-------- 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 M. Apatow
Founder, Director of Research & Development
Humanitarian Resource Institute
Humanitarian University Consortium Graduate Studies
Center for Medicine, Veterinary Medicine & Law
Phone: 203-668-0282
Email: s.m.apatow@humanitarian.net
Internet: www.humanitarian.net
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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.
----------------------------------
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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