You remember Kelo v. City of New London? That’s where the city of New London took people’s homes in order to build a business park for Pfizer.
Well, following it’s purchase of Wyeth, they are closing their facility there, (also here) leaving the city with a big honking hole, and Pfizer looking to sell the land, for which it paid nearly nothing, and building.
You know, when you give free sh$# to contemptible greed-heads, this is what they do: They f@#$ you over when it’s convenient.
Needless to say, the plaintiffs in Kelo are as unamused as anyone in this development.
Yet another example of the fabulous “innovations” that our modern financial industry have given us.
It turns out that when Atlanta had a bond issue, they went to a consultant to review the bids, and this consultant, David Rubin, ruled out the winning bid, costing the City $58,000 by going with the runner up Bank of America.
Only after the Internal Revenue Service investigated five years later did local officials learn that Rubin’s firm, CDR Financial Products Inc., had entered into a secret side agreement with the Charlotte, North Carolina-based bank. CDR’s share would be worth as much as $340,000, based on city and federal records.
“IRS believes that CDR, Bank of America and possibly others may have colluded to fix pricing,” an unidentified Atlanta employee wrote in an undated internal memorandum after city authorities met with IRS investigators in September 2005.
This is a theft of honest services, a felony, and likely a RICO violation too, and it looks like Mr. Rubin is going to jail.
The real problem here is that municipalities are entering into agreements which are too complex for them to evaluate, and so their taxpayers are getting done like a drunk sorority girl on prom night.
I’ve said it before, and I’ll say it again: When the Wall Street Journal Describes Finance With Cartoons, it Means that Someone will Get Boned, and it ain’t the “Bankers, Lawyers, and Other Advisers.”
Which means that taxpayers are about to get boned again, without lube.
In an interview, Joe Exnicios, chief risk officer of Whitney’s Whitney National Bank unit, of New Orleans, cited a hypothetical example in which a developer borrows money to develop a small retail center and gets a drugstore chain to sign a lease for one store. If the developer can’t sell the other sites, he would be unable to repay the loan. Under the new guidelines, the bank could create a healthy, performing loan supported by the drugstore lease and a nonperforming loan from the rest of the loan. “It may make a difference on whether you need to have additional capital and take additional reserves,” he said. Critics agree that regulatory flexibility might help some banks avoid failure. But the troubled loans remaining on their books will discourage them from lending, reminiscent of Japan’s “lost decade” in the 1990s. A better solution, critics said, would be similar to the approach regulators took during the commercial real-estate crash of the early 1990s. “Back then, regulators moved aggressively to force banks to take write-offs and sell off their troubled loans, and the market recovered faster,” said Mark Edelstein, head of the real-estate group at law firm Morrison & Foerster LLP.
The problem here is that Barack Obama and His Stupid Minions™ are asking the wrong question. Instead of asking, “How do we get capital flows moving again,” they are asking, “How do we save the banks.”
These two things are orthogonal.
*Like he gives a damn. I’m just a loud mouth with a blog.
He is backing Blair because if he becomes EU President, he must necessarily work from his office in Brussels, and Belgium has acceded to the jurisdiction of the International Criminal Court (ICC), which means that, unlike in the US and the UK, they can indict him, arrest him, and ship him off to the Hague for trial:
Within the UK, there is no means of prosecuting Blair. In 2006 the law lords decided that the international crime of aggression has not been incorporated into domestic law. But, elsewhere in the world, it has been. In 2006 the professor of international law Philippe Sands warned that “Margaret Thatcher avoids certain countries as a result of the sinking of the Belgrano, and Blair would be advised to do likewise”.
I’m beginning to think that Bush, Cheney, and Rumsfeld should be made EU President too.
*According to the Wiki, The Guardian, formerly the Manchester Guardian in the UK. It’s nicknamed the Grauniad because of its penchant for typographical errors, “The nickname The Grauniad for the paper originated with the satirical magazine Private Eye. It came about because of its reputation for frequent and sometimes unintentionally amusing typographical errors, hence the popular myth that the paper once misspelled its own name on the page one masthead as The Gaurdian, though many recall the more inventive The Grauniad.”
<snark>That’s simply unAmerican. You are supposed to beat the competition by massaging revenue streams and balance sheets, or by using better PR, not by making focusing on the product and the consumer and better products. What is wrong with Alan Mulally?</snark>
A new Internal Revenue Service enforcement unit targeting the very wealthy will help the tax agency decode partnerships, offshore trusts and other complex techniques used to hide income, IRS Commissioner Doug Shulman said Monday.
Dubbed the Global High Wealth Industry group, the unit will launch “a small number” of audits of individuals with assets or income in the tens of millions of dollars, Mr. Shulman told an accountants’ trade group. An IRS official said the group would begin work on these initial audits in the next month.
The high-wealth group, housed in the IRS’s large- and medium-sized business division, marks a sharpening of the IRS approach to auditing the very wealthy. Its creation is a response to the complex web of entities and transactions many high-net-worth individuals use to manage their financial affairs.
The tax dodges that they have used have become increasingly more sophisticated, and need a dedicated team with the forensic skills in order to pursue these tax cheats.
Allowing rich people to evade taxes is corrosive to society, tax collection, and budget decisions, and create an environment where politicians say that you can’t raise taxes on the rich, because they will just weasel out of them. (see Bush, George W.)
If everyone believes that the rich do not pay their share, they will be less inclined to pay their share too, and the cooperation of the taxpayer is crucial to our system working.
Now what they need to do is go go criminal prosecution, with jail time, on the some of the worst offenders.
It appears that Jon Stewart is a super-being who is capable of doing things that violate the basic laws of this world, because he just forced Sean Hannity to admit that they were lying with the videos that he posted. (earlier post on this)
It is currently a schedule 1 controlled substance, meaning dangerous, with no medical use, and the AMA, bowing to reality, has decided that it should be legal to at least test the stuff:
The American Medical Assn. on Tuesday urged the federal government to reconsider its classification of marijuana as a dangerous drug with no accepted medical use, a significant shift that puts the prestigious group behind calls for more research.
The nation’s largest physicians organization, with about 250,000 member doctors, the AMA has maintained since 1997 that marijuana should remain a Schedule I controlled substance, the most restrictive category, which also includes heroin and LSD.
In changing its policy, the group said its goal was to clear the way to conduct clinical research, develop cannabis-based medicines and devise alternative ways to deliver the drug.
Hopefully, the progress towards sanity involving THC will continue, and perhaps, I could then go back to one of the activities of my college days.
Such positions may put Omar’s Taliban at odds with al-Qaeda’s extremist Sunni agenda of overthrowing what it sees as corrupt Muslim governments and targeting Shiites. Analysts said that Omar, who leads a council of Taliban commanders based in or around the Pakistani city of Quetta, wants such countries as Saudi Arabia, the United Arab Emirates and Pakistan to recognize the Taliban as a legitimate government if it regains power and that he has little interest in fomenting war elsewhere.
“We assure all countries that the Islamic Emirate of Afghanistan, as a responsible force, will not extend its hand to cause jeopardy to others,” Omar said in a written statement in September.
The messages from the Taliban leadership since the spring amount to something of a “revolution,” said Wahid Mujda, a political analyst who was a Foreign Ministry official under the Taliban government. “Al-Qaeda’s path is now different from the Taliban’s path, and they are growing more separated.”
This ain’t a revolution.
Al Qaeda was never particularly popular in Afghanistan, where the people are, after all not Arabs, and they have about as much love for rich Arabs as we in the United States do.
Bin Laden was there because the Taliban wanted his money, not him.
When they were in control of Afghanistan, not only were they not fierce protectors of him, but they were trying to find a way for help the US make him dead in a way that gave them some plausible deniability.
The following congressmen, Ann Kirkpatrick, Harry Mitchell, Gabrielle Giffords, Dennis Moore, John Hall, Alan Grayson, Mark Schauer, Mike Arcuri, Steve Kagen, Jerry McNerney, Melissa Bean, Debbie Halvorson, Bill Foster, Tim Walz, Bill Owens, Carol Shea-Porter, Tim Bishop, Dina Titus, Mary Jo Kilroy, and Kurt Schrader all voted for healthcare reform and against the Stupak amendment, and they all have districts that imply a close election.
You can donate to them all at once at the link, or separately, as, for example, Grayson has already raised over $400,000 on act blue, and Melissa Bean is way too friendly with the banking industry, though she is good on other things.
Their specialty, “Strategic consulting,” since, I guess the strategy in Iraq worked so tremendously well.
In any case, attempting to look at RiceHadley.com gets the following, which, given the record of both Rice and Hadley, and of Bush’s Evil Minions™ generally, seems to be me to be a remarkably apropos statement.
I’m not a gold bug, but Rolf Winkler’s graph pr0n is interesting. It could imply that gold has further up to go, or that the stock market is overvalued. Your call.
In currency, driven partly by the Bank of China statements, the dollar weakened to more than $1.50:€1.00, though it settled at $1.4961 when trading ended.
In either case, it appears that people are still betting on a recovering economy, as crude oil rose again today.
The real problem here for CNN was that Lou Dobbs has gone completely around the bend, but crazy motherf$#@ers bring in ratings, (see O’Reilly, Bill), but it also means a hit to his credibility.
His exit was certainly abrupt, he announced today that this was his last show, and the reason that he gave, “some leaders in media, politics and business have been urging me to go beyond the role here at CNN and to engage in constructive problem solving as well as to contribute positively to the great understanding of the issues of our day,” implies to me that he was pushed.
It sounds a lot like, “Spending more time with his family.”
I’ve been holding off talking about this, news has been coming out in dribs and drabs, but now that Dodd has released his version, I think that things will move forward more quickly, so here is what we has happened so far.
First, in both the House (Rep. Barney Frank) and Senate (Sen. Chris Dodd), we have changes to allow for resolution authority for the banking mega-giants (I prefer Sen. Bernie Sanders’ alternative of breaking them up into small and manageable pieces to both bills, but that’s just me), and for a consumer financial protection agency. (CFPA)
First, the CFPA, and it should be noted that the House bill has moved further along the legislative process, and as such, it has incorporated more bad ideas as amendments, such as sunsetting the Home Valuation Code of Conduct (HVCC), which was proposed by Rep. Gary Miller (R-Realtor).
The objection to the HVCC is not that it is inaccurate, but that it is accurate, and so it makes more difficult to move homes, because it shows that a lot of people overpaid, and are now under water.
Freddie Mac has issued a report saying that HVCC has substantially improved loan quality, which, since the taxpayers back up Freddie, and Fannie, and the FHA, means that Miller won one for his realtor friends at the expense of the taxpayers.
So the CFPA can write rules for small banks, and can investigate complaints at small banks, but can’t examine small banks, or enforce its own regulations at small banks? It all seems like a horrible mess to me.
He suggests that perhaps an online clearing house of complaints, basically “crowd sourcing” them to send to the CFPA would be a way of dealing with this.
It should be noted that this is the same office of the OCC that fought Eliot Spitzer tooth and nail when he saw evidence of banks were engaging in predatory lending against minorities. (Thankfully, while Spitzer lost this suit at the appellate court level, his successor, Andrew Cuomo, continued to pursue the litigation, and won at the Supreme Court).
Note that these are all problems because the House bill is further along, and as such, has been put through the sausage machine, and as Bismark noted, it resembles the making of sausage.
Dodd’s bill is “clean” at this point, which means that it covers all banks, and that it does not allow agencies to preempt stricter state laws, so I think that it clearly better here.
Next we have the issues of systemic risk and resolution authority, and while the Dodd and Frank bills are different, Dodd calling for after-the-fact payments in the event of a resolution/bankruptcy, and Frank calling for a before-the-fact insurance fund like the FDIC.
What has happened here, I think, is that the initial proposal, put forward by Timothy “Eddie Haskell” Geithner was that the big banks be required to pay after the fact, and as more comments came in, most notably FDIC Chairman Sheila Bair’s blistering criticisms of the idea (also here and here) in favor of an FDIC style system.
President Obama, when Congressmen are calling your Secretary of the Treasury a bitch, it’s time to reconsider his employment.
Geithner does not like an FDIC style system, thinking that it, “would encourage risky behavior by ‘creating an expectation of explicit insurance.'”
The word for this is “bullsh&^“. As Luis Gutierrez (D-IL) noted in when Geithner testified before Congress:
Let’s create the fund, just like the FDIC, so when we need to resolve [a financial institution], it stands. Your argument is, ‘oh, but Luis, moral hazard’…I don’t see banks racing to the precipice of destruction and bankruptcy because the FDIC exists. Nor do I go to an insurance company and take out a life insurance policy on myself, and the next day decide, wow, maybe I’ll just start smoking. Maybe I’ll start drinking, maybe I’ll start driving my car in a crazy manner. Maybe I really don’t care whether I live or die. I’ve got life insurance, what the hell if I die, everything is taken care of. No, that’s not the way it works.
The reason the Timothy Geithner thinks that there is a “moral hazard” problem with a prepaid insurance because, “That great vampire squid wrapped around the face of humanity,”* Goldman Sachs, told him to say this. Geithner is a poster boy for regulatory capture.
“If you wait until after the fact, you would then have to go to the taxpayer first and get the assessment to repay it and some people are afraid that would never happen,” said Frank, a Democratic representative from Massachusetts.
Which is what happened this time. If, after Lehman had gone down, we had demanded that the rest of the industry pay the costs of liquidation of the firms, it would have driven into bankruptcy too, so when there is a need, the money will never be collected. Goldman Sachs, of course, knows this, which is why they want a phony reimbursement plan.
Frank/Bair are right here, and Dodd/Geithner are wrong, but I think that we will end up with the FDIC type plan when everything settles out, because it is so clearly the best solution.†
Geithner, in testimony to the U.S. House of Representatives Financial Services Committee, said the Fed should keep its ability to act as an emergency lender of last resort, but only to solvent firms in times of severe stress in financial markets — with Treasury consent.
“Any firm that puts itself in a position where it cannot survive without special assistance from the government must face the consequences of failure,” Geithner said. “The proposed resolution authority would not authorize the government to provide open-bank assistance to any failing firm.”
I guess that no one can be wrong all the time, not even Timmeh.
Strips regulatory authority from the FDIC, OCC, and Federal Reserve.
Removes much of the authority for the Fed to make emergency loans to banks, and requires fuller disclosure of these loans.
Removes the authority that private banks have to choose directors, and places the authority in the Federal Reserve board, and makes the chairman of the board for the regional Fed banks a Presidential appointment with formal Senate confirmation.
Here, I would go further, and enact a 1-term for the Fed Chairman, because, much like the FBI, the level of power accrued by the chairman can create situations where is both unaccountable, which is necessary for managing monetary policy, and where the financial markets demand his reappointment.
Creates a CFPA.
Note here that in stripping regulatory authority from the Fed, and leaving the monetary policy there, Dodd is not moving to an untried model: The UK does this, with the Bank of England controlling monetary policy, and the Financial Services Authority doing regulation of the financial markets, and it a little (very little) bit better than our current layout.
Simply put, we cannot afford another Randroid nut-job like, Alan “Bubbles” Greenspan to be in the position he held, where he controlled all of monetary policy, and was simultaneously the most powerful person in the United States (world) in terms of financial regulation, for 18½ years….It Damn near destroyed us.
I like Dodd’s bill more than Frank’s, and I think that the concerns of people that I generally agree with, like Felix Salmon, about the curtailing of the powers of the Fed, are misplaced.
Cutting the Federal Reserve down to size is a feature, not a bug, and one of the best features, at that.
Includes a CFPA with rule-writing authority, with no federal preemption of state law. All financial institutions are subject to examination by the CFPA.
Includes a CFPA with rule-writing authority, and bank regulators can preempt state law on a case-by-case basis. Financial institutions with less than $10 billion in assets are not subject to CFPA examinations.
Consolidated Regulators
Consolidates all existing federal bank regulators into one super-regulator, the Financial Institutions Regulatory Authority (FIRA). Removes bank supervisory powers from the Federal Reserve and the FDIC.
Merges the Office of Thrift Supervision (OTS) and the Office of the Comptroller of the Currency (OCC), leaves other regulators in place.
Resolution Authority
Includes resolution authority, funded by an after-the-fact assessment on institutions with more than $10 billion in assets. Institutions must draw up a “living will,” to be used in the event they must be unwound.
Includes resolution authority, pre-funded by an assessment on institutions with more than $10 billion assets. Institutions must draw up a “living will,” to be used in the event they must be unwound.
Systemic Risk
Creates a new Agency for Financial Stability, composed of the federal bank regulators and two independent councilors appointed by the President. The council will make decisions regarding systemically risky firms.
A systemic risk council, composed of the federal bank regulators, will make decisions, to be carried out by the Federal Reserve. The Fed would be empowered to conduct “on site” examinations of any systemically risky firm.
Breaking up risky firms.
Gives federal regulators the authority to break up systemically risky firms on a case-by-case basis.
Gives federal regulators the authority to break up systemically risky firms on a case-by-case basis.
*Alas, I cannot claim credit for this bon mot, it was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine. †Why yes, I am sounding like I have the political acumen of Little Orphan Annie, why do you ask?
Top executives at Blackwater Worldwide authorized secret payments of about $1 million to Iraqi officials that were intended to silence their criticism and buy their support after a September 2007 episode in which Blackwater security guards fatally shot 17 Iraqi civilians in Baghdad, according to former company officials.
Blackwater approved the cash payments in December 2007, the officials said, as protests over the deadly shootings in Nisour Square stoked long-simmering anger inside Iraq about reckless practices by the security company’s employees. American and Iraqi investigators had already concluded that the shootings were unjustified, top Iraqi officials were calling for Blackwater’s ouster from the country, and company officials feared that Blackwater might be refused an operating license it would need to retain its contracts with the State Department and private clients, worth hundreds of millions of dollars annually.
So they violated the Foreign Corrupt Practices Act, and, if you go down further, it looks like they were paying off victims and witnesses in order to secure their silence during the FBI investigation.
The monoliner business model is that you create a company, get an AAA rating, and then make money by renting out that credit rating.
Among other things, it’s a way to soften the blow of the comparatively low credit ratings that states and municipalities get, and it allows for another revenue stream for the parasites on Wall Street to tap.
I think think that the entire business is essentially corrupt, and should be outlawed.
The recent news does not seem to have effected the price of Treasurys, though which were basically flat.
In energy, we have weather, specifically the fact that Ida was pretty weak by the time that it hit oil producing areas, driving oil down, and China’s gangbuster economic report drove the US dollar down.
Under fire from allies in Latin America and on Capitol Hill, the Obama administration moved Tuesday to try to salvage the American-brokered agreement that had been billed as paving the way for a peaceful end to the coup in Honduras. Instead, the accord seems to have provided the country’s de facto government with a way to stay in power until a presidential election scheduled for the end of this month.
The State Department sent Deputy Assistant Secretary of State Craig Kelly to Honduras on Tuesday for meetings with Manuel Zelaya, who was ousted from power as president more than four months ago, and with the head of the de facto government, Roberto Micheletti.
The problem here is that when bad people seize power, they like to hold onto it, and the Obama administration took a cowardly position, because they just did not want to be bothered with little things like the principle of democracy and free elections:
The deal began to unravel last week when the Congress announced it would postpone a vote on Mr. Zelaya’s return to power until after the election. In protest, Mr. Zelaya then refused to submit names for the coalition government. And the United States, breaking with its allies in Latin America, announced it would recognize the results of the coming presidential election, even if Mr. Zelaya were not reinstated.
A hint that this move on their part was a completely boneheaded move that gave succor to tyrants? This:
While the announcement was celebrated by Republicans as a “reversal” of the administration’s policy, it ignited a storm of criticism from Mr. Obama’s allies at home and across Latin America.
If you are getting cheers from the ‘Phants, you are on the wrong side of the argument.
What happened here is that it was pressure from other Latin American nations that forced the State Department to start talking about sanctions against the coup leaders, and the Treasury started talking about possible restrictions on remittances, which created an agreement.
The problem was that once the agreement was signed, signals were sent indicating that the US no longer had any interest in the matter.
This is a big deal for a number of reasons.
First, it is a reversal on the progress toward democracies in Latin America, and second it has some very real implications for US foreign policy in the region, because, unlike the US (and Canada), the rest of this hemisphere takes a very dim view on green lighting coups, because they all remember the bad old days when the overthrow of a legitimately elected government, sometimes at the request of US corporate interests, was the rule, rather than the exception.
China and Russia are both making significant efforts in the region, both in terms of securing raw materials and making military sales, and this, along with out completely boneheaded policies on Cuba, are likely to make Latin American countries much more receptive to their overtures.
Yet another example of the fabulous “innovations” that our modern financial industry have given us.
In any case, attempting to look at 
