Politics and Legislation
Today,ALEC Brings Lawmakers and Big Oil Together to Undermine Clean Energy
Today, behind closed doors in Charlotte, North Carolina, legislators from 15 states will meet with the oil and gas industry to discuss so-called “model legislation” as part of the American Legislative Exchange Council (ALEC). The result could be laws that handicap renewable energy targets — while creating loopholes for fossil fuels, written directly by the oil and gas industry itself.
ALEC has faced backlash recently for its role in crafting Florida’s Stand Your Ground laws. Now the organization is taking the same secretive approach to kill renewable energy development across the country.
Oil and gas corporations have a very strong role in politics through groups like Americans For Prosperity, American Petroleum Institute, and, of course, ALEC. Four of the largest oil and gas corporations and two of the most profitable U.S. corporations overall, ExxonMobil, Chevron, Shell, and BP, sit on ALEC’s task forces. And so today, according to documents posted by Common Cause, representatives from these and other energy groups will discuss potential legislation that would undermine clean energy standards and limit regulations of polluting industries.
Greece lurches towards new vote, hard left leads
By Lefteris Papadimas and George Georgiopoulos
(Reuters) – Greece’s president summoned party leaders on Saturday for one final attempt to avert new elections, but the effort looked doomed to fail after politicians deeply divided over austerity plans said they would stick to their guns.
Greece’s political landscape is in disarray a week after an election left parliament almost equally divided between parties backing and opposing an EU/IMF bailout that keeps Athens afloat in return for pledges of deep spending cuts and tax hikes.
If President Karolos Papoulias fails in a final attempt to persuade leaders to form a coalition, he will have to call a new vote in June. Opinion polls predict the balance of power would tip decisively towards the bailout’s radical leftist opponents, potentially jeopardizing Greece’s membership in the euro zone.
Papoulias called the leaders of the three biggest parties for coalition talks on Sunday at 0900 GMT, after Socialist leader Evangelos Venizelos became the third and last of them to acknowledge he had failed to assemble a coalition.
Without a government to negotiate a new aid tranche from the EU and IMF, Greece risks bankruptcy in weeks and – as European leaders now openly acknowledge – potential ejection from the common currency.
A week of efforts to put together a government failed because of disagreement over the bailout. Party officials said on Saturday they would not change their stances.
“There is no change (to our position),” said Panos Skourletis, a spokesman for the anti-bailout Left Coalition SYRIZA party, which placed second on Sunday and has since seen its popularity increase as anti-bailout voters rally around its charismatic 37-year-old leader, Alexis Tsipras.
“It is obvious that there is an effort to bring about a government that will implement the bailout. We are not participating in such a government,” Skourletis told Reuters.
Tsipras has the most to gain from a new vote. If, as polls predict, SYRIZA overtakes the conservatives to place first, it would be awarded an extra 50 seats in the 300-seat house, making the former student activist – little known outside Greece just weeks ago – into the country’s pre-eminent politician.
A senior official at the smaller and more moderate Democratic Left party, which has enough seats to give the pro-bailout parties a majority, reiterated that it would not participate in a government unless SYRIZA also agreed to join.
Lobbyists Arranged N.Y. Congressman’s $20,000 Trip to Taiwan
Although Owens filed a travel disclosure with the House Ethics Committee that identifies the trip’s sponsor as the Culture University, email messages and other documents reviewed by ProPublica show that lobbyists from the New York firm Park Strategies, founded by former New York Sen. Al D’Amato, had invited Owens on the trip and spent four months organizing it.
A rule passed by Congress after the Jack Abramoff scandal states: “Member and staff participation in officially-connected travel that is in any way planned, organized, requested, or arranged by a lobbyist is prohibited.”
Besides D’Amato, others involved in arranging the trip included two executives at his firm, John Zagame and Sean King, son of Rep. Peter King, R-N.Y. The Park Strategies lobbyists are registered foreign agents for the government of Taiwan.
“Lobbyists are not supposed to be associated with this trip in any way — they are not supposed to be organizing this or orchestrating it,” said Public Citizen’s Craig Holman, who helped draft the post-Abramoff reforms.
The Ethics Committee investigates potential rule violations and can recommend penalties, such as censure or a fine, to the full House. The committee approved Owens’ trip before he left, but the congressman’s filings with the panel listed only the Culture University as sponsor and did not mention Park Strategies.
Both Park Strategies and Owens’ spokesman told ProPublica they believe the trip complied with House rules.
Congress adopted the rule barring lobbyist involvement in most congressional travel after abuses exposed by the Abramoff influence-peddling scandal. Trips were a favorite method of Abramoff to warm members of Congress and staffers to his clients’ interests. In the most serious case, Rep. Bob Ney, R-Ohio, was sentenced to 30 months in prison in 2007 after admitting he accepted luxury travel and other gifts from Abramoff while helping the lobbyist’s clients.
Park Strategies’ organizing role in the Owens trip stands out because it is documented by an unusually rich trove of email and other records filed by the firm with the Justice Department under the Foreign Agents Registration Act, which requires disclosure of congressional contacts by lobbyists for foreign governments, businesses and political organizations, among others.
UK denying access to Britain on the eve of the Olympics
The British government has been gearing up its security for this year’s Olympics. The code red level security has denied individuals’ access to England and Parliament could soon pass an anti-terrorism plan similar to the American Patriot Act, which would give the government access to it citizens’ emails, text messages, phone calls and online activity. So are the security measures being taken to the extreme? Here is our report.
Chinese State Media Unravels on Chen Story
(LinkAsia News: 5/11/12) China’s tightly controlled state propaganda machine was in complete disarray as the Chen Guangcheng saga played out last week, with conflicting messages abounding. Contributor David Bandurski breaks down the sequence of events that played out between state and social media.
Watch more LinkAsia stories at http://linkasia.org.
IMAGE: Police officers approach a journalist outside of Chaoyang Hospital, where blind activist Guangcheng was reported to be staying at, in Beijing: REUTERS/Carlos Barria
Native Congressional Candidate Responds to Media Usage of Indian Terms
FLAGSTAFF, ARIZONA – Harvard Law School graduate (’06) and Democratic candidate for Arizona’s First Congressional District, Wenona Benally Baldenegro has issued a statement in response to offensive media characterizations of American Indians, following questions of US Senate candidate Elizabeth Warren’s American Indian ancestry. Baldenegro was a student at Harvard Law School, during the same time that Dr. Warren was a Harvard Law professor.
Baldenegro, a member of the Navajo Nation, is running a historic campaign to be the first American Indian woman ever to be elected to the United States Congress.
“I do not have the answers to the questions regarding Dr. Warren and her background. Only she can answer any lingering questions. What I can say is that I am greatly concerned about the tremendous disrespect with which this story has been reported by some in the media. Fox News’ Michelle Malkin wrote an article where she referred to Dr. Warren, using extremely offensive names, including ‘Sacaja-whiner,’ ‘Pinocchio-hontas,’ ‘Chief Full-of-Lies,’ and ‘Running Joke.’”
“The right wing website, The Daily Caller, re posted Malkin’s piece, with the headline ‘Sitting Bulls**t.’ While The Daily Caller has since changed its title, Malkin’s article continues to be circulated around the internet without any accompanying commentary condemning the use of such degrading and offensive terms. We should not tolerate it, and I stand with the Native American Journalists Association, and the Indian nations that have publicly condemned these highly offensive characterizations. “
Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO
By Danielle Kucera, Sanat Vallikappen and Christine Harper
Eduardo Saverin, the billionaire co- founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill.
Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company. Saverin’s stake is about 4 percent, according to the website whoownsfacebook.com. At the high end of the proposed IPO market capitalization, that would be worth about $3.84 billion. His holdings aren’t listed in Facebook’s regulatory filings.
May 11 (Bloomberg) — Results of a Bloomberg investor poll show that 79 percent of respondents say Facebook is overvalued at $96 billion. Dominic Chu reports on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)
Saverin, 30, joins a growing number of people giving up U.S. citizenship ahead of a possible increase in tax rates for top earners. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dormitory and stand to reap billions of dollars after the world’s largest social network holds its IPO.
“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said Tom Goodman, a spokesman for Saverin, in an e-mailed statement.
Saverin’s name is on a list of people who chose to renounce citizenship as of April 30, published by the Internal Revenue Service. Saverin made that move “around September” of last year, according to his spokesman.
Besides helping cut tax bills stemming from the Facebook, the move may also help him avoid capital gains taxes on future investments since Singapore doesn’t have a capital gains tax.
3.6 Million Taxpayer Dollars Being Used To Support The Lavish Lifestyles Of Former Presidents Such As Bush And Clinton
You are not going to believe how much money is being spent on our former presidents. At a time when U.S. government spending is wildly out of control, a total of 3.6 million dollars is being used to support the lavish lifestyles of former presidents such as George W. Bush and Bill Clinton in 2012. For 2013, the plan is to increase that amount to 3.7 million dollars. But do any of them really need this kind of welfare? The truth is that all of them are very wealthy. So what justification is there for giving them so much money? You can see the GSA budget proposal for former presidents for 2013 right here. The 3.7 million dollars for 2013 does not even include the cost of Secret Service protection. Rather, it only covers expenses such as office rentals, travel, phone bills, postage, printing and pension benefits. Certainly it is not unreasonable to grant former presidents a small pension, but should we be showering them with millions of dollars each year? At a time when the federal government is drowning in so much debt, the fact that these former presidents are willing to take such huge amounts of taxpayer money really does make them look like parasites.
So why are these former presidents getting this money?
Congress passed The Former Presidents Act of 1958 because they didn’t want other presidents to end up as poor as Harry Truman did.
Reid furious as GOP blocks quick Senate Export-Import vote
Legislation reauthorizing the Export-Import Bank hit a snag Thursday when Sen. Jon Kyl (R-Ariz.) blocked an attempt by Senate Majority Leader Harry Reid (D-Nev.) to move to a final vote on the bill.
Reid responded by filing for cloture on the legislation, which was approved by the House on Wednesday and was expected to be dispatched quickly by the Senate. Reid’s move sets up a vote on Monday.
Reid asked for unanimous consent to approve the motion to proceed to the bill, but Kyl objected and asked for consent to include five amendments to the legislation.
Kyl also asked that the Senate require a 60-vote margin for passage for the legislation.
Conservative groups have pushed Republicans to oppose the Export-Import Bank, which they argue disrupts markets through export subsidies. Ninety-three House Republicans voted against the bill in the House.
House votes to replace Pentagon cuts mandated by debt deal
The House voted Thursday to override steep cuts to the Pentagon’s budget mandated by last summer’s debt deal and replace them with spending reductions to food stamps and other mandatory social programs.
While doomed in the Senate and opposed by the White House, the legislation, which would reduce the deficit by $243 billion, is a Republican marker for post-election budget talks with the White House.
Members approved the Sequester Replacement Reconciliation Act in a party-line 218-199 vote. As expected, the bill was supported by nearly all Republicans — only 16 opposed it, and no Democrats supported it.
Republicans voting against the bill were Reps. Justin Amash (Mich.), Roscoe Bartlett (Md.), Charlie Bass (N.H.), John Duncan (Tenn.), Mike Fitzpatrick (Pa.), Chris Gibson (N.Y.), Louie Gohmert (Texas), Jaime Herrera Beutler (Wash.), Tim Johnson (Ill.), Walter Jones (N.C.), Raul Labrador (Idaho), Steve LaTourette (Ohio), Frank LoBiondo (N.J.), Todd Platts (Pa.), Ed Whitfield (Ky.) and Frank Wolf (Va.). GOP Rep. James Sensenbrenner (Wis.) voted present.
Republicans cast the bill as a first step back toward controlling federal spending, after years of allowing spending and deficits to balloon.
“We believe the purpose of the sequester was to replace the fact that Congress isn’t governing,” House Budget Committee Chairman Paul Ryan (R-Wis.) said during the opening debate on the bill. “Well, let’s have Congress govern. That’s why we’re doing this.”
Public Overwhelmingly Supports Large Defense Spending Cuts
While politicians, insiders and experts may be divided over how much the government should spend on the nation’s defense, there’s a surprising consensus among the public about what should be done: They want to cut spending far more deeply than either the Obama administration or the Republicans.
That’s according to the results of an innovative, new, nationwide survey by three nonprofit groups, the Center for Public integrity, the Program for Public Consultation and the Stimson Center. Not only does the public want deep cuts, it wants those cuts to encompass spending in virtually every military domain — air power, sea power, ground forces, nuclear weapons, and missile defenses.
According to the survey, in which respondents were told about the size of the budget as well as shown expert arguments for and against spending cuts, two-thirds of Republicans and nine in 10 Democrats supported making immediate cuts — a position at odds with the leaderships of both political parties.
The average total cut was around $103 billion, a substantial portion of the current $562 billion base defense budget, while the majority supported cutting it at least $83 billion. These amounts both exceed a threatened cut of $55 billion at the end of this year under so-called “sequestration” legislation passed in 2011, which Pentagon officials and lawmakers alike have claimed would be devastating.
“When Americans look at the amount of defense spending compared to spending on other programs, they see defense as the one that should take a substantial hit to reduce the deficit,” said Steven Kull, director of the Program for Public Consultation (PPC), and the lead developer of the survey. “Clearly the polarization that you are seeing on the floor of the Congress is not reflective of the American people.”
A broad disagreement with the Obama administration’s current spending approach — keeping the defense budget mostly level — was shared by 75 percent of men and 78 percent of women, all of whom instead backed immediate cuts. That view was also shared by at least 69 percent of every one of four age groups from 18 to 60 and older, although those aged 29 and below expressed much higher support, at 92 percent.
Disagreement with the Obama administration’s continued spending on the war in Afghanistan was particularly intense, with 85 percent of respondents expressing
support for a statement that said in part, “it is time for the Afghan people to manage their own country and for us to bring our troops home.” A majority of respondents backed an immediate cut, on average, of $38 billion in the war’s existing $88 billion budget, or around 43 percent.
Despite the public’s distance from Obama’s defense budget, the survey disclosed an even larger gap between majority views and proposals by House Republicans this week to add $3 billion for an extra naval destroyer, a new submarine, more missile defenses, and some weapons systems the Pentagon has proposed to cancel. Republican presidential candidate Mitt Romney has similarly endorsed a significant rise in defense spending.
When it comes to military forces, respondents on average favored at least a 27 percent cut in spending on nuclear arms — the largest proportional cut of any in the survey. They also supported, on average, a 23 percent cut for ground forces, a 17 percent cut for air power and a 14 percent cut for missile defenses. Modest majorities also said they favored dumping some major individual weapons programs, including the costly F-35 jet fighter, a new long-range strategic bomber, and construction of a new aircraft carrier.
Bernanke to Dems: Congress endangers recovery by not finishing its work
Federal Reserve Chairman Ben Bernanke warned Senate Democrats Thursday that Congress could derail the national economy if it fails to complete work on important tax and spending issues by year’s end.
Taxes will increase by an estimated $5 trillion over the next decade if Congress does not extend expiring law by Dec. 31. The nation also faces an automatic $1.2 trillion spending cut and the expiration of the payroll tax holiday and benefits for the unemployed.
Bernanke warned Democrats at a lunch meeting that the combined effect would have severely damaging consequences for the recovering economy.
“He stressed if all these things occur, it could drive us back into a worse recession and the sooner we can resolve these issues, the more likely we are to give confidence to consumers and investors across America,” said Senate Democratic Whip Dick Durbin (D-Ill.).
Senate Budget Committee Chairman Kent Conrad (D-N.D.) said Bernanke and his colleagues discussed a “fiscal cliff” that could put the country back into recession.
“Talking about the fiscal cliff at the end of this year, with all the tax cuts expiring, with [the spending] sequester, with unemployment insurance expiring and payroll tax cut expiring and if all those things happened that would constitute a fiscal cliff and that would have economic consequences,” said Conrad.
MSM: Over 200k to Lose Unemployment Benefits
While the media was busy obsessing about Obama’s fundraiser they totally missed the fact hundreds of thousands of Americans are losing their unemployment benefits. In 8 states, this weekend, 230 thousand Americans will lose their unemployment benefits. Nearly 100 thousand of those workers, coming from the State of California alone. So why did the media totally ignore it?
97% of Lockheed’s Sales Come From Govt.
This week Goldman Sachs put out an list of companies that get 20 percent or more of their sales from the government. the names on the list aren’t shocking, but the percentages are.
TEHRAN – The latest exploration operations at the Kish gas field, which is located in the Persian Gulf, show that it contains at least 66 trillion cubic feet of natural gas, which is a rise of 26 trillion cubic feet over previous estimates, according to an official of the National Iranian Oil Company.
And explorations are underway in the region to find new natural gas deposits, NIOC Exploration Department Director Mahmoud Mohaddess told the Mehr News Agency on Friday.
Earlier, National Drilling Company of Iran Deputy Director Mehran Makvandi said that 60,000 meters of drilling will be carried out at the Kish gas field, the Shana News Agency reported.
Oil Minister Rostam Qasemi recently said that the National Iranian Oil Company and its subsidiaries should finish drilling wells and start gas production as soon as possible.
He added that development and exploitation of the Kish gas field can boost the national economy.
Implementation of the development plan for the Kish gas field started in 2007. In addition to its 66 trillion cubic feet of in-situ gas, the field also contains about 514 million barrels of condensates.
Iran has the second largest proven gas reserves in the world after Russia.
Iran’s natural gas production capacity stands at around 554 million cubic meters per day, National Iranian Gas Company spokesman Majid Boujarzadeh said on February 5.
Boujarzadeh told the Pana News Agency that taking the gas imported from Turkmenistan into account, about 600 million cubic meters of natural gas is supplied across the country every day.
Iran exported over 7.6 billion cubic meters of natural gas during the previous Iranian calendar year, which ended on March 19, up 10.5 percent compared to the year before.
Native Firms Capture $6.8 Billion, Add 109,000 Jobs through SBA 8(a) Program
WASHINGTON – Addressing Native poverty through the SBA 8(a) program not only shifts economic activity, it stimulates the economies of some of the poorest communities in the country as it replaces welfare and/or social service spending, moves people into the labor force, and stimulates Native capital growth – especially Native human capital.
“The story is compelling, as our study clearly shows how important this program is to our Native communities,”
stated Lance Morgan, Chairman of the Native American Contractors Association.
The impact is some $6.8 billion sold to the Federal Government.
The $6.8 billion of 2011 federal contracting requires Native firms to purchase input goods and services and to hire workers, according to the Native American Contractors Association along with Taylor Policy Group, which released these findings late Tuesday afternoon.
The estimated economy wide impacts include:
almost $6 billion in wages and benefits; and
a total GDP contribution of $9.6 billion.
“Our goal is for the study to serve as a glaring illustration of the importance and success of Native participation in the SBA 8(a) program. This study is made available not to only our membership, but also for the agencies and legislators that work with, and seek information from, Tribes, Alaska Native Corporations, and Native Hawaiian Organization when it comes to government contracting matters and concerns,”
stated NACA’s Executive Director, Kevin Allis.
U.N. Warns of Social Fall-Out from Spain’s Austerity Plan
An expert body of the United Nations has warned the Spanish government that the severe budget cutbacks it is applying must not undermine its commitment to upholding the economic, social and cultural rights of the country’s people.
Austerity measures imposed by the government of centre-right Prime Minister Mariano Rajoy could have “a negative and disproportionate impact on the enjoyment of those rights,” said the United Nations Committee on Economic, Social and Cultural Rights (CESCR).
Committee Chairperson Ariranga Govindasamy Pillay, a native of Mauritius, said these concerns will definitely appear in the final conclusions of its review of Spain’s compliance with the provisions of the International Covenant on Economic, Social and Cultural Rights, to be released on May 18.
The Committee, made up of 18 independent experts from different regions of the world, monitors observance of the Covenant by the 160 states that have ratified it since its adoption in 1966 and its entry into force in 1976.
Two particular events mark the case of Spain, which was discussed this week, said expert Jaime Marchán of Ecuador, the Committee’s rapporteur on the report presented by Spain.
One was the elections in November last year, won by the People’s Party, which replaced the government of the Spanish Socialist Workers’ Party (PSOE) led by former prime minister José Luis Rodríguez Zapatero, in power since 2004.
The second feature mentioned by Marchán was “the persistence of a very severe economic crisis whose direct negative and devastating impacts have often interfered with maintenance of basic levels of protection for economic, social and cultural rights.”
In his assessment of Spain’s compliance, the rapporteur recalled that since 2004 the country has taken measures to promote economic, social and cultural rights, adopting many of the recommendations issued by the U.N. Committee in their review of Spain that year. Marchán mentioned the action plan for development of the Roma, or gypsy, population in 2010-2012 and the new 2012-2020 strategy for integration of Roma communities.
However, lawyer Carlos Villán, president of the Spanish Society for International Human Rights Law (AEDIDH), told IPS that in his country, gypsies “continue to be victims of racism and rejection by a segment of the majority population.”
Indentured Servitude for Seniors: Social Security Garnished for Student Debts
By Ellen Brown
“The Social Security program…represents our commitment as a society to the belief that workers should not live in dread that a disability, death, or old age could leave them or their families destitute.” – President Jimmy Carter, December 20, 1977.
“[This law] assures the elderly that America will always keep the promises made in troubled times a half century ago…[The Social Security Amendments of 1983 are] a monument to the spirit of compassion and commitment that unites us as a people.” – President Ronald Reagan, April 20, 1983
So said Presidents Carter and Reagan, but that was before 1996, when Congress voted to allow federal agencies to offset portions of Social Security payments to collect debts owed to those agencies. (31 U.S.C. §3716). Now we read of horror stories like this:
I’m a 68 year old grandma of 2 young grandchildren. I went to college to upgrade my employment status in 1998 or 1999. I finished in 2000 and at that time had a student loan balance of about 3500.00.
Could not find a job and had to request forbearance to carry me. Over the years I forgot about the loan, dealt with poor health, had brain surgery in 2006 and the collection agents decided to collect for the loan in 2008.
At no time during the 6-7 year gap did anyone remind me or let me know that I could make a minimum payment on the loan. Now that I am on Social Security (have been since I was 62), they have decided to garnishee my SS check to the tune of 15%.
I have not been employed since 2004 and have the two dependents . . . . I don’t dispute that I owed them the $3500.00 but am wondering why they let it build up to somewhere around $17,000/20,000 before they attempted to collect.
Her debt went from $3500 to over $17,000 in 10 years! How could that be?
It seems that Congress has removed nearly every consumer protection from student loans, including not only standard bankruptcy protections, statutes of limitations, and truth in lending requirements, but protection from usury (excessive interest). Lenders can vary the interest rates, and some borrowers are reporting rates as high as 18-20%. At 20%, debt doubles in just 3-1/2 years; and in 7 years, it quadruples. Congress has also given lenders draconian collection powers to extort not just the original principal and interest on student loans but huge sums in penalties, fees, and collection costs.
U.S. taxpayers now pay nearly half a trillion dollars annually to finance our federal debt. The cumulative figure comes to $8.2 trillion paid in interest just in the last 24 years. By financing the debt itself rather than paying interest to private parties, the government could divert what it would have paid in interest into tuition, jobs, infrastructure and social services, allowing us to keep the social contract while at the same time stimulating the economy.
The majority of these debts are being imposed on young people, who have a potential 40 years of gainful employment ahead of them to pay the debt off. But a sizeable chunk of U.S. student loan debt is held by senior citizens, many of whom are not only unemployed but unemployable. According to the New York Federal Reserve, two million U.S. seniors age 60 and over have student loan debt, on which they owe a collective $36.5 billion; and 11.2 percent of this debt is in default. Almost a third of all student loan debt is held by people aged 40 and over, and 4.2% is held by people over the age of 60. The total student debt is now over $1 trillion, more even than credit card debt. The sum is unsustainable and threatens to be the next debt tsunami.
By Douwe Miedema and Sarah White
LONDON (Reuters) – Banks are quietly readying themselves to start trading a new Greek currency. Some banks never erased the drachma from their systems after Greece adopted the euro more than a decade ago and would be ready at the flick of a switch if its debt problems forced it to bring back national banknotes and coins.
From the end of the Soviet Union – which spawned currencies such as the Estonian Kroon and the Kazakh Tenge – to the introduction of the euro, they have had plenty of practice in preparing their systems to cope with change.
Planning behind the scenes has been underway since Europe’s debt crisis erupted in Greece in 2009, said U.S.-based Hartmut Grossman of ICS Risk Advisors who works with Wall Street banks.
“A lot of the firms, particularly in Europe and also here, have been looking at that for a long time,” said Grossman, who added that the latest Greek political crisis had brought matters “to a little bit of a head”.
“But there really has been contingency planning at all of the financial institutions for that to happen … Greece leaving the euro zone is not a new idea,” he said.
The EU says it wants Greece to stay in the common currency, and opinion polls show Greeks want to keep it. But they also voted last Sunday for parties opposed to a bailout with the EU and IMF, throwing Greece’s future in the bloc back into doubt.
The elections threw into doubt the EU/IMF aid package that came at the price of harsh austerity measures, and was reached only after much haggling between banks and politicians over a 100 billion euro debt reduction.
While the deal averted financial market catastrophe by allowing Greece to continue repaying its reduced debts, any future problems could be yet more troublesome, even if Athens managed the process in a more or less orderly fashion.
A Greek departure from the euro would create legal and practical problems for the banks which would dwarf the relatively straightforward technical job of dealing in a new currency.
The 2 Billion Dollar Loss By JP Morgan Is Just A Preview Of The Coming Collapse Of The Derivatives Market
When news broke of a 2 billion dollar trading loss by JP Morgan, much of the financial world was absolutely stunned. But the truth is that this is just the beginning. This is just a very small preview of what is going to happen when we see the collapse of the worldwide derivatives market. When most Americans think of Wall Street, they think of a bunch of stuffy bankers trading stocks and bonds. But over the past couple of decades it has evolved into much more than that. Today, Wall Street is the biggest casino in the entire world. When the “too big to fail” banks make good bets, they can make a lot of money. When they make bad bets, they can lose a lot of money, and that is exactly what just happened to JP Morgan. Their Chief Investment Office made a series of trades which turned out horribly, and it resulted in a loss of over 2 billion dollars over the past 40 days. But 2 billion dollars is small potatoes compared to the vast size of the global derivatives market. It has been estimated that the the notional value of all the derivatives in the world is somewhere between 600 trillion dollars and 1.5 quadrillion dollars. Nobody really knows the real amount, but when this derivatives bubble finally bursts there is not going to be nearly enough money on the entire planet to fix things.
Sadly, a lot of mainstream news reports are not even using the word “derivatives” when they discuss what just happened at JP Morgan. This morning I listened carefully as one reporter described the 2 billion dollar loss as simply a “bad bet”.
And perhaps that is easier for the American people to understand. JP Morgan made a series of really bad bets and during a conference call last night CEO Jamie Dimon admitted that the strategy was “flawed, complex, poorly reviewed, poorly executed and poorly monitored”.
The funny thing is that JP Morgan is considered to be much more “risk averse” than most other major Wall Street financial institutions are.
So if this kind of stuff is happening at JP Morgan, then what in the world is going on at some of these other places?
That is a really good question…..
Wars and Rumors of War
Blogger proves TSA body scanners are useless
The Transportation Security Administration has frisked toddlers and put kids on the no fly list in America. Many Americans feel the TSA is obsolete and feel their tax money could be better spent on other things. One blogger was able to sneak items through the body scanners that are supposed to protect Americans from another terror attack. Anthony Randazzo, director of economic research at the Reason Foundation, joins us for more.
Britain said Thursday that it was in talks with other European Union members about possibly easing a provision of their Iran oil embargo, set to begin in less than two months, that could cause harmful and unintended side effects because it bans Europe-based insurers from covering any ships that carry Iranian oil anywhere in the world.
Such an easing would most likely be welcomed by Iran as well as non-European buyers of Iranian oil, and it could reduce a potential cause of spiking oil prices. Most of Iran’s estimated 2.2 million barrels of daily oil production goes to Asia.
Concern about the impact of the insurance provision has grown since the European Union announced the embargo early this year, part of a coordinated Western campaign to penalize Iran over its uranium enrichment program.
Most big maritime insurers and underwriters are based in Europe, and other buyers of Iranian oil are finding it increasingly difficult to buy the required liability insurance needed to ship it as the embargo’s July 1 enforcement date looms.
The provision has also been criticized as hastily conceived by many in the insurance industry, notably the associations of shipowners and charterers who pool resources to provide coverage. They are known as P&I clubs, for protection and indemnity.
Even China, Iran’s biggest customer, signaled last month that it might be forced to curtail purchases partly because of the insurance problem. Reports in the insurance trade press said the China P&I Club would suspend doing business with tankers carrying Iranian oil. Japan has already done so.
There had been speculation that Britain, an epicenter of maritime insurance services and home to the International Group of P&I Clubs, a trade group, would seek to delay the insurance ban in consultation with other European Union members, which are scheduled to review the embargo’s provisions this month. Reuters, quoting unidentified diplomats, reported Wednesday that the British would seek a six-month postponement.
Britain’s Foreign Office said in a statement on Thursday that it was “committed to a two-track approach of engagement and increasing pressure on Iran through far-reaching sanctions.” The statement also said that the European Union was reviewing aspects of the insurance provision “to ensure that the pressure on Iran is maximized, while avoiding any undesired impacts elsewhere.”
“We are in discussions with several E.U. member states on this,” it said.
Iran had no immediate comment, but Iranian officials have confidently predicted that the European Union embargo would fail, undermined by divisions within Europe and by the demand for its oil elsewhere.
The development came as Iran and the so-called P5-plus-1 countries — the permanent members of the United Nations Security Council plus Germany — are preparing for a second round of negotiations over Iran’s uranium enrichment activities in Baghdad on May 23. Iranian officials have said they expect a gesture of good faith — like an easing of the sanctions — as the talks progress.
(Source: The New York Times)
US military under fire for ‘anti-Islam class’
The United States military has called for a review of all its training classes after receiving criticism for a course taught to senior officers that allegedly encouraged war against Islam.
The controversial class presented slides that accused dozens of Islamic groups, many widely recognised as mainstream advocacy groups, of infiltrating the US media, education system, government and military.
One slide titled “The Muslim Brotherhood and Violence” showed a photo of an al-Qaeda beheading, erroneously conflating the two groups.
Through the slides and other presentations, the course created a picture of a US government co-opted by subversive Muslim elements.
Al Jazeera’s Josh Rushing reports from Washington.
Articles of Interest
Flags Ordered Flown at Half Mast
WINDOW ROCK, ARIZONA – The Navajo Nation has lost yet another Code Talker.
Navajo Code Talker Samuel Tso
Samuel Tso, 89, of Lukachukai, Arizona, passed away Wednesday evening with family members beside him at San Juan Regional Medical Center in Farmington, New Mexico.
Navajo Nation President Ben Shelly has ordered the Navajo Nation flag to be flown at half staff beginning at today, May 10, through sundown May 14, to honor Code Talker Tso for his service to the Navajo Nation and his country in World War II.
“The Navajo Nation has lost another Code Talker and that saddens my heart. The Code Talkers have brought great pride to our Nation and the loss of Samuel Tso saddens not only myself, his loss saddens the Navajo Nation. On behalf of the First Lady, the Vice President, and the Navajo people, we offer our prayers, condolences and words of encouragement to the Tso family. Samuel Tso was a true Navajo warrior,”
said President Shelly.
Art imitates life they say, and every now and then life imitates art.
Which is only slightly terrifying when the art being imitated is a Call of Duty title and the real-world entity doing the imitating is the Pentagon.
A fictional drone from a videogame that hasn’t even been released yet has inspired a US DoD office to consider pursuing the same drone in real life, Brookings Institute 21st Century Defense Initiative director and all-around drones guru Peter Singer tells Innovation News Daily.
Mosaic News 5/10/2012: Thousands of Mauritanians Declare Readiness to Kick out President Aziz
Thousands of Mauritanians declare readiness to kick out President Aziz, devastating bombings hit the Syrian capital as the blame game continues, Algeria holds parliamentary elections amid voter apathy, and more.
Today’s headlines in full:
Thousands of Mauritanians declare readiness to kick out President Aziz
Devastating bombings hit Syrian capital as the blame game continues
New TV, Lebanon
Algeria holds parliamentary elections amid voter apathy
BBC Arabic, UK
Relatives of Palestinian hunger strikers slam Red Cross for ‘negative’ role
Al Jazeera, Qatar
Bahrain postpones retrial of medics jailed for treating protestors
Press TV, Iran
International community, especially US, turning blind eye to Bahrain
Press TV, Iran
Mubarak’s PM reenters Egyptian presidential race
Press TV, Iran
Netanyahu’s last-minute Kadima deal sparks protests across Israel
Moody’s downgrades rating for Israel’s banking system
Israeli settlers burn hundreds of olive trees in West Bank
Palestine TV, Ramallah
Mosaic is a Peabody Award-winning daily compilation of television news reports from the Middle East, including Egypt, Lebanon, Israel, Syria, the Palestinian Authority, Iraq and Iran. Watch more Mosaic at http://www.linktv.org/mosaic
Deerfield employees can earn $100 for reporting crimes
A group of about 70 landscapers and garbage truck drivers got training from the Broward Sheriff’s Office this week so they know what to look for. Another group of about 35 will train next week.
BSO calls the program Operation B.O.L.O. When an employee reports something suspicious, on-duty BSO deputies will drive to the scene. If the information leads to an arrest, the employee gets a reward of up to $100.
“We’re targeting employees out and about throughout the day, who can be an extra set of eyes and ears,” said BSO Deerfield Police Chief Pete Sudler. “There’s no doubt while they’re out there, things are going on around them they’re not trained to spot yet.”
The program is the first of its kind in South Florida, Sudler said, though there are similar programs in Illinois, Texas and in Central Florida. He’s never heard of a city paying employees for good information, though.
The program is funded by BSO’s Law Enforcement Trust Fund, which is made up of funds seized during investigations. By Florida law, the trust fund must be spent on special programs or crime prevention and can’t be used to defray normal operating costs for a police department.
An initial allocation of $5,000 will cover the program for now. How quickly that money disappears will measure the program’s effectiveness, Sudler said.
Arrests in crimes including burglaries, robberies and drug deals will bank employees the full $100. Lesser crimes and tips that less directly lead to an arrest would pay a little less, with the payment determined on a case-by-case basis.
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