January 2012 archive

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.

January 25 is the 25th day of the year in the Gregorian calendar. There are 340 days remaining until the end of the year (341 in leap years).

On this day in 1905, the world’s largest diamond is found. At the Premier Mine in Pretoria, South Africa, a 3,106-carat diamond is discovered during a routine inspection by the mine’s superintendent. Weighing 1.33 pounds, and christened the “Cullinan,” it was [the largest diamond ever found.

The Cullinan diamond is the largest rough gem-quality diamond ever found, at 3,106.75 carats (621.35 g).

The largest polished gem from the stone is named Cullinan I or the Great Star of Africa, and at 530.4 carats (106.1 g) was the largest polished diamond in the world until the 1985 discovery of the Golden Jubilee Diamond, 545.67 carats (109.13 g), also from the Premier Mine. Cullinan I is now mounted in the head of the Sceptre with the Cross. The second largest gem from the Cullinan stone, Cullinan II or the Lesser Star of Africa, at 317.4 carats (63.5 g), is the fourth largest polished diamond in the world. Both gems are in the Crown Jewels of the United Kingdom.

History

The Cullinan diamond was found by Frederick Wells, surface manager of the Premier Diamond Mining Company in Cullinan, on January 26, 1905. The stone was named after Sir Thomas Cullinan, the owner of the diamond mine.

Sir William Crookes performed an analysis of the Cullinan diamond before it was cut and mentioned its remarkable clarity, but also a black spot in the middle. The colours around the black spot were very vivid and changed as the analyzer was turned. According to Crookes, this pointed to internal strain. Such strain is not uncommon in diamonds.

The stone was bought by the Transvaal government and presented to King Edward VII on his birthday. It was cut into three large parts by Asscher Brothers of Amsterdam, and eventually into 9 large gem-quality stones and a number of smaller fragments. At the time, technology had not yet evolved to guarantee quality of the modern standard, and cutting the diamond was considered difficult and risky. In order to enable Asscher to cut the diamond in one blow, an incision was made, half an inch deep. Then, a specifically designed knife was placed in the incision and the diamond was split in one heavy blow. The diamond split through a defective spot, which was shared in both halves of the diamond.

I’m grouchy about 2 things.  First and foremost I’ll be missing the Phineas and Ferb Time Warped series for about the 3rd time.  Secondly, Barack Obama has broken so many false populist promises that watching him talk is not just unconvincing, it’s physically painful.

The most optimistic estimates are that he’ll play some variation on his Osawatomie, Kansas speach which was frankly feckless and weak.  The usual suspects- Klein, Bernstein, DeLong, Sargent are all making the same tired old excuses for inaction at best and Republican policies as the norm.

It’s noteworthy that there has been less leakage of the prepared text which I suspect is due more to the collapse of his sellout to the Banksters on mortgage fraud and robo-signing than his and Holder’s fanatical prosecution of whistle blowers and journalists instead of war criminals and thieves.  The gang that couldn’t shoot straight screws up again, unless you prefer to call them simply evil which certainly matches the facts.

dday has the best preview I was able to find.  In addition to Warren Buffet’s secretary as a poster child for tax reform, he’ll also have Admiral William McRaven of the Bin Laden kill team, and Steve Jobs’ wife.

Not quite sure what she’s meant to illustrate unless it’s the efficiency of working people to death in overseas sweat shops.

I expect there will also be a full throated denial of science in defense of fracking and global warming from the president who had no problem denying women access to Plan B contraception and supporting the Stupak amendment.

If you don’t have access to a TV CSPAN will be starting its coverage at 8 pm with ceremonial entries.  They’ll also have the Republican response from Mitch Daniels who today attempted to strip Union rights from workers.

They should all be fired and prosecuted to the fullest extent of the law.

Not that I personally think their analysis is all that sound, but the second of the big three rating agencies has announced their intention to declare a CDS triggering event regardless of how the negotiations continue.

As we are constantly reminded by the Banksters, the intent of a Credit Default Swap is as insurance against a default in payments.  In fact they are used to make side bets on outcomes and their notional value almost always exceeds the actual underlying asset by orders of magnitude.

So the question is- will they pay off?

In the 2008 financial collapse the chief issuer of these instruments, American International Group, went bankrupt and only massive intervention by the U.S. Treasury Department and Federal Reserve Bank allowed them to make good their obligations at face value.

This was Insurance Fraud on a historic scale.  The rules require you to cover your policies.

Because we don’t know the actual amount of CDSes it is difficult to predict whether they will be honored or not but that’s only the first wave of the problem.  Spain, Portugal, and Italy also face default because of the usurious interest rates currently being demanded and a Greek default is only likely to increase their vulnerability.

European policy makers have shown no indication that they actually understand the magnitude of the difficulty and every response so far has been wrong headed austerity.  The fundamental reality is that their economies can no longer support the inflated, leveraged, fictional values the holders of these worthless scraps of paper demand and the reckoning is going to come from their pockets simply because they’re the ones holding the hot potato.

It’s coming.  It’s coming soon.  A lot of people and institutions that considered themselves quite well off are going to find their estimations substantially reduced.

Greek Debt Talks Still Without Resolution; Bondholders Make Final Offer

By: David Dayen, Firedog Lake

Monday January 23, 2012 6:20 am

The debt talks between Greece and their bondholders, thought to be a done deal late Friday, spilled into the weekend and still found no resolution as of today. The short version is that the creditors want a higher coupon, or interest rate on the new bonds they’ll accept in exchange for taking at huge hit on the bonds they currently hold.

…

At a low interest rate, the creditors would then call the deal involuntary, a credit default swaps would trigger. However, according to the Fitch rating agency, there is no such thing as a voluntary debt restructuring, and they would read any deal as a default event. This is why Noriel Roubini says we will see “a credit event” in Greece either way.

…

The bondholders presented what they called their "maximum" offer over the weekend. Charles Dallara, the managing director of the Institute for International Finance, who has been negotiating on behalf of the creditors, said that both sides were at a “crossroads” and the “limits of a voluntary deal.” Interestingly, the biggest holdout could be the European Central Bank, which holds 55 billion euros of Greek debt and doesn’t want to take any losses on it. The EFSF, the European bailout fund, may have to buy the debt off the ECB at par to get a deal structured.

Greece has already said they would change the terms of the bonds by law, if need be, but then some creditors would hold out and there would be litigation and CDS triggering.

Anything controversial or unmanageable out of Greece would risk contagion elsewhere in Europe, especially in Portugal, probably the next most-threatened country on the periphery. The dangers in Europe are very much apparent here.

S&P: Greek Debt Restructuring Would Be a Default

By: David Dayen, Firedog Lake

Tuesday January 24, 2012 8:55 am

Standard and Poor’s has become the second rating agency to say that, regardless of the conclusion of the Greek debt restructuring, they would judge the country as in "selective default". With two rating agencies – Fitch is the other – now on the record about default, it’s almost certain that the announcement of the deal, if we ever get one, will trigger credit default swaps.

So I see no point in having the negotiations continue. They were predicated on getting bond holders to accept a voluntary haircut, to avoid the triggering of CDS. That will now be impossible. And the Greek government has the ability to change the law and mandate the new payments on debt. So they might as well just do that, at this point. In truth, there never was a voluntary haircut, anyway. So everyone might as well tell the truth.

An S&P official does not believe that a Greek default event would necessarily lead to contagion in the Eurozone. However, we’ve seen the cascading effect play out many times in the past year or so. As much as the regulators want to tell themselves they don’t foresee a problem, one could be staring them in the face.

In fact, we may already by seeing contagion in the form of Portugal’s struggles.

IMF slashes world growth forecast

By Paul Handley (AFP)

3 hours ago

On Monday in Berlin, IMF managing director Christine Lagarde pressed European leaders to build a stronger backstop to prevent the problems in the continent’s weakest economies — Greece, Spain and Portugal — from pulling down others.

“We need a larger firewall,” she said. “Without it, countries like Italy and Spain that are fundamentally able to repay their debts could be forced into a solvency crisis by abnormal financing costs.”

The Fund warned against overly sharp budget-balancing by those countries that can afford to move slowly to reduce their deficits.

Otherwise, they will just create more drag on the global economy.

“Decreasing debt is a marathon, not a sprint,” said Olivier Blanchard, the IMF’s chief economist. “Going too fast will kill growth and further derail the recovery.”

The recommendation was pointed at Europe’s largest economies Germany, France and Britain, all of which it said would continue to grow this year, albeit at a weak pace.

Germany’s economy was seen growing 0.3 percent, France’s 0.2 percent, and Britain’s 0.6 percent.

The United States, the world’s largest economy, was projected to grow 1.8 percent in 2012.

The growth downgrades covered the entire world.

The Greek debt talks fall apart

Felix Salmon, Reuters

Jan 24, 2012 04:33 EST

Remember here that Greece itself is basically just an intermediary, stuck between the Troika (EU, ECB, IMF) on the one hand, which is going to fund its deficits for the foreseeable future and therefore can demand anything it wants, and bondholders, on the other. And the problem is that what’s acceptable to the bondholders – a 4% coupon, basically, on restructured debt – is unacceptable to the Troika.

…

In a way, this is a good thing, because it only serves to clarify the fact that Greece is defaulting in a way that’s going to make its bondholders very unhappy. All the talk of a “voluntary” restructuring was a way of attempting to paper over that fact, and that paper was always extremely thin. Maybe a bit of honesty will help people face up to reality in a way that they’ve been very reluctant to do until now.

…

No one thinks of this deal as a “one and done” restructuring. Bailing in the ECB or the EFSF at this point would just be denial: it would encourage the EU to think (or at least to say) that the Greek debt problem was solved for perpetuity, when it clearly isn’t. So let’s force the private sector to take its big NPV haircut now. And then the next step can come a few years down the road, when Greece discovers it can’t pay the Troika what it owes.

It’s that time of the year. No, not the State of the Union address. pfffttt. The Academy Awards nominations were announced this morning. It’s Oscar time, you silly gooses!

The 84th Academy Awards will be presented on February 26th hosted by one of the best hosts since Bob Hope, Billy Crystal and will air on the ABC network at 7 PM EST/ 6 PM CST.

As we did last year, we here at Stars Hollow, will be hosting a live blog and Oscar party. Prior to the big night, I will once again have food and drink suggestions that will entertain your palate as you watch the festivities. So get ready there is barely a month to prepare.

And here are the nominees:

Best Picture

“The Artist”

“The Descendants”

“Extremely Loud & Incredibly Close”

“Hugo”

“Midnight in Paris”

“The Help”

“Moneyball”

“War Horse”

“The Tree of Life”

Best Actor

Demian Bichir, “A Better Life”

George Clooney, “The Descendants”

Jean Dujardin, “The Artist”

Gary Oldman, “Tinker Tailor Soldier Spy”

Brad Pitt, “Moneyball”

Best Actress

Glenn Close, “Albert Nobbs”

Viola Davis, “The Help”

Rooney Mara, “The Girl With the Dragon Tattoo”

Meryl Streep, “The Iron Lady”

Michelle Williams, “My Week With Marilyn”

(The rest below the fold. We wouldn’t want to hog the stage. 😉

“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”.

This is a great read that make make you  a little dizzy but says volumes about Pres. Obama.

Bill Moyers and Michael Winship: The Washington-Wall Street Revolving Door Just Keeps Spinning Along

We’ve already made our choice for the best headline of the year, so far:

“Citigroup Replaces JPMorgan as White House Chief of Staff.”

When we saw it on the website Gawker.com we had to smile — but the smile didn’t last long. There’s simply too much truth in that headline; it says a lot about how Wall Street and Washington have colluded to create the winner-take-all economy that rewards the very few at the expense of everyone else.

Robert Reich: Obama’s Mixed Messages

Many Democrats are congratulating themselves that the final two in the 2012 Republican field are a stuffed shirt who can’t motivate his own base and a wild man who seems to inspire only fundamentalists and Tea Party fanatics. But let’s not pop the champagne quite yet.

According to a video sent to supporters Saturday, President Obama is planning to strike a “populist” note in his Tuesday State of the Union Address and in the themes he sounds in his re-election campaign. Obama will pledge “an America where everybody gets a fair shot, and everyone does their fair share and everybody plays by the same set of rules.”

“We can go in two directions. One is towards less opportunity and less fairness,” Obama declared in the video, “Or we can fight for where I think we need to go: building an economy that works for everyone, not just a wealthy few.”

Obama, say widely reported White House leaks, will double down on promises of tax breaks for manufacturing, job training and education initiatives, other help for the unemployed, and stronger efforts to deal with the foreclosure crisis. All of these, except for the tax breaks, by definition require activist government.

So despite Obama’s fervent desire throughout his presidency to surmount ideological divisions, 2012 promises to be a great ideological debate.

President Barack Obama once again has gone after a whistle blower while letting the criminals completely off the hook or walk away with a slap on the wrist. Since taking office Obama has waged unprecedented war on whistleblowers despite campaign promises to have a transparent government.

Former CIA Officer John Kiriakou Charged with Disclosing Covert Officer’s Identity and Other Classified Information to Journalists and Lying to CIA’s Publications Review Board

   A former CIA officer, John Kiriakou, was charged today with repeatedly disclosing classified information to journalists, including the name of a covert CIA officer and information revealing the role of another CIA employee in classified activities, Justice Department officials announced.

   The charges result from an investigation that was triggered by a classified defense filing in January 2009, which contained classified information the defense had not been given through official government channels, and, in part, by the discovery in the spring of 2009 of photographs of certain government employees and contractors in the materials of high-value detainees at Guantanamo Bay, Cuba. The investigation revealed that on multiple occasions, one of the journalists to whom Kiriakou is alleged to have illegally disclosed classified information, in turn, disclosed that information to a defense team investigator, and that this information was reflected in the classified defense filing and enabled the defense team to take or obtain surveillance photographs of government personnel. There are no allegations of criminal activity by any members of the defense team for the detainees.

Like she did with the outing of CIA operative Valerie Plame-Wilson, Marcy Wheeler, along with Jim White at emptywheel, dissects this case exposing the hypocrisy of the government and the cover up of the real crime, a war crime, torture, here, here, here, here and here. In those articles they expose the weakness of the DOJ’s case against Kiriakou and that Obama has covered for and refused to prosecute war crimes committed by CIA agents and covers up military war crimes by hiding the evidence under the guise of national security.

A prime example of this hypocrisy it outrageous that has allowed war criminal to get off with just a tap on the wrist while the commanding officers were not even mentioned:

January 23, 2012 – CAMP PENDLETON, Calif. (AP) – A Marine sergeant who told his troops to “shoot first, ask questions later” in a raid that killed unarmed Iraqi women, children and elderly pleaded guilty Monday in a deal that will carry no more than three months confinement and end the largest and longest-running criminal case against U.S. troops from the Iraq War.

The agreement marked a stunning and muted end to the case once described as the Iraq War’s version of the My Lai massacre in Vietnam. The government failed to get one manslaughter conviction in the case that implicated eight Marines in the deaths of 24 Iraqis in the town of Haditha in 2005.[..]

Kamil al-Dulaimi, a Sunni lawmaker from the Anbar provincial capital of Ramadi, called the plea deal a travesty of justice for the victims and their families. “It’s just another barbaric act of Americans against Iraqis,” al-Dulaimi told The Associated Press. “They spill the blood of Iraqis and get this worthless sentence for the savage crime against innocent civilians.”

This is a disgrace.

Obama is not upholding his oath of office and that is an even bigger disgrace.

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.

January 24 is the 24th day of the year in the Gregorian calendar. There are 341 days remaining until the end of the year (342 in leap years).

On this day in 1848, A millwright named James Marshall discovers gold along the banks of Sutter’s Creek in California, forever changing the course of history in the American West.

The California Gold Rush began at Sutter’s Mill, near Coloma. On January 24, 1848 James W. Marshall, a foreman working for Sacramento pioneer John Sutter, found shiny metal in the tailrace of a lumber mill Marshall was building for Sutter on the American River. Marshall brought what he found to John Sutter, and the two privately tested the metal. After the tests showed that it was gold, Sutter expressed dismay: he wanted to keep the news quiet because he feared what would happen to his plans for an agricultural empire if there were a mass search for gold. However, rumors soon started to spread and were confirmed in March 1848 by San Francisco newspaper publisher and merchant Samuel Brannan. The most famous quote of the California Gold Rush was by Brannan; after he had hurriedly set up a store to sell gold prospecting supplies, Brannan strode through the streets of San Francisco, holding aloft a vial of gold, shouting “Gold! Gold! Gold from the American River!” With the news of gold, local residents in California were among the first to head for the goldfields.

At the time gold was discovered, California was part of the Mexican territory of Alta California, which was ceded to the U.S. after the end of the Mexican-American War with the signing of the Treaty of Guadalupe Hidalgo on February 2, 1848.

On August 19, 1848, the New York Herald was the first major newspaper on the East Coast to report the discovery of gold. On December 5, 1848, President James Polk confirmed the discovery of gold in an address to Congress. Soon, waves of immigrants from around the world, later called the “forty-niners”, invaded the Gold Country of California or “Mother Lode”. As Sutter had feared, he was ruined; his workers left in search of gold, and squatters took over his land and stole his crops and cattle.

San Francisco had been a tiny settlement before the rush began. When residents learned about the discovery, it at first became a ghost town of abandoned ships and businesses whose owners joined the Gold Rush, but then boomed as merchants and new people arrived. The population of San Francisco exploded from perhaps 1,00 in 1848 to 25,000 full-time residents by 1850. The sudden massive influx into a remote area overwhelmed the infrastructure. Miners lived in tents, wood shanties, or deck cabins removed from abandoned ships.[13] Wherever gold was discovered, hundreds of miners would collaborate to put up a camp and stake their claims. With names like Rough and Ready and Hangtown, each camp often had its own saloon and gambling house.

What has happened to Keith Olbermann?  

I know that he has some health issues, but for Chrissakes, he is younger than I am, and I NEVER miss a post unless something really important is happening.  And I do not make any money posting here, either.

Iowa AG Miller Claims No Foreclosure Fraud Settlement This Week

By: David Dayen, Firedog Lake

Monday January 23, 2012 2:55 pm

Perhaps Tom Miller, the head of the executive committee negotiating a foreclosure fraud settlement, is feeling a little too much heat today.

…

(L)et’s just go back to what this is all about, because it has very little to do with the usual media storylines and narratives running about. Somewhere along the lines the financial industry stopped keeping the records they were legally required to keep to ensure that they had standing to foreclose on borrowers. Instead of untangling the mess, they participated in a cover-up, by fabricating documents and affidavits on a mass scale to sucker courts into allowing foreclosures. That is no different than criminal theft. If I came into a courtroom looking to foreclose on a homeowner, and my proof of ownership was a plastic bag with the words “I OWNZ THAT” scrawled on it, that would be little different, under the eyes of the law, from what the banking industry has done over the last decade. Strip away all the complexities in the law and that’s what you’re left with.

So state and federal regulators attempting to settle with banks for stealing homes are really violently upsetting any pretense of a rule of law in America. Setting aside the fact that the penalty is completely inadequate and there’s no indication that banks will actually follow through on the specifics, some things are more important than a financial settlement can provide. The current group of big banks and loan servicers broke the richest market in the world, the residential US housing market. They really do need to pay for this. Because if they don’t, they will continue to violate the law as they have been doing unchecked for the past several years.

The lights will be burning late tonight as they frantically re-write the State of the Union.

Good.

This morning the Supreme Court handed down a 9 – 0 decision on the 4th Amendment and privacy right ruling that police must obtain a warrant before they can place GPS device on a person’s vehicle. The ruling in United States v. Jones upholds a citizen’s right to privacy and smacks down the Obama administrations defense of unlimited surveillance. The ruling overturns the drug conviction of Antoine Jones that used information from a GPS device that was placed on his vehicle without a warrant.

Justices Say GPS Tracker Violated Privacy Rights

WASHINGTON – The Supreme Court on Monday unanimously ruled that the police violated the Constitution when they placed a Global Positioning System tracking device on a suspect’s car and monitored its movements for 28 days.

But the justices divided 5-to-4 on the rationale for the decision, with the majority saying that the problem was the placement of the device on private property. That ruling avoided many difficult questions, including how to treat information gathered from devices installed by the manufacturer and how to treat information held by third parties like cellphone companies. [..]

Though the ruling was limited to physical intrusions, the opinions in the case collectively suggested that a majority of the justices are prepared to apply broad Fourth Amendment privacy principles unrelated to such intrusions to an array of modern technologies, including video surveillance in public places, automatic toll collection systems on highways, devices that allow motorists to signal for roadside assistance and records kept by online merchants.

The Obama administration had argued that under a 1983 ruling the police had the right to place the device:

One of the Obama administration’s main arguments in support of warrantless GPS tracking was the high court’s 1983 decision in United States v. Knotts, in which the justices ruled it was OK for the government to use beepers known as “bird dogs” to track a suspect’s vehicle without a warrant. In that case, the police had the consent of that truck’s owner, which was not the case in the opinion decided Monday, Scalia wrote.

Law Professor Jonathan Turley provides broader discussion of the two opinions that were written by Justices Samuel Alito and Anton Scalia. Scalia’s opinion prevailed with Justices Anthony M. Kennedy, Clarence Thomas and Sonia Sotomayor concurring.

Also Jeralyn E. Merritt of TalkLeft points out a question that was not addressed:

Whether the electronic surveillance, if achieved without having to physically trespass on Jones’s property, would have been “an unconstitutional invasion of privacy.”