07/25/2012 archive

As Atrios said, not at all unexpected when “you put the put a bunch of evil skimmers and the stupidest f#%$ing man on the face of the planet in charge of your economy.”

Britain’s economic output collapsed by 0.7% in the second quarter of 2012 as the country’s double-dip recession extended into a third quarter [..]

The first double-dip recession since the mid-1970s – when the UK was beset by high inflation and rising unemployment – meant GDP in the second quarter of 2012 was 0.8% lower than in the same three months of 2011. [..]

The news will come as a fresh blow to the chancellor, George Osborne, whose deficit reduction plans have been thrown off course by the poor performance of the economy. Output has declined in five of the last seven quarters. [..]

The data shocked City analysts. Howard Archer of IHS Global Insight said the figures were “a very nasty surprise indeed”. And Labour were swift to criticise the chancellor. Rachel Reeves, the shadow chief secretary to the Treasury, tweeted that the 0.7% contraction was a “disastrous verdict on George Osborne’s failed plan”.

The reason for Osborne’s sticking to his austerity guns is the AAA rating from the same discredited ratings agencies that rated Lehman Brothers and AIG as safe investments right before their crash in 2008. His policy has just exacerbated Britain’s “deep-rooted economic problems”

In his response to today’s terrible GDP figures (the economy shrunk by 0.7% in the second quarter), George Osborne wisely resisted blaming the eurozone, the weather or the Jubilee for the third successive quarter of contraction. Instead, he dwelt on the UK’s “deep-rooted economic problems”. Britain has many long-term problems – an economy too dependent on finance, a lack of long-term investment, and persistently high levels of youth unemployment – but the charge against Osborne is that he has made them worse, not better. [..]

At times of recession, when consumer spending is depressed and businesses are hoarding cash, the state must act as a spender of last resort and stimulate growth through temporary tax cuts and higher infrastructure spending. Yet it is precisely this option that Osborne has rejected at every turn, dismissing well-intentioned critics as “deficit deniers”. Today’s figures are his reward. [..]

While Osborne’s arbitrary targets are of little economic importance they are of immense political significance. Should he abandon his debt rule, the UK could lose its AAA credit rating. Standard & Poor’s, for instance, has previously warned that our top rating is conditional on Osborne meeting his fiscal mandate. But why should we listen to the discredited agenices that rated Lehman Brothers and AIG as “safe investments” days before the crash? The answer is simple: we shouldn’t. But this doesn’t alter the fact that Osborne did. Having adopted the UK’s credit rating as his metric of success (he once boasted that we were “the only major western country which has had its credit rating improve”) he can hardly change tact now.

The Cameron government should be fired and sent packing to a special asylum for treatment of “Austerity Insanity.”

Geithner Raked Over the Coals in House Committee About Libor

By: David Dayen, Firedog Lake

Wednesday July 25, 2012 9:35 am

Barney Frank operated as Geithner’s lawyer through all of this, saying that the 2008-era financial regulators were all Bush appointees. But that’s not the point; none of those regulators had access to documentary evidence of the commission of fraud.

Here’s the backstory. When Geithner ran the New York Federal Reserve Board, they failed to inform US regulators that they had an admission of guilt from a Barclays employee that the Libor was being rigged. The Commodity Futures Trading Commission and the Justice Department had to build their case without the direct evidence of rigging that Geithner and his staff knew all about.

Geithner denied this today. He claimed that he did everything he could. “We took the initiative to bring those concerns to the attention of the broader U.S. regulatory community, including all the agencies that have responsibility for market manipulation and abuse,” he said in testimony.

Well, someone’s lying. And Geithner’s claim that he didn’t know about rate rigging until 2008, when the NY Fed acknowledged in documents that they had evidence in 2007, doesn’t make him a credible witness. Not to mention the fact that the NY Fed set the payouts for the AIG bailout, and the TALF lending facility, using Libor as a benchmark.

…

If there were any justice in the world, Geithner would be dead to rights. He had documentary evidence of fraud, and he didn’t send it up the chain to the authorities. In fact, he continued to use the fraudulent rates in the NY Fed’s everyday business.

N.Y. Fed quiet on Barclays’ admission of rigging Libor

By Jia Lynn Yang and Danielle Douglas, Washington Post

Published: July 24

Geithner, who was then head of the Federal Reserve Bank of New York, did not communicate in key meetings with top regulators that British bank Barclays had admitted to Fed staffers that it was rigging Libor, according to people familiar with the matter.

Instead, regulators at the Commodity Futures Trading Commission and the Justice Department worked largely without the Fed’s help to build a case against Barclays. That work has culminated in a massive scandal rocking the banking industry on both sides of the Atlantic.

…

Still, the Fed proceeded to use Libor as a benchmark to determine how much insurance giant American International Group would pay back the government during its bailout. The measure also was used in the fall of 2008 to set the interest rate for the emergency lending program called the Term Asset-Backed Securities Loan Facility, or TALF.

“That number [Libor] determined how the taxpayer would be compensated,” said Neil Barofsky, who was the chief watchdog of the financial system’s $700 billion bailout. “That’s putting the Federal Reserve’s imprimatur on a rate it has suspicion to think was fraudulent. The Federal Reserve’s use of that and Treasury’s use of that in the bailout sends a powerful message to the market: ‘Hey don’t worry about this, we’re endorsing it.’ ”

He added that the Fed’s response can be measured by the fact that no one has reformed Libor.

Libor is critical because it is used worldwide to set the rates for trillions of dollars’ worth of mortgages, student loans, auto loans and many other financial contracts. It was an especially important metric during the financial crisis because it was a key indicator for the health of the banking industry.

SIGTARP: Taxpayers still exposed as AIG shrinks CDS portfolio

By Jon Prior, HousingWire

July 24, 2012

Taxpayers are still owed more than half their original investment in American International Group even as its non-insurance business operates without a consolidated banking regulator, according to the Special Inspector General for the Troubled Asset Relief Program.

AIG still has $30.4 billion from the original $67.8 billion TARP investment outstanding as of July, which is on track to actually earn a return, SIGTARP said in a special report (.pdf) Wednesday.

…

“For more than two years, AIG has had no consolidated banking regulator of its non-insurance financial business,” SIGTARP said in its report.

Despite the regulatory uncertainty, AIG continues to bet on the mortgage market. From December 2010 through March 31, it doubled its commercial mortgage-backed securities and private-label mortgage bond holdings to $28.4 billion.

New York Fed Faces Questions Over Policing Wall Street

By BEN PROTESS and JESSICA SILVER-GREENBERG, The New York Times

July 24, 2012

(T)he JPMorgan debacle and the interest-rate investigation have raised questions about the New York Fed. They highlight how the regulator is hampered by its lack of enforcement authority and dogged by concerns that it is overly cozy with the banks.

Mr. Geithner is expected to face questions from lawmakers on Wednesday about the rate-rigging inquiry that has ensnared more than a dozen big banks. In June, Barclays agreed to pay $450 million to authorities for manipulating the London interbank offered rate, or Libor.

…

(T)he New York Fed, which knew Barclays had been reporting false rates at the time, did not stop the actions.

And when Mr. Geithner briefed other American regulators about Libor in May 2008, he did not disclose the specific wrongdoing, according to people briefed on the meeting. In later briefings, New York Fed officials did warn their counterparts about “allegations of misreporting.”

“The regulator has an obligation to make a criminal referral if it suspects a crime may have occurred,” said Bart Dzivi, who served as special counsel to the Federal Financial Crisis Inquiry Commission. “How this doesn’t rise to that level, simply boggles the mind.”

“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”.

Wednesday is Ladies’ Day

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Katrina vanden Heuvel: Women for Paid Sick Days

Some policy questions are difficult. Here are a few easy ones: Should people who handle food for a living have to work while contagious? Should sick kids be stuck at school because their parents are stuck at work? Should coming down with something cost you your job?

Most Americans say: No, no and no. Politicians are catching up with them, but not fast enough.

As I noted last winter, 2011 was the biggest year yet for paid sick leave, a common sense reform requiring employers to provide a minimum number of sick days, so low-wage workers can stay home sick without losing their pay or their jobs.  After years of savvy, tenacious organizing, last year Seattle joined San Francisco and DC to become the nation’s third paid sick leave city, and Connecticut’s became the nation’s first statewide law (Milwaukee passed a bill in 2009 but Scott Walker has overridden it).

Paid sick leave is the kind of pro-family policy that we should be able to take for granted in a civilized democracy. By averting senseless firings, it reduces unemployment. By letting sick people stay home, it advances public health. In San Francisco, which in 2006 became the first city to mandate paid leave, even critics have changed their tune. In 2010, the executive director of the Golden Gate Restaurant Association, which had decried the bill as a job killer, told Bloomberg Businessweek that it had turned out to be “the best public policy for the least cost. Do you want your server coughing over your food?”

Dahlia Lithwick and Raymond Vasvari: The GOP’s War Against Facts

The truth became dangerous for the Republican Party when it ran out of arguments.

Someday political scientists will try to date the decline of reasoned discourse in America to the moment when the left and the right began to invent their own facts. Climate change deniers, the purveyors of lies linking abortion to breast cancer, and creationists will all be blamed for the end of meaningful debate between liberals and conservatives. But that’s not quite right. The real end of civic discourse can be traced to the new conservative argument that facts themselves are dangerous.

It’s a dangerous contention not just for what it hides, but also for what it reveals: a lack of any other arguments.

It’s tough times for facts in America. First Mitt Romney-interviewing for the position of president-declined to release his tax returns because, as he explained, the Obama team’s opposition research will “pick over it” and “distort and lie about them.” He isn’t actually claiming that his opponents will lie. He’s claiming he’s entitled to hide the truth because it could be used against him. As Jon Stewart put it, “You can’t release your returns, because if you do, the Democrats will be mean to you.” These are tax returns.  Factual documents. No different than, say, a birth certificate. But the GOP’s argument that inconvenient facts can be withheld from public scrutiny simply because they can be used for mean purposes is a radical idea in a democracy. It has something of a legal pedigree as well.

Welcome to the Olympics.

Today the games start with team sports that require round robins which take a lot of time.  Specifically today we have Women’s Football (including Team USA, the favorites) on MSNBC and Vs. (NBC Sports).

I’ll probably publish twice a day, 6 am – 6 pm and 6 pm – 6 am which seems to be how NBC is dividing it.  The point of these pieces is so you can watch the events you want and comment on them, get the results of the previous day’s activity, and occasionally live blogging might break out (go Badminton!).

If things get too hectic I may re-think.

G4S trainee: ‘Most people failed the initial x-ray exam. But not for long’

The Guardian

Monday 23 July 2012

But when all else fails, the instructor said, there’s no harm giving someone a good thump.

And he explained how best to do it without getting in trouble with the law. “You can hit them first. This is known as a preemptive strike. If you were to strike someone, use an open hand. This has the same power as a punch but it doesn’t leave a mark.”

The instructor had more advice. He suggested we should be very careful talking to the police.

“You’re not convicted on what you did but on what you say. Be very careful about making statements. I have two solicitors. One of them I’ve used for 20 years, he gets everyone off. Some of my dodgy friends. You need someone like that to hold you by the hand.”

…

Everyone seemed to be cheating and the instructors weren’t doing anything to stop it. By the end of the day the vast majority passed. The few who haven’t are told they’ll be reassigned to other roles.

The next day we have a different instructor who congratulates us on passing the x-ray exam but quickly makes us all feel a bit guilty: “Everyone is here on their own ability. If you’ve cheated to get here, you’re playing with peoples lives.”

G4S security guard protecting Olympic footballers at top hotel ‘stole mobile phone from colleague’

By Alex Horlock, Daily Mail

PUBLISHED: 09:42 EST, 24 July 2012

Warwickshire Police Federation has expressed major concerns after two security guards were arrested at the renamed City of Coventry Stadium last week when officers discovered they were illegal immigrants.

Fassal Mahmood, from Windmill Lane, Smethwick, was yesterday charged with the theft of a mobile phone at Chesford Grange Hotel, near Kenilworth, which is hosting international football teams.

…

Warwickshire Police confirmed the 20-year-old has been bailed and will appear before Leamington magistrates next month.

He has been suspended from work.

This humiliating shambles: MPs aghast as G4S chief insists on taking £57m management fee

By Stephen Wright, David Williams and Chris Greenwood, Daily Mail

PUBLISHED: 03:52 EST, 17 July 2012

Mr Buckles was under intense pressure to quit his £830,000-a-year job after members of the select committee ridiculed him and his company’s performance.

Yet although G4S shares have fallen 17 per cent, wiping £700million from its market value, he maintained he is the right man to lead the world’s second-largest private-sector employer.

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Mr Buckles repeatedly said the company still intended to claim its £57million management fee for work over the past two years, even though it cannot provide anywhere near the number of guards it had originally promised.

‘We’ve managed the contract and we’ve had management on the ground for two years. We still expect to deliver a significant number of staff to the Olympics.’

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He said there are 4,200 G4S staff working on the ground on the Olympics and the minimum the company will deliver is 7,000 – 70 per cent of what they were expected to provide.

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Mr Buckles said he told Locog on July 3 that his firm had experienced a shortfall in staff over the previous weekend, in part due to its scheduling system not working properly.

Who says sports are not political?

Today’s Schedule

Vs. repeats all the games from 6 pm to 12:30 am and again from 12:30 am to 7 am.

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 enlarge

July 25 is the 206th day of the year (207th in leap years) in the Gregorian calendar. There are 159 days remaining until the end of the year.

On this day in 1788, Wolfgang Mozart completes his Symphony No. 40 in G minor.

The question of the Symphony’s premiere

There is no completely solid documentary evidence that the premiere of the 40th Symphony took place in Mozart’s lifetime. However, as Zaslaw (1983) points out, the circumstantial evidence that it was performed is very strong. On several occasions between the composition of the symphony and the composer’s death, symphony concerts were given featuring Mozart’s music, including concerts in which the program has survived, including a symphony, unidentified by date or key.

Most important is the fact that Mozart revised his symphony (the manuscripts of both versions still exist). As Zaslaw says, this “demonstrates that [the symphony] was performed, for Mozart would hardly have gone to the trouble of adding the clarinets and rewriting the flutes and oboes to accommodate them, had he not had a specific performance in view.” The orchestra for the 1791 Vienna concert included the clarinetist brothers Anton and Johann Stadler; which, as Zaslaw points out, limits the possibilities to just the 39th and 40th symphonies.

Zaslaw adds: “The version without clarinets must also have been performed, for the reorchestrated version of two passages in the slow movement, which exists in Mozart’s hand, must have resulted from his having heard the work and discovered an aspect needing improvement.”

Concerning the concerts for which the Symphony was originally (1788) intended, Otto Erich Deutsch suggests that Mozart was preparing to hold a series of three “Concerts in the Casino”, in a new casino in the Spiegelgasse owned by Philipp Otto. Mozart even sent a pair of tickets for this series to his friend Michael Puchberg. But it seems impossible to determine whether the concert series was held, or was cancelled for lack of interest. Zaslaw suggests that only the first of the three concerts was actually held.