Daily Archive: 07/12/2012

Jul 12 2012

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Follow us on Twitter @StarsHollowGzt

Richard (RJ) Eskow: As Evidence Mounts, DC Insiders Worry About Holder’s Inaction on Wall Street Crime

More and more Washington insiders are asking a question that was considered off-limits in the nation’s capital just a few months ago: Who, exactly, is Attorney General Eric Holder representing? As scandal after scandal erupts on Wall Street, involving everything from global lending manipulation to cocaine and prostitution, more and more people are worrying about Holder’s seeming inaction — or worse — in the face of mounting evidence.

Confidential sources say that the President’s much-touted Mortgage Fraud Task Force is being starved for vital resources by the Holder Justice Department. Political insiders are fearful that this obstruction will threaten Democrats’ chances at the polls. Investigators and prosecutors from other agencies are expressing their frustration as the ever-rowing list of documented crimes by individual Wall Street bankers continues to be ignored.

Robert Reich: The Truth About Obama’s Tax Proposal (and the Lies the Regressives are Telling About It)

To hear the media report it, President Obama is proposing a tax increase on wealthy Americans. That’s misleading at best. He’s proposing that everyone receive a continuation of the Bush tax cuts on the first $250,000 of their incomes. Any dollars they earn in excess of $250,000 will be taxed at the old Clinton-era rates.

Get it? Everyone is treated exactly the same. Everyone gets a one-year extension of the Bush tax cut on the first $250,000 of income. No “class warfare.” [..]

In sum: Don’t fall for these big lies – Obama wants to extend the Bush tax cut “only for some people,” small businesses will be badly hit, businesses won’t hire because of uncertainty this proposal would create, or the Clinton-era tax levels crippled the economy,

A ton of corporate and billionaire money is behind these lies and others like them, as well as formidable mouthpieces of the regressive right such as Rupert Murdoch’s Wall Street Journal editorial page.

The truth is already a casualty of this election year. That’s why it’s so important for you to spread it.

John Acheson: The New Company Store: The Final Step in the Corporate Takeover of America

Well, here we are, slouching toward another national garage sale in which corporations bid on and buy candidates the way futures traders bid on commodities – or as our founders used to call it: an election.

As we go to the polls, it might be wise to remember the song Sixteen Tons. {..]

It is a song about the truck system, and debt bondage.  Under this economic model, workers lived in houses owned by the company, shopped in stores owned by the company, and got paid in scrip minted by the company.  And no matter how hard they worked, they remained indebted to the company. [..]

Thanks to thirty years of Republican policies and Democratic complicity, we’re in the process of reopening the company store, only as with all things 21st Century, it’s a national chain.

Today, we shop with credit cards owned by “the company,” live in houses financed by “the company” – often owing more than the value of the home – and get our news and information from sources controlled by “the company.”  In short, the company store is back in business.

Paul Krugman: For Europe’s Leaders, the Solution Remains Elusive

The European Union summit in June was clearly an upside surprise: in effect, the Latin bloc forced German Chancellor Angela Merkel to bend, at least slightly. But was it good enough?

In an online article for Vox, the economist Charles Wyplosz argued, sensibly, that it was nowhere close. “At the end of the day, the summit was a little move in the right direction on bank supervision, but keep watching; we still don’t know what will actually be put in place,” he wrote on June 30. “There was nothing on collapsing Greece, nothing on unsustainable public debts in several countries, and no end in sight to recession in an increasing number of countries.”

Jim Hightower: Agribusiness Genetically Tampering With Our Food

Some people are too smart for your own good.

Food geneticists, for example. These technicians have the smarts to tinker with the inner workings of Momma Nature’s own good foods – but not the smarts to leave well enough alone.

In fairness, much of their scientific tinkering has been beneficial. But during the past half-century, too much of their work devolved from tinkering into outright tampering with our food. This is mostly the result of money flowing to both private and public centers from big agribusiness corporations that want nature’s design altered in ways that fatten their bottom lines. Never mind that the alterations created by these smart people are frequently not good for you and me.

Bill Boyarsky: Job by Job

[..] Progress is measured in what amounts to inches-a job gained or a small plant coming to town. A manufacturer of campers for heavy trucks keeping up with trends by producing travel trailers light enough to be towed by small SUVs is a move that could save and even add jobs, but it’s not a story hot enough for cable TV and that medium’s obsession with the latest political chatter. Yet these small stories give a more realistic look at the difficulty of dropping the national unemployment rate below its present 8.2 percent. [..]

But the game won’t be changed for most of the country unless the federal government does much more. When Franklin D. Roosevelt pulled back from pump-priming measures in 1937, recovery from the Depression stopped, only to revive with preparations for World War II.

Mitt Romney and the rest of the Republicans oppose such federal intervention. Their program is simple: Cut taxes for the rich and wipe out most regulation of business.

As history shows, that doesn’t work. Whether it is the City Council in conservative Lancaster providing roads for the new Morton Manufacturing plant or the federal government building bridges, highways and rail lines across the United States, unemployment won’t be reduced without help from the government, no matter how distasteful that idea is to the Republicans.

Jul 12 2012

LIBOR Effects on US Loans

LIBOR just keeps getting bigger by the day, like a wildfire.

Effect of Libor on US loans examined

by Shahien Nasiripour at The Financial Times

US lawmakers have raised concerns that the alleged manipulation of the London Interbank Offered Rate, or Libor, may have harmed households, raising the stakes on a scandal that thus far has been confined to Wall Street and the City of London.

There are at least 900,000 outstanding US home loans indexed to Libor that were originated from 2005 to 2009, the period the key lending gauge may have been rigged, investigators have said. Those mortgages carry an unpaid principal balance of $275bn, according to the Office of the Comptroller of the Currency, a bank regulator.

During periods when banks were allegedly attempting to push Libor higher, households with loans tied to the gauge may have paid higher rates than necessary. However, if the rate was manipulated lower, households may have benefited from paying below-market interest rates.

“I think the US government should be just as aggressive in getting to the bottom of this scandal as the United Kingdom has been,” said Senator Sherrod Brown, chair of the bank regulatory subcommittee on the Senate banking committee.

“This was not isolated to London, but affected tens of millions of investors, borrowers and taxpayers in our country as well,” Mr Brown added.

Libor Investigation Extended to US Mortgages, but What About TALF Loans?

by Yves Smith at naked capitalism

One area we hope will be investigated is the impact on TALF borrowing. Some of the loans were priced off Libor, raising the specter that the banks might have gamed the rates not just for advertising purposes, but to game these programs. From the Federal Reserve Bank of New York’s website:

   The interest rate on TALF loans secured by ABS backed by federally guaranteed student loans will be 50 basis points over 1-month LIBOR. The interest rate on TALF loans secured by SBA Pool Certificates will be the federal funds target rate plus 75 basis points. The interest rate on TALF loans secured by SBA Development Company Participation Certificates will be 50 basis points over the 3-year LIBOR swap rate for three-year TALF loans and 50 basis points over the 5-year LIBOR swap rate for five-year TALF loans. For three-year TALF loans secured by other eligible fixed-rate ABS, the interest rate will be 100 basis points over the 1-year LIBOR swap rate for securities with a weighted average life less than one year, 100 basis points over the 2-year LIBOR swap rate for securities with a weighted average life greater than or equal to one year and less than two years, or 100 basis points over the 3-year LIBOR swap rate for securities with a weighted average life of two years or greater. For TALF loans secured by private student loan ABS bearing a prime-based coupon, the interest rate will be the higher of 1 percent and the rate equal to “Prime Rate” (as defined in the MLSA) minus 175 basis points. For other TALF loans secured by other eligible floating-rate ABS, the interest rate will be 100 basis points over 1-month LIBOR.

Note again that some of the loans were priced off one-month Libor, which per the Barclays disclosures, were among the maturities manipulated; these are clearly a place to start [..]

The Market Has Spoken, and It Is Rigged

by Simon Johnson at The New York Times

In the aftermath of the Barclays rate-fixing scandal, the most surprising reaction has been from people in the financial sector who fully understand the awfulness of what has happened. Rather than seeing this as an issue of law and order, some well-informed people have been drawn toward arguments that excuse or justify the behavior of the Barclays employees.

This is a big mistake, in terms of the economics at stake and the likely political impact.

The behavior at Barclays has all the hallmarks of fraud – intentional deception for personal gain, causing significant damage to others.

The Commodity Futures Trading Commission nailed the detailed mechanics of this deception in plain English in its Order Instituting Proceedings (which is also a settlement and series of admissions by Barclays). Most of the compelling quotes from traders involved in this scandal come from the commission’s order, but too few commentators seem to have read the full document. Please look at it now, if you have not done so already.

The commission’s order portrays a wide-ranging conspiracy (or perhaps a set of conspiracies) to rig markets, including, but not limited to, any securities for which the price is linked to a particular set of short-term interest rates.

This past weekend on Up with Chris Hayes, Chris and his panel guests discuss the rate rigging scandal.

Jul 12 2012

On This Day In History July 12

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

Click on images to enalarge

July 12 is the 193rd day of the year (194th in leap years) in the Gregorian calendar. There are 172 days remaining until the end of the year.

On this day in 1862, the Medal of Honor is created.

President Abraham Lincoln signs into law a measure calling for the awarding of a U.S. Army Medal of Honor, in the name of Congress, “to such noncommissioned officers and privates as shall most distinguish themselves by their gallantry in action, and other soldier-like qualities during the present insurrection.” The previous December, Lincoln had approved a provision creating a U.S. Navy Medal of Valor, which was the basis of the Army Medal of Honor created by Congress in July 1862. The first U.S. Army soldiers to receive what would become the nation’s highest military honor were six members of a Union raiding party who in 1862 penetrated deep into Confederate territory to destroy bridges and railroad tracks between Chattanooga, Tennessee, and Atlanta, Georgia.

History

The first formal system for rewarding acts of individual gallantry by American soldiers was established by George Washington on August 7, 1782, when he created the Badge of Military Merit, designed to recognize “any singularly meritorious action.” This decoration is America’s first combat award and the second oldest American military decoration of any type, after the Fidelity Medallion.

Although the Badge of Military Merit fell into disuse after the American Revolutionary War, the concept of a military award for individual gallantry by members of the U.S. armed forces had been established. In 1847, after the outbreak of the Mexican-American War, a Certificate of Merit was established for soldiers who distinguished themselves in action. The certificate was later granted medal status as the Certificate of Merit Medal.

Early in the Civil War, a medal for individual valor was proposed by Iowa Senator James W. Grimes to Winfield Scott, the Commanding General of the United States Army. Scott did not approve the proposal, but the medal did come into use in the Navy. Senate Bill 82, containing a provision for a “Medal of Honor”, was signed into law (12Stat329) by President Abraham Lincoln on December 21, 1861. The medal was “to be bestowed upon such petty officers, seamen, landsmen, and Marines as shall most distinguish themselves by their gallantry and other seamanlike qualities during the present war.” Secretary of the Navy Gideon Welles directed the Philadelphia Mint to design the new decoration. Shortly afterward, a resolution of similar wording was introduced on behalf of the Army and was signed into law on July 12, 1862. This measure provided for awarding a Medal of Honor, as the Navy version also came to be called: “to such noncommissioned officers and privates as shall most distinguish themselves by their gallantry in action, and other soldier-like qualities, during the present insurrection.”

As there were only two medals that could be issued until the World War I including the Purple Heart, the Medal of Honor was sometimes awarded for deeds that would not later merit that distinction. In 1917, when other medals were created for bravery, a recall was requested for 910 Medals of Honor that had been previously issued, but no longer considered that noteworthy. Thereafter, and until the present day, the Medal was awarded for deeds that were considered exceptional.

Jul 12 2012

2012 Le Tour – Stage 11

Albertville / La Toussuire – Les Sybelles (92 miles)

Le.  Tour.  De.  France.

Special 7 am Edition (to get you ready for tomorrow’s 6:30 am edition, no- I am not kidding).

Tony Martin, Rémy Di Gregorio, and Matthew Lloyd were unable to start yesterday.  Rémy Di Gregorio was arrested at his hotel for trafficking in doping substances.

At the finish it was Thomas Voeckler, Scarponi, Voigt, and Sanchez.  In the overall GC the top 5 changed not at all.  Another missed opportunity for Evans.

That was Medium Mountains, today they are High.  There are 2 un-classified climbs, a 2 and a 3.  The Award point is just before the start of the second unclassified climb.

General Classification

Place Rider Team Time/Delta
1 WIGGINS Bradley SKY PROCYCLING 43:59:02
2 EVANS Cadel BMC RACING TEAM +01:53
3 FROOME Christopher SKY PROCYCLING +02:07
4 NIBALI Vincenzo LIQUIGAS-CANNONDALE +02:23
5 MENCHOV Denis KATUSHA TEAM +03:02
6 ZUBELDIA Haimar RADIOSHACK-NISSAN +03:19
7 MONFORT Maxime RADIOSHACK-NISSAN +04:23
8 VAN DEN BROECK Jurgen LOTTO-BELISOL TEAM +04:48
9 ROCHE Nicolas AG2R LA MONDIALE +05:29
10 VAN GARDEREN Tejay BMC RACING TEAM +05:31
11 COSTA Rui Alberto MOVISTAR TEAM +05:46

Coverage is customarily on Vs. (NBC Sports) starting at 7 am with repeats at noon, 2:30 pm, 8 pm, and midnight.  There will be some streaming evidently, but not all of it is free.

Sites of Interest-

The Stars Hollow Gazette Tags-

Pretty tables-

Jul 12 2012

My Little Town 20120711: Uncle David’s Boat

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile or so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a rural sort of place that did not particularly appreciate education, and just zoom onto my previous posts to understand a bit about it.

When I was around eight or so Uncle David built a jon boat out of marine plywood.  Uncle David is really good at woodworking and makes some nice pieces.  As far as I know it was his first attempt at a boat.  I rarely write about living people, but the humor in this piece is not at Uncle David’s expense and I bet that he gets a kick out of reading this.

He did a really good job of it, and it looked really nice.  It took him several days to finish it, and since they lived just across the street I watched quite a bit of how he built it.  He had gotten some plans from somewhere, but could have built it without any prepackaged plans because he was that good.