Tag: ek Politics

NBC News Confirms Attempt by Edward Snowden to Go Through Channels at NSA

By: Kevin Gosztola, Firedog Lake

Thursday May 29, 2014 10:51 am

One major argument from critics of NSA whistleblower Edward Snowden has been that he did not go through “proper channels” in government before taking documents on top secret surveillance programs and providing them to journalists. But, during NBC News’ exclusive interview with Snowden, the network indicated that it was able to confirm Snowden had made at least one attempt to go through channels and the network is in the process of obtaining records showing other complaints were made to superiors.

NBC Nightly News anchor Brian Williams asked Snowden, “When the president and others have made the point that you should have gone through channels, become a whistleblower and not pursued the route you did, what’s your response?”

“I actually did go through channels and that is documented,” Snowden answered. “The NSA has records. They have copies of emails right now to their Office of General Counsel, to their oversight and compliance folks, from me raising concerns about the NSA’s interpretations of its legal authorities.”

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After this portion of the interview played, Williams informed viewers that NBC News had learned from “multiple sources that Snowden did indeed send at least one email to the General Counsel’s office raising policy and legal questions.” It was working to confirm further details and had filed a Freedom of Information Act request for any other records of Snowden going through channels.

Remarkably, during the post-interview analysis show that streamed on the web, NBC News anchor and correspondent Andrea Mitchell said in April 2013 he sent the one email to the General Counsel, which he talked about. She then acknowledged the NSA could be covering up “other emails” and Snowden could be right-that there is a “paper trail” showing he made “multiple attempts” to take his concerns to superiors.

“I asked one top official, do you think they could be lying to you and not turning it over to the legislative branch? And this person said I can’t be 100% sure,” Mitchell reported. “That is the degree to which what Snowden has revealed has affected supporters of the government surveillance program, their sense of the credibility, because we do think that people are lying to us about it.”

So don’t let people bullshit you.

New safety requirements set for Keystone pipeline

Associated Press

Posted: Tuesday, May 27, 2014 8:00 am

The new conditions were added four months after the pipeline safety agency sent TransCanada two warning letters last year about defects and other construction problems on the Keystone Gulf Coast Pipeline, which extends from Oklahoma to the Texas Gulf Coast.

“From the start of welding, TransCanada experienced a high weld rejection rate,” said one letter dated Sept. 26. Over 72 percent of welds required repairs during one week. In another week, TransCanada stopped welding work after 205 of 425 welds required repair.

Inspections by the safety agency found TransCanada wasn’t using approved welding procedures to connect pipes, the letter said. The company had hired welders who weren’t qualified to work on the project because TransCanada used improper procedures to test them, the letter said. In order to qualify to work on a pipeline, welders must have recent experience using approved welding procedures and pass a test of their work.

The weld failure rates are “horrible,” said Robert Bea, professor emeritus of civil and environmental engineering at the University of California, Berkeley. “The level of defects is indeed cause for alarm and indicative of something that is going on in the Keystone organization that isn’t satisfactory.”

In high-risk projects such as nuclear submarines or nuclear power plants, even one-tenth of a percent rate of bad welds would be cause for deep concern, Bea said.

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Another letter, dated Sept. 10, said a government inspector witnessed TransCanada officials investigating dents in pipeline that had been laid without first sufficiently clearing rock from trenches or from soil used as backfill. The same letter said coating that protects pipeline from corrosion was damaged by weld splatter because a contractor hadn’t followed the company’s welding procedures. Eventually, pipeline was excavated in 98 places to make coating repairs.

Dents and damaged coatings are serious defects because they can weaken pipes and lead to failures, Bea said.

After Safety Concerns Over Its Southern Leg, Keystone XL Is Getting New Regulations

By Katie Valentine, Think Progress

May 27, 2014 at 10:20 am

PHMSA slipped in the two conditions towards the end of the appendices of the State Department’s Environmental Impact Statement, released this January. They dictate that TransCanada hires a third-party contractor chosen by PHMSA to monitor Keystone XL’s construction and report any faulty construction techniques back to the agency. In addition, TransCanada will be required to adopt a quality management program to make sure that Keystone XL is “built to the highest standards by both Keystone personnel and its many contractors.”

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The letters aren’t the only evidence of faults along Keysone XL’s southern leg, however. A November report found that TransCanada had dug up the pipeline 125 times to fix dents and sags, defects that can weaken pipelines and eventually lead to spills. And as Bloomberg reported last year, TransCanada won’t be using the most advanced spill detection technology, which employs infrared sensors or fiber-optic cables to find even tiny spills, on Keystone XL. That failure to include high-tech spill detection is concerning, especially when paired with news that PHMSA could be shrinking its staff by nine percent by mid-June, due to agency-offered employee buyouts.

What really bugs me is how little the D.C. elite seem to care about exposing themselves as bald faced liars and incompetant fools.

Today’s cases in point- it turns out Barack Obama and Joe Biden never had the least intention of removing U.S. troops from Afghanistan this year and instead are going to maintain a residual force of between 10 and 12 thousand (depending on NATO contributions).

Of course they make the same empty noises about needing to continue the “training mission”, but that’s not what it’s about at all.  It’s about providing a security force so we can continue our illegal and murderous drone strikes in Pakistan and our torture chambers at Bagram Air Field.

President Obama looks to keep 9,800 troops in Afghanistan

By EDWARD-ISAAC DOVERE and PHILIP EWING, Politico

5/27/14 12:26 PM EDT

President Barack Obama will announce Tuesday afternoon that he plans to keep 9,800 troops in Afghanistan after the end of the year to continue training Afghan forces and supporting operations against Al Qaeda, a senior administration official said.

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The White House did not detail Monday how many non-U.S. troops might remain in Afghanistan, but American commanders have said they’ve endorsed a plan for as many as 12,000 total NATO troops. If that figure remains an official goal, the balance of the ultimate force would likely come from Europe.

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Obama’s announcement, scheduled for the Rose Garden at 2:45 p.m., follows two days after the president made a surprise visit to Afghanistan to renew his pledge to end all combat operations by the end of the year and meet with commanders on the ground about steps forward.

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American military commanders have said they would not support leaving behind a force in Afghanistan without a BSA, which would protect U.S. troops from being prosecuted in Afghan courts and set other important policy for their time there.

So there’s the lie exposed just 2 days after he said exactly the opposite.

Now the incompetance-

White House staff tried to ‘un-ring the bell’ after revealing CIA chief’s identity

Tom McCarthy, The Guardian

Monday 26 May 2014 13.24 EDT

The agent in question, listed as chief of station, would be a top manager of CIA activity in Afghanistan, including intelligence collection and a drone-warfare programme under which unmanned aerial vehicles mount cross-border attacks into Pakistan.

The name appeared on a list of attendees requested by White House officials for the president’s visit to Bagram air base to mark Memorial Day, the national day of tribute to fallen service members. The list of 15 people was drawn up by the military, written into a routine press report and sent to Washington. The Obama press office then sent the list, unredacted, to the larger group.

The mistake did not come to light until the reporter who had filed from Afghanistan, the veteran Washington Post correspondent Scott Wilson, looked more closely at what he had sent and noticed the name and title.

“I drew it to their attention before they had noticed what had happened,” Wilson said on Monday, hours after returning from the 33-hour trip overseas.

But wait!  There’s more!

Former CIA Director And Defense Secretary Says CIA Tried, But Failed, To Do Economic Espionage

by Mike Masnick, TechDirt

Tue, May 27th 2014 9:55am

US intelligence officials still seem to think that there’s some big distinction between the kind of intelligence work the US does versus the kind that other countries do. US officials time and time again claim that they don’t do “economic espionage” — even though it’s pretty clear that [they do it ], just through indirect means (i.e., while they don’t hand trade secrets over to companies, they’re certainly using economic information to impact policy and trade discussions).

Former Defense Secretary and CIA boss Robert Gates continued this sort of tone deaf line of thinking from US intelligence defenders by claiming that French intelligence downloads the contents of laptops from businessmen visiting Paris.

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Throwing everyone else under the bus does nothing to make the US and the NSA’s activities any better, and it’s bizarre that intelligence officials seem to think they have the moral upper hand here. Almost no one sees it that way. They just look petty.

Even more bizarre: for all of Gates’ talk about how the US doesn’t do economic espionage… he then basically admits that he tried to do exactly that and failed.

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(H)e says “this is something we don’t do” while admitting that he tried to do exactly that. He was just stymied by whoever was Commerce Secretary. If a more… permissive Commerce Secretary were in the job, it would be a very different story, now wouldn’t it? In fact, this is a pretty major admission. For all the talk of “we don’t do that,” what Gates really means is “we tried to do economic espionage, and we would do economic espionage, if we could.”

Do you feel any safer after Elliot Rodger’s killing spree?  Maybe if he had a obviously Muslim name?

Where was the NSA before the Isla Vista Mass Shooting?

By: Peter Van Buren, Firedog Lake

Tuesday May 27, 2014 7:47 am

He stabbed three men to death in his apartment and shot the others as he opened fire on bystanders on the crowded streets of Isla Vista, California. Rodger then killed himself. Three semi automatic handguns, along with 41 loaded ten-round magazines- all bought at local gun stores- were found in his car. There could have been many more dead.

So where was the NSA?

For the year since Edward Snowden revealed in detail the comprehensive spying on every aspect of American lives, we have been assured by the president and the NSA that every single one of those intrusions into our life was necessary to protect us. The now-former NSA chief said he knows of no better way his agency can help protect the U.S. than with spy programs that collect billions of phone and Internet records. “How do we connect the dots?” he said, referring to often-hidden links between people, events and what they do online. “There is no other way that we know of to connect the dots. Taking these programs off the table is absolutely not the thing to do.”

So where was the NSA?

Elliot Rodger posted on his social media, presumably monitored by the NSA, about suicide and killing people. His family asked police to visit Rodger’s residence. But when they showed up, Rodger simply told deputies it was a misunderstanding and that he was not going to hurt anyone or himself. No search was conducted.

Barely 24 hours before the killing spree, Rodger posted a video on YouTube, presumably monitored by the NSA, in which he sat behind the steering wheel of his black BMW and for seven minutes announced his plans for violence. The video has been leaked- see it here.

And finally this gem- GCHQ and the NSA has identified their hardware hacks (the chips they are replacing in your laptop so they can more easily spy on you) by their very specific and targeted destruction when the raided The Guardian’s offices.

GCHQ targeted input components in Guardian newspaper raid

By Graeme Burton, Computing

23 May 2014

The government had demanded that The Guardian destroy the documents, which it did. But that was not enough for the security services, and police were sent in to seize computing equipment.

“Surprisingly, however, GCHQ were not just interested in hard drives nor did they destroy whole devices,” claims Privacy International, which has led an examination of the hardware that the security services targeted.

It continued: “During our investigation, we were surprised to learn that a few very specific components on devices, such as the keyboard, trackpad and monitor, were targeted along with apparently trivial chips on the main boards of laptops and desktops.”

Indeed, when the devices were returned to The Guardian, these chips had clearly been ripped out.

Coming at the same time that it was revealed that US security services have tampered with exports of networking equipment in order to plant bugs, the particular seizures of these devices indicates that they may have played a role in UK security services’ eavesdropping.

Excellent tradework you morons.

This man made millions suffer: Tim Geithner’s sorry legacy on housing

David Dayen, Salon

Wednesday, May 14, 2014 07:45 AM EDT

“I saw some of the excerpts about housing and I must say I split my side in laughter because Tim Geithner personally and actively opposed mortgage refinancing, constantly,” Hubbard told Politico. “And now he’s claiming this would be a great idea in the country.”

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When Hubbard talks about refinancing, he’s being very specific. He co-wrote a plan in 2008 endorsing mass refinancing through Fannie Mae and Freddie Mac, as a economic stimulus, getting homeowners reduced monthly payments. This was one of the major fiscal policy tools available to the Administration that didn’t require additional spending – the Federal Reserve had lowered interest rates, it was merely up to Fannie and Freddie to take advantage of it. But in the early years of the crisis, the White House did little. Brad DeLong backs up Hubbard on this point, saying he never got a satisfactory answer for the lack of mass refinancing.

It took until 2012, just coincidentally an election year, for the administration to remove blockages on their key refinancing program (the Home Affordable Refinancing Program, or HARP). In an interview with Ezra Klein, Geithner plays the classic three-card monte trick of taking credit for every single refinance in the entire country, a number surpassing 20 million. In reality, HARP just hit 3 million refis this February, with the overwhelming majority of them coming after 2012. In the darkest years of the recovery, failing to engage in mass refinancing, particularly for those underwater homeowners (who owed more on their houses than they were worth) who couldn’t get a refi without government assistance, really missed an opportunity to put more money in homeowner’s pockets that would get spent.

On the more critical issue of helping homeowners stay in their homes, Geithner looks even worse. One smoking gun in the debate is the continued presence, throughout the Geithner tenure, of Ed DeMarco, a Bush-era official running the Federal Housing Finance Agency, the conservator for Fannie and Freddie. DeMarco blocked both refinancing for underwater borrowers and principal reductions for struggling homeowners, seen as the strongest and most sustainable way to keep people in their homes. The administration made no effort to remove DeMarco from his post despite claiming to be at odds with his policies.

In reality, Geithner made the same arguments as DeMarco against principal reduction, most explicitly in a hearing of the Congressional Oversight Panel in December 2009, arguing it would be “dramatically more expensive for the American taxpayer, harder to justify, and] create much greater risk of unfairness.” Geithner later cited the [potential moral hazard of “strategic default,” where homeowners would intentionally not pay their mortgage to get a principal reduction (something that never has and never would happen), to argue against making such modifications mandatory when they made sense for the investor and the borrower.

Keep in mind that this was the guy who handed hundreds of billions of dollars over to banks with basically no strings attached, suddenly worried about fairness when homeowners get a break on their mortgage payments. The White House was certainly chilled by the Rick Santelli rant about “the loser’s mortgages,” and mindful of giving money to the “wrong” people, but that was a political problem, one that could be solved by a stronger economic recovery, like through preventing foreclosures.

In his book, Geithner says that “I don’t think a more compliant FHFA would have produced a dramatically different result,” meaning that whatever differences existed between the administration and DeMarco were immaterial. In fact, the thrust of Geithner’s argument on housing in the book is that the administration did the best they could possibly do, that the alternatives were impractical or unwise, and that ultimately their efforts prevented 5 million foreclosures. This is another three-card monte trick, taking credit for every single mortgage modification, including ones not aided by the government’s HAMP (Home Affordable Modification Program) incentive payments. Even modifications that later went into default get counted as “preventing” a foreclosure under Geithner’s math. For context, there are currently not even 1 million permanent HAMP modifications.

Here are a few points to puncture holes in that balloon. On January 15, 2009, Larry Summers wrote a letter to Congressional leaders, promising a “sweeping effort to address the foreclosure crisis,” including a measure to “reform our bankruptcy laws.” This letter was critical to getting the second tranche of bailout money for the banks out of Congress, and yet afterwards, the administration gave little more than token support for the bankruptcy reform, known as “cram-down,” which would have allowed judges to modify terms of primary residence mortgages. Geithner admits in his book that “I didn’t think cram-down was a particularly wise or effective strategy,” meaning that, unless you believe Geithner played no role in administration decisions, the economic team effectively lied to Congress about cram-down to get the bailout money.

Geithner elaborates about cram-down to Klein, saying you would still have to go through a broken servicing industry and the court system to get it done, showing that he has no understanding of the value of cram-down whatsoever. The point, as the Cleveland Federal Reserve makes clear, wasn’t to actually use the bankruptcy process, it was to keep it in reserve it as a threat, to force banks toward modifications instead of a unilateral write-down administered by a judge. The point was increasing leverage for homeowners, and it’s not surprising Geithner wouldn’t grasp that.

Geithner: As Wrong about Soccer as Regulation

By William K. Black, New Economic Perspectives

Posted on May 21, 2014

Geithner begins his (brief) discussion of his regulation of Citi by stating that seven months after he became NY Fed President the NY Fed imposed a “hefty fine” on Citi. And then one reads the single clause that he devotes to detailing Citi’s conduct. It deliberately targeted its customers in a scheme to profit by placing its customers in grotesquely unsuitable investments – and then it covered up that abuse by lying to the NY Fed’s examiners – which is a federal felony. The deliberate sale of unsuitable investments to its own elderly customers may not have been a crime, but it was reprehensible and could have provided the basis for the “removal and prohibition” of the officers who led the abuse and huge fines against them. The crime of lying to examiners to cover up the breach of Citi’s fiduciary duties and own procedures should have led the NY Fed to file a criminal referral and demand that the Department of Justice (DOJ) prosecute the Citi officers who committed the felony. Instead, Geithner imposed only a “hefty fine” (trivial from Citi’s perspective) as a minor cost of doing Citi’s abusive and criminal business. It is revealing that he chooses to start his brief discussion of Citi with example of his feebleness as a regulator under the delusion that it demonstrates how tough he was. His narrative is deliberately disingenuous and unintentionally damning of Geithner as a faux regulator.

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Remember, Geithner wrote this only months ago – after the federal government, state government, and investigators had demonstrated the three epidemics of accounting control fraud that drove the crisis, plus the Euribor and Libor cartels/frauds run by the world’s largest banks, plus the willingness of top banks to aid the most violent drug cartels in the world and (if Geithner believes his own agency’s findings) terrorist groups, and nations subject to Treasury sanctions because they are developing nuclear capabilities and/or support terror.

Geithner obviously still doesn’t get it. His story is preposterous – but it explains why there are zero prosecutions of any of the elite bankers for leading the frauds that caused the crisis. His story is that he was misled about the “capab[ility] and ethic[s]” of “Wall Street” because met almost exclusively with: “talented senior bankers, and selection bias probably gave me an impression that the U.S. financial sector was more capable and ethical than it really was.” Even Greenspan is more honest than Geithner – and failing that relative test means that Geithner should never be allowed to run anything.

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I have a question for Geithner that perhaps some reporter would ask when he is flogging his book: was it the “senior bankers'” supreme “talent[],” “capab[ility],” or “ethic[s]” – or some combination of those stellar traits – that proved most useful in making them fabulously wealthy through “looting” “their” banks (Akerlof & Romer 1993) and brought the global economy to the edge of destruction (Geithner 2014)?

Geithner is seriously peddling the claim – in 2014 – that the crisis was caused by the junior clerks and lending officers of the banks. The noble “senior officers” that dined with Geithner are blameless. After all, everyone knows that the systemically dangerous institutions (SDIs) are “too big to manage” – no, wait, must not admit that or my support for SDIs looks bad. Rewind tape. Delete last sentence. Geithner’s “introspection” is phony.

Geithner has contributed the ideal dishonest bookend book to pair with a book that blames the crisis on the idiot-savant hairdressers who conned the poor banks run by Geithner’s “talented … capable and ethical” “senior bankers” into making them home loans they could not repay. Please put the over-the-top paperback fictions novellas of your collection between those bookends so that they will feel at home in your library. And if you believe the “blame the loan officer” and “blame the hairdresser” memes – well, there’s a house in Las Vegas I’d like to sell you at its June 2006 price. Read Geithner to see where Wall Street accountability went to die. And then recall that Axelrod described President Obama and Geithner as having a mutual “man crush.”

Andrew Ross Sorkin, Timothy Geithner, and the Three Card Monte Model of Propaganda

by Yves Smith, Naked Capitalism

Posted on May 12, 2014

The focus on TARP (and to a lesser degree, Lehman) allows Sorkin to omit mention of actions that were clearly Geithner’s doing, including: his fighting Sheila Bair tooth and nail on resolving the clearly insolvent Citigroup; his decision to pay AIG credit default swaps counterparties 100 cents on the dollar; his defense of the failure to haircut AIG employees’ pay; [Treasury’s acceptance of intransigence by AIG’s CEO, Robert Benmosche; his refusal to use $75 billion in TARP that Paulson’s Treasury had courteously left aside for homeowner relief; the clearly too permissive “stress tests”; Geithner’s Treasury allowing banks to repay TARP funds early rather than rebuild their balance sheets (get this: because they were eager to escape very limited restrictions on executive pay); Treasury letting banks repay TARP warrants at an unduly cheap price until Elizabeth Warren’s Congressional Oversight Panel caught them out; his cynical policy of “foaming the runway,” as in using what were billed as homeowner relief programs merely to attenuate foreclosures and thus spread out bank losses, which had the secondary effect of wringing more money out of already stressed borrowers before they were turfed out of their homes. And this is far from a complete list of Geithner’s actions that favored banks over the public at large.

Tim’s Not Wild About Larry

By MICHAEL HIRSH, Politico

May 20, 2014

What is new and startling is the sheer number of the fights that occurred between the administration’s two top economic policy-makers, as well as the acerbity of their rivalry.  Geithner gives accounts of the chronic policy disagreements between them over the “Buffett Rule,” a proposal to tax very rich individuals, which Geithner supported and Summers thought was “gimmicky”; over the “Volcker Rule,” the curb on risky bank trading that Geithner came to warily endorse but Summers thought a “stupid and craven concession to populism”; and over nationalizing the banks (Summers thought it wasn’t a bad idea, while Geithner hated it). What emerges is a portrait of two men struggling for power and influence but also in a state of constant strife over ideas. In general, Summers is more of a progressive about changing Wall Street and tackling health care and other aspects of the ailing economy-one reason he left the administration in 2010 was that he saw Obama bowing to GOP demands for austerity at a time when more stimulus was needed, friends say-while Geithner is more the pure crisis manager, monomaniacally convinced that the economy can come back only if Wall Street does.

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In the summer of 2013, Obama was reportedly keen again to appoint Summers as Federal Reserve chairman. But by then criticism of both Summers and Geithner had mounted over what critics deemed to be half-hearted stimulus and financial reform thanks in large part to their advice-a politically troublesome problem for the president amid the lingering aftereffects of the Great Recession. Summers, in particular, was a target of liberal economists such as Paul Krugman and Joseph Stiglitz for not pushing a much bigger stimulus. Some senators also wanted to confront him over his role in deregulating the financial system during the Clinton years, which helped set the stage for the 2008 financial crisis. After progressive Democrats in the Senate began lining up against him, Summers withdrew his name, and Janet Yellen, Bernanke’s No. 2, was chosen instead.

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Why does any of this matter? In large part because Geithner supplies an unprecedented glimpse into the very small Democratic fraternity that has run the world’s biggest economy for much of the last two decades. Many of them are disciples of Robert Rubin, Bill Clinton’s former Treasury secretary, and until recently their views have been seen as largely monolithic. Clearly they are not, and depending on how the economy does, these lines of battle could reappear in Democratic Party politics going into 2016.

Spain’s San Isidro bullfighting festival suspended after three matadors injured

AFP

Wednesday 21 May 2014 13.50 EDT

For the first time in 35 years, the San Isidro festival, which opens the bullfighting season in Spain, had to be suspended because all the matadors had been injured.

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The first bull on the programme, a black, 532kg animal named Deslio, knocked Mora over during a pass as his yellow and pink cape swirled in the wind.

Mora fell to the sand beneath his cloak, but the bull immediately turned on him, head down, ramming its horn deep into his leg and tossing him over repeatedly.

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The second matador, Antonio Nazare, appeared before the shocked audience to finish off the animal with his sword.

Nazare then faced his own opponent, however, a 537kg brown bull named Feten. The animal dragged the matador along the sand, injuring his knee and forcing him to seek treatment at the bullring’s hospital, the medical report showed.

The third matador, Saúl Jiménez Fortes, entered the ring to fight the same bull. The animal skewered him in the right leg and the pelvis, leaving three 10cm-deep injuries, the bullring doctor said. Fortes managed to kill the beast before he, too, sought medical treatment.

It’s hard not to laugh when some NeoLib Freshwater Friedmanite starts pontificating about ‘the invisible hand of the Market’ and ‘price discovering rational actors’ when it’s such a load of fucking bullshit.

Those concepts were developed by Adam Smith in his book Wealth of Nations in response to the prevailing practice of Royal Grants of Monopoly and Crony Capitalism as part of the Merchantilist system of Colonial wealth extraction and prohibitive Tariffs designed to protect ‘favored’ industries and individuals.

He spends far more time in that work inveighing against collusive business interests that form cabals and monopolies to engage in price fixing, a “conspiracy against the public or in some other contrivance to raise prices” to maximize the amount “which can be squeezed out of the buyers”.

Smith also warned that a business-dominated political system would allow a conspiracy of businesses and industry against consumers, with the former scheming to influence politics and legislation. Smith states that the interest of manufacturers and merchants “…in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.”

This is NOT “Free Enterprise”, it is a criminal enterprise and should be prosecuted under RICO–

HSBC, JPMorgan and Credit Agricole charged with alleged euro rates fixing

Reuters

Tuesday 20 May 2014 14.25 EDT

Brussels has charged Britain’s biggest bank, HSBC, its US peer JPMorgan and France’s Crédit Agricole with rigging financial benchmarks linked to the euro.

The European commission said it would soon charge the broker ICAP for suspected manipulation of the yen Libor financial benchmark.

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Prosecutors have charged 16 men with fraud-related offences.

“The commission has concerns that the three banks may have taken part in a collusive scheme aimed at distorting the normal course of pricing components for euro interest rate derivatives,” the commission said.

The three banks and ICAP, which refused to settle the case in December, could face penalties of up to 10% of their global turnover if found guilty of breaching EU antitrust rules.

Springtime for Bankers

Paul Krugman, The New York Times

MAY 18, 2014

By any normal standard, economic policy since the onset of the financial crisis has been a dismal failure.

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Now Timothy Geithner, who was Treasury secretary for four of those six years, has published a book, “Stress Test,” about his experiences. And basically, he thinks he did a heckuva job.

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How can people feel good about track records that are objectively so bad? Partly it’s the normal human tendency to make excuses, to argue that you did the best you could under the circumstances.

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But there’s also something else going on. In both Europe and America, economic policy has to a large extent been governed by the implicit slogan “Save the bankers, save the world” – that is, restore confidence in the financial system and prosperity will follow. And government actions have indeed restored financial confidence. Unfortunately, we’re still waiting for the promised prosperity.

Much of Mr. Geithner’s book is devoted to a defense of the U.S. financial bailout, which he sees as a huge success story – which it was, if financial confidence is viewed as an end in itself.

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One reason for sluggish recovery is that U.S. policy “pivoted,” far too early, from a focus on jobs to a focus on budget deficits. Mr. Geithner denies that he bears any responsibility for this pivot, declaring “I was not an austerian.” In his version, the administration got all it could in the face of Republican opposition. That doesn’t match independent reporting, which portrays Mr. Geithner ridiculing fiscal stimulus as “sugar” that would yield no long-term benefit.

But fiscal austerity wasn’t the only reason recovery has been so disappointing. Many analysts believe that the burden of high household debt, a legacy of the housing bubble, has been a big drag on the economy. And there was, arguably, a lot the Obama administration could have done to reduce debt burdens without Congressional approval. But it didn’t; it didn’t even spend funds specifically allocated for that purpose. Why? According to many accounts, the biggest roadblock was Mr. Geithner’s consistent opposition to mortgage debt relief – he was, if you like, all for bailing out banks but against bailing out families.

Tim Geithner, unreliable narrator

Felix Salmon, Medium

Published May 18, 2014

one thing has become generally-received wisdom about the book: whatever you might think of Geithner’s actions and opinions, he’s at least presenting himself in an honest and unvarnished manner. Michael Lewis describes this as a “near-superhuman feat”: “there’s hardly a moment in Geithner’s story when the reader feels he is being anything but straightforward,” he writes.

If Geithner isn’t being honest about his actions and the actions of others, then the whole book becomes much more problematic. And already critics on the right have, predictably enough, accused Geithner of lying.

Most of the time, such accusations boil down to a he-said-she-said about private conversations held in secret. But sometimes, Geithner makes simple declarations which are easily fact-checked.

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Geithner at his most prescient and heroic. He enters a hidebound wood-paneled institution where coffee is brought to his desk on a silver tray while briefings involved precious little discussion or debate; and in his very first speech he decides to speak truth to entrenched financial power, trying to “push back against complacency” and warn against the rise of the shadow banking system.

But here’s the thing: we can read the speech, it’s archived on the Fed’s website. And so it’s pretty easy to tell whether Geithner did indeed try to push back against complacency, in his speech, and warn of the rise of the shadow banks.

Spoiler: he didn’t.

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Geithner was saying that the shadow banking system is getting bigger, that the banks the NY Fed regulated were accounting for a smaller and smaller part of the total financial system - and that this was a positive development. Geithner wasn’t warning his audience about the risks of shadow banking, he was extolling it, on the grounds that it had “improved the capacity of our system to handle stress”!

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This is a bright green light to all the bankers in the room, saying “go ahead with all your whiz-bang new innovative products, we think they’re great, even if we don’t really understand them or know how to regulate them, it’s our job to keep up with you, and we have people in Basel who are on it.” Not once did Geithner indicate that the financial system was getting too complex and that the Canadian approach of forcing banks to keep things simple was maybe a good idea. Instead, he embraced all of the complexity, and just said that the regulatory architecture would have to cope, somehow.

…

There are two big worrying things here. The first is that Geithner didn’t see the crisis coming at all, and indeed was something of a cheerleader for all of the dangerous activities that the banks were getting up to. The second, which is just as bad, is that with hindsight, Geithner sees this speech as being prescient and heroic - that it’s something to be proud of, rather than sheepishly ashamed of.

As I read the rest of Geithner’s book, then, I’m basically forced to treat the author as an unreliable narrator. Geithner might seem to be straight-up and guileless, but his report of this speech shows that he can remember things - even things which are easily found on the internet - in an extremely self-serving manner. Maybe that’s only to be expected, from a political memoir. But it’s disappointing, all the same.

I’ll have a Brador, thanks.  And keep them coming.

And those Aussies.

Maybe a couple of Oil Cans now.

The climate is apparently already affecting the United States, according to the latest scientific reports, and the IPCC report is saying that we are facing severe crisis as we move further into this century. Yet public policy is nowhere near catching up to the extent of the crisis.

The underlying economic crisis has not been dealt with. The issues that led to the financial collapse in 2008 have not been addressed. The issues of too-big-to-fail, the issue of massive financial speculation and gambling that triggered the crisis have not been mitigated in any serious way by legislation. And most predictions are we’re heading into another global, deep recession sooner than later.

Lawrence Wilkerson is a retired United States Army soldier and former chief of staff to United States Secretary of State Colin Powell.

Transcript

I think, your real question, who’s behind the White House, and who’s therefore behind U.S. foreign policy, more or less? I think the answer today is the oligarchs, which would be the same answer, incidentally, ironically, if you will, for Putin in Russia, the people who own the wealth, the people who therefore have the power and who more or less (and I’m not being too facetious here, I don’t think) buy the president and thus buy American foreign policy.

Transcript

Transcript