Wall Street Heathens: How Their Greed And Gambling Became The Axe Of Statist Policy

One of the most unfortunate acronyms ever invented was BRIC. It supposedly embodied an epoch-defining ignition of capitalist growth and prosperity in Brazil, Russia, India and China. And these leading paragons were held to be emblematic of a general economic awaking in the EM.
But it was no such thing. The BRIC countries were actually economic cripples riven with socialist and statist policy afflictions that had the good fortune to hitch a ride on the central bank fueled credit binge of the last two decades.
Not surprisingly, the term was invented in 2001 by Goldman’s London based stock peddler and propagandist, Jim O’Neill. The latter’s patented slide shows about the awesome BRIC advance were typically bulging with charts and data. But what O’Neill failed to comprehend was that these bounteous curves and soaring CAGRs were tracking a metastasizing monetary bubble, not a miracle of capitalist prosperity.
And there is an unheralded reason for this epic error. O’Neill is economically unchurched, which is to say, a Wall Street heathen. The righteous capitalist doctrines of sound money, fiscal rectitude and markets free of state intervention and bailouts are completely unknown to him. Like his ex-Goldman compatriot, Mario Draghi, his creed is ‘whatever it takes’. That is, whatever action is required of the state and its central banking branches to keep financial asset markets inflating is deemed to be per se legitimate and urgent.
After all, in the age of central bank driven bubble finance the purpose of Wall Street and its equivalents elsewhere is to scalp profits from the expanding bubble, not to discover honest securities prices, allocate capital or transform real economic savings into productive long-term investments.

This post was published at David Stockmans Contra Corner by David Stockman ‘ December 31, 2014.

Central Bankers At Work: Money Dies In Japan, Markets Chaotic In Europe

While Abenomics continues to be classified as ‘pro-growth’ rather than vilified for what it has done, that is as clear in the real economy as it is in the financial realm. Japanese experimentation with ZIRP has destroyed, effectively, any informational content from the JGB curve which contributes to continued resource waste. The Japanese just auctioned a 2-year note at a negative yield, as the nation continues to achieve these dubious milestones of global repute. Their 10-year has collapsed to barely 30 bps in yield.
These kinds of results are the death of ‘money’ (using the term broadly here, certainly not specifically applicable as true money would prevent all of this). Is it any wonder that the one economy that has been totally disabled for a quarter of a century is ground zero for financial experimentation of the highest order? The death of money is the inevitable conclusion of this trend, and no economy will be able to survive it outside of long-term zombification dooming its people to stagnation and decay. Japanification is not a theory any longer.
Less far along on that trend are the Europeans. The economy is not as obviously in distress as it is in Japan, but it is acknowledged and nearly conventional wisdom that it is not far off from that woeful fate. And like Japan, Europe is awash in the death of money, perhaps even comically so given the state of finance there.
For a detached observer, there is nothing quite like the Swiss government bond ‘curve.’ Of course, it ceased being a curve denoting anything fundamental of Swiss or even broader European economics a long time ago, but in the space of just four months it has been tortured and twisted into a thing unrecognizable to logical finance.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ December 29, 2014.

Occam’s Oil Razor: Oil Is Falling Hard Because World Demand Is Falling Hard

As my colleague Joe Calhoun continually reminds us, everything that happens has happened before. The ongoing ‘struggle’ to define what is driving crude oil prices lower is perhaps another instance of a past ‘cycle’ being reborn. With oil prices now heading much closer to the $40′s than the $60′s, consistent commentary is increasingly swept aside.
The move in crude these past six months is now nothing short of astounding. At about $52 current prices (which will probably move in either direction significantly by the time this is posted) the collapse from the recent peak now equals only past, significant global recessions under the oil regime that began in the mid-1980′s.

That comparison includes the 1997-98 Asian ‘flu’ episode where the mainstream convention was also totally convinced of only massive oversupply defining price action. This was incorporated even into the International Energy Agency’s (IEA) estimates of oil inventories, as described shortly thereafter by certain incredulous oil observers:

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ December 31, 2014.

Commodity Prices Are Cliff-Diving Due To The Fracturing Monetary Supernova – The Case Of Iron Ore

Crude oil is not the only commodity that is crashing. Iron ore is on a similar trajectory and for a common reason. Namely, the two-decade-long economic boom fueled by the money printing rampage of the world’s central banks is beginning to cool rapidly. What the old-time Austrians called ‘malinvestment’ and what Warren Buffet once referred to as the ‘naked swimmers’ exposed by a receding tide is now becoming all too apparent.
This cooling phase is graphically evident in the cliff-diving movement of most industrial commodities. But it is important to recognize that these are not indicative of some timeless and repetitive cycle – – or an example merely of the old adage that high prices are their own best cure.
Instead, today’s plunging commodity prices represent something new under the sun. That is, they are the product of a fracturing monetary supernova that was a unique and never before experienced aberration caused by the 1990s rise, and then the subsequent lunatic expansion after the 2008 crisis, of a cancerous regime of Keynesian central banking.
Stated differently, the worldwide economic and industrial boom since the early 1990s was not indicative of sublime human progress or the break-out of a newly energetic market capitalism on a global basis. Instead, the approximate $50 trillion gain in the reported global GDP over the past two decades was an unhealthy and unsustainable economic deformation financed by a vast outpouring of fiat credit and false prices in the capital markets.
For that reason, the radical swings in commodity prices during the last two decades mark the path of a central bank generated macro-economic bubble, not merely the unique local supply and demand factors which pertain to crude oil, copper, iron ore, or the rest. Accordingly, the chart below which shows that iron ore prices have plunged from $150 per ton in early 2013 to about $65 per ton at present only captures the tail end of the cycle.
What really happened is that the central bank instigated global macro-economic bubble ripped commodity pricing cycles out of their historical moorings, resulting in a one time eruption of price levels that had no relationship to sustainable supply and demand factors in the mines and petroleum patch. What materialized, instead, was an unprecedented one-time mismatch of commodity production and use that caused pricing abnormalities of gargantuan proportions.

This post was published at David Stockmans Contra Corner on December 29, 2014.

Why Commodity Prices Are Cliff Diving: The Iron Ore Collapse Reflects The End Of The Monetary Super-Cycle

Crude oil is not the only commodity that is crashing. Iron ore is on a similar trajectory and for a common reason. Namely, the two-decade-long economic boom fueled by the money printing rampage of the world’s central banks is beginning to cool rapidly. What the old-time Austrians called ‘malinvestment’ and what Warren Buffet once referred to as the ‘naked swimmers’ exposed by a receding tide is now becoming all too apparent.
This cooling phase is graphically evident in the cliff-diving movement of most industrial commodities. But it is important to recognize that these are not indicative of some timeless and repetitive cycle – – or an example merely of the old adage that high prices are their own best cure.
Instead, today’s plunging commodity prices represent something new under the sun. That is, they are the product of a fracturing monetary super-cycle that was a unique and never before experienced aberration caused by the 1990s rise, and then the subsequent lunatic expansion after the 2008 crisis, of a cancerous regime of Keynesian central banking.
Stated differently, the worldwide economic and industrial boom since the early 1990s was not indicative of sublime human progress or the break-out of a newly energetic market capitalism on a global basis. Instead, the approximate $50 trillion gain in the reported global GDP over the past two decades was an unhealthy and unsustainable economic deformation financed by a vast outpouring of fiat credit and false prices in the capital markets.

This post was published at David Stockmans Contra Corner by David Stockman ‘ December 29, 2014.

Obamacare: How Screwed Are You?

ObamaCare was never about healthcare, the poor, insurance, or anything else.
It’s about controlling the populace, paying off cronies, donors, supporters and expanding the size and authority of the central government.
You think they cared that no one could get on the website and actually sign up for ObamaCare before the 2012 election?
Pa-lease..
But since then, millions of Kool-aid drinking Americans figured out what a scam they’d been sold and the 2014 result was a resulting nightmare for Democrats and Barack Obama.
Stay with me:
So far, nearly 12,000,000 words – that’s 12 meeellion (pinky to mouth) words have been written, published and are being implemented into the final ObamaCare regulations.
If that sounds like a lot, consider that the monstrous original Affordable Care Act was a paltry 380,000 words or so before it was bribed, cajoled, conned and finally hoaxed legislatively down our throats.
That means unelected bureaucrats, various lobbyists, corporate interests, union pinheads and other cronies looking to cash-in on the slush or get in on the massive cottage industry being paid billions to explain it all to businesses, hospitals, doctors, caregivers and average citizens who never asked for it in the first place – have themselves created a behemoth thirty times bigger than the original bill..

This post was published at The Daily Sheeple on December 28th, 2014.

Origins Of Today’s Middle East Cauldron: Machinations Of British & French Imperialists During WWI

By Sheldon Richmond at the Future Of Freedom Foundation
The wall-to-wall coverage of the disintegration of Iraq ought to carry this credit: ‘This bloodshed was made possible by the generosity of British and French imperialists.’
The stomach-wrenching violence in Iraq – not to mention the horrendous civil war in Syria, the chronic unrest in Palestine/Israel, and problems elsewhere in the Middle East – are direct consequences of the imperialist acts of the British and French governments at the end of World War I, the history-altering catastrophe that began 100 years ago.
The story has been told many times. The government of Great Britain wanted to disrupt the Ottoman Empire’s ability to help Germany and the Austro-Hungarian Empire in the Great War. So the British dispatched personnel, most famously T. E. Lawrence (‘Lawrence of Arabia’), to persuade the Arab leaders to revolt against the Turks, in return for which they would gain their independence in (roughly) the Levant (what today is Israel/Palestine, Jordan, and Syria), Mesopotamia (Iraq), and the Arabian Peninsula. The Arab leadership agreed and proceeded to obstruct the Turks’ war efforts.
In the 1915-16 correspondence between the British High Commissioner in Cairo, Sir Henry McMahon, and Arab leader Hussein bin Ali, McMahon acknowledged Hussein’s demand for independence in most of the Levant (Palestine included) and the Arabian peninsula:
Subject to the above modifications, Great Britain is prepared to recognize and support the independence of the Arabs in all the regions within the limits demanded by the Sherif of Mecca [Hussein].

This post was published at David Stockmans Contra Corner on December 27, 2014.

How Goldman Sachs and D.C. Hosed AIG – and the Taxpayers

The truth about crony capitalism, at the highest level, is being laid bare right before our eyes.
I’m talking here about Goldman Sachs Group Inc. (NYSE: GS) as the husband of global investment banking prowess with the U. S. government as its mistress puppet.
Maybe there is hope that the Goldman Government can be brought down.
Okay, I was pushing it there. That’s not going to happen in this century.
But here’s what is happening…
A Little Light Shines In The public is finally getting a look inside the black box where the titans of Wall Street and their inside-jobbers in Congress and at the highest levels of the U. S. government plot their profiteering and pilfering schemes.
Remember Starr International suing the United States for essentially ripping off American International Group Inc. (NYSE: AIG) and its shareholders? Starr is an insurance company controlled by Maurice ‘Hank’ Greenberg, the former CEO of AIG, not long ago the largest insurance company in the world.
I told you about it back in September.
Apparently, this closely watched 37-day trial that was supposed to have ended in November is far from over.

This post was published at Wall Street Examiner on December 26, 2014.

The Keynesian End Game Crystalizes In Japan’s Monetary Madness

If the BOJ’s mad money printers were treated as monetary pariahs by the rest of the world, it would at least imply that a modicum of sanity remains on the planet. But just the opposite is the case. Establishment institutions like the IMF, the US treasury and the other major central banks urge them on, while the Keynesian arson squad led by Professor Krugman actually faults Japan for being too tepid with its ‘stimulus’.
Now comes several new data points that absolutely confirm Japan is a financial mad house – -even as its policy model is embraced by mainstream officials and analysts peering from a distance. Front and center is the newly reported fact from the Cabinet Office that Japan’s household savings rate plunged to minus 1.3% in the most recent fiscal year, thereby entering negative territory for the first time since records were started in 1955.

Indeed, Japan had been heralded as a nation of savers only a generation ago. During the era before it’s plunge into bubble finance in the late 1980s, households routinely saved 15-25% of income. But after nearly three decades of Keynesian policies, Japan has now stumbled into an insuperable demographic/financial trap; and one that is unusually transparent and rigidly delineated, to boot.

This post was published at David Stockmans Contra Corner on December 26, 2014.

David Stockman Debunks TARP Profit Claims: The Fed Runs A ‘No Banker Left Behind’ Program

Washington’s untruths about the Troubled Asset Relief Program (TARP)’s so-called ‘success’ add up to something worse than the original taxpayer bailouts of big banks and other corporations, according to David Stockman, White House budget chief during the Regan administration.
He noted the Treasury Department recently concluded that the 2008 TARP had actually returned a profit of $15.3 billion, returning $441.7 billion on the $426.4 in taxpayer monies invested to save the likes of Citigroup, Bank of America, General Motors, American International Group (AIG) and other pre-meltdown spendthrifts.
‘The ‘small profit’, along with most of the so-called ‘recovery’ of Uncle Sam’s $426 billion initial investment, was ground out of the backs of America’s savers and depositors; or it was scalped from the massive financial bubbles the Fed has generated in the Wall Street casino,’ Stockman wrote on his Contra Corner blog.
‘In short, under an honest monetary regime of market clearing interest rates, bank balance sheets would be far smaller. Likewise, deposit costs would be far higher, and opportunities to scalp profits from the global scramble for yield far less abundant.’

This post was published at David Stockmans Contra Corner on December 26, 2014.

Bill Sardi: Defending Health Against the Government

ROCKWELL: Well, good morning. This is the Lew Rockwell Show. And it’s great to have as our guest this morning, Mr. Bill Sardi. First of all, if you’re not entirely up on Sardi-ism, take a look at his archive on LewRockwell.com, his magnificent health articles, political articles, financial articles. Not only will you learn a lot, but it goes down very easily because he’s such a wonderful writer and such a clear thinker. And I also want to highly recommend, if you don’t happen to live in Bill’s area in California, you can hear his unbelievably great daily radio show that’s on 9:00 to 10:00 California time. It’s KLAV1230am.com. And we’ll put that, of course, into this podcast, as well as his Knowledge of Health site, his natural health library and online book site. Really, he’s a one-man combination of the most important things we need to know about.
And, Bill, it’s so wonderful to have you on the show again.
And before we talk about what you’ve done in terms of vitamins and supplements and the banking system and the political cronies and all the rest of the terrible problems we have in this country, tell me what has happened to your magnificent discovery of resveratrol? What it is, what it does, and how – I guess, we shouldn’t be surprise, though it’s still an outrage – how the medical establishment has treated you.
SARDI: It’s very interesting. We got a front-line view of this for the last 10 years. How does modern medicine thwart maybe one of the greatest discoveries of all time? That is, that maybe we could live 120 healthy years. And so the promise of it is that if we just took a diet of one meal a day calorie restriction and we consume that, as it’s been proven in every form of life, from yeast cells to roundworms to fruit flies on up to mice and even the primate monkeys, such a diet would almost double our life span and our health span. Now the point is we’re probably not going to adhere to such a diet but they found, 10 years ago, that you could mimic the effects of that with little small molecules. And the key molecule was resveratrol or red wine molecule.
And so I had set out and I had interviewed, as a journalist, David Sinclair at Harvard. From this, spawned a dietary supplement that I then marketed for 10 years, and then faced all of the road blocks that modern medicine imposed because they overdosed the lab animals and intentionally produced negative results. We had a clinical study scheduled for humans with Alzheimer’s disease at University of Wisconsin. You could still go to clinical trials and see the registrations. They failed to proceed and recruit patients. A drug company interfered with that trial. We’ve had laboratory samples destroyed in transit. We’ve had our lead researcher falsely accused of scientific fraud. This eventually led to his death due to the stress of it all. And, of course, it was outrageous because we had research centers in Italy and Canada that had duplicated his work, and yet they accused him of fraud. There was no evidence of it. He had, of course, been pilloried. So we’ve been living with this whole thing.

This post was published at Lew Rockwell on December 26, 2014.

Statins Cause Brain Dysfunction

Statins are the most profitable medications in the history of Big Pharma. They are promoted as the go-to medications to prevent/treat heart disease. A recent study found nearly 100% of men and 62% of women aged 66-75 should take a statin medication even if their cholesterol level is normal. (1)
Listening to conventional cardiologists, the American Heart Association, the American College of Cardiology and many other mainstream groups would have you believe that statins should be placed in the water supply. If statins significantly lowered the risk of heart disease – they don’t – and if statins were not associated with adverse effects – they are – then I could entertain a discussion on the widespread use of statins. However, statins are associated with a wide range of serious adverse drug reactions which should cause any health care provider to think twice or at least to use caution when prescribing this class of medication.

This post was published at Lew Rockwell on December 25, 2014.

Krugman’s Case For Even More Stimulus Is Even More Erroneous

As distasteful as it can be, there will be, I believe, a necessary condition whereby closer examination of Paul Krugman’s writings and rantings is fruitful. The rise of Keynesian doctrine, more specifically the re-rise, seems to be more and more prevalent especially as the global economy careens out and away from all the trillions in monetarisms that have been perpetrated these past seven years. Part of that is due to Krugman’s assertions, which have been very blunt and emphatic to his credit, that monetarism would not work. Thus what is more important are his prescriptions for what to do next, not as if they will be more effective but rather as instructive as to what further mistakes policymakers will render in the near future.
As this becomes true, his reasoning as to why he believed monetary unsuitability to be the case becomes paramount – namely that monetary ‘stimulus’ without fiscal ‘stimulus’ especially at the zero lower bound is useless. He is of the ‘liquidity trap’ generation, as he diagnoses the current condition as ‘pushing on a string.’
This was not, apparently, a long-held position for Dr. Krugman, but one in which he converted out of Japan’s ‘experiment’ in the late 1990′s.
To my own surprise, what the model actually said was that when you’re at the zero lower bound, the size of the current money supply does not matter at all. You might think that it’s a fundamental insight that doubling the money supply will eventually double the price level, but what the models actually say is that doubling the current money supply and all future money supplies will double prices. If the short-term interest rate is currently zero, changing the current money supply without changing future supplies – and hence raising expected inflation – matters not at all.
That is his explanation as to why even massive QE will not move to inflation at the zero lower bound. To his formulation there needs to be a credible assertion of continually applying the same pressure through QE. Financial agents are not to be fooled by that, as this is all rational expectations theory, because they know (which is debatable) there is a boundary by which a central bank will not pass. In other words, if central banks commit to doubling the money supply to gain inflation, financial agents already know that such a commitment is false and constrained by (what they hope) rational sense not to perpetuate into hyperinflation and collapse.

This post was published at David Stockmans Contra Corner on December 23, 2014.

Another Non-Confirmation Of 5% GDP: New Homes Sales Flat-Line At Historic Bottom

Perhaps the BEA should have moved the GDP release up a few days to allow mainstream commentary its unbridled and unstained euphoria. Almost as soon as the GDP revisions were released, the upward appearance of economic growth was seriously undermined by income results and the nature of spending ‘gains.’ That was soon followed by a rather dire look into business investment through capital goods. And the pre-holiday data dump took one more leg out of the fun with new home sales that continued the trend of the growing and prior real estate funk.
The decline in existing home sales released yesterday was matched by not just tepid new home sales in November but revisions that continue all in the ‘wrong’ direction.

The total seasonally-adjusted annual rate (SAAR) of sales in November was just 438k, continuing the rather noticeable slightly sinking rate going back to the early part of 2013. The fact that new home sales have not appreciably gained since then goes a very long way toward explaining why builderscontinue to avoid building. It’s not as if the current pace is difficult to best, as new home sales, as construction, remains stuck at a level historically reserved for massive complications.

This post was published at David Stockmans Contra Corner on December 24, 2014.

100 Years Ago Today: The Christmas Truce of 1914 Was A Moment Of Hope Squelched By The War Party On Both Sides

It was exactly 100 years ago when the Christmas Truce of 1914 occurred, when Christian soldiers on both sides of the infamous No Man’s Land of the Western Front, recognized their common humanity, dropped their guns and fraternized with the so-called enemies that they had been ordered to kill without mercy the day before.
The truth of that remarkable event was effectively covered up by state and military authorities (and the embedded journalists at the time) because the authorities were angered (and embarrassed) by the breakdown of military discipline.
In the annals of war, such ‘mutinies’ are now unheard of. The generals and (as well as the saber-rattling, chest-thumping politicians and war profiteers back home) rapidly developed strategies to prevent such behavior from happening again.
Christmas Eve of 1914 was only five months into World War I, and the cold, weary, homesick soldiers found themselves not heroes, as expected, but rather miserable, frightened and disillusioned wretches living in rat- and louse-infested trenches.

This post was published at David Stockmans Contra Corner on December 24, 2014.

Inside Q3 GDP: A Keynesian Puzzle Palace Where ‘Spending’ Soars, Income Stagnates

There is a lot to say about the latest GDP revisions, particularly as it relates to the breakdown of the measure in comparison with something besides itself. The headline was all that was needed to ‘confirm’ the best economic growth in decades, though.
‘There is a positive feedback loop going on at the moment,’ Mike Jakeman, global analyst for the Economist Intelligence Unit, said in a note. ‘Job creation is running at the strongest rate for 15 years. More people in work means more income, which means more private spending, which means more business investment, which means more hiring.’
That last part is the trickiest, as GDP is synonymous with ‘national income’ but is strangely crafted in how ‘that side’ of the ledger is balanced. You would think there would be evidence of this ‘more income’ somewhere, as though second derivatives were as good as actual results.
The jump in growth was less dramatic on an annual basis. Economic output in the third quarter climbed 2.7% from a year earlier, up from 2.6% growth in the second quarter.
In other words, the baseline comparison of Q/Q was established for this ‘best growth in forever’ in the feverish downward revisions of Q1. That makes it all the more difficult to tell exactly what GDP is saying about the economy. A full part of the downward revisions then were due to the high degree of uncertainty (meaning no prior data upon which to statistically model) surrounding healthcare spending.

This post was published at David Stockmans Contra Corner on December 23, 2014.

The Fracturing Bubble Down South: Brazil Is Another Victim Of Global Money Printing

Did Bloomberg recently acquire The Onion and fail to announce it? Well, you have to read its lead paragraph about Brazil’s latest outlook twice to be sure:
Analysts reduced to 0.55 percent their GDP estimate for 2015 from 0.69 percent the previous week, according to the Dec. 19 central bank survey of about 100 analysts published today.
Apparently that’s a tradable data bite for some algo, somewhere. But its also a cogent demonstration that central bank driven financialization has generated mind-blowing pockets of wasteful stupidity everywhere. Could there really be 100 economists updating there GDP forecast every week to the second decimal point for Brazil alone?
In the real world, Brazil is a financially unstable, debt-bloated, politically corrupt, speculation-riven satellite of the China house of cards. Accordingly, the 14 bps of GDP forecast change highlighted above is about as pure an expression of content-free noise as can be found in the financial media. It cannot possibly be of any use except to robo-traders with holding periods of a few seconds – or even hours or days for that matter.
If someone were to actually ‘invest’ in Brazilian securities, by contrast, it might be better to know that nearly every single macro indicator is heading south at an accelerating pace; that over the last 10 years the Brazilian economy has been bloated and distorted by the double whammy of unsustainable demand for raw materials from China and rampant internal malinvestment and speculative bubbles funded by its socialist government and the latter’s central bank hand-maiden; and that the Brazilian household sector went on a borrowing spree that made the US mortgage bubble look tame.

This post was published at David Stockmans Contra Corner on December 23, 2014.

The Greater Abomination: Washington’s Lies About TARP’s ‘Success’ Are Worse Than The Original Bailouts, Part I

The mainstream economics narrative is so far down the monetary rabbit hole that the blinding clarity of the chart below has no chance whatsoever of seeing the light of day. That’s because it dramatizes the real truth regarding all the Fed gibberish about ‘accommodation’ and ‘stimulus’. Namely, that what lies beneath its ‘extraordinary measures’, such as ZIRP, QE, wealth effects and the rest of the litany, is a central banking regime that systematically destroy savers. Period.
Just take the simple case of a worker who joined the labor force in 1969 at $100 per week or $5,200 annually, and worked at the average non-supervisory weekly wage posted by the BLS every year through 2009. By that point he or she would have attained an ending wage of $600 per week or $31k annually, and a 40-year average annual income of about $20k in nominal terms. With a normal load of payroll and state and local withholding, the latter would have left about $15,000 per year on an after-tax basis.
Upon retirement this BLS tracking worker could have possibly accumulated $100,000 in a savings nest egg – -but only if he or she had been completely atypical and set aside an average of 17% of after-tax income each and every year. Needless to say, that would have precluded nearly all everyday ‘luxuries’ such as a regular new car, an occasional trip to Disneyland, a bass boat for weekend fishing and most other like and similar modest indulgences. Instead, deep thrift would have been the omnipresent watchword of this household.

This post was published at David Stockmans Contra Corner on December 22, 2014.

Monsanto implicated in ‘fraud and abuse of patent law’

Patent EP1812575 held by the US company Monsanto has been revoked by the European Patent Office (EPO) after the international coalition No Patents on Seeds! filed an opposition in May 2014. A further opposition was filed by Nunhems / Bayer CropScience. In November 2014, Monsanto requested that the patent be revoked in its entirety and the EPO complied with this request. The patent covered conventionally bred tomatoes with a natural resistance to a fungal disease called botrytis, which were claimed as an invention. The original tomatoes used for this patent were accessed via the international gene bank in Gatersleben, Germany, and it was already known that these plants had the desired resistance. Monsanto produced a cleverly worded patent in order to create the impression that genetic engineering had been used to produce the tomatoes and to make it look ‘inventive’.
‘Revoking this patent is an important success. It was more or less based on a combination of fraud, abuse of patent law and biopiracy. The patent could have been used to monopolise important genetic resources. Now breeders, growers and consumers have a chance of benefiting from a greater diversity of tomatoes improved by further breeding’, says Christoph Then, a coordinator of No Patents on Seeds!. ‘The intended resistance is based on complex genetic conditions, which are not known in detail. So genetic engineering is clearly not an option in this case.’

This post was published at FarmWars on 22 December 2014.