F.B.I. Seizes Web Servers, Knocking Sites Offline New York Times (hat tip reader bob)
Gov’t: No quick fix for leaky nuclear reactors CBS News (hat tip reader Tim C)
‘Germany Was Biggest Debt Transgressor of 20th Century’ Der Spiegel (hat tip reader xct). Ed Harrison sent me the link in German, and I can report that Google Translate did better than BabelFish. But I wish whoever wrote the headline for the official English version had used the word “deadbeat”.
Time for common sense on Greece Martin Wolf, Financial Times. Includes a very good recap of how Greece has fared under austerity thus far.
Stuffing bondholders in Greece and Ireland Ed Harrison
Italian Voters Turn Out Against Water Privatization Food and Water Watch (hat tip reader furzy mouse)
Desperate Times: Man Robs Bank to Get Health Care in Jail Good (hat tip Ed Harrison)
Fraud at senior management level is highlighted in KPMG report Guardian
Slow Domestic Economy Puts Focus on Cost of Two Wars New York Times. About time.
5 WikiLeaks Revelations Exposing the Rapidly Growing Corporatism Dominating American Diplomacy Abroad Alternet (hat tip reader furzy mouse)
Bachmann’s Congressional Spending Shows Close Links to Political Activity Roll Call (hat tip reader furzy mouse). The headline is coded. The text suggests there may have been a pretty basic ethics violation.
At least Weiner was a distraction Matt Stoller, Politico. Some great lines. My favorite:
Blank is a “pragmatic progressive” economist, which apparently means someone who feels bad about the damage caused by the problems they aren’t trying to fix.
Americans Worse Than When Obama Inaugurated by 44%-34% Margin Bloomberg
‘Scrap Yards Are the New Pawn Shops’ Michael Panzner (hat tip reader bob)
Is there excess demand for base money? Canucks Anonymous (hat tip Ed Harrison)
The Bankers Who Cried Wolf: Wall Street’s History Of Hyperbole About Regulation Marcus Baram, Huffington Post
Antidote du jour:
51 comments
Comments are closed.
So what’s the catch?
“JPMorgan Joins World Bank in $400 Million Hedging Program for Agriculture” http://t.co/c4sAPkL via @BloombergNews
”
World Bank in $400 Million Hedging Program for Agriculture”
”
~~Usha Abramovitz~
Was the World’s first financial swap a swap between World Bank and IBM? Look it up! Read it and weep.
I wonder if these geniuses can hedge marriages or write relative swaps – my uncle for your cousin, that kind of swap?
How to lie about what is securitisated by using a complicated company structure and avoid prosecution even if you are caught.
A license to lie, backdated.
http://www.interfluidity.com/v2/1923.html
We discussed and even excepted that in a post yesterday.
Jail the new retirement plan. I see this as a growing trend.
that was standard procedure in the cleveland ghettos in the 60s…i knew guys who needed dental work who would commit a misdemeanor like shoplifting so they’d get sent to the house of correction for a few months, where they’d get their teeth taken care of….and more than one homeless guy would do the same so he could spend the winter indoors & get 3 square meals a day…
Well older than that: This was the plot of “The Cop and the Anthem”, a 1904 story by O. Henry. The story was the basis of the annual Christmas story on the Red Skelton show.
Hmm. Jail is really only the ‘option you sell’ when you commit the crime. I suspect a lot more people will just try to steal and rob and not get caught.
Unemployment insurance is really insurance for those of us who want to walk down the street and not get mugged.
Good for the Italians. Britain’s water was privatized under Margaret Thatcher. The biggest of the privatized companies, in the South East of England, is now owned by MacQuarie, an Australian investment bank.
So instead of good clean water, subsidized by progressive taxation (i.e. a net win if you’re not a millionaire), the water is now provided by temporary contract workers, minimum-wage immigrant labor and offshored customer services, and paid for by the highest charges the fully-captured industry regulator will allow. The difference between the lower wages and the higher charges goes to the Australian owners. Well done British voters! You certainly saw that efficiency that business is famous for in your bills! ”’
Well, “efficiency” doesn’t necessarily mean the same thing to everybody, any more than the phrase “to serve man” has a universally agreed-upon meaning.
http://www.youtube.com/watch?v=5x0BSgLKnSk
Dear Prof;
I don’t care if it is a cookbook, I still want the ‘free’ trip. (I wonder what Mattheson or Ballard would make of todays news?)
LOL!
Ballard would probably take the long view, visualizing the world’s financial centers turning into fetid, reptile-infested swamps in the 22nd century, life imitating ethics.
Nice summary in that 2nd par.
Better to shoot up a post office. They’re conveniently located in your town and the crime is strictly federal so the quality of health care’s more consistent.
doom;
I worked at the post office for a few years in the late ’80s. (It’s much worse than you think.) To get on there, after you took the test, Veterans got an extra five points, scale was 1 to 100, and Namvets an extra five over that. A lot of them were gunned up big time. A lot of PTSD and assorted heritage effects too. So, one of the better ‘sick’ jokes I ever heard came out of that experience, (which I suffered my own mini-PTSD from,) to wit: “How do you tell when a guy who’s ‘gone postal’ is a good union man?” Answer: “He shoots management first.”
Nicosea is nice this time of year. Ta ta.
Wonder how this will go over…
Post office suspends retirement contributions http://news.yahoo.com/s/ap/20110622/ap_on_re_us/us_postal_problems
Mz Valissa;
The USPS is a curious hybrid entity, thanks to Dick Nixon. It is one of the first ‘Privitizations’ of a public utility. The package business was split off, sort of, and became the domain of groups like FedEx, UPS, etc. The reason being, packages were always the profit centres for the old Post Office. Letters have always been marginally self supporting, and often loss leaders. The dreaded Bulk Business Mail was always somewhere inbetween. (When I worked there we always seriously dreaded ‘Ed McMans.’) Hence, the money woes of the present USPS come as no surprise.
The question is, what do we expect from the mail service? Is it a ‘public good’ to be treated as a public utility? Or is it a profit driven capitalist enterprise? My take on this is that it is an object lesson on the hazards of “Privitization” of public services.
FBI- I know a guy in computer forensics there. They confiscate computers in fraud cases mostly. What will happen as stuff moves to the cloud?
Copper: south west trains out of London were stopped for four hours last week after thieves stole signaling wire.
From the Matt Stoller Politico piece, my nomination for the quote that nails it best:
“Though creativity, boldness and wisdom might be required to find the appropriate tools, I’m sure that those who have found the legal authority to attack Libya without congressional authorization could tackle our domestic problems.”
Funny how those obstructionist Republicans are not a problem when you really want to do something.
The picture is really excellent!
Where do you find them?
Yes, quite an appropriate picture. The chicks on the left would be finance, insurance, and real estate. The bird on the right, the government. And the cricket? You and me, baby.
LOL, thanks.
RE: “Fraud at Senior Management Level is Highlighted in KPMG Report”
So what else is new? ….OOOOHHH, I SEE … You meant fraud perpetrated by senior management at OTHER companies.
All kidding aside- this is a clear case of the pot(KPMG) calling the kettle black- e.g. Lehman’s Repo 105 adventure, the tax shelter fraud, American Century, etc.
The KPMG report goes on to blame companies because of when “…they contribute to fraud when failing to detect or respond to lapses or gaps in controls…”
Auditing standard AU 150-02 Requires that an auditor gain an understanding of the entity and its environment. This process helps establish a framework within which the auditors assesses the risk of material misstatement and how they plan the audit in response to those risks.
Part of that requires some degree of understanding of external pressures (including regulatory oversight) in assessing those risks. So logic tells me that a potential reduction in the threat of external regulatory enforcement of accounting frauds at client companies as was exemplified during late 90’s(other than in the most egregious of cases), should have caused auditors to increase their level of risk assessment at large client company audits across the board. Higher audit risk = required expanded audit scope and/or auditing procedures. Credible external regulatory oversight and enforcement could be considered a sort of “external control” (my term- not official). So then, any change in the overall level of threat of external control (enforcement) would be inversely proportional to the level of risk that an auditor would have to assess at the front end of his engagement during the planning stage of the audit(and expanded auditing procedures).
Therefore, the lack of credible external enforcement actions against financial reporting frauds that came to light during the millennium, should have caused their subsequent audit risk assessment conclusions to skyrocket across the board. Obviously, that didn’t happen. So with this in mind, how was it that all of the large audit firms were caught back on their heels, when they issued their audit opinions on the large financial institutions during the early years(2002-2005) of the subprime crisis? There’s no other reasonable explanation other than the front line troops were being influenced(pressured) from above.
BTW- if someone responds that complexity was the real cause- don’t believe it. Think of complexity in this context as a euphemism for “camouflaged misrepresentation” . Need more proof- read “ECONNED” It explains what happened during the crisis in easy to understand terms. To me, “complexity” used as a defense in this fashion, means nothing more than the fact that someone just didn’t do their homework.
It would be foolish for an auditor say he didn’t find the fraud because it was too complex. If so, he’d be admitting that he wasn’t competent to conduct the audit(remember he has the responsibility to understand the client entity and its environment). This, in the same way as if I charged someone to work on their car with only my current level of expertise. Now that would be complex!
So, I’ll wrap up by saying that IMO for KPMG to make this kind of broad charge about the failures at other companies to uncover frauds is no better than if Allen Stanford were to stand up in a crowded room, point his crooked finger at Bernie Madoff and scream “Thief! Thief!”.
Mea Culpa- Lehman’s Repo 105 was an E & Y affair not KPMG. KPMG was involved in other Repo 105 situations such as Citigroup as shown below.
Also- “American Century” should have been “New Century”
Re: The tax illegal shelters-
http://www.irs.gov/newsroom/article/0,,id=146999,00.html
Re: New Century-
http://online.wsj.com/article/SB123860415462378767.html
Regarding KPMG’s Repo 105 Transgressions-
http://www.businessweek.com/news/2010-07-15/aig-citigroup-tell-sec-they-classified-some-repos-as-sales.html
http://retheauditors.com/2010/10/31/going-concern-treasury-votes-to-reappoint-kpmg-as-auditor-of-citi/
Apologies for not checking on things first.
@anon48, I would go as far as to say, all_so called_audit controls are in fact a *shield* from responsibility, an unloading to individuals or out side entity’s. This would include functions like ie. safety, QA, HR, etc, the bigger the company the more egregious the violations.
Skippy…Paycheck = your signature on the compliance form, certified to lie, the bigger the pay packet, the bigger the lies told. So your ability to deceive is commensurate to your worth. So much drinking, I wonder why?
Re: Americans worse than…
The most discouraging tidbit from this article is that the GOP and deficit hawks are winning the propaganda battle again, despite (or should i say “because”?) of all the evidence coming from England, Ireland and Greece that austerity in a time of recession is the worst thing one can do.
The capacity of people to step on their own weenies is truly amazing.
I see Bloomberg has corrected the headline from “Americans worse…” to “Americans worse off…”. A copy editor having a little joke?
“eurozone crisis not greek drama”:
http://www.stratfor.com/geopolitical_diary/20110622-eurozone-crisis-not-greek-drama
final paragraph:
“Monumental shifts are underway in Europe. We have no reason to believe that Greece is at the center of them. What is most interesting is that the focus, both in terms of risks and solutions, continues to be on both short-term effects and singular events. This myopia is in part because Eurozone member states, in particular Germany, have not offered a long-term solution or plan. Calls to resolve the fundamental structural imbalances between northern and southern Europe are few and far between. This reticence is itself a sign that Berlin is not planning for the long term, which is either a gross oversight or a hint that Berlin does not plan to stick with the Eurozone through the end of the decade. The Eurozone can and will muddle through the current crisis — it has proven that it has the tools and required flexibility to do so. The question that needs to be asked is: what do Europeans, and specifically the Germans, plan to do with Europe’s security and political architecture in the long term? The answer to that question cannot be found in the financial databases of Eurostat or the Bank of International Settlement, nor especially in the coverage of 24-hour investor-news stations.”
STRATFOR is always looking at the larger picture, which is very informative. Other financial influence games going on in Europe behind the scenes…
Russia Eyes Austria’s Banking Empire http://www.stratfor.com/analysis/20110617-russia-eyes-austrias-banking-empire
The two largest state-owned Russian lending banks, VTB and Sberbank, are looking to either acquire or inject capital into several major Austrian banks ahead of Europe’s second round of stress tests in July. The Russian business daily Vedomosti and the Financial Times initially reported on these banks’ intentions on April 15 and May 29, respectively. However, what appears to be a simple financial transaction is in fact a strategic move by Moscow to build economic insight and influence within its periphery.
The opportunities for Russian banks to profit by recapitalizing cash-strapped Western European banks abound in the current dire economic climate, but it is not clear that Austrian banks are the most attractive among these options. However, Austrian banks have traditionally held large amounts of their assets in Central and Eastern European countries; coincidentally these are also the nations that most vociferously oppose a resurgent Russia. The acquisition of Austrian bank shares thus would allow Russia to be privy to financial and economic dealings of Central and Eastern European countries while evading the local reluctance to accept greater Russian influence.
It seems very likely that the Russians got this idea to “invest” in Austrian banks from this crew…
Dimon, Pandit, Blankfein, Ackermann Join Kremlin Advisory Board http://www.bloomberg.com/news/2011-03-10/dimon-pandit-blankfein-ackermann-join-kremlin-advisory-board.html
Various STRATFOR articles in the past 6 months have discussed Russia’s current strategies of deal-making with Germany and France, as well as the diminishing power and importance of NATO. Russia is less and less being perceived as “the enemy” by the European elites. Money lubricates friendships like little else does.
Russia: German Company To Build Military Training Center http://www.stratfor.com/sitrep/20110621-russia-german-company-build-military-training-center/
German defense company Rheinmetall AG Chairman Klaus Eberhardt signed a contract to build a 11,132 million rubles ($397.55 million) combat training center for the Russian ground troops at Mulino in the Nizhny Novgorod region, according to the Russian Defense Ministry, Interfax-AVN reported June 21. Eberhardt signed the deal when Russian Defense Minister Anatoly Serdyukov visited Magdeburg on June 17. Serdyukov said the center will begin operating in mid-2014, with the company-level facility to be open in 2013 and the facility for battalions to train against each other to open by June 2014.
Why are so many personally invested in the integrity of the EuroZone, at all costs? Why is it so difficult for an organization like Stratfor (which recently reported that by 2050 Mexico will be a Top 5 Economic country, despite having had GDP/Capita growth of 0.6% during the last 28 years) to consider that the natural state of Europe is for each nation to be sovereign? I applaud German and Greek citizens for wanting to leave the Eurozone.
As a subscriber to STRATFOR Global Intelligence, I can say that the analysts there often discuss the importance of the nation state and national identity as a major aspect of geopolitics. They do not seem to have an attachment one way of another to the outcome of the EU, they simply analyze events and postulate outcomes based on history, geopolitics, economics, and military strategy. Their viewpoints are often complex and nuanced… they are realists and analysts (not politicians). You can get a free subscription which gives you about 2 reports a week (limited access).
Man robbed bank to get health care in jail.
But due to bureacracy and union rules, he wasn’t not put in jail for a few decades.
(Some even conjecture that the police was out busy writing profitable…sorry, strike that… traffic tickets.)
Thus, the saying, health care delayed is health care denied.
Oh, the best laid schemes of man and mice…
(I mean, it could happen like that)
Sure. Once we get the Debtor’s Prison Health Care Plan, and you just can’t get your house foreclosed on.
a privatized water supply is truly the worst idea ever.
talk about something that should be getting people off their asses and pick-up their pitchforks.
Yes Another Crisis is Coming and it Will be Much Worse
http://lonerangersilver.wordpress.com/2011/06/22/yes-another-crisis-is-coming%E2%80%A6-and-it-will-be-much-worse/
Don’t waste time reading the lonerangersilver spam post…
“Trading silver and gold”
“my FREE report”
“17 pages contain a wealth of information… which investments to own”
Special Report: Europe’s other crisis [immigration] http://news.yahoo.com/s/nm/20110622/ts_nm/us_europe_refugees
You can’t keep breast implants for life, FDA says http://news.yahoo.com/s/nm/20110622/hl_nm/us_fda_implants
Post-approval studies showed up to 70 percent of all women who received reconstruction surgery, and up to 40 percent of those getting an enlargement procedure using silicone, needed another surgery within eight to 10 years.
When I saw the quotation beginning “Blank…” I thought blank meant fill-in-the. I didn’t realize it is the woman’s last name until I read the article. Now I think never was a woman more aptly named.
Corporate capture is pretty much complete. The ruling class is doing quite well as things are. What’s the problem?
2moro new ECB president will be approved by EU parliament. There are reports of a discrepancy between his statements and 2010 euro-stat audit of off-market swaps to conceal Greek debt. He claims no implication on the basis that they were initiated before he came in. Lame defense. But also not factual. Contract was renegotiated in 8/2005 to extend maturity, during his tenure as VP of GS for Europe. ECB barring Bloomberg from accessing data citing market risk is also dubious. Perjury, again?
I was sympathetic to Alex Andreou’s piece until I read Michael Lewis’ article in Vanity Fair:
http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010 (especially the sections on tax collection)
And this (from another author) may also be true:
“The trouble is not that Greece lacks the assets to pay, but that the country consists of a collective tax dodge by all the owners of vacation properties. The average Greek owns several properties (due to immigration and a shrinking population) and lives by renting them to foreigners; rental is paid by agencies in London or Zurich into bank accounts in Liechtenstein. Greeks simply have no incentive to pay taxes and the Greek tax authorities have no capacity to collect them. So many Greeks are in on the dodge that it is impossible to negotiate a solution by the normal means.”
The country is unable to pay their foreign debt, and as all debtors realize sooner or later — why pay any debt back if you can’t pay it all back? The whole country is corrupt and most of the citizens participate in that corruption in one way or another.
Perhaps the best thing for Greece (and everyone else) would be for them to default completely, get kicked out of the EU and go back to the drachma. Then the Greeks themselves will be forced to reorganize their society and economy and legal system. Hopefully there will be mass protests, blood in the streets, and in the end social revolution, with the biggest kleptocrats being prosecuted and having their money clawed back. There is something like 280 billion Euros squirreled away in Swiss banks by Greeks, and the Greeks themselves are the ones who must get it back.
source (“from another author”?) of the quot. that you say “may be true”? if it ISN”T true, then it’s false, in which case, why was it published?
“the whole country is corrupt and most of the citizens participate in that corruption one way or another.”
if most but not all of the citizens participate, how can the WHOLE country be corrupt? could you please clarify how you mean “whole country.”
also, can you specify some of the one or another ways that you mean to say everyone participates?
during slavery in the u.s., many of the practices that enslaved people used to keep body and soul together were punished by violence and torture, under the aegis of the “law.”
“corruption” is very much in the eye of the beholder, and one must be careful to clarify one’s meaning.
the fruit vendor who set himself on fire so no way forward because he had no choice but to become a victim of “corruption.”
how many, like him, have no choice?
of course, here in the u.s., we are not corrupt, that is, as a whole country. . . in only a few cases do we sell off our public infrastructure to private corporations so we can rent them back from them at a higher cost, and it is only a few of the more desperate among us who pick up what pieces they can carry of the same infrastructure, like railroad tracks and transformers, and likewise sell them to the highest bidder. certainly our whole country is not corrupt.
something to cheer one up a bit perhaps, from vermont:
http://www.commonsnews.org/site/site04/story.php?articleno=3652&page=1
a quote from the vermont piece linked above:
“New economy” refers to a set of financial values that embrace caring for local communities, food systems, and the environment, explained John Cavanagh, director of the Institute for Policy Studies (IPS), a Washington, D.C.-based think tank.
Cavanagh, who spoke at the event, said these values contrast with the present Wall Street financial system that treats the economy like a “giant casino.” He describes the current economic situation as a “Great Depression moment” and said that the majority of Americans believe that the old money system has broken down.
“At IPS, we see work to create a new economy as the most important work in the county right now,” he said.
…..
do the majority of Americans really believe this? if this is true, it’s quite remarkable.
Melter is the latest to step up with the argument that “it’s uncertainty over Obama’s tax and regulatory policies that are responsible for our economic problems”.
http://finance.yahoo.com/blogs/daily-ticker/blodget-vs-meltzer-uncertainty-over-obama-policies-really-162640423.html?sec=topStories&pos=9&asset=&ccode=
Now, I can’t stand Henry Blodget, but I’ll give him props for confronting that nonsense head on. That an economics professor at a fairly prestigious argument would make such a nonsensical argument speaks volumes about the profession.
Leave it to the Minnesotans to come up with a complicated equity stripping scheme. Now up on federal charges :D
http://www.startribune.com/business/124359354.html?source=error
Re: Italian Referenda
The morning after Slimy Silvio’s Slapdown, it was a lede story @ Al Jazeera. To find it @ NYT or WaPo required minimum 2 clicks and some search savvy.
The USMSM doesn’t wish to disturb us frogs while we boil.