Tag: ek Politics

Among other useless skills and trivia picked up in my misspent youth, I know how to use a Research Library.

What lies behind the battle over the New York Public Library

Jason Farago, The Guardian

Saturday 7 July 2012

Libraries across America are facing swingeing budget cuts and uncertain futures. But here in New York, home to the second-largest library in the country, the future is now.

The hottest cultural controversy of this already hot summer concerns the New York Public Library (NYPL), and a plan to disembowel its main building – a plan that will slice open the stacks and “replace books with people”, in the words of the NYPL system’s CEO, Tony Marx. It’s enraged writers and professors, demoralized a staff already coping with layoffs, and called the entire purpose of the system into question.

…

Unlike the borough branches, the central library does not lend books. It’s a research institution, and compared to establishments of the same caliber – the Library of Congress, say, or the collections of Harvard and Yale – it is exceptionally open. You don’t need an academic affiliation. You don’t need to pay for a reader’s ticket. You don’t even need to come up with a convincing excuse to call up Walt Whitman’s manuscripts if you want to have a rifle through. Just fill out a call slip and you can have it in about an hour.

The new Central Library Plan, though, will move 3m books (about 60% of what’s now on site) out of the central facility, to be immured in some bunker in New Jersey. Researchers have been promised that they can summon these books with a day’s notice. But the library already promises that for books currently off-site, and it doesn’t really work that way; in practice, it takes closer to two or three days.

…

What will take the place of the books? Well, the closed stacks will be smashed open to make way for a smaller lending library, to supersede the large one across the street from the main facility which the NYPL plans to sell off. That worries not just researchers but architectural preservationists. The library, designed by Carrère and Hastings, is a masterpiece of engineering; unusually, the grand reading room sits at the top of the building, perched on stacks that were state of the art in their day.

…

A research library has a different mission from a lending library; it’s there to put everything, not just the most popular volumes, at our disposal. If you hit an intriguing footnote that references another publication, or if you find an irregularity in a text and want to check it against another source, all you have to do now is grab one of the library’s stubby golf pencils, write down the title, and it’s yours. That will soon be gone, and its effect on research will be brutal if not mortal.

…

The central library plan might not be irredeemable. Several advocates have proposed a sensible alternative that would keep most of the books in town. But the NYPL has shown no inclination to listen to its own users, or even to make its deliberations public, and that is the truly worrying thing. Replacing books with people may look accessible and anti-elitist. But the real popular gesture is to keep research free for all.

Instead, on the advice of some of the world’s most profitable consultancies and a board full of oligarchs, we are being told that what we really deserve is not a world-class library, but comfy chairs and blueberry muffins.

Lifeguard’s ordeal is parable about outsourcing

By Steven Pearlstein, Washington Post

Published: July 14

Because they are generally free from union contracts and the unwritten norms of pay equality that exist within any enterprise, contractors are able to pay lower wages and benefits – in many cases, a lot lower. That was certainly the case with Ellis and the Hallandale lifeguards.

The second big advantage that outsourcing firms enjoy is the economies of scale. A firm that specializes in one function and does a lot of it can generally do it at a lower cost simply by spreading fixed costs over a much larger base of business.

Simply by having more experience, a specialty contractor is also more likely to hit upon the most efficient and effective ways of doing things and can quickly adopt those improvements throughout its operations.

…

There is, however, an important trade-off that is made by outsourcing that contractors reflexively deny but is inherent in any firm that derives its competitive advantage from having carefully constructed systems for doing just about everything.

It is these systems – the rules, the procedures, in effect the operational software – that allow companies to take relatively low-skilled, low-paid workers with relatively little experience and have them do tasks that were once done by people with higher skills, higher pay and more experience. And it is the very nature of these systems that workers are discouraged, if not prohibited, from exercising their own discretion. Their only job is to follow rules, stick to the script and leverage the experience and expertise that are embedded in the system.

That’s why the person in the airline call center in Bangalore can’t do what is necessary to help you catch your honeymoon cruise after your flight has been canceled because a co-pilot failed to show up on time. Her computer simply won’t allow her.

…

The reason these various systems can deliver reliable service at lower cost most of the time is precisely because front-line workers are willing and able to act like cogs in a machine. So when two of Lopez’s colleagues later told supervisors they would have done the same thing, they were fired as well.

If you want discretion and judgment, if you want workers who really understand and relate to customers, if you want the flexibility necessary to respond to individual needs or unforeseen circumstances, then you can go back to paying twice as much to have your own, longtime employees doing the work. That’s the outsourcing trade-off. It may be a good trade-off – most of the time I suspect it is. But it is an unavoidable trade-off, no matter how good the contractors or their systems.

Let’s Talk Turkey About Greece

Ian Welsh

2012 May 26

• Start gun-running and other black market activities up.  European gun-running currently goes through Albania.  Greece has much better ports.  If the Euros don’t like it, they can militarize Greece’s borders at a cost much higher than feeding the Greeks.
• Become a full on black-hole for banking.  If anyone wants to store money in Greece, they can.  No questions asked, no forms needed.
• Make deals with other “pariah” and semi-pariah nations.  Start with Iran and Russia for oil (Iran will be happy to give oil in exchange for black market help).  Make a deal with various 2nd world nations for food, start with Argentina, they have no reason to love the IMF or the European Union, which promised to “punish” them for nationalizing oil in Argentina.  In exchange Greece can offer use of their fleet, for cheap, and port rights for the Russian navy.  They’ve wanted a true warm water port for some time.  Offer them a nice island in the Med with a 30 year lease.

Europe’s Downturn Creates Unlikely Smugglers

By STEPHEN CASTLE and DOREEN CARVAJAL, The New York Times

Published: July 11, 2012

For years, law enforcement officers and smugglers have played cat and mouse in Europe, where contraband cigarettes are stashed in everything from furniture shipments to loads of Christmas trees. But Europe’s four-year-old economic crisis is expanding the black market for cigarettes, robbing European Union nations of valuable revenue and drawing in a new class of smugglers.

…

Hard facts about this smuggling trade are found in the lowliest places: the garbage. In annual surveys, financed by cigarette companies, researchers fan out to major cities in 27 European nations and collect crumpled cigarette packs. In turn those packs are analyzed by laboratories to determine how many are bought across the counter and how many are counterfeit. Some boxes are so meticulously produced in China, Dubai or Eastern Europe that they contain bogus tax stamps for different nations.

The latest results of the garbage scavenging showed the black market competition had increased to record levels. In Spain, illicit sales last year soared 300 percent to more than 4.6 billion cigarettes. In the struggling region of Andalusia, they showed, contraband cigarettes commanded 20 percent of the market.

In Ireland, smugglers are robust competitors with legal cigarette companies, reaching more than 17 percent. Over all, black market cigarettes continued a steady climb for the fifth straight year, topping 10 percent of consumption or 65 billion cigarettes, according to the annual report issued in June by KPMG for Philip Morris International.

…

“A lot of people perceive this as a ‘Robin Hood’ type of fraud and that the ordinary person in the street, who has a lot less money these days, is gaining the benefit,” said Austin Rowan, head of the unit responsible for cigarette smuggling at OLAF, the European Union’s Anti-Fraud Office. “But this trade is financing organizations that are involved in other activities including drugs smuggling.”

Our idiot ‘Masters of the Universe’ who can’t even make money on carry trades at 0% borrowing costs are soon going to learn that 10%+ return on investment is not part of the Constitution or Bill of Rights.

Get ready for the end of record corporate profits

By MATTHEW CRAFT, AP Business Writer

6 days ago

For almost three years, no matter what has rattled the financial markets – a debt crisis in Europe, high gasoline prices, a slower economy – investors have been soothed by rising corporate profits.

…

Over recent weeks, a motley collection of chain stores, steel producers and technology titans have warned of slowing profits. They all point to similar culprits – flagging sales to Europe and slower economic growth in China.

…

“You’ve seen the evidence,” says Adam Parker, chief U.S. equity strategist at Morgan Stanley, the investment bank. “A ton of companies have already told you the economy is slowing.”

The list of companies that have warned of trouble is long and varied, and includes well-known names such as McDonald’s, Cisco, Starbucks and Tiffany & Co.

Add them up, and 94 companies have lowered their estimates for this earnings season, which begins on Monday when Alcoa, the aluminum maker, reports its results. Only 26 have raised their estimates.

Morgan Stanley’s research team says the ratio hasn’t been that lopsided toward the negative since the summer of 2001, when the economy was in the middle of an eight-month recession brought on by the bursting of a bubble in technology stocks.

Shares Fall for a Sixth Day

By THE ASSOCIATED PRESS

Published: July 12, 2012

Wall Street stocks slid for a sixth consecutive day on Thursday as concern spread that weaker global economic growth and the European debt crisis would hurt American corporate earnings. The Standard & Poor’s 500-stock index was headed for its longest losing streak since mid-May.

…

Aluminum maker Alcoa, which started the second-quarter earnings season on Monday, reported weak revenue because of the faltering global economy. Fastenal, an American industrial distributor, reported revenue Thursday that was weaker than analysts had expected.

Marriott, the hotel operator, and Progressive, an insurance company, both fell after reporting weak financial results.

…

Supervalu, the supermarket operator, plunged by nearly half after it reported a sharp drop in net income late Wednesday and suspended its dividend. The company owns Albertsons, Jewel-Osco and Save-A-Lot.

Supervalu’s losses dragged on a rival grocery chain, Safeway, which fell 10.5 percent. Safeway’s was the biggest percentage decline in the S.&P. 500 index.

The weak corporate results will probably lead analysts to lower their quarterly earnings forecasts for the entire S.&P. 500, said John Fox, a co-manager of the FAM Value Fund, which specializes in small and medium-sized companies.

…

New numbers to be released on Friday are expected to show that China’s growth in the second quarter fell to 7.3 percent from the previous quarter’s 8.1 percent, which was a three-year low. Revenue from the construction, shipbuilding and export manufacturing industries might have been cut in half since last year.

Because LIBOR Investor Fraud is so yesterday.

HSBC Reveals Problems With Internal Controls

By LANDON THOMAS JR. and MARK SCOTT, The New York Tmes

July 12, 2012

The money laundering, which a U.S. Senate subcommittee indicates was linked to terrorism and drug deals, could result in HSBC’s paying fines of up to $1 billion, according to analysts.

…

In the case of the money laundering, the U.S. authorities have been examining HSBC for several years. On Tuesday, officials from the bank are set to testify in Washington before the Senate Permanent Subcommittee on Investigations. A subcommittee spokesman declined on Thursday to discuss the investigation, but the panel’s Web site describes the agenda: “a hearing on the money laundering and terrorist financing vulnerabilities created when a global bank uses its U.S. affiliate to provide U.S. dollars, U.S. dollar services, and access to the U.S. financial system to high risk affiliates, high risk correspondent banks, and high risk clients, using HSBC as a case study.”

…

Adding another political wrinkle: HSBC’s former chairman, Stephen Green, who was in office from 2006 to 2010 when many of the money-laundering detection problems occurred, is currently the trade minister in British prime minister David Cameron’s government. Mr. Green’s office did not reply to a request for comment on Thursday.

HSBC braced for huge U.S. penalty

By Sharlene Goff, Financial Times

July 12, 2012

HSBC is to apologise to US lawmakers for failing to have appropriate controls in place to ensure it did not facilitate the financing of terrorism and other criminal activities, transgressions that analysts estimate may cost it up to $1bn in fines.

…

Mr Gulliver warned that HSBC was likely to face further action from other US authorities in coming months.

HSBC said in its 2011 annual report that fines relating to money laundering issues could be “significant”. There has been speculation among analysts that the bank could be hit with a higher charge than the $619m ING, the Dutch bank, agreed to pay to settle accusations it violated US sanctions by helping Iranian and Cuban companies move billions of dollars through the US financial system. Some have suggested it could be as much as $1bn.

HSBC chief admits bank failed to control money laundering

Dominic Rushe, The Guardian

Wednesday 11 July 2012

In the memo, first reported by Bloomberg News, Gulliver said the hearing would “reveal that in the past we fell well short of the standards that our regulators, customers and investors expect”. He said: “It is right that we be held accountable and that we take responsibility for fixing what went wrong.”

…

Last month ING, the Dutch bank, paid $619m to settle accusations it helped Iranian and Cuban companies move billions of dollars through the US financial system in violation of US sanctions. Some analysts have suggested HSBC’s fine could be far higher.

…

William Black, professor of economics and law at University of Missouri Kansas City, said: “There is a theme developing in Washington that the City of London is evil, that it has a corrupt culture.”

He said that while the view might not be fair, the JP Morgan scandal, Libor and now HSBC meant it was a theme that was likely to be developed. “We like to blame someone else,” he said.

Former Congo warlord sentenced to 14 years over child soldiers

Los Angeles Times

July 10, 2012

Former Congolese warlord Thomas Lubanga was ordered to spend 14 years in prison Tuesday for enlisting children as soldiers, the first sentence handed down by the decade-old International Criminal Court.

…

Six years will be deducted from Lubanga’s sentence to cover the time since he first surrendered to the court, aggravating critics who called the sentence too light.

…

The March verdict was hailed by human rights groups as a key step toward bringing war criminals to justice. Though other tribunals have been created throughout history to punish atrocities from specific conflicts, Lubanga was the first person to be convicted and sentenced by the International Criminal Court, created a decade ago to address war crimes in places where local courts are unable or unwilling to act.

European parliament rejects anti-piracy treaty

Eric Pfanner, Business Standard

Jul 06, 2012

Foes of the treaty said the vote, by an overwhelming margin in the European Parliament at Strasbourg, would probably end the prospects of European involvement in the Anti-Counterfeiting Trade Agreement, or ACTA, which has been signed by the United States, Japan, Canada, Australia, South Korea and a number of individual EU members.

…

The vote was not even close, with 478 members of Parliament opposing the treaty, only 39 supporting it and 146 abstaining, yet it leaves considerable uncertainty. Under EU law, the treaty cannot go into effect without the Parliament’s endorsement.

“It’s a crushing victory,” said Jérémie Zimmermann, spokesman for La Quadrature du Net, a group in Paris that was active in the treaty protests. “It’s a political symbol on an enormous scale, in which citizens of the world, connected by the internet, have managed to defeat these powerful, entrenched industries.”

The legality of second hand software sales in the EU

by Jas Purewal, Gamer Law

Posted on 3.7.12

The second hand sale of physical and digital software has effectively been declared legal, according to a judgment published by the Court of Justice of the European Union today.  This has the potential to have a real impact on the way that software is sold and consumed – but at the same time the case raises more questions than it answers, so we’re really not in a clear cut situation at all.

…

Essentially, the court held that, under EU law, the right of software developers to control distribution of a piece of software – whether stored physically or digitally –  is “exhausted” (i.e. lost) once the developer has been paid for it (known as a “first sale“).  This means that developers lose the ability to prohibit any second hand sale.

However, if a second hand sale goes ahead then the first purchaser must stop using her copy of the software and render it unusable, because the developer’s right to control reproduction of software is not exhausted on a second hand sale.  In order to make sure that the first purchaser stops using the software she has sold on, it is permissible for the software developer to use “technical protective measures such as product keys“.

(h/t Ian Welsh)

Verizon Playing Dangerous Game in Net Neutrality Battle

By Tony Bradley, PCWorld

Jul 3, 2012 5:13 pm

This time around, Verizon is playing the First Amendment card. The challenge, essentially, is that by limiting Verizon’s ability to choose which content to block or promote, the FCC is infringing on Verizon’s right to free speech.

There are a couple major flaws in the argument. First, an individual’s right to free speech shouldn’t apply equally to a corporation.

…

Second, the FCC net neutrality rules don’t actually inhibit an ISP’s ability to express itself freely. Under the FCC rules, Verizon is free to publish whatever content it chooses–it simply can’t block or discriminate against other content as a matter of business practice.

The fact of the matter is the vast majority of the data traversing the ISP’s network (like Verizon) doesn’t belong to the ISP in the first place. An argument could be made that by throttling or blocking traffic Verizon is actually the party guilty of stepping on the First Amendment rights of others.

…

Part of the underlying problem is the fact that the major ISPs are also content providers. Verizon has a vested interest in preventing Netflix traffic because it has its own streaming entertainment services. Comcast is owned by NBC, so it could gain a strategic advantage for its own content by throttling the bandwidth for rival networks. The simple solution is for Congress to impose regulations banning ISPs from delivering their own content, or being owned by companies that publish or deliver content.

If the net neutrality rules suggested by the FCC to keep the Internet fair and open to all seem too draconian for Verizon, perhaps the problem is that Verizon the ISP needs to be separated from Verizon the cable TV provider, or Verizon the wireless broadband provider, or Verizon the VoIP (voice over IP) phone provider.

Court Papers Undercut Ratings Agencies’ Defense

By GRETCHEN MORGENSON, The New York Times

Published: July 2, 2012

When Cheyne issued its various securities in 2005, Moody’s and S.& P. rated them all investment grade. Even though Cheyne’s portfolio was bulging with residential mortgage securities, some of its debt received the agencies’ highest ratings, a grade equal to that assigned to United States Treasury securities. About two years later, as mortgage losses began to balloon, both agencies downgraded Cheyne’s debt below investment grade, to what is known as junk.

After the institutions that bought Cheyne’s debt sued Morgan Stanley and the ratings agencies, Moody’s and S.& P. immediately mounted a First Amendment defense. But Shira A. Scheindlin, the federal judge overseeing the matter, ruled in September 2009 that it did not apply because the Cheyne deal was a private offering whose ratings were distributed to a small group of investors and not the public at large. Judge Scheindlin agreed with the plaintiffs, who argued that the ratings were not opinions but were misrepresentations that were possibly a result of fraud or negligence.

“The disclaimers in the Information Memoranda that ‘a credit rating represents a rating agency’s opinion regarding credit quality and is not a guarantee of performance or a recommendation to buy, sell or hold any securities,’ are unavailing and insufficient to protect the rating agencies from liability for promulgating misleading ratings,” Judge Scheindlin ruled.

The judge also ruled against the defendants’ motion that documents and depositions generated in the case should be sealed. As a result, e-mails and deposition transcripts were filed with the court on Monday, showing how closely agency officials rating the deal had collaborated with Morgan Stanley, the firm that hired them to rate Cheyne’s securities.

Former Brokers Say JPMorgan Favored Selling Bank’s Own Funds Over Others

By SUSANNE CRAIG and JESSICA SILVER-GREENBERG, The New York Times

July 2, 2012, 9:06 pm

Amid the market volatility, ordinary investors are leaving stock funds in droves.

In contrast, JPMorgan is gathering assets in its stock funds at a rapid rate, despite having only a small group of top-performing mutual funds that are run by portfolio managers. Over the last three years, roughly 42 percent of its funds failed to beat the average performance of funds that make similar investments, according to Morningstar, a fund researcher.

“I was selling JPMorgan funds that often had weak performance records, and I was doing it for no other reason than to enrich the firm,” said Geoffrey Tomes, who left JPMorgan last year and is now an adviser at Urso Investment Management. “I couldn’t call myself objective.”

…

There is also concern that investors may not have a clear sense of what they are buying. While traditional mutual funds update their returns daily, marketing documents for the Chase Strategic Portfolio highlight theoretical returns. The real performance, provided to The Times by JPMorgan, is much weaker.

Marketing materials for the balanced portfolio show a hypothetical annual return of 15.39 percent after fees for three years through March 31. Those returns beat a JPMorgan-created benchmark, or standard of comparison, by 0.73 percentage point a year.

The actual return was 13.87 percent a year, trailing the hypothetical performance and the benchmark. All four models with three-year records were lower than the hypothetical performance and the benchmarks.

…

Regulators tend to discourage the use of hypothetical returns. “Regulators frown on using hypothetical returns because they are typically very sunny,” said Michael S. Caccese, a lawyer for K&L Gates.

Why is Nobody Freaking Out About the LIBOR Banking Scandal?

Matt Taibbi, Rolling Stone

July 3, 9:04 AM ET

Most intriguingly, or perhaps disturbingly, there were revelations last week that Bank of England deputy Governor Paul Tucker had a conversation with Diamond at the peak of the crisis in 2008. The conversation reportedly left Diamond, and subsequently his traders, with the impression that the bank had carte blanche to rig LIBOR downward in order to help allay spiraling public fears about the banks’ poor financial health.

…

That is explosive stuff. Members of Parliament will be grilling Tucker tomorrow about those events in what is sure to be a far more combative and entertaining legislative inquiry than the Jamie Dimon dog-and-pony show we just went through here in the states in recent weeks.

…

Anyway, the LIBOR story is leading the front pages of most of Britain’s dailies, it’s on TV, and it’s producing blistering editorials and howls of outrage amongst politicians and activists. But as compadre Yves Smith at Naked Capitalism put it, where’s the outrage here in America?

…

(T)o me what’s missing from all of this is the “Holy Fucking Shit!” factor. This story is so outrageous that it shocks even the most cynical Wall Street observers. I have a friend who works on Wall Street who for years has been trolling through the stream of financial corruption stories with bemusement, darkly enjoying the spectacle as though the whole post-crisis news arc has been like one long, beautifully-acted, intensely believable sequel to Goodfellas. But even he is just stunned to the point of near-speechlessness by the LIBOR thing. “It’s like finding out that the whole world is on quicksand,” he says.

Mirabile Dictu! Barclays CEO Bob Diamond Resigns Over Libor Scandal (Updated)

Yves Smith, Naked Capitalism

Tuesday, July 3, 2012

This sudden announcement also makes it seem much more likely that serious shoes will drop at the Wednesday hearings.

Although this news has just broken, and I’m sure there will be a ton more commentary in the next few hours, I suspect the proximate cause is that Diamond’s attempts to defend the rigging of Libor during the crisis as being tacitly approved by the Bank of England was not going to fly.

…

In other words, Diamond was saying “you can’t really blame us for this, we told everyone and no one said no.” We’ll find out soon enough, but the effort to shift blame to the regulators may be what sunk him. Paul Tucker, the deputy governor to the Bank of England to whom Diamond spoke directly on October 28, 2012, has had subordiantes issue denials of Diamond’s account.

…

The other interesting side effect is that this development, that of two heads falling in short succession at the top of one of the UK’s biggest banks, the only major institution not to receive any bailout funds, will raise the visibility of the Libor scandal in the US considerably. One correspondent has said the price manipulation goes back to 2001, and if that proves to be true, this is an even bigger cesspool that the reports so far envision. And the fact that top executives have been forced to resign from a bank that cooperated in the investigations and the settlement documents said deserved to be treated with leniency as a result, raises the question of what sort of sanctions should be meted on the executives of less cooperative and presumably equally culpable institutions.

Behold, the British establishment, panicked

Paul Mason, BBC

3 July 2012

Here is the central problem with Barclays. Its business model has become heavily reliant on the kind of investment banking Bob Diamond pioneered at Barcap, a division he created and was determined to lead to global dominance until Alistair Darling impolitely stopped his acquisition of Lehman Brothers in September 2008.

…

The results have been felt in every community in Britain. Four years ago, Barclays was lending £52bn to non-finance, non-property businesses in the UK, 27% of all loans.

Now the figure is £38bn, and just 16% of business loans. In the process the bank – single handedly – has taken £3bn of capital out of manufacturing, more than £3bn out of retail/wholesale, while ploughing an extra £10bn into home loans and £6bn into property.

…

It has reduced its exposure to British business, carries a £700bn net credit risk that is only possible because of the implicit guarantee the October 2008 bailout gave to all banks. And it is:

“(a) a machine for enriching investment bankers … with £1.5 billion in staff bonuses last year versus a pre tax profit of £3billion (b) the risks to the tax payer are not offset by corporation tax, because Barclays has used losses to minimise its payments; [paying] just £113 million in UK corporation tax in 2009.”

…

But the crisis threatens to escalate in three directions. First to the 20 other global banks who stand accused of manipulating Libor.

The scale of class-action lawsuits being readied in the United States is, say some, big enough to sink certain of these banks. We will soon hear the results of the other – regulatory and criminal – investigations into the City of London.

Second, to the City of London itself.

…

(T)he management of the bank: its board, its chairman and its CEO stood accused, effectively, of negligence. Yet again London turned out to be the dodgiest place to do business, and that was why the original slap on the wrist did not work.

So now we have a third direction of escalation. Both the SEC and FSA left unanswered questions about the manipulation of Libor for “survival” reasons.

…

By last night, that meant the Bank of England – an institution created in the Christopher Wren era – was getting calls from financial journalists of the type normally aimed at, well, people like Bob Diamond. In short order he was gone.

Such is the power of the British establishment. But its problems are not over.

I hate to advocate drugs, alcohol, violence, or insanity to anyone, but they’ve always worked for me.

– Stockton