Monthly Archive: April 2014

Apr 30 2014

Smoking

TPP Unraveling?

Real News Network

April 27, 14

President Obama returns from East Asia empty-handed after Japan rejects bilateral agreement – but if the TPP moves forward, will it be in the interest of most Americans?

President Obama’s smoking problem in Malaysia

By ERIC BRADNER, Politico

4/28/14 6:53 PM EDT

However, one thing neither leader talked specifically about during the media event was a brewing tension surrounding the negotiations: the way Malaysia’s health officials fear the deal might sabotage their country’s efforts to fight its smoking problem.

Malaysia worries that it will suffer the fate that Uruguay, Australia and Thailand did in other trade deals: dragged into an expensive, yearslong international legal fight over its right to block cigarette companies from advertising.

“The U.S. government’s proposal on tobacco does not go far enough. It is insufficient to protect the government’s sovereignty to do their utmost to protect public health,” said Mary Assunta, a senior policy adviser for the Southeast Asia Tobacco Control Alliance. “Tobacco companies should not interfere with this, nor challenge governments using the free-trade platform.”

Early in the deal’s negotiations, the United States was willing to give Malaysia something close to what it wanted, calling for a so-called safe harbor provision that protected anti-smoking rules. But under pressure from business groups and lawmakers, the Obama administration changed its mind in August.

However, the U.S. proposal doesn’t block tobacco companies from making such challenges in the first place – driving Malaysia’s worries that one of those companies could potentially persuade an independent dispute panel to order the elimination of the government’s prohibition against advertising cigarettes, just as those policies appear to be stopping the growth in the country’s number of smokers.

Obama trip stirs emotions over Asia trade pact

By DOUG PALMER, Politico

4/21/14 3:32 PM EDT

The trip gives the president a high-profile opportunity to ignite action in Congress on trade legislation that is stalled largely because of opposition from fellow Democrats. But even under the most optimistic scenario, that seems like a long shot.

“I basically think the White House knows this is over,” Rep. Louise Slaughter (D-N.Y.) recently told reporters, in regard to the stalled trade promotion authority bill, or “fast track,” that would allow Obama to submit the TPP agreement to Congress for a straight up-or-down vote without any amendments.



“If they have really good meetings with really good optics and strong commitments coming out of the Asia trip, that provides the incentives” for Congress to begin work on the trade bill, (Scott) Miller (a trade analyst at the Center for Strategic and International Studies) said. “But it’s not going to happen without a major lift from the executive branch.”



Meanwhile, Obama’s visit to South Korea draws attention to a trade deal that in its first two years has not delivered an expected increase in U.S. exports, putting the administration on the defensive as it makes the case to Congress for TPP and trade promotion authority.



In a call with reporters, they (Democratic critics) said past trade deals like the North American Free Trade Agreement and the more recent free-trade pact with South Korea have hurt the U.S. economy more than they’ve helped and warned that the TPP agreement would be more bad news for the United States.

“TPP would force Americans to compete against workers from Vietnam, where the minimum wage is $2.75 per day,” Rep. Rosa DeLauro (D-Conn.) said. “It threatens to roll back financial regulations, environmental standards and U.S laws that protect the safety of drugs and food and the toys we give our kids.”

Did Japan’s Prime Minister Abe Serve Obama Beefsteak-Flavored Revenge for US Trade Representative Froman’s TPP Rudeness?

Clive, Naked Capitalism

Posted on April 28, 2014

(A)ccording to the US playbook, Froman’s roughing up of Japan in public would be followed at the end of April by US President Obama’s visit to Japan where he would then be able to seal a TPP deal, have a photo op and declare his Asian visit a triumph.

What happened instead is that, according to credible reports, is it was the US which had to capitulate on rice and wheat tariffs. Japan is still holding out for the retention of tariffs on other agricultural products such as pork and beef. As Obama left Japan last week without a deal, an agreement seems as far away as ever.



Okay, who having got this far isn’t starting to think to themselves, hey, wait a minute, this doesn’t sound at all plausible. We’re supposed to have had the Japanese Prime Minister and two other key cabinet members dining in public in a Tokyo restaurant bad mouthing (albeit mildly) the US President…and this conversation just happens to have been overheard by some mysterious agent who just happened to blab to the press. Really? If you believe that, Iíd love to talk to you about a great deal I can offer you on the Akashi-Kaikyo Bridge… Much more likely of course is that the whole story was a plant by the Japanese government to make clear what it thinks of Obama.



From the Japanese Gendai Daily News-

Obamaís Just Left the Country…And Leaves Prime Minister Abe Bitchin’ about the State Visit

US Given the Brush-off at 500-bucks a Head Steakhouse

There’s even more to the steak angle of this story. Right now, Japan is the cause of the impasse in the TPP negotiations (which includes beef tariff elimination which Japan is resisting). But despite Obama’s known fondness for Kobe beef he wasn’t served any during his visit to Japan. On the first day of his trip, he was invited to a ritzy sushi place in Tokyo. And at the state banquet in the Imperial Palace on the second day, he was served steamed sheep leg.

But on the same day as Abe treated Obama to sushi (at a moderately upscale place in Tokyo charging about $300 a head, which is pricy but not exceptional by Tokyo’s famously over the top dining scene standards), he himself was enjoying beefsteak at the ultra-exclusive Kawamura restaurant charging a minimum of $500 per person before extras. Those in political circles commented “You can see how Obama might gripe that he didn’t get to enjoy such wonderful beefsteak because of Abe, due to a misunderstanding (of Abe’s actions)”

TPP Is Right Where We Want It: Going Nowhere

by Maira Sutton, Common Dreams

Tuesday, April 29, 2014

As negotiations continue to be shrouded in secrecy, the Pacific trade deal faces mass opposition both inside and outside of the U.S., and reports say little progress has been made for many months. State leaders and trade delegates have held dozens of closed-door meetings to discuss possible trade-offs and concessions over various tariffs and regulations, including some of the most controversial copyright enforcement provisions in the Intellectual Property chapter. Based upon the leaked text published by Wikileaks in November, several countries are resisting the extreme U.S. proposals on Digital Rights Management (DRM) and Internet Service Provider (ISP) liability.

Following massive blows to the Fast Track bill introduced in January, many Senators are maintaining their stiff opposition against handing over trade authority to the White House. Under Fast Track, also known as Trade Promotion Authority, lawmakers would be limited to an up-or-down vote, and shirk their responsibility to hold proper hearings on its provisions. Republican Senator Roger Wicker has openly stated that he “couldn’t be less optimistic” about any progress being achieved during Obama’s trip to Asia. In an op-ed published this week in the LA Times, three Democratic Representatives reiterated their strong criticism of the TPP, advising that no one should “blindly endorse” this agreement. In November, the New York Times had done precisely that, but they too have suddenly changed their tune-publishing an editorial this week that expressed their heavy doubts over TPP’s objectives. They correctly questioned the administration’s secrecy over the negotiations and wrote that the “Obama administration also needs to do much more to counter the demands of corporations with those of the public interest.”



As others have pointed out, the Obama administration only has itself to blame for this mess. By listening to corporate demands above all else, it has alienated itself from its own political party, public interest groups, and most of all, the people whose interests it is supposedly meant to represent. Unless the U.S. trade rep radically changes its approach to this agreement-to make the negotiations truly transparent and incorporate substantive input from the public, for starters-it seems the President is going to be stuck defending a bad deal and a bad process.

Apr 30 2014

The Torturer of Beverly Hills

The legacy of torture that the United States has left in Iraq and Afghanistan is appalling. Not only has the US failed to investigate or prosecute any of its own torturers, it is now giving safe haven to Afghanistan’s torturer in chief.

In Afghanistan, his presence was enough to cause prisoners to tremble. Hundreds in his organization’s custody were beaten, shocked with electrical currents or subjected to other abuses documented in human rights reports. Some allegedly disappeared.

And then Haji Gulalai disappeared as well.

Today, Gulalai lives in a pink two-story house in Southern California, on a street of stucco homes on the outskirts of Los Angeles.

How he managed to land in the United States remains murky. Afghan officials and former Gulalai colleagues said that his U.S. connections – and mounting concern about his safety – account for his extraordinary accommodation.

But CIA officials said the agency played no role in bringing Gulalai into the country. Officials at the State Department and the Department of Homeland Security would not comment on his relocation or immigration status, citing privacy restrictions. Gulalai and members of his family declined repeated inquiries from The Washington Post. [..]

Applicants are screened against databases for criminal convictions or terrorist ties. But experts said those records are unlikely to reveal allegations of human rights abuses, particularly when the alleged abuser was operating under government authority and was not arrested or publicly accused. Prospects of detection may have been further complicated by the fact that Gulalai used only his (Kamal) Achakzai name once in the United States.

There is at least one indication, however, that U.S. authorities were able to connect the asylum seeker to his NDS résumé.

At a hearing before an immigration judge in Los Angeles several years ago, Gulalai defended his asylum claim by presenting photos of the Kabul bombing and other evidence of the danger he faced in Afghanistan, said (Bashir) Wasifi, who accompanied his friend to help interpret.

A U.S. attorney challenging the claim asked repeatedly whether the man now calling himself Achakzai was ever known by another name. After getting only looks of bewilderment, Wasifi said, the attorney changed his question: “Then who is Gulalai?”

Gulalai chuckled and replied that it was just a nickname bestowed by his family, and apologized for the slip, Wasifi said. He emerged from the hearing with his immigration status intact. [..]

Wasifi said Gulalai secured permanent resident status in the United States last year and is moving toward citizenship. The allegations against him, Wasifi said, should not stand in his way.

“I blame the U.S. for this,” Wasifi said. “If he was doing wrong to society, it is a shame for you. You appointed him to this position. NDS (National Directorate of Security) did not exist before. You created it. If you occupy a country, you are responsible.”

He was just doing what the US paid him to do, being a good soldier.

As Marcy Wheeler says, torture for the US and retire with impunity just don’t try to expose the war crimes:

Torturing on behalf of the United States appears to be a career move that results in a comfortable lifestyle after moving on from government service. Jose Rodriguez, who both ordered up torture and then personally destroyed video evidence of it, now profits from those events through book sales. James Mitchell, who was integral to the design of the torture program, now lives quietly in Land O’Lakes, Florida and until very recently didn’t even have to bother talking with reporters, let alone crime investigators. Of course, if you choose to expose US torture, it’s prison for you, as John Kiriakou has demonstrated.

But the disgusting free status of Rogdriguez and Mitchell pales in comparison to the level of depravity in the known history of personal involvement in torture for Haji Gulalai and how it was revealed yesterday that Gulalai is now living a quiet, comfortable life just outside Los Angeles. [Just as a bit of life advice, never piss off Julie Tate, as her work in finding Gulalai is perhaps the best bit of investigative journalism in the US in decades.] [..]

Standing out especially among the disgusting aspects of Gulalai’s case is the mystery surrounding how he was able to enter the US and then be granted asylum. Rank and file interpreters who worked for the US military in Afghanistan (and Iraq) face incredible difficulty getting into the US, even when they can present evidence that they face extreme danger staying behind: [..]

But here is an even bigger outrage in the process surrounding Gulalai, again from the excellent report from Greg Miller, Julie Tate and Joshua Partlow:

   Gulalai has made several return trips to Afghanistan in recent months to sell property there, family members and associates said. If true, the visits could undermine the argument that Afghanistan had become too dangerous for him, potentially complicating his asylum claim.

And what Charles Pierce said:

(O)f course, if there is any attempt to haul this sociopath off to The Hague, there will be several earnest columns written about how unfair it is because of what “we” asked him to do, and about abandoning allies, and so on. We are all complicit accessories before and after the fact. C-Plus Augustus made us that way.

And thank you, Barack Obama.

Apr 30 2014

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.

Wednesday is Ladies’ Day.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Follow us on Twitter @StarsHollowGzt

Heidi Moore: Thomas Piketty is a rock-star economist – can he re-write the American dream?

The unlikely bestseller has roiled pundits and crystallized a conversation about inequality we should have had long ago. Now he has to win over normal people

When the movie is made about the fall of Western capitalism, Thomas Piketty will be played by Colin Firth. Piketty, whom the Financial Times called a “rock-star economist”, isn’t a household name – but he should be, and he has a better shot than any other economist. He is the author and researcher behind a 700-page economic manifesto, titled Capital in the 21st Century, that details the path of income inequality over several hundred years.

This sublime nerdishness is, somehow, a huge hit. It is now No 1 on Amazon’s bestseller list and sold out in many bookstores. When Piketty spoke on a panel this month at New York’s CUNY with three other economists – two of them Nobel-prize winners, Joseph Stiglitz and Paul Krugman – the Frenchman was the headliner. The event was so packed that the organizers had to create three overflow rooms. Weeks after the release of Capital, intellectuals are still salivating, even calling Piketty the new de Tocqueville.

Zoë Carpenter: There Is No Such Thing As a ‘Typical’ Low-Wage Worker

Spotted among a few hundred people rallying outside the Capitol on Monday for a higher minimum wage: A bearded man in a jean jacket, with a bandana on his head. A woman with close-cut gray curls and a gap where her top front teeth should be. A young man in a suit. Dreadlocks, ponytails, and mullets; baseball caps and cowboy hats and a lime green headscarf. Teenagers in hoodies, and one in a fishnet top with a leopard print bra underneath. Middle-aged women in pink hats.

With the Senate preparing to hold a procedural vote as early as Wednesday on a proposal to increase the federal minimum wage from $7.25 to $10.10 an hour, it’s worth considering what’s at stake in the debate-or rather, who. As the rally illustrated, it’s hard to point to a “typical” low-wage worker. Many are in the fast-food industry, the most unequal sector of the American economy. Others are in domestic work, or retail, or are bank tellers. Some are highly educated while others have not graduated from high school. One sure thing is that most aren’t kids making date money.

Jessica Valenti: The White House wants to end campus rape. Great. Now what about colleges?

Obama and Biden have taken a sudden feminist turn on sexual assault. Shouldn’t someone still make some rules for punishing school rapists?

American colleges are not known for taking rape very seriously: activists at Brown University are currently protesting the measly one-semester suspension of a man who sexually assaulted and choked another student; 23 students currently allege that Columbia University violated federal law by discouraging victims of sexual assault from reporting and allowing rapists to stay on campus; the University of Chicago is facing a federal investigation over its handling of sexual assault; and Tufts University revoked its agreement with the US Department of Education to remedy a poor track record of dealing with sexual assault on campus in violation of Title IX. And that’s just this week.

But thanks to the work of grassroots and student-led organizations, a new initiative from the White House to curb sexual assault on campus is using explicitly feminist ideas to frame their recommendations. Color this feminist pleasantly surprised, if not entirely satisfied.

Emma Brockes: The truth about Airbnb: not a racket, nor brothel, just sparing a dime on rent

Questions we should be asking about the startup: isn’t it just a course correction for a real-estate system stacked against us? Also: is someone having sex in my bed?

Eric Schneiderman, the New York attorney general, has lots of questions for the residents of the “digital Wild West” who rent out their apartments on Airbnb. Roughly: who are you, where do live and you’re making how much from your spare room, five flights up and with an unrestricted view of your neighbor’s air vent?

All of which misses the exact point of the ingenius pad-crashing service, and the more pressing issue facing users, not lawyers. As those of us with friends who hand over their keys for the weekend know well, there is only one question for occasional landlords on Airbnb, to be asked in a squealy voice and with a face like you just sucked an extra large lemon: how can you let strangers have sex in your bed?!

Ana Marie Cox: The NRA has declared war on America

Wayne LaPierre and Co are not out merely to defend the Second Amendment or Newtown or gun laws anymore. They want you to pay the price for freedom and they want their money now

As the annual meeting of National Rifle Association members started here this weekend, the gentleman seated next to me said to settle in: “It’s mostly administrative stuff. We vote on things.” He paused for emphasis: “It’s the law.”

He’s somewhat mistaken, of course. The NRA doesn’t have any state-mandated obligation to hold an annual meeting. What’s more, the NRA has very little respect for the law. A half an hour later, at that very meeting, NRA executive vice president Wayne LaPierre exhorted the crowd to a morally obligated vigilantism. He drew a vivid picture of a United States in utter decay and fragmented beyond repair, Mad Max-meets-Hunger Games, divided by Soylent Green:

Katrina vanden Heuvel: What Cliven Bundy Learned From the Koch Brothers

Nevada rancher Cliven Bundy’s fifteen minutes of fame are up. He was a Fox News poster boy when he refused to pay fees for grazing his cows on federal land and greeted federal rangers with the threat of armed resistance. But when he voiced his views on the joys of slavery for “the Negro,” his conservative champions fled from his side.

What is interesting about Bundy, however, is not his tired racism but rather his remarkable sense of entitlement. His cattle have fed off public lands for two decades while he refused to pay grazing fees that are much lower than those he would have to pay for private land (and lower even than the government’s costs). “I’ll be damned if this is the property of the United States,” he says, claiming he won’t do business with the federal government because the Constitution doesn’t prohibit Americans from using federal lands.

Apr 30 2014

On This Day In History April 30

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

April 30 is the 120th day of the year (121st in leap years) in the Gregorian calendar. There are 245 days remaining until the end of the year.

On this day in 1900, Jones dies in a train wreck in Vaughn, Mississippi, while trying to make up time on the Cannonball Express.

John Luther (“Casey”) Jones (March 14, 1863 – April 30, 1900) was an American railroad engineer from Jackson, Tennessee, who worked for the Illinois Central Railroad (IC). On April 30, 1900, he alone was killed when his passenger train, the “Cannonball Express,” collided with a stalled freight train at Vaughan, Mississippi, on a foggy and rainy night.

His dramatic death, trying to stop his train and save lives, made him a hero; he was immortalized in a popular ballad sung by his friend Wallace Saunders, an African American engine wiper for the IC.

Death

On April 29, 1900 Jones was at Poplar Street Station in Memphis, Tennessee, having driven the No. 2 from Canton (with his assigned Engine No. 382 ). Normally, Jones would have stayed in Memphis on a layover; however, he was asked to take the No. 1 back to Canton, as the scheduled engineer (Sam Tate), who held the regular run of Trains No. 1 (known as “The Chicago & New Orleans Limited”, later to become the famous “Panama Limited”) and No. 4 (“The New Orleans Fast Mail”) with his assigned Engine No. 382, had called in sick with cramps. Jones loved challenges and was determined to “get her there on the advertised” time no matter how difficult it looked.

A fast engine, a good fireman (Simeon T. Webb would be the train’s assigned fireman), and a light train were ideal for a record-setting run. Although it was raining, steam trains of that era operated best in damp conditions. However, the weather was quite foggy that night (which reduced visibility), and the run was well-known for its tricky curves. Both conditions would prove deadly later that night.

Normally the No. 1 would depart Memphis at 11:15 PM and arrive in Canton (188 miles to the south) at 4:05 AM the following morning. However, due to the delays with the change in engineers, the No. 1 (with six cars) did not leave Memphis until 12:50 am, 95 minutes behind schedule.

The first section of the run would take Jones from Memphis 100 miles south to Grenada, Mississippi, with an intermediate water stop at Sardis, Mississippi (50 miles into the run), over a new section of light and shaky rails at speeds up to 80 mph (129 km/h). At Senatobia, Mississippi (40 miles into the run) Jones passed through the scene of a prior fatal accident from the previous November. Jones made his water stop at Sardis, then arrived at Grenada for more water, having made up 55 minutes of the 95 minute delay.

Jones made up another 15 minutes in the 25-mile stretch from Grenada to Winona, Mississippi. The following 30-mile stretch (Winona to Durant, Mississippi) had no speed-restricted curves. By the time he got to Durant (155 miles into the run) Jones was almost on time. He was quite happy, saying at one point “Sim, the old girl’s got her dancing slippers on tonight!” as he leaned on the Johnson bar.

At Durant he received new orders to take to the siding at Goodman, Mississippi (eight miles south of Durant, and 163 miles into the run) and wait for the No. 2 passenger train to pass, and then continue on to Vaughan. His orders also instructed him that he was to meet passenger train No. 26 at Vaughan (15 miles south of Goodman, and 178 miles into the run); however, No. 26 was a local passenger train in two sections and would be in the siding, so he would have priority over it. Jones pulled out of Goodman, only five minutes behind schedule, and with 25 miles of fast track ahead Jones doubtless felt that he had a good chance to make it to Canton by 4:05 AM “on the advertised”.

But the stage was being set for a tragic wreck at Vaughan. The stopped double-header freight train No. 83 (located to the north and headed south) and the stopped long freight train No. 72 (located to the south and headed north) were both in the passing track to the east of the main line but there were more cars than the track could hold, forcing some of them to overlap onto the main line above the north end of the switch. The northbound local passenger train No. 26 had arrived from Canton earlier which had required a “saw by” in order for it to get to the “house track” west of the main line. The saw by maneuver for No. 26 required that No. 83 back up and allow No. 72 to move northward and pull its overlapping cars off the south end, allowing No. 26 to gain access to the house track. But this left four cars overlapping above the north end of the switch and on the main line right in Jones’ path. As a second saw by was being prepared to let Jones pass, an air hose broke on No. 72, locking its brakes and leaving the last four cars of No. 83 on the main line.

Meanwhile, Jones was almost back on schedule, running at about 75 miles per hour toward Vaughan, unaware of the danger ahead, since he was traveling through a 1.5-mile left-hand curve which blocked his view. Webb’s view from the left side of the train was better, and he was first to see the red lights of the caboose on the main line. “Oh my Lord, there’s something on the main line!” he yelled to Jones. Jones quickly yelled back “Jump Sim, jump!” to Webb, who crouched down and jumped about 300 feet before impact and was knocked unconscious. The last thing Webb heard when he jumped was the long, piercing scream of the whistle as Jones tried to warn anyone still in the freight train looming ahead. He was only two minutes behind schedule about this time.

Jones reversed the throttle and slammed the airbrakes into emergency stop, but “Ole 382” quickly plowed through a wooden caboose, a car load of hay, another of corn and half way through a car of timber before leaving the track. He had amazingly reduced his speed from about 75 miles per hour to about 35 miles per hour when he impacted with a deafening crunch of steel against steel and splintering wood. Because Jones stayed on board to slow the train, he no doubt saved the passengers from serious injury and death (Jones himself was the only fatality of the collision). His watch was found to be stopped at the time of impact which was 3:52 AM on April 30, 1900. Popular legend holds that when his body was pulled from the wreckage of his train near the twisted rail his hands still clutched the whistle cord and the brake. A stretcher was brought from the baggage car on No. 1 and crewmen of the other trains carried his body to the depot ½-mile away.

Apr 30 2014

The Breakfast Club 4/30/2014

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Everyone’s welcome here, no special handshake required. Just check your meta at the door.

Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

This Day in History

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Apr 30 2014

TDS/TCR (Nothing Succeeds Like Excess)

TDS TCR

Racism is Over!

Apr 29 2014

The Good News Just Keeps Coming

Bank of America Finds a Mistake: $4 Billion Less Capital

By PETER EAVIS and MICHAEL CORKERY, The New York Times

April 28, 2014, 9:18 am

The mistake, which had gone undetected for several years, led the bank to report recently that it had $4 billion more capital than it actually had. After Bank of America reported its error to the Federal Reserve, the regulator required the bank to suspend a share buyback and a planned increase in its quarterly dividend.

While regulators still believe Bank of America has sufficient capital, the disclosure of the accounting error will most likely add fuel to the debate over whether the nation’s largest banks are too big and complicated to manage.

The error also raises questions about the quality of Bank of America’s own accounting employees, who are supposed to present an accurate financial picture of the bank’s sprawling operations to the public and regulators each quarter. The audit committee of the bank’s board and PricewaterhouseCoopers, its external auditor, also allowed the error to slip by for so long.



Some of the spotlight may also fall on the Fed. Since the financial crisis of 2008, the government has focused its financial system overhaul on increasing capital, the part of a bank that absorbs losses and helps it weather storms. The Fed conducts so-called stress tests of big banks each year to assess whether they have enough capital to withstand shocks. Bank of America passed its test in March, paving the way for the increase in its shareholder payouts. It gained approval for a $4 billion share repurchase plan and a 4-cent increase in its quarterly dividend.

But after the accounting error, Bank of America will have to go back to the Fed to try and resolve the issue. If the Fed is satisfied with Bank of America’s explanations and remedies, it will probably be able to make some payouts, though the bank said on Monday that it expected the distributions to be less than originally announced.

Bank of America’s missteps could be resolved relatively quickly, unlike those of Citigroup, which failed the stress test last month after the Fed found potentially deep-seated problems with the bank’s financial projections, which could take several months to resolve.



(C)racks appeared in the comeback narrative in recent days. As part of its first-quarter earnings earlier this month, Bank of America announced $6 billion in new legal expenses related to defective mortgages, higher than many investors expected. Reports then came out indicating that the bank might later this year face more than $16 billion in penalties to settle claims with the Justice Department that it sold investors faulty mortgages.



Bank of America assumed bonds that Merrill had issued, including a $60 billion portfolio of so-called structured notes.

When Bank of America put the notes on its own balance sheet, it did so at a discount to their original value. Bank of America has since paid off many of the notes or bought them back from investors. When these payouts were higher than the value at which Bank of America assumed the notes, the bank booked a loss because it was paying out more money than its balance sheet said the bank owed.

Bank of America’s capital should have been reduced by these losses. But instead, and in error, the bank did not do that, which artificially lifted its capital over several years.



The size of the capital hole, and the length of time that it was overlooked, could also raise questions about the thoroughness of the Fed’s annual stress tests. In the tests, the banks are supposed to evaluate their own strength under difficult economic and market conditions, but the Fed is also meant to review the banks’ numbers, using its own examination to identify potential red flags. The Bank of America mistake is expected to prompt the Fed to look more closely at this area of capital calculation.

Apr 29 2014

Reversal of Fortune and Mind by a Climate Denier

After over a two year investigation in campaign finance corruption, Representative Michael Grimm (R-NY11) was indicted on Monday, with charges including mail, wire, and healthcare fraud, filing false tax returns, perjury, and employing undocumented immigrants. Grimm, with a history of bad behavior made headlines most recently when he threatened to throw a NY1 reporter, Michael Scotto, off the balcony of the Capitol rotunda when he lost his temper over Scotto’s commentary.

The district that Grimm represents, Staten Island and part of Brooklyn, was hard hit by super storm Sandy in October 2011 and is still has not fully recovered due much to the lax distribution of funds by New York City, a problem that newly elected Mayor Bill De Blasio is working quickly to remedy. Grimm is also, or was, a climate change denier. In episode 3 of the Showtime series on climate change, “Years of Living Dangerously,” Grimm sat down with MSNBC’s Chris Hayes to discuss the devastation, recovery and climate change. In that segment which was taped in August 2012, Grimm revealed that he had changed his mind about climate change and said that the storm was a major factor in his decision. However, he also said that there is nothing that he could do to change the conversation in the House.

This was news to his constituents since since Grimm has consistently voted with his Republican colleagues to block any climate change solutions. He even told Hayes “I don’t think the science is there to tell us what’s causing it…. I don’t want to get into the political debate of what’s causing it.” Ironically, the segment aired on Sunday, the day before Grimm surrendered to authorities to face the 20 count indictment.

Monday night, Hayes revisited his interview with Rep. Grimm where the conversation turned to the environment.

After all this Grimm is not resigning his house seat and he is still the GOP nominee for that district. But even if the Staten Island GOP wanted to replace him, they are hard pressed to try and their choice to replace him is  a former congressman whose career ended with a DUI arrest that exposed an affair, Vito Fossella. If you thought the Republicans in the midwest and south were ignoramuses, you haven’t been to Staten Island, the last stronghold for the GOP in New York City.

Grimm’s constituents deserve better. They deserve someone who will stand up and fight for them.

 

Apr 29 2014

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

Dean Baker: What Problem Is Privatizing Fannie and Freddie Meant to Solve?

President Obama’s chief economist, Jason Furman, weighed in behind efforts to privatize Fannie Mae and Freddie Mac last week. The main plan on the table is a bill forward by Senators Tim Johnson and Mike Crapo, the chair and ranking member, respectively, on the Senate Banking Committee.

While Furman’s column (which was co-authored with James Stock, another member of the president’s Council of Economic Advisers) indicated support for the principles behind the Johnson-Crapo bill, it is not clear what problem they are hoping to solve.

At the moment, it seems Fannie Mae and Freddie Mac are doing their job just fine. They are issuing mortgage-backed securities (MBS) that include more than 60 percent of new mortgages. Interest rates on mortgages are low and both companies are making substantial profits that are refunded to the government. Why is there any need to overhaul this system?

Yochai Benkler: The US supreme court needs to keep up with our cellphones – and the NSA

Tuesday’s oral arguments on search and seizure make it clear: the era of incremental justice ends now, because the age of metadata is already getting out of hand

Tuesday’s US supreme court arguments involved a seemingly basic legal question about the future of the Fourth Amendment: do police officers need a warrant to search the cellphone of a person they arrest? But the two privacy cases pit against each other two very different conceptions of what it means to be a supreme court in the first place – and what it means to do constitutional law in the 21st century.

“With computers, it’s a new world,” several justices reportedly said in the chamber. Are they ready to be the kinds of justices who make sense of it?

Cellphones expose so much of our most personal data that the decision should be a 9-0 no-brainer. The basic problem that makes it a harder call is that lawyers and judges are by training and habit incrementalists, while information and communications technology moves too fast for incrementalism to keep up.

Philip Pilkington: Our fragile economy of stock bubbles and luxury goods

Income inequality is creating a new normal of high-end consumption and inflated stock prices driving anemic growth

Imagine a world in which those who work – or try to work- are given mere scraps. Imagine an economy that is driven purely by speculation by the wealthy, the gains of which are then spent in high-end stores, the source of employment for those lucky enough to have a job. Imagine economic institutions that puzzle over the slow growth experienced in this economy, uncertain as to the cause.

Imagine no more, because this is the world we live in. Thankfully, however, two economists have finally pieced together the puzzle from disparate fragments of data to explain this malaise.

In a recent study (PDF), Steven Fazzari and Barry Cynamon start with what seems to be a paradox: Keynesian economic theory, together with common sense, tells us that higher-income groups should spend less in relation to their income than lower-income groups. However, since 1980, inequality in the United States has risen enormously, yet household spending has increased to historic highs.

According to the authors, the reason this occurred is that the debt-to-income ratio for the bottom 95 percent of the population rose enormously.

Robert L. Borosage: The Big Fix: How Congress Rigs the Rules

This week, the House Ways and Means Committee is poised to demonstrate exactly how the rules get rigged. Beginning on Tuesday, the committee will mark up a series of bills on corporate tax breaks — known as “extenders” because they have been extended regularly every year or two for over a decade. Only now the Committee plans to make many of them permanent, at the cost of an estimated $300 billion over 10 years. And it does not plan to pay for them by closing other corporate loopholes or raising rates. The giveaway — almost all of which goes to corporations — will simply add to the deficit. And no doubt those who vote for them will later demand deeper cuts in programs for the vulnerable in order to bring “spending” under control.

The measures range from big to small, sensible to inane. Two centerpieces are glaring loopholes for multinational companies and banks, encouraging them to ship jobs and report profits abroad to avoid an estimated $80 billion in taxes over a decade.

Khaled Fahmy: The Egyptian state must stop killing the Egyptian people

Mass death sentence is the latest outrage by country’s corrupt judiciary

On March 24 and after only two swift sessions, one of them lasting less than an hour, a court in the southern Egyptian city of Minya issued its verdict concerning 529 defendants, reportedly all members of the now banned Muslim Brotherhood. The court referred the papers of the defendants to the mufti, one of the country’s highest officials in Islamic affairs, asking for his opinion on hanging them.

Even by the standards of the Egyptian judiciary, which many local human rights groups have recently accused of corruption and partiality, this ruling constitutes a serious affront to justice. Never before in Egypt’s modern history have so many defendants been sentenced to death in one case and with such haste. Never before has an Egyptian court been so dismissive of basic requirements of the judicial process as stipulated by Egyptian law, denying, as it did, defense lawyers the chance to present their case, preventing witnesses from testifying and ignoring complaints by the defendants about the impartiality and competence of the sitting judge.

Vartan Oskanian: Iran nuclear talks: The ‘trust but verify’ dictate

We can only understand Iran’s real intentions by engaging Iranians – not cornering them.

Although the Iran nuclear talks are officially between Iran and the five UN Security Council permanent members plus Germany, at the core, this tug-of-war is between Iran and the United States. I can even picture the US and Iranian diplomats, alone, behind closed doors, working on drafts of the final document.

The signs and posturing from all sides indicate that the US and Iran are serious, genuine and committed to reaching an agreement. The negotiations are being conducted quietly, and between rounds, the sides are displaying restraint and expressing cautious optimism. When the US, for domestic reasons, refused a visa to Iran’s UN representative, Iran’s response was measured. In the recent UN vote condemning Russia’s actions in Ukraine, Iran did not come in on Russia’s side, as it usually does. All this points to a very real opportunity for a positive outcome by the July deadline they have set for themselves.

How is it that what was unthinkable only a year ago suddenly seems plausible?

Apr 29 2014

The Breakfast Club: 4-29-2014

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

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