July 2012 archive

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

Paul Krugman: Who’s Very Important?

“Is there a V.I.P. entrance? We are V.I.P.” That remark, by a donor waiting to get in to one of Mitt Romney’s recent fund-raisers in the Hamptons, pretty much sums up the attitude of America’s wealthy elite. Mr. Romney’s base – never mind the top 1 percent, we’re talking about the top 0.01 percent or higher – is composed of very self-important people.

Specifically, these are people who believe that they are, as another Romney donor put it, “the engine of the economy”; they should be cherished, and the taxes they pay, which are already at an 80-year low, should be cut even further. Unfortunately, said yet another donor, the “common person” – for example, the “nails ladies” – just doesn’t get it.

Amy Goodman: The Pain in Spain Falls Mainly on the Plain (Folk)

As Spain’s prime minister announced deep austerity cuts Wednesday in order to secure funds from the European Union to bail out Spain’s failing banks, the people of Spain have taken to the streets once again for what they call “Real Democracy Now.” This comes a week after the government announced it was launching a criminal investigation into the former CEO of Spain’s fourth-largest bank, Bankia. Rodrigo Rato is no small fish: Before running Bankia he was head of the International Monetary Fund. What the U.S. media don’t tell you is that this official government investigation was initiated by grass-roots action.

The Occupy movement in Spain is called M-15, for the day it began, May 15, 2011. I met with one of the key organizers in Madrid last week on the day the Rato investigation was announced. He smiled, and said, “Something is starting to happen.” The organizer, Stephane Grueso, is an activist filmmaker who is making a documentary about the May 15 movement. He is a talented professional, but, like 25 percent of the Spanish population, he is unemployed: “We didn’t like what we were seeing, where we were going. We felt we were losing our democracy, we were losing our country, we were losing our way of life. … We had one slogan: ‘Democracia real YA!’-we want a ‘real democracy, now!’ Fifty people stayed overnight in Puerta del Sol, this public square. And then the police tried to take us out, and so we came back. And then this thing began to multiply in other cities in Spain. In three, four days’ time, we were like tens of thousands of people in dozens of cities in Spain, camped in the middle of the city-a little bit like we saw in Tahrir in Egypt.”

Joe Conason: If We’re Headed Toward Greece, Republicans Are Driving Us There

Despite growing debt and deficits, we are not on the road to Greece. With investors around the world rushing to purchase U.S. Treasury bonds and driving rates to historic lows, this country is far from the plight of the homeland of democracy. For now, it is safe to ignore right-wing rhetoric that shrieks the fiscal sky is falling.

But if such troubles lie ahead, the real cause will not be spending on income security, health care, infrastructure, education or any of the other programs that have made America a great nation. If we are driven toward national bankruptcy someday, the likeliest cause will be our failure to raise and enforce taxes on those who can afford to pay-because we, too, have encouraged a culture of evasion rather than responsibility.

Bill Moyers and Michael Winship: Banksters Take Us to the Brink

Every day brings more reminders of the terrible unfairness that besets our country, the tragic reversal of fortune experienced by millions who once had good lives and steady jobs, now gone.

An article in the current issue of Rolling Stone chronicles “The Fallen: TheSharp, Sudden Decline of America’s Middle Class” and describes a handful of middle class men and women made homeless, forced to live out of their cars in church parking lots in Southern California.

One of them, Janis Adkins, drove a van filled with her belongings to Santa Barbara, where she panhandled at an intersection with a sign reading, “I’d Rather Be Working – Hire Me If You Have a Job.” Once upon a time she had a successful plant nursery business in Utah that annually grossed $300,000. But two years after the nation’s financial meltdown her sales had dropped by fifty percent and the value of her land plunged even more. She tried to refinance but four banks turned her down flat. “Everyone was talking about bailouts,” Adkins told reporter Jeff Tietz. “I said, ‘I’m not asking for a bailout, I’m asking you to work with me.’ They look at you, no expression on their faces, saying, ‘There’s nothing we can do.'”

“Nothing we can do.” And yet it was banks like these who helped get people like Janis Adkins into such desperate jams in the first place. When faced with their own financial catastrophes, all those big-time bankers came running to the government and taxpayers for those aforementioned bailouts worth hundreds of billions of dollars, then scooped up big bonuses and perks for themselves, and went back to business as usual.

Nick Turse: America’s Shadow Wars in Africa

Secret Wars, Secret Bases, and the Pentagon’s “New Spice Route” in Africa

They call it the New Spice Route, an homage to the medieval trade network that connected Europe, Africa, and Asia, even if today’s “spice road” has nothing to do with cinnamon, cloves, or silks.  Instead, it’s a superpower’s superhighway, on which trucks and ships shuttle fuel, food, and military equipment through a growing maritime and ground transportation infrastructure to a network of supply depots, tiny camps, and airfields meant to service a fast-growing U.S. military presence in Africa.

Few in the U.S. know about this superhighway, or about the dozens of training missions and joint military exercises being carried out in nations that most Americans couldn’t locate on a map.  Even fewer have any idea that military officials are invoking the names of Marco Polo and the Queen of Sheba as they build a bigger military footprint in Africa.  It’s all happening in the shadows of what in a previous imperial age was known as “the Dark Continent.”

Robin Welss: Mitt Romney’s Offer of Government of Billionaires, for Billionaires, by Billionaires

“Too much money” sounds like an oxymoron, especially when applied to American politics. But in the last week, Republicans are beginning to learn that lots of money can have its downside. Thursday’s story that Romney may have actively directed Bain Capital three years longer than he claimed – a period in which Bain Capital-managed companies experienced bankruptcies and layoffs – caps what must be the worst weekly news cycle of any modern American presidential candidate. From images of corporate raiding, to luxury speedboats, to offshore accounts in the Cayman Islands, to mega-mansions in the Hamptons, this week’s stories suggest that the candidacy of Mitt Romney – poster-boy for the symbiotic relationship between big money and the modern Republican party – is in serious trouble.

Last weekend’s photos of the Romney clan on a luxury speedboat cruising around a lake in New Hampshire, where their multimillion-dollar compound sits, were startling in their tone-deafness. And just to make sure the sentiment wasn’t lost on anyone, at a campaign event the same week, Obama recounted childhood memories of touring the US with his grandmother by Greyhound bus, even the thrill of staying at a Howard Johnson motel. In a smart political calculation, the Obamas chose to forgo their annual summer vacation in Cape Cod (a nice upper-middle class vacation spot, mind you, but nowhere near the same league as the Romney estate). Instead, Obama was photographed visiting a senior citizens’ home in the battleground state of Ohio. [..]

Taking the hint, the Obama administration is finally positioning itself on the firmly on the side of progressives, attacking income inequality and holding Republicans accountable for their assaults on the middle and working classes. How ironic it would be if, after all, the other side’s big money is the answer to the Democrats’ prayers.

On This Day In History July 13

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 13 is the 194th day of the year (195th in leap years) in the Gregorian calendar. There are 171 days remaining until the end of the year.

On this day in 1930, the first two World Cup matches took place simultaneously on 13 July and were won by France and USA, who defeated Mexico 4-1 and Belgium 3-0 respectively. The first goal in World Cup history was scored by Lucien Laurent of France. In the final, Uruguay defeated Argentina 4-2 in front of a crowd of 93,000 people in Montevideo, and in doing so became the first nation to win the World Cup.

Previous international competitions

The world’s first international football match was a challenge match played in Glasgow in 1872 between Scotland and England, which ended in a 0-0 draw. The first international tournament, the inaugural edition of the British Home Championship, took place in 1884. At this stage the sport was rarely played outside the United Kingdom. As football grew in popularity in other parts of the world at the turn of the 20th century, it was held as a demonstration sport with no medals awarded at the 1900 and 1904 Summer Olympics (however, the IOC has retroactively upgraded their status to official events), and at the 1906 Intercalated Games.

After FIFA was founded in 1904, it tried to arrange an international football tournament between nations outside the Olympic framework in Switzerland in 1906. These were very early days for international football, and the official history of FIFA describes the competition as having been a failure.

At the 1908 Summer Olympics in London, football became an official competition. Planned by The Football Association (FA), England’s football governing body, the event was for amateur players only and was regarded suspiciously as a show rather than a competition. Great Britain (represented by the England national amateur football team) won the gold medals. They repeated the feat in 1912 in Stockholm, where the tournament was organised by the Swedish Football Association.

With the Olympic event continuing to be contested only between amateur teams, Sir Thomas Lipton organised the Sir Thomas Lipton Trophy tournament in Turin in 1909. The Lipton tournament was a championship between individual clubs (not national teams) from different nations, each one of which represented an entire nation. The competition is sometimes described as The First World Cup, and featured the most prestigious professional club sides from Italy, Germany and Switzerland, but the FA of England refused to be associated with the competition and declined the offer to send a professional team. Lipton invited West Auckland, an amateur side from County Durham, to represent England instead. West Auckland won the tournament and returned in 1911 to successfully defend their title. They were given the trophy to keep forever, as per the rules of the competition.

In 1914, FIFA agreed to recognise the Olympic tournament as a “world football championship for amateurs”, and took responsibility for managing the event. This paved the way for the world’s first intercontinental football competition, at the 1920 Summer Olympics, contested by Egypt and thirteen European teams, and won by Belgium. Uruguay won the next two Olympic football tournaments in 1924 and 1928. Those were also the first two open world championships, as 1924 was the start of FIFA’s professional era.

Due to the success of the Olympic football tournaments, FIFA, with President Jules Rimet the driving force, again started looking at staging its own international tournament outside of the Olympics. On 28 May 1928, the FIFA Congress in Amsterdam decided to stage a world championship itself. With Uruguay now two-time official football world champions and to celebrate their centenary of independence in 1930, FIFA named Uruguay as the host country of the inaugural World Cup tournament.

The national associations of selected nations were invited to send a team, but the choice of Uruguay as a venue for the competition meant a long and costly trip across the Atlantic Ocean for European sides. Indeed, no European country pledged to send a team until two months before the start of the competition. Rimet eventually persuaded teams from Belgium, France, Romania, and Yugoslavia to make the trip. In total thirteen nations took part: seven from South America, four from Europe and two from North America.

World Cups before World War II

After the creation of the World Cup, the 1932 Summer Olympics, held in Los Angeles, did not plan to include football as part of the schedule due to the low popularity of the sport in the United States, as American football had been growing in popularity. FIFA and the IOC also disagreed over the status of amateur players, and so football was dropped from the Games. Olympic football returned at the 1936 Summer Olympics, but was now overshadowed by the more prestigious World Cup.

The issues facing the early World Cup tournaments were the difficulties of intercontinental travel, and war. Few South American teams were willing to travel to Europe for the 1934 and 1938 tournaments, with Brazil the only South American team to compete in both. The 1942 and 1946 competitions were cancelled due to World War II and its aftermath.

2012 Le Tour – Stage 12

Saint-Jean-de-Maurienne / Annonay Davézieux (140.4 miles)

Le.  Tour.  De.  France.

You see, it’s not just the 1:26.  You can think of scenarios where you could make that time back.  Nope, it’s the fact that you now need 3 buses and Cadel Evans has demonstrated that he’s not even close to finding a solution to any of the other contenders.

Yes, we have Medium Mountains today.  Two category 1s and a category 3 with the Award point after the two category one climbs.  However much the commentators and organizers may wish it however, it doesn’t seem like that’s any kind of advantage for Evans.  He can’t out climb, out sprint, or out trial them, what exactly is he supposed to do?

Mark Renshaw, Bauke Mollema, Rob Ruijgh, Gustav Larsson, and Lieuwe Westra had to withdraw yesterday, Fabian Cancellara did not start so he could visit his wife and newborn.  Alessandro Petacchi and Yuriy Krivtsov were outside the time limit.  Jean-François Pescheux, the official site analyst, thinks that many more Sprinters will be forced out today.

General Classification

Place Rider Team Time/Delta
1 WIGGINS Bradley SKY PROCYCLING 48:43:53
2 FROOME Christopher SKY PROCYCLING +02:05
3 NIBALI Vincenzo LIQUIGAS-CANNONDALE +02:23
4 EVANS Cadel BMC RACING TEAM +03:19
5 VAN DEN BROECK Jurgen LOTTO-BELISOL TEAM +04:48
6 ZUBELDIA Haimar RADIOSHACK-NISSAN +06:15
7 VAN GARDEREN Tejay BMC RACING TEAM +06:57
8 BRAJKOVIC Janez ASTANA PRO TEAM +07:30
9 ROLLAND Pierre TEAM EUROPCAR +08:31
10 PINOT Thibaut FDJ-BIGMAT +08:51

Coverage is customarily on Vs. (NBC Sports) starting at 6:30 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-

Double Digit Growth Is Not ‘Normal’

Our idiot ‘Masters of the Universe’ who can’t even make money on carry trades at 0% borrowing costs are soon going to learn that 10%+ return on investment is not part of the Constitution or Bill of Rights.

Get ready for the end of record corporate profits

By MATTHEW CRAFT, AP Business Writer

6 days ago

For almost three years, no matter what has rattled the financial markets – a debt crisis in Europe, high gasoline prices, a slower economy – investors have been soothed by rising corporate profits.



Over recent weeks, a motley collection of chain stores, steel producers and technology titans have warned of slowing profits. They all point to similar culprits – flagging sales to Europe and slower economic growth in China.



“You’ve seen the evidence,” says Adam Parker, chief U.S. equity strategist at Morgan Stanley, the investment bank. “A ton of companies have already told you the economy is slowing.”

The list of companies that have warned of trouble is long and varied, and includes well-known names such as McDonald’s, Cisco, Starbucks and Tiffany & Co.

Add them up, and 94 companies have lowered their estimates for this earnings season, which begins on Monday when Alcoa, the aluminum maker, reports its results. Only 26 have raised their estimates.

Morgan Stanley’s research team says the ratio hasn’t been that lopsided toward the negative since the summer of 2001, when the economy was in the middle of an eight-month recession brought on by the bursting of a bubble in technology stocks.

Shares Fall for a Sixth Day

By THE ASSOCIATED PRESS

Published: July 12, 2012

Wall Street stocks slid for a sixth consecutive day on Thursday as concern spread that weaker global economic growth and the European debt crisis would hurt American corporate earnings. The Standard & Poor’s 500-stock index was headed for its longest losing streak since mid-May.



Aluminum maker Alcoa, which started the second-quarter earnings season on Monday, reported weak revenue because of the faltering global economy. Fastenal, an American industrial distributor, reported revenue Thursday that was weaker than analysts had expected.

Marriott, the hotel operator, and Progressive, an insurance company, both fell after reporting weak financial results.



Supervalu, the supermarket operator, plunged by nearly half after it reported a sharp drop in net income late Wednesday and suspended its dividend. The company owns Albertsons, Jewel-Osco and Save-A-Lot.

Supervalu’s losses dragged on a rival grocery chain, Safeway, which fell 10.5 percent. Safeway’s was the biggest percentage decline in the S.&P. 500 index.

The weak corporate results will probably lead analysts to lower their quarterly earnings forecasts for the entire S.&P. 500, said John Fox, a co-manager of the FAM Value Fund, which specializes in small and medium-sized companies.



New numbers to be released on Friday are expected to show that China’s growth in the second quarter fell to 7.3 percent from the previous quarter’s 8.1 percent, which was a three-year low. Revenue from the construction, shipbuilding and export manufacturing industries might have been cut in half since last year.

RICO Money Laundering

Because LIBOR Investor Fraud is so yesterday.

HSBC Reveals Problems With Internal Controls

By LANDON THOMAS JR. and MARK SCOTT, The New York Tmes

July 12, 2012

The money laundering, which a U.S. Senate subcommittee indicates was linked to terrorism and drug deals, could result in HSBC’s paying fines of up to $1 billion, according to analysts.



In the case of the money laundering, the U.S. authorities have been examining HSBC for several years. On Tuesday, officials from the bank are set to testify in Washington before the Senate Permanent Subcommittee on Investigations. A subcommittee spokesman declined on Thursday to discuss the investigation, but the panel’s Web site describes the agenda: “a hearing on the money laundering and terrorist financing vulnerabilities created when a global bank uses its U.S. affiliate to provide U.S. dollars, U.S. dollar services, and access to the U.S. financial system to high risk affiliates, high risk correspondent banks, and high risk clients, using HSBC as a case study.”



Adding another political wrinkle: HSBC’s former chairman, Stephen Green, who was in office from 2006 to 2010 when many of the money-laundering detection problems occurred, is currently the trade minister in British prime minister David Cameron’s government. Mr. Green’s office did not reply to a request for comment on Thursday.

HSBC braced for huge U.S. penalty

By Sharlene Goff, Financial Times

July 12, 2012

HSBC is to apologise to US lawmakers for failing to have appropriate controls in place to ensure it did not facilitate the financing of terrorism and other criminal activities, transgressions that analysts estimate may cost it up to $1bn in fines.



Mr Gulliver warned that HSBC was likely to face further action from other US authorities in coming months.

HSBC said in its 2011 annual report that fines relating to money laundering issues could be “significant”. There has been speculation among analysts that the bank could be hit with a higher charge than the $619m ING, the Dutch bank, agreed to pay to settle accusations it violated US sanctions by helping Iranian and Cuban companies move billions of dollars through the US financial system. Some have suggested it could be as much as $1bn.

HSBC chief admits bank failed to control money laundering

Dominic Rushe, The Guardian

Wednesday 11 July 2012

In the memo, first reported by Bloomberg News, Gulliver said the hearing would “reveal that in the past we fell well short of the standards that our regulators, customers and investors expect”. He said: “It is right that we be held accountable and that we take responsibility for fixing what went wrong.”



Last month ING, the Dutch bank, paid $619m to settle accusations it helped Iranian and Cuban companies move billions of dollars through the US financial system in violation of US sanctions. Some analysts have suggested HSBC’s fine could be far higher.



William Black, professor of economics and law at University of Missouri Kansas City, said: “There is a theme developing in Washington that the City of London is evil, that it has a corrupt culture.”

He said that while the view might not be fair, the JP Morgan scandal, Libor and now HSBC meant it was a theme that was likely to be developed. “We like to blame someone else,” he said.

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.

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.

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.

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-

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.

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