08/07/2012 archive

Coalition deadlock as Nick Clegg and David Cameron veto each other

Patrick Wintour, The Guardian

Monday 6 August 2012

Nick Clegg’s plan for constitutional reform and David Cameron’s scheme to shift parliamentary boundaries in the Conservatives’ favour both lay in ruins on Monday as victims of the prime minister’s inability to persuade his backbenchers to support an elected House of Lords.

A subdued and depressed Clegg announced he was abandoning all plans to reform the Lords in this parliament, adding as a result he will also be instructing his MPs to vote down revised parliamentary boundaries designed to reduce the number of MPs to 600.

…

The announcement represents a personal blow to Clegg, who had championed widescale political reform as a distinctive Liberal Democrat contribution to the coalition but has been thwarted at virtually every turn.

It leaves the deputy prime minister increasingly reliant on an upturn in the economy, progress on social mobility and a broader liberal agenda to justify the original decision to form the coalition with Cameron.

…

Clegg was eager on Monday to limit the damage from the collapse of Lords reform – insisting the government would still be anchored in the centre ground, and focused on delivering a revival of the economy, the reason the coalition agreement was made in the first place. He said a relationship of mutual trust and respect could be maintained with his partners.

Sucker or Liar?

UK coalition in crisis over parliamentary reform

By Tim Castle and Mohammed Abbas, Reuters

Mon Aug 6, 2012 2:56pm

The scuppering of Lords reform, a key plank of the coalition agreement struck in May 2010 with Cameron’s Conservatives, is particularly damaging for Clegg as it fuels the perception that the Liberal Democrats have gained little from going into government with a party that was not their ideological ally.

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However, neither governing party is eager to sink the coalition and spark an election during a recession, and while polls show both parties are unpopular.

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Dropping Lords reform is especially difficult for his party because he backed an unpopular proposal to increase university tuition fees as part of the coalition deal, a move that saw the Liberal Democrats hemorrhage support in opinion polls.

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Jeremy Hunt, a Conservative minister, said Clegg’s announcement was disappointing but said the coalition would remain focused on its economic program.

“There isn’t a cigarette paper between us on that. That is what we are focused on getting the gold medal for. Nothing is going to change that focus,” he told Sky television.

Electoral Victory?  Hah, hah, hah, hah, hah.  They don’t care about that any more over there than they do over here.

Here’s what Nick Clegg sold his soul and his party for that he’s not going to get-

Cracks in British Governing Coalition as House of Lords Overhaul Falls Apart

By JOHN F. BURNS, The New York Times

Published: August 6, 2012

As the perennial third party in British politics, the Liberal Democrats have long regarded an elected upper chamber as a potential steppingstone beyond the marginal role the party and its historical progenitor, the Liberals, have played in British politics since the 1930s.

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(T)he Conservatives’ push to change the electoral rules to bring parliamentary constituencies closer to a nationwide norm in terms of overall voter numbers, from the present system that requires many more votes to win a Conservative seat, on average, than a Labour one.

The change was one that political experts saw as capable of delivering 20 or more seats to the Conservatives at the cost of the opposition Labour Party, a potentially decisive margin in a close contest.

The proposed changes in the House of Lords would have nearly cut in half the size of the upper chamber, from its present membership of 826 to 450, and made 80 percent of the body elective by 2025, with one-third of its elected membership chosen at each of three successive general elections beginning in 2015.

Instead of the current practice of peers gaining appointment on the recommendation of the prime minister or other political leaders, 360 of the 450 House of Lords’ members would have to compete for seats in regional elections. Proportional voting rules for the contests would have favored smaller parties like the Liberal Democrats more than the current system used in elections to the House of Commons.

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The abandonment of the reform package has been a deep personal blow to Mr. Clegg, exposing him ever more starkly as a man caught between a strong commitment to sustaining the coalition until the election and a gathering revolt among a powerful bloc of Liberal Democrats who have come to regard the partnership with the Conservatives as dragging them away from their core political beliefs on social issues like education, health, immigration and justice.

Exceptional.

“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”.

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New York Times Editorial: Business Fears the Fiscal Cliff

So it turns out that federal spending is important to the economy after all.

As Nelson Schwartz reported in The Times on Monday, a number of manufacturers say they are canceling plans for investing and hiring, in part, because they fear that some $100 billion in budget cuts will take effect in 2013. In all, the law currently calls for $1.2 trillion in automatic spending cuts over 10 years, starting Jan. 1, divided between nondefense programs and defense projects.

Republican lawmakers demanded the cuts last year as part of their brinkmanship over the debt ceiling, and business lobbies have generally supported slashing the deficit. But now that the cuts are imminent, corporate executives seem to have realized that the last thing the economy needs is a large budget cut across the board.

Gore Vidal: Gore Vidal Speaks Seriously Ill of the Dead

The following was first published March 20, 2008 at Truthdig

I can recall that day in the 1930s when a “news” (sic) magazine appeared in Washington, D.C.; it was called Newsweek: meant to be a counterbalance to Time Magazine’s uncontrollable malice. In due course the two became sadly alike as Vincent Astor morphed into Henry Luce: Was it something in the water? I once asked Henry Luce why he called Time a news magazine when it was simply Uncle Harry’s means of venting his rage (this was 1960 or so) at liberals, and “degenerate art” like the plays of Tennessee Williams-he had no answer. At Newsweek Vincent Astor was far too stupid to answer any such complaint. Now here we are in the Newsweek of 2008, and it’s still lousy. There have been a few decent writers in between that were less nutty than today’s Newsweek hacks. [..]

The unique mess that our republic is in can be, in part, attributed to a corrupt press whose roots are in mendacious news (sic) magazines like Time and Newsweek, aided by tabloids that manufacture fictional stories about actual people. This mingling of opinion and fiction has undone a media never devoted to truth. Hence, the ease with which the Republican smear-machine goes into action when they realize that yet again the party’s permanent unpopularity with the American people will cause them defeat unless they smear individually those who question the junk that the media has put into so many heads. Anyone who says “We gotta fight ’em over there or we’re gonna have to fight ’em over here.” This absurdity has been pronounced by every Republican seeking high office. The habit of lying is now a national style that started with “news” magazines that was further developed by pathological liars that proved to be “good” Entertainment on TV. But a diet of poison that has done none of us any good.

I speak ex cathedra now, ad urbe et orbe, with a warning that no society so marinated in falsity can long survive in a real world.

Leaving a sinking ship-

As Libor Fault-Finding Grows, It Is Now Every Bank for Itself

By AZAM AHMED and BEN PROTESS, The New York Times

August 5, 2012

Major banks, which often band together when facing government scrutiny, are now turning on one another as an international investigation into the manipulation of interest rates gains momentum.

With billions of dollars and their reputations on the line, financial institutions have been spreading the blame in recent meetings with authorities, according to government and bank officials with knowledge of the matter.

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Authorities around the world are investigating more than 10 big banks for their roles in setting global interest rates like the London interbank offered rate, or Libor. Such benchmarks underpin trillions of dollars of financial products, including mortgages and student loans.

Regulators are examining whether banks colluded to move the rates up or down to get extra profits and limit losses on their trading positions. Some banks are also under investigation for reporting artificially low rates to make themselves appear financially healthier.

When banks first started conducting internal investigations at the behest of regulators two years ago, they figured the potential penalties would be manageable, according to bank officials.

But the size of the Barclays settlement and the growing public outcry have left banks scrambling to limit their culpability as the threat of criminal actions increases. Part of the banks’ problem is that their internal investigations have created a road map that authorities are using to pursue criminal and civil cases.

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The financial industry often tries to negotiate a common deal to avoid getting singled out for bad behavior. This year, five banks collectively struck a multibillion-dollar agreement with federal authorities to address foreclosure abuses.

With the rate investigation, institutions are not sharing information or even discussing the case with rivals, according to lawyers involved in the matter. In part, they do not want to appear to have close ties with their rivals, since such cozy relationships are part of the government’s inquiry.

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The Justice Department is aiming to file criminal actions against two banks before the end of the year and is preparing to arrest former traders at Barclays and other banks, according to government officials. In addition, state attorneys general and local district attorneys have approached the Justice Department in recent weeks, seeking a role in the case.

Coming home to roost-

Banks face valuation losses

Reuters

August 6, 2012

Global banks are delaying what will be an inevitable shift to valuing unsecured derivative positions at market rates because it could hit their bottom lines, but new global prudential regulations next year are set to force their hands.

Traders and accountants have known for some time what is only becoming apparent to the public now – the London Interbank Offered Rate or Libor, the interbank funding rate now at the centre of a rigging scandal, is not the appropriate price to value most derivative deals on banks’ books.

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As of now, no one’s quite sure how entities with huge discrepancies in funding costs will arrive at a market standard for pricing unsecured trades.

FVA, or funding valuation adjustment, is a bitter pill to swallow. In the simplest terms, it means traders have to absorb the rise in borrowing costs over the past four years into the way they price a swap, pay for an option or discount future cash flows from long-term derivatives.

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All that’s clear is the absence of collateral makes these trades riskier, and the economic case for revised valuations is strong.

The Basel III reforms, which kick in from next year, prescribe capital requirements for unfunded deals. The amount of margin banks will have to post with their clearing agents will likewise build as interest rate swaps, currency forwards and other over-the-counter derivatives are mandatorily cleared on exchanges.

Sharks in the water-

Libor, the New Asbestos

By Roben Farzad, Business Week

August 01, 2012

These are parched times for law firms. Clients just aren’t willing to pay what they used to for associates’ billable souls.

How fortuitous then that a multitrillion-dollar financial scandal promises to throw the lawsuit industry beaucoup fees, from both the alleged aggressors and their aggrieved. Thanks to the Barclays blowup, we now know that Libor, the most widely used and quoted benchmark for valuing about $360 trillion in financial products, has been rather rigged. Throw in the fact that this gauge is set by Wall Street, the villain à la mode, and a heretofore harmless interest rate could join the likes of asbestos and tobacco in one-word liability infamy.

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Libor is so ubiquitously baked into the world of financial products that it is hard to get a sense of the extent of who exactly was done wrong and by how much. Libor-related litigation “has the potential to be the biggest single set of cases coming out of the financial crisis, because Libor is built into so many transactions and Libor is so central to so many contracts,” says Harvard Law School professor John Coates. “It’s like saying reports about the inflation rate were wrong.” Or like asbestos, which was built into everything from ships to cars to houses before blowing up into the most expensive mass tort action in history.

Seems Discovery is right on time.

I’ve been disappointed so often it’s hard to get enthusiastic, but facts are stubborn things and the current corrupt Merchantilist system is not going to be able to satisfy even its own ‘beneficiaries’.  It wasn’t the peasants who demanded the Magna Carta, it was the Barons.

Adam Smith, The Wealth of Nations, Book 4 Chapter 8–

But in the system of laws which has been established for the management of our American and West Indian colonies, the interest of the home-consumer has been sacrificed to that of the producer with a more extravagant profusion than in all our other commercial regulations. A great empire has been established for the sole purpose of raising up a nation of customers who should be obliged to buy from the shops of our different producers all the goods with which these could supply them. For the sake of that little enhancement of price which this monopoly might afford our producers, the home-consumers have been burdened with the whole expence of maintaining and defending that empire. For this purpose, and for this purpose only, in the two last wars, more than two hundred millions have been spent, and a new debt of more than a hundred and seventy millions has been contracted over and above all that had been expended for the same purpose in former wars. The interest of this debt alone is not only greater than the whole extraordinary profit which it ever could be pretended was made by the monopoly of the colony trade, but than the whole value of that trade, or than the whole value of the goods which at an average have been annually exported to the colonies.

It cannot be very difficult to determine who have been the contrivers of this whole mercantile system; not the consumers, we may believe, whose interest has been entirely neglected; but the producers, whose interest has been so carefully attended to; and among this latter class our merchants and manufacturers have been by far the principal architects. In the mercantile regulations, which have been taken notice of in this chapter, the interest of our manufacturers has been most peculiarly attended to; and the interest, not so much of the consumers, as that of some other sets of producers, has been sacrificed to it.

Here are some of the good guys in Congress who are trying to protect our freedoms under the Fourth Amendment:

Merkley Introduces Bill to Prevent Warrantless Surveillance of Americans

Under amendments to FISA passed during the Bush administration, the intelligence agencies may conduct warrantless wiretapping, potentially collecting vast amounts of communications and data, so long as they reasonably believe the communications involve individuals who are located outside of the United States and who are not U.S. citizens. However, there are loopholes in the current statute that could permit the intelligence community to intentionally or unintentionally collect and store the communications of American citizens and others living in the U.S. and to mine data collected from Americans without a warrant.  National security agencies have not even released estimates of how often Americans’ communications are swept up by the warrantless wiretapping program.  [..]

“Keeping Americans safe versus protecting American’s privacy is a false choice. We have a moral and Constitutional duty to do both,” Merkley said. “We can ensure our government has the tools to spy on our enemies without giving it a license to intrude into the private lives of American citizens.  This bill will establish new safeguards to respect the principles of the Fourth Amendment protections from government intrusion without a warrant while ensuring that the intelligence community has the tools it needs to combat terrorism.” [..]

“This bill will give the FISA Amendments Act the overhaul it so desperately needs, restraining the government from unconstitutionally collecting and using vast amounts of data about innocent Americans,” said Michelle Richardson, ACLU Legislative Counsel. “These amendments would allow collection against foreigners to continue while better protecting Americans and should be considered a win-win for both the intelligence community and the Constitution.”  

Wyden Places Hold on FISA Amendments Act Extension

Warns that Loophole Gives Government the Ability to Circumvent Warrant Requirements to Spy on U.S. Citizens

Wyden identified two specific concerns that he believes Congress must address before agreeing to a long-term extension of FAA’s authorities.

The first pertains to the lack of information regarding the number of law-abiding American citizens who have had their communications collected and reviewed under the FISA Amendments Act authorities.  Last Summer, he and Senator Mark Udall asked the Administration for an estimate of the “number of people located in the United States whose communications were reviewed by the government pursuant to the FISA Amendments Act.”  The Office of the Director of National Intelligence responded that it was “not reasonably possible to identify the number of people located in the United States whose communications may have been reviewed under the authority of the FAA.”  Nearly a year later, Congress has yet to receive an estimate of the number of Americans who have had their communications collected under FAA.  

“The purpose of this 2008 legislation was to give the government new authorities to collect the communications of people who are believed to be foreigners outside the United States, while still preserving the privacy of people inside the United States,”  Wyden explains in his hold statement.  “Before Congress votes to renew these authorities it is important to understand how they are working in practice.  In particular, it is important for Congress to better understand how many people inside the United States have had their communications collected or reviewed under the authorities granted by the FISA Amendments Act.”

Wyden’s second concern pertains to what he describes as the law’s inadequate protections against warrantless “back door” searches of Americans.

“I am concerned, of course, that if no one has even estimated how many Americans have had their communications collected under the FISA Amendments Act,” Wyden writes. “Then it is possible that this number could be quite large.  Since all of the communications collected by the government under section 702 are collected without individual warrants, I believe that there should be clear rules prohibiting the government from searching through these communications in an effort to find the phone calls or emails of a particular American, unless the government has obtained a warrant or emergency authorization permitting surveillance of that American.“

David Kravets alerts us to a proposal (pdf) by Rep. Jerrold Nadler (D-NY) and  Rep. John Conyers Jr. (D-MI) that require the government to obtain a probable-cause warrant to access data stored in the cloud:

The law that the measure would amend is the Electronic Communications Privacy Act, which has seen few updates following President Ronald Reagan’s 1986 signature on the measure.

The proposal represents yet another attempt to rewrite legislation that generally grants the government wide powers to access Americans’ cloud-stored data without a probable-case showing. [..]

Adopted when CompuServe was king, ECPA allows the government to acquire a suspect’s e-mail or other stored content from an internet service provider without showing probable cause that a crime was committed, as long as the content had been stored on a third-party server for 180 days or more. E-mail and other cloud-stored data younger than six months is protected by the warrant requirement, as is all data stored on a personal computer drive.

ECPA was adopted at a time when e-mail, for example, wasn’t stored on servers for a long time. Instead it was held there briefly on its way to the recipient’s inbox. E-mail more than six months old on a server was assumed abandoned, and that’s why the law allowed the government to get it without a warrant. At the time there wasn’t much of any e-mail for the government to target because a consumer’s hard drive – not the cloud – was their inbox.

But technology has evolved, and e-mail often remains stored on cloud servers indefinitely, in gigabytes upon gigabytes – meaning the authorities may access it without warrants if it’s older than six months.

The same rule also applies to content stored in the cloud. That includes files saved in Dropbox, communications in Facebook, and Google’s cloud-storage accounts. Such personal storage capabilities were nearly inconceivable when President Reagan signed the bill.

The proposal will probably never be even heard in the radical right wing House committee. Kravets notes that a similar proposal in the Senate by Sen. Patrick Leahy (D-VT) never even got a hearing in the Judiciary Committees that Leahy chairs.

While the Obama administration continues to carry out and expand the Bush/Cheney regime agenda and the obstructionist Republicans and Right wing Democrats unwittingly (or not) help him, there are some people who recognize that security and freedom are not mutually exclusive.

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

August 7 is the 219th day of the year (220th in leap years) in the Gregorian calendar. There are 146 days remaining until the end of the year.

The Northern Hemisphere is considered to be halfway through its summer and the Southern Hemisphere half way through its winter on this day.

On this day in 1947, Kon-Tiki, a balsa wood raft captained by Norwegian anthropologist Thor Heyerdahl, completes a 4,300-mile, 101-day journey from Peru to Raroia in the Tuamotu Archipelago, near Tahiti. Heyerdahl wanted to prove his theory that prehistoric South Americans could have colonized the Polynesian islands by drifting on ocean currents.

Heyerdahl and his five-person crew set sail from Callao, Peru, on the 40-square-foot Kon-Tiki on April 28, 1947. The Kon-Tiki, named for a mythical white chieftain, was made of indigenous materials and designed to resemble rafts of early South American Indians. While crossing the Pacific, the sailors encountered storms, sharks and whales, before finally washing ashore at Raroia. Heyerdahl, born in Larvik, Norway, on October 6, 1914, believed that Polynesia’s earliest inhabitants had come from South America, a theory that conflicted with popular scholarly opinion that the original settlers arrived from Asia. Even after his successful voyage, anthropologists and historians continued to discredit Heyerdahl’s belief. However, his journey captivated the public and he wrote a book about the experience that became an international bestseller and was translated into 65 languages. Heyerdahl also produced a documentary about the trip that won an Academy Award in 1951.

The talk of the town is the Women’s Football Team.  Now many of you know I consider Soccer confusing, low scoring, and slooooooooooooooooooooooooooo…ooooooooooooooooooooow.

Yesterday’s match, which I had the good fortune to catch from about 60 minutes in, was anything but.

4 Goals in 10 minutes!  Last minute score sends it to overtime tied with a 30 second remaining victory!

Almost as exciting as Baseball.

It’s been mighty confusing to see everything I really wanted to (NBC reschedules with no notice, I do the best I can) yet I must say that catching glimpses of the unique events like Fencing and Whitewater Kayaking makes me wish that there was a channel like the old ESPN which would show odd stuff like Lacross and Field Hockey.

Now things like Motor Sports and Shooting have several channels and I’d think narrowcasting the non major sports would find a market.

But then I like Rugby and Darts.

Broadcast Schedule

All this is sourced through the NBC Olympics broadcast schedule.  Competition starts again at 6 am tomorrow.  

Competitions designated by (Medal) will award winners that day.  ‘all’ means not specified.  Sometimes NBC especially does mashups and doesn’t include event or competitor information.  Elimination means no round robin, one and done.

These schedules are a place for you to make sure you don’t miss a sport you like and share your observations.  Have fun today!