09/19/2013 archive

The Congressional Game of Chicken: Debt Ceiling, Default, Crash the Global Economy

Here we go again. The feral children of the House of Representatives, better known as Republicans with a few Democrats added for interest, have decided that they will not raise the debt ceiling  unless the Affordable Care Act (aka Obamacare) is defunded. They realized that just attaching the amendment to the stop gap funding bill to prevent the partial shutdown of the government on October 1 would never pass muster in the Senate. So they decided to go one better:

GOP leaders telegraphed that they would likely concede to the Senate’s demand for a stopgap spending bill shorn of the Obamacare provision but that they would carry on with the fight on legislation to increase the government’s borrowing cap.

“There should be no conversation about shutting the government down,” House Speaker John Boehner, R-Ohio, said. “That’s not the goal here.”

The debt-limit measure, required to allow the government to pay all of its bills on time, would be brought to the House floor as early as next week and would allow the Treasury to borrow freely for one year.

Republicans vow to load that bill with a GOP wish list, including another assault on the health care bill and a provision to force the construction of the Keystone XL pipeline from Canada to Texas Gulf Coast refineries, a project that environmentalists oppose and that the Obama administration so far has refused to approve. Other elements will reflect different Republican budget priorities, including as-yet-undisclosed savings from health care and government benefit programs and steps to speed work on an overhaul of the tax code.

If this sounds familiar,it should. We’ve been down this road in 2011 with the great debate ending in narrowly avoided default and led to the first ever downgrade of America’s credit rating.

At New Economic Perspectives, Joe Firestone, pointed out in his article President Barack Obama has stated that he would not negotiate on raising the debt ceiling but that he was willing to negotiate with the Republicans on the budget on matters including entitlements. He also highlights an exchange that took place on MSNBC’s “NOW with Alex Wagner,” including Alex Wagner, David Corn, Sam Stein and Ezra Klein:

  Sam Stein: . . . you can see the contours of a deal that would upset both parties but palatable. something like in exchange for changes to social security payments, cpi, chained cpi. you could get a reprieve from sequestration. something like that along the lines where both parties are like, well, we don’t really want to do it, but for the sake of making sure we pay our bills – that’s why the republicans keep going there. they know obama care defunding isn’t going to happen, but there are other hostages.

   Alex: why does president obama come to the table at all?

   Ezra: i think that’s the kind of deal they would come to the table on. they would consider that a deal over sequestration. i’m not sure if they would do that exact deal, but the two deals they won’t do are the ones the republicans want. they don’t want that sequestration deal. they want an obama care deal or a debt ceiling deal. they won’t come to the table on those. . .

So, Sam Stein thinks the zombie “chained CPI” lives again, and Ezra agrees, but also thinks that the Republicans will not agree to that unless they get the deals they want. So, once again, the right wing, through their intransigence, may save us from President Obama’s continuing insistence that seniors must suffer now, and future seniors must suffer as well, for the sake of an illusory long-term debt/insolvency problem that doesn’t really exist, and that he can dispel at any moment by minting a $60 T coin.

Meanwhile, the four Versailles “progressives” on this panel laugh at the stupidity of the Republicans who are marching to the doom of their party, while refusing to call attention to the fact that this “funding” crisis, and the previous ones since 2010 were and are all kabuki, since the President could and still can dispel the illusion of possible insolvency any time he chooses to use the power Congress has given him to mint that coin.

So pull up a chair for the latest installment of “The Congressional Game of Chicken.” I’m betting on Curtain 2 with another filibuster threat to make it a really fun and interesting game.

The Cost of Doing Business

JPMorgan Agrees to Pay $920 Million in Fines Over Trading Loss


September 19, 2013, 9:23 am

Extracting the fines and a rare admission of wrongdoing from JPMorgan Chase, the nation’s largest bank, regulators in Washington and London took aim at a pervasive breakdown in controls and leadership at the bank. The deal resolves investigations from four regulators: the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Federal Reserve and the Financial Conduct Authority in London.

But the bank has struggled to settle with another regulator, the Commodity Futures Trading Commission, which is investigating whether the bank’s trading manipulated the market for financial contracts known as derivatives. JPMorgan Chase disclosed on Thursday that the agency’s enforcement staff had recommended the filing of an enforcement action.

Under the deal with the S.E.C., which also brought civil cases against the traders, JPMorgan took the unusual step of acknowledging that it violated federal securities laws. That concession reverses a decade-long policy at the S.E.C. to allow banks to “neither admit nor deny” wrongdoing. It may also expose JPMorgan to private litigation from investors who will seize on the bank’s admissions.

For now, the bank agreed to pay $300 million to the comptroller’s office, and about $200 million to the S.E.C. and each of the other agencies. The comptroller’s office also cited the bank on Thursday for separate failings in the way it collected overdue bills from consumers and military members.

The fines, while collectively steep, fall in between what other banks have paid when settling with multiple regulators. And the fines can be seen as a reasonable trade-off for a bank seeking to move past the trading losses.

Even with the settlement on Thursday, JPMorgan’s regulatory headaches are far from over. On Thursday, both the comptroller’s office and the Consumer Financial Protection Bureau levied fines against the bank for its credit-card practices, including how the bank pursues customers who have fallen behind on their bills.

JPMorgan agreed to pay $80 million in fines to regulators over accusations that the bank duped its credit card customers into buying products pitched as a way to shield them from identity theft. Those products, regulators said, never materialized.

“Put simply, Chase was charging consumers for services that they did not receive,” said Richard Cordray, the director of the Consumer Financial Protection Bureau.

The regulators also faulted JPMorgan for how the bank collects debt from its customers. The federal actions stem from an investigation into debt-collection lawsuits the bank filed against its credit card customers from 2009 to 2011. As JPMorgan churned through a glut of overdue credit card bills and other loans, authorities said, the bank relied on faulty documentation to substantiate the amount owed by consumers. Often, the bank relied on outside law firms without double-checking their work.

The questionable debt-collection practices evoked some of the same tactics banks used to foreclose on homes during the mortgage crisis. Those problems – like robo-signing, where bank employees and outside lawyers churned through mountains of foreclosure documents without vetting them for errors – were at the center of a sweeping deal between the nation’s biggest banks and the comptroller’s office.

On Thursday, the regulators took aim at the lawsuits JPMorgan filed to recover money on unpaid bills. According to the comptroller’s office, JPMorgan relied on sworn legal documents that had not been reviewed for accuracy. The bank also flouted a federal law that governs how lenders collect overdue bills from military members, the comptroller’s office said.

JPMorgan Pays Small Fine For Lying To Regulators And Manipulating Market

By: DSWright, Firedog Lake

Thursday September 19, 2013 8:58 am

You had to see this coming. After lying to regulators, manipulating the market, and putting out fraudulent documents JPMorgan will pay a relatively small fine and move on. Because when the powerful repeatedly break the law the consequences are never very severe. If we stopped these Wall Street banksters from making criminal profits they might stop making criminal profits – then where would our economy be?

Well, as long as they learned their lesson. Never mind that JPMorgan reported $6.5 billion in profits last quarter. So of course a fine significantly less than 3 months profit will really make them shudder. It’s all about incentives people.

The one regulator that hasn’t taken a dive so far is the CFTC which has refused to settle unless JPMorgan admits market manipulation. Lets hope they don’t cave. Though it seems their regulatory colleagues just left them alone in the desert.

(W)hat is the penalty for that crime for 99% of Americans? Someone audits you or your business and you “fail to turn over significant information” to an auditor? I’ll give you a hint, it wouldn’t be a relatively small fine. Actually it would be a very large fine and possibly a government mandated visit to a correctional facility. But that’s what you get for not being rich enough to bribe Congress.

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”.

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The New York Times Editorial Board: The March to Anarchy

Until now, the only House Republicans pushing for a government shutdown and debt crisis were a few dozen on the radical right, the ones Senator, Harry Reid, the majority leader, referred to as “the anarchists.” On Wednesday, however, the full Republican caucus, leadership and all, joined the anarchy movement, announcing plans to demand the defunding of health care reform as the price for keeping the government open past Sept. 30. [..]

Mr. Boehner is playing the dangerous game of trying to placate the extremists for a few days. But, in the end, the burden will be squarely on his shoulders. If he allows the entire House, including Democrats, to vote on straightforward measures to pay for the government and raise the debt limit, the double crisis will instantly end. If he does not, he will give free rein to his party’s worst impulses.

Richard (RJ) Eskow: Your Household Lost Seven Thousand Dollars Last Year. Where Did It Go?

If you’ve read the new Census Bureau on income, poverty, and health insurance you may be asking yourself: Where did our seven thousand dollars go?

We’re inundated with economic numbers every day, so let’s just consider that one figure for a moment: Seven thousand dollars. Actually, the statistics tell us that the figure for your household is probably even larger than that. The average under-65 household in the United States has lost $7,490 in annual income since the year 2000, according to 2012 census data. [..]

That’s a lot of money for most people. And it raises the question: If the average household — if your household — didn’t get that money, who did?

Bruce Fein: American Exceptionalism Challenged

Russian President Vladimir Putin provoked widespread scorn among America’s chattering class for employing The New York Times’ editorial pages as a megaphone to scold the United States for hubris, i.e., a belief in its saintliness and destiny to lead the planet, a.k.a. American Exceptionalism. The pretentious pundits rebuked the messenger as ill-suited to deliver the message. True enough. President Putin’s Russia exhibits more warts than the United States.

But Putin’s detractors have been unable to answer his message. It echoed the admonition against British messianism voiced more than two centuries ago by Edmund Burke, British statesman and champion of the American Revolution in a futile attempt to forestall the self- ruination of the British Empire:

I dread our own power and our own ambition. I dread our being too much dreaded. It is ridiculous to say we are not men, and that, as men, we shall never wish to aggrandize ourselves.

Amy Goodman: Americans Say No to Another Middle East War

The likelihood of peace in Syria remains distant, as the civil war there rages on. But the grim prospect of a U.S. strike has been forestalled, if only temporarily, preventing a catastrophic deepening of the crisis there. The American people stood up for peace, and for once, the politicians listened. Across the political spectrum, citizens in the U.S. weighed in against the planned military strike. Members of Congress, Democrat and Republican, were inundated with calls and emails demanding they vote “no” on any military authorization.

The media credits Russian President Vladimir Putin with extending a lifeline to President Barack Obama, allowing him a diplomatic way to delay his planned attack. But without the mass domestic public outcry against a military strike, Obama would not have needed, nor would he likely have heeded, an alternative to war.

Robert Creamer; Want to Cut Food Stamp Costs? Raise the Minimum Wage

This week the Tea Party House Republicans plan to bring a bill to the floor that would slash funding for food assistance to poor families. The program used to be known as “food stamps.” Now it is called the Supplemental Nutritional Assistance Program (SNAP). [..]

But the real dirty secret of food stamps is that the primary beneficiaries are often giant corporations who pay their employees poverty wages, counting on food stamps, Medicaid and other forms of government assistance as indirect subsidies to their wealthy stock holders.

In fact, the quickest way to cut food assistance spending would be to raise the minimum wage to assure that no one who worked full-time would live in poverty.

Ana Marie Cox: What not to say after a mass shooting

To talk gun control just after a trauma like the navy yard shooting would be ‘politicising’. No, we need to debate it every day

Mass shootings are still, statistically, quite rare in the United States (though not as rare as they are in rest of the world). Still, there are enough of them that our reactions, especially on social media, are ritualized: an outpouring of shock and panic is followed by a flurry of misinformation; Monday’s navy yard shooting saw two news outlets confidently reporting the name of the shooter only to retract it within minutes. [..]

Understandably, only the optimists get a pass from the hyper-vigilant emotional etiquette police of Twitter. In fact, the call to “not politicize” the event is as much a part of the formal exercise as wreath-layings and lapel ribbons.

Recently, though, more commenters have come to recognize that refusing to contextualize a tragedy is also a political act – a tacit form of approving the status quo.

It Be International Talk Like A Pirate Day!

The Pastafarian Service Council wants to remind you that today, September 19th, be International Talk Like A Pirate Day.

As Slushy the Polar Bear says-

“Only you can prevent Global Warming.  Arrgh.”

PhotobucketAhoy mateys.  It be Cap’n Hank Bloodbeard hijacking your blog ag’in.  Since the establishin’ of International Talk Like a Pirate Day in 1995, the number of Pirates has increased gratifyin’ly thereby proving the success of our Pastafarian Pirate Recruitin’ Program and confirmin’ the link between increased piracy and declinin’ Global Warmin’.

But wait ye say, Global Warmin’ has gotten worse and Pastafarianism is a made up religion contrived out of equal measures of ennui, ignorance and Rum!

WHY IS THERE NEVER ANY RUM!  Oh, that’s why.

Ye scurvy dog, them be fightin’ wards.  Ye’ll walk the plank. I’ll keelhaul ye.  I’ll see your black hearted soul in Davey Jones Locker (the one ‘e shares w’ Peter Toth).

We used to worry about that too until we took up w’ a crew o’ Freshwater Pirates from the Chicago School who explained that it doesn’t matter how consistently and thoroughly wrong ye are if ye suck up to rich people enough and parrot their prejudices, beat down the po’ folk until morale improves, and kiss their ass long and hard.  Take what ye can, give nothin’ back, yo ho.

Polly want a grant?

E’en on these shores Cap’n Bloodbeard (aside from really enjoyin’ referin’ to hisself in the thard person) be known for ‘is trail of terror and carnage and really bad puns.

I generally celebrate International Talk Like a Pirate Day by telling the 3 Pirate Jokes.  There are only 3, all the others are just variations.  As Cap’n Slappy says:

Thar be only three pirate jokes in the world. The biggest one is the one that ends with someone usin’ “Arrr” in the punchline. Oh, sure, thar be plenty o’ these, but they’re all the same damn joke.

“What’s the pirate movie rated? – Arrr!”

“What kind o’ socks does a pirate wear? – Arrrrgyle!”

“What’s the problem with the way a pirate speaks? – Arrrrticulation!”

…and so forth.

The second joke is the one wear the pirate walks into the bar with a ships wheel attached to the front o’ his trousers. The bartender asks, “What the hell is that ships wheel for?” The pirate says, “I don’t know, but it’s drivin’ me nuts!”

And finally. A little boy is trick or treatin’ on Halloween by himself. He is dressed as a pirate. At one house, a friendly man asks him, “Where are your buccaneers?” The little boy responds, “On either side o’ me ‘buccan’ head!”

And there ye have it. A symposium on pirate humor that’ll last ye a lifetime – so long as life is violent and short.

If ye steer a course to the official website of International Talk Like A Pirate Day, ye may wish to read the FAQ, to help ye splice the mainbrace proper like.  Then ye’ll be ready to talk like a pirate.

Talking like a pirate, however, doesn’t just mean running through the hallways yelling “yarr!” at everyone. To get more in touch with one’s inner pirate, here is a short list of useful terms that may help readers throughout their day of pillaging and searching for buried treasure.

I also spend this day in Worship at Church and emulate the manners, customs, and language o’ me Pirate forbearers (I have the good fortune to be 1/4 full blooded Pirate through my Viking ancestors, indeed Viking is a verb which means ‘Pirate’) and singing some Pirate Carols.

There will come a time when you have a chance to do the right thing.

I love those moments. I like to wave at them as they pass by.

On This Day In History September 19

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.

September 19 is the 262nd day of the year (263rd in leap years) in the Gregorian calendar. There are 103 days remaining until the end of the year.

On this day in 1796, President George Washington’s Farewell Address to the Nation is published.

George Washington’s Farewell Address was written to “The People of the United States” near the end of his second term as President of the United States and before his retirement to Mount Vernon.

Originally published in David Claypoole’s American Daily Advertiser on September 19, 1796 under the title “The Address of General Washington To The People of The United States on his declining of the Presidency of the

United States,” the letter was almost immediately reprinted in newspapers across the country and later in a pamphlet form. The work was later named a “Farewell Address,” as it was Washington’s valedictory after 45 years of service to the new republic, first during the Revolution of the Continental Army and later as the nation’s first president.

The letter was originally prepared in 1792 with the help of James Madison, as Washington prepared to retire following a single term in office. However, he set aside the letter and ran for a second term after his Secretary of the Treasury, Alexander Hamilton, and his Secretary of State, Thomas Jefferson, convinced him that the growing divisions between the newly formed Federalist and Democratic-Republican parties, along with the current state of foreign affairs, would tear the country apart in the absence of his leadership.

Four years later, as his second term came to a close, Washington revisited the letter and with the help of Alexander Hamilton prepared a revision of the original draft to announce his intention to decline a third term in office; to reflect the emerging issues of the American political landscape in 1796; and to parting advice to his fellow Americans, express his support for the government eight years following the adoption of the Constitution; and to defend his administration’s record.

The letter was written by Washington after years of exhaustion due to his advanced age, years of service to his country, the duties of the presidency, and increased attacks by his political opponents. It was published almost two months before the Electoral College cast their votes in the 1796 presidential election.

No Nukes for Iran or What We Have Always Known

On August 3, 2013, Hassan Rouhani took over the office of president of Iran, its seventh since the overthrow of the shah. He succeeded Mahmoud Ahmadinejad, the controversial conservative who was most likely elected as a reaction to the US President George W. Bush calling Iran part of his “axis of evil” and UN sanctions. President Rouhani, a devote Muslim, is also a lawyer, academic and diplomat. He headed Iran’s former nuclear negotiating team and was the country’s top negotiator with the UK, France, and Germany on Iran’s nuclear program. He has been steadily reaching out to the world using a unique tool, Twitter. Yeah, he tweets and sent his blessing to Jews worldwide on Rosh Hashanah.

And he isn’t the only member of the Iranian government that Tweets, so does Foreign Minister Javad Zarif. He had a very interesting exchange with Christine Pelosi, daughter of U.S. House Minority Leader Nancy Pelosi:

It would seem that rational heads have taken charge. Indeed they have. In the latest sign that he is reaching out to thaw the relationship with the US, Pres. Rouhani granted an interview with NBC News national and international correspondent Ann Curry who pointedly asked him about Iran’s intent to acquire nuclear weapons. Not surprising to anyone who pays close attention to the politics of Iran, Pres. Rouhani clearly stated the Iran will never develop nuclear weapons.  

Pres. Rouhani confirmed that he has exchanged letters with President Barack Obama and is hoping to meet with him next week at the UN General Assembly in New York City.

A meeting could go a long way to cooling the militarist rhetoric that has dominated any discussion about the Middle East and move to ease the sanctions imposed by the international community on Iran that have mostly impacted the less fortunate Iranians.

The ball is now in President Obama’s court.