Tag: ek Politics

Heh.  National Occupy Leaders?

There aren’t any.

Quan says she’ll call national Occupy leaders

Will Kane,Henry K. Lee, Chronicle Staff Writers, San Francisco Chronicle

January 30, 2012 01:55 PM

Oakland Mayor Jean Quan said today that she is going to call national leaders of the Occupy Wall Street movement and implore them to disown Oakland’s protest movement.

“I plan to call some of the national leadership of Occupy this week to say that the Oakland group is not nonviolent and has not agreed to be nonviolent,” Quan said in an interview on KCBS. “The national Occupy movement has said they are nonviolent.”

…

Rachel Lederman, a civil rights lawyer based in San Francisco who is working with the Occupy movement, said police have overreacted and have used excessive force, creating “an increasing level of confrontation with Occupy Oakland over the past several months” and that officers on Saturday had boxed in peaceful protesters.

She said some protesters had carried shields with them because “these young people have felt the need to protect themselves when they’re likely to be shot with so-called less-than-lethal projectiles.”

…

“What they are doing against the city economically is not nonviolent either,” she (Quan) continued on KCBS. “Every Saturday they are doing demonstrations and in my city that is my night of highest police need. They are taking away resources from my city and creating a situation that is making it more difficult for me to keep the city safer.”

…

“Well you guys used tear gas and batons too,” Quan said, referring to San Francisco. “I think it is a different time, I think it is how the media plays it. There is also probably a little misogyny and a little racism, when I looked at what happened in terms of how the national media portrayed it, and how Occupy’s internal media portrayed it.”

"Mortgage Fraud is a Top Priority for This Administration"

By Matt Stoller, Naked Capitalism

Friday, January 27, 2012

Department of Justice official Tony West, July 2009

Mortgage fraud is a top priority for this Administration, especially when public dollars are at stake.

US Attorney Lawrence Brown, Oct, 2009

The vigorous pursuit of real estate professionals who perpetrated mortgage fraud is a top priority for federal authorities in this region.

Department of Justice official Tony West, Jan 2010

Mortgage fraud is a top priority for this administration. We will aggressively pursue both individuals and corporations who defraud federal mortgage insurance programs, which are so important to this economy.

US Attorney Dennis Burke, March, 2010

Mortgage fraud is a top priority for the U.S. Justice Department in the District ofArizona, where it has destroyed property values, lending institutions, and entire neighborhoods in our community. No question, complex fraud schemes – a prime example, here – played a role in crashing our real estate market. Culprits like these defendants will be tracked down, prosecuted and convicted. I congratulate the FBI for their thorough investigation that led to this significant sentence.

U.S. Attorney David Gaouette April, 2010

The prosecution of those who commit mortgage fraud is a top priority of the Department of Justice and this U.S. Attorney’s Office. Those who commit such crimes seriously erode the confidence of financial institutions to lend money which is a key element of the future strength of our economy.

US Attorney Wilfredo Ferrer, Southern District of Florida, May, 2010

There is rampant fraud in South Florida. I think that’s unfortunate. It is embarrassing that we are known in some circles as the fraud capital of the country. I don’t like that title.

US Attorney John Walsh, Jan 2011

The investigation and prosecution of mortgage fraud is a top priority of the Justice Department and this office. Prosecuting these cases helps protect the integrity of the housing market.

Promises Made, and Remade, by Firms in S.E.C. Fraud Cases

By EDWARD WYATT, The New York Times

Published: November 7, 2011

Nearly all of the biggest financial companies, Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America among them, have settled fraud cases by promising the S.E.C. that they would never again violate an antifraud law, only to do it again in another case a few years later.

A New York Times analysis of enforcement actions during the last 15 years found at least 51 cases in which 19 Wall Street firms had broken antifraud laws they had agreed never to breach.

…

S.E.C. officials say they allow these kinds of settlements because it is far less costly than taking deep-pocketed Wall Street firms to court and risking losing the case. By law, the commission can bring only civil cases. It has to turn to the Justice Department for criminal prosecutions.

FCIC Referred Criminal Securities Fraud Violations to Justice Deparment a Year Ago

By: David Dayen, Firedog Lake

Monday January 30, 2012 11:39 am

I remember confirming with the Justice Department that they received those referrals of potential violations of law from the FCIC. As it turns out, that happened a year ago Saturday. And we’ve heard nothing arising out of those criminal referrals from the existing Financial Fraud Task Force.

In addition, we knew at the time that those criminal referrals related to violations of secruties law, in other words precisely what the new RMBS working group would want to investigate.

…

The Justice Department has had this information, contained in depositions and official testimony, for a little over a year. They’ve done nothing. The Securities and Commodities Fraud working group would have been the natural arm of the Financial Fraud Task Force to which to refer those FCIC findings. The co-chairs of that group included Lanny Breuer and Robert Khuzami, who are also co-chairs of the RMBS working group that Schneiderman co-chairs.

Even those excited about this working group would have to admit that the same people at the federal level had the same access to the same violations of law and sat on their hands for the entire tenure of the Obama Administration. That’s why some people are skeptical that this new working group will lead to anything real. I recognize the claims that the dynamic around financial fraud and making Wall Street pay has changed generally, and that the Administration’s political people know they have a problem with coziness toward Wall Street, and so they may let the rope out a little bit. Plus there are prosecutors in DoJ at a lower level who may be dying to get their hands on some of this material and work with the new mandate to make some real noise. I understand that perspective. Time will tell if that will resolve in any different manner than the FCIC criminal referrals did.

Angelides closes by saying that “I look forward to President Obama’s newly appointed task force righting the financial wrongs that were committed, including the matters identified by the FCIC and referred to the Department of Justice.” So do I.

The Baltic Dry Index–

tracks worldwide international shipping prices of various dry bulk cargoes.

The index provides “an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Handymax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.”

Since 1744.  Because Cargo Ships take a long time to build and are very expensive, capacity is relatively stable and rises and falls in the price are a leading indicator of Economic Demand for Raw Materials.

Handymax is the smaller sizes, Panamax is the largest size that will fit through the Panama Canal, Capesize are so large they have to sail around Cape Horn and the Cape of Good Hope.

Unlike stock and bond markets, the BDI “is totally devoid of speculative content,” says Howard Simons, an economist and columnist at TheStreet.com. “People don’t book freighters unless they have cargo to move.”

The companion index is the HARPEX which doesn’t have it’s own Wikipedia entry, but which measures shipments of cargo packaged in containers.  Some raw materials yes, but mostly manufactured items being transported for assembly and sale.  Your Foxconn iPhone came from China in one.

Last week Louis Basenese of Wall Street Daily (not Journal) published this piece that made some Economists nervous.

The Most Alarming Chart I’ve Seen All Week

Louis Basenese, Wall Street Daily

Published Fri, Jan 20th, 2012  

While (almost) everyone finally agrees that the United States has avoided a nasty double-dip recession, a slowdown’s brewing elsewhere in the world.

How can I be so sure? All I have to do is look at the latest chart for the Baltic Dry Index.

…

(T)he Index is down 48.4% in the last month. And it’s down 54.4% in the last three months.

The culprit? Why, Europe, of course.

…

On Wednesday, the World Bank cut its world economic growth forecast explicitly because of Europe’s never-ending debt crisis. Meanwhile, as Europe’s debt crisis persists, Bloomberg reports that the IMF plans to cut its global growth forecasts, too.

…

A recession is afoot, if not already underway.

And thus it has come to pass, exactly as predicted.

U.K. Teeters on Brink of Recession as King Signals More Stimulus: Economy

By Scott Hamilton and Jennifer Ryan, Bloomberg News

Jan 25, 2012 7:38 AM ET

The U.K. economy shrank more than economists forecast in the fourth quarter as manufacturers cut output and services stagnated, leaving Britain on the brink of another recession

Gross domestic product fell 0.2 percent from the third quarter, when it increased 0.6 percent, the Office for National Statistics said in London today. The median forecast of 33 forecasts in a Bloomberg survey was for a drop of 0.1 percent. Public-sector strikes over pensions on Nov. 30 had “some impact” on GDP in the quarter, the statistics office said.

Bank of England Governor Mervyn King said yesterday that policy makers can increase stimulus again if needed to guard against a “renewed severe downturn.” The U.K., the first Group of Seven nation to report fourth-quarter data, may not be the last to report a contraction. Germany’s statistics office estimated GDP fell about 0.25 percent in the period and the International Monetary Fund has forecast a euro-area recession.

That would be Mervyn King, Bank of England Governor.  Elizabeth Mountbatten is still preparing for her Diamond Jubilee and Prime Minister David Cameron’s idea of economic stimulus is to give her a $2 or $3 Billion Yacht she doesn’t need and says she doesn’t want.

Now the Wall Street Bull Shill Artists don’t like bad news getting in the way of their Ponzi schemes so there’s been some push back-

The Blame Game: Revisiting "The Most Alarming Chart I’ve Seen All Week"

Louis Basenese, Wall Street Daily

Published Fri, Jan 27th, 2012

Readers responded that I unfairly pegged the three-month, 54.4% drop in the Baltic Dry Index on Europe’s never-ending debt crisis. Instead, readers said I should have also pointed a finger at China.

Well, readers, I admit it: You’re right.

As I noted on Wednesday, China’s economy is decelerating. And as the biggest consumer of raw materials, it’s definitely having an impact on the Baltic Dry Index and global economic activity. In fact, the IMF cut its global GDP forecast this week from 4% to 3.3%.

Shame on me for not blaming China, too. Can you ever forgive me?

But wait!  It’s all about the Supply Side!

The supply of bulk ships only increased 8.9% over the last year and 2.8% in the last three months. Do you really think a 2.8% increase in supply is entirely responsible for a 54.4% drop in the Baltic Dry Index over the same time period?

Even if we look at the increase in capacity – which is up 12.7% in the last year and 3.9% in the last three months – there’s no way it’s the only factor sinking the Baltic Dry Index.

And how about that HARPEX?

In the last six months, the number of container ships only increased 0.3% and capacity only increased by 1.9%. Meanwhile, the HARPEX Index is down 46.9% over the same period.

Louis is not the only one noticing this.

Chart of the Day: The Baltic Dry Index

Sebastian Walsh, Financial News

25 Jan 2012

According to (Nick) Bullman (managing partner at risk consultant Check Risks), its initial collapse in October was driven primarily by a fall-off in demand from China, where declining housing prices pushed purchasing managers to cut back on orders for the raw materials whose transport the Baltic Dry Index reflects.

He said: “This collapse looks similar to the falls we saw in the Baltic Dry ahead of the recessions of the late 1970s and early 1990s – but this drop is actually steeper.”

…

“US unemployment is in high double digits at moment, not 9% – the way the US government collates the data means the long-term unemployed just fall out of the numbers.”

…

Bullman said that shipping companies have also been deliberately slowing down their journeys to save fuel, with trips from China to the US going now taking around 50% longer than they were early in 2011.

…

(H)e said he was surprised by how long the Baltic Dry took to fall.

…

“What this is signalling is that the world economy is slowing down much more quickly than people have been thinking.”

Even if the problem is over capacity, this is not good news.

Business Insider quoted Basil Karatzas, the chief executive of Karatzas Marine Advisors, as saying European banks could face nearly $100 billion in losses to restructure the $500 billion in shipping loans on their books.

(h/t Lambert Strether @ Naked Capitalism)

Perhaps you have heard by now that Twitter has a new policy (or not so new) of blanket censoring Tweets by country of origin and topic-

Twitter Allows for Censorship of Tweets in Individual Countries

By: David Dayen, Firedog Lake

Friday January 27, 2012 10:15 am

I think we should definitely be concerned that Twitter is bowing to pressure and allowing for the censorship of tweets in individual foreign countries.

…

I guess they’re selling this as an advance. But really it’s a way for countries to censor content inside their borders, without the messiness of having to kill the entire Internet, like they did in Egypt briefly during the uprising.

Twitter does plan to share the content censored at Chilling Effects. And the fact that the rest of the world can see the tweets means that someone can bear witness. But this unquestionably makes censorship easier in individual countries. I don’t know how you could say otherwise.

Twitter faces censorship backlash

Charles Arthur, The Guardian

Friday 27 January 2012 07.19 EST

The company has insisted that it will not use the gagging system in a blanket fashion, but would apply it on a case-by-case basis, as already happens when governments or organisations complain about individual tweets.

The new system, which can filter tweets on a country-by-country basis and has already been incorporated into the site’s output, will not change Twitter’s approach to freedom of expression, sources there indicated.

…

Twitter insists that the system will only formalise a system it already uses, where tweets are blocked or deleted following full judicial process. Being able to limit tweets to particular countries, rather than blocking them altogether, expands its ability to “let tweets flow”.

…

Terence Eden, a London-based mobile developer, complained on Twitter: “I don’t want to develop on an API which contains a ‘withheld_in_countries’ field. What’s next, a ‘for_your_own_good’ field?” He added: “I helped develop a Twitter client that Chinese pro-democracy activists used. Guess that’s dead now. Thanks, Twitter.”

Eden, who describes the move as censorship, said it would be difficult to work around because Twitter will identify which country a user is in by their internet address. “You can spot the censorship, but it’s hard to route around it,” he said.

This Action Item Breaking-

Twitter users threaten boycott over censorship accusation

Julian Borger and Charles Arthur, The Guardian

Friday 27 January 2012 15.55 EST

“The Tweets must flow”, Twitter declared a year ago, and quickly became an instrument of fast-moving revolution across the Arab world, coordinating mass protests in Egypt and sidestepping the state censorship in Syria. But, the microblogging site conceded that the tweets would not flow evenly in every country.

The company was accused of censorship by many users and threatened with a one-day boycott on Saturday after announcing that it could remove tweets in certain countries which have “different ideas about the contours of freedom of expression”.

…

Jeff Jarvis, the media commentator, said the move set the microblogging site onto the “slippery slope of censorship”. “I understand why Twitter is doing this – they want to be able to enter more countries and deal with the local laws,” he said. “But, as Google learned in China, when you become the agent of the censor, there are problems there.”

Ai Weiwei, the Chinese artist and dissident, put it more simply, posting: “If Twitter starts censoring, I’ll stop tweeting”.

…

The US civil liberties website, Demand Progress, opened a petition declaring: “Twitter’s importance as an open platform has been demonstrated time and again this year. We need you to keep fighting for and enabling freedom of expression – not rationalize away totalitarianism as a legitimate ‘different idea’.”

I hate repeating myself.

This is an Open Thread.

First thing- it doesn’t have anything to do with “Health Care” nor is it “Reform”.  It’s about Mandated Insurance Coverage, taking money from your pocket and forcing you to give it to ghouls.

Health Care All But Ignored in the State of the Union

By: Jon Walker, Firedog Lake

Wednesday January 25, 2012 7:46 am

If you look at President Obama’s State of the Union address as primarily a political speech to kick off his re-election effort, you get a strong sense of what the Obama campaign thinks are his strengths and weaknesses.

…

(I)n the entire 7,000 word speech, there are only two lines, one of which ignores the proposed large expansion of government Medicaid, sandwiched between other unrelated talking points.

I take this as a strong sign that the Obama campaign is basically admitting they simply can’t win the politics on Obamacare. It’s a sign they believe their best political approach is just to ignore the issue as much as possible in the campaign. The law was unpopular when it passed and is still unpopular to this day. There is no reason to believe it will get any more popular by November.

It’s not working-

Number of Uninsured Americans Steadily Increasing

By: Jon Walker, Firedog Lake

Tuesday January 24, 2012 8:58 am

Since President Obama took office the percentage of uninsured people in America has been steadily raising and has now reached a new high.

…

I simply don’t know how the Administration can successfully campaign on passing a law to expand coverage, when the level of uninsured has increased significantly during Obama’s tenure. It is tough for people to see such a law is any form of a real accomplishment when over a year after its passage it hasn’t even begun to accomplish its main promises and the exact opposite is taking place in people’s lives.

Instead of campaigning on delivering for the American people with his signature legislation, Obama will be forced to explain that even though the insurance situation has gotten worse, voters need to trust his claims that his signature law will eventually improve things in the future.

“Eventual change in the future I hope you believe me about” just doesn’t have that nice campaign ring to it.

The decision to delay the start date of the primary expansion in the Affordable Care Act until 2014 should be remembered as one of the most idiotic political and policy decisions ever made. I would argue that if Obama narrowly loses in 2012, it could be the single decision that is most responsible.

…

Almost no one will remember the bill’s official CBO score come November 2012, but plenty of people will remember they haven’t seen any tangle benefits from the law Obama spent a year working on in the middle of an economic and unemployment crisis.

It’s deeply, deeply unpopular-

American People Still Really Hate the Individual Mandate

By: Jon Walker, Firedog Lake

Thursday January 26, 2012 8:48 am

Even after almost two years since the passage of the Affordable Care Act, the individual mandate continues to be as unpopular as always. An overwhelming 2/3rds of the county holds an unfavorable view of the mandate and the majority thinks the Supreme Court should strike it down.

…

The individual mandate was clearly politically toxic long before the Democrats voted for the law and it has remained politically toxic ever since. The Democrats had both ample warning and ample time to replace it with a less controversial and unquestionably constitutional alternative to encourage individuals to get insurance. Such a modest correction would have been easy to make right before passage to increase support for the law.

I don’t know if I can think of another policy that was ever viewed so unfavorably by the electorate yet was still very publicly pushed forward by one party. The disdain this move showed toward public opinion played an important role in driving the conservative energy that allowed the GOP to win a historic victory in the House. The fact that Democrats could have easily avoided this political problem yet actively choose not to makes it one of the greatest unforced political errors in American politics.

Given how many people actually expect the Supreme Court to strike down the mandate, it is hard to guess whether a favorable ruling for the administration would be a political positive or negative for Obama.

…

They currently don’t think they need a Republican to win the Presidency for the highly unpopular mandate to go away. If the Court doesn’t get rid of it as these people expect, that could give many a new incentive to help elect Republicans in order for the GOP to get rid of the mandate with legislation.

Remember, it’s all about electoral victory!

Or maybe not so much now that we hardly have any left.

Rules of American justice: a tale of three cases

Laws are used to shield egregious crimes while severely punishing those who publicly discuss them

By Glenn Greenwald, Salon

Tuesday, Jan 24, 2012 4:23 AM Eastern Standard Time

(I)n American justice yesterday, the conclusion came to the criminal process arising from a horrific 2005 incident in which 24 unarmed Iraqi civilians were slaughtered in the town of Haditha during American raids conducted in the aftermath of an explosion of a roadside bomb. The Marine Staff Sgt. who ordered his soldiers to “shoot first, ask questions later,” Frank Wuterich, was in the midst of a manslaughter trial that could have sent him to prison for life (first-degree murder charges were previously withdrawn by the Government). Instead, prosecutors “offered Wuterich a deal that stopped the proceedings and could mean little to no jail time.” Instead, he “pleaded guilty Monday to negligent dereliction of duty” and “now faces no more than three months in confinement.” Lest you think that’s too lenient: “he could also lose two-thirds of his pay and see his rank demoted to private when he’s sentenced.”

…

The Rules of American Justice are quite clear:

(1) If you are a high-ranking government official who commits war crimes, you will receive full-scale immunity, both civil and criminal, and will have the American President demand that all citizens Look Forward, Not Backward.

(2) If you are a low-ranking member of the military, you will receive relatively trivial punishments in order to protect higher-ranking officials and cast the appearance of accountability.

(3) If you are a victim of American war crimes, you are a non-person with no legal rights or even any entitlement to see the inside of a courtroom.

(4) If you talk publicly about any of these war crimes, you have committed the Gravest Crime – you are guilty of espionage – and will have the full weight of the American criminal justice system come crashing down upon you.

Just to be clear, let’s remind ourselves of just what these “soldiers”, “this generation of heroes (that) has made the United States safer and more respected around the world” did-

What happened at Haditha?

By Martin Asser, BBC News

Monday, 10 March 2008

Eyewitness accounts suggest that comrades of TJ Terrazas, far from coming under enemy fire, went on the rampage in Haditha after his death.

Twelve-year-old Safa Younis appears on video saying she was in one of three houses where troops came in and indiscriminately killed family members.

“They knocked at our front door and my father went to open it. They shot him dead from behind the door and then they shot him again,” she says in the video.

“Then one American soldier came in and shot at us all. I pretended to be dead and he didn’t notice me.”

There were eight bodies in the house, including Safa’s five siblings, aged between two and 14.

In another house seven people including a child and his 70-year-old grandfather were killed. Four brothers aged 41 to 24 died in a third house. Eyewitnesses said they were forced into a wardrobe and shot.

In the street, US troops gunned down four students and a taxi driver they had stopped at a roadblock set up after the bombing.

According to a witness, they were shot by the side of the road, as they stood with their hands on their heads.

Gee- do you think they could be angry about that?

Marine gets no jail time in killing of 24 Iraqi civilians

By Tony Perry, Los Angeles Times

January 25, 2012

Jones said he had planned to recommend 90 days in the brig – the maximum as requested by the prosecution – but that the plea bargain approved by Lt. Gen. Thomas Waldhauser had called for no jail time.

“It’s difficult for the court to fathom negligent dereliction of duty worse than the facts in this case,” Jones told Wuterich.

…

A Marine Corps spokesman said Waldhauser would offer no public explanation of his decision to accept the plea bargain and stipulate that Wuterich receive no jail time.

No jail for marine? Haditha massacre verdict stuns Iraqis.

By Whitney Eulich, Staff writer, The Christian Science Monitor

January 25, 2012

However, the military court’s decision to demote Wuterich’s rank to private in lieu of jail time is one more blow to the idea of US justice system being a source of guidance or authority in Iraq, according to the Washington Post.

“I was expecting that the American judiciary would sentence this person to life in prison and that he would appear and confess in front of the whole world that he committed this crime, so that America could show itself as democratic and fair,” survivor Awis Fahmi Hussein told the Washington Post, showing his scars from a bullet wound to the back.

The Telegraph reports that the ruling is viewed as “…an insult to all Iraqis,” while the Associated Press reports that it reopened old wounds – both with the US and the Iraqi government. The predominantly Sunni region has been unable to convince its Shiite-led government to condemn the murders or push to bring those responsible to trial.

In Iraq, Haditha deal another case of injustice

By Raheem Salman and Patrick J. McDonnell, Los Angeles Times

January 25, 2012 at 6:20 AM

“The Americans killed children who were hiding inside the cupboards or under the beds,” said Rafid Abdul Majeed Hadithi, 43, a teacher who says he witnessed the 2005 assault by Marines that took the lives of 24 unarmed Iraqi civilians. “Was this Marine charged with dereliction of duty because he didn’t kill more? Is Iraqi blood so cheap?”

…

“That soldier would be sent to prison for more than three months if he had thrown trash on the streets in America,” said Khalid Salman, 45, whose cousin was killed. “This is not new, and it’s not new for the American courts that already did little about Abu Ghraib and other crimes in Iraq.”

…

Assim Omar al-Hadithi, 40, a relative of another victim, said such a light sentence “shows the lies of the Americans, whether they are judges or members of the military.”

Thair Thabit Hadithi, 41, a photographer who says he came upon the scene shortly after the killings, on Tuesday recalled the unrelenting crackle of gunfire, an injured victim bleeding to death outside his house, the black nylon body bags in which Marines placed the corpses.

The Marine Corps initially said 15 Iraqis had been killed in a roadside bombing and that the others perished in a subsequent firefight. None of that was true. Hadithi said he had grisly photos showing the devastation and bloodshed in a poor residential quarter.

Anger in Iraq After Plea Bargain Over 2005 Massacre

By MICHAEL S. SCHMIDT, The New York Times

Published: January 24, 2012

Assim Omar al-Hadithi, 40, a relative of another victim, said that such a light sentence “shows the lies of the Americans, whether they are judges or members of the military.”

He continued: “All the world knew that the American soldiers committed crimes in Iraq. We were extensively surprised when we heard the news, and it has made our minds even worse. It is no consolation for the victims’ families.”

The shadows cast by the Haditha massacre, the abuse of detainees at the Abu Ghraib prison and the killing of civilians by contractors for Blackwater at a square in Baghdad helped turn Iraqi public opinion against the American presence. An agreement to keep American troops here past 2011 collapsed when Iraqi officials would not agree to extend their immunity from Iraqi prosecution.

…

A number of Americans in high-profile cases have received what many Iraqis regarded as token sentences. In August, the supposed ringleader in the Abu Ghraib abuses, Pvt. Charles A. Graner Jr., was released early from prison because of good behavior. He had been sentenced to 10 years but served just 6 1/2.

In 2009 charges were dropped against four American military contractors in the killings of the 17 civilians at the square in Baghdad. While a federal court ruling in Washington reopened manslaughter charges against the four, many Iraqis continue to believe that the contractors will never be punished.

Iraqis received Tuesday’s plea deal with the same cynicism and anger. “I am not satisfied with the court decision against those killers – they need to be tortured and executed because they killed innocent people,” said Tariq Abas al-Najar, 43, a taxi driver in Basra. “If Marines killed a sheep in Europe, the judge would punish them much harsher than for the killing of those innocent Iraqis.”

Yesterday–

The fundamental reality is that their economies can no longer support the inflated, leveraged, fictional values the holders of these worthless scraps of paper demand and the reckoning is going to come from their pockets simply because they’re the ones holding the hot potato.

Today-

Hedge Funds Scramble to Unload Greek Debt

By LANDON THOMAS JR., The New York Times

January 25, 2012, 7:29 am

Hedge funds that in the last month or so have purchased an estimated 4 billion euros ($5.2 billion) of beaten down Greek bonds that mature on March 20 are now trying to unload their positions, according to brokers and traders.

That is because it is becoming clear to one and all that Greece – under pressure from its financial backers – is preparing to impose a broad-based haircut that would hit all investors with a loss of 50 percent or more, whether they agree to the deal or not.

…

Starting in December, the counterintuitive, go-long Greece bet was one of the more popular pitches made to funds in New York and London.

Investment banks – Merrill Lynch was particularly aggressive in recommending the trade, investors say – argued that even though Greece was near bankrupt, those who bought the paper maturing in March could double their money when Greece received its latest bailout tranche due that month.

…

Now, with momentum building in Europe for an agreement on a 50 percent-plus haircut to be reached before March 20 – one that would be legally binding on all holders – the smart money is not looking so smart anymore.

Oh, but it gets so much better.

European Central Bank Moves to Avoid Loss on Greek Bonds

By LANDON THOMAS Jr. and JAMES KANTER, The New York Times

Published: January 24, 2012

For months, the proposed debt restructuring deal between Greece and its private sector creditors had excluded the central bank from taking a loss on its Greek bond holdings while banks and hedge funds would have losses of 50 percent or more.

…

Private sector investors, including large European banks and hedge funds, have complained bitterly – and in some cases threatened legal action – over the central bank’s insistence that its 55 billion euros in Greek bonds were exempt from the loss that the private sector is facing, which some have estimated at 60 cents on the euro.

The central bank bought the bulk of its Greek bonds in 2010 in a failed attempt to stabilize Greece’s collapsing bond market, paying discounted prices of about 70 to 75 cents on the euro. As part of the current talks, the central bank might exchange its current bonds for a different form of Greek debt at a cost similar to that of the distressed bonds.

EU ratchets up pressure with Greek default threat

By Ambrose Evans-Pritchard, International Business Editor, The Telegraph

9:39PM GMT 24 Jan 2012

The head of the European Commission’s economics team Mario Buti said Brussels is prepared to allow credit default swaps (CDS) on Greek bonds to come into play if talks fail to reach a deal that gives Greece enough debt relief to claw its way back to viability. “Triggering CDS may have to be considered,” he said.

…

Charlesa Dallara, the head of the International Institute for Finance (IIF) representing creditor banks, said EU officials were playing with fire by talking about default and demanded that the EU stick to the agreement reached last October.

“We put an offer on the table and it remains on the table. All parties need to contribute to the solution. We are wiping off the face of the earth €100bn in existing claims against Greece,” he told Bloomberg.

First Act of Greek Default Proceedings Drawing to a Close

Author: Claus Vistesen, EconoMonitor

January 24th, 2012

Let me be clear, absolutely clear, here. Within any conceivably realistic macroeconomic model, there is no way that Greece can reach a stable debt level with moderate growth under these conditions. Under the interest rate scenario noted above (let us say with an average interest rate of 3.8% on the new debt) the nominal interest rate would still be substantially higher than the growth rate of the economy. The only way, the nominal debt level could then be kept stationary is by forcing the fiscal balance into surplus. However, the problem is that this affects the denominator in the debt/GDP calculation by sucking out demand (growth) from an economy already structurally impaired (within a currency union and all that).

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The deal which now seems to be close to completed by no means closes proceedings. It is very likely in my opinion that private creditors who are currently the only ones being forced to take a haircut due to seniority of the IMF and the ECB will face a near 100% loss on their holdings. The argument is simple. Given the amount of debt held by the ECB and the IMF and the fact that these two institutions are senior debt holders the debt held by private creditors becomes junior debt and thus the tranche which takes the first (and in my opinion likely complete) loss in the event of a default.

Of course, once we reach this point the issue of CDS contracts will rear its head yet again since if a 50-60% haircut can be considered voluntary anything beyond this becomes very difficult to characterize as such. Any rating agency would find it difficult not to classify further losses as a default and thus begins the fun in earnest. And then comes the ECB and IMF’s share. It will be political dynamite if the ECB had to print on the liability side to cover losses on the asset side on Greek sovereign debt or if the IMF had to ask its contributors for extra cash to cover for losses on loans made out to Greece or any other economy. Obviously, much will be done to prevent this, but just look at the numbers of Greece’s economy and you will see that it is not that outlandish, especially if Greece opts to stay in the euro zone. Finally, Greece only represents the starter here. Any deal agreed to  in Greece will be ardently watched in Ireland and Portugal who will feel they are entitled to the same deal with their private creditors.

Germany Loses Its Grip

By Delusional Economics, Naked Capitalism

Wednesday, January 25, 2012

(I)t is just one symptom of the actual problem. That problem was highlighted overnight with the European flash PMI’s. Germany once again outperformed the rest of Europe, France treaded water, admittedly with its head held a little higher, while the periphery of Europe slowly drifts away. The latest Euro PMI was a little better than expected, in some part due to the ECB’s actions over the last month or so no doubt, put the forward looking indicators suggest more weakness to come and I expect the divide to grow as Europe slows further. As I have stated previously that the German data is a double edged sword because, although it is good for Germany that its economy is powering, it is a big negative for the rest of Europe because one of the major issues that brought on the crisis in the first place was the competitiveness imbalance of nations under the single currency.

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So now even if Greece manages a deal to write-off some of its debt the markets will quickly turn their eyes to Portugal who will no doubt require a second bail out, but increasingly a debt restructure as well.

With Spain also struggling and Italy under increasing pressure, the continuation of contagion appears to be taking its toll on the politics of Europe with Germany’s ability to control the situation diminishing.

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Germany also appears to be losing support from even its strongest allies. Last week the Dutch central banker Klaas Knot gave an interview blaming Germany for the failure of the EFSF.

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To add to that, Luxembourg’s new foreign minister gave an interview with German media yesterday in which he called the fiscal compact a ‘waste of time and energy’.

Is the failure of austerity-centric policy finally taking its toll on Germany’s ability to steer Europe’s response to the financial crisis? This would certainly explain why Mario Monti seems so sure that his country will be receiving the fiscal and monetary backstops. The outcomes from next week’s EU summit will provide more clues.

I’m grouchy about 2 things.  First and foremost I’ll be missing the Phineas and Ferb Time Warped series for about the 3rd time.  Secondly, Barack Obama has broken so many false populist promises that watching him talk is not just unconvincing, it’s physically painful.

The most optimistic estimates are that he’ll play some variation on his Osawatomie, Kansas speach which was frankly feckless and weak.  The usual suspects- Klein, Bernstein, DeLong, Sargent are all making the same tired old excuses for inaction at best and Republican policies as the norm.

It’s noteworthy that there has been less leakage of the prepared text which I suspect is due more to the collapse of his sellout to the Banksters on mortgage fraud and robo-signing than his and Holder’s fanatical prosecution of whistle blowers and journalists instead of war criminals and thieves.  The gang that couldn’t shoot straight screws up again, unless you prefer to call them simply evil which certainly matches the facts.

dday has the best preview I was able to find.  In addition to Warren Buffet’s secretary as a poster child for tax reform, he’ll also have Admiral William McRaven of the Bin Laden kill team, and Steve Jobs’ wife.

Not quite sure what she’s meant to illustrate unless it’s the efficiency of working people to death in overseas sweat shops.

I expect there will also be a full throated denial of science in defense of fracking and global warming from the president who had no problem denying women access to Plan B contraception and supporting the Stupak amendment.

If you don’t have access to a TV CSPAN will be starting its coverage at 8 pm with ceremonial entries.  They’ll also have the Republican response from Mitch Daniels who today attempted to strip Union rights from workers.

They should all be fired and prosecuted to the fullest extent of the law.

Not that I personally think their analysis is all that sound, but the second of the big three rating agencies has announced their intention to declare a CDS triggering event regardless of how the negotiations continue.

As we are constantly reminded by the Banksters, the intent of a Credit Default Swap is as insurance against a default in payments.  In fact they are used to make side bets on outcomes and their notional value almost always exceeds the actual underlying asset by orders of magnitude.

So the question is- will they pay off?

In the 2008 financial collapse the chief issuer of these instruments, American International Group, went bankrupt and only massive intervention by the U.S. Treasury Department and Federal Reserve Bank allowed them to make good their obligations at face value.

This was Insurance Fraud on a historic scale.  The rules require you to cover your policies.

Because we don’t know the actual amount of CDSes it is difficult to predict whether they will be honored or not but that’s only the first wave of the problem.  Spain, Portugal, and Italy also face default because of the usurious interest rates currently being demanded and a Greek default is only likely to increase their vulnerability.

European policy makers have shown no indication that they actually understand the magnitude of the difficulty and every response so far has been wrong headed austerity.  The fundamental reality is that their economies can no longer support the inflated, leveraged, fictional values the holders of these worthless scraps of paper demand and the reckoning is going to come from their pockets simply because they’re the ones holding the hot potato.

It’s coming.  It’s coming soon.  A lot of people and institutions that considered themselves quite well off are going to find their estimations substantially reduced.

Greek Debt Talks Still Without Resolution; Bondholders Make Final Offer

By: David Dayen, Firedog Lake

Monday January 23, 2012 6:20 am

The debt talks between Greece and their bondholders, thought to be a done deal late Friday, spilled into the weekend and still found no resolution as of today. The short version is that the creditors want a higher coupon, or interest rate on the new bonds they’ll accept in exchange for taking at huge hit on the bonds they currently hold.

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At a low interest rate, the creditors would then call the deal involuntary, a credit default swaps would trigger. However, according to the Fitch rating agency, there is no such thing as a voluntary debt restructuring, and they would read any deal as a default event. This is why Noriel Roubini says we will see “a credit event” in Greece either way.

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The bondholders presented what they called their "maximum" offer over the weekend. Charles Dallara, the managing director of the Institute for International Finance, who has been negotiating on behalf of the creditors, said that both sides were at a “crossroads” and the “limits of a voluntary deal.” Interestingly, the biggest holdout could be the European Central Bank, which holds 55 billion euros of Greek debt and doesn’t want to take any losses on it. The EFSF, the European bailout fund, may have to buy the debt off the ECB at par to get a deal structured.

Greece has already said they would change the terms of the bonds by law, if need be, but then some creditors would hold out and there would be litigation and CDS triggering.

Anything controversial or unmanageable out of Greece would risk contagion elsewhere in Europe, especially in Portugal, probably the next most-threatened country on the periphery. The dangers in Europe are very much apparent here.

S&P: Greek Debt Restructuring Would Be a Default

By: David Dayen, Firedog Lake

Tuesday January 24, 2012 8:55 am

Standard and Poor’s has become the second rating agency to say that, regardless of the conclusion of the Greek debt restructuring, they would judge the country as in "selective default". With two rating agencies – Fitch is the other – now on the record about default, it’s almost certain that the announcement of the deal, if we ever get one, will trigger credit default swaps.

So I see no point in having the negotiations continue. They were predicated on getting bond holders to accept a voluntary haircut, to avoid the triggering of CDS. That will now be impossible. And the Greek government has the ability to change the law and mandate the new payments on debt. So they might as well just do that, at this point. In truth, there never was a voluntary haircut, anyway. So everyone might as well tell the truth.

An S&P official does not believe that a Greek default event would necessarily lead to contagion in the Eurozone. However, we’ve seen the cascading effect play out many times in the past year or so. As much as the regulators want to tell themselves they don’t foresee a problem, one could be staring them in the face.

In fact, we may already by seeing contagion in the form of Portugal’s struggles.

IMF slashes world growth forecast

By Paul Handley (AFP)

3 hours ago

On Monday in Berlin, IMF managing director Christine Lagarde pressed European leaders to build a stronger backstop to prevent the problems in the continent’s weakest economies — Greece, Spain and Portugal — from pulling down others.

“We need a larger firewall,” she said. “Without it, countries like Italy and Spain that are fundamentally able to repay their debts could be forced into a solvency crisis by abnormal financing costs.”

The Fund warned against overly sharp budget-balancing by those countries that can afford to move slowly to reduce their deficits.

Otherwise, they will just create more drag on the global economy.

“Decreasing debt is a marathon, not a sprint,” said Olivier Blanchard, the IMF’s chief economist. “Going too fast will kill growth and further derail the recovery.”

The recommendation was pointed at Europe’s largest economies Germany, France and Britain, all of which it said would continue to grow this year, albeit at a weak pace.

Germany’s economy was seen growing 0.3 percent, France’s 0.2 percent, and Britain’s 0.6 percent.

The United States, the world’s largest economy, was projected to grow 1.8 percent in 2012.

The growth downgrades covered the entire world.

The Greek debt talks fall apart

Felix Salmon, Reuters

Jan 24, 2012 04:33 EST

Remember here that Greece itself is basically just an intermediary, stuck between the Troika (EU, ECB, IMF) on the one hand, which is going to fund its deficits for the foreseeable future and therefore can demand anything it wants, and bondholders, on the other. And the problem is that what’s acceptable to the bondholders – a 4% coupon, basically, on restructured debt – is unacceptable to the Troika.

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In a way, this is a good thing, because it only serves to clarify the fact that Greece is defaulting in a way that’s going to make its bondholders very unhappy. All the talk of a “voluntary” restructuring was a way of attempting to paper over that fact, and that paper was always extremely thin. Maybe a bit of honesty will help people face up to reality in a way that they’ve been very reluctant to do until now.

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No one thinks of this deal as a “one and done” restructuring. Bailing in the ECB or the EFSF at this point would just be denial: it would encourage the EU to think (or at least to say) that the Greek debt problem was solved for perpetuity, when it clearly isn’t. So let’s force the private sector to take its big NPV haircut now. And then the next step can come a few years down the road, when Greece discovers it can’t pay the Troika what it owes.