Url: http://www.fdic.gov/regulations/laws/important/index.html
- Glass–Steagall Act: Wickpedia: http://en.wikipedia.org/wiki/Glass–Steagall_Act
- Derivative (finance): Wickpedia: http://en.wikipedia.org/wiki/Derivative_(finance)
- Brooksley
Born: Wickpedia. Url: http://en.wikipedia.org/wiki/Brooksley_Born
- "The Warning",
PBS Frontline, October 20, 2009. Url: http://video.pbs.org/video/1302794657
- The courageous Brooksley Born, By Henry CK Liu, Asia
Times. Url: http://www.atimes.com/atimes/Global_Economy/KL04Dj01.html
- Wall Street Crash of 1929: Wickpedia. Url: http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
- The global OTC
derivatives market at end-June 1999: Bank for International Settlements
(BIS). Url: http://www.bis.org/press/p991125.htm
- Remarks by Jill Considine: At the joint European Central
Bank/Federal Reserve Bank of Chicago Conference on “Issues Related to Central
Counterparty Clearing” Frankfurt, Germany, April
4, 2006. Url: https://www.ecb.int/events/pdf/conferences/ccp/Considine.pdf
- Global Glass-Steagall Restoration Initiative: Humanitarian
Resource Institute, 19 November 2009 (Updated: 14 December 2009). Url:
http://www.unarts.org/news/gsteagall_11192009.html
- Global accounting body suggests splitting up large banks:
Europolitics, 4 January 2009.
Url: http://www.europolitics.info/business-competitiveness/global-accounting-body-suggests-splitting-up-large-banks-art258942-8.html
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