November 2013 archive

JP Morgan Chase is once again under investigation by the Department of Justice. This time for possibly bribing the daughter of the Chinese prime minister with a lucrative business deal to gain preferential treatment on the Chinese markets.

To promote its standing in China, JPMorgan Chase turned to a seemingly obscure consulting firm run by a 32-year-old executive named Lily Chang.

Ms. Chang’s firm, which received a $75,000-a-month contract from JPMorgan, appeared to have only two employees. And on the surface, Ms. Chang lacked the influence and public name recognition needed to unlock business for the bank.

But what was known to JPMorgan executives in Hong Kong, and some executives at other major companies, was that “Lily Chang” was not her real name. It was an alias for Wen Ruchun, the only daughter of Wen Jiabao, who at the time was China’s prime minister, with oversight of the economy and its financial institutions.

While the bank emerged from the financial crisis stronger than it ever was, Moody’s Investors Service cut its ratings of the JPMC and three other banks after deciding the government would be less likely to help them repay creditors in a crisis. JPMorgan was cut to A3 from A2. According to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority, the yield on JPMorgan’s $2 billion of 3.375 percent subordinated notes due May 2023 slipped 10 basis points to 4.3 percent.

Moody’s said that there was less likelihood of a widespread bailout of banks by the United States government as there was during the financial crisis five years ago and that bank debt holders would be forced to shoulder more of the losses in the future.

But the rating agency said it expected banks would be required by regulators in the United States to hold a higher level of capital, which was likely to result in higher recoveries for creditors in any future bank default. [..]

Under the Dodd-Frank Act, the Federal Reserve has been limited in its ability to provide taxpayer money to individual banks, and failing banks would be wound down in a so-called orderly liquidation, in which creditors would bear the bulk of the burden of the losses.

However, some critics have expressed doubts that regulators could handle the liquidation of one or more of the nation’s largest banks in a severe financial crisis.

In the midst of this, somebody at JPMC thought it would be a great idea to hold a Twitter Q&A with the public using the hashtag #AskJPM. The results were extremely amusing but a major PR #FAIL for the bank. Award winning actor Stacy Keech, the voice of American Greed, reads some of the best tweets verbatim.

If you’re a poet and good at writing haiku, Rolling Stone‘s contributing editor Matt Taibbi is offering a Jaime Dimon tee shirt for the best “J.P. Morgan Chase Q&A Fiasco” haiku. Matt will announce the winner Monday.

Even as President Barack Obama’s nominee to chair the Federal Reserve is committed to transparency, Janet Yellen is opposed to an audit of the central bank’s monetary policy decisions.

Sen. Rand Paul (R-KY) has proposed legislation that would subject the Federal Reserve to a full audit by the Government Accountability Office (GAO), offering Congress a look at the internal operations of the famously opaque institution. Tea partiers like Paul aren’t the only people who support an audit: the proposal has also garnered support among labor leaders such as AFL-CIO president Richard Trumka, progressive economists like Dean Baker, and Congressional liberals such as Rep. Alan Grayson, D-Fla.

Paul has threatened to block Yellen’s nomination unless his proposal for a Fed audit gets a vote in the Senate. His office did not respond to a request for comment on Yellen’s remarks.

Yellen, who currently serves as vice chair of the Federal Reserve, also indicated during the confirmation hearing that her tenure would not represent a significant break from that of outgoing chair Ben Bernanke. She defended the Fed’s policy of buying Treasury bonds as a form of economic stimulus and hinted that she would continue with policies in that vein if confirmed.

The Federal Reserve has only been audited once in 2010 after the proposal for a one time only audit, sponsored by Sen. Bernie Sanders, was attached to the Dodd-Frank Finance Reform bill. That audit revealed trillions in secret bailouts to banks around the world.

“This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else,” U.S. Senator Bernie Sanders, an Independent from Vermont, said in a statement.

The majority of loans were issues by the Federal Reserve Bank of New York (FRBNY). [..]

The report notes that all the short-term, emergency loans were repaid, or are expected to be repaid.

The emergency loans included eight broad-based programs, and also provided assistance for certain individual financial institutions. The Fed provided loans to JP Morgan Chase bank to acquire Bear Stearns, a failed investment firm; provided loans to keep American International Group (AIG), a multinational insurance corporation, afloat; extended lending commitments to Bank of America and Citigroup; and purchased risky mortgage-backed securities to get them off private banks’ books. [..]

Some of the financial institutions secretly receiving loans were meanwhile claiming in their public reports to have ample cash reserves, Bloomberg noted.

The Federal Reserve has neither explained how they legally justified several of the emergency loans, nor how they decided to provide assistance to certain firms but not others.

“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

Ian Welsh: The Obamacare Fiasco

I think Schadenfraude nicely sums up what I’m feeling about Obama’s troubles with his signature health care bill, though I do feel  sorry for people who are being hurt by Obamacare.

It’s not the website that is killing Obama, of course, it’s the cancellation of pre-existing policies (though the website is an unforced mistake).  Obama told people they could keep their policies, but that decision was never his to make, it was up to insurance companies.  Since there is no robust public option, Obama does not have any significant leverage over the insurance companies, there is nothing he can do to them, so why shouldn’t they do what is in their best interest? [..]

When you are dealing with bad people, you must assume bad faith; bad behavior.  You must plan for it.  The best option was always Medicare-for-all (and I was told by at least one House staffer that they could pass it if they really wanted to and were willing to go nuclear.)  The problem with Obama has always been this sickening need to be one of the boys.  He appears to genuinely like and genuinely admire the people who have “made it” in this society-people like Jamie Dimon and the people who run insurance  and drug companies.  He thinks you can make deals with these people, and make sure everyone wins.

You can’t.  These people are the most successful parasites ever produced by our nasty form of sociopathic capitalism.  You can only give them what they want or you can rip them from the body politic, so they stop sucking the blood from the host they’re killing.

Paul Krugman: The Money Trap

When Greece hit the skids almost four years ago, some analysts (myself included) thought that we might be seeing the beginning of the end for the euro, Europe’s common currency. Others were more optimistic, believing that tough love – temporary aid tied to reform – would soon produce recovery. Both camps were wrong. What we actually got was a rolling crisis that never seems to reach any kind of resolution. Every time Europe seems ready to go over the edge, policy makers find a way to avoid complete disaster. But every time there are hints of true recovery, something else goes wrong.

And here we go again. Not long ago, European officials were declaring that the Continent had turned the corner, that market confidence was returning and growth was resuming. But now there’s a new source of concern, as the specter of deflation looms over much of Europe. And the debate over how to respond is turning seriously ugly.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

November 15 is the 319th day of the year (320th in leap years) in the Gregorian calendar. There are 46 days remaining until the end of the year.

On this day in 1867, On this day in 1867, the first stock ticker is unveiled in New York City. The advent of the ticker ultimately revolutionized the stock market by making up-to-the-minute prices available to investors around the country. Prior to this development, information from the New York Stock Exchange, which has been around since 1792, traveled by mail or messenger.

The ticker was the brainchild of Edward Calahan, who configured a telegraph machine to print stock quotes on streams of paper tape (the same paper tape later used in ticker-tape parades). The ticker, which caught on quickly with investors, got its name from the sound its type wheel made.

Calahan worked for the Gold & Stock Telegraph Company, which rented its tickers to brokerage houses and regional exchanges for a fee and then transmitted the latest gold and stock prices to all its machines at the same time. In 1869, Thomas Edison, a former telegraph operator, patented an improved, easier-to-use version of Calahan’s ticker. Edison’s ticker was his first lucrative invention and, through the manufacture and sale of stock tickers and other telegraphic devices, he made enough money to open his own lab in Menlo Park, New Jersey, where he developed the light bulb and phonograph, among other transformative inventions.

Stock tickers in various buildings were connected using technology based on the then-recently invented telegraph machines, with the advantage that the output was readable text, instead of the dots and dashes of Morse code. The machines printed a series of ticker symbols (usually shortened forms of a company’s name), followed by brief information about the price of that company’s stock; the thin strip of paper they were printed on was called ticker tape. As with all these terms, the word ticker comes from the distinct tapping (or ticking) noise the machines made while printing. Pulses on the telegraph line made a letter wheel turn step by step until the right letter or symbol was reached and then printed. A typical 32 symbol letter wheel had to turn on average 15 steps until the next letter could be printed resulting in a very slow printing speed of 1 letter per second. In 1883, ticker transmitter keyboards resembled the keyboard of a piano with black keys indicating letters and the white keys indicating numbers and fractions, corresponding to two rotating type wheels in the connected ticker tape printers.

Newer and more efficient tickers became available in the 1930s and 1960s but the physical ticker tape phase was quickly coming to a close being followed by the electronic phase. These newer and better tickers still had an approximate 15 to 20 minute delay. Stock ticker machines became obsolete in the 1960s, replaced by computer networks; none have been manufactured for use for decades. However, working reproductions of at least one model are now being manufactured for museums and collectors. It was not until 1996 that a ticker type electronic device was produced that could operate in true real time.

Simulated ticker displays, named after the original machines, still exist as part of the display of television news channels and on some World Wide Web pages-see news ticker. One of the most famous displays is the simulated ticker located at One Times Square in New York City.

Ticker tapes then and now contain generally the same information. The ticker symbol is a unique set of characters used to identify the company. The shares traded is the volume for the trade being quoted. Price traded refers to the price per share of a particular trade. Change direction is a visual cue showing whether the stock is trading higher or lower than the previous trade, hence the terms downtick and uptick. Change amount refers to the difference in price from the previous day’s closing. These are reflected in the modern style tickers that we see every day. Many today include color to indicate whether a stock is trading higher than the previous day’s (green), lower than previous (red), or has remained unchanged (blue or white).

Occupy Wall Street activists buy $15m of Americans’ personal debt

Adam Gabbatt, The Guardian

Tuesday 12 November 2013 10.34 EST

Rolling Jubilee, set up by Occupy’s Strike Debt group following the street protests that swept the world in 2011, launched on 15 November 2012. The group purchases personal debt cheaply from banks before “abolishing” it, freeing individuals from their bills.

By purchasing the debt at knockdown prices the group has managed to free $14,734,569.87 of personal debt, mainly medical debt, spending only $400,000.

…

The group is able to buy debt so cheaply due to the nature of the “secondary debt market”. If individuals consistently fail to pay bills from credit cards, loans, or medical insurance the bank or lender that issued the funds will eventually cut its losses by selling that debt to a third party. These sales occur for a fraction of the debt’s true values – typically for five cents on the dollar – and debt-buying companies then attempt to recoup the debt from the individual debtor and thus make a profit.

…

(Andrew Ross, a member of Strike Debt and professor of social and cultural analysis at New York University says) “Very few people know how cheaply their debts have been bought by collectors. It changes the psychology of the debtor, knowing this.

“So when you get called up by the debt collector, and you’re being asked to pay the full amount of your debt, you now know that the debt collector has bought your debt very, very cheaply. As cheaply as we bought it. And that gives you moral ammunition to have a different conversation with the debt collector.”

Occupy Wall Street’s debt buying strikes at the heart of capitalism

Alex Andreou, The Guardian

Wednesday 13 November 2013 11.20 EST

When the Occupy movement came into being in the summer of 2011, its critics said that a lack of identifiable objectives and strategy for achieving them meant it was doomed to fail. This was a monumental underestimation of its potential impact. Two years on, the debate about the ethics of corporate capitalism in its current form, the fairness of the remuneration of those at the top, the widening wealth gap and the morality of tax avoidance is alive and well. The concept of the “99%” is now part of the collective consciousness. All this is, in no small part, down to the fuse lit by the Occupy movement.

…

One of the most significant, and perhaps the most threatening to the status quo, is the Strike Debt group, of which the Rolling Jubilee project forms part.

The idea is that, those freed from debt and those sympathetic to the movement, then donate into the fund to keep it “rolling” forward; hence the name. The fund has already raised $600,000 and has used $400,000 of this to purchase and cancel an astonishing $14.7m of debt, primarily focusing on medical bills. This strikes at the very heart of the system, not only by using its own perverse rules against it, but critically by revealing the illusory and circular nature of debt.

Capitalism requires a layer of cheap, flexible labour to operate optimally. It is not a coincidence that the most successful global economy, by any traditional capitalist measure, is an authoritarian quasi-communist state. Many, myself included, have been arguing that our current predicament is not crisis-consequent austerity, but a permanent adjustment. David Cameron on Monday confirmed as much. The great lie, peddled by Thatcher and Reagan, was the idea that we could all be middle class, white-collar professionals within a neoliberal economy. It was simply not true.

…

This is why the debate on the back-door privatisation of medical and education services in this country matters so much. The extraction of profit from these two key areas changes the social contract in a fundamental way. The idea is no longer that the state will educate you and keep you healthy, so that you may continue to contribute with both your work and your taxes. It has mutated instead into “you will borrow money from the state’s private partners in order to become educated and stay healthy, so that you may continue to contribute to their bottom line”. All of the 99%, in a very real way, work in part for an assortment of financial institutions, largely invisible and certainly unaccountable.

Iceland’s – strangely unreported – decision to write down mortgage debt for its citizens, undermines that notion. A rejection of traditional systems of credit and money as a response to austerity, such as in the barter markets of Volos in Greece and Turin in Italy undermines that notion. The Rolling Jubilee project undermines that notion in a significant way, by asking the sizzling question: “If a corporation is prepared to accept five cents on the dollar in exchange for our debts, if that is our debt’s open market value, how much do we really owe?”

“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

Dan Gillmor: Thanks to WikiLeaks, we see just how bad TPP trade deal is for regular people

The more you know about the odious Trans-Pacific Partnership, the less you’ll like it. It’s made for corporate intellectual property and profits

Among the many betrayals of the Obama administration is its overall treatment of what many people refer to as “intellectual property” – the idea that ideas themselves and digital goods and services are exactly like physical property, and that therefore the law should treat them the same way. This corporatist stance defies both reality and the American Constitution, which expressly called for creators to have rights for limited periods, the goal of which was to promote inventive progress and the arts. [..]

I’m talking about the appalling Trans-Pacific Partnership agreement, a partial draft of which WikiLeaks has just released. This treaty has been negotiated in secret meetings dominated by governments and corporations. You and I have been systematically excluded, and once you learn what they’re doing, you can see why.

The outsiders who understand TPP best aren’t surprised. That is, the draft “confirms fears that the negotiating parties are prepared to expand the reach of intellectual property rights, and shrink consumer rights and safeguards,” writes James Love a longtime watcher of this process.

Robert Sheer: The True Patriots in Congress Trying to End NSA Tyranny

Good old George can stop spinning in his grave. Yes, that George, our most heroic general and inspiring president, who warned us in his farewell address “to guard against the impostures of pretended patriotism. …” It’s an alert that’s been ignored in the nation’s hysterical reaction to the attacks of 9/11 that culminated in the NSA’s assault on our Constitution’s guarantee of “the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures. …”

That right was reaffirmed boldly and righteously Monday, for the entire world to hear, by F. James Sensenbrenner, the Republican chair of the House Judiciary Committee, which unanimously had produced the USA Patriot Act. Speaking on Monday at the Civil Liberties Committee of the European Parliament, Sensenbrenner blasted the misuse of the Patriot Act by the NSA and other government agencies entrusted with ensuring the nation’s safety.

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.

November 14 is the 318th day of the year (319th in leap years) in the Gregorian calendar. There are 47 days remaining until the end of the year.

On this day in 1851, the novel Moby Dick is published. Moby Dick, a novel by Herman Melville about the voyage of the whaling ship Pequod, is published by Harper & Brothers in New York. Moby Dick is now considered a great classic of American literature and contains one of the most famous opening lines in fiction: “Call me Ishmael.” Initially, though, the book about Captain Ahab and his quest for a giant white whale was a flop.

Moby-Dick is widely considered to be a Great American Novel and a treasure of world literature. The story tells the adventures of the wandering sailor Ishmael, and his voyage on the whaleship Pequod, commanded by Captain Ahab. Ishmael soon learns that Ahab seeks one specific whale, Moby Dick, a ferocious, enigmatic white sperm whale. In a previous encounter, the whale destroyed Ahab’s boat and bit off his leg. Ahab intends to take revenge.

In Moby-Dick, Melville employs stylized language, symbolism, and metaphor to explore numerous complex themes. Through the main character’s journey, the concepts of class and social status, good and evil, and the existence of gods are all examined as Ishmael speculates upon his personal beliefs and his place in the universe. The narrator’s reflections, along with his descriptions of a sailor’s life aboard a whaling ship, are woven into the narrative along with Shakespearean literary devices such as stage directions, extended soliloquies and asides. The book portrays insecurity that is still seen today when it comes to non-human beings along with the belief that these beings understand and act like humans. The story is based on the actual events around the whaleship Essex, which was attacked by a sperm whale while at sea and sank.

Moby Dick has been classified as American Romanticism. It was first published by Richard Bentley in London on October 18, 1851, in an expurgated three-volume edition titled The Whale, and weeks later as a single volume, by New York City publisher Harper and Brothers as Moby Dick; or, The Whale on November 14, 1851. Although the book initially received mixed reviews, Moby Dick is now considered part of the Western canon.

In a three part interview that appropriately began on Veterans’ Day, journalist, author and photographer discussed her latest book They Were Soldiers: How the Wounded Return From America’s Wars-The Untold Story with Jaisal Noor, the Real News Network producer.

They Didn’t Know What They Were Getting Into: The Cost of War American-Style

by Ann Jones, TomDispatch

   The last time I saw American soldiers in Afghanistan, they were silent. Knocked out by gunfire and explosions that left them grievously injured, as well as drugs administered by medics in the field, they were carried from medevac helicopters into a base hospital to be plugged into machines that would measure how much life they had left to save. They were bloody.  They were missing pieces of themselves. They were quiet.

   It’s that silence I remember from the time I spent in trauma hospitals among the wounded and the dying and the dead. It was almost as if they had fled their own bodies, abandoning that bloodied flesh upon the gurneys to surgeons ready to have a go at salvation. Later, sometimes much later, they might return to inhabit whatever the doctors had managed to salvage.  They might take up those bodies or what was left of them and make them walk again, or run, or even ski.  They might dress themselves, get a job, or conceive a child. But what I remember is the first days when they were swept up and dropped into the hospital so deathly still.

   They were so unlike themselves. Or rather, unlike the American soldiers I had first seen in that country. Then, fired up by 9/11, they moved with the aggressive confidence of men high on their macho training and their own advance publicity.

The push for an increase in the minimum wage has grown with the recent passing of an increase in New Jersey from $7.25 to 8.25 with annual increases based in inflation. The amendment to the state’s constitution passed with 61% of the vote over newly reelected Governor Chris Christie’s objection. A Gallup poll conducted Nov. 5-6 shows that an even greater percentage of Americans would vote for an even higher minimum wage. According to a White House official, the Obama administration supports the bill introduced by Sen. Tom Harkin (D-IA) and and Rep. George Miller (D-CA) to raise the federal minimum wage from $7.25 an hour to $10.10 an hour in increments of 95 cents.

The same Gallup poll that showed 76% of Americans support for the increase, also showed support across party lines with 58% of self-identified Republicans supporting it. So what’s the problem? The issue is congress’ feral children, the Tea Party coalition in both houses who have vowed to block it and would completely abolish the minimum wage if they had their way. These are the same extremists who would repeal child labor laws, as well.

Despite the objections of the radical minority, the wave for an increase of the minimum wage is swelling as RJ Eskow observes:

“There’s something happening here/what it is ain’t exactly clear …”

When Steve Stills wrote the dystopian anthem “For What It’s Worth” in 1966, it resonated with listeners who understood that great if half-hidden transformations were underway. There’s been a turn toward the dystopian in recent economic and social trends as well: Wall Street greed and criminality. The growing power of wealth over the political process. The rise of the Tea Party. The collapsing middle class. Growing inequalities of wealth. Lost social mobility.

But there were encouraging signs in 1966, as well as troubling ones, and that’s equally true today. Take the movement for a minimum wage. Voters in the state of New Jersey and the city of Tacoma, Washington voted to increase the minimum wage in last week’s election. These victories follow a series of polls which confirm that the general public holds strongly progressive views on issues which range from taxation to Medicare and Social Security.

Something is happening here.

Noam Scheiber, senior editor for The New Republic, spoke with Rachel Maddow about why economic populism is a wise strategy for Democrats.

As it turns out Dylan Davies’ book The Embassy House which was the basis of the 60 Minutes Benghazi report by Lara Logan is published by Threshold, an imprint of Simon & Schuster, which is a division of…

Wait for it.

CBS.

It has been withdrawn from publication.

Nothing to see here.  Move along.

“60 Minutes” and the Benghazi Scandal Trap

Posted by Amy Davidson, The New Yorker

November 12, 2013

There are really two charges against CBS: that they were duped, and that the segment itself was an example, to borrow Logan’s terms, of misinformation, confusion, and intense partisanship. Journalists make mistakes; sources lie. DeYoung’s story ran in the Post on October 31st, and was followed up with passion elsewhere. (Dave Weigel has written about Media Matters’s role.) CBS lost some sympathy by apparently accepting, for a number of days, Davies’s explanation that the incident report, which was in his voice but didn’t have his signature, was the byproduct of lies he told a supervisor out of his immense respect for the man whose orders he hadn’t followed. Perhaps Logan thought that tracked; her apology-preview appearance on CBS’s “This Morning” only partly clarified the thinking. She was still defending Davies days after DeYoung’s report, telling the Times that the criticism was political. “We worked on this for a year. We killed ourselves not to allow politics into this report.” Then came the F.B.I. report, and there went the clarity Logan claims to have finally found in Davies’s story.

It’s a sad aspect of this story that Logan claims the segment was more than a year in the making. Where did the time go? In the fairly long piece, Logan fails to offer any real statement about the Administration’s perspective. Only two other people are interviewed on camera. One is a military man who doesn’t understand why the diplomats didn’t get out of Benghazi months earlier. Another is a diplomat who doesn’t understand why, at the critical moment, significant military forces didn’t move into Benghazi from across the border. Davies, who is somehow supposed to tie these threads together, doesn’t understand why, on the first day he first arrived in the city, he found Libyan guards “inside, drinking tea, laughing and joking” rather than looking sharp, and why everyone didn’t heed a private contractor, like him. Not that Davies is identified as such: he’s a “security officer,” Logan says. “A former British soldier, he’s been helping to keep U.S. diplomats and military leaders safe for the last decade.” (Nor does she mention that his book, promoted in the segment, was published by Simon & Schuster, a unit of CBS, something she has admitted was a mistake.) But who knows what Davies said before or during the attack. His account is about as good as a spilled cup of tea, making the rest unreadable.