Year: 2014

Congress Does the Right Thing, and then Scrambles to Repeal It

No Comments

I am talking, of course, about the attempts to repeal changes to the federal flood insurance program, so as to stop subsidizing people who choose to live in flood prone regions:

Setting aside objections from the White House and fiscal watchdogs, a bipartisan Senate majority voted Thursday to delay rate increases in federal flood insurance for coastal property owners from Maine to California.

The 67 to 32 vote reflected mounting political opposition to big insurance hikes that Congress passed in 2012 to prop up the nation’s nearly bankrupt flood insurance program. The bill, which faces an uncertain outcome in the House, would delay the increases for up to four years for hundreds of thousands of property owners across the country, including tens of thousands in Massachusetts.

The measure also postpones the adoption of a new set of official flood maps for coastal regions, which would have dramatically expanded areas designated as prone to floods and required thousands more to obtain costly insurance. In Boston alone, the number of properties encompassed in the new maps would rise from 8,000 to 18,000.

Floods are getting worse because of anthropogenic climate change, and the original maps were too conservative, and the rates were never appropriate to the level of risk.

The solution to ameliorating damage from flooding is not to pay people to live there.

Capitalism, Huh?

No Comments


click a picture for a slide show

When Metallica discovered that their music was being used to torture inmates at Guantanamo, they send a cease and desist letter.

Canadian electro-industrial band Skinny Puppy went a different route, and have sent an invoice demanding payment:

By now we’re all familiar with the U.S. government’s practice of using heavy metal to torture detainees. We’ve all seen “Zero Dark Thirty” and “Homeland”—we get the drill. Usually metal music is used for its general unpleasantness. It’s impossible to sleep through and just all-around unnerving.

 Except Canadian band Skinny Puppy had no idea their music was being used in the service of the U.S. military.

 ………

 The Independent points out Friday that when Metallica learned their music was being used as a torture device at Guantanamo they sent the the government a cease and desist. Skinny Puppy, on the other hand, went the other way and just sent an invoice.

 “We heard that our music was used on at least four occasions,” Evin Key said. “So we thought it would be a good idea to make an invoice to the U.S. government for musical services.”

 Asked how he felt about his music being used to torture people, he said, “Not too good. We never supported those types of scenarios. Because we make unsettling music, we can see it being used in a weird way. But it doesn’t sit right with us.”

It doesn’t sit right with anyone who values the idea of rule of law and civil rights, Evin.

I would remind you thought that the statutory damages for such a use, it is clearly a public performance, are on the order of $150,000 per infraction.

It might be more worth your while to sue.

The Consumer Financial Protection Bureau Goes to Work

No Comments

CFPB Alleges Mortgage Insurer Operated 15-Year-Long Kickback Scheme – Consumerist

The Consumer Financial Protection Bureau has begun proceedings against PHH Corporation for its involvement in a 15-year-long mortgage insurance kickback scheme that collected hundreds of millions of dollars from homeowners.

 The CFPB announced Wednesday that it is seeking a civil fine, an injunction to prevent future violations and victim restitution from PHH Corporation and its residential mortgage origination subsidiaries, PHH Mortgage Corporation and PHH Home Loans LLC, as well as it’s wholly-owned subsidiaries, Atrium Insurance Corporation and Atrium Reinsurance Corporation, for violating the Real Estate Settlements Procedures Act and harming consumers through a kickback scheme beginning as early as 1995 and continuing until at least 2009.

 ………

 An investigation by the CFPB showed that when PHH originated mortgages, it referred consumers to its mortgage insuring partners. In exchange for the referral, the insurers purchased reinsurance – a product that transfers risk to help mortgage insurers cover their own risk of unexpected losses – from PHH’s subsidiaries. As a result, consumers ended up paying more in mortgage insurance premiums.

Good, but this will not send anyone to jail.

Until we start people, not just corporations, start experiencing the direct consequences of the misdeeds, nothing will change.

A 23 Year Long Multi-Billion Dollar Long Contract Dispute Settled

No Comments

And, surprise, surprise, it is a sweetheart deal for the defense contractors: (paid subscription required)

After more than two decades and numerous attempts at a settlement, the U.S. government finally agreed to accept $400 million from General Dynamics and Boeing in the dispute over the Navy’s cancellation of the $4.8 billion A-12 Avenger II program.

 The settlement is a fraction of what the government sought when the lawsuit began, demanding $1.3 billion in restitution ($2.2 billion in 2014 dollars) for money spent on the stealthy carrier-based aircraft program that had yet to deliver an aircraft. And it is even smaller when compared with an agreement for $2.9 billion that was nearly negotiated in 2003.

 ………

 The Navy will receive three EA-18G Growlers that will be delivered on top of the 21 Boeing aircraft that were funded by Congress for fiscal 2014 and are expected to be delivered in 2016, according to the Navy.

 General Dynamics will provide $198 million in credits to the Navy toward the design, construction and delivery portions of the Zumwalt-class DDG-1000 destroyer.

 ………

 The dispute began in 1991, when then-Defense Secretary Dick Cheney canceled the $4.8 billion stealth attack aircraft, run by General Dynamics and McDonnell Douglas, which has since been acquired by Boeing. It was terminated in part due to the government’s conclusion that contractors were not meeting cost and schedule targets. The Navy demanded that contractors repay $1.3 billion to the government.

 The prime contractors sued the government, arguing the government should make penalty payments because the contract was canceled for “convenience,” not a failure to perform. The case festered in the court system, eventually reaching the Supreme Court.

 ………

 In 2011, 20 years after the start of the dispute, the Supreme Court considered the case. The Navy argued that the contractors had not completed the work they had promised. The contractors argued that the government held back classified information about stealth technology that hampered their effectiveness. Ultimately, the Supreme Court sent the case back to the U.S. Court of Federal Claims, where it remained until now.

They met none of their technical requirements, they missed their schedule, and they were hideously over budget, and the punishment for the (now effectively admitted with the settlement) misfeasance and malfeasance is that the contractors get to secure the status of existing programs.

5 Words that Strike Terror into My Heart

No Comments

“Wall Street’s New Housing Bonanza“

Wall Street’s latest trillion-dollar idea involves slicing and dicing debt tied to single-family homes and selling the bonds to investors around the world.

 That might sound a lot like the activities that at one point set off a global financial crisis. But there is a twist this time. Investment bankers and lawyers are now lining up to finance investors, from big private equity firms to plumbers and dentists moonlighting as landlords, who are buying up foreclosed houses and renting them out.

 The latest company to test this emerging frontier in securitization is American Homes 4 Rent. The company talked to prospective investors at a conference in Las Vegas last week about selling securities tied to $500 million of debt, according to people briefed on the matter.

 American Homes 4 Rent, which went public in August, has tapped JPMorgan Chase, Goldman Sachs and Wells Fargo as its bankers for a debt deal that is expected to be sold by the end of the first quarter, these people said.

This will not end well.

Another complex deal that will leave banksters richer, and rest of us stuck with the f%$#ing tab.

Linkage

No Comments

H/t DC at the Stellar Parthenon BBS for the screen capture of the FB dialogue.

Barack Obama is Determined to Go to War Against Syria

No Comments

Because we need to find some little country to beat up every decade or so.

The US is now amping up complaints about the speed of Syrian chemical weapons destruction as a justification for military strikes:

The United States on Thursday accused Syria of deliberately delaying the surrender of its chemical weapons stockpiles and jeopardizing a tightly timed and costly international removal and destruction operation that narrowly averted U.S. airstrikes last year.

It was the first formal accusation that Syria was not cooperating with the terms of its disarmament after months in which international diplomats and chemical weapons experts marveled at the speed with which the process was being carried out. The public denunciation, however, closely tracked concerns that independent experts have expressed privately in recent weeks about the operation’s pace.

………

Most chemical weapons experts agree that Syria’s ability to manufacture and deploy the banned weapons was destroyed last year. ………

Would You Let the Vampire Squid Get a Hold of Your Dong?

No Comments

It appears that the coalition in Denmark has collapsed over this issue:

After a recent spate of controversies and ministerial resignations, the Danish centre-left government suffered another blow on Thursday when the Socialist People’s party (SF) left the ruling coalition amid anger over Goldman Sachs‘s investment in Denmark’s state-owned energy company.

 Goldman’s 8bn kroner (£900m) purchase of a 19% share in Dong Energy has been championed by the government but caused a revolt among SF’s parliamentary group. After a night of tension and discussions, SF’s leader, Annette Vilhelmsen, announced her resignation and said her party was leaving the coalition.

 “It has been a dramatic 24 hours,” Vilhelmsen said. “Yesterday it became clear to me that it wasn’t possible to unite the party. For the sake of SF, I take the consequence of this.”

 The Goldman Sachs deal was approved by the parliament’s finance committee on Thursday, but it has come under widespread scrutiny and criticism in recent weeks. A poll showed 68% of Danes were against the sale, and close to 200,000 people signed an online petition opposing the deal.

(emphasis mine)

Even worse, like most privatization deals, it is a hand out from taxpayers to overpaid CEOs:

My friend Niels-Jakob Harbo Hansen and I calculated some of the financial aspects of the deal, and they don’t look that good. The bidders are offering about 107.25 kroner per share, supposedly valuing the company at 31.5 billion kroner before the investment. In addition to a healthy package of minority rights, they also get a put option for 60% of the shares: if DONG doesn’t go public within 4 years or so (and Goldman can veto that), the investors can sell 60% of their shares at a strike price equal to the purchase price of 107.25 kr per share, plus a healthy return of about 3% per year.

 That’s like an insurance policy that covers not only your loss, but also the insurance premium you originally paid, plus interest.

 Once you account for the put option, the deal values the shares at 24.5 billion kr., around 47% of book value. Maybe that’s fair because DONG just had a big loss and will be constrained by its business plan to invest in windmills and such, but it still seems awfully low. On the other hand, the investment bankers have deemed it Fair™, so who am I to question that.

 The main thing we did was to compare the deal to the most obvious alternative: the Danish government (AAA rating, 26% debt/GDP, 45% including local government) could borrow at an interest rate of about 1%, and make the investment itself. The expected loss from the deal compared to a government investment is about 2.5 billion kroner.

So, it costs the taxpayer 3x as much as a public investment, and you can be certain that rates will go up faster than they would if the company were to remain completely publicly owned.

Thank You Harry Reid

No Comments

The Majority Leader of the Senate has come out against fast track authority for trade deals:

President Barack Obama’s push for authority to fast-track trade deals has hit a big setback in the form of opposition from his top fellow Democrat in Congress, but it is far from dead.

Senate Majority Leader Harry Reid’s warning to policymakers on Wednesday “just to not push this right now” reflects concern about the domestic political agenda ahead of November’s congressional elections, when free trade could be a damaging issue for many Democrats.

The unusually blunt public opposition came less than 24 hours after Obama noted the need for fast-track power in his State of the Union address, albeit less forcefully than business lobbyists and pro-trade Republicans would have liked.

The White House called Reid’s office shortly after his comments to voice displeasure, a top Democratic party aide said.

“They were really upset,” the aide said. But the aide said the White House did not try to get Reid to shift his position.

These guys were really upset because they, like the staffers who negotiated NAFTA for Clinton and Bush I, made some serious bank as lobbyists and consultants.

I really hope that it’s not, as Yves Smith’s sources say,  “Another gambit is more likely: to make some cosmetic changes and try to get the bill passed during the lame duck session, on the assumption that some Democrats (particularly those who are leaving office) will use the cover and change positions.”

The TPP, and it’s European equivalent, the TTIP, are egregiously bad deals, not just for the United States, but for the whole world, because they are predicated on the idea that democracy and transparency must be almost completely eschewed in the interest of unregulated global investment flows and IP based looting through draconian copyright and patent provisions.

These are abysmally bad deals for everyone but banksters, big pharma, and the cocaine addicted brothers in law of senior studio and record label executives.

Pushback on Drug Pricing

No Comments

The AIDS Healthcare Foundation is lobbying to keep the $1000.00 a pill Sovaldi out of Medicaid formularies.

I wholeheartedly agree enough is enough:

In a series of letters to be sent to state Medicaid directors starting today, AIDS Healthcare Foundation (AHF) President Michael Weinstein will ask the state directors to block Gilead Sciences’ new $1,000-per-pill Hepatitis C drug Sovaldi (sofosbuvir) from inclusion on their respective state Medicaid and other drug formularies. The drug was approved by the F.D.A. on December 6, 2013 and Gilead immediately announced that it would price the drug at $84,000 for a twelve-week course of treatment—or $1,000 per tablet—making it one of the most expensive drugs ever marketed. Suggested treatment guidelines also require that Sovaldi be used with another drug, ribavirin (a nucleoside inhibitor), further adding to the cost of the prohibitively expensive course of treatment.

 “When is enough, enough? At $1,000-per-pill, Sovaldi is priced 1,100% more than Gilead’s most expensive AIDS drug, Stribild, its four-in-one AIDS drug combination, which was priced at $80 per pill a year ago when it came to market,” said Michael Weinstein , President of AIDS Healthcare Foundation. “At that time, Stribild’s price was 35% more than Atripla, the company’s best selling combination HIV/AIDS treatment, and made Stribild the highest priced first-line combination AIDS therapy. Now, Gilead has set a new benchmark for unbridled greed with its outrageous price for Sovaldi—a price that some pharmacy industry sources suggest represents a retail markup of 279,000% over the cost of actually producing the drug.”

 In his letter to state Medicaid directors, Weinstein wrote, “Gilead is charging a higher price for this drug even though the cost to produce it is small. According to industry reports, Gilead produces Sovaldi for approximately $1.00 per gram (with only 10 to 30 grams needed to successfully treat patients with Hepatitis C).1 This represents a retail markup of over 279,000%.

Enough is f%$#ing enough.

This sh%$ needs to stop.

Mixed Emotions

2 Comments

When something bad is happening to an group of truly awful people, I frequently experience schadenfreude.

When it in suggest negative implications for the rest of us, my feelings are more mixed.

Case in point, the defamation suit that may bankrupt the National Review:

National Review, founded by William F. Buckley Jr. in 1955, has had an enormous impact on the nation’s politics. Its writers formulated the ideology that animated the quixotic Barry Goldwater campaign of 1964, and then Ronald Reagan’s successful run for the White House in 1980. In the years since, National Review has often worked to keep Republican presidents focused on implementing its vision of conservatism, while bucking up the conservative troops when the movement has found itself out of power.

Today the magazine enjoys circulation roughly equivalent to that of The Nation, the American Left’s leading journal of opinion, and more than twice that of William Kristol’s The Weekly Standard, its primary competition on the Right.

And now, National Review may be fighting for its life.

Climate scientist Michael Mann is suing National Review and Mark Steyn, one of its leading writers, for defamation. It’s a charge that’s notoriously hard to prove, which is no doubt why the magazine initially refused to apologize for an item on its blog in which Steyn accused Mann of fraud. Steyn also quoted a line by another conservative writer (Rand Simberg) that called Mann “the Jerry Sandusky of climate science, except that instead of molesting children, he has molested and tortured data.” (Simberg and the free market think tank for which he works, the Competitive Enterprise Institute, are also named in the suit.)

The lawsuit has not been going well for the magazine. In July, Judge Natalia Combs Greene rejected a motion to dismiss the suit. The defendants appealed, and last week D.C. Superior Court Judge Frederick Weisberg rejected the motion again, opening the door for the discovery phase of the lawsuit to begin.

That’s not all. On Christmas Eve, Steyn (who regularly guest hosts Rush Limbaugh’s radio show) wrote a blog post in which he excoriated Greene, accusing her of incompetence, stupidity, and obtuseness. As a result of this outburst, the law firm that had been representing National Review and Steyn (Steptoe & Johnson) has dropped Steyn as a client and reportedly has plans to withdraw as counsel for the magazine as well.

Part of me hopes that The National Review gets sued into oblivion.    It is a pernicious organization, and it has been since Buckley founded it, and filled it with Oh-So-Civilized support for segregation.

Part of me worries that the Kochs will start funding SLAPP suits against in an attempt to intimidate real news gathering organizations.

And so I leave it with all of you: Which came out of the opened door – the lady, or the tiger?

H/t Salon.

You Sure Picked the Wrong Guy to go All ‘Roid Rage On, Representative Grimm………

No Comments

After the State of the Union Address, a NY1reporter Michael Scotto asked Congressman Michael Grimm about his fundraising scandal.

Grimm, expecting questions about the SOTU address, was upset and walked off.

Then he walked back, and threatened to break reporter Scotto in half and throw him off of the Congressional Balcony.

This does make the persisistent rumors of anabolic steroid abuse more credible.

But he picked the wrong reporter to threaten.

You see Michael Scotto is the nephew of Anthony Scotto, a former head of the Brooklyn longshoremen’s union and a former boss in the Gambino crime family.

Grim went postal, and, to my non-lawyer eyes, it was technically assault, on the nephew of a Gambino crime bus.

Sucks to be you.

BTW, before he was a Congressman, he was an FBI agent, and I have to agree with Alex Pareene when he says, “We shouldn’t let people like him have badges and guns.”

The only thing worse than a goon is a goon with a gun and a badge.

Deep Thought

No Comments

The death of Pete Seeger has me thinking of Woody Guthrie:

See the label on his guitar saying, “This machine kills fascists?”

Folk songs are about not some sort of generic emotional warm fuzzies.

They are about life, and they are about deep moral outrage.

H/t TPM for the picture (c. 1943).

Barack Obama, Fire James Clapper Now

No Comments

If you want to give a guy the keys to our security apparatus, they cannot hold the Constitution of the United States of America in contempt:

James Clapper, the Director of National Intelligence, appeared today before the Senate Intelligence Committee, his first appearance since outright lying to that Committee last March about NSA bulk collection. In his prepared opening remarks, Clapper said this:

Snowden claims that he’s won and that his mission is accomplished. If that is so, I call on him and his accomplices to facilitate the return of the remaining stolen documents that have not yet been exposed to prevent even more damage to U.S. security.

Who, in the view of the Obama administration, are Snowden’s “accomplices”? The FBI and other official investigators have been very clear with the media that there is no evidence whatsoever that Snowden had any help in copying and removing documents from the NSA.

If there were any credible evidence of foreign agency involvement, it would have been leaked by Obama and His Evil Minions™, if not publicly trumpeted in a press conference.

Clapper, the man whom Edward Snowden proved to have lied to Congress, should not be allowed to have access classified of any kind.

Here’s hoping that Mr. Snowden wins the Nobel Peace Prize he was recently nominated for.

He is far more deserving that President “I Have a Drone”:

One of the biggest debates over the last year was whether Edward Snowden, the whistleblower who ignited a storm of controversy when he revealed a huge number of covert measures by the NSA, was a traitor or a hero. Today, the latter camp got a big boost after it was announced that Snowden had officially been nominated for a Nobel Peace Prize.

While Nobel Peace Prize nominations are typically kept secret for 50 years, those who submit nominations can make them public themselves sometimes. Thousands of different people, including academics, elected officials, and former recipients can make nominations for whomever “shall have done the most or the best work for fraternity between nations, for the abolition or reduction of standing armies and for the holding and promotion of peace congresses” over the preceding year.

Snowden was nominated by Norway’s Socialist Left Party politicians Baard Vegar Solhjell, a former environment minister, and Snorre Valen, a member of the Council of Europe in Strasbourg, where Valen announced the whistleblower’s nomination earlier today.

The FCC Gets Lemons, and Makes An Antifreeze Cocktail

No Comments

I have a plan so cunning that you could put a tail on it and call it a weasel………Not!!!!

Because the FCC is unwilling (not unable, just unwillint) to properly classify broadband providers as common carriers, because they are a bunch of wimps have been cowed by, and have bought into, the bankrupt philosophy of the free market Mousketeers, so they have come up with a plan that makes Baldrick from Blackadder look like a genius:

The nation’s top telecom regulator is tipping his hand a bit more on network neutrality.

While FCC chairman Tom Wheeler wouldn’t say outright how he intends to respond to a recent court decision overturning his agency’s rule barring Internet providers from blocking Web traffic, he appears to be leaning increasingly toward using the FCC’s existing legal authority to regulate broadband providers.

Industry watchers say this approach would likely turn on a part of the Communications Act known as Section 706, which gives the FCC authority to promote broadband deployment. Moving in that direction would put more distance between Wheeler and another alternative that’s been floated, which is to reclassify Internet service provders (ISPs) as a kind of utility (making them much more like the phone companies the FCC already regulates strongly).

You see the problem here, don’t you?

What happens when the next Michael Powell, a corporate tool nonpareille ends up running the FCC, and they decide, much as Powell did, that eliminating regulation will magically promote broadband.

This is what has given the United States the slowest and most expensive Internet access in the developed world.

Here is an Amicus Brief I Fully Support

No Comments

There has been a fascinating friend of the court (amicus) brief on the latest Obamacare suits, the “ladyparts are icky” suits from Hobby Lobby and Conestoga Wood Specialties.

It argues that the “Religious Freedom Restoration Act” is an unconstitutional because it is an unconstitutional abrogation of the constitutional role of the courts in interpreting the law:

Arguing that Congress has gone too far to push aside the Supreme Court’s constitutional role in religion cases, a loose coalition of child welfare organizations, survivors of clergy child sexual abuse, and non-believers has urged the Justices to strike down the Religious Freedom Restoration Act when it rules on a new dispute over the federal health care law.

 The amicus brief, written by a prominent academic authority on religion and the law, Cardozo Law School’s Marci A. Hamilton, seeks to add a bold new dimension to the Court’s review of the Affordable Care Act’s “contraception mandate.”

 “RFRA,” the document contended, “is Congress’s overt attempt to take . . . over this Court’s role in interpreting the Constitution. . . . [T]his novel federal statute, which is one of the most aggressive attacks on this Court’s role in constitutional interpretation in history, has fomented culture wars in the courts like the one ignited” in the pending cases by for-profit businesses seeking a RFRA-based exemption from the mandate to provide health insurance for pregnancy-related services to workers.

Normally, I would not expect that this would have any bearing on the court’s decision, but the core of this argument is flattering the court as an institution, so that makes it a bit more likely.