Wednesday, November 30, 2011

Willie Winfield and The Harptones - A Sunday Kind Of Love

Not a "kinder, gentler time" -- I was just much younger.

APNewsBreak: Honda Worker Cited Under Ala. Law

Good old Alabama -- bigots in motion, like a dance of hatred. I hope none of their crops are EVER harvested. every foreign national, every Hispanic person in Alabama for ANY reason should leave NOW! No more factories, no matter how much they abuse workers, or limit workers rights. After all, how long before some "Deputy" blows away the President of Mercedes, Toyota, Honda, or other foreign companies who were bottom feeding, shopping for the most docile, sheep-like workers?

Please follow link to original

APNewsBreak: Honda Worker Cited Under Ala. Law

By JAY REEVES Associated Press
BIRMINGHAM, Ala. December 1, 2011 (AP)

A Japanese man temporarily working at Honda's car factory in east Alabama became the second foreign auto worker charged under the state's law on illegal immigration, the company said Wednesday.

The employee at Honda Manufacturing of Alabama in Talladega County received a ticket but wasn't taken into custody, unlike a Mercedes-Benz manager who was previously arrested in Tuscaloosa, Ala.

Yet Republican lawmakers in Alabama cast doubt on whether the citation was actually made under the immigration law, saying it did not seem to match the law's requirements.

Philip Bryan, spokesman for Senate President Pro Tem Del Marsh, R-Anniston, said there is "no instance or violation" under the new law that calls for writing someone a ticket.

"Therefore, regardless of human error, it is not legally possible for anyone ever to be written a ticket if they violate the immigration law," Bryan said in an email to The Associated Press. "None."

It wasn't clear where the Honda worker was stopped. But a person with knowledge of the case said the man was ticketed at a routine roadblock set up by police even though he had a valid Japanese passport and an international driver's license. The person wasn't authorized to release the information and asked not to be identified.

Parts of the law have been blocked by federal courts in response to lawsuits by the Obama administration, immigrant rights groups and others. Police are still required to ask for driver's licenses as proof of citizenship during routine traffic stops.

The law states that foreigners are presumed to be in the country legally if they have forms of identification including a valid passport, so it is unclear why the man would have been ticketed under the law if he had a passport. State Homeland Security officials, who are monitoring enforcement of the law, said they were seeking details on the case.

On Nov. 16, a German manager with Mercedes-Benz was arrested under the law for not having a driver's license with him while driving a rental car. Tuscaloosa city attorney Tim Nunnally said the charge was dismissed after the man provided the documents in municipal court.

Mercedes-Benz opened the door for Alabama's multibillion dollar automobile industry with its decision to build its first U.S. assembly plant about 40 miles west of Birmingham in 1993. Honda has been building cars and minivans for a decade about 45 miles east of Birmingham in Lincoln, where it has a 3.5 million-square-foot plant, and Hyundai and Toyota also have factories in the state.

While some industrial recruiters are worried fallout from the law may harm Alabama's image, development leader Ron Scott said he was unaware of any effect on ongoing recruitment efforts.

Scott said he's getting more and more questions about the law and its effects on the state, though.

"Most of the calls I've gotten are about the possible impact on the state from local economic developers," said Scott, executive director of the Economic Development Association of Alabama.

Warming-Enhanced Texas Drought Is Once in “500 or 1,000 Years … Basically Off the Charts,” Says State Climatologist

This from "Climate Progress" -- some info. on the "unprecedented" Texas (and surrounding area) drought. I guess Mama Nature/Gaia is trying to tell all our warming deniers a thing or two. Read and weep - but, save the tears.

Please follow link to original

Warming-Enhanced Texas Drought Is Once in “500 or 1,000 Years … Basically Off the Charts,” Says State Climatologist

Leading experts explain how human-caused warming exacerbates the drought

“With no previous points so dry it’s hard to say exactly what history would say about a summer such as this one. Except that this summer is way beyond the previous envelope of summer temperature and precipitation.” — Texas State Climatologist John Nielsen-Gammon

From October of 2010 through this September 2011, Texas saw its driest year on record, according to the National Oceanic and Atmospheric Administration.

But these historic dry conditions stretch back even further than that.

After examining tree-ring data going back to 1550, researchers at Columbia University found that this year’s drought was only rivaled once in the last 461 years. According to the Palmer Drought Severity Index, a system for measuring wet and dry conditions, the last time Texas experienced a drought this bad was in 1789.

The state’s climatologist, John Nielsen-Gammon, explained the historical significance of the ongoing drought in an interview with CBS:

“This is basically off the charts. Based on past history, you wouldn’t expect to see this happening in maybe 500 or 1,000 years. One more year and we’re already talking about a drought more severe than anything we’ve ever had. And this will become for them, the drought of record.”

The drought, which Nielsen-Gammon says could stretch over a number of years, has devastated cotton crops, livestock, pumpkin crops, and, as the below CBS story points out, Christmas trees. The dry conditions have been exacerbated by a combination of human-caused global warming and La Niña, which pushes unusually cold air from the Pacific Ocean and causes drier-than-average conditions in the Southern U.S.

A number of leading climate experts recently explained the role that they believe human-caused global warming is playing in this epic drought.

As Texas climatologist Katherine Kayhoe put it in an email to Climate Progress, dumping ever-increasing amounts of greenhouse gases into the atmosphere is setting the conditions for turning extreme-weather events into history-setting catastrophes:

We often try to pigeonhole an event, such as a drought, storm, or heatwave into one category: either human or natural, but not both. What we have to realise is that our natural variability is now occurring on top of, and interacting with, background conditions that have already been altered by long-term climate change.

As our atmosphere becomes warmer, it can hold more water vapor. Atmospheric circulation patterns shift, bringing more rain to some places and less to others. For example, when a storm comes, in many cases there is more water available in the atmosphere and rainfall is heavier. When a drought comes, often temperatures are already higher than they would have been 50 years ago and so the effects of the drought are magnified by higher evaporation rates.

The Why Files has comments on the drought from many leading experts:

Gammon: “There is evidence that global warming has had an effect on the drought, primarily by increasing the surface temperature, which increases the drought severity by increasing evaporation and water stress, and by decreasing stream flow and water supply….

… “temperatures have been rising in Tex over past 30 years or so, and they are projected to continue rising at similar rates. We think that the hole is filling, and I am afraid of a rebound effect, where natural variability varies in the opposite direction and the temperature rise would be relatively rapid.”
Richard Alley, professor of geosciences, Earth and Environmental Systems Institute, The Pennsylvania State University

It sure looks like warming, wrote Richard Alley, an expert on climate and ice at Pennsylvania State University, via email. “Our usual scientific response is to say that human burning of fossil fuels has made the events more likely, and they happened,” but conclusive proof is not available. “You as journalists, and the public in general, HATE that. But it’s probably the best answer.

“In a warmer world, we expect more record highs and fewer record lows, more heat waves and fewer cold snaps. That pattern is being observed. Warmer air can ‘hold’ more water (saturation vapor pressure increases with temperature), so if air is warmer when a rainstorm happens, then the rain can be more intense.

“In addition, there is a fairly strong reason to expect that in a warming world the subtropical dry zones (which include the Sahara and the Kalahari, and influence the U.S. Southwest, including parts of Texas) will intensify and expand poleward at least somewhat.

“Suppose you’re playing dice with me, and after you lose, you discover that I stuck some carefully positioned weights inside them. Out in the climate, the dice are now loaded, but not nearly as much as they will be in the future if we keep burning fossil fuels and releasing the CO2 to the air. It is hard to prove that any particular event was extreme because of global warming … but for many events (record heat, drought and flood) it is harder to prove that humans did not influence the outcome, just as it is very hard to prove that my loaded dice didn’t affect the game.”
Kevin Trenberth, distinguished senior scientist, National Center for Atmospheric Research

Is the Texas drought and heat wave due to climate change or natural variation? “There is no doubt a modest component related to climate change, while natural variability plays a major role,” says Kevin Trenberth, a climatologist at the National Center for Atmospheric Research. “Fifteen years ago we suggested that with ENSO [El Nino-Southern Oscillation; periodic variations in water temperatures in the Pacific] the floods and droughts would become more intense.”

… Although the drought is linked to La Nina, it is also exacerbated by climate warming, Trenberth adds. Human climate change adds “about a 1 percent to 2 percent effect every day in terms of more energy. So after a month or two this mounts up and helps dry things out. At that point all the heat goes into raising temperatures. So it mounts up to a point that once again records get broken. The extent of the extremes would not have occurred without human climate change.”

In short, Texas ain’t seen nothing yet, assuming we keep listening to their politicians….

Please go to the original -- read the additional information available, it's important for EVERYONES future.

Mayor Bloomberg calls the NYPD ‘my own army’

Gee, how many "centrist Democrats" who touted Bloomberg for President might just have to re-think that position. He acts just like a petty dictator, just like a "I'll make the trains run on time" Fascist. This from Raw Story -- please follow link to original

Mayor Bloomberg calls the NYPD ‘my own army’

New York City mayor Michael Bloomberg said the New York Police Department was like his own personal military force during a speech at the Massachusetts Institute of Technology, according to PolitickerNY.

“I have my own army in the NYPD, which is the seventh biggest army in the world,” he said. “I have my own State Department, much to Foggy Bottom’s annoyance. We have the United Nations in New York, and so we have an entree into the diplomatic world that Washington does not have.”

Bloomberg was speaking about why he prefers City Hall to the White House. But later in the speech, he raised the possibility that he would seek the presidency. He claimed the executive duties performed by mayors prepared them for the White House better than other political positions.

Bloomberg recently came under rhetorical fire for the NYPD’s actions in Zuccotti Park. When police moved to evict “Occupy Wall Street” protesters, reporters were prevented from witnessing the scene and some were even arrested.

The city also closed airspace in lower Manhattan to prevent news helicopters from taking aerial footage of the police crackdown.

The human rights organizations PEN American Center and PEN International condemned the restrictions on press coverage as “an obvious abridgement of the First Amendment right of all Americans to monitor official actions that clearly carry their own First Amendment concerns.”

Long-shot Republican presidential candidate Buddy Roemer blasted Bloomberg, claiming his actions against the protesters put him on “the wrong side of history.” New York Rep. Jerrold Nadler (D) said the unannounced crack down raised “a number of serious civil liberties questions".

What we are seeing is all semblance of "Protect and Serve", or "Community Policing" totally discarded. It's HIS "private army", nothing to do with the PEOPLE HE is supposed to "serve", nothing to do with the POLICE being, "public servants". This is 1% thinking at its "best". I'm so glad I'm no longer in N.Y.

Beware of falling masonry

This from "The Economist" -- please follow link to original -- READIT, and MORE!

Beware of falling masonry
The crisis in the euro area is turning into a panic and dragging the zone into recession. The risk that the currency disintegrates within weeks is alarmingly high

FIRST Greece; then Ireland and Portugal; then Italy and Spain. Month by month, the crisis in the euro area has crept from the vulnerable periphery of the currency zone towards its core, helped by denial, misdiagnosis and procrastination by the euro-zone’s policymakers. Recently Belgian and French government bonds have been in the financial markets’ bad books. Investors are even sniffy about German bonds: an auction of ten-year Bunds on November 23rd shifted only €3.6 billion-worth ($4.8 billion) of the €6 billion-worth on offer.

Worse, there are signs that the euro zone’s economy is heading for recession, if it is not there already. Industrial orders in the euro zone fell by 6.4% in September, the steepest decline since the dark days of December 2008. A closely watched index of euro-zone sentiment, based on surveys of purchasing managers in manufacturing and services, is also signalling contraction, with a reading of 47.2: anything below 50 suggests activity is shrinking. The European Commission’s index of consumer confidence fell in November for the fifth month in a row.

Now an even bigger calamity is looking likelier. The intensifying financial pressure raises the chances of a disorderly default by a government, a run of retail deposits on banks short of cash, or a revolt against austerity that would mark the start of the break-up of the euro zone.

The German government can probably shrug off a failed auction: it likes to price its bonds as richly as it can, and occasionally cannot sell all it would like, even in untroubled times. Still, the timing is awful, and other governments are not so lucky: the contrast between Germany’s borrowing costs and those of other euro-zone sovereigns is stark (see chart 1). European banks are dumping the bonds of the least creditworthy, and other assets, in an attempt to conserve capital and improve cashflow as a full-blown funding crisis looms. Governments are promising ever more severe budget cuts in the hope of pacifying bond markets. The direct result of these scrambles is a credit crunch and a squeeze on aggregate demand that is forcing Europe into recession. Add the indirect effects on the confidence of consumers and businesses, and the downturn will be deep.

A recipe for recession

Consider the three ingredients for recession: a credit crunch, tighter fiscal policy and a dearth of confidence. In aggregate, European banks’ loans exceed their deposits, so they rely on wholesale funds—short-term bills, longer-term bonds or loans from other banks—to bridge the gap. But investors are becoming warier of lending to banks that have euro-zone bonds on their books and that can no longer rely on the backing of governments with borrowing troubles of their own. Long-term bond issues have become scarce and American money-market funds, hitherto buyers of short-term bank bills, are running scared.

Banks are frantically shedding assets both to raise cash and to ration their capital in order to meet European Union minimum capital-adequacy targets by next June. The early victims of this deleveraging are borrowers in emerging markets. The euro zone’s eastern neighbours may be hit particularly hard: the Turkish lira, for instance, has come under pressure in the past week, a hint that money is flowing out. The repatriation of funds by euro-zone banks might explain why the euro has been remarkably stable against the dollar in recent weeks, despite the zone’s internal convulsions. But businesses and householders at home will also soon be hurt by scarcer credit and rising interest rates, as the banks’ higher funding costs are passed on.

Governments are cutting back too. The precise impact of next year’s belt-tightening is tricky to gauge. France’s budget plans are close to being agreed on; further cuts are likely but will be delayed until after the elections in spring. Italy has yet to vote through a much-revised package of cuts. Spain’s incoming government has promised further spending cuts, especially in regional outlays, in order to meet deficit targets agreed with Brussels.

Even so, it seems plain that fiscal tightening will weaken growth. Take the plans that countries presented to the European Commission and add what has been advertised since, and the squeeze across the euro area comes to around 1.25% of GDP next year, reckons Laurence Boone, chief European economist at Bank of America. That alone is enough, says Ms Boone, to chop around a percentage point off GDP growth in 2012. Germany will be the least affected of the zone’s four biggest economies, followed by France. Spain and Italy will be hurt most.

The euro zone’s businesses and consumers will be drawn into the downward spiral of confidence. In the autumn of 2008 companies learned that credit lines could not be relied on when banks were fighting for survival. When banks are short of liquidity, firms have to watch their own cashflow closely. That implies leaner stocks and reductions in discretionary spending, such as capital projects or advertising campaigns.
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September’s sharp decline in industrial orders is an early sign that companies are cutting back. Andreas Willi, head of capital-goods research at JPMorgan, notes that SKF, a Swedish firm that is the world’s largest maker of ball bearings and a bellwether of industrial demand, gave analysts a cautious assessment of its future revenues in mid-October. That guidance suggests a further softening of investment demand. Consumers are also likely to defer big purchases as long as the crisis is unresolved and credit is scarce.

A drop in demand for capital equipment, durable consumer goods and cars will strike at the euro zone’s industrial heartland, including Germany. Ms Boone reckons GDP will fall by around 0.5% in Germany next year and by the same amount in the whole zone. In September the IMF forecast that the zone’s GDP would grow by 1.1% in 2012 but estimated that if European banks were deleveraging quickly (as they are now), the economy could shrink by around 2%.

Breaking point

A downturn of such severity will hugely increase the pressures within the zone. Investors will be even less willing to finance banks, as more garden-variety loans to businesses and householders turn bad. As unemployment rises, tax receipts will go down and welfare payments up, making it harder for governments to rein in their deficits and hit the targets they have set, and causing bond markets to question their solvency more pointedly still.

In such circumstances, the chances of a policy error or broader panic increase sharply. The calculations of bond investors, bank depositors and politicians are prone to sudden change. Hopes that the fracture of the euro zone might be averted by far-sighted policymakers could give way to a belief that it is inevitable. Such beliefs, once they take hold, are likely to be self-fulfilling.

How? The drying-up of funding for sovereigns and for banks is a threat to the integrity of the euro, because of the stark divide between debtor and creditor countries within the zone. As late as March 2010, Jean-Claude Trichet, then head of the ECB, boasted that simply belonging to the euro area automatically ensured balance-of-payments financing. It doesn’t look that way now.

During the credit boom, cheap capital flowed into Greece, Ireland, Portugal and Spain to finance trade deficits and housing booms. As a result, the net foreign liabilities—what businesses, householders and government owe to foreigners, less the foreign assets they own—of all four are close to 100% of GDP. (By comparison, America’s net foreign liabilities are 17% of GDP.) Much of their debt is being financed by local bank borrowing or bonds sold to investors in creditor countries, such as Germany. Ireland is unusual in that a large chunk of what it owes is in the form of equity (all those American-owned factories and offices) and so does not need to be refinanced.

With a few exceptions, the benchmark cost of credit in each euro-zone country is related to the balance of its international debts. Germany, which is owed more than it owes, still has low bond yields; Greece, which is heavily in debt to foreigners, has a high cost of borrowing (see chart 2). Portugal, Greece and (to a lesser extent) Spain still have big current-account deficits, and so are still adding to their already high foreign liabilities. Refinancing these is becoming harder and putting strain on local banks and credit availability.

The higher the cost of funding becomes, the more money flows out to foreigners to service these debts. This is why the issue of national solvency goes beyond what governments owe. The euro zone is showing the symptoms of an internal balance-of-payments crisis, with self-fulfilling runs on countries, because at bottom that is the nature of its troubles. And such crises put extraordinary pressure on exchange-rate pegs, no matter how permanent policymakers claim them to be.

One of the initial attractions of euro membership for peripheral countries—access to cheap funds—no longer applies. If a messy default is forced upon a euro-zone country, it might be tempted to reinvent its own currency. Indeed, it may have little option. That way, at least, it could write down the value of its private and public debts, as well as cutting its wages and prices relative to those abroad, improving its competitiveness. The switch would be hugely costly for debtors and creditors alike. But the alternative is scarcely more appealing. Austerity, high unemployment, social unrest, high borrowing costs and banking chaos seem likely either way.

The prospect that one country might break its ties to the euro, voluntarily or not, would cause widespread bank runs in other weak economies. Depositors would rush to get their savings out of the country to pre-empt a forced conversion to a new, weaker currency. Governments would have to impose limits on bank withdrawals or close banks temporarily. Capital controls and even travel restrictions would be needed to stanch the bleeding of money from the economy. Such restrictions would slow the circulation of money around the economy, deepening the recession.

External sources of credit would dry up because foreign investors, banks and companies would fear that their money would be trapped. A government cut off from capital-market funding would need to find other ways of bridging the gap between tax receipts and public spending. It might meet part of its obligations, including public-sector wages, by issuing small-denomination IOUs that could in turn be used to buy goods and pay bills.

When cash is scarce, such scrip is readily accepted by tradesmen. In August 2001 the Argentine province of Buenos Aires issued $90m of small bills, known as patacones, to employees as part of their pay. The bills were soon circulating freely: McDonalds even offered a “Patacombo” menu in exchange for a $5 pata c ón. Argentina broke its supposedly irrevocable currency peg to the dollar a few months later.

Scrip of this kind becomes, in effect, a proto-currency. In a stricken euro-zone country, it would change hands at a discount to the remaining euros in circulation, foreshadowing the devaluation to come. To pre-empt further capital outflows, a government would have to pass a law swiftly to say all financial dealings would henceforth be carried out in a new currency, at a one-for-one exchange rate with the euro. The new currency would then “float” (ie, sink) to a lower level against the abandoned euro. The size of that devaluation would be the extent of the country’s effective default against its creditors.

Market gurus and other students of misaligned stock, bond or home prices often say that although it is easy to spot an asset-price bubble, it is impossible to know the event that finally pricks it. In much the same way, the likeliest trigger for a disintegration of the euro is unknowable. But there are plenty of candidates. One is a failed bond auction that forces a country into default and sends a shock wave through the European banking system. Italy has €33 billion of debt coming due in the final week of January and a further €48 billion in the last week of February (see chart 3). Since bond investors are turning their noses up even at offerings from thrifty Germany, the odds against Italy’s being able to raise the money it needs early next year are uncomfortably short.

Another danger is a disagreement between Greece and its trio of rescuers (the EU, the IMF and the ECB) over the conditions of its bail-out. The risk of a mishap will be greater after the Greek elections in February if the country’s political mood sours yet further. Perhaps the spark will come from another source: the bankruptcy of a bank; fresh trouble in Portugal; or a chain of events that starts with France losing its AAA rating and ends with runs on banks across Europe. The exposure of French banks to Italy and to other countries that have been in bond traders’ sights for longer implies that contagion would quickly spread to the euro’s core (see chart 4). Widespread defaults in the periphery would wipe out a big chunk of Germany’s wealth and begin a chain of bank failures that could turn recession into depression.

The few left in the euro (Germany and perhaps a few other creditor countries) would be at a competitive disadvantage to the new cheaper currencies on their doorstep. As well as imposing capital controls, countries might retreat towards autarky, by raising retaliatory tariffs. The survival of the European single market and of the EU itself would then be under threat.

Such a disaster can still be averted. The ECB might launch a programme of bond-buying on the pretext that a deep recession in the euro area threatens deflation. If done on the scale that the Bank of England has undertaken, it could restore stability to Europe’s panicky bond markets. If bond purchases were made in proportion to the size of each euro member’s economy, that might go some way to overcoming German misgivings that the central bank was being used to provide favourable financing to profligate countries.

Such action by the ECB is an essential short-term palliative. But any lasting stability for the euro must lie with governments, particularly in the degree to which they are willing to give up fiscal sovereignty in return for pooling liabilities. Germany stands firmly at one extreme of this debate. Its chancellor, Angela Merkel, wants big changes to force probity (and wants the EU summit on December 9th to focus on such rule changes), but has opposed the idea of jointly guaranteed “Eurobonds”. German officials have argued that any open-ended commitment to joint liabilities would encourage errant governments to profligacy, violate Germany’s constitution and raise its borrowing costs. Even now, the head of the Bundesbank, Jens Weidmann, appears to believe that the imposition of fiscal rigour will be enough to restore calm to Europe’s bond markets.

Hanging together

Others think that circumstances demand speedier concentration on ways to pool liabilities. On November 23rd the European Commission laid out three approaches for issuing Eurobonds, two of which imply mutual guarantees.

Another new proposal is intriguing—thanks, in part, to its provenance. Germany’s Council of Economic Experts recently proposed a “European Redemption Pact”. This scheme would place the debt, in excess of 60% of GDP, of all euro-zone governments not already in IMF rescue plans into a jointly guaranteed fund that would be paid off over 25 years. Modelled in part on the federal government’s assumption of the debt of America’s states begun by Alexander Hamilton in 1790, the fund would provide joint liability for these debts under strict conditions. These would require euro-zone countries to introduce debt brakes into their constitutions, like the one Germany and Spain already have; give priority to paying off the mutualised bonds; set aside a specific tax revenue to do so; and pledge foreign-exchange reserves as collateral.

At its peak, the redemption pact would be huge: the joint liability would amount to €2.3 trillion. But it would technically be temporary. For all these safeguards, Germany’s government has so far poured cold water on the idea. But time is running out. And the scale of the impending catastrophe demands radical answers.

Audit: Fed gave $16 trillion in emergency loans

It's about time the USA forgave ALL mortgages, dropped free money to all of US, and cut credit card rates to a max of 8.9% -- I bet it would still have cost us less, and the economy would be humming.

Once again, the "masters of the universe", the "uber-rich", will have to learn the same hard lesson -- sooner or later, when we all get poor, so will most of them.

Anyway, this from "Raw Syory" - please follow link to original.

Audit: Fed gave $16 trillion in emergency loans

The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government’s first-ever audit of the central bank.

Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.

Of the $16.1 trillion loaned out, $3.08 trillion went to financial institutions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office’s (GAO) analysis shows.

Additionally, asset swap arrangements were opened with banks in the U.K., Canada, Brazil, Japan, South Korea, Norway, Mexico, Singapore and Switzerland. Twelve of those arrangements are still ongoing, having been extended through August 2012.

Out of all borrowers, Citigroup received the most financial assistance from the Fed, at $2.5 trillion. Morgan Stanley came in second with $2.04 trillion, followed by Merill Lynch at $1.9 trillion and Bank of America at $1.3 trillion.

The audit also found that the Fed mostly outsourced its lending operations to the very financial institutions which sparked the crisis to begin with, and that they delegated contracts largely on a no-bid basis. The GAO report recommends new policies that would eliminate such conflicts of interest, and suggests that in the future the Fed should keep better records of their emergency decision-making process.

The Fed agreed to “strongly consider” the recommendations, but as it is not a government-run institution it cannot be forced to do so by lawmakers. The seven-member board of governors and the Fed chairman are, however, appointed by the President of the United States and confirmed by the Senate.

The audit was conducted on a one-time basis, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed last year. Fed officials had strongly discouraged lawmakers from ordering the audit, claiming it may serve to undermine confidence in the monetary system.

Suez Port Employees Reveal 21-Ton US Tear Gas Order for Interior Ministry

From "Common Dreams" -- we "support" the Egyptian Protestors -- but, we sell their military TONS of tear gas -- because, well - just because -- follow link to original

Suez Port Employees Reveal 21-Ton US Tear Gas Order for Interior Ministry
Port workers in Suez refuse to receive initial seven ton shipment as the interior ministry looks to restock after firing tear gas at protesters in Egypt for six days last week

A group of customs employees at the Suez seaport have revealed that the Egyptian Ministry of Interior is in the process of receiving 21 tons of tear gas from the US.

The claim was supported by Medhat Eissa, an activist in the coastal city of Suez, who provided documents he says he obtained from a group of employees at the Suez Canal customs. The employees have been subjected to questioning for their refusal to allow an initial seven ton shipment of the US-made tear gas canisters enter the port.

A group of employees at the Adabiya Seaport in Suez have confirmed, with the documents to prove it, that a three-stage shipment of in total 21 tons of tear gas canisters is on course for the port from the American port of Wilmington.

Employees say the container ship Danica, carrying seven tons of tear-gas canisters made by the American company Combined Systems, has already arrived at the port, with two similar shipments from the same company expected to arrive within the week.

The GOP wants to take your money and give it to rich people, full stop

This from Amanda Marcotte at "Pandagon" -- follow link to original.

The GOP wants to take your money and give it to rich people, full stop

Are Republicans for lower taxes, as a general principle? They would have you believe the answer is yes; in fact, getting the rubes to vote for them is a matter of promising to take control of the nation's uteruses away from their rightful owners plus a promise that you personally will see lower taxes. But are they in fact in support of lower taxes? Here's your answer:

At issue is the expiration of payroll tax cuts that Obama insisted on when he cut a deal with congressional Republicans last year to extend the Bush tax cuts. The 4.2 percent rate that workers have been paying will revert to the old level of 6.2 percent unless Congress and the White House can reach a deal before the end of the year. For most of this year, Republicans have been signaling strong opposition to extending the cuts. Over the summer, Rep. Paul Ryan belittled the payroll tax cut as “sugar-high economics,” while just this past Sunday Sen. Jon Kyl argued that it “has not stimulated job creation. We don’t think that is a good way to do it.”

So, if a tax squeezes the working class, they are all for it. They are for tax cuts, sure, but only if you're rich. Everyone else should pay more to make sure that our wealthiest class can afford a fourth summer home. According to this article, the average amount they want the 99% to pay in order to subsidize Ferrari maintenance for the 1% is about $1,000 a year: you should sacrifice a mortgage payment, your family's Christmas, or teeth cleanings for everyone so that rich people can better afford that $39,000 backpack. That's what Republicans stand for. Anything else they claim is just hand-waving.

By the way, blather about job creation is part of that hand-waving. Average families will spend that $1,000 on stuff that stimulates the economy. Money going to your dentist or to pay your mortgage or buy presents for your kids does a lot more, economically, than money that goes from a rich person to another rich person to buy a fancy doo-dad.

"Get A Job"

Found this on Daily Kos - follow link to original

A Look at America's Geography Shows That the Tea Party Is Doomed

Here is an interesting article from "Alternet", by Colin Woodard. I'm including an excerpt. Please follow link to read the entire article. It's very interesting, and (I believe) quite accurate.

A Look at America's Geography Shows That the Tea Party Is Doomed

Even as the movement's grip tightens on the GOP, its influence is melting away across vast swaths of America, thanks to centuries-old regional traditions.

When 2011 began, the Tea Party movement had reason to think it had seized control of Maine. Their candidate, Paul LePage, the manager of a chain of scrappy surplus-and-salvage stores, had won the governor’s mansion on a promise to slash taxes, regulations, spending, and social services. Republicans had captured both houses of the state legislature for the first time in decades, to the surprise of the party’s leaders themselves. Tea Party sympathizers had taken over the GOP state convention, rewriting the party’s platform to demand the closure of the borders, the elimination of the Federal Reserve and the U.S. Department of Education, a prohibition on stimulus spending, a “return to the principles of Austrian Economics,” and a prohibition on “any participation in efforts to create a one world government.” A land developer had been put in charge of environmental protection, a Tea Party activist was made economic development chief, and corporate lobbyists served as the governor’s key advisers. A northern New England state’s rather liberal Democrats and notoriously moderate Republican establishment had been vanquished.

Or so they thought.

Less than a year later, it’s Maine’s Tea Party that’s on the wane. Prone to temper tantrums and the airing of groundless accusations, Governor LePage—who won office by less than two points in a five-way race, with just 38 percent of the vote—quickly alienated the state party chair and GOP legislative leadership. His populist credentials were damaged when it was revealed that much of his legislative agenda— including a widely condemned proposal to roll all state environmental laws back to weak federal baselines—had been literally cut and pasted from memos sent to his office by favored companies, industrial interests, or their lobbyists. His economic development commissioner was forced to step down after allegedly insulting several (previously friendly) audiences, while a court ruled that his environmental protection nominee violated conflict-of-interest provisions. He triggered international media coverage, a lawsuit, and large protests after removing a mural depicting the history of Maine’s labor movement from the Department of Labor because an anonymous constituent compared it to North Korean “brainwashing.” Eight of twenty GOP state senators blasted the governor’s bellicose behavior in an op-ed carried in the state’s newspapers, the largest of which declared in April that “the LePage era is over.” Power in the state’s diminutive capital, Augusta, now resides with the senate president, a Republican moderate who was Senator Olympia Snowe’s longtime chief of staff.

The Tea Party itself has been all but destroyed in Maine by its association with the debt ceiling hostage takers in Washington, according to Andrew Ian Dodge, founder of the organization Maine Tea Party Patriots and the state movement’s most high-profile activist. “There were people saying, ‘Yes, I think we should default,’ and there were the rest of us saying, ‘You’re insane,’ ” says Dodge, a dark-horse challenger to Snowe. “Now I’m emphasizing my Tea Party links even less because a lot of people think they are the crazy people who almost drove us off a cliff.”

Indeed, in much of the northern tier of the country, the Tea Party has seen a similar reversal of fortune. Wisconsin Governor Scott Walker—who won by just 6 percent— has faced powerful resistance to his deregulatory, antiunion, antigovernment agenda, including the recall of two of his senatorial allies; his political future is uncertain. In Massachusetts, Tea Party-backed Senator Scott Brown has emerged as a moderate Yankee Republican along the lines of Snowe. In New Hampshire, Tea Party organizer Jack Kimball stepped down as state party chair this September after losing the confidence of the state’s leading Republicans. “This is the establishment Republicans versus the Tea Party that helped get them into office,’’ one angry Tea Party activist said of Kimball’s departure. “They rode us in, now they’re bringing us back to the barn.’’

World Theater

Headline: "Iranians Storm UK Embassy" -- all I could think was --- I've already seen this movie.

Is this crap all choreographed? Sure seems that way. Will there be some sort of "hostage crisis" next? Is this a major distraction from how crappy the economy is?

Do these bozos work together? WTF???

Senate Rejects Amendment Banning Indefinite Detention

This from the ACLU Blog Of Rights. Please follow link to original.

Senate Rejects Amendment Banning Indefinite Detention

Today, the Senate voted 37-61 to reject an important amendment to the National Defense Authorization Act (NDAA) that would have removed harmful provisions authorizing the U.S. military to pick up and imprison without charge or trial civilians, including American citizens, anywhere in the world. The amendment offered by Sen. Mark Udall (D-Colo.), would have replaced those provisions with a requirement for an orderly congressional review of detention power.

The Secretary of Defense, the Director of National Intelligence, the Director of the FBI and the head of the Justice Department’s National Security Division have all said that the indefinite detention provisions in the NDAA are harmful and counterproductive, and the White House has issued a veto threat over the provisions.

We’re disappointed that, despite robust opposition to the harmful detention legislation from virtually the entire national security leadership of the government, the Senate said ‘no’ to the Udall amendment and ‘yes’ to indefinite detention without charge or trial.

The next opportunity to remove the harmful detention provisions from the bill will be when House and Senate conferees meet in conference committee next week.

If the conference committee fails to remove the detention provisions, President Obama should follow through with his veto threat. Today’s vote on the Udall amendment shows there’s more than enough opposition to these provisions to sustain a veto. Stay tuned for more information.

Tuesday, November 29, 2011

Restore the Basic Bargain

This from Robert Reich -- he's only trying to save the U.S.A. -- that's all.

Please follow link to original.

Restore the Basic Bargain

Monday, November 28, 2011

For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.

That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.

Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day – three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”

But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.

That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.

The basic bargain is over – not only at Ford but all over the American economy.

New data from the Commerce Department shows employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data in 1929.

Meanwhile, corporate profits now constitute the largest share of the economy since 1929.

1929, by the way, was the year of the Great Crash that ushered in the Great Depression.

In the years leading up to the Great Crash, most employers forgot Henry Ford’s example. The wages of most American workers remained stagnant. The gains of economic growth went mainly into corporate profits and into the pockets of the very rich. American families maintained their standard of living by going deeper into debt. In 1929 the debt bubble popped.

Sound familiar? It should. The same thing happened in the years leading up to the crash of 2008.

The latest data on corporate profits and wages show we haven’t learned the essential lesson of the two big economic crashes of the last seventy-five years: When the economy becomes too lopsided – disproportionately benefitting corporate owners and top executives rather than average workers – it tips over.

In other words, we’re in trouble because the basic bargain has been broken.

Yet incredibly, some politicians think the best way to restart the nation’s job engine is to make corporations even more profitable and the rich even richer – reducing corporate taxes; cutting back on regulations protecting public health, worker safety, the environment, and small investors; and slashing taxes on the very rich.

These same politicians think average workers should have even less money in their pockets. They don’t want to extend the payroll tax cut or unemployment benefits. And they want to make it harder for workers to form unions.

These politicians have reality upside down.

Corporations don’t need more money. They have so much money right now they don’t even know what to do with all of it. They’re even buying back their own shares of stock. This is a bonanza for CEOs whose pay is tied to stock prices and it increases the wealth of other shareholders. But it doesn’t create a single new job and it doesn’t raise the wages of a single employee.

Nor do the wealthiest Americans need more money. The top 1 percent is already taking in more than 20 percent of total income — the highest since the 1920s.

American businesses, including small-business owners, have no incentive to create new jobs because consumers (whose spending accounts for about 70 percent of the American economy) aren’t spending enough. Consumers’ after-tax incomes dropped in the second and third quarters of the year, the first back-to-back drops since 2009.

The recent small pickup in consumer spending has come out of their savings. Obviously this can’t continue, and corporations know it. Consumer savings are already at their lowest level in four years.

Get it? Corporate profits are up right now largely because pay is down and companies aren’t hiring. But this is a losing game even for corporations over the long term. Without enough American consumers, their profitable days are numbered.

After all, there’s a limit to how much profit they can get out of cutting American payrolls or even selling abroad. European consumers are in no mood to buy. And most Asian economies, including China, are slowing.

We’re in a vicious cycle. The only way out of it is to put more money into the pockets of average Americans. That means extending the payroll tax cut. And extending unemployment benefits.

Don’t stop there. Create a WPA to get the long-term unemployed back to work. And a Civilian Conservation Corp to create jobs for young people.

Hire teachers for classrooms now overcrowded, and pay them enough to attract people who are talented as well as dedicated. Rebuild our pot-holed highways. Create a world-class infrastructure.

Pay for this by hiking taxes on millionaires.

A basic bargain was once at the heart of the American economy. It recognized that average workers are also consumers and that their paychecks keep the economy going.

We can’t have a healthy economy until that bargain is restored.

How Paulson Gave Hedge Funds Advance Word

Any o0ne who does not think EVERY aspect of our Government is not both corrupt, and "fixed" for the wealthy -- read and weep.

Follow link to original. Give credit to reporters who are willing to tell the truth. Give credit to outlets that are willing to publish it. Make sure this becomes public knowledge.

How Paulson Gave Hedge Funds Advance Word - from Bloomberg, By Richard Teitelbaum

Treasury Secretary Henry Paulson stepped off the elevator into the Third Avenue offices of hedge fund Eton Park Capital Management LP in Manhattan. It was July 21, 2008, and market fears were mounting. Four months earlier, Bear Stearns Cos. had sold itself for just $10 a share to JPMorgan Chase & Co. (JPM)

Now, amid tumbling home prices and near-record foreclosures, attention was focused on a new source of contagion: Fannie Mae (FNMA) and Freddie Mac, which together had more than $5 trillion in mortgage-backed securities and other debt outstanding, Bloomberg Markets reports in its January issue.

Paulson had been pushing a plan in Congress to open lines of credit to the two struggling firms and to grant authority for the Treasury Department to buy equity in them. Yet he had told reporters on July 13 that the firms must remain shareholder owned and had testified at a Senate hearing two days later that giving the government new power to intervene made actual intervention improbable.

“If you have a bazooka, and people know you have it, you’re not likely to take it out,” he said.

On the morning of July 21, before the Eton Park meeting, Paulson had spoken to New York Times reporters and editors, according to his Treasury Department schedule. A Times article the next day said the Federal Reserve and the Office of the Comptroller of the Currency were inspecting Fannie and Freddie’s books and cited Paulson as saying he expected their examination would give a signal of confidence to the markets.
A Different Message

At the Eton Park meeting, he sent a different message, according to a fund manager who attended. Over sandwiches and pasta salad, he delivered that information to a group of men capable of profiting from any disclosure.

Around the conference room table were a dozen or so hedge- fund managers and other Wall Street executives -- at least five of them alumni of Goldman Sachs Group Inc. (GS), of which Paulson was chief executive officer and chairman from 1999 to 2006. In addition to Eton Park founder Eric Mindich, they included such boldface names as Lone Pine Capital LLC founder Stephen Mandel, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.

After a perfunctory discussion of the market turmoil, the fund manager says, the discussion turned to Fannie Mae and Freddie Mac. Paulson said he had erred by not punishing Bear Stearns shareholders more severely. The secretary, then 62, went on to describe a possible scenario for placing Fannie and Freddie into “conservatorship” -- a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets.
Stock Wipeout

Paulson explained that under this scenario, the common stock of the two government-sponsored enterprises, or GSEs, would be effectively wiped out. So too would the various classes of preferred stock, he said.

The fund manager says he was shocked that Paulson would furnish such specific information -- to his mind, leaving little doubt that the Treasury Department would carry out the plan. The managers attending the meeting were thus given a choice opportunity to trade on that information.

There’s no evidence that they did so after the meeting; tracking firm-specific short stock sales isn’t possible using public documents.

And law professors say that Paulson himself broke no law by disclosing what amounted to inside information.
Rampant Rumors

At the time, rumors about Fannie and Freddie were tearing through the markets. The government-chartered firms’ mandate, which continues today, is to buy mortgages from banks and repackage them into securities either for their own portfolios or to sell to others. The banks can then use the proceeds from those transactions to write new mortgages.

By mid-2008, delinquencies and foreclosures were soaring, and the GSEs set aside billions of dollars against future losses. In the first six months of 2008, they racked up net losses of $5.46 billion as they slashed dividends and marked down the values of their huge inventories of mortgage-backed securities.

On Wall Street, confusion reigned. UBS AG analyst Eric Wasserstrom on July 10 cut his share price target on Freddie to $10 from $28. The next day, Citigroup Inc. (C) analyst Bradley Ball reiterated a “buy” recommendation on the two GSEs. On July 12, the Times of London, without citing a source, reported that Paulson was contemplating a $15 billion capital injection into the firms.
Shares Rally

At the time Paulson privately addressed the fund managers at Eton Park, he had given the market some positive signals -- and the GSEs’ shares were rallying, with Fannie Mae’s nearly doubling in four days.

William Black, associate professor of economics and law at the University of Missouri-Kansas City, can’t understand why Paulson felt impelled to share the Treasury Department’s plan with the fund managers.

“You just never ever do that as a government regulator -- transmit nonpublic market information to market participants,” says Black, who’s a former general counsel at the Federal Home Loan Bank of San Francisco. “There were no legitimate reasons for those disclosures.”

Janet Tavakoli, founder of Chicago-based financial consulting firm Tavakoli Structured Finance Inc., says the meeting fits a pattern.

“What is this but crony capitalism?” she asks. “Most people have had their fill of it.”
A Lawyer’s Advice

The fund manager who described the meeting left after coffee and called his lawyer. The attorney’s quick conclusion: Paulson’s talk was material nonpublic information, and his client should immediately stop trading the shares of Washington- based Fannie and McLean, Virginia-based Freddie.

Seven weeks later, the boards of the two firms voted to go into conservatorship under the newly created Federal Housing Finance Agency. The takeover was effective Sept. 6, a Saturday, and the companies’ stock prices dropped below $1 the following Monday, from $14.13 for Fannie Mae and $8.75 for Freddie Mac (FMCC) on the day of the meeting. Various classes of preferred shares lost upwards of 85 percent of their value.

A complete list of those at the Eton Park meeting isn’t publicly available. A Treasury Department roster of those expected to attend, obtained by Bloomberg News under the Freedom of Information Act, includes Ripplewood Holdings LLC CEO Timothy Collins, who says, through a spokesman, that he didn’t participate.
Storied Investors

At least one fund manager who wasn’t listed in the FOIA document, Daniel Stern of Reservoir Capital Group, did attend, says the manager who described the meeting.

The gathering comprised some of Wall Street’s most storied investors. Mindich, a former chief strategy officer of New York- based Goldman Sachs, started Eton Park in 2004 with $3.5 billion, at the time one of the biggest hedge-fund launches ever. Singh, a former head of Goldman’s proprietary-trading desk, also began his fund in 2004, in partnership with private- equity firm Texas Pacific Group Ltd.

Lone Pine’s Mandel worked as a retail analyst at Goldman before joining Julian Robertson’s Tiger Management LLC, one of the most successful hedge funds of the 1980s and 1990s. He started his own firm in 1997. Och was co-head of U.S. equity trading at Goldman before founding Och-Ziff in 1994. The publicly listed firm managed $28.9 billion in November.
Goldman Alums

One other Goldman Sachs alumnus was at the meeting: Frank Brosens, founder and principal of Taconic Capital Advisors LP, who worked at Goldman as an arbitrageur and who was a protege of Robert Rubin, who went on to become Treasury secretary.

Non-Goldman Sachs alumni who attended included short seller James Chanos of Kynikos Associates Ltd., who helped uncover the Enron Corp. accounting fraud; GSO Capital Partners LP co-founder Bennett Goodman, who sold his firm to Blackstone Group LP (BX) in early 2008; Roger Altman, chairman and founder of New York investment bank Evercore Partners Inc. (EVR); and Steven Rattner, a co-founder of private-equity firm Quadrangle Group LLC, who went on to serve as head of the U.S. government’s Automotive Task Force.

Another person in attendance: Michele Davis, then-assistant secretary for public affairs at the Treasury Department, who now represents Paulson as a managing partner at public relations firm Brunswick Group Inc. In an e-mail response to Bloomberg Markets, she referred all questions to Paulson’s book on the financial crisis, “On the Brink” (Business Plus, 2010), which makes no mention of the Eton Park meeting.
Paulson Thinktank

Paulson is now a distinguished senior fellow at the University of Chicago, where he’s starting the Paulson Institute, a think tank focused on U.S.-Chinese relations.

Eton Park’s Mindich, Lone Pine’s Mandel, TPG-Axon’s Singh and Och-Ziff (OZM)’s Och all declined to comment through spokesmen. Reservoir’s Stern didn’t return phone calls. Altman, through a spokesman, confirmed his attendance and declined to comment further.

Brosens confirmed in an e-mail that he had attended and said he couldn’t recall details. A spokesman for Rattner acknowledged he attended and said he didn’t trade in Fannie Mae- or Freddie Mac-related instruments after the meeting. Chanos declined to comment.

A Blackstone spokesman confirmed in an e-mail that GSO’s Goodman attended the meeting. Blackstone doesn’t believe market- sensitive information was discussed, and in any event Blackstone didn’t take any positions in Fannie or Freddie between the luncheon and Sept. 6, he wrote.
Strong Short Interest

Records show that many investors were betting against Fannie Mae and Freddie Mac at the time. According to Data Explorers Ltd., a London-based research firm, short interest in Fannie Mae shares rose sharply in July, to 163 million shares on July 14 from 86.3 million shares on July 9.

Short Interest continued to rise, to 240 million shares, on the day of the Eton Park meeting; it hit 262 million on July 24, its high for the year. Freddie Mac’s short interest showed a similar trajectory.

Revelations about the meeting come at a sensitive time.

“The optics are awful; there’s no doubt about it,” says professor Larry Ribstein of the University of Illinois College of Law in Champaign. “Everyone knows that insider trading is a huge issue.”

Rajat Gupta, the former head of McKinsey & Co. who was a member of Goldman’s board, was indicted by a federal grand jury on Oct. 26 for disclosing nonpublic information on Goldman and other companies to Raj Rajaratnam, a hedge-fund manager who earlier in October was sentenced to 11 years in prison for profiting from inside information provided by a web of industry insiders, including Gupta.

Gupta has pleaded not guilty.
LightSquared Probe

Several U.S. agencies face increased scrutiny in Congress for possible improper disclosures or ties to hedge funds. Senators are looking into whether the U.S. Department of Education divulged nonpublic details about new rules being considered to regulate for-profit educational institutions to outsiders, including Steven Eisman, former managing director of FrontPoint Partners LLC, who held short positions in the sector.

Education Department spokesman Justin Hamilton denies any impropriety. Eisman hasn’t been accused of any wrongdoing.

In October, Republican Senator Charles Grassley of Iowa asked hedge-fund manager Philip Falcone for copies of all communications between his Harbinger Capital Partners and the Department of Commerce, the Federal Communications Commission and the White House. Grassley is looking into whether Falcone improperly sought to influence regulators and the White House while seeking approvals for LightSquared Inc., the company constructing a broadband wireless network his fund is bankrolling.
‘Government Information’

Robin Roger, general counsel for the fund’s management firm, says any assertion that the fund or LightSquared tried to improperly influence regulators is unfounded.

For government officials, the leaking of market-sensitive information, even if inadvertent, represents an ethical minefield.

“There’s a lot of government information out there, and the hedge funds are trying to get it,” says Richard Painter, a law professor at the University of Minnesota who advised the Bush administration on Paulson’s sale of his Goldman stock when he became Treasury secretary. “It’s a huge problem that has to be addressed.”

The rules for what can or cannot be disclosed by government officials are often either unclear or nonexistent.
Tipping Hands

“The bottom line is that senior-level people in Washington, in the name of keeping in touch with their stakeholders, are tipping their hands,” says Adam Zagorin, a senior fellow at the Project on Government Oversight, a Washington watchdog group. “You can’t prosecute them for insider trading if they didn’t trade the shares. You may not be able to even reprimand them. What the hell are the rules?”

An official such as Paulson has no legal obligation to keep material nonpublic information to himself, says Phillip Kaplan, partner for litigation at Manatt Phelps & Phillips LLP, where he specializes in securities and class-action cases.

“I don’t think a government person is liable,” he says. “He didn’t profit from the information or trade on it.”

In the rapidly evolving world of insider-trading prosecutions, that could change, says the University of Illinois’s Ribstein, adding that the U.S. Securities and Exchange Commission is taking a broader view of what constitutes insider trading. SEC Enforcement Director Robert Khuzami, who can bring only civil cases, and the Justice Department, which can mount criminal prosecutions, have cast their net wide, Ribstein says.
Small Players Sued

In addition to going after big names like Rajaratnam and Gupta, the authorities are suing and indicting smaller players who might not have been prosecuted in the past, like accountants and analysts at so-called expert networks, who sell their expertise to hedge funds.

The University of Missouri’s Black says there’s no question that the plan to take over Fannie and Freddie -- however uncertain -- was material nonpublic information that could not be lawfully traded on. “What Paulson said put those managers in an untenable position,” he says. “They were exposed to all kinds of liabilities.”

The situation also generates some sympathy for Paulson.

“It seems to me, you’ve got to cut the guy some slack, even if he tipped his hand,” says William Poole, a former president of the Federal Reserve Bank of St. Louis. “How do you prepare the market for the fact that policy has changed without triggering the very crisis that you’re trying to avoid? What is he supposed to say without misleading these people?”
Market Insights

Poole says government officials need to communicate with industry participants in order to gain insights into market conditions and gauge likely reaction to interventions.

Black says the Eton Park meeting was the wrong way to communicate to the markets.

“Wink, wink, nod, nod is no way to approach sensitive information,” he says.

Paulson often contacted Wall Street participants throughout his tenure, according to his calendar. On that July trip to New York alone, he talked to Lehman Brothers Holdings Inc. CEO Richard Fuld, Washington Mutual Inc. CEO Kerry Killinger and Citigroup senior adviser Rubin.

Morgan Stanley and BlackRock Inc. both helped the Federal Reserve and OCC prepare the reports on Fannie Mae and Freddie Mac that Paulson told the New York Times would instill confidence the morning of the Eton Park meeting.
‘Unsafe and Unsound’

Paulson learned by mid-August that the Federal Reserve had found the GSEs “unsafe and unsound,” he told the Financial Crisis Inquiry Commission, which was appointed by President Barack Obama and Congress to probe the causes of the financial collapse.

“We’d been prepared for bad news, but the extent of the problems was startling,” he wrote in “On the Brink.”

On Sept. 6, when the GSEs’ boards agreed to have their companies placed in conservatorship, full-year 2008 losses were projected to reach as much as $50 billion for Fannie Mae and $32 billion for Freddie Mac. In October 2011, the FHFA estimated the cost to taxpayers of rescuing the firms at $124 billion through 2014.

The manager who described the Eton Park meeting says he also discussed it with an investigator from the FCIC. The discussion was confirmed by a former FCIC employee.

That manager says he ended up profiting from his Fannie Mae and Freddie Mac positions because he was already short the stocks. On his lawyer’s advice, he stopped covering his short positions and rode Fannie and Freddie shares all the way to the bottom.

MY Governor, Rick Perry -- I never knew he was that STUPID!

I just had to put this up. This from Joe.My.God. -- follow link to original.

The man has been very well protected by the "powers" in Texas. Walk and chew gum? NEVER!!

Another Rick Perry Gaffe

Rick Perry just can't get anything right, can he?

Perry, who during a recent Republican presidential debate struggled for nearly a minute to remember the third agency on a list of three federal departments that he said he wanted to eliminate, slipped up just as he was wrapping up his prepared remarks at his third of four events in the Granite State. "Those of you that will be 21 by Nov. 12th, I ask for your support and your vote," Perry said to a crowd that included college students. "Those of you who won't be -- just work hard -- because you are going to inherit this and you're counting on us to get this right. The idea that you're looking at a $15-trillion debt, that you're looking at entitlement programs that will not be there for you if we continue on this path, is not fair to you and it’s not right."

The voting age is 18. The election is November 6th.

Go to "Some Assembly Required" - it will be good for you.

Just go to "Some Assembly Required" -- read what he has put up, follow his links.

There will be a TEST very soon. It will not be from me. -- now, follow link to "Some Assembly Required". No, I'm not putting up any of his stuff -- you go there and read it.

Things To Tax

This from Dr. Krugman - please follow link to original

Things To Tax

The supercommittee was a superdud — and we should be glad. Nonetheless, at some point we’ll have to rein in budget deficits. And when we do, here’s a thought: How about making increased revenue an important part of the deal?

And I don’t just mean a return to Clinton-era tax rates. Why should 1990s taxes be considered the outer limit of revenue collection? Think about it: The long-run budget outlook has darkened, which means that some hard choices must be made. Why should those choices only involve spending cuts? Why not also push some taxes above their levels in the 1990s?

Let me suggest two areas in which it would make a lot of sense to raise taxes in earnest, not just return them to pre-Bush levels: taxes on very high incomes and taxes on financial transactions.

About those high incomes: In my last column I suggested that the very rich, who have had huge income gains over the last 30 years, should pay more in taxes. I got many responses from readers, with a common theme being that this was silly, that even confiscatory taxes on the wealthy couldn’t possibly raise enough money to matter.

Folks, you’re living in the past. Once upon a time America was a middle-class nation, in which the super-elite’s income was no big deal. But that was another country.

The I.R.S. reports that in 2007, that is, before the economic crisis, the top 0.1 percent of taxpayers — roughly speaking, people with annual incomes over $2 million — had a combined income of more than a trillion dollars. That’s a lot of money, and it wouldn’t be hard to devise taxes that would raise a significant amount of revenue from those super-high-income individuals.

For example, a recent report by the nonpartisan Tax Policy Center points out that before 1980 very-high-income individuals fell into tax brackets well above the 35 percent top rate that applies today. According to the center’s analysis, restoring those high-income brackets would have raised $78 billion in 2007, or more than half a percent of G.D.P. I’ve extrapolated that number using Congressional Budget Office projections, and what I get for the next decade is that high-income taxation could shave more than $1 trillion off the deficit.

It’s instructive to compare that estimate with the savings from the kinds of proposals that are actually circulating in Washington these days. Consider, for example, proposals to raise the age of Medicare eligibility to 67, dealing a major blow to millions of Americans. How much money would that save?

Well, none from the point of view of the nation as a whole, since we would be pushing seniors out of Medicare and into private insurance, which has substantially higher costs. True, it would reduce federal spending — but not by much. The budget office estimates that outlays would fall by only $125 billion over the next decade, as the age increase phased in. And even when fully phased in, this partial dismantling of Medicare would reduce the deficit only about a third as much as could be achieved with higher taxes on the very rich.

So raising taxes on the very rich could make a serious contribution to deficit reduction. Don’t believe anyone who claims otherwise.

And then there’s the idea of taxing financial transactions, which have exploded in recent decades. The economic value of all this trading is dubious at best. In fact, there’s considerable evidence suggesting that too much trading is going on. Still, nobody is proposing a punitive tax. On the table, instead, are proposals like the one recently made by Senator Tom Harkin and Representative Peter DeFazio for a tiny fee on financial transactions.

And here’s the thing: Because there are so many transactions, such a fee could yield several hundred billion dollars in revenue over the next decade. Again, this compares favorably with the savings from many of the harsh spending cuts being proposed in the name of fiscal responsibility.

But wouldn’t such a tax hurt economic growth? As I said, the evidence suggests not — if anything, it suggests that to the extent that taxing financial transactions reduces the volume of wheeling and dealing, that would be a good thing.

And it’s instructive, too, to note that some economies already have financial transactions taxes — and that among those who do are Hong Kong and Singapore. If some conservative starts claiming that such taxes are an unwarranted government intrusion, you might want to ask him why such taxes are imposed by the two countries that score highest on the Heritage Foundation’s Index of Economic Freedom.

Now, the tax ideas I’ve just mentioned wouldn’t be enough, by themselves, to fix our deficit. But the same is true of proposals for spending cuts. The point I’m making here isn’t that taxes are all we need; it is that they could and should be a significant part of the solution.

This article has been revised to reflect the following correction:

Correction: November 28, 2011

An earlier version of this column referred incorrectly to Hong Kong’s political status. It is one of China’s special administrative regions, not an independent country.

Monday, November 28, 2011

And Some Wonder Why Americans Are So Dumbed Down?

This from "Common Dreams" - please follow link to original

And Some Wonder Why Americans Are So Dumbed Down?

The covers of the US edition of this week's Time Magazine compared to the international editions.

We can't make this stuff up. It kind of says it all..


As they said at the end of "Looney Tunes" cartoons --- "that's all folks"

From "Some Assembly Required" -- have fun

Today is a very busy day here in the Old Lady Household -- as a result, here are a few juicy tid-bits from "Some Assembly Required" -- please go to the original (follow link), and go to the originals he has quoted, paraphrased. That should make for very rewarding reading -- some might even be frightening. Have fun.

History Lesson: Lots of talk this weekend about various ways Germany can take control of the rest of Europe through elaborate charades in Brussels aimed at gaining “closer financial integration... and joint control over the budgets of the member countries, including intervention rights if individual countries should violate the agreed rules.” The last time this sort of dominance was sought, the US had to bail out the whole continent. Probably will have to again.

Can You Hear Me Now? For over three years the 250 million-plus computers with iTunes installed have been open to intelligence and police hackers. Apple, which learned of the vulnerability in 2008, patched its software this month.

The Years of Living Dangerously: Nearly half [45%] of Americans do not earn enough to set aside money after their basic expenses to provide savings for things like college or an illness. Most can't cover replacing the air conditioner or refrigerator without paying ruinous interest rates. They are not officially poor, but they are damned near destitute

Follow the Money: Why has Homeland Security begun co-coordinating multi-city police raids on #Occupy protesters? What is the clear and present danger they present? Perhaps it is their call to get money and corporations out of politics. Or reform and meaningful regulation of the finance industry. Or perhaps it is their desire that Congress no longer be permitted to enrich themselves in ways that are illegal for ordinary citizens. And DHS does not decide to encourage mayors to order their police forces to make war on peaceful citizens without getting approval from the White House or Congress. Someone authorized this, intending to do away with the movement. Instead it fanned the flames.

Report Card: Black Friday sales – no matter how strong – do not say anything about the US economy and certainly cannot be interpreted in terms of job creation. The big sales are in TVs, PCs, iPhony things, software and games, none of which is made in the US. All the sales suggest is how much further the customer went into debt.

It's Only Make Believe: The IMF doesn't have €600 billion ($800 billion) to lend to Italy. €600 billion ($800 billion) wouldn't be enough. And then there's Portugal. And Spain. And France. Jeesh, get a grip.

It's A Free Country: Remember TARP's $700 billion? Okay then, do you remember $7.77 trillion in secret loans and guarantees to the banks? Oh, right. They were secret. Because, Bernanke says, the banks wouldn't take the money if they had to do it in public. And bread eaten in secret is sweet.

Have a good afternoon. Talk to you later.

Philip Pilkington: The Coming Age of Neocla

This from "Naked Capitalism" -- please follow link to original

Monday, November 28, 2011
Philip Pilkington: The Coming Age of Neocla

By Philip Pilkington, a journalist and writer living in Dublin, Ireland

We stand for the withering away of the state. At the same time we stand for the strongest state power that has ever existed. Is this “contradictory”? Yes, it is contradictory. But this contradiction fully reflects Marx’s dialectics.

– Josef Stalin in remarks to the Soviet Party congress in 1930

Such is the contorted nonsense that flows from doctrine and dogma when these become institutionalised. When dogma is confined to the armchair of the intellectual or the blackboard of the social scientist it is innocuous – simply an attempt by one individual to make sense of a world that they will never, in truth, ever make sense of. But when it comes to occupy a seat of power it becomes like a steamroller that can crush common sense and practicality in a misled attempt to change the world for the better.

Stalin and The Party came to call Marx’s (or Engels’?) philosophy of dialectical materialism ‘diamat’ – a phrase that perfectly captures the bureaucratic, narrow mindset that Orwell invoked when he referred to his semi-fictitious ‘newspeak’. In like manner I propose that we rename neoclassical economics whenever it comes to truly occupy a real seat of power; that is, when this set of ideas takes control over peoples’ lives in a wholly unmediated manner. When this occurs… well, welcome to the topsy-turvy world of ‘neocla’.

In times past when neocla grabbed power it was either through the IMF (as, for example, happened in Latin America during their various crises) or through the co-opting of some hapless government in search of answers (as happened in Russia under Yeltsin and Chile under Pinochet). When neocla gained real power its faceless bureaucrats then went about wrecking the society and the economy through various ‘microeconomic’ ‘reforms’ – taxation-based, usually, but also through privatisation, deregulation etc.

The reason these policies were enacted is because adherents of neocla claim that they have a model worked out in their heads of the world really works – just like Stalin’s, but the details are a little different. So, they figure that if they can just get the world to look a little bit more like their model and a little less the existing world, they figure we’ll eventually establish a sort of utopia – again, like Stalin, except the details are a little different. When they encounter failure they assure themselves that it is only a temporary setback; after all, they have this model in their heads and they simply know that it describes the inner-workings of the outside-world – again, like Stalin except the details are a little different.

(Note that the adherents of neocla will often bend language through the prism of their own ideas to suit their purposes and justify their crimes – just like Stalin does in the above quote. They will claim that they are not, in fact, imposing policy at all when they ‘reform’ the tax system or privatise certain institutions. Instead they will claim that they are actually rescinding policies. The logic of this is so twisted that I will leave it to some philosopher to explore in any depth. For now, it can safely be said that these folks step in and make changes in policy. In that they are imposing policy, no matter how they like to twist this to claim that when they impose policy they are actually not imposing policy but are, in fact, getting rid of already existing policy etc.)

In the past the adherents of neocla were kicked out of positions of power in the economies they wrecked after a few years of imposing nonsensical policies. The reason for this was that democracy, or at the very least popular opinion, pushed in a way that it could not in the stifled, totalitarian USSR. In this the populations exerted enough pressure on the government to change tack or elected a government that would do so.

But we are now seeing the birth of a new centre for neocla policymaking in Europe that I fear will be far more difficult for its victims to do away with. We see this new centre – let us call it the ‘Politeuro’ – emerge slowly through the centralisation of fiscal policy that is currently taking place in Europe; as yet its constitution is indeterminate, but even now we can start to make out its general shape and nature. We can see a broad sketch of it here, as written by Professor Bill Mitchell:

Basically it is setting up a centralised surveillance unit to further usurp the fiscal capacity of the member states without at the same time establishing a fully-fledged “federal” fiscal capacity to meet asymmetric aggregate demand shocks (across the region).

The plan would require all member states (17 nations) to send draft budgets to the EC by October 15 each year. The Commission could then reject the plan and force the nation to alter the spending and taxation proposals. There would also be stricter rules under the “Excessive Deficit Procedure” which would seek to enforce the Stability and Growth Pact more closely.

All member states would be forced to set up “independent fiscal councils” which would be involved in the preparation of budgets and official forecasts.

If a nation needed financial assistance there would be federal support it would have to be obedient under these rules.

Short conclusion: it would be a total disaster.

And that doesn’t even take into account the subcommittees of neocla that will enforce privatisation and various other microeconomic policies on governments that cannot comply with their impossible demands.

Soon a bunch of neocla policymakers will have significant control over the minutiae of government policy in the peripheral countries. And, since they are unchecked by the populations – not being subject to democratic control – and basically have free rein to implement their policies from a distance, we can be sure that they will concoct a most outlandish and stupid grab-bag of neocla policies which they will then force down the necks of the periphery governments.

They will tinker with taxes and impose privatisations, all of which will fly in the face of common sense – and all of which will be undertaken in reverence to a ‘free market’ that only exists in the foggiest corners of their own minds.

The economies and the societies of the periphery will suffer to no end, but these neocla technocrats will be particularly difficult to get rid of. They will be allied neither to a single government, nor will they be tied to a strictly international institution like the IMF. Instead they will be built into the European ‘chain of command’.

The Politeuro will be listened to by governments in the periphery and the citizens that elect these impotent governments will pay for it in real living standards. Meanwhile, these citizens will not have within their grasp any lever of power that they can pull to change the rules of the game.

In saying all this, I, like many others, recognise that we need the ECB to step in and write the check in order to stymie the crisis in Europe. And I fully recognise that, at this juncture, we have no real choice but to hand over fiscal powers so as to convince them to do so.

But we should not walk into this with our eyes closed. It is all too clear what is taking place here: the birthing of a sickly neoliberal superstate in which neocla technocrats will be able to impose their fantasies on people from a safe distance with complete freedom from democratic accountability. Once the ECB steps in and the eurocrisis is wound down, this will be the world in which many of us will have to live. And a brave a new world it will be – with all the Huxleyian associations that particular phrase calls to mind.

Sunday, November 27, 2011

Washington Leaves Millions to Die by Jeffrey D. Sachs

This from "The Huffington Post", by way of "Common Dreams" -- please follow link to original

Washington Leaves Millions to Die
by Jeffrey D. Sachs

The wonder of our world is that scientific knowledge is now so powerful that we can save millions of children, mothers, and fathers from killer diseases each year at little cost. The Global Fund to Fight AIDS, TB, and Malaria has mobilized that knowledge over the past decade to save more than 7 million lives and to protect the health of hundreds of millions more. Yet now the Global Fund is under mortal threat because of budget cuts approved by President Obama and the Congress.

The Obama Administration had pledged $4 billion during 2011-13 to the Global Fund, or $1.33 billion per year. Now it is reneging on this pledge. For a government that spends $1.9 billion every single day on the military ($700 billion each year), Washington's unwillingness to follow through on $1.33 billion for a whole year to save millions of lives is a new depth of cynicism and recklessness.

As a result of US budget cutbacks, and me-too cutbacks by other countries, the Global Fund this week closed its doors on providing new funds to impoverished nations. It was supposed to accept proposals next month from the poorest countries for an 11th round of disease-control funds. Instead, it has scrapped any new funding until 2014 at the earliest, and will only fund the continuation of the coverage of existing programs. US officials will prevaricate, noting that the US spends this amount or that amount. History will treat such excuses with the scorn they deserve.

Millions of people are now at risk of death in the coming years as a result of Obama's lassitude and neglect. Hundreds of thousands of children who would have been saved will now die of mosquito bites. They will die because they live in poor tropical environments where a mosquito bite kills, and where their impoverishment makes it impossible for them to afford a $5 bed net, $1 diagnostic test, $1 dose of anti-malaria medicine, or access to a clinic. Countless others will die because they cannot get AIDS or TB treatments to stay alive.

If you think that money spent on the Global Fund is money down the drain, think again. The Global Fund was created a decade ago because the world needed to respond to the uncontrolled epidemics of AIDS, malaria, and TB. It has been a historic success, proving the skeptics wrong. The Global Fund keeps alive 3.2 million people on anti-retroviral treatment. It has financed 8.2 million courses of TB treatment and the distribution of 190 million insecticide-treated nets. You can read an overview here.

The Global Fund money has reached millions of people in need. When its programs have been hit by corruption, audits have paused the funding and reoriented the programs. The result of this practical approach is great success in many of the world's poorest places. Malaria has come down sharply, averting an estimated 400,000 deaths per year in Africa compared to the baseline path as of the year 2000. Yet there are still around 700,000 malaria deaths each year that can be prevented if the Global Fund has the means. Read here about the remarkable progress against malaria. Similar progress is being made against AIDS. Now that progress is at dire risk.

Reorienting less than 1 day's military budget to help save millions of lives (in conjunction with the efforts of other countries) is not only a great humanitarian step but also the most cost-effective step we can take for our own security. Countries like Yemen or Somalia are falling apart because they cannot meet their most basic needs. We send in drone missiles -- each one at the cost of at least 20,000 bed nets -- but we will find no real security until we help address the problems of disease, poverty, and hunger that destabilize these regions.

It is painful to recall the campaign promises made by Obama and Secretary Hillary Clinton. Both promised that they would step up the fight to control AIDS, TB, and malaria. Empty words. President Obama's aides tell him that foreign assistance is bad domestic politics and he listens. On this issue even George W. Bush knew better.

The head of the Foreign Affairs Committee in Congress, Congresswoman Ileana Ros-Lehtinen, is not quiet. She is an aggressive and outspoken foe of foreign assistance, pretending to her constituents that cutting a $1 billion to the Global Fund is the way to balance the budget. Great, we're now 0.001 of the way there.

The United States Government, I noted earlier, is not alone in the collapse of morality, decency, and common sense. Each government that once contributed to the Global Fund takes refuge in the budget cuts by the US and the others. The apparent belief of the politicians is that there is safety in numbers if they all starve the Global Fund together.

We live in a country where the Federal Government doesn't think twice about the fate of impoverished and dying people. Such a government won't act to save your life or mine. Politicians so brazen and irresponsible need to be voted out of office. In the meantime, I will join the efforts around the world to find new means and new leaders to continue the struggle against the killer diseases. I hope that you will do so too.
© 2011 Jeffrey D. Sachs

Senators Demand the Military Lock Up American Citizens in a “Battlefield” They Define as Being Right Outside Your Window

This from the ACLU "Blog Of Rights" -- please follow link to original.

It matters not if you are Republican or Democrat, "Liberal", "Conservative", or "Radical" -- this is an attempt to totally subvert The Constitution, turn us ALL into SUBJECTS instead of CITIZENS. It makes the Bill of Rights nothing more than TOILET PAPER> Contact your Senators, urge them to oppose these "laws". Please get ready for peaceful demonstrations against these unlawful "laws". The future of America, of The United States as a Democratic Republic is at stake!

Senators Demand the Military Lock Up American Citizens in a “Battlefield” They Define as Being Right Outside Your Window

While nearly all Americans head to family and friends to celebrate Thanksgiving, the Senate is gearing up for a vote on Monday or Tuesday that goes to the very heart of who we are as Americans. The Senate will be voting on a bill that will direct American military resources not at an enemy shooting at our military in a war zone, but at American citizens and other civilians far from any battlefield — even people in the United States itself.

Senators need to hear from you, on whether you think your front yard is part of a “battlefield” and if any president can send the military anywhere in the world to imprison civilians without charge or trial.

The Senate is going to vote on whether Congress will give this president—and every future president — the power to order the military to pick up and imprison without charge or trial civilians anywhere in the world. Even Rep. Ron Paul (R-Texas) raised his concerns about the NDAA detention provisions during last night’s Republican debate. The power is so broad that even U.S. citizens could be swept up by the military and the military could be used far from any battlefield, even within the United States itself.

The worldwide indefinite detention without charge or trial provision is in S. 1867, the National Defense Authorization Act bill, which will be on the Senate floor on Monday. The bill was drafted in secret by Sens. Carl Levin (D-Mich.) and John McCain (R-Ariz.) and passed in a closed-door committee meeting, without even a single hearing.

I know it sounds incredible. New powers to use the military worldwide, even within the United States? Hasn’t anyone told the Senate that Osama bin Laden is dead, that the president is pulling all of the combat troops out of Iraq and trying to figure out how to get combat troops out of Afghanistan too? And American citizens and people picked up on American or Canadian or British streets being sent to military prisons indefinitely without even being charged with a crime. Really? Does anyone think this is a good idea? And why now?

The answer on why now is nothing more than election season politics. The White House, the Secretary of Defense, and the Attorney General have all said that the indefinite detention provisions in the National Defense Authorization Act are harmful and counterproductive. The White House has even threatened a veto. But Senate politics has propelled this bad legislation to the Senate floor.

But there is a way to stop this dangerous legislation. Sen. Mark Udall (D-Colo.) is offering the Udall Amendment that will delete the harmful provisions and replace them with a requirement for an orderly Congressional review of detention power. The Udall Amendment will make sure that the bill matches up with American values.

In support of this harmful bill, Sen. Lindsey Graham (R-S.C.) explained that the bill will “basically say in law for the first time that the homeland is part of the battlefield” and people can be imprisoned without charge or trial “American citizen or not.” Another supporter, Sen. Kelly Ayotte (R-N.H.) also declared that the bill is needed because “America is part of the battlefield.”

The solution is the Udall Amendment; a way for the Senate to say no to indefinite detention without charge or trial anywhere in the world where any president decides to use the military. Instead of simply going along with a bill that was drafted in secret and is being jammed through the Senate, the Udall Amendment deletes the provisions and sets up an orderly review of detention power. It tries to take the politics out and put American values back in.

In response to proponents of the indefinite detention legislation who contend that the bill “applies to American citizens and designates the world as the battlefield,” and that the “heart of the issue is whether or not the United States is part of the battlefield,” Sen. Udall disagrees, and says that we can win this fight without worldwide war and worldwide indefinite detention.

The senators pushing the indefinite detention proposal have made their goals very clear that they want an okay for a worldwide military battlefield, that even extends to your hometown. That is an extreme position that will forever change our country.

Now is the time to stop this bad idea. Please urge your senators to vote YES on the Udall Amendment to the National Defense Authorization Act.

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