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Dismantling of US Bill of Rights Proceeds Apace … |

Dismantling of US Bill of Rights Proceeds Apace … |.

February 28, 2014 | Author 

Another Amendment Bites the Dust

Back in October, the WSJ reported on an interesting case about to be heard by  the Supreme Court. Apparently prosecutors are more and more often rigging trials by means of civil forfeiture. By simply confiscating the assets of the accused, the accused can no longer pay for a defense lawyer of their choice. This makes life for the prosecution a lot easier, but it appears to be in conflict with the 6th amendment, at least in spirit. The amendment states:

“In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.

(emphasis added)

One could of course argue that a court-appointed lawyer is after all counsel as well (in fact, the prosecution did so argue in the case discussed below), but the countless innocents found vegetating on death row after DNA analysis became available could probably tell you a thing or two about the quality issues occasionally associated with that option.

The WSJ wrote at the time:

“On Oct. 16, the Supreme Court will hear oral arguments on a claim brought by husband and wife Brian and Kerri Kaley. The Kaleys are asking the high court to answer a serious and hotly contested question in the federal criminal justice system: Does the Constitution allow federal prosecutors to seize or freeze a defendant’s assets before the prosecution has shown at a pretrial hearing that those assets were illegally obtained?

Such asset freezes often prevent a defendant from hiring the trial counsel of his choice to mount a vigorous defense, thus increasing the likelihood of the government extracting a guilty plea or verdict. Because asset forfeiture almost automatically follows conviction, a pretrial freeze ultimately enables the Justice Department to grab the frozen assets for use by executive-branch law enforcement agencies. It is a neat, vicious circle.

What crimes are the Kaleys charged with? Kerri Kaley was a sales representative for a subsidiary of Johnson & Johnson. Beginning in 2005, the feds in Florida investigated her, her husband Brian, and other sales reps for reselling medical devices given to them by hospitals. The hospitals had previously bought and stocked the devices but no longer needed or wanted the overstock since the company was offering new products. Knowing that the J&J subsidiary had already been paid for the now-obsolete products and was focused instead on selling new models, the sales reps resold the old devices and kept the proceeds.

The feds had various theories for why this “gray market” activity was a crime, even though prosecutors could not agree on who owned the overstocked devices and, by extension, who were the supposed victims of the Kaleys’ alleged thefts. The J&J subsidiary never claimed to be a victim.

The Kaleys were confident that they would prevail at trial if they could retain their preferred lawyers. A third defendant did go to trial with her counsel of choice and was acquitted. But the Justice Department made it impossible for the Kaleys to pay their chosen lawyers for trial.

The government insisted that as long as the Kaleys’ assets—including bank accounts and their home—could be traced to the sale of the medical devices, all of those assets could be frozen. The Kaleys were not allowed to go a step further and show that their activities were in no way criminal, since this would be determined by a trial.But the Kaleys insisted that if the government wanted to freeze their funds, the court had to hold a pretrial hearing on the question of the legality of how the funds were earned.

The Kaleys complained that the asset freeze effectively deprived them of their Sixth Amendment right to the counsel of their choice—the couple couldn’t afford to hire the defense that they wanted. Prosecutors and the trial judge responded that the Kaleys could proceed with a public defender. This wouldn’t have been an encouraging prospect for them, for while public counsel is often quite skilled, such legal aid wouldn’t meet the requirements the Kaleys believed they needed for this complex defense. Choice of counsel in a free society, one would think, lies with the defendant, not with the prosecutor or the judge.”

(emphasis added)

“Choice of counsel in a free society, one would think, lies with the defendant, not with the prosecutor or the judge” – Yes, one would certainly think so, alas…

Supreme Court Hands Government a Big Club

As criminal defense lawyer Scott Greenfield reports, the “Day the 6th Amendment Died” has arrived. He sounds slightly surprised, but he shouldn’t be. After all, the 4th amendment and habeas corpus have become victims of the GWOT and the ‘national security’ octopus with nary a peep from anyone. A great many protections once enjoyed by individuals have become, shall we say, bona peritura.

Asset forfeiture on pure suspicion is especially pernicious given the fact that nowadays everyone is basically a criminal, as a result of the vast overproduction of laws, and rules/regulations that have the force of laws. Since ignorance cannot protect one from the law, every citizen would in theory have to spend several lifetimes studying the whole shebang to make 100% certain he won’t commit at least three crimes before 9 AM. Of course this situation is not a coincidence. The fact that there are now so many laws that it has become nigh impossible not to break some of them now and then without even knowing it has become a major weapon against the citizenry in the hands of the State (only TBTF banks are completely safe, even if they e.g. launder 100ds of millions in drug money – since they are ‘systemically relevant’, they cannot be prosecuted or punished. And this after it was decided that corporations are ‘persons’. Evidently not all ‘persons’ are similarly likely to get the book thrown at them).

As the case of the Kaleys shows, such asset forfeitures can be employed on what appear to be rather flimsy grounds. Judging from the WSJ article, the government seems to be attempting to transform an apparently victimless crime – as no-one asserts that they believe their property rights were violated by the accused (how can there be theft without victims? It boggles the mind) –  into a major theft and criminal conspiracy case ex nihilo. This is all the more astonishing as one of the co-accused has already been acquitted in a separate trial. So clearly, the prosecution is seeking to gain an advantage by means of the asset forfeiture in a complicated case it might otherwise very easily lose.

Here are a few excerpts from Mr. Greenfield’s article:

“Having followed Kerri Kaley’s struggle to enable herself and her husband to fight charges of dubious merit since the circuit, an old question arose: Would the law that grew like a fungus in the bad, old drug days of forfeiture law that gave rise to such discreditable decisions as Monsanto, be perpetuated now that they were being applied to people who society didn’t inherently despise?

The Supreme Court answered the question in Kaley v. United States, a split decision by Justice Elena Kagan: Hell, yes!

[…]

The manner in which the Court structured its issue, and hence its response, foretold the outcome. Rather than approach the case as a 6th Amendment deprivation of the ability to obtain counsel to defend themselves from a spurious indictment, the majority seized upon it as a math problem.

Indictment = Probable Cause

Forfeiture = Probable Cause

Indictment = Forfeiture

Ham sandwich, anyone?  In considering the Court’s adherence to beloved legal fictions, one of which is that a grand jury indictment conclusively proves the existence of probable cause to believe that a crime occurred and the defendants committed the crime, the majority reduced the issue before it to an absurdity. What about the presumption of innocence?  What about the right to counsel of choice? What about the constraints of forfeiture to the proceeds of crime?

Meh.  It’s as if someone mumbled during their post argument conference, “you know, if we cut her a break, it’s going to look like we no longer have faith in grand jury indictments. Since everybody already knows they’re argle-bargle, that won’t end well. It looks like we have no choice here.”

There was always the other side of the equation, that pre-trial restraint of allegedly forfeitable assets is unconstitutional because it impairs a fundamental 6th Amendment right to counsel, but they blew that one in Monsanto when they were busy hating on drug dealers.  Yes, that crap invariably comes back to haunt us.”

(emphasis added)

Goodbye, presumption of innocence and due process. Which incidentally is precisely what Justice Roberts mentioned in his dissenting opinion:

“The issues presented here implicate some of the most fundamental precepts underlying the American criminal justice system. A person accused by the United States of committing a crime is presumed innocent until proven guilty beyond a reasonable doubt. But he faces a foe of powerful might and vast resources, intent on seeing him behind bars. That individual has the right to choose the advocate he believes will most ably defend his liberty at trial.”

(emphasis added)

Inspector Clouseau to Justice Roberts:

Not anymeure!

 

What is the price of a piano compared to the terrible crime that has been committed here?

 

Dismantling of US Bill of Rights Proceeds Apace … |

Dismantling of US Bill of Rights Proceeds Apace … |.

February 28, 2014 | Author 

Another Amendment Bites the Dust

Back in October, the WSJ reported on an interesting case about to be heard by  the Supreme Court. Apparently prosecutors are more and more often rigging trials by means of civil forfeiture. By simply confiscating the assets of the accused, the accused can no longer pay for a defense lawyer of their choice. This makes life for the prosecution a lot easier, but it appears to be in conflict with the 6th amendment, at least in spirit. The amendment states:

“In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.

(emphasis added)

One could of course argue that a court-appointed lawyer is after all counsel as well (in fact, the prosecution did so argue in the case discussed below), but the countless innocents found vegetating on death row after DNA analysis became available could probably tell you a thing or two about the quality issues occasionally associated with that option.

The WSJ wrote at the time:

“On Oct. 16, the Supreme Court will hear oral arguments on a claim brought by husband and wife Brian and Kerri Kaley. The Kaleys are asking the high court to answer a serious and hotly contested question in the federal criminal justice system: Does the Constitution allow federal prosecutors to seize or freeze a defendant’s assets before the prosecution has shown at a pretrial hearing that those assets were illegally obtained?

Such asset freezes often prevent a defendant from hiring the trial counsel of his choice to mount a vigorous defense, thus increasing the likelihood of the government extracting a guilty plea or verdict. Because asset forfeiture almost automatically follows conviction, a pretrial freeze ultimately enables the Justice Department to grab the frozen assets for use by executive-branch law enforcement agencies. It is a neat, vicious circle.

What crimes are the Kaleys charged with? Kerri Kaley was a sales representative for a subsidiary of Johnson & Johnson. Beginning in 2005, the feds in Florida investigated her, her husband Brian, and other sales reps for reselling medical devices given to them by hospitals. The hospitals had previously bought and stocked the devices but no longer needed or wanted the overstock since the company was offering new products. Knowing that the J&J subsidiary had already been paid for the now-obsolete products and was focused instead on selling new models, the sales reps resold the old devices and kept the proceeds.

The feds had various theories for why this “gray market” activity was a crime, even though prosecutors could not agree on who owned the overstocked devices and, by extension, who were the supposed victims of the Kaleys’ alleged thefts. The J&J subsidiary never claimed to be a victim.

The Kaleys were confident that they would prevail at trial if they could retain their preferred lawyers. A third defendant did go to trial with her counsel of choice and was acquitted. But the Justice Department made it impossible for the Kaleys to pay their chosen lawyers for trial.

The government insisted that as long as the Kaleys’ assets—including bank accounts and their home—could be traced to the sale of the medical devices, all of those assets could be frozen. The Kaleys were not allowed to go a step further and show that their activities were in no way criminal, since this would be determined by a trial.But the Kaleys insisted that if the government wanted to freeze their funds, the court had to hold a pretrial hearing on the question of the legality of how the funds were earned.

The Kaleys complained that the asset freeze effectively deprived them of their Sixth Amendment right to the counsel of their choice—the couple couldn’t afford to hire the defense that they wanted. Prosecutors and the trial judge responded that the Kaleys could proceed with a public defender. This wouldn’t have been an encouraging prospect for them, for while public counsel is often quite skilled, such legal aid wouldn’t meet the requirements the Kaleys believed they needed for this complex defense. Choice of counsel in a free society, one would think, lies with the defendant, not with the prosecutor or the judge.”

(emphasis added)

“Choice of counsel in a free society, one would think, lies with the defendant, not with the prosecutor or the judge” – Yes, one would certainly think so, alas…

Supreme Court Hands Government a Big Club

As criminal defense lawyer Scott Greenfield reports, the “Day the 6th Amendment Died” has arrived. He sounds slightly surprised, but he shouldn’t be. After all, the 4th amendment and habeas corpus have become victims of the GWOT and the ‘national security’ octopus with nary a peep from anyone. A great many protections once enjoyed by individuals have become, shall we say, bona peritura.

Asset forfeiture on pure suspicion is especially pernicious given the fact that nowadays everyone is basically a criminal, as a result of the vast overproduction of laws, and rules/regulations that have the force of laws. Since ignorance cannot protect one from the law, every citizen would in theory have to spend several lifetimes studying the whole shebang to make 100% certain he won’t commit at least three crimes before 9 AM. Of course this situation is not a coincidence. The fact that there are now so many laws that it has become nigh impossible not to break some of them now and then without even knowing it has become a major weapon against the citizenry in the hands of the State (only TBTF banks are completely safe, even if they e.g. launder 100ds of millions in drug money – since they are ‘systemically relevant’, they cannot be prosecuted or punished. And this after it was decided that corporations are ‘persons’. Evidently not all ‘persons’ are similarly likely to get the book thrown at them).

As the case of the Kaleys shows, such asset forfeitures can be employed on what appear to be rather flimsy grounds. Judging from the WSJ article, the government seems to be attempting to transform an apparently victimless crime – as no-one asserts that they believe their property rights were violated by the accused (how can there be theft without victims? It boggles the mind) –  into a major theft and criminal conspiracy case ex nihilo. This is all the more astonishing as one of the co-accused has already been acquitted in a separate trial. So clearly, the prosecution is seeking to gain an advantage by means of the asset forfeiture in a complicated case it might otherwise very easily lose.

Here are a few excerpts from Mr. Greenfield’s article:

“Having followed Kerri Kaley’s struggle to enable herself and her husband to fight charges of dubious merit since the circuit, an old question arose: Would the law that grew like a fungus in the bad, old drug days of forfeiture law that gave rise to such discreditable decisions as Monsanto, be perpetuated now that they were being applied to people who society didn’t inherently despise?

The Supreme Court answered the question in Kaley v. United States, a split decision by Justice Elena Kagan: Hell, yes!

[…]

The manner in which the Court structured its issue, and hence its response, foretold the outcome. Rather than approach the case as a 6th Amendment deprivation of the ability to obtain counsel to defend themselves from a spurious indictment, the majority seized upon it as a math problem.

Indictment = Probable Cause

Forfeiture = Probable Cause

Indictment = Forfeiture

Ham sandwich, anyone?  In considering the Court’s adherence to beloved legal fictions, one of which is that a grand jury indictment conclusively proves the existence of probable cause to believe that a crime occurred and the defendants committed the crime, the majority reduced the issue before it to an absurdity. What about the presumption of innocence?  What about the right to counsel of choice? What about the constraints of forfeiture to the proceeds of crime?

Meh.  It’s as if someone mumbled during their post argument conference, “you know, if we cut her a break, it’s going to look like we no longer have faith in grand jury indictments. Since everybody already knows they’re argle-bargle, that won’t end well. It looks like we have no choice here.”

There was always the other side of the equation, that pre-trial restraint of allegedly forfeitable assets is unconstitutional because it impairs a fundamental 6th Amendment right to counsel, but they blew that one in Monsanto when they were busy hating on drug dealers.  Yes, that crap invariably comes back to haunt us.”

(emphasis added)

Goodbye, presumption of innocence and due process. Which incidentally is precisely what Justice Roberts mentioned in his dissenting opinion:

“The issues presented here implicate some of the most fundamental precepts underlying the American criminal justice system. A person accused by the United States of committing a crime is presumed innocent until proven guilty beyond a reasonable doubt. But he faces a foe of powerful might and vast resources, intent on seeing him behind bars. That individual has the right to choose the advocate he believes will most ably defend his liberty at trial.”

(emphasis added)

Inspector Clouseau to Justice Roberts:

Not anymeure!

 

What is the price of a piano compared to the terrible crime that has been committed here?

 

My letter to the NY Times re: The Lawless Fed – Ludwig von Mises Institute Canada

My letter to the NY Times re: The Lawless Fed – Ludwig von Mises Institute Canada.

Thursday, February 27th, 2014 by 

Re: Fed’s Aid in 2008 Crisis Stretched Worldwide

Dear Sirs:
Your article about the Fed’s actions in 2008 to lend $580 billion in so-called “swap lines” to central banks internationally sounds a note of triumphalism that is completely unwarranted.  The Fed had no authority to lend to these entities, despite its attempts to justify its action as lending against collateral.  In any regard, if the collateral against which the Fed lent dollars was so strong and, as your article states, the American taxpayers actually made money on the deal, why did the Fed need to get involved at all?  The obvious answer is that the Fed took an illegal risk that fortunately worked out.  New York Fed President Timothy Geithner’s chest puffing statement that “the privilege of being the reserve currency comes with some burdens” is especially troubling in that we may assume that in the future the Fed will engage in similar risky adventures.  One final note…what caused the 2008 crisis in the first place?  Your article identifies it perfectly: “The root cause of the problem was this: Global banks did lots of business in dollars–buying up United States mortgaged-backed securities,…”  And what initiated the massive issuance of these soon-to-be-worthless mortgaged-backed securities?  Fed money printing.  So, please, let’s not call the Fed a hero, when it really caused the crisis that led to its illegal actions.

Patrick Barron is a consultant to the banking industry. He teaches Austrian school economics at the University of Iowa and Bank Managemant Simulation for the Graduate School of Banking, University of Wisconsin. Visit his blog. Send him mail.

Drones Are Now Flying in Flocks | Motherboard

Drones Are Now Flying in Flocks | Motherboard.

February 28, 2014 // 09:30 AM EST
Drone haters have a new reason to fear the flying robots: they’ve learned to work together.

In a paper submitted for an IEEE conference later this year, a Hungarian team claim to have created the first drones that can fly in an autonomous flock. Nature’s Ed Yong reported that the work saw ten quadcopter drones fly in formation over a Budapest field, without any central control.

That’s to say that the drones figured out their own flight paths by communicating with each other, just like natural group travellers like flocks of birds or schools of fish. Principal investigator Tamás Vicsek explained in a video that building the robots was in fact a step towards better understanding flock behaviour in nature.

They started with standard commercial quadcopters and added their own hardware “brain.” “With the proper flocking algorithms fed to this new brain, the copters are able to fly autonomously, which could totally eliminate the need for manual control, and a group of quadrocopters could perform flights and tasks on their own,” said robotics leader Gábor Vásaárhelyi.

The video shows some pretty cool flight patterns; when the drones are directed to form a circle, for instance, they all find their own place and even decide which way to fly around depending on the positions they held before the formation. When they need to get through a gap, they all queue up mid-hover and go through one by one.

They’re given a direction or a formation to follow, but it’s up to them to figure out how to work as a group and avoid crashing in a collision of wires and rotors. They navigate using GPS, and communicate with each other over radio, which sounds pretty much like what humans do when trying to coordinate a trip.

The drones before take-off. Image: Hungarian Academy of Sciences 

While other researchers have looked into drone flocks, this innovation is a first insofar as the drones were tested in an open outdoor area and weren’t hooked up to a central computer.

In their paper, the researchers lay out the advantages of a multi-drone flock: It’s able to operate longer than an individual robot and cover more ground, which could be useful for applications such as monitoring the environment. Other jobs they suggest for the robo-swarms include forming ad-hoc mobile networks, helping with airport traffic control, assisting in rescue missions, and pest control (I’d love to see that last one).

There is perhaps some cause for worry, though, as the authors recognise another potential sector for development: military applications. “However, by demonstrating the stable flight of a truly autonomous, decentralised robotic flock, our main goal was to show that the various peaceful applications of drones are by now feasible,” they finished.

Drones Are Now Flying in Flocks | Motherboard

Drones Are Now Flying in Flocks | Motherboard.

February 28, 2014 // 09:30 AM EST
Drone haters have a new reason to fear the flying robots: they’ve learned to work together.

In a paper submitted for an IEEE conference later this year, a Hungarian team claim to have created the first drones that can fly in an autonomous flock. Nature’s Ed Yong reported that the work saw ten quadcopter drones fly in formation over a Budapest field, without any central control.

That’s to say that the drones figured out their own flight paths by communicating with each other, just like natural group travellers like flocks of birds or schools of fish. Principal investigator Tamás Vicsek explained in a video that building the robots was in fact a step towards better understanding flock behaviour in nature.

They started with standard commercial quadcopters and added their own hardware “brain.” “With the proper flocking algorithms fed to this new brain, the copters are able to fly autonomously, which could totally eliminate the need for manual control, and a group of quadrocopters could perform flights and tasks on their own,” said robotics leader Gábor Vásaárhelyi.

The video shows some pretty cool flight patterns; when the drones are directed to form a circle, for instance, they all find their own place and even decide which way to fly around depending on the positions they held before the formation. When they need to get through a gap, they all queue up mid-hover and go through one by one.

They’re given a direction or a formation to follow, but it’s up to them to figure out how to work as a group and avoid crashing in a collision of wires and rotors. They navigate using GPS, and communicate with each other over radio, which sounds pretty much like what humans do when trying to coordinate a trip.

The drones before take-off. Image: Hungarian Academy of Sciences 

While other researchers have looked into drone flocks, this innovation is a first insofar as the drones were tested in an open outdoor area and weren’t hooked up to a central computer.

In their paper, the researchers lay out the advantages of a multi-drone flock: It’s able to operate longer than an individual robot and cover more ground, which could be useful for applications such as monitoring the environment. Other jobs they suggest for the robo-swarms include forming ad-hoc mobile networks, helping with airport traffic control, assisting in rescue missions, and pest control (I’d love to see that last one).

There is perhaps some cause for worry, though, as the authors recognise another potential sector for development: military applications. “However, by demonstrating the stable flight of a truly autonomous, decentralised robotic flock, our main goal was to show that the various peaceful applications of drones are by now feasible,” they finished.

Jesse's Café Américain: Third World America – The Big Fix: The Gulf Of Mexico Oil Spill Coverup

Jesse’s Café Américain: Third World America – The Big Fix: The Gulf Of Mexico Oil Spill Coverup.

As we approach the fourth anniversary of the Deepwater Horizon Gulf Oil Disaster, perhaps it is a good time to remember the great success it represents, the success in shifting the thoughts of attention deficient Americans from the things that really matter, like honest and accountable government.

Is anything really different, or have we just been prompted to move on and think about something else?  Will the US be better prepared to deal with the next financial or environmental crisis?

Are portions of the US any different from other third world countries that are sacked of their resources, their people impoverished, their quality of life ruined, and their children left with little or no hope for the future?

Hope and change.

Related:

BP Get Slick In Trying to Undermine Gulf Oil Spill Settlement
Fish Suffering Heart Failure and Decreased Numbers Due to BP Oil Spill
BP Oil Spill Causes Heart Damage Killing Tuna
Gulf War Syndrome Comes to the Gulf of Mexico?

POSTED BY JESSE AT 11:52 AM

Jesse’s Café Américain: Third World America – The Big Fix: The Gulf Of Mexico Oil Spill Coverup

Jesse’s Café Américain: Third World America – The Big Fix: The Gulf Of Mexico Oil Spill Coverup.

As we approach the fourth anniversary of the Deepwater Horizon Gulf Oil Disaster, perhaps it is a good time to remember the great success it represents, the success in shifting the thoughts of attention deficient Americans from the things that really matter, like honest and accountable government.

Is anything really different, or have we just been prompted to move on and think about something else?  Will the US be better prepared to deal with the next financial or environmental crisis?

Are portions of the US any different from other third world countries that are sacked of their resources, their people impoverished, their quality of life ruined, and their children left with little or no hope for the future?

Hope and change.

Related:

BP Get Slick In Trying to Undermine Gulf Oil Spill Settlement
Fish Suffering Heart Failure and Decreased Numbers Due to BP Oil Spill
BP Oil Spill Causes Heart Damage Killing Tuna
Gulf War Syndrome Comes to the Gulf of Mexico?

POSTED BY JESSE AT 11:52 AM

Did Canada’s Housing Bubble Just Get Popped? | CANADIAN MARKET REVIEW

Did Canada’s Housing Bubble Just Get Popped? | CANADIAN MARKET REVIEW.

FEBRUARY 12, 2014

Canada’s housing market has soared while the US market crashed.

Canada has the most overvalued housing market in the world:

The WSJ recently commented:

Canada, for example, is very open to foreign investors, which means that in an age of unprecedented global liquidity cash-rich wealthy individuals who are looking for places to park their excess funds can do so in its housing market far more easily than in Japan, with its closed system.

Now, the Canadian government is eliminating “its controversial investor Visa scheme, which has allowed waves of rich Hongkongers and mainland Chinese to immigrate since 1986.”

The story continues in The South China Morning Post:

Canada’s government has announced that it is scrapping its controversial investor visa scheme, which has allowed waves of rich Hongkongers and mainland Chinese to immigrate since 1986.

The surprise announcement was made in Finance Minister Jim Flaherty’s budget, which was delivered to parliament in Ottawa on Tuesday afternoon local time. Tens of thousands of Chinese millionaires in the queue will reportedly have their applications scrapped and their application fees returned.

The decision came less than a week after the South China Morning Post published a series of investigative reports into the controversial 28-year-old scheme.

The Post revealed how the scheme spun out of control when Canada’s Hong Kong consulate was overwhelmed by a massive influx of applications from mainland millionaires. Applications to the scheme were frozen in 2012 as a result, as immigration staff struggled to clear the backlog.

In recent years, significant progress has been made to better align the immigration system with Canada’s economic needs. The current immigrant investor program stands out as an exception to this success,” Flaherty’s budget papers said.

For decades, it has significantly undervalued Canadian permanent residence, providing a pathway to Canadian citizenship in exchange for a guaranteed loan that is significantly less than our peer countries require,” it read.

Under the scheme, would-be migrants worth a minimum of C$1.6 million (HK$11.3 million) loaned the government C$800,000 interest free for a period of five years. The simplicity and low relative cost of the risk-free scheme made it the world’s most popular wealth migration program.

A parallel investor migration scheme run by Quebec still remains open. Many Chinese migrants use the alternative scheme to get into Canada via the French-speaking province and then move elsewhere in Canada. The federal government has previously pledged to crack down on what it said was a fraudulent practice.

Flaherty also announced yesterday the scrapping of a smaller economic migration scheme for entrepreneurs.

All told, 59,000 investor applicants and 7,000 entrepreneurs will have their applications returned, Postmedia News reported. Seventy per cent of the backlog, as of last January, was Chinese, suggesting more than 46,000 mainlanders will be affected by yesterday’s announcements.

The Immigrant Investor Program, which has brought about 185,000 migrants to Canada, was instrumental in facilitating an exodus of rich Hongkongers in the wake of the 1989 Tiananmen massacre and in the run-up to the handover. More than 30,000 Hongkongers immigrated using the scheme, though SAR applications have dwindled since 1997.

The investor visa plan is truly stupid and should be eliminated. The idea of requiring loans to the government in exchange for citizenship is incredibly perverse. All money lent to the government is wasted and hurts the economy. The Chinese and Hongkongers who participated in this program could have really invested that money in productive endeavors instead. But this is a double-whammy to the Canadian economy, because to pay back those loans the Canadian state must tax its citizens, which hurts the economy even more.

But what effect will this have on Canada’s housing bubble? It will reduce demand for Canadian real estate. That obviously doesn’t help keep prices high.

Yet the really critical factor is central bank policy. The Bank of Canada is not up to date on its financial statements, but as of November it held more assets than ever. I am interested to see whether Poloz will “taper” with his American counterparts.

My intuition says that he won’t. Poloz wants to keep down the Canadian dollar and subsidize exports.  The Bank of Canada has been expanding its balance sheet since mid-2010. Canada’s M1 money supply has grown dramatically. Canada’s housing prices are high. Canada’s interest rates are low. Yield on Canadian government bonds have fallen below American bonds. Yet consumer prices are not rising quickly, so the Bank of Canada sees its policy as an epic success so far.

Did Canada’s Housing Bubble Just Get Popped? | CANADIAN MARKET REVIEW

Did Canada’s Housing Bubble Just Get Popped? | CANADIAN MARKET REVIEW.

FEBRUARY 12, 2014

Canada’s housing market has soared while the US market crashed.

Canada has the most overvalued housing market in the world:

The WSJ recently commented:

Canada, for example, is very open to foreign investors, which means that in an age of unprecedented global liquidity cash-rich wealthy individuals who are looking for places to park their excess funds can do so in its housing market far more easily than in Japan, with its closed system.

Now, the Canadian government is eliminating “its controversial investor Visa scheme, which has allowed waves of rich Hongkongers and mainland Chinese to immigrate since 1986.”

The story continues in The South China Morning Post:

Canada’s government has announced that it is scrapping its controversial investor visa scheme, which has allowed waves of rich Hongkongers and mainland Chinese to immigrate since 1986.

The surprise announcement was made in Finance Minister Jim Flaherty’s budget, which was delivered to parliament in Ottawa on Tuesday afternoon local time. Tens of thousands of Chinese millionaires in the queue will reportedly have their applications scrapped and their application fees returned.

The decision came less than a week after the South China Morning Post published a series of investigative reports into the controversial 28-year-old scheme.

The Post revealed how the scheme spun out of control when Canada’s Hong Kong consulate was overwhelmed by a massive influx of applications from mainland millionaires. Applications to the scheme were frozen in 2012 as a result, as immigration staff struggled to clear the backlog.

In recent years, significant progress has been made to better align the immigration system with Canada’s economic needs. The current immigrant investor program stands out as an exception to this success,” Flaherty’s budget papers said.

For decades, it has significantly undervalued Canadian permanent residence, providing a pathway to Canadian citizenship in exchange for a guaranteed loan that is significantly less than our peer countries require,” it read.

Under the scheme, would-be migrants worth a minimum of C$1.6 million (HK$11.3 million) loaned the government C$800,000 interest free for a period of five years. The simplicity and low relative cost of the risk-free scheme made it the world’s most popular wealth migration program.

A parallel investor migration scheme run by Quebec still remains open. Many Chinese migrants use the alternative scheme to get into Canada via the French-speaking province and then move elsewhere in Canada. The federal government has previously pledged to crack down on what it said was a fraudulent practice.

Flaherty also announced yesterday the scrapping of a smaller economic migration scheme for entrepreneurs.

All told, 59,000 investor applicants and 7,000 entrepreneurs will have their applications returned, Postmedia News reported. Seventy per cent of the backlog, as of last January, was Chinese, suggesting more than 46,000 mainlanders will be affected by yesterday’s announcements.

The Immigrant Investor Program, which has brought about 185,000 migrants to Canada, was instrumental in facilitating an exodus of rich Hongkongers in the wake of the 1989 Tiananmen massacre and in the run-up to the handover. More than 30,000 Hongkongers immigrated using the scheme, though SAR applications have dwindled since 1997.

The investor visa plan is truly stupid and should be eliminated. The idea of requiring loans to the government in exchange for citizenship is incredibly perverse. All money lent to the government is wasted and hurts the economy. The Chinese and Hongkongers who participated in this program could have really invested that money in productive endeavors instead. But this is a double-whammy to the Canadian economy, because to pay back those loans the Canadian state must tax its citizens, which hurts the economy even more.

But what effect will this have on Canada’s housing bubble? It will reduce demand for Canadian real estate. That obviously doesn’t help keep prices high.

Yet the really critical factor is central bank policy. The Bank of Canada is not up to date on its financial statements, but as of November it held more assets than ever. I am interested to see whether Poloz will “taper” with his American counterparts.

My intuition says that he won’t. Poloz wants to keep down the Canadian dollar and subsidize exports.  The Bank of Canada has been expanding its balance sheet since mid-2010. Canada’s M1 money supply has grown dramatically. Canada’s housing prices are high. Canada’s interest rates are low. Yield on Canadian government bonds have fallen below American bonds. Yet consumer prices are not rising quickly, so the Bank of Canada sees its policy as an epic success so far.

Ukraine Tells Russia Invasion Means War as Putin Makes Plans – Bloomberg

Ukraine Tells Russia Invasion Means War as Putin Makes Plans – Bloomberg.

By Daryna Krasnolutska and Volodymyr Verbyany  Mar 2, 2014 5:34 AM ET

Heavily-armed troops displaying no identifying insignia and local pro-Russian militants stand guard outside a local… Read More

Photographer: Sean Gallup/Getty ImagesHeavily-armed soldiers without identifying insignia guard the Crimean parliament building shortly after taking up… Read More

Photographer: Yury Kirnichny/AFP via Getty ImagesA woman holds a sign during a demonstration in front of the Russian Embassy in Kiev on March 1, 2014.

Photographer: Mikhail Metzel/RIA-NOVOSTI/Pool/AFP via Getty ImagesRussian President Vladimir Putin attends a meeting at his Novo-Ogaryovo residence, outside Moscow on February 26, 2014.

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Ukraine told Russia that a military invasion would be an act of war following a vote by lawmakers in Moscow to give President Vladimir Putin the right to send troops after pro-Russian forces seized control of Crimea.

Ukraine, which put its military on full combat alert, is also mobilizing the reserves, Andriy Parubiy, secretary of the National Security and Defense Council, said in a briefing today. He urged the U.S. and U.K. to defend the country’s territorial integrity. Putin told U.S. President Barack Obama that Russia may act if violence spreads to Russian-speaking regions, the Kremlin said in a statement.

In a 90-minute phone call, Obama “expressed his deep concern over Russia’s clear violation of Ukrainian sovereignty and territorial integrity” and told Putin his country is violating international law by sending troops into Ukraine, according to a White House statement.

The U.S. and Canada are suspending preparations for a meeting of the Group of Eight industrial nations in Russia in June. The U.S. called on Russia to withdraw its forces to bases in Crimea, refrain from interfering elsewhere in Ukraine and conduct “direct engagement” with the country’s newly formed government.

Facing Default

Ethnic strife erupted in Ukraine’s Crimea region, where the majority of the population is Russian, after an uprising led to last week’s overthrow of President Viktor Yanukovych. The military movements risk destabilizing the country as its new government looks to the U.S. and Europe for a bailout to avoid default.

“The Ukrainian state will protect all citizens no matter in which region they live in and which language they speak or which church they attend,” acting Ukrainian President Oleksandr Turchynov said.

Tensions in the mostly Russian-speaking Crimea have worsened since gunmen took control of the regional legislature this week and installed a pro-Kremlin premier, Sergey Aksenov.

Ukraine asked the European Union, the U.S. and the North Atlantic Treaty Organization to consider “all means’ for the defense of its territorial integrity, the Interfax news service reported, citing Foreign Minister Andriy Deshchystya.

The United Nations Security Council held an emergency session to discuss the events in Ukraine. Following a request from Poland, NATO’s North Atlantic Council will meet today for consultations on a potential threat to its security.

‘Act of Aggression’

In a statement to the Security Council, Ukrainian Ambassador to the UN Yuriy Sergeyev called on the international community ‘‘to do everything possible” to stop a Russian “act of aggression,” saying the number of Russian soldiers in Crimea is increasing “every hour.”

Russian UN Ambassador Vitaly Churkin said “cooler heads should prevail” and the West must stop spurring the conflict by encouraging protesters.

U.S. Ambassador to the UN Samantha Power called for observers and told the session that Russia approving the use of force is “dangerous and destabilizing.”

Canada is recalling its ambassador to Moscow, Prime Minister Stephen Harper said in a statement. Japanese Foreign Minister Fumio Kishida said his country is concerned about the situation and urged all parties to exercise restraint.

‘Back Off’

“People right around the world will be thinking right now: hands off the Ukraine,” Australian Prime Minister Tony Abbott said today, according to an e-mailed transcript of an interview on Channel 10’s “The Bolt Report.” “This is not the kind of action of a friend and neighbor and really, Russia should back off.”

Crimea was given to Ukraine by Russia in 1954 by then-Soviet leader Nikita Khrushchev. Ethnic Russians comprise 59 percent of Crimea’s population of about 2 million people, with 24 percent Ukrainian and 12 percent Tatar, according to 2001 census data. Russians make up 17 percent of Ukraine’s entire population of 45 million people.

Heeding a request by Putin to protect ethnic Russians, lawmakers in Moscow yesterday voted unanimously to allow him to send troops to its neighbor after unidentified troops seized facilities in Ukraine’s southern Crimea region.

‘Naked Aggression’

Ukraine is diverting funds for the military, Yatsenyuk said. Putin had no reason to request the use of force against Ukraine as Russians aren’t under threat, Turchynov said.

Turchynov earlier accused Russia of “naked aggression.” Ukraine’s defense minister said yesterday that Russia has sent 6,000 more soldiers into Crimea in the past 24 hours, while Crimean Premier Sergey Aksenov, who asked Russia for help, said Russian troops were guarding key buildings there, Interfax news service reported.

“The situation is under control,” Aksenov, who had asked for aid from Russia and was voted as leader in a closed-door session after gunmen took control of the legislature this week, was quoted as saying by Interfax. “Cooperation has been established with the Black Sea Fleet on guarding crucial facilities.”

A U.S. official described events over the past days as an orchestrated series of steps intended to make Russian military intervention in Crimea appear legitimate. The official requested anonymity to discuss classified intelligence matters.

‘Tyranny and Violence’

Putin has not yet made a decision on when to send troops, his spokesman Dmitry Peskov said by phone. Ukraine’s government said efforts to speak with Russia’s Foreign Ministry were ignored.

The vote by Russian lawmakers followed an appeal by the council of Russia’s State Duma to protect Russians in Crimea from “tyranny and violence,” RIA Novosti reported, citing SpeakerSergei Naryshkin.

Lawmakers also said Russia should no longer abide by a 1994 agreement under which Ukraine gave up its nuclear weapons in exchange for a guarantee from the U.S., U.K. and Russia to protect its independence and territorial integrity.

Russia’s Foreign Ministry said gunmen “sent by Kiev” tried to seize Crimea’s Interior Ministry. An unidentified group of masked men also took over the trade union building in Crimea’s capital, Simferopol.

Gunmen earlier surrounded Crimea’s main airport in the capital, while more than 10 trucks carrying Russian servicemen encircled the Kirov military airfield, Interfax reported, citing an unidentified person in the Ukrainian military.

Pro-Russian protesters yesterday stormed the chamber of the regional government in Kharkiv, a city in Ukraine’s northeast, and ejected government supporters in clashes where both sides threw stones and wielded sticks, the Unian news service reported yesterday.

Moscow’s Orbit

Russia has alarmed Western leaders with moves in Crimea to thwart any push by Ukraine’s democratic movement to draw the nation toward the European Union and out of Moscow’s orbit.

The turmoil comes as Ukraine’s new government tries to shore up an economy in need of aid. Ukraine needs $15 billion in the next 2 1/2 years from the International Monetary Fund, and securing a deal at the start of April would be the best scenario, Finance Minister Oleksandr Shlapak said in Kiev yesterday.

It wasn’t clear what tools the U.S. and its allies have to deter Russia from escalating the situation.

“There could be trade or financial sanctions on Russia,” said Daniel Serwer, senior fellow at the Center for Transatlantic Relations at the Johns Hopkins School of Advanced International Studies in Washington. “The problem is no one wants to go back to a Cold War.”

Russian Goal

A full invasion of Ukraine could risk interrupting deliveries of Russian gas to other European nations and further destabilizing a country that’s already on the brink of default and elected a new government only this week. Gazprom yesterday reiterated that Ukraine owes $1.55 billion for supplies of Russian gas, RIA said, citing company officials.

Putin’s goal may instead be to ensure Russia’s military dominance of the region survives through its hold on the deep-water Black Sea port of Sevastopol, which it received in a leasing deal with Ukraine until 2042. The threat of military force may set the stage for a referendum slated for March 30 in Crimea over whether the region should have more independence from Kiev, said Ruslan Pukhov, director of the Moscow-based Center of Analysis of Strategies and Technologies.

“What the Russian army is doing now is guaranteeing the impossibility for Kiev to use force in Crimea and to ensure that the referendum will be passed,” Pukhov said by phone yesterday. “Putin’s goal is to have Crimea with as wide rights of autonomy as possible and become de facto Russia’s unofficial protectorate. The plan is to keep the Black Sea fleet forever.”

To contact the reporters on this story: Daryna Krasnolutska in Kiev atdkrasnolutsk@bloomberg.net; Volodymyr Verbyany in Simferopol, Ukraine atvverbyany1@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; John Walcott at jwalcott9@bloomberg.net Alaa Shahine, Andrew J. Barden

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