Category: Corruption

H1B and H2B Immigration Scams

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It’s spring, and cheap employers minds turn to using immigration to depress wages.

So, we see two articles regarding employers having problems finding workers because the H-1B (employees in specialty occupations), and H2B (seasonal employees) visa limits.

So we have hand wringing reports of high tech firms being unable to grow because of H1B limits, and, “Carnival operators in Alaska, landscapers in Pennsylvania and sugarcane processors in Louisiana” complaining of the same with regards to H2B.

The late Milton Friedman called the H1B a “just another government subsidy“, and he was right.

What’s more, it is a subsidy that works like a reverse Robin, taking from the poor and giving to the rich.

If you cannot find an employee in this moribund economy, you are not offering enough in wages and benefits.

Not only that, in the case of H1B visas in particular, it exacerbates any shortage (and there isn’t one, it’s just that people flee the profession in question) by dissuading people from entering these fields of study.

Anti Terror Clown Show: Liberty City Seven

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After another few hundred thousand dollars of tax payer money, we have another mistrial.

It’s clear what happened here, a bunch of losers were contacted by an FBI informant, and they thought that he was al Queida, and that they could scam him out of money, uniforms, and maybe some assault rifles.

Fundamentally the real problem is that the material support statutes are so vague and so broad that the judge can’t throw this out of court with a big “BS” scrawled on the indictment.

OK, This One is Really Bad News if True

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OK, for a while now, I have been talking about how the increasing TED and other spreads indicate that the credit market has not unfrozen.

It now appears that at least one of these numbers, the LIBOR, the London inter-bank offered rate, may actually have been significantly understated, meaning that the spread is higher, which means that people are more timid about lending money than has been previously reported (H/t Paul Krugman)

There are now indications that some banks may be under-reporting both the interest rates on the loans that they are paying, because it would be seen as financial weakness, which might lead to downgrades, and possibly a run on the institution.

Questions about Libor were raised as far back as November, at a Bank of England meeting in which United Kingdom banks, the firms that process bank trades and central bank officials discussed the recent financial turmoil. According to minutes of the meeting, “several group members thought that Libor fixings had been lower than actual traded interbank rates through the period of stress.” In a recent report, two economists at the Bank for International Settlements, a sort of central bank for central bankers, also expressed concerns that banks might report inaccurate rate quotes.

It’s of interest to more than the markets. LIBOR is also what many adjustable rate mortgages use as a benchmark to set their rates.

The financial system really does seem on the verge of collapse. We are getting to the point where there is absolutely no reliable data upon which one can make a decision, whether it is an individual investor, or the Federal Reserve.

Credit Default Swaps: Another Primer

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In 2002, Greenspan discussing the CDS said that, “The use of a growing array of derivatives and the related application of more sophisticated methods for measuring and managing risk are key factors underpinning the enhanced resilience of our largest financial intermediaries.

Now we have $45 TRILLION of potential exposure out there.

Bloomberg has a pretty good primer here, and it’s fairly entertaining, which goes along with the fact that “Frankenstein’s Monster” is in the title.

Obama Would Investigate Bush Law Breaking

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According to Attytood, in response to a question from Will Bunch, Obama replied that he, “would ask his AG to “immediately review” potential of crimes in Bush White House.”

That’s good, though I admit that there is a part of me that wants to see them all water-boarded, I know that this is wrong.

The question is how aggressively he will pursue people after the inevitable flurry of pardons in December and January, which will make this like peeling an onion.

Rand Could Not Write Her Way Out of a Paper Bag

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So says Harold Bloom, a professor of humanities and English at Yale, in response to an interview about the increasing number of grants from various titans of industry making grants requiring the study of, or chairs in, the studies of the works of Ayn Rand.

I would have to agree. I took an elective course in high school, Philosophy of Literature, and as a part of an extra credit assignment, I read, The Virtue of Selfishness, which I found to be less comprehensible, and more poorly written than Emmanuel Kant.

I’ve come to realize that in addition to piss-poor writing, it was incomprehensible because it was piss-poor thinking.

I recognized it as bullsh#@ as a 16 year old, and it was painful enough that I wanted nothing to do with her fiction.

Full disclosure, to the degree that I place myself in a philosophical school, and I try not to, I find it a waste of time, I consider myself to be a Jewish Existentialist Utilitarian with a rather Deist view of the universe.

As Daniel at Crooked Timber notes:

Although the Ayn Rand Institute is quoted as being basically approving of the trend, I think that a decent case can be made to the effect that the article is wrong to say that “While Rand, an advocate of free markets, would support a university’s getting paid to teach her works”. This is essentially a bribe to the university and as far as I can see, taking a bribe to compromise your own vision of an undergraduate reading list doesn’t fit in particularly well with Rand’s particular ethics of self-reliance and independent thought. I don’t even really think that having a university professorship endowed by a charitable foundation is particularly consistent Objectivism but there you go.

I’m a bit more cynical though.

She was a self parody in life, and now her philosophy is a self parody.

FWIW, the Chronicle of Higher Ed has some names and programs their report.

FBI Goons Sent to Intimidate Wecht Jurors

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While it is normal for lawyers from both sides to talk with jurors following a mistrial, it is highly unusual, at least so far as I know, for the US Attorney to send FBI agents to interview the jurors.

Absent an allegation of something like juror tampering, it simply makes no sense. FBI agents are not trained as jury consultants or litigators, and as such are not the best choice for this task.

So now, at the end what was clearly a political show trial, one in which the prosecution could not meet the burden of proof, we are seeing a highly public harassment of those jurors at the direction of the US Attorney’s office.

When this is all over, U.S. Attorney Mary Beth Buchanan, and the rest of her bully boys, need to be fully investigated over their actions, which are a basic affront to the concepts of laws going back to perhaps the Magna Carta.

If wrongdoing is uncovered, they need to be prosecuted to the fullest extent of the law, with imprisonment and disbarment as the results.

More on the Wecht Political Show Trial

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Well, it appears that things are getting weirder in the aftermath of the Cyril Wecht trial.

First, the judge has placed a gag order on the jury until after the retrial, which was described by Wecht’s lawyer, and I agree, as extremely unusual.

Among other things, I would assume that the Lawyers would not want to talk to the Jurors to get some insights for the retrial.

In any case, some of the jurors talked, and it’s clear that the majority though that they should acquit.

I will note that from what I’ve read Schwab appears to be a complete political hack, and a disgrace to the bench. Harper’s Scott Horton has more details.

Also, this interview with a dismissed (for health reasons) juror speaks volumes.

British Court Says Prince Bandar Bribery Probe Closure Illegal

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It appears that Prince Bandar, nicknamed “Bandar Bush” for his closeness to the Bush clan, may not have been quite as successful as he though in shutting down the bribery investigation against him.

The basic deal is that Bandar netted billions of dollars (a quick Google shows £1 billion, you do the math) in bogus “consulting fees” in order to “facilitate” the £43bn Al-Yamamah arms deal.

The Serious Fraud Organization was looking into the deal, and was near to getting Swiss bank account information, when Tony Blair shut it down, probably there was a threat that the sales of 72 Eurofighter Typhoons would be canceled if there were further investigations.

The OECD, an international corruption watchdog, condemned the termination of the investigation.

It’s unclear from the story whether this ruling means that the investigation will restart, but Labour is taking no chances, they have a draft law in Parliament that would allow, “an Attorney General to close down such investigations as he or she saw fit on ‘national security’ grounds”.

Why We Need Real Financial Regulation

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Because people like this wreck national economies for sport.

The Financial Times reports on how a booze soaked get together of international hedge fund managers was organized by Bear Stearns laid the groundwork for a conspiracy to destroy the Icelandic currency and economy.

Of interest is that Iceland made itself vulnerable to this as a part of its aggressive transition from a resource extraction (fishing, once more than 1/6 of the economy) to a banking economy, and right now they have 8.7% inflation, and the central bank has set rates at 15%, so fishing may stage a comeback.

It should be noted that Iceland is actually in a pretty good position. It’s banks are well capitalized, and it has been running budget surpluses for some time, though its current account deficit is large.

One wonders if JP Morgan might be left holding the bag on this.

Bogus Job Creation Data?

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I would be stunned if the Bush Administration would take a nonpartisan collection of data, and massage it for political advantage. What if they did it on Global Warming Data ANWR Drilling Stem Cell Research Morning After Contraceptives Safe Sex Preventing AIDS Lead Paint Mercury Iraq

Well, it now appears that Bush and His Evil Minions™ are overstating job growth in the US, see Dean Baker and Barry Ritholtz.

Basically, it comes down to the fact that the BLS cannot get questionnaires regarding employment to all the businesses out there. A number of businesses, particularly newer and smaller ones, slip through the cracks.

It’s called birth-death adjustment, and in 2007, it guesstimated about 300,000 more jobs than were actually created.

Dean Baker notes that the BLS is showing that the restaurant sector is shown to have added 48,000 jobs in January and February, but restaurant spending is shown to have decreased by about 0.6% over the same period.

Barry Ritholtz notes that the B/D adjustment accounted for 80% of all new jobs in 2007, and he has a nice picture of 2008 adjustments:

Given Baker’s data on restaurants, I would circle hospitality too, but the idea that construction and financial services are surging is just loopy.

Iraq Update: Petraeus As Lying Dishonorable Disgrace to Uniform Edition

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We are still having c, see lashes between the Mahdi Militia and the Iranian Puppet Government forces.

David Petraeus is claiming that Iran supported the Mahdi militias in Basra, which is absolute BS.

While Iran wants a Shia dominated Iraq, they do not want Shia Arab nationalists dominating Iraq, they want people in their pocket, like Chalabi, Hakim, and Maliki.

Sir, in lying in this way to promote Bush’s war, you dishonor the sacrifices of your troops.

Alan “Bubbles” Greenspan, the “I Didn’t Do It Kid”, Says that Housing is not His Fault

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Yep, he’s claiming that the housing bubble, and subsequent bust are not his fault.

  • He claims that evidence of any link between monetary policy and the bubble was “statistically very fragile”.

Let’s see, you nearly tripled the money supply before you stopped publishing M3 data in 2006, and that is “fragile”.

  • He Claims that he is, “puzzled why so many commentators seek to explain the US housing bubble in terms of Fed actions when many other economies with different central banks and different monetary policies also saw rapid house price gains.”

M3 again baby, with all that money that you created, it all had to go somewhere.

  • Mr Greenspan says, it is only with hindsight that it looks like the US economic recovery was well enough entrenched before 2004

Dude, that was you PIMPING yourself to George Walker Bush for the election, so you would get reappointed.

  • Mr Greenspan reaffirms his long-held belief that central banks cannot effectively “lean against the wind” by setting monetary policy a little tighter than it would otherwise have been during asset price booms.

Dude, you have actively pumped up and bailed out every asset boom under your watch. You engineered bailouts, either through monetary policy such as low interest rates, or directly, as you did with the LTCM hedge fund.

  • Mr Greenspan also takes issue with those who blame lax regulation by the Fed for allowing a serious deterioration in underwriting standards in the mortgage industry. The problem, Mr Greenspan argues, “is not the lack of regulation, but unrealistic expectations about what regulators are able to prevent”.

Which is why you did your best to effectively dismantle Glass-Steagall back when Paul Volker was Fed Chair.

  • The former Fed chief says the core of the subprime problem “lies with the misjudgments of the investment community”. The scramble to invest in what were initially highly profitable subprime loans would have overwhelmed any regulatory effort to slow the growth of this sector, he claims.

You allowed, scratch that, you encouraged the repackaging of garbage into Byzantinely complex instruments, and you called them good.

Regulators are more than able to prevent this, you were simply completely unwilling to take even the most basic advisory steps to do so. Your whole hearted of so called financial innovations like “credit default swaps” which are too complex for the people who trade them to understand is clear.

The legacy of Ayn Rand, your mentor, is bad writing, ugly prose, and the impoverishment of all but the most dishonest.

Thanks asshole.

Ashcroft Did Not Sign off on Yoo “No 4th Amendment” Memo

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This is an very interesting development. It appears to me that this renders the legal authority of Yoo memorandum to a level akin to graffiti on a bathroom wall:

Neither the attorney general at the time, John D. Ashcroft, nor his deputy, Larry D. Thompson, were aware of the 81-page memo when it was written and sent to the Pentagon in March 2003, according to several former senior department officials. The Pentagon was told in December 2003 to disregard the legal advice in the memo after Justice Department lawyers raised objections.

The sequence of events is now that someone demanded this memo, got a copy, and sent it out for implementation without any sort of legal review. This memo said that “military operations combating terrorism inside the United States are not limited by Fourth Amendment protections against unreasonable searches and seizures”.

For anyone who wishes to assert that DoJ opinions indemnify law breakers (Mukasey), it becomes increasingly clear that the political appointees of the DoJ created a clown show, and that John Ashcroft was one of those showing the greatest integrity.*

*He doesn’t have much, he just had the most integrity. Still, that is something I never expected to write.

Apparent Hung Jury in Wecht Political Show Trial

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This is good news for the defense.

To refresh your memory, this trial is about “celebrity pathologist Cyrl Wecht” allegedly using public resources of his medical examiner’s office for his private practice, and 24 of the counts are over $3.06.

Basically, it appears that he may have used a publicly paid secretary to run his business and make some faxes, and the US Attorney in Pittsburgh literally made a federal case out of this.

Note that he is a prominent Democrat, and that Republican Dick Thornburg, former Attorney General has called it a political witch hunt.