Guambat Stew

China opposes US drilling in its Pacific region

2012-01-30T06:48:00.007+10:00

US senators vow increased military presence

THE UNITED STATES will be increasing its military presence in Asia-Pacific in view of the expected shift in the world’s economic focus to the region, visiting US senators announced yesterday.

“We will be shifting a lot of our attention to the Asia-Pacific region... It’s also in recognition of the world’s economy shifting to the Asia-Pacific region as well as a recognition that there are tensions in the region as we all know,” US Senator John S. McCain III (R-Arizona) said in a briefing at the US Embassy.

The senator, who is also the second most senior member of the US Senate committee on armed services, said the expansion of US military presence will be manifested through “an increase in naval and air assets into the region.”

He also said the US “will be increasing joint exercises with our allies and friends in the region.”

Citing the economic aspect of the US’ relation to the region as “more important than any other issue,” Mr. McCain said: “I believe that the best way to make sure we have peace in the region [is] to have strong military presence. The best way to achieve goals is [to do it] peacefully.”

“I don’t predict conflict with China but I do predict strong military presence will lead to a more peaceful region,” he said. Any withdrawal of US presence “would mean instability in the region,” he added.

China: Strategic Impact Of US Defense Strategic Review 2012 – Analysis

Envisioned in this Review are the main threats to the United States in the 21st Century and United States military blueprint to meet the challenges these threats pose to United States national security interests.

Topping the list of the US threats perceived in the 21st Century is The China Threat and hence the United States predominant shift in military focus and a ’pivot’ to the Asia Pacific.

The US Defence Strategic Review 2012 approved by President Obama emerges as a “game changer” in Asia Pacific strategic dynamics and places US-China relations at strategic crossroads with far reaching implications. It is a manifestation of United States seriousness to come to grips with The China Threat, a seriousness which the United States was ducking so far.

Initially what must be noted is that China has never cowed down in face of stupendous strategic challenges. Remember China taking on the United States during the Korean War in the 1950s, when the United States was the sole nuclear weapons power and China had nothing else to militarily boast off other than massed manpower.

China expectedly can be expected to react forcefully to the new US strategic formulations and therein lay the seeds of an increased confrontation between China and the United States.

Initially, no official reactions were forthcoming and only media publications of Chinese Government mouthed some edgy views. It was only a few days later that the first official response appeared on the Chinese Ministry of Defence website. All of them were highly critical of the militarization of US strategy in the Asia Pacific.

More pointedly striking hard stances was the Global Times, a virtual mouthpiece of the Chinese Government which asserted that the United States cannot stop China’s rise and further that “ China needs to enhance its long distance military attack ability and develop more ways to threaten US territory in order to gradually push outward the frontline of the game with America”

US, Filipino forces plan combat drills at oil rigs near South China Sea waters Beijing claims

U.S. and Philippine marines plan to hold combat drills at an oil rig in the South China Sea to bolster the defense of such sensitive facilities.... The drills involve U.S. Marines training their Philippine counterparts in defending and retaking oil and gas rigs captured by security threats like terrorists, Sabban said, adding military organizers from both sides did not contemplate on China as an imaginary target when they planned the drills.

Lt. Gen. Juancho Sabban, commander of the Philippine military’s Western Command, said Thursday the exercises will be held in March or April off western Palawan province and should not alarm China because these will be done within Philippine territorial waters.

The Balikatan or “shoulder-to-shoulder” exercises have mostly been done around the main northern Luzon island in past years but will be held in Palawan for nearly a month starting in mid-March. More than 500 U.S. soldiers and marines, along with their warships and aircraft, will take part in the exercises with about 1,000 Filipino military personnel, Sabban said.

Make Philippines pay for balancing act

Not being an empire, China won't be easily irritated or flex its military muscle at will. However, it has its principles. It will not accept a small country in the region creating military tensions by playing a balancing strategy. A price should be paid for violating this principle. The Philippines will not be an exception.

The Philippines has signaled during a recent bilateral defense dialogue that it would expand the US military presence on its soil. US navy ships will reportedly be deployed in the Philippines, and more joint military exercises will be considered. China must respond to this move. Besides expressions of concern and disagreement, detailed countermeasures are necessary.

Given the recent active maneuvers of the US military in China's neighboring area, the lack of a response from China would be inappropriate, though it is also impossible to react strongly toward every move by the US. It is thus necessary to single out a few cases and apply due punishment.

The Philippines is a suitable target to impose such a punishment. A reasonable yet powerful enough sanction can be considered. It should show China's neighboring area that balancing China by siding with the US is not a good choice.

The Philippines and Vietnam are the two main countries creating waves in the South China Sea. Yet Vietnam needs China's political support as an alliance between Vietnam and the US has a difficult line to cross. However, the Philippines can easily surrender itself as a pawn in the US' geopolitical game against China. But the Philippines has its own bitter memory of the US. At least for now, Filipinos remain aware of the history of US colonization. Meanwhile, China's economy presents a huge attraction.

The US will likely increase aid to the Philippines to make up for its losses. This will further burden the US financially. During this tug of war, as long as China keeps its economic growth momentum, it will have an advantage.

China: Asia needs peace, stability

China called for greater efforts toward “peace and stability” in the region yesterday after the Philippines offered to allow more US troops on its territory.

“We hope that relevant parties will make more effort towards peace and stability in the region,” China’s foreign ministry said in a brief statement faxed to AFP.

China and the Philippines, along with Vietnam, have rival claims to parts of the South China Sea, home to some of the world’s most important shipping lanes and believed to hold vast deposits of fossil fuels.

Taiwan, Brunei and Malaysia also have claims in the South China Sea.

Manila and Hanoi complained repeatedly last year of what they said were increasingly aggressive acts by China in the decades-long rift.

The alleged acts, which included a Chinese naval ship reportedly firing warning shots at Filipino fishermen, fuelled fears among some nations in the region about China as its military and political strength grows.

Manila is urging non-claimant countries such as the United States and Japan to ensure safe and free passage in open seas and curb transnational crimes.

Naval modernisation: A sea change for Indonesia?

A Javanese proverb alon-alon asal kelakon - slowly but surely - seems to reflect Indonesia's naval modernisation bid. Since 2004, Jakarta has begun to beef up its naval muscles at a modest pace. Indonesia aims to have a "Green-Water Navy" by 2024 - a navy second to none in Southeast Asia - an expectation that some may find too far-fetched. But recent increases in military spending might prove the sceptics wrong.

Why modernise?

As the world's largest archipelagic state sitting astride major global shipping lanes, Indonesia puts a high premium on its maritime security. One of the main responsibilities of the Indonesian Navy (TNI-AL) is to patrol vast swathes of Indonesian waters despite Indonesia having a Sea and Coast Guard (KPLP). However, lack of resources made monitoring of Indonesian seas difficult and resulted in rampant maritime crimes, such as piracy, illegal fishing and smuggling, which annually could cost Indonesia more than US$1 billion.

Furthermore, natural disasters have stressed the versatility of naval power.

Maritime boundary disputes too have prompted urgent calls for the government to revamp Indonesia's naval defences. Indonesia still has over ten unresolved maritime boundary disputes with neighbouring states; some of them, like in Ambalat and Natuna Sea, often resulted in naval skirmishes among the disputants. Indonesia and Malaysia are currently in dispute over Ambalat waters off East Kalimantan and Sabah, known to contain huge hydrocarbon reserves. In May 2009, naval skirmishes almost led a TNI-AL vessel to fire upon a Malaysian patrol boat.

Similarly, China's "cow's tongue" claim in the South China Sea which overlapped with Indonesia's exclusive economic zone (EEZ) in the Natuna Sea is a brewing storm. In 2010, a Chinese armed vessel threatened to fire on a TNI-AL patrol boat after the latter had earlier detained a Chinese trawler suspected of fishing illegally in Indonesian EEZ. Therefore, a robust navy is a strategic imperative.

Remember, these are only excerpts, some re-arranged, some out of context. Always read the full articles linked in Guambat's Stew.

Chinese dragon waits for recognition

What kind of dragon is China? It's a worrying question to ask, with implicit motives.

China should not set too high a standard for itself, or fear making mistakes, as having a place on the world stage allows for some leeway.

What we should especially keep in mind is that China is the arriviste in the world club, and is destined to be teased or scorned by others, and we should therefore forget about "face."

We must get ready for economic loss in order to be tenable to stand up to our rivals, and flex our military muscles for that purpose. Only in this way will the world change for China.

China still has a long way to go before it is accepted and respected. Maybe the day will come when China's GDP grows to equal that of all Western countries combined. As we realize how far away that is, we are not in any rush. We also don't believe in the possibility of a future allout conflict between China and the US, as it is the last thing the American people, like us, want.

Enjoy this Spring Festival for now. It looks to be the most prosperous Year of the Dragon yet. Let unpleasant memories be forgotten, and embrace our good luck. There will be more trouble after the holidays, but such is life.

~~~~~~~~~~~~~~~~~~~
BUT WAIT THERE'S MORE:

(China press) Philippines sends 'wrong signal'

By allowing more US troops on its soil, the Philippines has sent the wrong signal, experts said, and the decision will cause more tension in the South China Sea.

China has taken note of the report and urges relevant parties to do more to help maintain regional peace and stability, the Foreign Ministry said in a statement on Sunday.

Foreign Secretary Albert del Rosario said last week in Manila that the Philippines was looking to conduct more joint exercises with the United States and have a greater number of US troops rotate through the Southeast Asian country.

The move sends a very dangerous signal that could cause China to misjudge the US' intentions, and raise suspicions between the two countries, Wang said. The US released its military budget last week, which indicated that $6 billion would be cut next year, reducing its ground forces by 100,000 troops, Wang added.

The Philippines also gets a "clear but wrong" message that the US supports a confrontation with China on the South China Sea, Wang said, adding that it might complicate the current situation in the area.

The offer comes two months after US President Barack Obama, on a visit to Australia, announced that the United States would send 2,500 Marines to the northern city of Darwin by 2016-17.

The United States also plans to deploy littoral combat ships in Singapore, a longtime US partner with a strategic position.

"No matter how strong the outside country is, it can not help the Philippines to achieve illegal sovereignty claims," said Peng Guangqian, a Beijing-based military strategist.

If Philippines-US military cooperation increases, the Philippines would pay a price on its sovereignty, he said. The Philippines is a former US colony, and it remains to be seen how far the cooperation will go, Peng added.

The plan for a stronger US military presence in the region has been met with opposition in the Philippines.

On Saturday, some 50 members of Philippine leftist New Nationalist Alliance (Bayan) picketed the US embassy, vowing to launch a campaign opposing the plan to allow more US troops in the country. They held a huge effigy of Uncle Sam with another of President Aquino labeled as his "dog", and riot police prevented them approaching the mission.

"If we allow more US troops to enter our country, the entire archipelago will be transformed into one military outpost for US hegemonic interests," Bayan said in a statement distributed at the rally.

(Philippine press) Government maintains good relations with China despite territory conflict

AMID growing tensions between the Philippines and China because of its overlapping claims on the West Philippine Sea (South China Sea), Foreign Affairs Secretary Albert del Rosario maintained that the government will continue to observe good relations with the Asian economic powerhouse.

“Our relations with China, as we had said before, should be governed by mutual respect, equality and observance of each other’s sovereignty,” the Foreign Affairs chief said in a statement.

“We are certain that China will fully concur with our stated position,” he added.

Guambat reckons that China is, again, rattling brushes. But this has the possibility to rattle nerves, as well, and could lead to "accidents", "regretful" ones.

Bitter late if ever

2012-01-25T04:05:00.002+10:00

The following story is truly gobsmacking in its dilettantism.

Seven years ago Guambat had a go at the so-called PPP financing scheme for major infrastructure. (Look here.) As many foresaw, it ended in disaster for investors, planners, citizens and government.

Now, at last, the finance overseers, who overlooked this at the time, are talking about getting around to bolting the door.

Ai adai.

Big projects get tough new scrutiny

THE corporate watchdog has cracked down on fund-raising in the infrastructure sector to prevent a repeat of debacles such as BrisConnections and Sydney's Cross City Tunnel.

Investors in infrastructure lost billions in a series of collapses and near-collapses after the global financial crisis.

Under the new rules, which have met with stiff opposition in the industry, infrastructure companies will have to either give investors far more information about their management, finances, modelling and forecasts, or explain why not.

Read more: http://www.smh.com.au/business/big-projects-get-tough-new-scrutiny-20120124-1qfob.html#ixzz1kOw5ommr

Talk. Nothing more. The horse has bolted. And is still running free. We need a right proper stockman to handle the brumbies, but ASIC ain't no Man From Snowy River.

A triumvirate, if not triumph, of reading

2012-01-21T05:17:00.002+10:00

Somehow Guambat got his periscope up from his burrow today. Peering through it, he noticed these:

Unearned, and Taxed Unequally

There was, in fact, only one time that capital gains were taxed at the same rates that were paid by people who earned their money by working. That was during the years 1988 to 1990, as a result of the Tax Reform Act of 1986 — a law championed by President Ronald Reagan.

To be sure, he changed his mind about unearned income in 1988.

Read the rest of Floyd Norris' commentary.

Montana Supreme Court upholds election spending limits

"Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people — human beings — to share fundamental, natural rights with soulless creatures of government," Justice James C. Nelson wrote in his reluctant dissent.

"Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons," he wrote.

Read the rest.

Andrew Sullivan: How Obama's Long Game Will Outsmart His Critics

And what have we seen? A recurring pattern. To use the terms Obama first employed in his inaugural address: the president begins by extending a hand to his opponents; when they respond by raising a fist, he demonstrates that they are the source of the problem; then, finally, he moves to his preferred position of moderate liberalism and fights for it without being effectively tarred as an ideologue or a divider. This kind of strategy takes time. And it means there are long stretches when Obama seems incapable of defending himself, or willing to let others to define him, or simply weak. I remember those stretches during the campaign against Hillary Clinton. I also remember whose strategy won out in the end.

Read the rest. Outsmarting his critics will be only slightly more problematic than outsmarting his election opponents.

In deep Schettino

2012-01-19T08:06:00.003+10:00

Behaviour like this does not just pop out of the blue, especially after roaming around the planet for 52 years. This jerk must have had a history of cocky poor judgement, ego-driven selfish me-first-ism, lying pass-the-buck-ism.

"This jerk" of course is "Captain" Francesco Schettino. Captain Jerk from the StarCrossed Costa Enterprise.

I'm a hero, not a coward says Costa Concordia captain Francesco Schettino

In an extraordinary claim, Francesco Schettino argued he was responsible for "saving hundreds, if not thousands, of lives" by steering the crippled ship closer to shore after it struck rocks, The Daily Telegraph reported.

Even though it had suffered a fatal gash in its port-side hull, Schettino - a Concordia ship's captain for six years - tells a worried harbourmaster that everything is fine other than just a small technical problem.

When officials again managed to contact the captain, who by now was safely on shore despite hundreds of passengers still being on board, he said he was unable to return because the cruise liner had started to list badly.

Instead of obeying the orders, Schettino was reportedly seen getting into a taxi and leaving the scene as passengers were left to fend for themselves.

Read more: http://www.news.com.au/travel/news/im-a-hero-not-a-coward-says-costa-concordia-captain-francesco-schettino/story-e6frfq80-1226247888401#ixzz1jqqMSgie

Cruise Captain Says He 'Tripped' Into Lifeboat, Couldn't Get Out

"I had no intention of escaping," Francesco Schettino, 52, said during his first court hearing Tuesday, according to Italy's Corriere della Sera newspaper. ... I tripped and I found myself inside the life boat with a number of passengers."

The captain also reportedly admitted to the court that he lied at one point when he assured officials that he had dropped anchor shortly after the Costa Concordia slammed into a rock to stabilize the luxury liner.

Schettino reportedly admitted that he made mistakes that led to the crash and afterwards, but said the ship's course, including the now-controversial close pass, had been set from the beginning. The cruise line previously said Schettino had made an unauthorized deviation from the programmed route.

Cruise disaster: captain neared rocks in Facebook stunt for friend's family

In a pre-planned stunt advertised on Facebook, captain of The Concordia, Francesco Schettino, sailed perilously close to the coast of Giglio so that the ship's head waiter could salute his family on land.

According to Italy's Corriere della Sera newspaper, as the cruise liner approached the island's coastline Captain Francesco Schettino, 52, said to the head waiter Antonello Tievolli: "Come and see, Antonello, we're right in front of Giglio".

Minutes before the cruise ship hit the rocks, the waiter's sister Patrizia Tievoli had posted on Facebook that: 'In a short period of time the Concordia ship will pass very close. A big greeting to my brother who finally get to have a holiday on landing in Savona.'

Compare and contrast Schettino with De Falco:

Costa Concordia coastguard rejects 'hero' label

Gregorio de Falco, commander of Livorno port authority, says he just did his job when he ordered captain Francesco Schettino back to the stricken cruise ship.

"Captain," said De Falco at one point. "This is an order. Now I am in command. You have declared the abandoning of a ship and are going to co-ordinate the rescue from the bridge," adding, "What do you want to do? Go home?"

Italy's Cruise Crisis Spawns An Unlikely Star

Five days after a cruise liner slammed into rocks off Italy's Tuscan coast, the country is gripped by the contrasting profiles of two key figures in the drama — the captain charged with abandoning ship and the captain who demanded he get back onboard.

During the four-minute conversation hours after the collision, an increasingly enraged De Falco orders Schettino to return to the ship and help coordinate the evacuation of the many remaining passengers.

"You've abandoned ship! I'm in charge now," De Falco rages at Schettino, who was apparently in a rowboat at this time. "Go back and report to me how many passengers [are still onboard] and what they need. ... Perhaps you saved yourself from the sea, but I'll make you pay for this, dammit!"

Schettino can be heard trying to refuse the order. "You don't understand, it's dark here. Can't see anything," he says.

"What is it, you want to go home Schettino?" De Falco spits out. "It's dark and you want to go home?"

Eventually De Falco demands: "Go back onboard, dammit!"

De Falco's Italian expletive is actually much harsher than "dammit" — but the line has become a national catchphrase and is Italy's top trending hashtag, or keyword on Twitter.

By Wednesday morning, his words were a national slogan, with T-shirts being sold online with the words, "Go back onboard, dammit."

One tweet from a woman named Sofia Rosada said, "It's men like De Falco who should be governing, instead we are full of men like Schettino."

Suits me

2012-01-03T10:05:00.002+10:00

Poppa Jack threw his out years ago.

MIT develops a suit that makes you feel like you're 75 years old

Braces on the suit mimic joint stiffness and make it hard to walk, leg straps limit how fast you can travel, and a helmet causes your head to be forced forward, mimicking the curved spine of an older adult. Yellow goggles and earplugs are the final touch on the outfit, making it difficult to read and hear some things.

Guambat is waiting for them to invent a Super Man suit.

NASA: Nada

2012-01-03T10:01:00.002+10:00

Just when it began to look like this might be an eventful year:

NASA: The world will not end in 2012

“Nothing bad will happen to the Earth in 2012. Our planet has been getting along just fine for more than 4 billion years, and credible scientists worldwide know of no threat associated with 2012,” the space agency said in a statement posted on its frequently asked questions segment of its website.

“Just as the calendar you have on your kitchen wall does not cease to exist after December 31, the Mayan calendar does not cease to exist on December 21, 2012. This date is the end of the Mayan long-count period but then — just as your calendar begins again on January 1 — another long-count period begins for the Mayan calendar,” says NASA.

“There are no known near-Earth objects in 2012 that present a credible risk to Earth,” said one NASA official. “None, zero, zip, nada.”

Read more: http://www.thestatecolumn.com/science/nasa-the-world-will-not-end-in-2012/#ixzz1iLh1BGaA

US presence in Iraq only contracts

2011-12-27T18:56:00.002+10:00

Soldiers gone, but contractors remain in Iraq. U.S. relies heavily on civilians, with even more in Afghanistan.

State Department officials have said they expect that 5,000 security contractors will be needed in Iraq next year to protect U.S. diplomats.

A “life support” team of an additional 4,500 contractors will cook, clean and provide transportation and other services.

In Afghanistan, 105,000 U.S. troops are supported by about 101,000 civilian contractors.

Only 23,000 of those contractors are U.S. citizens. About 50,000 are Afghans, and 27,900 come from other countries.

“The U.S. military can't move, fight or sustain itself without contractor support today,” said Steven Schooner, a law professor at George Washington University who has studied contractor fatalities.

According to a report released in August by the congressionally chartered Commission on Wartime Contracting in Iraq and Afghanistan, at least $31 billion — and possibly as much as $60 billion — has been lost to contract waste and fraud. It concluded that the government was relying too much on contractors and that major reforms were needed.

Read more: http://www.mysanantonio.com/news/local_news/article/Soldiers-gone-but-contractors-remain-in-Iraq-2426228.php#ixzz1hiwaDxN2

Guilty until proven innocent?

2011-12-27T18:49:00.003+10:00

Swedish journalists receive 11 years in jail

Two Swedish journalists who were found guilty in Ethiopia of supporting terrorism were sentenced to 11 years in jail Tuesday, the Swedish foreign ministry said.

Ethiopian troops captured Persson and Schibbye in July during an exchange of gunfire with a rebel group in the Ogaden, a prohibited region along the nation's border with Somalia, according to state media.

Ethiopians officials have accused the journalists of being accomplices to terrorism after the government declared the Ogaden National Liberation Front a terrorist group in June.

Persson and Schibbye were convicted on two counts: entering the country illegally and providing assistance to a terrorist organization, according to the Committee to Protect Journalists (CPJ).

Both journalists pleaded guilty to entering the country illegally through Somalia without accreditation, according to the CPJ, which says Ethiopian officials deny media access without government minders.

"Our starting point is and remains that they have been in the country on a journalistic mission," Swedish Prime Minister Frederick Reinfeldt said in a statement last week. "They should be freed as soon as possible and be able to rejoin their families in Sweden."

But presiding judge Shemsu Sirgaga said the two "have shown that they are esteemed journalists, but we cannot conclude that someone with a good reputation does not engage in criminal acts," Sirgaga said.

"They have not been able to prove that they did not support terrorism."

Of oligopolies past and future

2011-12-09T06:29:00.003+10:00

Guambat is toward the end of his short annual Sydney sojourn, where the weather has been as cruel as the economy. His attention is more closely directed to the Aussie news, and this item is big on his radar.

The story is about how the so-called "Big Four" or "Four Pillars" or 'bankster cartel' set their interest rates, otherwise referred to as resale price maintenance.

First, it looks at how the group have conducted their little cozy business in the past, then suggests a new strategy, characterized as a lone (pun alert) break-out by one of the four. Guambat is dubious. This is a well orchestrated monkey-see, monkey-pas-de-deu, as well choreographed as Olympic synchronous swimming (if there remains any such thing).

See what you think:

ANZ a wildcard as it leads pack by Anne Knight

ON TUESDAY, leak-proof bunkers were set up to house four senior banking teams. They are, in effect, war rooms where interest rate battle strategies are hatched and various scenarios are accessed and tested. Two are in Melbourne - ANZ and National Australia Bank - and the other two in Sydney's CBD are occupied by teams from Commonwealth Bank and Westpac

The participants comprise the heavyweights of each business, its chief executive, finance director, the head of the retail operations, treasury, marketing and corporate affairs.

The pressure is intense. Each team watches every piece of media coverage - newsflashes, the online updates and reads newspaper commentary. They listen to every utterance from the government - the impromptu press conferences known in the media trade as door stops. But they watch their competitors' moves even more closely.

When the RBA announced a 25 basis point cut to its cash rate at 2.30pm on Tuesday the clock started ticking.

The top dogs in finance and treasury have the task of assessing how much it will cost their bank to pass on the full rate cut and how much they can save by shaving a couple of percentage points off a full cut. In order to play this game of chicken they must also understand how much financial pain/gain will be sustained by the other three.

Inside the bunkers, the marketing and retail services operatives must overlay the financial outcomes against the government backlash, PR fallout and the possibility of customer leakage.

None of the banks wanted to pass on the full 25 basis points, but none wanted to be the first to do so. There is no first mover advantage in this game. It might be unpopular to agree with the banks on this issue, but thanks to the state of offshore credit markets the banks' cost of borrowing has gone up. If they needed to wade into these wholesale markets tomorrow it would be expensive. The scenarios worked through by these war cabinets would have involved a matrix of possibilities.

They even debate whether it should be a Sydney or a Melbourne bank that moves first.

But all understand that to the extent they would fall short of matching the Reserve Bank it would be better to do so as a pack.

NAB would have been desperate to see the others pass on less than 25 basis points, providing it with the excuse to stay with the pack. But nothing this week has gone to script. Within hours of ANZ's move NAB followed, passing on the full 25 basis points.

OK. There you have the description of how the oligopoly past behaves. Now the vision of the oligopoly future, perhaps?

Yesterday at 12.30 ANZ became the first breakaway - it announced a cut of the full 25 basis points. But with the ANZ announcement came an unexpected kicker: in future it will not respond to changes in the Reserve Bank's cash rate but change its variable interest rates on its own timetable, the second Friday of each month. And, more importantly, the movement will reflect changes to its own cost of funds.

This decoupling is all about convincing consumers that the bank's cost of borrowing has little to do with the benchmark rate set by the Reserve Bank. In doing so, ANZ will be less tied to central bank settings and is more likely to move rates up next month if European debt markets remain in a parlous state. It's a clever strategy, albeit probably unpopular. It is also a game-changer.

Most consumers will not understand the significance of ANZ moving away from the Reserve Bank's rate agenda. They will just see a 25-basis-point rate cut as a win.

But the breakaway is sufficiently radical and unexpected that the rest will need to reform their strategies.

It is now a fair bet that the others will fall into line. A new pack has formed and to stay outside it would be dangerous.

Read more: http://www.smh.com.au/business/anz-a-wildcard-as-it-leads-pack-20111208-1olam.html#ixzz1fyhtyPq

If there truly were any competitive instincts in the cartel, the ranks will break with this move. Time will tell. Guambat reckons the rank oligopoly will reform and hold as tight as the one of olde.

FAIRNESS DOCTRINE FOLLOW UP:

Further to above, consider this:

Banks damned if they do and damned if they don't

This week's apparent indecision was in marked contrast to what happened just four weeks ago.

Then, the two biggest banks, the Commonwealth and Westpac, announced within a short period of each other and not long after the RBA's 2.30pm Melbourne Cup day cut they would follow suit and reduce their interest rates

ANZ left it to the next day, leaving National Australia Bank as the odd one out by only passing on part of the rate cut - 0.20 per cent - rather than the full 0.25 per cent.

NAB was vilified, not surprisingly perhaps, given it had sought to make a virtue of being the odd one out by projecting itself as the consumers' friend just a year before with its "breaking up with the big four" home loans campaign.

In little more than a day, NAB had handed back some of its hard-fought PR gains over what appeared, in public at least, to be a miserly amount - just five basis points, or 0.05 of a per cent.

As small as that seemed, it was in fact a significant turning point in what has become a hugely competitive battle for market share

Before last month's shenanigans, NAB had been successful in grabbing market share through the use of a classic retail-style price war. And in doing so, it was prepared to sacrifice some of its profit margin to buy that volume.

But all of this has come at a cost, a factor highlighted in prescient comments made just a week ago in the Herald by banking analyst Brett Le Mesurier of brokers BBY.

"From their [NAB] accounts to September it looked like to me like it was a pure 'price versus volume' trade-off," he said. "So more volume, lower price. And you multiply the two and you end up no better from a growth perspective."

But it wasn't just about the growth or the quality of that bigger market share. It was also about the cost of funding that growth. Put simply, NAB's lower-priced mortgages have been hurting its bottom line since its own cost of borrowing is no cheaper than its rivals.

In fact, the battle in the lending market has been matched by an equally expensive fight for deposits, which has only added to the pressure on profit margins.

Read more: http://www.smh.com.au/business/banks-damned-if-they-do-and-damned-if-they-dont-20111209-1ongv.html#ixzz1g3L5VDWP

As always, be sure to read the whole linked article. Much has been left out here. Guambat is still not wholly convinced that mere marketing wars constitute competition. In the classic sense, competition drives down price, and the Big Four show little ambition to do anything so brash for very long.

The very foundations of the Four Pillars Policy is to avoid the kind of price competition that would yield the kind of creative destruction of any of the existing banks that classic economics finds useful. Bank competition in Australia is more akin to rearranging deck chairs. Which is what oligopolies do.

Of public capital and public interest

2011-12-01T02:03:00.007+10:00

First, on the matter of public capital, we are the 99.9%, according to this Forbes article/opinion piece carried on Yahoo Finance, excerpts extracted:

The Top 0.1% Of The Nation Earn Half Of All Capital Gains

The top 0.1%-- about 315,000 individuals out of 315 million-- are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.

The [Bush 2003]reduction in the [capital gains] tax from 20% to 15% continued the step-by-step tradition of cutting this tax to create more wealth. It had first been reduced from 35% in 1978 at a time of stock market and economic stagnation to 28%. Again 1981, at the start of the Reagan era, it was reduced again to 20%-- raised back to 28% in 1987, on the eve of the October 19 th-- 23% crash in the market [obvious transcription error in article here]. In 1997 Clinton agreed to reduce it back to 20%, which move was an inducement for the explosion of hedge funds and private equity firms-- the most "rapidly rising cohort within the top 1 per cent."

The facts are clear according to the Congressional Budget Office more than 80% of the increase in income inequality was the result of an increase in the share of household income from capital gains. In fact, you can go so far as to claim that "Capital Gains income is the most unevenly distributed-- and volatile-- source of household income," according to Laura D'Andrea Tyson, University of California business professor and former chairwoman of the Council of Economic Advisers under President Clinton.

I commend you to the late Justice Louis Brandeis warning to the nation that " We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both."

Coincidentally, Guambat finally received his New Yorker magazine for October 24 in the mail today (thank you Captain Jack), and found resonance with its cover:

As as to public interest in those capital gains (and losses), consider the opinion of US District Court Judge Jed S. Rakoff, when asked to rubber stamp a "settlement" of a complaint by the SEC against Citibank. On October 19, 2011, the U.S. Securities and Exchange Commission
(the "S.E.C.") filed lawsuit [as well as a parallel Complaint filed the same day against Citigroup employee Brian Stoker], accusing defendant Citigroup Global Markets Inc. ("Citigroup") of a substantial securities fraud. Excerpts, snippets and such follow.

Although this would appear to be tantamount to an allegation of knowing and fraudulent intent ("scienter," in the lingo of securities law), the S.E.C., for reasons of its own, chose to charge Citigroup only with negligence.

The Court turns first to the standard of review. In its original Memorandum in support of the proposed Consent Judgment! filed before the case had been assigned to any judge, the S.E.C. expressly endorsed the standard of review set forth by this Court in its Bank of America decisions, i.e., "whether the proposed Consent Judgment ... is fair, reasonable, adequate, and in the public interest."

In its most recent filing in this case, however, the S.E.C. partly reverses its previous position and asserts that, while the Consent Judgment must still be shown to be fair, adequate, and reasonable, "the public interest ... is not part of [the] applicable standard of judicial review." This is erroneous.

As a fall-back, the S.E.C. suggests that, if the public interest must be taken into account, the S.E.C. is the sole determiner of what is in the public interest in regard to Consent Judgments settling S.E.C. cases. That, again, is not the law.

[A] court, while giving substantial deference to the views of an administrative body vested with authority over a particular area, must still exercise a modicum of independent judgment in determining whether the requested deployment of its injunctive powers will serve, or disserve, the public interest. Anything less would not only violate the constitutional doctrine of separation of powers but would undermine the independence that is the indispensable attribute of the federal judiciary.

Before the Court determines whether the settlement is fair, it must ask a preliminary question: fair to whom? As the holding of Trucking Employers quoted above makes plain, the answer is fair to the parties and to the public.

Purely private parties can settle a case without ever agreeing on the facts, for all that is required is that a plaintiff dismiss his complaint. But when a public agency asks a court to become its partner in enforcement by imposing wide-ranging injunctive remedies on a defendant, enforced by the formidable judicial power of contempt,3 the court, and the public, need some knowledge of what the underlying facts are: for otherwise, the court becomes a mere handmaiden to a settlement privately negotiated on the basis of unknown facts, while the public is deprived of ever knowing the truth in a matter of obvious public importance.

Applying these standards to the case in hand, the Court concludes, regretfully, that the proposed Consent Judgment is neither fair, nor reasonable, nor adequate, nor in the public interest. Here, the S.E.C.'s long-standing policy - hallowed by history, but not by reason - of allowing defendants to enter into Consent Judgments without admitting or denying the underlying allegations,4 deprives the Court of even the most minimal assurance that the substantial injunctive relief it is being asked to impose has any basis in fact.

As a matter of law, an allegation that is neither admitted nor denied simply that, an allegation. It has no evidentiary value and no collateral estoppel effect.

As for common experience, a consent judgment that does not involve any admissions and that results in only very modest penalties is just as frequently viewed, particularly in the business community, as a cost of doing business imposed by having to maintain a working relationship with a regulatory agency, rather than as any indication of where the real truth lies. This, indeed, is Citigroup's position in this very case.

Of course, the policy of accepting settlements without any admissions serves various narrow interests of the parties.

In this case, for example, Citigroup was able, without admitting anything, to negotiate a settlement that (a) charges it only with negligence, (b) results in a very modest penalty, (c) imposes the kind of injunctive relief that Citigroup (a recidivist) knew that the S.E.C. had not sought to enforce against any financial institution for at least the last 10 years, and (d) imposes relatively inexpensive prophylactic measures for the next three years.

In exchange, Citigroup not only settles what it states was a broad-ranging four-year investigation by the S.E.C. of Citigroup's mortgage-backed securities offerings, but also avoids any investors' relying in any respect on the S.E.C. Consent Judgment in seeking return of their losses. If the allegations of the Complaint are true, this is a very good deal for Citigroup; and, even if they are untrue, it is a mild and modest cost of doing business.

It is harder to discern from the limited information before the Court what the S.E.C. is getting from this settlement other than a quick headline. By the S.E.C.'s own account, Citigroup is a recidivist [external link added], and yet, in terms of deterrence, the $95 million civil penalty that the Consent Judgment proposes is pocket change to any entity as large as Citigroup.

While the S.E.C. claims that it is devoted, not just to the protection of investors but also to helping them recover their losses, the proposed Consent Judgment, in the form submitted to the Court, does not commit the S.E.C. to returning any of the total of $285 million obtained from Citigroup to the defrauded investors....

the Court is forced to conclude that a proposed Consent Judgment that asks the Court to impose substantial injunctive relief, enforced by the Court's own contempt power, on the basis of allegations unsupported by any proven or acknowledged facts whatsoever, is neither reasonable, nor fair, nor adequate, nor in the public interest.

It is not reasonable, because how can it ever be reasonable to impose substantial relief on the basis of mere allegations? It is not fair, because, despite Citigroup's nominal consent, the potential for abuse in imposing penalties on the basis of facts that are neither proven nor acknowledged patent. It is not adequate, because, in the absence of any facts, the Court lacks a framework for determining adequacy. And, most obviously, the proposed Consent Judgment does not serve the public interest, because it asks the Court to employ its power and assert its authority when it does not know the facts.

An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous. The injunctive power of the judiciary is not a free roving remedy to be invoked at the whim of a regulatory agency, even with the consent of the regulated. If its deployment does not rest on facts - cold, hard solid facts, established ei by admissions or by trials - it serves no lawful or moral purpose and is simply an engine of oppression.

Finally, in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth.

the S.E.C., of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if fails to do so, this Court must not, in the name of deference or convenience, grant judicial enforcement to the agency's contrivances.
Accordingly, the Court refuses to approve the proposed Consent Judgment. Instead, the Court hereby consolidates this case with the Stoker action, adopts the Case Management Order in that action as equally applicable to the instant case, and directs the parties to be ready to try this case on July 16, 2012.

Clearly, the Court believes the public not only can handle the truth hidden by settlements such as this, but they are entitled to know it. We need more same same decisions.

El Chiño

2011-11-24T16:43:00.007+10:00

Like an El Niño, China is turning up the heat in the Pacific Ocean.

Is this just another ratcheting of the South China Seize (Guambat's copyrighted pun), or mere Super Power Posturing?

China navy to carry out Pacific exercises

Japanese defence officials reported seeing six warships sailing in international waters near the country's southern Okinawa prefecture.

The Chinese defence ministry said the drills were routine and were not targeting any specific country. A short statement on the defence ministry's website announced the exercises late on Wednesday.

"This is an annual, planned, routine drill. It is not directed at any specific country or target and is in keeping with relevant international laws and practices," said the statement.

"China's freedom of navigation and other legal rights should not be obstructed."

A Pentagon spokesman said the US had no problem with the naval exercises. Captain John Kirby said that China was "entitled to exercise their military in ways they deem fit".

Jaswant Singh: Asia's Giants Colliding at Sea?

While returning in late July from a goodwill visit to Vietnam in waters recognized as international, an Indian naval ship was 'hailed' on open radio and advised to 'lay off' the South China Sea.

Why did China attempt to interfere with a ship sailing in open seas? Was this 'merely' another of China's unwarranted assertions of sovereignty over the whole South China Sea, or was something more malevolent afoot?

At China's Foreign Ministry, a spokesperson explained: 'we are opposed to any country engaging in oil and gas exploration and development activities in waters under China's jurisdiction.'

Is the two countries' argument merely about who will develop the South China Sea's untapped energy resources, or are we dealing with the beginning of a struggle for spheres of influence?

To find an answer requires confronting civilizational norms, which are reflected in the intellectual games that the countries favor. India has traditionally favoured the game of chaupad (four sides), or shatranj (chess), concentrating on contest, conquest, and subjugation. China, on the other hand, has wei qui (known in Japan as go), which focuses on strategic encirclement. As Sun Tzu advised many centuries ago, 'Ultimate excellence lies...not in winning every battle, but in defeating the enemy, without ever fighting.'

For India, the sense that a struggle for regional mastery is occurring has become increasingly keen. Chinese activity in Pakistan and Myanmar, the expansion of China's port agreements in the Indian Ocean (the so-called 'string of pearls'), and heightened Chinese naval activity in the Indian Ocean have jangled India's security antennas. Indeed, the official Chinese publication Global Times, altering its previous stance, recently called for putting a stop to India's energy plans in the region. 'Reasoning may be used first, but if India is persistent in this, China should try every means possible to stop this...from happening.'

The same article then threw Tibet into the stew of accusations. 'Chinese society,' it continued, 'has...been indignant about India's intervention in the Dalai problem,' cautioning India to 'bear in mind' that 'its actions in the South China Sea will push China to the limit.' According to Global Times, 'China cherishes the Sino-Indian friendship, but this does not mean China values it above all else.'

Military and Security Developments Involving the People’s Republic of China
2011 (USDOD Report to Congress)

Section 1246, “Annual Report on Military and Security Developments Involving the People‟s Republic of China,” of the National Defense Authorization Act for Fiscal Year 2010, Public Law 111-84, which amends the National Defense Authorization Act for Fiscal Year 2000, Section 1202, Public Law 106-65, provides that the Secretary of Defense shall submit a report “in both classified and unclassified form, on military and security developments involving the People‟s Republic of China. The report shall address the current and probable future course of military-technological development of the People‟s Liberation Army and the tenets and probable development of Chinese security strategy and military strategy, and of the military organizations and operational concepts supporting such development over the next 20 years. The report shall also address United States-China engagement and cooperation on security matters during the period covered by the report, including through United States-China military-to-military contacts, and the United States strategy for such engagement and cooperation in the future.”

The United States welcomes a strong, prosperous, and successful China that reinforces international rules and norms and enhances security and peace both regionally and globally.

China’s 2010 Defense White Paper asserts that China’s "future and destiny have never been more closely connected with those of the international community". Nonetheless, China’s modernized military could be put to use in ways that increase China’s ability to gain diplomatic advantage or resolve disputes in its favor.

Over the past decade, China’s military has benefitted from robust investment in modern hardware and technology. Many modern systems have reached maturity and others will become operational in the next few years. Following this period of ambitious acquisition, the decade from 2011 through 2020 will prove critical to the PLA as it attempts to integrate many new and complex platforms, and to adopt modern operational concepts, including joint operations and network-centric warfare.
China has made modest, but incremental, improvements in the transparency of its military and security affairs. However, there remains uncertainty about how China will use its growing capabilities.

China’s leaders characterize the initial two decades of the 21st century as a "strategic window of opportunity". They assess that during this period, both domestic and international conditions will be conducive to expanding China’s "comprehensive national power" (zonghe guoli—综合国力), a term that encapsulates all elements of state power including economic capacity, military might, and diplomacy. Speaking in December 2010, PRC Defense Minister Liang Guanglie asserted that ―making the country prosperous and making the armed forces strong are two major cornerstones for realizing the great rejuvenation of the Chinese nation.

China’s leaders anticipate that a successful expansion of comprehensive national power will serve China’s overriding strategic objectives, which include perpetuating CCP rule; sustaining economic growth and development; maintaining domestic political stability; defending national sovereignty and territorial integrity; and securing China’s status as a great power.

Rather than challenge the existing global order, China has adopted a pragmatic approach to international relations and economic development that seeks to strengthen the economy, modernize the military, and solidify the CCP’s hold on power. This approach reflects Beijing’s assumption that great power status over the long-term is best achieved by avoiding confrontation in the near-term. China’s leaders routinely emphasize the goal of reaching critical economic and military benchmarks by 2020 and eventually becoming a world-class economic and military power by 2050.

Historically a continental power, China increasingly looks to the maritime domain as a source of economic prosperity and national security. China’s evolving "maritime consciousness", as reflected in senior-level rhetoric and resource allocation, has potentially far reaching consequences in the Asia Pacific region and beyond. Many PRC officials and citizens view maritime power as a prerequisite to becoming a "great power".

In its 2010 "China Ocean’s Development Report", China’s State Oceanic Administration (SOA) proclaimed, "building maritime power" is China’s historic task for the 21st century, and the decade from 2010-2020 is the key historic stage for realizing this task. Although China appears to lack an official maritime strategy, PRC officials, military strategists, and academics are focused on the growing relevance of maritime power to China’s interests.

China’s expanding economic interests, including both maritime commerce and the exploitation of marine resources, have affected Beijing’s perception of maritime power as it relates to national interests. Speaking in 2007, President Hu asserted that, "to develop maritime issues is one of the strategic tasks to boost our national economic development". China looks to the oceans as a critical resource, providing fish and potentially large oil and gas reserves.

The oceans also serve as a vital artery for trade and support China’s economic health, with approximately ninety percent of China’s imports and exports transiting by sea. A net oil exporter until 1993, China now imports over half of the oil it consumes, over 80 percent of which transits the Malacca Strait and South China Sea.

Until General Liu instituted the PLA Navy’s "Offshore Defense" strategy in 1986, the PLA Navy was focused mainly on "resisting invasions and defending the homeland".

Although not defined by specific boundaries, Offshore Defense is generally characterized by the maritime space within China’s Exclusive Economic Zone (EEZ) or sometimes by the "first island chain", including the Yellow Sea, East China Sea, and South China Sea.

In recent years, the PLA Navy has begun emphasizing missions in the so-called "far seas", an area loosely defined by the "second island chain", which stretches from Northern Japan, through the Northern Mariana Islands, through Guam.

From the perspective of Beijing, these so called "near seas" constitute a security buffer and hold potentially significant oil and gas resources. The PRC has attempted to use legal pronouncements, civilian enforcement, and naval assets to advance PRC interests within this buffer zone.

In 1992, China’s National People’s Congress passed the Law of Territorial Sea and Contiguous Zones, which proclaimed the South China Sea as PRC "historic waters." Beijing has crafted a series of laws that codify PRC claims to regional territory and proscribe special restrictions on foreign activities in China’s EEZ.

China has attempted to apply security restrictions to the EEZ, which are inconsistent with customary international law as reflected in UNCLOS.

Around the time President Hu Jinto articulated the "New Historic Missions" in 2004, Chinese officials and scholars began openly discussing the extent to which China should expand its maritime power.

The term "yuanhai fangwei" (远海防卫) which translates to "distant/far sea defense," began appearing with increasing frequency in Chinese publications. Authors associated with the Naval Research Institute (NRI) called the "shift from offshore to open ocean naval operations" an "inevitable historic choice" for China noting that naval power must "match the expansion of China’s maritime interests." [Does "Manifest Destiny" or "Monroe Doctrine" ring any bells?]

Navy deployment trends in recent years underscore China’s interests in a limited "far seas" capability. Some PRC commentators advocate a sustained shift from an "Offshore Defense" strategy to "Far Seas Defense."

Recently, several Navy officials and commentators have broached the once-taboo topic of overseas military basing.

The DOD report is quite long and filled with side bars and maps and other useful information. It, and all linked arthttp://www.blogger.com/img/blank.gificles, should be read for better understanding (and making sure it's presented right here in context).

Further reading:

China’s Near Sea Policy Provoking Regional Instability – Analysis

China’s mix of historical and legal claims in the South China Sea are inconsistent, says Frank Ching. Beijing can’t have its cake and eat it.

The idea that the United States should abandon Southeast Asia to China is misplaced. Asia isn’t another Georgia, says James Holmes.

And in related (?) news: NK issues 'sea of fire' warning against South

The warning came a day after South Korea staged exercises near Yeonpyeong Island to mark the first anniversary of the North's deadly shelling of the South Korean border island.

If South Korea dares "to impair the dignity of (the North) again and fire one bullet or shell toward its inviolable territorial waters, sky and land, the deluge of fire on Yonphyong Island will lead to that in Chongwadae and the sea of fire in Chongwadae to the deluge of fire sweeping away the stronghold of the group of traitors," the command said in a statement, carried by the official (North) Korean Central News Agency (KCNA).

Distances

2011-11-23T05:30:00.052+10:00

President Obama's mid-night ride through Guam left Guambat feeling somewhat distant. Indeed, he is. Washington DC is about 7930 miles away from Guam as the crow flies, according to the Free Map Tools websites' "How Far is it Between" utility (which you can play with here).

Guambat is closer to almost every capital city and major city of every country in Asia, Oceania, Southeast Asia, Europe and much of the Middle East and Subcontinental Asia.

Tokyo 1550 miles, Manila 1600

Shanghai 1920 miles, Seoul 1990

Darwin 2030 miles, Pyongyang 2115

Beijing 2510 miles, Hanoi 2615

Jakarta 2935 miles, Kamchatka 2940

Bangkok 2970 miles, Kuala Lumpur 3025

Mongolia 3220 miles, Myanmar 3255

Sydney 3300 miles, Honolulu 3805

Auckland 4215 miles, Colombo 4425

Anchorage 4595 miles, Mumbai 4755

Kabul 4880 miles, Karachi 5075

Juneau 5100 miles, Diego Garcia 5165

Vancouver 5610 miles, Oman 5610 also

San Francisco 5800, Tehran 5865

Moscow 6100 miles, Kuwait 6165

Baghdad 6295 miles, Jordan 6785

Tel Aviv 6850 miles, Riadh 6915

Cairo 7100 miles, Athens 7225

London 7480 miles, Rome 7555

and Washington DC ... 7930 light years away

Apologies if this didn't line up well with your browser. It seems to work for some better than others.

And Guam is America's keyhole, or something like that

2011-11-17T11:28:00.006+10:00

US President Obama says Asia-Pacific is key to future

Speaking to the Australian parliament in Canberra, Mr Obama said the US was now turning its attention to the region. [Now?]

"Let there be no doubt: in the Asia-Pacific in the 21st century, the United States of America is all in," he said. [Except we still treat Guam and the CNMI as foreign.]

"As a Pacific nation [at least as far as Hawaii] the United States will play a larger and long-term role in shaping this region and its future by upholding core principles and in close partnership with our allies and friends." [Allies and friends like the Guamanians and Northern Mariana Islanders. They may be US Citizens but only the "core principles" of the Constitution will follow our flag that far into Asia.]

FOLLOW UP:

BREAKING NEWS: Obama lands on Guam for refueling stop; leaves without meeting local community

Guam Delegate Madeleine Bordallo confirmed at 12:28 a.m. today that Obama has made a brief refueling stop on Guam en route to Washington, D.C.

Guam residents have been hoping for a visit by Obama after the then-presidential candidate appealed for Guam Democrats to support him over Hilary Clinton in the Democratic Party presidential primary. His campaign aired ads on Guam emphasizing his roots as an "island boy."

By the time the confirmation was made, the president was well on his way back to the White House aboard Air Force One -- with Bordallo on board.

"The congresswoman was invited to accompany the president back to Washington on Air Force One, and she greatly appreciates the invitation. She intends to convey the ‘Team Guam’ approach to issues important to our island if she has a meeting with the president, ensuring that our voices will be heard and our concerns will have his personal attention during the flight back to Washington, D.C.," according to Bordallo.

Not quite all along the watchtower

2011-11-16T04:14:00.009+10:00

The US President and his Secretary of State have been hopping all over Pacific Asia of late, and hopping right over Guam, the most eastern point of American sovereignty in the Pacific.

Clinton in Manila amid ASEAN row over South China Sea

Obama's Asia trip: China's territorial assertiveness rises as key topic

Obama Goes ‘Down Under’ to Boost U.S. Influence in Pacific

Obama in Hawaii, Australia and Indonesia: Briefing

Obama to vow bigger Asia footprint on Pacific tour

Here's a map Guambat posted a almost a couple of years ago. The radius of the circle on the map, centered on Guam, is the distance between San Francisco and Hawaii. The circle pretty pretty much covers the relevant footprint of the President's visit.

The circle begins at the Pacific side of the international date line. Hawaii is way out of the circle, almost as far again to Guam as San Francisco is from Hawaii.

America's Asian footprint is in Guam's waters. Guam is where East meets West. It is The Crossroads of the Pacific, north to south, east to west.

America has a toe-hold on Asia, but, evidently, that is not part of the footprint. The President is just cruising past as though its Colors were as insignificant as, say, Nauru's.

Guambat wonders if the fact that Guamanian US citizens have no vote is a factor in in the Administration's $trategic geographic amnesia? After all, it's not like a US President passes by this neck of the Pacific just every day.http://www2.blogger.com/img/blank.gif
http://www2.blogger.com/img/blank.gif
Guambat will return to his Burrow over the Bay to nurse his eye. It feels poked.

UPDATE: It's being reported that the President will possibly be putting down on Guam on his way Stateside. For fuel. Behind the fences of the air base. No public. Might not even put foot on ground. Guambat's other eye is now feeling sore, too.

Meanwhile, notwithstanding the shallowness of his interest in things Guamish ...

Obama, in Australia, Vows Deeper Regional Ties

But... is this a sign of support for more domestic defense spending (Guam is domestic, Senator/Congressman/woman), or just more foreign aid?:

Budget Won’t Constrain U.S. Pacific Plans: Obama

(On a side note, Obama is cementing what is implied to be some kind of new arrangement whereby USAF planes will have closer working relations with the RAAF in Darwin. Guambat remembers personally leading a delegation of Darwinian Dignitaries on a tour of Guam about 25 years ago as part of what was then a well established "sister" base relationship with the US Guam base and the Australian Darwin base. So, what's new and how is the world treating you?)

SEEK and ye shall find ... Taliban?

2011-11-16T04:01:00.003+10:00

The Taliban Got the Biometric Border Blues

When Osama bin Laden was killed in Pakistan on May 2nd, it was reported that his body was quickly identified and confirmed. That was done using biometric technology developed during the last decade, and applied widely in Iraq and Afghanistan.

Called SEEK (Secure Electronic Enrolment Kit), this is a portable electronic toolkit that collects biometrics from people. This includes fingerprints, eye (iris) scan and photos of suspects, which are stored electronically.

The fingerprints are particularly useful, because when they are stored electronically, you can search and find out immediately if the print you have just lifted from somewhere else, like off the fragment of a car bomb, is in there or not.

While DNA tests (which take hours to perform, on not-so-portable equipment) are the best form of ID, if you have fingerprints, iris scans and a photo, you are nearly as certain. Even just fingerprints and the face scan/photo, is pretty convincing. Because of the reporting on SEEK after the bin Laden raid, there were few Pakistani officers or government officials who were unaware of what biometrics was and what it could do.

In Afghanistan, the government this year used SEEK kits to collect data on nearly two million Afghans, so that these people could be issued very secure (hard to fake) ID cards. For the government, this makes it more difficult for criminals, Taliban and Islamic radicals in general to infiltrate the government, or just operate freely.

The U.S. has long collected biometrics from those they arrest, or otherwise encounter and want to positively identify. This database now has nearly a million people in it.

It only takes about two minutes per subject to use SEEK to take the biometric data, so any suspicious characters are quickly added to the master database. Now, after several years of this, raiding parties know to grab any guy who seems to panic at the sight of the biometrics equipment coming out. The terrorists know that biometrics is bad news for them, and they fear it.

The equipment for this was installed at border posts near Quetta (the capital of Baluchistan province, which forms Afghanistan's southern border) five years ago. But after a few days, thousands of armed, and angry, tribesmen forced the border posts to shut down until they got rid of the biometric gear. The Taliban, and drug gangs, knew that this biometric stuff was being used with great success in Afghanistan to identify and track Islamic radicals and all sorts of criminals.

Pakistan, under pressure from the United States and Afghanistan, has agreed to resume using biometric (fingerprinting, photos and iris scans) of people using the roads between Pakistan and Afghanistan. It is believed that this new attempt will be equally short-lived and unsuccessful. But the Pakistanis are under pressure to show the Americans and Afghans that they are not partners with the Taliban.

Oh, yeah. 50,000+

2011-11-10T20:29:00.003+10:00

Guambat has noticed that his hit-o-meter has broken the 50,000 mark since his debut in 2005. Of course much of that is due to his habitual logging in to see what the current hit rate is, and to his seemingly fruitless attempts to prevent the hit-o-meter from registering such ego-oriented and deceiving statistics.

The hit-o-meter was also deceptively boosted along by some pranksters who were miffed (actually viciously agitated) several years ago by Guambat's innocent if not non-culpable practice of "borrowing" imagery from other posting around the web. Coincident with a few threats and nasty accusations, they somehow hacked his url or other identity so that all of his imagery, from whatever source, got high marks from search engines looking for images, so that many of the hits are not substantive but pictorial. It skews the hit stats terribly, but not so bad if Guambat ever decides to "monetize" this diatribe (not a chance).

The other big factor, of course, are his two readers. Thanks Captain Jack and Son of a Guambat, and I have not forgotten you either, Davo. The readers, Guambat thinks, reflect the eclecticism of the blog. But then Guambat thrives on his own adulation. Get it where you can.

Cheers everyone.

Snore.

Of limp "enforcement"

2011-11-10T20:02:00.007+10:00

Really, this is just all too much.

Too big to fail is now too big to flail. If this is the new normal in corporate oversight, there is no abnormal.

Guambat says, bring out the cat-o-9-tails and put the whip to some humans here. At the very least, how about applying the "3 strikes and you're out" rule, assiduously applied to small potatoes, to the Big Spuds in Cow Town?

All these "settlements" settle nothing.

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

When Citigroup agreed last month to pay $285 million to settle civil charges that it had defrauded customers during the housing bubble, the Securities and Exchange Commission wrested a typical pledge from the company: Citigroup would never violate one of the main antifraud provisions of the nation’s securities laws.

It also was not the first time the firm was making that promise.

Citigroup’s main brokerage subsidiary, its predecessors or its parent company agreed not to violate the very same antifraud statute in July 2010. And in May 2006. Also as far as back as March 2005 and April 2000.

Citigroup is far from the only such repeat offender — in the eyes of the S.E.C. — on Wall Street. 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.

On Wednesday, Judge Jed S. Rakoff of the Federal District Court in Manhattan, an S.E.C. critic, is scheduled to review the Citigroup settlement. Judge Rakoff has asked the agency what it does to ensure companies do not repeat the same offense, and whether it has ever brought contempt charges for chronic violators.

The S.E.C. said in a court filing Monday that it had not brought any contempt charges against large financial firms in the last 10 years.

Guambat has never run the numbers, but he's pretty sure, by the wet finger in the wind test, that he's quite squarely in the 99% crowd. And he's a bit pissed off, too. He's certainly not eased by the rest of that story:

prior violations are plentiful. For example, Bank of America’s securities unit has agreed four times since 2005 not to violate a major antifraud statute, and another four times not to violate a separate law. Merrill Lynch, which Bank of America acquired in 2008, has separately agreed not to violate the same two statutes seven times since 1999.

Of the 19 companies that the Times found to be repeat offenders over the last 15 years, 16 declined to comment. They read like a Wall Street who’s who: American International Group, Ameriprise, Bank of America, Bear Stearns, Columbia Management, Deutsche Asset Management, Credit Suisse, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, Putnam Investments, Raymond James, RBC Dain Rauscher, UBS and Wells Fargo/Wachovia. Two others, Franklin Advisers and Massachusetts Financial, said that their two settlements were made simultaneously and therefore one incident did not violate a previous cease-and-desist order.

But some experts view many settlements as essentially meaningless, particularly since they usually do not require a company to admit to the accusations leveled by the S.E.C. Nearly every settlement allows a company to “neither admit nor deny” the accusations — even when the company has admitted to the same charges in a related case brought by the Justice Department — so that they are less vulnerable to investor lawsuits.

In 2005, Bank of America was one of several companies singled out for allowing professional traders to buy or sell a mutual fund at the previous day’s closing price, when it was clear the next day that the overall market or particular stocks were going to move either up or down sharply, guaranteeing a big short-term gain or avoiding a significant loss.

In its settlement, Bank of America neither admitted nor denied the conduct, but agreed to pay a $125 million fine and to put $250 million into a fund to repay investors. The company also agreed never to violate the major antifraud statutes.

Two years later, in 2007, Bank of America was accused by the S.E.C. of fraud by using its supposedly independent research analysts to bolster its investment banking activities from 1999 to 2001. In the settlement, Bank of America without admitting or denying its guilt, paid a $16 million fine and promised, once again, not to violate the law.

But two years later, in 2009, the S.E.C. again accused Bank of America of defrauding investors, saying that in 2007-8, the bank sold $4.5 billion of highly risky auction-rate securities by promising buyers that they were as safe as money market funds. They weren’t, and this time Bank of America agreed to be “permanently enjoined” from violating the same section of the law it had previously agreed not to break.

In fact, the company had already violated that promise, according to the S.E.C when it was accused last year of rigging bids in the municipal securities market from 1998 through 2002. To settle the charges, Bank of America paid no penalty, but refunded investors $25 million in profits plus $11 million in interest. And, the bank promised again never to violate the same law.

The S.E.C. allowed the bank to settle without admitting or denying the charges, even though Bank of America had simultaneously settled a case with the Justice Department’s antitrust division admitting the very same conduct.

Companies routinely argue that while they may be settling multiple violations of the same law, the facts of each case are different — and therefore not exactly a repeat offense.

Guambat calls enough BS on this stuff.

These are serious offenses, by orders of magnitude much more serious than the offenses of "common" criminals who pay with much more jail time and other deprivations of liberty than any of the banks or other financial institutions have ever paid.

Guambat joins with those in the OWS crowd who say, we will accept the holding of the Supreme Court that corporations are persons too, with all the liberties accorded real people, when one of them is strung up.

Hang 'em high.

Otherwise, as Barry points out, "moving our money is an effective step towards reclaiming America."

OWS let the Gini out of the bottle (with a boost from T Party?)

2011-11-10T05:17:00.006+10:00

Barry Ritholtz' blog has a regular contributor, Invictus, who posts this:

Meritocracy vs. Plutocracy

As Barry has described it, “there is an unfocused financial rage in the United States” — and you see it in both the Tea Party and the OWS movement. Rather than mischaracterize why so many Americans — on the Left and the Right — are unhappy, let’s go to the actual data to see what is underlying this negative general sentiment.

Let’s start with the Gini Index, “the degree of inequality in the distribution of family income in a country.” Here’s our place in the world: [USA is in league with the dislikes of Mozambique and Uganda -- go read his post for details].

Well, How’d the Gini Index Get So Out of Whack?

In brief (footnotes removed):
In recent decades, CEO pay has grown dramatically in the United States. Between the 1930s and the 1970s, CEOs of the largest companies received approximately $1 million in total annual compensation (adjusted for inflation in year 2000 dollars). During this period, the ratio of CEO-to-worker pay narrowed as workers’ wages grew and CEO pay rose modestly. By the 1990s CEO pay grew dramatically. Business Week estimated that CEO pay at the largest companies grew from 42 times the average worker’s pay in 1980 to 531 times the average worker’s pay in 2000. In 2010, large company CEOs received $11.4 million, or 343 times worker pay, according to calculations by the AFL-CIO’s Executive Paywatch website.
A $1MM reduction in a CEO’s pay could be used to fund 13 jobs at $75k/year; nothing too complex about that math.

Meanwhile, while CEOs and other executives have feathered their nests — largely by exploiting overly-friendly relationships with all-too-compliant boards to negotiate outrageous compensation and severance packages — things have not been going quite as well for the rest of the country, as those at the top continue to rise while the remainder continue to drift

There is plenty of other data and commentary that follows, so be sure to click the link: Read the rest of this entry ».

Like yelling "Print Money!" in a movie house

2011-11-10T04:55:00.005+10:00

US Stocks Tumble As Italy Debt Troubles Escalate

European shares hit as Italian debt risk surges

What's Killing Morgan Stanley Today? Italy

Morgan Stanley‘s bets on Europe are hammering its shares this morning.

What’s hurting Morgan exactly? Well, a quick look at its European debt exposure shows its got loads of Italian debt on its books relative to its exposure in Greece. Morgan’s net exposure to Italy, after its hedged positions, is $1.79 billion, according to its third quarter regulatory filing.

That net exposure includes includes obligations from sovereign governments, corporations, clearinghouses and financial
institutions. Without its hedged positions Morgan’s exposure to Italy is $4.5 billion.

The irony here is that Morgan shares suffered drastic losses in September when there was speculation about its exposure to French banks. In September financial blog ZeroHedge said Morgan’s exposure to French banks was 60% greater than its market cap and more than half its book value. That sent Morgan shares under $13.

The moves in its shares prompted an internal memo from CEO James Gorman who attempted to quell rumors. “In fragile markets, where fear triumphs over common sense, these things are bound to happen,” Gorman wrote. “It is easy to respond to the rumor of the day, but that is not usually productive.”

Italy Bond Attack Breaches Euro Defenses, Contagion Worsens

“The house is on fire,” said Dante Roscini, a lecturer at Harvard Business School and former chief executive officer of Morgan Stanley in Italy.
“The ECB needs to print money and buy Italian bonds, it’s the only way to put the fire out.”

Is Morgan Stanley the next MF Global?

Real estate is still bottoming

2011-11-10T04:39:00.004+10:00

Well, thank god the real estate market mayhem has been contained and is now behind us.

Right?

US Home Prices Fall In 75% Of Metro Areas

The median price for previously occupied homes sold in the July-September quarter fell compared with last year in 111 out of 150 areas tracked by the National Association of Realtors, the trade group said Wednesday. Prices rose in 39 metro areas.

The results were roughly even with the second quarter, in which median prices fell in 109 out of 151 cities tracked by the real estate trade association. The national median price for single-family homes sold in the third quarter was $ 169,500, down 4.7% from the same quarter a year earlier.

"Home sales need to recover first, only then can prices stabilize," said Lawrence Yun, the Realtors' chief economist, in a statement.

Seems about right to Guambat. Now there's an economist worth his salt.

On a related note ....:

How a Financial Pro Lost His House

Reflecting market or blinding it?

2011-11-10T04:24:00.004+10:00

FSA hits Dubai-based investor with £4m fine [Well, actually, 6million pounds including the disgorgement order.]

Rameshkumar Goenka manipulated the closing share price of Reliance on the London Stock Exchange in 2010, as part of a ruse to avoid losing nearly £2m.

The 66-year-old trader had acquired an investment product from an unnamed European bank that paid out if Reliance's shares reached a pre-determined level by a certain date. But when the investment looked as if it would go sour, Goenka swung into action.

According to the FSA "[he] had arranged for a pre-planned series of substantial and carefully timed orders to be placed in the final seconds of the LSE's closing auction.

The FSA ordered him to remit £2m to the bank and fined him a further £4m. The fine would have been even higher, £7.7m, had Goenke not settled early and benefited from a 30% discount.

Tracey McDermott, acting director of enforcement and financial crime at the FSA, said: "Goenka's structured product was an investment that would have made him a considerable profit had it been successful. When he saw that it was not going to produce the desired result, Goenka manipulated the market to avoid a substantial loss.

"The impact of such behaviour goes far beyond one counterparty. Market confidence will suffer if participants cannot be satisfied that the price of quoted securities reflects the proper interplay of supply and demand."

As usual, there's more to this story and you should consider at least reading it on the link above.

But Guambat remains impressed that someone some place is sticking with the rather quaint idea that markets are what you trade and not how you trade. Guambat is quite certain that no one has told that to the black boxes, algorithms and other creatures inhabiting the deep seas of the closing and opening half hours of the global markets. Where does market manipulation begin and market regulation end if not in efforts to make a gain or avoid a loss? And does that matter to sharks?

Guambat is not inclined very much to swimming in those channels any longer.

Does the name determine ownership?

2011-10-20T20:10:00.006+10:00

The South China Sea. Must belong to China?

There has been a lot of buzz over the past year, at least, about the buzz from the Global Times, a Chinese news source. It seems to be airing the possibility of dire straights in the South China Sea.

According to this article, and Wikipedia,

"Global Times (环球时报, Huanqiu Shibao) is not an official newspaper. Published on weekdays, it focuses on international issues and foreign reaction to developments in China. But it is sponsored by and produced under the auspices of People’s Daily (人民日报, Renmin Ribao), the official daily newspaper of the Communist Party of China (CPC) Central Committee."

One story has particularly gone round the web, e.g., this, this, and this.

Time to teach those around South China Sea a lesson

Vietnam’s insults in the South China Sea remained unpunished today. It encouraged nearby countries to try their hands in the “disputed” area and attracted the attention of the US so that a regional conflict gradually turned international.

China, concentrating on interior development and harmony, has been ultimately merciful in preventing such issue turning into a global affair so that regional peace and prosperity can be secured.

But it is probably the right time for us to reason, think ahead and strike first before things gradually run out of hands.

Singapore brings home high-end stealth aircraft while Australia, India and Japan are all stockpiling arms for a possible “world-class” battle. The US, provoking regional conflict itself, did not hesitate to meet the demands of all of the above.

It’s very amusing to see some of the countries vow to threaten or even confront China with force just because the US announced that it has “returned to Asia.”
The tension of war is escalating second by second but the initiative is not in our hand. China should take part in the exploitation of oil and gas in South China Sea.
For those who infringe upon our sovereignty to steal the oil, we need to warn them politely, and then take action if they don’t respond.

We shouldn’t waste the opportunity to launch some tiny-scale battles that could deter provocateurs from going further.

By the way, I think it’s necessary to figure out who is really afraid of being involved in military activities. There are more than 1,000 oil and gas wells plus four airports and numerous other facilities in the area but none of them is built by China.

Everything will be burned to the ground should a military conflict break out. Who’ll suffer most when Western oil giants withdraw?

But out there could just be an ideal place to punish them. Such punishment should be restricted only to the Philippines and Vietnam, who have been acting extremely aggressive these days.

The Afghanistan and Iraq Wars have already set some bad examples for us in terms of the scale of potential battles, but the minnows will get a reality check by the art of our move.

Many scholars believe that the US presence in this area caused our inability to sort the mess out.

However, I think US pressure in the South China Sea should not be taken seriously, at least for now given the war on terror in the Middle East and elsewhere is still plaguing it hard.

We should make good preparations for a small-scale battle while giving the other side the option of war or peace.

Russia’s decisive move on Caspian Sea issues in 2008 proved that actions from bigger countries might cause a shockwave for a little while but will provide its region with long-term peace.

Meanwhile, back in Guambat's neck of the Pacific: A force buildup on Guam anchors a broad US military strategy to keep China in check.

However, Senator John McCain, with Armed Services Chair Levin, is leading the charge to freeze Guam Build-Up spending, and Congress is turning inward, blocking any military hardening on Guam, with several Congresspeople wanting nothing to do with spending money on US military bases in "foreign" territory. Ai adai.

Ironically (?), that is the same decision Congress made in the late 1930's when Japan was exercising military drilling for oil. For lack of a few million dollars then, the US ending up spending billions of dollars and tens of thousands of US soldiers' lives, and untold numbers of civilian casualties to take back the abandoned Guam.

How do you spell strategic?

$trategic.

And up north, ...

Fitial offers to lease some islands to China

Gov. Benigno R. Fitial told an economic forum of nearly 400 in Beijing that he is willing to lease some of the CNMI's islands but only if it's not for military purposes, so that the Commonwealth can provide job opportunities and improve its economy.

Press secretary Angel Demapan, when asked for confirmation yesterday, said that Fitial was making reference to the availability of mass public lands in the undeveloped and uninhabited Northern Islands.

The Northern Islands include Farallon de Medinilla, Anatahan, Sarigan, Guiguan, Alamagan, Pagan, Agrihan, Asuncion, Maug, and Farallon de Pajaros or Uracas.

“In this regard, Governor Fitial took the opportunity to market the NMI’s greatest resource-availability of land-for large-scale investments like agriculture, retirement communities, timeshare homes, and electronics manufacturing to both large business entities and/or public-private partnerships or co-ops. Of course, in regards to private lands, that’s up to the respective landowners,” Demapan told Saipan Tribune.

“If you are interested, I am offering these islands to China. Lease these islands so that I can have enough financial resources to provide for more full employment for my people,” Business Week quoted the governor as saying when he addressed a group of “Chinese governors and provincial Community Party Secretaries” at a Beijing conference.

It also quoted the governor as saying that he has the right to lease the islands to “anybody.”

“We control the islands, the islands belong to us. We have to make sure in the lease agreement that we won't allow anything that will be military because we are under the U.S. government,” Business Week quoted the governor as saying.

Public Lands Secretary Oscar M. Babauta, in a separate interview yesterday, said the CNMI can lease islands to interested investors.

However, he said if the public land to be leased is more than 5 hectares, the approval of the CNMI House and Senate is needed.

“If it's for investment opportunities and economic development, the CNMI can lease islands. I am sure the governor was referring to Northern Islands. But here on Saipan, Tinian, and Rota, investors can lease public and private lands as they do now,” said Babauta, a former House speaker.

And speaking of up north and things pacific ...

Leaked report says AG violated laws

AG: Leaked docs 'not official'

AG lawsuit vs Pai re-assigned to Govendo; Wiseman recuses self

'Focus must be on whether Buckingham should be prosecuted'

OAG files case vs Pai's wife for alleged theft of utilities

And all that in just one day's edition of the Saipan Tribune, mind you.

Throwin' yourself on the MERSy of the County Judge

2011-09-27T21:29:00.002+10:00

Guambat has to beg Barry's pardon here. Guambat considers himself a bit of a regular visitor on Barry Ritholtz' blog, The Big Picture. He also reckons he's a bit of an old timer, if irregular, member of the commentariat on Barry's blog.

Was, that is. He's just about now spit the dummy on trying to get past the ever changing, never remembering, wordpress moat that stand between quick qomment and the "try again" pop-up when the last known password fails to pass muster, or gas or anything else that passes for sesame.

So, here's the comment Guamtat would have posted had he been the least bit buddy-buddy with the gatekeeper. The context is this post:

Counties (Finally) Suing MERS Over Recording Fees

We’ve discussed Mortgage Electronic Registration Systems (aka MERS) repeatedly over the years, including its quasi-legal standing and how it illegally failed to pay lawful recording fees to states and counties. (Back in March ’11, we discussed that County & State Litigation vs MERS was coming soon).

The Dallas DA action may be the largest major City/County litigation versus MERS. This may break open the flood gates for other such suits by counties and states around the country.

Unfortunately, after all that, Guambat forgot just what it was that was so brilliant as to event attempt to run the wordpress gauntlet.

Sigh. Just as well, he supposes.

Chip on his shoulder

2011-09-27T21:05:00.004+10:00

This item is big news, from LA to India to Wall Street. Really. Fair dinkum.

Let the chips fall where they may.

'Doritos' creator passes away

‘Doritos’ creator to be buried with the snack that made him famous Arch West, credited with the creation of the popular American snack food 'Doritos' has passed away, and according to his family he will be buried with the chips that made him famous.

Relatives of West said that they plan to pay tribute to him with the snack itself by sprinkling it over his body before he is buried.

"We are tossing Doritos chips in before they put the dirt over the urn. He'll love it," The Sun quoted his daughter Jana Hacker as telling the Dallas Morning News .

Arch West dies, will be buried with chips

West, who was 97 when he died of natural causes last week, was a former Frito-Lay executive. He reportedly came up with the idea of Doritos when he was on vacation with his family in Mexico and came upon a snack shack selling fried tortilla chips.

By the 1970s, Doritos was one of the best-selling chips in the Frito-Lay arsenal, but the chips that will accompany West to his grave are quite different from those the company released more than 40 years ago.

Doritos were given a big overhaul in 1995, when Frito-Lay made them 20% larger and 15% thinner. Frito-Lay also got rid of the sharp angles on the chip, giving it rounded corners.

Also, the company eliminated trans fats from the chips several years ago.

Food Marketer Struck Gold With Doritos

After he failed to persuade his bosses to copy the product as a companion to the company's corn-based Fritos and Cheetos, Mr. West secretly spent part of his budget on the project anyway.

Introduced nationally in 1966, Doritos—"little bits of gold" is how Frito-Lay translates the name—were a hit in plain and what the company called "taco" flavors. The Nacho cheese flavor, which Frito-Lay said was a blend of cheddar and Romano, debuted in 1972 under Mr. West's guidance.

The chips were aimed at the youth market, marketed as "the with-it chip." Doritos became Frito-Lay's second-biggest seller, behind Lay's potato chips.

Mr. West was a native of Franklin, Ind. He grew up in a Masonic home for boys after his father, a Mason, died. Mr. West won a scholarship to Franklin College and became a cheese salesman.

After serving as a gunnery officer in the Navy during World War II, he took a job as a food marketer at Lever Brothers. He worked on marketing campaigns for Jell-O.

But it didn't make Mr. West rich. "It's not like we got royalties," said his daughter, Jana Hacker. Mr. West was also involved with developing other products, including Funyuns.

Mr. West shared his marketing expertise with Texas picante sauce manufacturer Eric Pace, persuading him to embrace the synergy of selling his salsa in the chips aisle of the grocery store instead of the condiments aisle, with ketchup.

He remained proud of his big hit with Doritos, and during a recent hospital stay insisted his family bring big bags of them for the nurses to snack on.

So, Guambat expects to have a bag or three of Mr. West's chips as he heads off to Margaritaville, Kauai. When the chips are down, the tough get more chips.

Make a note, Mickey.

Crowd computing

2011-09-19T13:49:00.002+10:00

Going where no computer has gone before. May the formidable force be with them.

US gamers crack puzzle in AIDS research that stumped scientists for years

In just three weeks, online gamers deciphered the structure of a retrovirus protein that has stumped scientists for over a decade, and a study out Sunday says their breakthrough opens doors for a new AIDS drug design.

Looking for a solution, researchers at the University of Washington turned to Foldit -- a program created by the university a few years ago that transforms problems of science into competitive computer games -- and challenged players to use their three-dimensional problem-solving skills to build accurate models of the protein.

With days, the gamers generated models good enough for the researchers to refine into an accurate portrayal of the enzyme's structure. What's more, the scientists identified parts of the molecule that are likely targets for drugs to block the enzyme.

"We wanted to see if human intuition could succeed where automated methods had failed," said Firas Khatib, a lead author of the study, published in the journal Nature Structural & Molecular Biology.

"The ingenuity of game players is a formidable force that, if properly directed, can be used to solve a wide range of scientific problems," Khatib said.

Seth Cooper, a co-creator of Foldit, added, "People have spatial reasoning skills, something computers are not yet good at. Games provide a framework for bringing together the strengths of computers and humans. The results in this week's paper show that gaming, science and computation can be combined to make advances that were not possible before."

First thing we do, let's kill Lady Justice

2011-09-17T11:39:00.006+10:00

All:

God save your majesty!

Cade:
I thank you, good people—there shall be no money; all shall eat and drink on my score, and I will apparel them all in one livery, that they may agree like brothers, and worship me their lord.

Dick:
The first thing we do, let's kill all the lawyers.

Cade:
Nay, that I mean to do.
Henry The Sixth, Part 2 Act 4, scene 2, 71–78

Brazil judge Patricia Acioli shot dead in Niteroi

A Brazilian judge renowned for her work against organised crime has been shot dead in Rio de Janeiro State.

Patricia Acioli was gunned down outside her home in the city of Niteroi late on Thursday by masked men travelling on two motorbikes, officials said.

She was best known for convicting members of vigilante gangs and corrupt police officers.

Brazil officers held in judge's death

Three military police officers have been ordered held as suspects in last month's killing of a Rio de Janeiro judge who had been investigating police links to organized crime, authorities said Monday.

The three officers, who had already been arrested in connection with an earlier killing of an 18-year-old slum resident, were members of a special tactical police battalion in the community of Sao Goncalo outside of Rio.

Read more: http://www.windsorstar.com/news/Brazil+officers+held+judge+death/5392544/story.html#ixzz1YAbVtzkT

Rio Reacts to Murder of Judge Patrícia Acioli

Judge Acioli is one of three judges executed in Brazil in the past eight years for their investigations into organized crime. A task force formed by three judges will take over Judge Acioli’s cases.

Over the past ten years, Criminal Judge Acioli was known for taking a tough stand against militia members, death squads and corrupt police officials. She was responsible for the arrest of some 60 officers linked to militias.

Hours before she was murdered, she had ordered the arrest of eight police officers suspected of killing a young woman in a favela in Sao Gonçalo, a municipality of Niterói. All eight officers have been arrested and placed in custody.

Reports show the bullets that killed Jugde Acioli came from .40 and .45 caliber pistols, weapons restricted to the Armed Forces and Civil and Military Police. Family members said that Judge Acioli had received several death threats and requested, but failed to receive, police protection. Several press outlets report that Acioli’s name appeared on a Black List marked for death, found on militia leader Wanderson Silva Tavares, known as Gordinho (Fatty), who was arrested in January this year.

Chief Justice Peluso asked for immediate action by the Federal Police. “On behalf of the Supreme Court, the National Council of Justice and the Judiciary, [I] repudiate the brutal murder of Judge [Acioli]. Cowardly crimes against magistrates are attacks on judicial Independence, rule of law and democracy in Brazil,” he said in a statement.

Hattip: Fearless About Jailing Rogue Police, Brazil Judge Was Slain in Hail of Police-Issue Bullets

The new attack of the killer tomato

2011-09-07T20:52:00.000+10:00

Think of that pretty ripe red tomato, with stem all green and beckoning, as a hand grenade. Before you pull the stem ...

... Read this.

Go on, click the link. You're not afraid of a little ole tomato are ya?

Lost or leaked

2011-09-06T11:57:00.000+10:00

Guambat owes this thought to local radio guy, the cynically savvy Ray Gibson: Is the not-again "lost iphone" story a bit too iphonie?

Might it be a way to both leak and attract attention in ways money can't buy??

China gags on free speech (again)

2011-09-05T09:52:00.002+10:00

Communist bosses move in at Beijing newspapers

Authorities claim the move was aimed at reigning in an advertising war between the competing publications, and say the two papers may be merged into one.

Propaganda authorities take over Beijing papers

Beijing's Communist Party-run media authorities have taken over at the helm of the popular "Beijing News" and the "Beijing Times," the government-run Qianlong website reported late Saturday.

Both papers routinely run stories critical of local governments around China, as well as articles that defy edicts issued by the party's propaganda bureau ordering media to show Chinese society in a positive light.

Both began publishing about a decade ago and gained widespread popularity for their colourful stories and advertisements.

The Chinese government strictly censors the country's newspapers, broadcast media and the Internet, blocking any information it considers sensitive.

Controls have been further tightened by a heavy clampdown on dissent, with a number of prominent lawyers and activists detained amid official fears that recent uprisings in the Arab world could spark similar movements in China.

Read more: http://www.google.com/hostednews/afp/article/ALeqM5iZ12sK_YThnbWggqHX3sjTRe3n0g?docId=CNG.e829052752a5436e909ab280ad561af6.7e1

Pen, Meet Market. Market, Meet Sword

"We are a commercial enterprise," an editor at the Beijing News told the Financial Times. "We need to produce a paper that has what people want to read." The remark is revealing of the way in which today's Chinese media think about their trade—that is, as a business, and a competitive one at that.

China's press is usually referred to as "state-run," but that obscures the fact that the country's media landscape today is diverse, commercialized and relatively free of direct state interference. In 1967 there were only 43 regular newspapers and a handful of mostly Communist Party-run television and radio stations. Today China boasts some 2,200 newspapers, 8,000 magazines, 2,900 television channels and 1,000 radio stations—all vying for audience attention.

Turning the media into a business has had profound effects on Beijing's ability to shape public sentiment. Some forms of censorship have become less feasible. The sheer volume of output makes it difficult to screen every title and broadcast. Municipal outlets—smaller and farther from the centers of power—enjoy relatively free rein in covering local affairs, even when doing so touches on sensitive national issues. Because local governments provide the most direct oversight of local media, one city's press may get away with reporting on another city's controversial news.

Read more: http://online.wsj.com/article/SB10001424053111903918104576499743117798916.html?mod=googlenews_wsj

China’s risky game of cat and mouse censorship

Mao Zedong famously suggested in 1957 that 100 flowers should bloom. Ostensibly it was an invitation for intellectuals to air diverse, even critical, opinions about the direction China’s leadership was taking. The campaign lasted six weeks. When it was over, many of those who had taken the Chairman at his word were marched off to labour camps.

So having a degree of free speech is a good way of keeping tabs on the mood of the non-electorate. It is also a means of flushing out egregious corruption or other misdemeanours by local officials who, far from the watchful eye of Beijing, may be abusing power. Encouraging citizens to express themselves can also be a relatively harmless way of allowing people to let off steam, providing a social safety valve and the illusion of free speech. And if they go too far, you can always lock them up.

There is a cat-and-mouse game going on between the state censors and a public testing the bounds of the permissible.

Read more: http://www.ft.com/intl/cms/s/0/d6c0fc3c-c816-11e0-9501-00144feabdc0.html#axzz1X1ywVk98

Unlike the last two?

2011-09-04T14:27:00.002+10:00

Bernanke’s Next Easing May Not Aid Jobless

Federal Reserve Chairman Ben S. Bernanke will probably try to spur economic growth this month by cutting near-record-low borrowing costs, economists said. His new stimulus may not aid the 14 million Americans without work.

QEs I and II went down like the Titanic if all you watched were employment figures and housing prices/foreclosures.

But have a squidge of the DJIA. QE I ushered in one of the great bull runs in history. QE II somewhat less so, given that it was seen more as taking the punch bowl away than spiking it with a double, but still we're not that far from the post-Greatish Recession highs, and holding above Dow 11000.

All in all, the stocks and banks (Wall Street) have been fairly well bailed out. But Joe Sixpack (Main Street)? How's that workin' out for ya?

At least Joe the Plumber seems to have got a job. Never let a bit of media frenzy go to waste: Joe The Plumber Gets A Teevee Show

And, he's stimulating (government) employment:

Ohio state snooper who targeted Joe the Plumber gets new government job

GOP says Joe the Plumber may challenge Kaptur in '12

Guambat's off to have a stein of tea, Texas tea, and enjoy the Labor Day off. This could be the Labor Decade off.

Banks will be banks, Silly Silly

2011-09-03T07:42:00.002+10:00

U.S. sues big banks over mortgage losses

The Federal Housing Finance Agency, which oversees government-seized mortgage firms Fannie Mae and Freddie Mac, is seeking billions of dollars in compensation. The lawsuits were filed in federal court and announced after the close of trading on Friday.

The FHFA argues that, when it came to mortgage securities purchased by Fannie and Freddie during the years leading up to the financial crisis, the banks failed to meet their due-diligence duties under securities law.

Large financial institutions are facing investor lawsuits over problem mortgages as well, though these investors want the big banks to repurchase problem loans they sold them before. FHFA is reportedly seeking reimbursement for losses on securities held by Fannie and Freddie.

The list of defendants is a who-who’s of mortgage finance: Bank of America Corp., Goldman Sachs Group Inc., J.P. Morgan & Chase & Co., Citigroup Inc., Deutsche Bank, Barclays PLC, Nomura Holdings Inc., Morgan Stanley, Ally Financial Inc., Credit Suisse Group Inc., First Horizon National Corp., General Electric Co., the HSBC North America Holdings unit of HSBC Holdings, The Royal Bank of Scotland Group PLC and Société Générale S.A.

There will be a lot of I told you so's and about times over that bit of news.

Robo-Signing Redux: Servicers Still Fabricating Foreclosure Documents

Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.

Some of documents reviewed by American Banker included signatures by current bank employees claiming to represent lenders that no longer exist.

The banks argue that creating such documents is a routine business practice that simply "memorializes" actions that should have occurred years before. Some courts have endorsed that view, but others, such as the Massachusetts Supreme Judicial Court, have found that this amounts to a lack of sufficient evidence and renders foreclosures invalid.

According to a document submitted in a Florida court by Bank of America Corp., bank assistant vice president Sandra Juarez signed a mortgage assignment on July 29 of this year that purported to transfer ownership of a mortgage from New Century Mortgage Corp. to a trustee, Deutsche Bank. Two problems with that: New Century, a subprime lender, went bankrupt in 2007; and the Deutsche Bank trust that purported to hold the loan was created for a securitization completed in 2006 — about five years before Juarez signed it over to the trust. (Bank of America, as the servicer of the loan, was seeking to foreclose on behalf of the trust and its bondholders.)

Most of the pooling and servicing agreements governing securitizations require a complete chain of endorsements.

Banks Continue to Fabricate Documents, Commit Foreclosure Fraud

This is the dirty secret about robo-signing: it’s still happening. So are the forgeries and the document fabrication and the fraud upon state courts. After the scandal erupted last October, the banks promised to fix their operations. They did so by waiting everyone out and engaging in the exact same practices.

And you see, the banks HAVE to fabricate documents. Because they destroyed the private property system through improper and sloppy securitizations and lost or missing mortgage assignments during the bubble years, and as such they cannot prove standing to foreclose without lying. Robo-signing is a crime, but it’s also a cover-up for a much bigger crime, which involves MERS and improper mortgage transfer and securities fraud. The robo-signed, forged, fabricated documents are the smokescreen being used to foreclose and get the real problem off the books. Banks are trying to wriggle off the hook by saying they are merely “memorializing” past actions with the fake documents. Some courts aren’t buying it; the pooling and servicing agreements stipulate that all assignments showing transfers must take place within 60 days, not years later through “memorialized” actions.

Hattip to Barry Ritholtz.

Tsk tsk. Silly silly banks.

The meddle kingdom?

2011-09-02T03:51:00.003+10:00

India, China Navies Face-Off

The Chinese Navy confronted an Indian naval ship in the South China Sea in July, demanding to know why the Indian vessel was in Chinese territory despite the incident appearing to take place in what are widely regarded as international waters, reports today are suggesting.

The face-off, which took place on July 22, is expected to heighten tensions in the often awkward relationship between Delhi and Beijing.

According to reports, the amphibious assault vessel INS Airavat was radioed by an unidentified Chinese naval vessel as it left Vietnamese waters. CNN-IBN reports that the Airavat was 45 nautical miles from Vietnam’s coast and heading towards the port of Haiphaong. ‘An unidentified caller who claimed to be from the Chinese Navy, but who was speaking in English, told INS Airavat that the Indian ship was entering Chinese waters and they must leave,’ according to IBN.

China has been engaged in a sometimes intense and long-running row with its Southeast Asian neighbours about ownership of the South China Sea, with China’s expansive claims disputed most notably by Vietnam and the Philippines. Indeed, Vietnam raised the stakes in June, calling on the United States and others to step in and help find some kind of resolution after a number of confrontations. But this may be the first time that China has directly challenged India.

Govt rejects confrontation between Indian, Chinese naval ships

[The Indian] Government on Thursday rejected reports of an alleged confrontation between an Indian Navy ship and a Chinese vessel off the coast of Vietnam and stressed it expected all countries to respect the freedom of navigation in international waters.

"There was no confrontation involving the INS Airavat," external affairs ministry spokesperson Vishnu Prakash said when asked about reports of a face-off between Indian naval ship and a Chinese warship. "At a distance of 45 nautical miles from the Vietnamese coast in the South China Sea, it was contacted on open radio channel by a caller identifying himself as the 'Chinese Navy' stating that 'you are entering Chinese waters'," the spokesperson said. "No ship or aircraft was visible from INS Airavat, which proceeded on her onward journey as scheduled," he added.

The spokesperson stressed that India backed "freedom of navigation in international waters, including in the South China Sea, and the right of passage in accordance with accepted principles of international law."

"These principles should be respected by all," he added.

‘Chinese ship caught spying on India’

In a worrying development, a Chinese spy ship disguised as a fishing trawler was tracked in the Indian Ocean recently, a report claimed on Wednesday.

The ship was detected near the coast of Little Anadaman.

It is believed that the ship had spent more than 20 days in the sensitive location before Indian radars could locate it.

While the Navy dispatched a ship as soon as the presence of the Chinese spy ship was confirmed, no action could be taken as the vessel was in international waters.

However, the Indian Navy ship did tail the Chinese vessel till it move towards Sri Lankan waters. The ship is reported to have docked at Colombo.

It is believed that the ship had as many as 22 laboratories on board.

Government sources say the Chinese ship had specific aims to map the Indian Ocean and collect Bathymetric data, which helps in submarine and aircraft carrier based operations.

The labs on board the ship are also believed to have been used to collect data on Ocean currents, the temperature at various depths and also underwater obstructions and obstacles. This information becomes crucial if one has to use torpedoes.

It is an open secret that both India and China are engaged in a race to assert their supremacy over the Indian Ocean region.

Anders Behring Beck drek

2011-07-26T19:57:00.008+10:00

It's still July! Hope you haven't missed this:

Beck: Norway camp smacks of 'Hitler Youth'

Beck said the camp "sounds a little like, you know, the Hitler Youth or whatever. Who does a camp for kids that's all about politics? Disturbing."

But while condemning the attacks, Beck said he predicted last fall that Europe "is going to go into problems with radical Islam" and cited Dutch far-right politician Geert Wilders as saying "Political correctness and multiculturalism is killing Europe, and he's right."

However, politically-oriented camps are being organized in several U.S. states by chapters of the "9/12 Project" -- an organization founded by Beck himself in 2009.

The Colorado 9/12 Project hosted a "Patriot Camp" for kids in grades 1-5 earlier this month, featuring programs on "our Constitution, the Founding Fathers, and the values and principles that are the cornerstones of our nation."

I did but see her passing over

2011-07-19T09:54:00.002+10:00

Driving to work today in the PT drop top, a route that takes Guambat across the end of the runway (well, not directly across, but just beyond, and downhill) of the GUM airport, looking at the plane gliding in over the southern ranges, slowly, gliding, how does it stay in the air, somewhat like Guambat would image a Shuttle landing (but with enormous engines underwing), still ponderous but quickly now and at last overhead...

Yes! There it is, painted in blue, "ANA". Wasn't a dream. Was a Dreamliner.

15th December 2009 13:46 GMT Today's the day - finally Boeing 787 Dreamliner set for first flight

Boeing's 787 Dreamliner will later today take to the skies for the first time, almost two-and-a-half years after it was originally supposed to get airborne.

Although the "eco-friendly"* Dreamliner has attracted 840 orders, customers' patience has been sorely tried by continuously-reshuffled delivery estimates. The 787 maiden flight is therefore critical for Boeing, as Richard Aboulafia, aerospace analyst at research firm Teal Group, explained to Reuters: "It will provide a badly needed perception that the program is on some kind of schedule again. But it's still a long way from the ultimate result."

Indeed, even if all goes according to plan today, there are still a minimum of nine months of "around the clock" flight testing of six aircraft to follow before All-Nippon Airways gets its hands on the first example by the end of 2010.

ANA 787 In GUM For Etops Testing

Per Boeing Boeing:

In addition to bringing big-jet ranges to mid-size airplanes, the 787 will provide airlines with unmatched fuel efficiency, resulting in exceptional environmental performance. The airplane will use 20 percent less fuel for comparable missions than today's similarly sized airplane. It will also travel at speeds similar to today's fastest wide bodies, Mach 0.85. Airlines will enjoy more cargo revenue capacity.

United Continental just raised its baggage fees, in apparent contemplation of that last metric.

Don't get the impression Guambat is a plane spotter, but he did grow up on and around air bases, and still remembers, years ago, going out with future Mrs. Guambat to SFO to get a look at the new 747.

I did but see him passing by

2011-07-15T19:45:00.004+10:00

Guambat is here talking about the inscrutable Mr. Murdoch, but with full apoplectics to poor old Sir Robert Menzies, the die hard of monarchism in Australia. Be sure to click the link in that story to hear this.

Murdoch is no Sisyphus. When that bastard chooses to climb a mountain, stone and all, he does; and he stays. Stone and all.

Or so it once was, and so it may forevermore no longer be if the story is told the way some minstrels would sing it.

Mr. Murdoch is one of those Genghis Khan types whose unbent rises to power consumes himself. For him, every slight along the way, every refusal to step aside, is not only remembered, it is crucified in both glory and gore.

When he was only 30 he had to step back and tug forelock from the ascending Kennedy star, in a move that left him with but no choice but to give up his birthright of citizenship to take on the entirety of the American political might, with control of the Wall Street Journal and Fox "News" and countless other rags for riches.

But before he consummated screwing over the sheepish American "news" followers, he first had to settle his score with the Mother Land, and the Mother of all mothers in that land.

Murdoch got his moleskins dirty following other Aussie country gentry, such as John McEwen, leader of the Australian Country Party. McEwen was governing in coalition with the larger Menzies-Holt Liberal Party. (Wikisource) "From the very first issue of The Australian Murdoch began taking McEwen's side in every issue that divided the long-serving coalition partners."

Murdoch, probably akin to McEwen, and certainly unlike Menzies, chafed at the old English establishment running Australia. So he would have been less than pleased with Menzies' sycophantic rendition of "we did but see her passing by". ("Despite Menzies continuing electoral success, Australians increasingly felt that his British and royalist sentiments were out of step with the majority attitude. This was brought to the fore in Menzies' much-lampooned 1963 speech to the Queen in which he quoted the verse "I did but see her passing by and yet I love her till I die". (Click to hear an excerpt from the speech." (From this).)

And so, before exiling himself back to Merry Old England, Murdoch, like a cat in a cat pan, scratched over Menzies' place in history by backing his nemesis, Gough Whitlam. As Wikipedia recounts, "Rupert Murdoch's flirtation with Whitlam turned out to be brief." Murdoch was, even at that early point in his empire building, more pragmatic than dogmatic, but even so, you could only push an old dog so far.

Having buried Menzies and abandoned Whitlam, Murdoch set about settling scores with Merry Old. As Wikepedia puts it: "In Britain in the 1980s Murdoch formed a close alliance with Margaret Thatcher, and The Sun credited itself with helping John Major to win an unexpected election victory in the 1992 general election.[38] However, in the general elections of 1997, 2001 and 2005, Murdoch's papers were either neutral or supported Labour under Tony Blair. This has led some critics to argue that Murdoch simply supports the incumbent parties (or those who seem most likely to win an upcoming election).

As we've seen in his framing of Fox News, Murdoch is very keen on selling media by, simply, telling folks what they want to hear, and then claiming it was his idea all along. Fair and balanced? Get real. Never give a sucker an even chance. Make him laugh, make him dance, make him pay.

And so, by wheeling an wiling, Murdoch has stitched up the world, from Adelaide to Arlington, from Sydney to Surrey, from Baltimore to Beijing. It's been a feat you just have to admire, no matter how much it makes you sick to your stomach at the same time.

But like Alexander the Great, Napoleon, Genghis and the rest, the impetuous dash for power, glory and most likely just getting even with all the rest because one slob sometime somewhere kicked sand in their faces, they burn out. Some of them go down in a flame of glory, others just go down, burned out.

Mr Murdoch is past his high corona days, but not one to be shorted unhedged.

As this item from not too long ago reported, It was Murdoch wot won it – or so he'd like us to believe.

Murdoch the Magician. Can he unwrap himself, again, from this Houdini trap?

Murdoch Defiant as FBI Acts

In an interview with The Wall Street Journal [WHICH HE OWNS] late Thursday, he said he wanted to address "some of the things that have been said in Parliament, some of which are total lies. We think it's important to absolutely establish our integrity in the eyes of the public. ...I felt that it's best just to be as transparent as possible."

Guambat has indeed but seem him, figuratively, passing by. But love him 'til he dies? Not a chance.

A good Israeli friend once told Guambat, you have to admire the Israelis, even if it is impossible to love them. Funny, Murdoch doesn't loooook Jewish.

The JP Morgan shell game

2011-07-09T02:25:00.002+10:00

J.P. Morgan continues to shell out money to keep from going to jail, or at least to avoid the prospect.

J.P. Morgan charged with rigging municipal bond deals

J.P. Morgan Securities rigged bids in at least 93 municipal bond deals in 31 states for eight years beginning in 1997, the Securities and Exchange Commission charged Thursday.

The government said the firm agreed to pay $228.2 million to settle charges

recent enforcement actions have portrayed this seemingly staid corner of the banking world as having been a feasting ground for corrupt financiers.

Thursday’s settlement was another mark against J.P. Morgan Chase, parent of the securities firm.

Last month, J.P. Morgan Securities agreed to pay $153.6 million for allegedly selling investors a complex investment that was secretly designed to help a hedge fund profit at their expense.

In 2006, the SEC charged J.P. Morgan Securities with abuses in the market for another type of investment known as auction-rate securities. In that case, the firm agreed to pay a $1.5 million fine.

J.P. Morgan Securities won the bidding in some transactions because it obtained information from the agents about competing bids, the SEC charged. In other instances, the bidding was rigged in J.P. Morgan’s favor, and in still other deals, J.P. Morgan helped other parties win by deliberately submitting losing bids, the agency said.

“Municipal issuers and investors didn’t stand a chance against the fraudulent strategies [J.P. Morgan Securities] and others used to guarantee profits,” Robert Khuzami, the SEC’s enforcement director, said in a statement.

The firm neither admitted nor denied wrongdoing in its settlement with the SEC. But in its settlement with the Justice Department, it admitted to illegal anti-competitive conduct by former employees. Under its agreement with Justice, the firm avoided prosecution.

“The investigations focused on a small desk that was discontinued and on certain employees who are no longer with the firm,” J.P. Morgan Chase said in a statement. “These employees concealed their conduct from management.”

Management doesn't commit illegal action. Small desks do. But there's no constitutional right to pack a small desk.

Of banks and bailing wire

2011-07-06T03:01:00.004+10:00

File this under financial wizardry, of the sovereign kind, with a European flair.

Is the European Union bailing out Greece?

Euro zone approves 12bn euros bailout for Greece

Euro zone finance ministers have approved a 12 billion euro installment of Greece’s bailout, but signaled that the nation must expect significant losses of sovereignty and jobs.

Ministers in the Euro-group gave the go-ahead for the fifth tranche of Greece’s 110-billion-euro financial rescue agreed last year, and said details of a second aid package for Athens would be finalized by mid-September.

But within hours of Saturday’s decision, Eurogroup chairman, Jean-Claude Juncker, warned Greeks that help from the EU and Inter-national Monetary Fund (IMF) would have unpleasant consequences.

Sounds a bit like it, but it depends, to some significant extent, on how you define "bail-out". And definition is everything in A Europe of judges.

EU: No-bailout rule III

In the Treaty establishing a Constitution for Europe the provisions on economic policy were located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

The ‘no-bailout’ clause is found in Article III-183, OJ 16.12.2004 C 310/78:

Article III-183 Constitution

1. The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.

'No Bailout' Clause? The EU's Greek Rescue Problems

European Policy Centre CEO Hans Martens is referring to the 'No Bailout' clause in the European treaty. Article 103 says that: the Union shall not be liable for or assume the commitments of central governments.

This article was specially written to leave ensure no EU country would be saved by the EU if it doesn't respect the Union's economic rules. And that's precisely the case in Greece.

On the other hand, if the European leaders are really willing to aid Greece, they can simply ignore the first clause and go with article 122, which states: when a member-state 'is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council [of national governments], on a proposal from the Commission, may grant, under certain conditions, Union financial assistance to the member-state concerned.

ECB's Stark rejects EU guarantees for Greek debt

A senior European Central Bank policymaker rejected the idea of a Greek debt solution involving EU guarantees on Wednesday, and said Greece would face economic collapse if it restructured its debt.

Asked about a scenario under which banks exchanged their Greek bonds for new paper backed by guarantees from EU states - an approach that would be similar to that used in Latin America in the 1980s - Juergen Stark said: "This instrument is disqualified."

"It would break the ban on support - the no bail-out clause in article 125 of the EU Treaty," Stark, a member of the ECB's Executive Board, told German newspaper Die Zeit in an interview.

The U.S.A. and Europe Are Reaching the End of the Line

Because of the sins of the € Commission, the European Central Bank (ECB), and the governments, which have repeatedly violated the no-bailout clause of the European Union's Maastricht Treaty with their so-called rescue packages, plus the ECB's acquisition of toxic government bonds, a situation has now arisen in which the ECB could become technically bankrupt overnight.

UPDATE 1-Finland demands bailout guarantees, bank participation

Finland's new finance minister said on Tuesday that the Nordic country will demand guarantees if it participates in any new euro area bailouts and that it wants private investors to bear more of the burden.

"We want to limit Finland's responsibilities. The new government has taken a tougher stance than the previous government regarding crisis countries' aid packages," Jutta Urpilainen said in a television interview with public broadcaster YLE.

She said the guarantees could be in the form of shares in a company managing the debt-laden state's property.

UPDATE 1-S&P warning adds default threat to Greece's bailout woes

Greece would likely be in default if it follows a debt rollover plan pushed by French banks, S&P warned on Monday, deepening the pain of a bailout that one European official said will cost Athens sovereignty and jobs.

Derivatives industry body ISDA said before the French proposal was released in late June that a voluntary agreement to roll over Greek debt would "typically" not trigger payments on credit default swaps.

European politicians and bankers had expressed confidence last week that the French proposal would not trigger a default, but ratings agency Standard & Poor's said it would involve losses to debt holders, most likely earning Greece a "selective default" rating. S&P cut Greece's sovereign rating to "CCC" last month, from "B", on a view that any restructuring of the country's massive debt load would count as an effective default.

Greece crisis: German lenders 'join rollover plan'

German lenders and insurers have agreed to participate in a plan to continue lending to Greece, according to German finance minister Wolfgang Schaeuble.

He was speaking after a private meeting of the country's main banks.

Mr Schaeuble said German institutions would contribute 3.2bn euros ($4.6bn, £2.9bn) to the plan, details of which have yet to be finalised.

It comes after French banks agreed to relend about half of Greek debts they own coming due by 2014.

Deutsche, Germany's biggest lender, was expected to contribute less than 1bn euros to the plan, according to reports in Germany.

Commerzbank , Germany's second-biggest lender, is likely to contribute far less than 1bn euros, the reports said.

The French plan is designed to make Greece's debtload more manageable in a way that would not be deemed a formal default.

If the deal is classified as a default by ratings agencies or credit derivatives traders, it could force European banks to recognise billions of euros in losses in Greek debts that they currently hold, putting their own solvency at risk.

A couple of years ago, ECB warns Germany against EU bail-out

The European Central Bank gave a thinly veiled warning to the German government on Friday not to violate the European Union’s “no bail-out” clause, which prevents members of the eurozone from supporting other members that are facing rising public debt.

Jürgen Stark, ECB executive board member, told Spiegel magazine in an interview released on Friday that the clause was an “important basis for the functioning of the monetary union”.

The warning follows reports that Germany was considering ways to help members of the eurozone that are facing fast-rising refinancing costs as investor fears rise about deteriorating public finances.

The “no bail-out” clause of the EU treaties prohibits countries from becoming “liable for” or assuming “the commitments” of other governments and is regarded by the ECB as an important weapon for ensuring fiscal discipline.

Asked about the issue on Friday, Frank-Walter Steinmeier, foreign minister, said; “A process is now starting to consider to what extent support via the eurozone and the economically strong countries of the eurozone can happen.”

Fast forward back to the present, German court considers challenge to EU bail-outs

Germany's Constitutional Court is hearing a challenge to the country's participation in bail-outs of Greece, the Republic of Ireland and Portugal.

A Berlin professor argues that the process violates constitutional provisions and should be blocked.

Germany's finance minister rejected the claim, saying all rescue packages had been made on solid legal ground. Experts say the court is unlikely to block Germany's participation in the eurozone bail-outs altogether.

German court hears case against bail-outs

The signs are still that the case is unlikely to cause serious problems for Berlin – the court last year declined to issue an injunction to prevent financial transfers to Greece. Judges signalled they were sceptical that an infringement of EU law would fall under their competence. However, as one government official remarked: “The court is always good for surprises.”

A decision is expected in September or October.

How do you tax the Nowhere Man?

2011-07-01T04:37:00.003+10:00

When sales taxes, gross receipts taxes and the like get much above 1%, and when don't they, retailers who don't have to pay that tax have a significant advantage over those who do.

So, catalog order companies like Amazon (in Guambat's day, Sears, Montgomery Ward and the like, and in Mrs. Guambat's days, Lands End and Williams-Sonoma and a myriad of others) get more than a virtual leg up over the bricks and mortar mortal because, under pre-web days, the US laws required some physical presence "nexus" before you could tax those mail-order sales.

But at the break-nexus speed of email-order sales, it is arguably time to have a rethink of the level playing field of tax policy (or, fantasy).

Amazon does not have a price advantage over other book (etc.) stores, it has simply externalized pre-tax overhead expenses and post-tax profits. And you can expect plenty of argy-bargy and spin as the coddled e-industries try to hide their profits from the taxman, and continue their externally taxpayer underwritten e-infrastructure, and their competitive advantage over the local showrooms and sales forces.

Nudging toward a new direction, but with caution born of identifying some kind of tangible nexus, California has joined a growing list of states trying to capture some of the tax base that the online world represents and virtually avoids.

Amazon to shut down California affiliates over new sales tax law

Late Wednesday, California joined the growing list of states attempting to collect sales tax from online retailers like Amazon in an effort to help close the state's vast budget deficit. Amazon, in typical fashion, has aggressively pushed back, warning its California-based affiliates that they'll have their revenue streams cut off as of September 30 if the law ends up being enacted.

California's new law, signed by Governor Jerry Brown on Wednesday, requires online retailers to collect sales tax even if they have no physical presence in the state. How does that work when federal law states they have to have a brick-and-mortar store to qualify? Like the many other states before it, California counts Amazon affiliates who reside in California as a "physical presence." So, if Joe Blow runs a personal blog with affiliate links to Amazon products (you know, to make a few bucks on the side), he is effectively "selling" Amazon products and making money from them via his home in California.

Because of this "physical presence" technicality, the state wants Amazon to begin collecting sales tax from California residents, and subsequently pay it back to the state.

California's—and other states'—laws don't just affect Amazon either, despite the "Amazon Tax" moniker. Plenty of other sites offer similar affiliate programs (Overstock.com, Drugstore.com, FatWallet.com, to name a few) and will either have to rework the way they do things with California residents or cancel their affiliate programs as well. eBay also claims to we worried about how the tax affects small businesses and individuals who are not actually involved with these large corporations. "We believe that putting a tax burden on small businesses and treating them the same as giant retailers is unfair," eBay senior director of government relations told Internet Retailer. "eBay is advocating a threshold that accurately defines a small business, so that the sellers that are getting started aren't held back from growing in across the US."

Amazon’s bad argument By Ezra Klein

I just received this e-mail from the company, as back when I had a personal blog, I was a member of their affiliates program:
Hello,

For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants...

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action...
Let’s be clear: Amazon opposes this bill because it wipes out a price advantage they currently have against their competitors.

And, as the Center on Budget and Policy Priorities has explained at length, their other arguments simply don’t add up.

Now, Amazon is a business, and so you can’t fault it for playing hardball in an effort to retain a competitive advantage. But this is bad policy that they’re trying to protect — it’s starving states, killing brick-and-mortar stores and encouraging a race to the bottom among states who want to attract the offices of online retailers. Brown is right and Amazon is wrong.

Guambat is sure there's some kind of hedge play for this situation, but reckons he'll hedge by going to that little shed out back and retrieving that Sears and Roebuck catalog. And replace it with his iPad.

It's a WIN-when? situation

2011-07-01T03:07:00.003+10:00

What is the corporate tax rate in the USA? Doesn't matter if there is nothing taxed, does it? It's a European holiday for free.

If companies are allowed, indeed encouraged by certain "transfer pricing" regimes or other ~~structured loopholes~~ mechanisms, to park profits overseas and then every few years simply bring them back "home" to "repair" balance sheets, "create jobs" or just about any other euphemism you can choose for "avoid tax payments", companies get away with tax avoidance scott-free regardless of the ersatz tax rate.

Indeed, such "repatriation" schemes, from the stance of global companies, is just one more "transfer pricing" get out of tax jail free card.

Yeah, the US corporate tax rate may or may not be competitive/fair/productive or whatever, but it really doesn't matter if it is never imposed, or if imposed, done so on only a very small portion of profits. So, yeah, they may be taxed at a higher rate, but when if not ever?

Back in 2004 many of these global companies, claiming a tax "home" in the USA, transferred billions of dollars from other tax havens back to the US tax haven is a scheme called "repatriation", but it was like repatriating draft dodgers, only here it was repatriating tax dodgers.

They did it under a cynical scheme, sold easily to the US Congress, called the "Homeland Investment Act of 2004".

Same guys, same scheme is being reheated in the Congressional kitchen under the new banner of the WIN America Campaign, as reported a few days ago by Jesse Drucker in Bloomberg.

Biggest Tax Avoiders Win Most Gaming $1 Trillion U.S. Tax Break

Cisco, Oracle Corp. (ORCL), Microsoft Corp. (MSFT) and others formed a coalition called WIN America Campaign that plans to spend several million dollars pushing the issue.

“We simply don’t think it’s a good idea to do nothing while a trillion dollars sits overseas,” said Doug Thornell, a vice president for the firm who is advising the campaign.

Companies including Google Inc. (GOOG), Apple Inc. (AAPL) and Pfizer Inc. (PFE) are also pushing the proposed tax holiday, which would allow profits to return to the U.S. at a discounted 5.25 percent rate. Under current law, American companies can defer federal income taxes on most overseas earnings indefinitely. When they do return to the U.S., they’re taxed at the corporate rate of 35 percent -- with credits for foreign income taxes paid. Thus, companies paying little overseas face higher U.S. tax bills upon repatriation, and would get more benefit from the discount.

One way multinationals avoid taxes is through “transfer pricing,” transactions among subsidiaries that allow for allocating expenses to high-tax countries and profits to tax havens.

Cisco Systems Inc. (CSCO) has cut its income taxes by $7 billion since 2005 by booking roughly half its worldwide profits at a subsidiary at the foot of the Swiss Alps that employs about 100 people.

Cisco transfers a portion of the patent rights to technology developed in the U.S. to a Dutch unit, which sells some of the resulting products back to its parent for eventual distribution in the U.S., according to annual reports filed by the Amsterdam subsidiary. That means Cisco credits about $5 billion in U.S. sales annually to the Netherlands.

At the same time, most of the income from sales in countries like Germany, France and Japan [and the US], where statutory income tax rates average more than 30 percent, is ultimately transferred to Switzerland, meaning the other nations lose potential tax revenue. The result: Cisco’s international earnings have been taxed at about 5 percent since 2008, records show.

All told, Cisco has accumulated $31.6 billion in overseas earnings on which it has paid no U.S. income taxes yet, records show -- part of more than $1 trillion in U.S. companies’ offshore profits, according to data compiled by Bloomberg. In total, almost 90 percent of Cisco’s cash sits overseas.

Cisco, the largest maker of networking equipment, wants to save even more -- by asking Congress to waive most federal taxes due when multinationals bring such offshore earnings home. Chief Executive Officer John T. Chambers has led the charge for the tax holiday, which would be the second since 2004. He says it would encourage companies to “repatriate” as much as $1 trillion held abroad, spur domestic investment and create jobs.
[In the Homeland Investment scheme, they used these "talking points":

* Increasing domestic investment in plant, equipment, R&D and job creation;
* Increasing investments in business ventures in emerging technologies,
* Increasing funding for pension plans depleted by declines in the stock market;
* Improving the long term financial strength of U.S.-based companies by reducing domestic debt loads, strengthening corporate balance sheets, and lowering corporate bond rates; increasing dividends to shareholders (which can be productively redeployed); and raising equity market valuations by increasing funds available for share repurchases.

Actually, that last point was rather right on the main purpose of the supporters, and perhaps too blatant.]

“I create jobs overseas,” Chambers told interviewer Lesley Stahl on the CBS News program “60 Minutes” in March. “I build plants overseas and I badly want to bring that money back.”

The company needs that cash to prop up its share price.

U.S. companies used $312 billion they repatriated under a 2004 tax holiday largely for stock repurchases, while doing little direct hiring or domestic investment, according to a paper in the current issue of the Journal of Finance by professors at the University of Illinois, Harvard University, and the Massachusetts Institute of Technology. It was the latest in a series of studies that reached similar conclusions.

“Cisco complies with all global tax laws,” said John Earnhardt, a spokesman for the San Jose, California-based company, which makes switches, routers and other products, in an e-mailed statement. “In the past three years alone, Cisco (which has over 35,000 U.S. employees) has paid approximately $4.4 billion in U.S. federal corporate income taxes.” The company reported an effective tax rate last year of 17.5 percent, half the U.S. statutory rate.

While Treasury Secretary Timothy F. Geithner has expressed skepticism about a new repatriation break, Representative Kevin Brady, a Texas Republican, introduced a bill on May 11 that, like the 2004 measure, would not require companies to use their cash for hiring.

Brady declined to address why his measure does not include a hiring requirement. “With millions of Americans seeking work it makes good economic sense to temporarily lower the tax gate and allow up to a trillion dollars of stranded American profits to flow back into our economy,” he said in a statement.

The idea gained momentum last week after Senator Charles Schumer, a New York Democrat, said his party’s caucus was discussing whether short-term revenue from the holiday could fund an “infrastructure bank” to create jobs. Senator John Kerry, a Massachusetts Democrat, has also signaled that he may reconsider his previous opposition.

“Why should we reward firms for successfully gaming the tax system when we in turn are called on to make up the missing tax revenues?” said Kleinbard, a former corporate tax attorney at Cleary Gottlieb Steen & Hamilton LLP. “Much of these earnings overseas are reaped from an enormous shell game: Firms move their taxable income from the U.S. and other major economies -- where their customers and key employees are in reality located -- to tax havens.”

Knowledge of history test scores pale in comparison

2011-06-16T03:30:00.005+10:00

George Carlin had it half right:

“Just think of how stupid the average person is, and then realize half of them are even stupider!”

With the latest history test scores in, Sara Palin may have actually tested above the average test score of US 12th graders, maybe even showing she knows more than a 5th grader. But don't get too excited if she did. Those benchmarks barely make it onto a bench.

U.S. Students Remain Poor at History, Tests Show

American students are less proficient in their nation’s history than in any other subject, according to results of a nationwide test.

Over all, 20 percent of fourth graders, 17 percent of eighth graders and 12 percent of high school seniors demonstrated proficiency on the exam, the National Assessment of Educational Progress.

fewer than a third of eighth graders could answer even a “seemingly easy question” asking them to identify an important advantage American forces had over the British during the Revolution, the government’s statement on the results said.

Only 2 percent of 12th graders correctly answered a question concerning Brown v. Board of Education. Students were given an excerpt including the passage, “We conclude that in the field of public education, separate but equal has no place, separate educational facilities are inherently unequal,” and were asked what social problem the 1954 ruling was supposed to correct.

“The answer was right in front of them,” Ms. Ravitch said. “This is alarming.”

History still a mystery for 12th-graders

12th-graders have shown little progress in their understanding of the U.S. role in global affairs, the concept of American democracy, technological breakthroughs and other key areas.

“All of these students are going to be voters in a year. … They should be well informed,” said Diane Ravitch, an education professor at New York University

To graphically appreciate that last statement, check out the YouTube video here and be sure to watch the last half if nothing else (but it's a total of only 10 minutes, so watch it all).

And remember George Carlin:

“I do this real moron thing, it's called thinking, and I'm not a very good Amercian because I like to form my own opinions.”

Sticks and Stones and Little Rocks may hurt bus ads

2011-06-13T07:59:00.003+10:00

The following story may sound like a case of discrimination or free speech, but actuarially, it's about insurance. Little Rock Christians, like their House of Abraham brothers in fundamental Muslim places, have an actuarial risk associated with violent, lawless behaviour.

Atheists Sue Little Rock’s Transit Authority for Rejecting Godless Bus Ads

A federal lawsuit was filed today against the Central Arkansas Transit Authority (CATA) and its advertising agent, On the Move Advertising, for declining to run $5,260.00 worth of bus ads aimed at attracting local atheists and agnostics. The queen-sized ads, to be placed on the sides of 18 buses serving Riverfest, would have said: "Are you good without God? Millions are." A blue sky with clouds was to be the background.

Atheists sue over bus ads on God-free lifestyle

The Central Arkansas Coalition of Reason alleged in a lawsuit that the Central Arkansas Transit Authority and its advertising agency are discriminating against the group because they're being required to pay tens of thousands of dollars to put $5,000 worth of ads on 18 buses.

Other groups, including churches, have not been required to pay the fee, which amounts to $36,000 in insurance in case of an attack on the buses by angry Christians, according to the lawsuit.

The insurance was requested by the transit agency's advertising firm, On The Move Advertising, officials said.

Because a handful of similar ads had been vandalized in other states, the ad agency required the payment for insurance reasons, said Jess Sweere, an attorney representing the transit authority.

LeeWood Thomas, a spokesman for the atheist group, quoted an email from the advertising agency obtained by the coalition that read: "Arkansas is the buckle of the Bible Belt and I can easily envision zealots or upstanding citizens with a strong faith acting out."

Thomas said it's clear his group is being punished for the actions of others.

"The insurance money needed from us basically says CATA and On The Move trust the atheists in this community more so than the religious, otherwise the churches that advertise would have that extra insurance premium added to their total cost," Thomas said.

Another View: Come, let us reason together

Not enough pens in the Foxhouse?

2011-06-10T18:09:00.003+10:00

US vs. The Wired World

FCC’s new report “The Information Needs of Communities,” released Thursday, surveys the current state of the American media and finds “a shortage of local, professional accountability reporting.” The report’s lead author, Steve Waldman, argues that the expansion and proliferation of online media outlets have not yet made up for http://www.blogger.com/img/blank.gifshrinking newspaper staffs and budgets—especially in the area of local news.

As quickly as online media has grown in the past decade and a half in the US, it might be surprising to see how Americans fare when compared to the rest of the world. Earlier inhttp://www.blogger.com/img/blank.gif the report, Waldman notes that while almost all Americans have easy access to TV, only about 55 percent of Americans have a broadband Internet connection at home. This is a problem, he says, because:

If traditional media companies devote fewer resources to accountability journalism, it becomes more important for all Americans to have access to a full range of comparable resources online. Those that have low quality newspapers or TV and limited Internet access end up with less useful news. Conversely, greater broadband penetration will make it more likely that local digital media efforts will succeed.

FCC Praises The Internet For News Evolution, Then Blames It For Crappy News Quality

Here're the choicest words to illustrate this from the report's executive summary:

In most ways today’s media landscape is more vibrant than ever, offering faster and cheaper distribution networks, fewer barriers to entry, and more ways to consume information. Choice abounds.

That's the good part. Then:

In many communities, we now face a shortage of local, professional, accountability reporting. This is likely to lead to the kinds of problems that are, not surprisingly, associated with a lack of accountability--more government waste, more local corruption, less effective schools, and other serious community problems.

The worries include "roughly 13,400 newspaper newsroom positions" lost in "just the past four years" creating "gaps in coverage that even the fast-growing digital world has yet to fill." And the observation that an "abundance" of media outlets, meaning the huge array of news sources available online, plus what's output by the newsprint and TV industries, doesn't directly parallel an "abundance of reporting."http://www.blogger.com/img/blank.gif

We could point out that bemoaning those thousands of jobs lost in traditional newsrooms have likely been far more than made up for in jobs in the digital news community, and that hyperlocal news reporting is now possible in ways never even imagined before, courtesy of blogging and social tools like Twitter. But we won't. Instead we'll note one innovative way the report does suggest that government could influence the situation: Government ads should be pushed through local, traditional news channels. For example, a military-recruitment campaign should have its ad dollars spent on a local TV news station and local newspaper instead of a big, commercial-centric channel like NBC.

FCC: Local News Collapsing Thanks to the Internet

“A shortage of reporting manifests itself in invisible ways: stories not written, scandals not exposed, government waste not discovered, health dangers not identified in time, local elections involving candidates about whom we know little,” the study says.

Though government has a role to play and should consider creating public affairs cable channels like C-SPAN or ease tax rules for non-profit news organizations, the study implies that there are limits to its involvement in news-gathering.http://www.blogger.com/img/blank.gif

While it expresses concern about the diminishing media landscape, the report says that some safeguards are antiquated and need to be swept away. In particular, the study says that commission should do away with the last remnants of the “Fairness Doctrine,” a policy that mandates broadcasters present balanced reports on political issues. The commission said that the rule is largely ignored, and that it has the potential to violate Free Speech rights.

Guambat disagrees. Fox has embraced the notion, to give its mockery of the ideal more potency and poignancy.

What We Need for a Local Reporting Renaissance

Among the study's many observations and recommendations, the irony of a reporting shortage in the face of "breathtaking media abundance" can't be missed. The study blames the market, noting how cutbacks in newsroom budgets mean fewer reporters which inevitably leaves stories unreported. The "ripple effects" of less information reverberate on a national scale as local television reporters and national news outlets often rely on local reporting as a source. Social media evangelists would be quick to argue that the original reporting is there, hiding in Facebook feeds and buried on Twitter. In the era of abundance somebody is surely saying something about the goings on at town hall or the corrupt local business man. The media just needs better curators, someone to filter the noise and aggregate the useful information. There's not an absence of local reporting, they may argue, there's an evolution in method that the local news industry just needs to figure out.

Ken Doctor, a blogger for the Nieman Journalism Lab at Harvard University, explains that that local news and aggregation are currently engaged in canceling each other out: "the aggregators have often laughed ... at those silly people who sink millions into creating local news, or content of any kind, while creators have joked ... that some day those aggregators will have to turn out the lights, when all the content creators have gone bankrupt and out of business."

At the end of the day, hard-nosed reporting, especially local reporting, is hard work, despite the presence of Blogger, Facebook and Twitter in connecting people and disseminating information. According to The New York Times's preview, the FCC report recommends government help, "making actual in-the-field reporting a part of the curriculum at journalism schools, steering more government advertising money toward local instead of national media and changing the tax code to encourage donations to nonprofit media organizations."

Another idea is for aspiring journalists to redirect their dreams away from New York City's saturated mediasphere and towards local papers where they can make a difference and be small-town heroes. We'll turn to Gawker's Hamilton Nolan for a rallying cry. We can't really tell how sarcastic Hamilton is being, but it's a good cry either way.

With a little gumption, you can quite easily become the most important media figure in Standard Small Town, USA, at the age of 22. In New York, you will never http://www.blogger.com/img/blank.gifbe important (sorry). You'll also be doing the fine small town folks an actual public service by covering the city council meetings and poking into the misdeeds of all the assholes on the school board or whatever. You'll be able to write stories that have a concrete impact that you'd never achieve by recapping TV shows or whatever awful thing you'll end up doing when you come to NYC with journalistic aspirations. And when the profit model for online local news finally gets itself together, you'll be right there, already entrenched, with your own tiny little media empire.

Good luck. We'll be cheering you on, from New York.

Patch.com reacts to FCC report: We’re filling the gaps in local journalism

Brazil beavers away on Lungs of the Planet

2011-05-26T01:51:00.003+10:00

Interesting contrast between these two press reports, one from a couple years back, one current.

Breathing Space for the Lungs of the Planet? Brazil takes the lead once again.

Los Angeles was the setting from September 30th to October 3rd for California Governor Arnold Schwarzenegger’s Global Climate Summit, which was convened to focus on sub-national initiatives on climate change in the run up to Copenhagen, and which drew governors from around the world.

Six governors were present from Brazil, including five from the Amazon. During their presentations, the Amazonian governors committed to reducing deforestation by 80% by 2020 and appealed to the international community to assist them in attaining this goal. President Lula made a similar commitment at the 2009 UN General Assembly the week before.

This is a remarkable commitment because saving the world’s rainforests is the most effective short term way to reduce global warming. As the “lungs of the planet,” the Amazon is by far the largest rainforest:

* It contains fully 25% of the earth’s biodiversity
* It contains 20% of all the earth’s fresh water
* It constitutes the largest carbon sink in the world.

And so on.

That was then. This is now:

Brazil eases rules on conserving Amazon rainforest

Brazil's Chamber of Deputies has voted to ease restrictions on the amount of land farmers must preserve as forest.

Under the current law, 80% of a farm in the Amazon must remain forested; in other areas, the requirement is lower, falling to 20%.

However, in practice, the legislation has not been widely enforced. It is estimated that 20% of the Amazon, the world's biggest rainforest, has been cleared, mainly as a result of logging and farming.

Under the new bill, small-scale landowners, who make up the majority of Brazil's farmers, will be exempt from having to replant deforested land.

The changes were proposed by Aldo Rebelo form Brazil's Communist Party (PCdoB), who argued that the existing rules prevented small farmers from making best use of their land to lift themselves out of poverty.

Farmers' groups backed the changes, saying Brazil, as one of the biggest exporters of soy, beef and sugar, needed to boost food production in times of high commodity prices.

"None of the world's large farm producers that compete with Brazil - the United States, Europe, China, Argentina and Australia - obliges its producers to preserve any forest," the National Agriculture Confederation (CNA) said.

The world was prosperous a few years back. Now not so much. Conservation is, bottom line, an affordability equation, measured by the fleeting life span of a single person. Sadly.

Let us help you protect yourself from us

2011-05-25T02:09:00.003+10:00

Businesses criticize whistleblower reward plan

The government already pays bounties to whistleblowers for exposing fraud, from tax evasion to Medicare scams and Pentagon procurement abuses.

As part of an overhaul of financial regulation, Congress and President Obama last year demanded a formal reward system at the SEC, which polices Wall Street and punishes fraud against investors. Under the Wall Street regulatory overhaul known as the Dodd-Frank Act, whistleblowers are entitled to rewards of 10 percent to 30 percent of the money they help the SEC recoup through enforcement actions.

The Securities and Exchange Commission is scheduled to vote Wednesday on a far-reaching proposal to combat corporate wrongdoing by paying private employees to join the fight. The bounties could give tipsters a powerful incentive to expose the kind of abuses that have cost investors dearly, from the Enron and WorldCom accounting frauds of a decade ago to the Fannie Mae and Freddie Mac scandals of later years and alleged misrepresentations involving toxic mortgages.

Some business groups have said they are worried that the SEC could be overwhelmed with tips. They say they want to ease the burden on regulators by screening the complaints.

“Companies are far better equipped to assess complaints in the context of their particular business and to ‘separate the wheat from the chaff,’ ” two major Wall Street groups, the Financial Services Roundtable and the American Bankers Association, said in a December letter to the SEC.

The article includes mention of many of the pushbacks wanted by industry, which, on the whole, strip the regulations of most efficacy, in Guambat's opinion.

"I have friends who are black."

2011-04-20T18:59:00.002+10:00

Yeah, but did you send them this email?

Racist Orange County Republican Email: President Obama and His Parents Are Apes

The Weekly has obtained a copy of an email sent to fellow conservatives this week by Marilyn Davenport, a Southern California Tea Party activist and member of the central committee of the Orange County Republican Party.

Under the words, "Now you know why no birth certificate," there's an Obama family portrait showing them as apes.

Marilyn Davenport sent an email to fellow Orange County Republican elected officials, apologizing if anyone was offended by her depicting President Barack Obama as an ape--while also blasting the "liberal media" for reporting the story.

"I simply found it amusing regarding the character of Obama and all the questions surrounding his origin of birth," Davenport wrote. "In no way did I even consider the fact he's half black when I sent out the email. In fact, the thought never entered my mind....

"Oh, come on! Everybody who knows me knows that I am not a racist. It was a joke. I have friends who are black."

After this story was published, she sent another email to fellow California conservative activists. It demanded to know the identity of "the coward" who supplied me with a copy of her offensive email.

Terrorism or business?

2011-04-16T10:36:00.004+10:00

Stratfor Global Intelligence provides very comprehensive political, military, economic and other intelligence and insight on issues around the world. It's almost too much to keep up with. But one of the emails Guambat received recently from Stratfor jumped out at him with one particular, and perhaps not germane, comment.

It came in the midst of an interview between a Stratfor correspondent, Colin Chapman, and a Mexican security expert, Scott Stewart. One of the talking points was the construction of extra car barriers outside the US Embassy in Monterrey, Mexico.

Chapman asked, "Has this building been targeted...?"

Stewart replied (extracts):

"The Mexican cartels certainly don’t shy away from violence. We see them regularly beheading and dismembering people. However they tend to try to target most of their violence against opponents of the fellow cartels or against government employees, and a lot of times the government employees that they target are actually working for opposition cartels. So there’s really a relation there between the targeting.

"One thing to remember is that these cartels are not terrorist groups. They are really businesses, and they’re organized crime organizations. So their end is making money. That is their objective."

Guambat appreciates that at some academic level there is a logic there. But damned if he can discern some universal distinguishing characteristic between the wantonness of Mexican violence and the wantonness of Al Queda violence. He has previously expressed his dismay about what is happening in Mexico, a country he once loved to visit.

Stratfor is by and large a subscription service, but it does have a free page with Scott Stewart discussing The Perceived Car Bomb Threat in Mexico. Click the linked title for the read.

Check the ABS on those Wall Street Wives

2011-04-15T00:39:00.003+10:00

Tracy Alloway posting on FT Alphaville is checking out the Wall Street Wives and their sexy ABS.

Taibbi takes aim at the Talf

here’s what we know: The company was founded in June 2009 with $14.87 million of investment capital, money that likely came from Christy Mack and Susan Karches. The two Wall Street wives then used the $220 million they got from the Fed to buy up a bunch of securities, including a large pool of commercial mortgages managed by Credit Suisse, a company [Christy's husband, former Morgan Stanley CEO] John Mack once headed.

With $220m in-hand the wives were free to do their part in kickstarting the Asset-Backed Securities (ABS). To paraphrase Tim Duy, back in 2008 and 2009 there were no bad assets, just misunderstood ones. The idea of the Talf was to revive demand for, and issuance of, ABS courtesy of Fed-provided funds.

However, as Taibbi notes, a key aspect of Talf is that the Fed doles out the money through what are known as non-recourse loans. So if the ABS bought by Christy and Susan bought turned sour, in theory they could just walk away.

The wives get most of the upside — the taxpayers get most of the downside.

Tax-Free speech

2011-04-15T00:11:00.004+10:00

Do we live in the Age of Corporatism?

Well, as we have seen, the Supreme Court has determined that corporations are as free to back politicians and political parties as your average citizen. Sort of a palsy-walsy, in pari passu patronage system, neh?

After all, just like your average citizen, corporations pay their fair share of taxes, don't they?

Don't they?

Ask Barry Ritholtz: Corporate Tax Rates, Then and Now

The GAO reported in 2008 that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.”

Since tomorrow is April 15th, it is a good time to look at our corporate tax rates. As the graphic below shows, the change in corporate tax rates over the past half century is astounding.

Corporate Taxes as a Percentage of Federal Revenue
1955 . . . 27.3%
2010 . . . 8.9%

Corporate Taxes as a Percentage of GDP
1955 . . . 4.3%
2010 . . . 1.3%

Individual Income/Payrolls as a Percentage of Federal Revenue
1955 . . . 58.0%
2010 . . . 81.5%

The average citizen is now footing way more of the government bill and getting far less per capita bang for her buck in the political arena than corporations. This is a trend that has gone on Guambat's entire life.

Sorry, kids. Hope you find a way to survive in the Age of Corporatism.

Why even think about nuclear energy?

2011-04-14T19:46:00.004+10:00

Guambat had a post about this several years ago. But a story in the NYT caught attention and, in light of the huge dislocation, without, so far, any deaths, from the Fukushima nuclear energy facility, Guambat reckoned as how the topic might again be lightly, or briefly if lightly is offensive, touched upon.

The NYT story took Guambat back to the days in the late '60's when he was a VISTA Volunteer, and spent a bit of time in the tri-State coal country of Ohio/W.Virginia/Kentucky. It is a unique place in America, the Appalachian Achilles Heal of health, education and pursuit of happiness. Guambat can still remember the smell, the silence, almost haunting, but in an enticing way, the base humanity of the place.

It will do no justice to excerpt the story, but Guambat must not, either, provide too much of it for you, so you'd be better off just clicking the link to it and reading it yourself. To tempt you, here's this:

As the Mountaintops Fall, a Coal Town Vanishes

Here in Boone County, coal rules. The rich seams of bituminous black have dictated the region’s destiny for many generations: through the advent of railroads; the company-controlled coal camps; the bloody mine wars; the increased use of mechanization and surface mining, including mountaintop removal; the related decrease in jobs.

In recent years, surface mining has eclipsed underground mining as the county’s most productive method. This includes mountaintop removal — or, as the industry prefers to call it, mountaintop mining — a now-commonplace technique that remains startling in its capacity to change things.

Various government regulations require that coal companies return the stripped area to its “approximate original contour,” or “reclaim” the land for development in a state whose undulating topography can thwart plans for even a simple parking lot. As a result, the companies often dump the removed earth into a nearby valley to create a plateau, and then spray this topsy-turvy land with seed, fertilizer and mulch.

The coal industry maintains that by removing some mountaintops from the “Mountain State,” it is creating developable land that makes the state more economically viable.

“We got to have coal,” says Mr. Cook, a retired miner. “What’s going to keep the power on? But I believe with all my heart that there’s a better way to get that coal.”

OK, which of these 2 stories will grow legs?

2011-04-14T15:22:00.003+10:00

From today's San Fransisco Chronicle, which Guambat only rarely reads since Herb Caen passed away:

Barry Bonds guilty of obstruction of justice

Barry Bonds, the former Giants outfielder and baseball's all-time home-run leader, was convicted Wednesday of obstruction of justice for giving evasive answers to a federal grand jury that questioned him about his use of performance-enhancing drugs.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/04/13/MN491J01BR.DTL#ixzz1JTL9Vhos

Goldman Sachs Misled Congress After Duping Clients, Levin Says

Goldman Sachs Group Inc. misled clients and Congress about the firm's bets on securities tied to the housing market, the chairman of the U.S. Senate panel that investigated the causes of the financial crisis said.

The Michigan Democrat also said federal prosecutors should review whether to bring perjury charges against Goldman Sachs Chief Executive Officer Lloyd Blankfein and other current and former employees who testified in Congress last year. Levin said they denied under oath that Goldman Sachs took a financial position against the mortgage market solely for its own profit, statements the senator said were untrue.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/04/13/bloomberg1376-LJM1ZZ1A1I4H01-0493A7DJR7692BN3LRLEGM0701.DTL#ixzz1JTLcT2g6

Bonds and Blankenfeld, both accused/guilty of bald-headed lies. Which one will we still be talking about in six months?

Sigh.

Regulators sit on fence, banks get whitewashed

2011-04-14T12:36:00.005+10:00

U.S. says lenders must pay for wrongful foreclosures

The federal government on Wednesday ordered the nation's largest banks and mortgage servicers to identify and compensate borrowers whose homes were taken in wrongful foreclosures.

In Palm Beach County, 51,518 foreclosures were filed during that period.

Shari Olefson, a Fort Lauderdale attorney who represents banks, called the orders "fluff" and questioned how long it would take to determine wrongdoing in individual foreclosures.

"I don't know what 'improperly foreclosed on' means because at the end of the day, if someone isn't paying their mortgage, they should be foreclosed on," said Olefson, who wrote the 2009 book Foreclosure Nation: Mortgaging the American Dream. "If you're in default, it's proper to foreclose on you."

But homeowner advocates criticized the much-anticipated agreements Wednesday, saying they impose no financial penalties and are vague about what kind of foreclosure practices would garner reparations and what those reparations would be.

"This is a huge whitewash to shut everyone up and continue the status quo," said Palm Beach County homeowner advocate Lisa Epstein, who writes a blog called Foreclosure Hamlet. "The end result will be a lot of frustrated people requesting restitution that will probably be denied."

Mortgage Lenders Get A Slap On The Wrist

... bank regulators attempted to punish the banks for such practices today but I’m not so sure they succeeded.

The Office of the Comptroller of the Currency, the Federal Reserve and the Office of Thrift Supervision announced today a settlement with the 14 largest U.S. mortgage servicers including Bank of America, Citibank, HSBC, JPMorgan Chase, MetLife Bank, PNC, U.S. Bank, and Wells Fargo.

The settlement doesn’t fine the banks for any of the wrongdoing but instead lists ways they need to improve their mortgage and foreclosure proceedings.I’ll stop there with the banker bashing that Dimon hates so much and instead take a minute to bash the OCC for getting in bed with the banks.
When you have to tell a bank not to purposely confuse borrowers and to communicate with them instead of keeping them in the dark about what you’re really doing to their mortgage something is wrong. No. Something is up.

Last month, a state financial regulator testified before the House Oversight Committee about his efforts with state attorneys general to gather data from subprime servicers. In his testimony, the regulator revealed that the data fell short of its potential to reveal foreclosure problems because the Office of the Comptroller of the Currency forbade national banks from providing loss mitigation data to the states.

(Check out Matt Stoller’s piece about the OCC cover up: Comptroller of the Currency Orders National Banks to Cover Up Foreclosure Scandal)

Now, a month later, the OCC and other regulators have basically announced that the foreclosure problems weren’t that bad,and that the bank can figure out how to resolve the residual problems on their own. The banks, I’m sure, couldn’t agree more.

Analysis: U.S. banks still face big foreclosure risks

In March, the OCC and other bank regulators bolted from a joint effort by the 50 states' attorneys general and multiple federal agencies to reach a "global" settlement with the servicers on terms tougher than those favored by the OCC.

OCC spokesman Robert Garsson said there had not been any intent to undercut the other regulators, or protect the banks at the expense of consumers. Referring to the banks' practices in servicing mortgages, he said, "From our perspective there's a process that's broken and needs to be fixed. Our enforcement orders will accomplish that."

In reality, within their states, the attorneys general have stronger powers than federal regulators to prosecute wrongdoing involving foreclosures. Foreclosures mainly are governed by state, not federal law. And the attorneys general have authority under state law to bring both criminal and civil cases for violations such as submitting false affidavits, creating false mortgage assignments, and forging signatures.

They also can bring lawsuits in state courts demanding restitution to homeowners and new requirements -- potentially stricter than those imposed by the OCC -- for handling foreclosures and loan modifications. Attorneys general in Florida and New York already have investigations well under way, and have subpoenaed law firms that handle large numbers of foreclosures for the major banks.

Federal bankruptcy courts oversee foreclosures for homeowners who are in bankruptcy. The U.S. Trustees Office, an arm of the Justice Department that oversees the integrity of the bankruptcy courts, has launched actions in bankruptcy courts around the country alleging that representatives of the banks committed fraud on the courts by knowingly submitting forged and fraudulent documents.

The U.S. Trustees office is working with local federal prosecutors in some areas, potentially leading to a series of criminal prosecutions.

Investor trusts that purchased securitized mortgages have filed large numbers of lawsuits against the banks, alleging that they never actually turned over to them the mortgages that they had bought. The suits claim that the banks never provided the documents legally required to turn over ownership.

A rapidly increasing number of state courts and federal bankruptcy judges around the country have begun to routinely throw out foreclosure cases when the banks cannot produce authentic documents showing who owns the mortgages. The courts' actions have slowed or halted foreclosures in areas subject to those rulings. RealtyTrac, which publishes foreclosure statistics, said the court decisions were largely responsible for a 27 percent decline in foreclosures from a year earlier.

U.S. judge to sanction LPS for lying to court

A federal bankruptcy judge in New Orleans said she will impose sanctions on Lender Processing Services, after concluding that the mortgage servicing company deliberately committed fraud on the court in a foreclosure case, by giving false testimony and submitting a "sham" affidavit.

The judge granted a motion by the U.S. Trustee's Office for sanctions, and said she would decide on financial and other penalties against LPS later, after holding a hearing.

Her opinion in the bankruptcy of Ron and LaRhonda Wilson, also sharply criticized the entire mortgage servicing industry.

"One too many times, this Court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry," she wrote.

On the wrong side of recent history

2011-04-01T20:13:00.004+10:00

The West's unwanted war in Libya

When the first Arab pro-democracy uprisings shook the thrones of aging autocrats in Tunisia and Egypt in January, France had got itself on the wrong side of history.

Foreign Minister Michele Alliot-Marie had enjoyed a winter holiday in Tunisia, a former French colony, oblivious to the rising revolt. She and her family had taken free flights on the private jet of a businessman close to President Zine al-Abidine Ben Ali, and then publicly offered the government French assistance with riot control just a few days before Ben Ali was ousted by popular protests.

French Prime Minister Francois Fillon had spent his Christmas vacation up the Nile as the guest of Egyptian President Hosni Mubarak, the next autocrat in the Arab democracy movement's firing line, while Sarkozy and his wife Carla had soaked up the winter sunshine in Morocco, another former French territory ruled by a barely more liberal divine-right monarch.

Meanwhile, in the other corner:

the international air campaign against Gaddafi's forces might never have happened without the self-appointed activism of French public intellectual Bernard-Henri Levy, a left-leaning philosopher and talk-show groupie, who lobbied Sarkozy to take up the cause of Libya's pro-democracy rebels.

Libya was the latest of a string of international causes that the libertarian icon with his unbuttoned white designer shirts and flowing mane of greying hair has championed over the last two decades after Bosnian Muslims, Algerian secularists, Afghan rebels and Georgia's side in the conflict with Russia. Levy went to meet the Libyan rebels and telephoned Sarkozy from Benghazi in early March.

"I'd like to bring you the Libyan Massouds," Levy says he told the president, comparing the anti-Gaddafi opposition with former Afghan warlord Ahmad Shah Massoud, who fought against the Islamist Taliban before being assassinated. "As Gaddafi only clings on through violence, I think he'll collapse," the philosopher told Reuters in an interview.

On March 10, Levy accompanied two envoys of the Libyan Transitional Council to Sarkozy's office.

To their surprise and to the consternation of France's allies, the president recognized the council as the "legitimate representative of the Libyan people" and told them he favored not only establishing a no-fly zone to protect them but also carrying out "limited targeted strikes" against Gaddafi's forces.

In doing so without consultation on the eve of a European Union summit called to discuss Libya, Sarkozy upstaged Washington, which was still debating what to do, embarrassed London, which wanted broad support for a no-fly zone, and infuriated Berlin, France's closest European partner.

He also stunned his own foreign minister, who learned about the decision to recognize the opposition from a news agency dispatch, aides said, while in Brussels trying to coax the EU into backing a no-fly zone.

Guambat confesses to a very personal interest in things Libyan. As the young eldest son of a couple of farm kids from Tennessee, escaping to see the world, Guambat went thru the middle and end of his single-digit years in Tripoli, Libya, guest of the US military service employing his father, unbeknownst icon of the US Marine hymn, From the Halls of Montezuma to the Shores of Tripoli.

If nothing before had done the trick, his life in that remarkable stretch of ancient civilization and barbarism inured him to the humdrum and compelled him to the exotic, the crossroads of history, old and new, legended and overlooked.

Guambat was living in a duplex, cinder-block kennel of enlisted men's base (and they did mean base) housing, in absolute bliss. Across the "street" from his home lay, first of all, during the Suez Crisis of 1956, a machine gun nest, but most of the time a long stretch of coastal plain which dropped off to the teasing shores of the Mediterranean, where he perfected his swimming, snorkeling, jelly-fish awareness and sunburn-made home-grown nose peal skin.

His parent took him to picnic in the ancient ruins of long ago Roman Leptis Magna and Sabratha and other bygone refuges of other bygone days, where no one else was round except the odd nomad and the odd but expected ghost of the past. Guambat's Dad would casually and regularly pick up old Roman coins and, like the honest citizen he was, turn them in to the local archivists.

His "house boy" and apartment block guards would spirit him off in old black horse-drawn carriages to the Old Town and dusty villages of Libyan hosts, with their sweet candies, delicious cakes, raucous markets and marvelous Italian sodas. His neighbors were from Greece, Italy, England, Turkey and Egypt, and he played with their kids, but he didn't notice it much, except their sandals, which he thought were a bit wee, but elegant. The streets commonly filled with herds of sheep shepherded by nomads just passing through.

The temperature got to the 120's F on some days, and so cold on others that Mom lit a kerosene room heater of the likes he hasn't seen since. Ice came in big blocks from the ice man to sit in the box on top of the food cooler, and Mom rinsed all the fresh vegetables in some kind of prophylactic chemical to kill the organic things (feces and such) that other wise found its way into the food chain.

Flies were kept under control by tying bunches of leafs together and hanging them in shady places and sprayed with DDT and god knows what.

It was a place of pomegranates and olive trees and citrus groves and camels sauntering to and fro up and down inclined walkways to pull goat-skins full of water from timeless wells to spill over into mazes of water ways irrigating lifeless dessert and bringing sweet dates to life and happiness. Of hammered copper and smokey fires brewing strong, black, sweet, peanut floated tee drunk out of small glass cafe glasses. Of minarets and minaret-like memorials to Remus and Romulus, men in baggy white pants and long-tailed white tunics and women draped in heavy white barakans, head to toe.

Libya has far distant, distorted, enhanced and special memories for Guambat. He wonders what side of history they are on. And whose.

A Tale of Two Disasters

2011-03-20T08:05:00.011+10:00

Click here for video and transcript from MediaMatters.

Trapped in the Superdome: Refuge becomes a hellhole

Crack vials littered the restroom. Blood stains the walls next to vending machines smashed by teenagers.

The Louisiana Superdome, once a mighty testament to architecture and ingenuity, became the biggest storm shelter in New Orleans the day before Katrina's arrival Monday. About 16,000 people eventually settled in. Within two days, it had degenerated into unspeakable horror.

"There is feces on the walls," said Bryan Hebert, 43, who arrived at the dome Monday. "There is feces all over the place."

The Superdome is patrolled by more than 500 Louisiana National Guard, many of whom carry machine guns as sweaty, smelly people press against metal barricades that keep them from leaving, shouting as the soldiers pass by: "Hey! We need more water! We need help!"

The soldiers — most are sleeping only two or three hours a night, and many have lost houses themselves — say they are doing the best they can with limited resources and no infrastructure. But they have become the target of many refugees' anger.

One man tried to escape yesterday by leaping over a barricade and racing toward the streets. The man was desperate, National Guard Sgt. Caleb Wells said. Everything he was able to bring to the Superdome had been stolen.

Some images here.

Survivors reveal Superdome horror

Katrina Survivors Face Cops, Gougers, Scams, ‘Gangs’

Outside the worst-hit areas, refugees have found themselves in harsh competition for necessities like gasoline and temporary shelter as opportunistic merchants are reportedly raising prices, taking advantage of increased demand for staples in the wake of the natural disaster.

Even in New Orleans, where very little buying and selling is taking place, price exploitation is at play. Hawaiian emergency medical workers stranded in New Orleans told their hometown paper, the Honolulu Star-Bulletin, that they had to pay $45 for two plates of fried squash and rice and one can of warm cola to split among four women.

On Tuesday, survivors absconded with everything from food to computers at a Wal-Mart on Tchoupitoulas Street in New Orleans, according to a detailed report by local daily Times-Picayune. The paper’s reporters said the scene began as a giveaway of essential items orchestrated by police but quickly erupted into a free-for-all looting extravaganza with police losing control and civilians accusing police of stealing "all the best stuff."

Police officers interviewed by the Times-Picayune said the looting was beyond their control throughout the city. "We don't have enough cops to stop it," the officer said. "A mass riot would break out if you tried."

Many law enforcement agents readily acknowledged to reporters that they recognized many people in the affected areas have no other access to food, clothing or first-aid supplies. With few emergency supplies making it to stranded survivors, supplies held in vacated storefronts constitute a vital lifeline.

By Wednesday evening, the relative goodwill of authorities had run out in New Orleans as well. Mayor Ray Nagin announced that nearly the entire active city police force was under orders to cease any search-and-rescue efforts and focus on suppressing looters.

"It's really difficult because my opinion of the looting is it started with people running out of food, and you can't really argue with that too much," Nagin said. "Then it escalated to this kind of mass chaos where people are taking electronic stuff and all that."

The Psychology of Looting

For Japan Tsunami Survivors, Woes Keep Mounting

Nearly a week after their home town was annihilated in a catastrophic tsunami, the 1,000-plus survivors of the small Japanese fishing town of Otsuchi are hanging by a thread.

With no water or electricity, and scant food, survivors keep each other company at one of three emergency shelters on the outskirts of what remains of the town.

"You can't wash your hands or face," says 72-year-old Katsu Sawayama, seated in the middle of the high school gymnasium, the biggest of the shelters in a town where more than half the 17,000 residents are still missing.

Adding to their woes, an unseasonal snowstorm sent temperatures plunging to below zero and blanketed acres of tsunami debris in white.

Like tens of thousands of people along Japan's northeast coast, the Otsuchi survivors have nowhere else to go.

Meals are barely enough to sustain them — half a rice ball and a small bowl of miso soup is a luxury; a slice of bread might have to feed a family of three.

"Whatever they give us, we just gratefully receive. At least they're feeding us three times a day," said Sayawama.

Earthquake refugees battle for survival in freezing northeast Japan

About 400 people found shelter at the hastily arranged welfare center in an elementary school gymnasium in Ofunato, on the Pacific coast, one of the areas hit hardest by the March 11 devastating earthquake.

Showing signs of fatigue, the refugees are cuddling together under thin blankets for warmth amid freezing temperatures in the cramped evacuation center with no electricity. There are two electric stoves with a power generator which is about to run out of fuel. "I could sleep only for three hours because it was so cold," Yotsuko Tanaka said after waking up at 4 a.m. on March 15, four days after the killer tremor devastated the region. "Seven of us are sharing a large blanket," said the 72-year-old Tanaka, whose home was wiped away by powerful tsunami waves.

Over a dozen nursery school children, haunted by fears of tsunami waves, are also cuddling together at the candlelit refugee center.

In Rikuzentakata, another city on the Pacific coast in Iwate Prefecture, about 800 people found shelter at a nursery home. The refugee center begins to get shrouded in complete darkness at around 6 p.m. and the evacuees light candles given by a nearby temple.

Some images here.

Hilltop city in Japan becomes a refuge for earthquake, tsunami survivors

The city's resilience in the face of a still-unfolding tragedy that killed at least 10,000 people and destroyed whole towns on the northeast coast is credited to its topography.

“We were so lucky really. I haven’t heard of any serious injuries amongst people I know,” says a security guard keeping watch outside the Hitachi Futo shipping company’s lot in the city’s harbor.

Behind him, brand new Mercedes-Benz cars are stacked on top of each other like toys in a child’s playroom, recently arrived from Germany but tossed around and mangled by the tsunami.

at the Hitachi Hotel Crane, families escaping the devastation of the worst-affected areas are simply happy to have a dry place to stay, despite a lack of running water – although the unfolding crisis at the Fukushima Daiichi Nuclear Power Station, only 60 miles away, weighed heavily.

“There’s no electricity where we were and it’s still cold at night, so it feels great to be here,” says a man checking into the hotel with his young family.

Japan Earthquake and Tsunami 2011, a Queue, Crowd Control, How You Can Help

We all know the typical response immediately after a tragedy – chaos, looting, violence, mob mentality, and other look-out-for-yourself behaviors. But, for now anyway, that seems to be absent in Japan.

if there’s looting and mob violence, medical and security personnel will be on the scene to assist victims and to enforce order. But, since there isn’t any of that in the Japan earthquake so far, medical and security personnel can continue to focus on finding real victims from the tsunami and the earthquake.

Reports of looting in Japan?

At Miyagi in earthquake disaster going on board and theft 40 case prefectural police note calling

Why No Looting In Japan? Ctd

Why is there no looting in Japan after the earthquake?

And what about:

Aceh, Indonesia
Peru
Thailand
Sri Lanka
Haiti
Morocco
New Zealand

Looting, like pricing, is taking unfair advantage of a disaster or tragedy. Dogs know when they've been kicked or accidentally stepped on. In the history of the common law we find that law courts could only go by the books, so the chancery courts had to step in to deal with the human questions of fairness and civility. That is how we ended up with different remedies in law and in equity.

Yes, questions of looting, as filtered through the notions of fairness and civility, is in the somewhat in the eye of the beholder, but most of us can agree differences do exist.

Of course, some people just don't have much sympathy for disaster of any sort, if they can make political mileage out of it, regardless where or how or whom the disaster strikes.

Rush Limbaugh, for instance, but as only one politically contempt example.

See the USA, in Your Chevrolet ...

2011-03-11T20:38:00.005+10:00

Amazing fees airlines are slapping on

U.S. airlines raise fares as fuel costs rise; Southwest, United join a trend started by Delta

A lure for expanded air service

American Airlines again bumps up airfares

Southwest matches fare increase led by legacy carriers; up go prices again

Where is my flying car?

Woulda watched it, but couldn't

2011-03-11T20:21:00.006+10:00

An 8.9 earthquake and tsumani in the neighbourhood is something that dilates the eyes around Guambat's burrow.

But at 15 miles or more deep and 1500 miles away, Guambat poured another one and simply watched mesmerized by the televised NHK images of ravaged northeastern Honshu, sound muted because of the constantly recurring warning blasts of the over-testosteroned homeland security types who would rather be heard than sorry. At the duly appointed time, the tides on Tumon Bay had no discernible change.

Of course, it was dark, so it was hard to tell for sure. But there were no white caps, no churning haze and no sounds of breakers in the distance.

Still, to give the under-worked Homeland Security Guards their due, by shutting off all traffic to Tumon Bay, Guambat and the Mrs enjoyed one of the quietest evenings in the Guambat burrow in yonks. Could almost get to enjoy these tsunami alerts so long as the mute button continues to work.

Mrs Guambat is trying to connect perceived dots between the Christchurch quake, the China quake and the Sendai quake, but Guambat reckons its just Rorschach by the numbers painting. If he's right, he can gloat. If he's wrong, there won't be anyone around to say "I told you so".

Ha.

The rich thimble game

2011-03-11T20:09:00.002+10:00

Who gets the government's largess? The poor, the middle class, the minorities, the welfare bludgers, labor unions, ... the rich???

Commentary: Uncle Sam subsidizes the lifestyle of the rich, famous

The budget hides $1 trillion in spending that primarily benefits wealthy and upper middle-class Americans and corporations.

If we reined in this hidden spending, it’d be a lot easier to balance the budget. But we can’t eliminate it — or even slow its growth — unless we’re willing to look at it squarely and call it what it is: welfare for the wealthy and for the middle class.

I’m talking about private spending that the government subsidizes through loopholes, deductions and credits in the tax code. These tax breaks — known as tax expenditures — subsidize some of the most expensive items in the family budget: buying a home, buying health care, saving for retirement and paying for college and child care.

Because the government provides these subsidies through the tax code instead of through direct spending, the benefits go largely to those who make the most money. A $1,000 deduction provides $350 in benefits to a taxpayer in the top 35% tax bracket, but just $100 to one in the bottom bracket of 10%. The 65% of taxpayers who don’t itemize deductions but take the standard deduction instead get nothing at all.

The richest 20% of families — those who make more than $115,000 a year — capture 71% of the benefits from the housing subsidies, as well as 80% of the benefits of retirement-savings deductions, according to the Tax Policy Center.

Meanwhile, the 20% at the bottom, who make less than $27,000 a year, get just 0.1% of the benefits of the housing subsidies and none of the benefits from the tax breaks for saving. Those in the exact middle 20% — families that make between $50,000 and $75,000 a year — get 8% of the benefits from the housing subsidy and 6% of the retirement subsidies.

The middle class doesn’t get much … just enough to ensure that Congress wouldn’t dare touch these giveaways.

These tax expenditures get in the way of balancing the budget, because the spending is largely hidden from view during the budget process. Congress doesn’t vote on these provisions each year, as it does for discretionary-spending programs, so they don’t get any scrutiny at all. In many cases, a direct subsidy would be a more efficient way of promoting a public good than a tax break.

Most of these incentives don’t actually do what they are intended to do. The deduction for mortgage interest just drives up the cost of housing, rather than making housing more affordable. Subsidies for saving mostly go to those who would save anyway. Also, one of the biggest reasons we can’t control health-care costs is that the tax code encourages us to buy too much health care.

In 2012, these so-called tax expenditures will amount to $1.1 trillion, more than twice as much as the $462 billion budgeted for nondefense discretionary spending. It’s a third of all federal spending, but you never hear about it.

The Republicans aren’t talking about the $1 trillion elephant in the room.

Fortunately a bipartisan deficit-reduction commission is.

Should we really be subsidizing mansions? Or cottages by the lake? Or “Cadillac” health-insurance plans? Or millionaires’ 401(k) plans?

Premature ejection costs Medicaid big time after Big Pharma gets involved

2011-03-10T11:49:00.003+10:00

Guambat's second grandchild was ejected yesterday on time, if only a few days earlier than the St Paddy's Day ETA. He is healthy and whole.

Some mothers, though, have very serious problems keeping baby in until safe to eject. The serious medical problem was not a serious financial problem until a Big Pharma player got official approval for a preemie prescription. Before, the cost of medication was $20/shot. Now it is $1,500/shot. And the shot doesn't go to the bottom of the baby, it goes to the bottom line of Big Pharma, and the top line of Medicaid and other insurance costs.

Price of drug to prevent preemies jumps from $20 to $1,500 after FDA approval

Since 2003, the American Congress of Obstetricians and Gynecologists has recommended that doctors offer the progesterone shots to high-risk women. But because there has not been a commercial product available, women have obtained the drug from so-called compounding pharmacies, which make it to order. The pharmacies have typically charged about $10 to $20 per shot for the drug, which is given weekly.

Last month, however, the FDA approved a commercial form of the drug, called Makena, manufactured by K-V Pharmaceutical Co. of St. Louis. The company said Wednesday that the drug will be available for shipping March 14 and that it will cost $1,500 per dose.

Meanwhile, women are unlikely to be able to continue to get the drug at compounding pharmacies. K-V sent letters to the pharmacies warning them of potential FDA action if they keep distributing the drug.

The burden for many will fall on insurance companies, which may have to raise rates. The increase will also affect already strapped Medicaid programs.

Britain's baby doomers

2011-03-10T11:26:00.002+10:00

In the US, baby boomers are finding that their Age of Aquarius has come and gone, as retirement realities loom. Guambat has personal knowledge. For the generations that followed, including Guambat's offsprung offspring, it's a time for a bit of ribbing the old folks; they have felt (without empirical justifications, Guambat reckons) it's about time someone took the punchbowl away from the boomers.

But in the UK, the boomer doomers threaten the whole muddle class economy.

Public sector staff to be told: Work for longer and get a smaller pension

A major Government report will recommend linking the pension age – currently 60 for most state employees – with the state pension age.

It is due to rise to 68 over the years ahead, threatening the retirement plans of millions of public employees, who will also have to contribute more to their ‘gold-plated’ pension funds. And experts forecast the state pension age will continue to rise, eventually hitting 70 as Britain struggles to meet the cost of its ageing population.

State workers who can currently retire as young as 55 will have to work for many more years to secure maximum pension benefits. Even members of theArmed Forces, police and firefighters, who can currently go on full pension as early as 50, will be told they will have to wait until they are 60 before they qualify.

The dramatic move is part of a broader shake-up of state employees’ retirement funds, which have created a £1trillion black hole in the public finances.

The highest-paid public sector employees are likely to have to pay far more into their pensions as a result – around 5 per cent of their earnings.

Read more: http://www.dailymail.co.uk/news/article-1364758/Public-sector-staff-told-Work-longer-smaller-pension.html#ixzz1G9mlpw5u

Most Britons face 60 percent income loss in retirement

Almost two-thirds of people living in Britain today are likely to see a 60 percent drop in their income when they retire over the next 40 years and a plummeting quality of life, a report said Thursday.

"The UK has a distinct problem with middle-income earners who are failing to save enough and are likely to find the drop in income during retirement unexpected and unacceptable," said Paola Subacchi, one of the report's authors.

The report says the problem is worsening because of a shift from defined benefit (DB) pension schemes to defined contribution (DC) schemes, which do not guarantee a predetermined retirement income.

"Furthermore, the recent recession has highlighted how vulnerable wealth and pension funds are to economic shocks and reduced annuity conversion rates," it adds.

Middle-class Britons' meagre savings mean they will have to rely heavily on the relatively small state pension, which "only just ensures a minimum standard of living," Chatham House said.

"Some may even slip into poverty," the report adds.

If the economy fares worse over the next decades than most economists forecast, retirement incomes of the so-called squeezed middle will be pressured even more, it adds.

The report follows a warning by Labour leader Ed Miliband that low and middle-income families in Britain are facing a "cost of living" crisis which will persist for years to come.

Interned Americans oppose demonizing American Muslims

2011-03-09T21:21:00.003+10:00

Japanese Americans: House hearings on radical Islam 'sinister'

Although the youngest who were interned are in their late 60s, Japanese Americans remember what it means to be targeted during wartime because of their nationality.

After the Japanese attacked Pearl Harbor in December 1941, President Franklin D. Roosevelt ordered that all ethnic Japanese along the Pacific Coast be sent to one of 10 isolated internment camps in seven states. Of those imprisoned, 62 percent were second- or third-generation Japanese Americans born in the United States. Most lost their property to the government.

During the chaotic days after the Sept. 11, 2001, terrorist attacks, Basim Elkarra was passing by an Islamic school in Sacramento when he did a double-take: The windows were covered with thousands of origami cranes - peace symbols that had been created and donated by Japanese Americans.

Amid the anger and suspicions being aimed at Muslims at that time, the show of support "was a powerful symbol that no one will ever forget," said Elkarra, a Muslim American community leader in California.

It was also the beginning of a bond between the two groups that has intensified as House Homeland Security Committee Chairman Peter T. King (R-N.Y.) prepares to launch a series of controversial hearings Thursday on radical Islam in the United States.

In 1988, Congress approved legislation that apologized and distributed $1.6 billion in reparations, blaming the roundup on "race prejudice, war hysteria, and a failure of political leadership."

It was the memory of the camps that led the Japanese to reach out to their Muslim counterparts, said Kathy Masaoka, a high school teacher who co-chairs the Los Angeles chapter of Nikkei for Civil Rights and Redress.

"It dawned on us that this is really something that could escalate among Muslims, the same things our parents faced," she said. "They were being scapegoated."

What followed was a candlelight vigil in Los Angeles's Little Tokyo and the "Bridging Communities" program, aimed at educating Muslim and Japanese high school students on diversity. Last year, 40 students participated in five seminars, sharing stories of challenges they face related to race, religion and ethnicity.

"They see clearly that they have similar experiences," said Affad Shaikh, civil rights manager for the Council on American-Islamic Relations. "Even though the target group of the discrimination is different, the purpose of that harassment is the same."

Peter King obviously is one who has a strong attraction to provoking fear. That kind of behaviour is socio-pathic and must be stopped.

Next they come for Guambats.
//

Terrorism makes for strange bed bugs

2011-03-07T18:20:00.006+10:00

According to the IrishCentral news site, Libya's Gaddafi to pay billions for IRA atrocities

Say what, thought Guambat? Gaddafi funded the bombing of that plane over Lockerbie, Scotland, but what's that got to do with the right wingnut Irish?

Well, this is the story (from a year ago) below the headline:

Colonel Gaddafi is to pay $3.5 billion to victims of IRA atrocities it has been revealed.

Gaddafi allowed the importation from Libya in the 1980s of tons of semtex plastic explosives to be used in IRA attacks.

Among the attacks carried out with Libyan semtex were the Harrods Christmas bombing of 1983, which killed six and the Enniskillen atrocity of 1987 that left 11 dead during a Remembrance Day service.

It was also used by the Real IRA splinter group in the Omagh bombing in August 1998, which killed 29 and injured 220 in the worst killings of the Troubles.

And Libyan semtex was also used in the 1989 Lockerbie Pan Am 103 airline bombing that left 270 dead.

The IRA don't colour beer green; they coloured it red.

IRA Atrocities

The Provisional Irish Republican Army (IRA) is an Irish republican paramilitary group - and proscribed Terrorist organization - whose aim was to remove Northern Ireland from the United Kingdom and bring about a United Ireland by force of arms and political persuasion.

This "force of arms" involved violence and murder against civilians - Catholic and Protestant - and members of the British Armed Forces. In all, 1,800 people were murdered by the IRA during the so-called "Troubles".

Thus, Guambat was moved from cynicism to dismay to read the following.

It takes a terrorist: Former IRA supporter to chair hearings on U.S. Muslims

In 1985, the Irish government boycotted the St. Patrick's Day parade in New York City, the biggest celebration in the Irish-American calendar. The cause of its umbrage was Peter King, that year's grand marshal and someone the Irish government said was an "avowed" supporter of a terrorist organization, the Irish Republican Army (IRA).

King, then a local politician on Long Island, was one of the most zealous American defenders of the militant IRA and its campaign to drive the British out of Northern Ireland. He described the IRA, which mastered the car bomb as an instrument of urban terror, as a "legitimate force."

And he compared Gerry Adams, the leader of Sinn Fein, the IRA's political wing, to George Washington.

But King sees no parallel between the IRA and violent Islamist extremism, which he describes as a foreign enemy or a foreign-directed enemy. His preferred comparison for the IRA is with the African National Congress led by Nelson Mandela; the IRA, no less than the ANC's military wing, was fighting for community rights and freedom, he says.

"I felt that the IRA, in the context of Irish history, and Sinn Fein were a legitimate force that had to be recognized and you wouldn't have peace without them," King said. "Listen, I think I'm one of the people who brought about peace in Ireland."

"If civilians are killed in an attack on a military installation, it is certainly regrettable, but I will not morally blame the IRA for it," King said in 1985.

King also clashed with prominent Irish-Americans who condemned IRA violence. He dismissed the Friends of Ireland caucus in Congress, which included Sens. Daniel Patrick Moynihan and Edward Kennedy, as infused with a "moral arrogance and self-righteousness that would do justice to the royal family."

A quarter-century later, the New York Republican is chairman of the powerful House Homeland Security Committee.

So what's the hubbub, Guambat?

Rally hits Congress’s focus on Muslims, terror

The chairman of the House Homeland Security Committee, Representative Peter King, has said that affiliates of Al Qaeda are radicalizing some American Muslims. King plans hearings starting Thursday on the threat he says they pose.

King, a Republican from Long Island, told CNN’s “State of the Union" yesterday that he sees an international movement with elements in the United States of Muslims becoming more radical and identifying with terrorists.

“I don’t believe there is sufficient cooperation" by American Muslims with law enforcement, King said. “Certainly my dealings with the police in New York and FBI and others say they do not believe they get the same — they do not give the level of cooperation that they need."

This is how an adult addresses the issue: Talking terrorism

Guambat is hopelessly confused:

just who is the terrorist? (See this)

Japanese Uni student shows App-titude for wiki-uni-leaks

2011-03-06T11:54:00.003+10:00

Student under arrest admits uploading 4 universities' entrance exam questions and Student arrested for posting exam questions online hid mobile phone between legs

A 19-year-old student, arrested for uploading Kyoto University entrance exam questions to an online bulletin board, has admitted responsibility for the online leakage of questions in three other universities' entrance exams he took, police sources said.

The 19-year-old stands accused of using a mobile phone to upload questions in the entrance examination of Kyoto University to the "Yahoo Chiebukuro" ("Yahoo pearls of wisdom") online bulletin board on Feb. 26, adversely affecting the fair implementation of the exam and obstructing the institution's operations.

This is reportedly the first time that law enforcers have formed a [criminal] case against someone who cheated in a school examination on suspicion of obstruction of business.

"I was sitting in a corner of the examination site, so I thought it was out of the proctors' line of vision. I did it repeatedly."

Kyoto Prefectural Police plan to re-enact the exam, paying attention to the student's position in the classroom and the placement of the exam supervisor, to determine whether it would have been possible for him to operate the phone without being noticed. They also plan to question the exam supervisor.

Guambat is impressed that the kid's name wasn't released. Very unAmerican, that. And maybe a factor that will mitigate suicide tendencies, let's hope.

But there's more to this story, in a very Japanesey way, too.

Kyoto U. faces backlash, charges of irresponsibility in wake of exam cheat's arrest

Following a preparatory school student's arrest over the recent online leak of entrance exam questions at Kyoto University, the elite school has come under fire from the public for not only failing to prevent the cheating but underlining its position as the "victim."

According to Kyoto University's public relations section, after the arrest of the 19-year-old student of a Sendai prep school was reported on the news on the afternoon of March 3, the university was flooded with angry phone calls, with most of them claiming that the school was too lax in monitoring the test takers or that its decision to file a complaint with police over the leak was wrong. Some also reportedly argued that arresting the culprit over cheating was "going too far," showing pity for the prep school student.

Meanwhile, Kyoto University's handling of the situation has also irked some at the Kyoto Prefectural Police.

"I seriously wonder why the university overlooked the supervisors' failure and immediately left everything to police. Without even conducting an in-house investigation, the school is probably just evading its responsibility in a bid to avoid criticism," one high-ranking Kyoto Prefectural Police officer commented.

On March 3, Kyoto University President Hiroshi Matsumoto attended a press conference for the first time since the leak was detected on Feb. 26.

"We always monitor exam takers properly," Matsumoto said, raising his voice. "If it's an Internet crime that occurred outside (Kyoto University exam supervisors') area of responsibility, we have to take (legal) action."

Most health care professionals do good, some do very well badly

2011-03-06T11:20:00.003+10:00

Guambat reckons we just need to pay these folks more?

Atlanta doctor indicted for Medicaid, Medicare fraud

While under contract to provide group psychological therapy to nursing home patients, Dr. Williams, 72, filed about 95,000 Medicare and Georgia Medicaid claims and was reimbursed about $1 million, according to the U.S. Attorney's Office in Atlanta.

Many of the claims filed during a two-year period beginning in the summer of 2007 were fraudulent, U.S. Attorney Sally Quillian Yates said. In some cases, the patients were dead by the time he reported seeing them, she said. In other cases, they were in the hospital and could not have appeared in the nursing home for therapy as claimed.

Brian D. Lamkin, an FBI special agent involved with the case, said such fraud costs the government and private insurers billions. Acts of "sheer greed" such as those alleged against Dr. Williams are "driving up healthcare costs and are depriving those that really need medical help," Lamkin said.

Pharmacist allegedly netted $3.5M in fraud scheme

John D. Love of Brazil, the owner of the Terre Haute Prescription Shop, faces one count of health care fraud and two counts of money laundering. U.S. Attorney Joe Hogsett said.

The scheme was the largest case of health care fraud and money laundering ever discovered in the Southern District of Indiana, Hogsett said during a news conference Friday.

"I want to make it loud and clear, that when individuals, who through their own greed, take advantage of the health care system for their own greed, take benefits intended to serve the neediest of Indiana's citizens, it will not be tolerated," Hogsett said.

A tip from an outside contractor uncovered information in an audit that prompted the investigation by the Federal Bureau of Investigation, the state's Medicaid Fraud Enforcement Unit and other agencies, Shepherd said.

Investigators said Love would enter bogus prescriptions in Indiana's Medicaid system, wait for his claims to be submitted, and then void them before others could see the orders had not been filled. Love billed Medicaid for more than 6,800 units of various prescription drugs from January 2006 through September 2010, while actually ordering only 156 units of the same drugs.

Love used at least $3 million of the profits to pay for four parcels of land, 15 vehicles, a wedding for one of his children and other personal expenses, prosecutors said. Federal authorities have seized property including five Harley Davidson motorcycles, two sports cars, four SUVs, two pickup trucks, one recreation vehicle and funds from multiple bank accounts.

That which doesn't kill Wall St. makes it stronger

2011-03-06T11:10:00.004+10:00

Paul B. Farrell, that irascible old coot, is at it again.

Commentary: Too late to jail bank CEOs; only revolution will succeed

Just three years after Wall Street’s crooks “brought down the world’s economy” Goldman’s Blankfein and his buddies are paying record bonuses, and laughing at us.

Seriously, think about it folks: Since the 2008 meltdown magazines and newspapers have analyzed the 2008 crash to death. It really is old news, history. Journalists churned out book after book: “Greenspan’s Bubbles,” “House of Cards,” “Trillion Dollar Meltdown,” “13 Bankers,” “Dumb Money,” “Bailout Nation,” “All the Devils Are Here,” “The Big Short,” “Too Big to Fail,” “The Failure of Capitalism,” “This Time is Different,” “And Then the Roof Caved In,” on and on, ad nauseum. All talk, no action, and no effect.

Get it? With every book, every editorial, every expose the past three years, Wall Street bankers actually grew stronger, got richer, more arrogant, bolder on bonuses, impervious to attacks, even taunting us, like the dictators Mubarak, Ben Ali and Gadhafi, confident they could do no wrong, confident no one would rebel. Jail? Our moment to act is long past. We blinked.

I hope that whetted your appetite. The rest is classic. So classic, Guambat wonders if ever Mr. Farrell was a long-haired type, or is just now getting around to being long harried.

Grousing over noodle soup

2011-03-05T10:24:00.002+10:00

Guambat has been under the weather for an unusually long time. His eating preferences have turned to the absolutely bland, like meatloaf and mash or chicken noodle soup.

It was his preference for the latter that made this article stand out:

Hokkaido gov't carried recipes for endangered bird on website

The Hokkaido Prefectural Government has been found to have carried on its website recipes to cook an endangered bird as part of an introductory guide to hunting, leading the regional government to delete the page containing the recipes for being "inappropriate."

On the online page, "Hazel grouse soba noodles" was introduced along with various recipes for other wild animals including Yezo deer. Furthermore, the description of hazel grouses reportedly read, "You can make a sophisticated, tasty soup broth from the birds," recommending that they are delicious when used in soba noodles, zoni (soup with rice cakes and vegetables), and samgyetang (Korean soup usually containing glutinous rice-stuffed chicken).

Hazel grouses are small wild birds that inhabit only Hokkaido Prefecture in Japan. The species used to be generally approved for human consumption, and today they are still available for hunting under the Wildlife Protection and Hunting Law. Due to a downward trend in the number of hazel grouses, however, the Hokkaido Prefectural Government registered the birds as a "scarce species" in its 2001 "Red Data Book" for threatened wild animals.

Mmmmmm, Hazel Grouse Noodle Soup

Divide and conquer - With Prequel

2011-02-27T20:57:00.004+10:00

UPDATE NOTE: This following story is related enough to the subject of this post as to mention here rather than a new post, and serves better to introduce this post than Post Script it:

Plutocracy Now: What Wisconsin Is Really About

Income inequality has grown dramatically since the mid-'70s -- the bulk of our growing inequality has been a product of skyrocketing incomes among the richest 1 percent and—even more dramatically—among the top 0.1 percent. It has, in other words, been CEOs and Wall Street traders at the very tippy-top who are hoovering up vast sums of money from everyone, even those who by ordinary standards are pretty well off.

American politicians don't care much about voters with moderate incomes. relentless concentration of wealth and power among the rich is deeply corrosive in a democracy, and this makes it a profoundly political problem as well.

How did we get here? In the past, after all, liberal politicians did make it their business to advocate for the working and middle classes, and they worked that advocacy through the Democratic Party. But they largely stopped doing this in the '70s, leaving the interests of corporations and the wealthy nearly unopposed.

it's not that the working class has abandoned Democrats. It's just the opposite: The Democratic Party has largely abandoned the working class.

because politicians don't respond to the concerns of voters, they respond to the organized muscle of institutions that represent them. With labor in decline, both parties now respond strongly to the interests of the rich—whose institutional representation is deep and energetic—and barely at all to the interests of the working and middle classes.

This has produced three decades of commercial and financial deregulation that started during the administration of a Democrat, Jimmy Carter, gained steam throughout the Reagan era, and continued under Bill Clinton. There were a lot of ways America could have responded to the twin challenges of '70s-era stagflation and the globalization of finance, but the policies we chose almost invariably ignored the stagnating wages of the middle class and instead catered to the desires of the superrich

Income volatility has risen dramatically over the past 30 years. The odds of experiencing a 50 percent drop in family income have more than doubled since 1970, and this volatility has increased for both high school and college grads. At the same time, traditional pensions have almost completely disappeared

This didn't all happen thanks to a sinister 30-year plan hatched in a smoke-filled room, and it can't be reined in merely by exposing it to the light. It's a story about power. It's about the loss of a countervailing power robust enough to stand up to the influence of business interests and the rich on equal terms. With that gone, the response to every new crisis and every new change in the economic landscape has inevitably pointed in the same direction. And after three decades, the cumulative effect of all those individual responses is an economy focused almost exclusively on the demands of business and finance.

For this to change, America needs a countervailing power as big, crude, and uncompromising as organized labor used to be.

But what?

Over the past 40 years, the American left has built an enormous institutional infrastructure dedicated to mobilizing money, votes, and public opinion on social issues, and this has paid off with huge strides in civil rights, feminism, gay rights, environmental policy, and more. But the past two years have demonstrated that that isn't enough. If the left ever wants to regain the vigor that powered earlier eras of liberal reform, it needs to rebuild the infrastructure of economic populism that we've ignored for too long. Figuring out how to do that is the central task of the new decade.

Now back to the original post:

Guambat is unimpressed with the tempest in Wisconsin, and elsewhere. Unimpressed with the base cynicism of it. It's a classic case of the big money guys playing around with a divide and conquer tactic. Don't fall for it.

The pitch is being made that state and local governments just cannot afford the overly paid workers on their payroll. It's a pitch aimed to divide middle class, many of who are tea sippers, many of whom are laid off, many of whom are in uninspiring government employment.

And the cynical little game is getting some traction, based on this article:

GOP governors gambling on challenge to public-sector unions

Michael Wernick, 61, a longtime body and fender man, says his financial fortunes have gone nowhere but down over the past decade. His salary is stagnant, and his 401(k) has shrunk, derailing his retirement plans.

So as he watches Gov. Scott Walker (R) take on the public-employee unions by not only demanding steep reductions in their pension and health-care benefits but by also insisting they give up many of their collective-bargaining rights, Wernick is quietly cheering him on.

"Maybe there is a little bit of jealousy here, but public workers have what I don't have."

But do public workers really have what private sectors don't have? Maybe in individual cases, but across the board, it's hardly a clear story.

For instance, The Business Insider, hardly a screaming socialist union voice, has this:

For Anyone Who Thinks Wisconsin State Workers Are Overpaid...

Paul Ryan and everyone else freaking out at the Wisconsin's striking state employees keep getting one fact wrong.

Wisconsin's public sector workers get paid LESS than the private sector.

You can see this in a couple of charts from economist Menzie Chinn. First, national compensation by education level. Public workers earn less at every level except for high school dropouts.

Second, here's how this breaks down in Wisconsin. Real annual compensation is 4.8% lower for public sector workers.

Read more: http://www.businessinsider.com/wisconsin-public-sector-wages-2011-2#ixzz1FE9SzfX1

And this perspective:

Comparing Public and Private Sector Compensation over 20 Years, April 2010

The current recession and the resulting fiscal difficulties faced by state and local governments have renewed interest in the compensation of the public workforce in regard to pay, pensions, and other benefits. In this report we examine the extent to which state and local government compensation in the United States is comparable to compensation in the private sector.

The analysis finds that:

• Public and private workforces differ in important ways. For instance, jobs in the public sector require much more education on average than those in the private sector. Employees in state and local sectors are twice as likely as their private sector counterparts to have a college or advanced degree.

• Wages and salaries of state and local employees are lower than those for private sector workers with comparable earnings determinants (e.g., education). State employees typically earn 11 percent less; local workers earn 12 percent less.

• Over the last 20 years, the earnings for state and local employees have generally declined relative to comparable private sector employees.

• The pattern of declining relative compensation remains true in most of the large states we examined, although some state-level variation exists.

• Benefits (e.g., pensions) comprise a greater share of employee compensation in the public sector.

• State and local employees have lower total compensation than their private sector counterparts. On average, total compensation is 6.8 percent lower for state employees and 7.4 percent lower for local workers, compared with comparable private sector employees.

On the other hand, the big boys have this to say,

Employee Compensation in State and Local Governments

State and local governments face large budget deficits
as revenues have stagnated and spending has remained at
high levels.

To reduce deficits, large savings can be found
in the generous compensation packages of the nation’s ~~Fat Cat Finance and Industry Management~~
20 million state and local workers.

In 2008, wages and
benefits of $1.1 trillion accounted for half of total state and
local government spending. This bulletin examines state
and local compensation costs, with a focus on the lucrative
pensions enjoyed by public sector workers.

Public sector pay averaged $39.66 per hour in 2009, which
was 45 percent higher than the private sector average. The
public sector advantage was 34 percent in wages and 70
percent in benefits.

So, we all know that there are lies, damned lies and statistics, but what is the smoke and mirrors going on here?

Ezra Klein has sort of a bead on it:

Are Wisconsin's state and local workers overpaid?

Consider this analysis the Economic Policy Institute conducted comparing total compensation -- that is to say, wages and health-care benefits and pensions -- among public and private workers in Wisconsin. To get an apples-to-apples comparison, the study's author controlled for experience, organizational size, gender, race, ethnicity, citizenship and disability, and then sorted the results by education. Here's what he got:

"Wisconsin public-sector workers face an annual compensation penalty of 11%. Adjusting for the slightly fewer hours worked per week on average, these public workers still face a compensation penalty of 5% for choosing to work in the public sector."

The deal that unions, state government and -- by extension -- state residents have made to defer the compensation of public employees was a bad deal -- but it was a bad deal for the public employees, not for the state government.

State and local governments were able to hire better workers now by promising higher pay later. They essentially hired on an installment plan.

And now they might not follow through on it. The ones who got played here are the public employees, not the residents of the various states. The residents of the various states, when all is said and done, will probably have gotten the work at a steep discount. They'll force a renegotiation of the contracts and blame overprivileged public employees for resisting shared sacrifice.

State and local budgets are in bad shape. They'll need deep reforms across a variety of categories, from tax increases to service cuts to changes to employee compensation.

But the focus on public employees -- and the accompanying narrative that they're greedy and overcompensated -- obscures a lot of that: It makes it seem as if the decisions that have to be made are easy and costless and can be shunted onto an interest group that some of us, at least, don't like.

It's the Republican version of when liberals suggest we can balance the budget simply by increasing taxes on the rich. But it's not true.

Guambat begins to suspect this whole thing is an effort to shift focus from the big bucks the big guys make. Stir up a battle in the suburbs and who knows what's going on in the yacht harbor?

For instance, remember the publicity about the huge CEO and other highflyer pay packets? Well, now, if we can just pit the ex-body mechanic against the local teacher, they won't be paying much attention to that little item, which is steadily returning to business as usual

And this disparity of the big money at the top is most likely what is behind the lies being spread around as statistics, as in this:

Federal salaries fall behind private sector, panel says

Official numbers released by the government late last week show salaries of federal workers falling slightly farther behind their private-sector counterparts in the last year, by an average of 2.1 percent across the country.

The government's numbers also show that higher-paid, more senior employees tend to fall behind their counterparts at private companies, whereas lower-paid employees in government come out ahead.

The non-government jobs often include bonuses or incentive pay in financial services and other industries, which helps skew those salaries up,said Allan G. Hearne, pay expert with the Office of Personnel Management.

"The highest-paid federal employee makes $400,000 a year," said Philip M. Doyle, assistant commissioner for compensation for the Bureau of Labor Statistics, referring to the president.

"There's a cap on federal salaries that's going to keep the higher end from going too high."

This story was picked up by the Federal Computer Weekly, which noted such studies were being hotly contested by the usual suspects:

Federal vs. private pay: The latest take on who makes more

These numbers, compiled by the Bureau of Labor Statistics, are likely to be hotly contested. USA Today issued a report in March that said the typical federal worker is paid 20 percent more than a private-sector employee in the same occupation. Salary figures listed by USA Today did not include benefits such as health insurance and pensions.

The CATO Institute, a libertarian think tank, arrived at a similar conclusion, as did The Heritage Foundation, another conservative association, which also issued a report stating that federal employees earn 22 percent more in hourly wages than the private sector, reported FCW on July 26. Republicans had cited these earlier reports as examples of overspending in the government.

BLS’ report also found different pay disparities based on an employees’ level, with higher-paid executives experiencing a larger wage gap than lower-paid employees, who may earn more than those in the private sector, the Post states.

Blimey, BBC discovered Guam

2011-02-25T17:35:00.005+10:00

And here Guambat thought Magellan discovered Guam about 500 years ago. That is, until his Chamorro friends told him they discovered it about 4,000 years ago. Before Hawaii. Before New Zealand.

Fancy that.

Guam: The best place you never considered going to

It has a link to a few pictures, half of which are taken around Tumon Bay, which Guambat's burrow overlooks, but you might get a better gestalt view here.

The story unfortunately breaks the secret on the best all-day breakfast diner on Guam, where carbs and fats come by the scoopful, and generally praises the very down to earth Guam eating habits.

But, for eating, you need to look to that other guambat, k. santos, who blogs as The Scent of Green Bananas, whose post for 20110222 features the little eatery next door, Delmonico's. Guambat and the Mrs are regulars. Delmonico's serves up a tasty dish of fried peppers and oysters, made all the better after Chef Eddie added okra, at Guambat's suggestion.

Once here, youse may's well go on out to the rest of Micronesia.

Oracle tries green persimmon effect

2011-02-19T09:06:00.004+10:00

Over 50 years ago, Guambat spent one of his most valuable summers of his life on his great-uncle's farm in Western Tennessee. He chopped cotton, worked the plow horse, carted 'maters, pulled 'tators, shucked corn -- and learned you cain't whistle Dixie, or anything at all, after chomping down into a green persimmon.

This last lesson was one of seemingly hundreds learned that summer. It came about as Guambat and his uncle were traipsing through a wooded area. Guambat delighted in the free fruit market that was his uncle's farm, and usually he'd find stone fruit, apples, berries of many sorts, and the odd run-away strawberry or what not. On this occasion, he came across a tree with some lovely green fruit, one of which he plucked.

He asked his uncle what is was. "It's a persimmon" said he, "but folks like to call 'em pawpaws." What a lovely name either way, Guambat thought. Must taste as lovely.

"Are they good to eat?", he asked his uncle. "Delicious when they're ripe", says he. "But I bet you can't eat a bite of that one and then whistle me Dixie".

So young Guambat, being ever so plucky, and after finding so many good things to eat on a Tennessee farm, ever so fatter, chomped off a crackling nice chunk of green persimmon.

Not only could he not whistle Dixie, he could hardly form a word. Nary a pucker came to his lips.

Had Guambat had access to the web back then, and taken notice, he would have known that the old uncle was just playing another trick on his city-fied nephew. See, Pucker up, it's persimmon time in Tennessee! from Hillbilly Savants' blog:

I can remember my cousin Danny saying; “Oh, Tug, these persimmons are delicious, you’ve got to try one!” Then he held one up to his mouth and pretended to take a bite and acted like it was the best thing he had ever tasted in his life. Of course I, not wanting to look stupid in front of my hero cousin, took a big bite. If you have never bitten into a green persimmon before, you don’t know what you are missing. Or rather I should say you don’t want to know what you are missing! It takes no more than one bite into one to turn your mouth completely inside out. It has the similar effect of biting into a lemon, only worse! The first thing you want to do after trying one is to stick your tongue out and start slapping it. That is hard to do because your lips are now drawn into a frozen pucker, making this nearly impossible.

You need to read that article, because it is full of beautiful pictures of the fruit and other memories and uses of it.

And so what does all this home-spun humour have to do with Oracle? Well, Oracle is trying to trick the Federal government into making State Attorneys General take a great big bite of green persimmon. Oracle wants to stop the whistleblowers.

But first, for background, see this blog post for the context:

Government not most favored customer of Oracle.

Oracle Seeks to Bar U.S. From Giving States Whistleblower Data

Oracle, accused in a U.S. lawsuit of overcharging the government on software contracts worth $1 billion, will argue in a hearing in Alexandria that U.S. Magistrate Judge Thomas Jones should block the Justice Department from sharing confidential company information with state attorneys general.

Lawyers specializing in whistleblower cases said Oracle’s request to shield documents from state governments may be an attempt to limit the company’s liability, which some attorneys not involved in the case said could be as much as $1 billion in the U.S. lawsuit alone.

The lawsuit was filed under the False Claims Act in 2007 by Paul Frascella, a former Oracle employee, and joined by the Justice Department on July 29. The act lets citizens sue on behalf of the government and share in any recovery, while the government has the option of intervening in a case. The U.S. is seeking triple damages and can collect as much as $11,000 for each false billing.

Oracle is accused of inducing the General Services Administration, or GSA, to buy $1.08 billion in software from 1998 to 2006 by falsely representing that the government was receiving the same discounts as most-favored commercial customers. Oracle instead gave companies discounts of as much as 92 percent, while the government’s reductions ranged from 25 percent to 40 percent, the U.S. claims.

On Jan. 31, Oracle America Inc. agreed to pay $46 million to resolve claims that Sun Microsystems Inc., which merged with Oracle last year, paid kickbacks in an attempt to get government contracts and submitted false information to U.S. contracting officers.

The case is United States of America v. Oracle Corp., 07- cv-00529, U.S. District Court, Eastern District of Virginia (Alexandria).

You can get a direct link to that case, and a wealth of further information, by reading the whole Bloomberg article.

Fannie closes doors on foreclosure law firms

2011-02-19T03:09:00.005+10:00

Foreclosure law firm lays off nearly half of its staff, after losing Fannie Mae

A Hollywood [Florida] law firm that processes thousands of foreclosures for major lenders laid off almost half of its 568 employees Monday, days after the government-owned mortgage giant Fannie Mae pulled its files from the practice.

Monday's layoffs echoed the massive job cuts that the law office of David J. Stern and public-traded affiliate DJSP Enterprises instituted after Fannie Mae and Freddie Mac, the other federal mortgage guarantor, dumped them. Fannie and Freddie comprised the bulk of Stern's business. About 700 Stern employees lost their jobs, according to regulatory filings.

Lawyer held in contempt over 'fraud' in foreclosure filing

Miami-Dade Circuit Judge Maxine Cohen Lando expressed her displeasure Friday in a case that involved a property in Homestead with a $265,134 foreclosure judgment issued in July.

Lando said the so-called original note and original mortgage were filed months after the bank said those documents were lost.

"That in itself is a fraud upon the court," Lando wrote in an order to show cause as to why she should not hold Ben-Ezra & Katz attorneys in contempt.

But, she added, the action "pales in comparison" to the fact that the mortgage and note are to a different property in Lehigh Acres, and that the documents are improperly signed and notarized. Lando said her verbal contempt finding on Friday would be followed by a written order.

The judge dismissed the foreclosure case and banned the lender from refiling it.

See, The Ball and Chain of Title

Bankruptcy judge makes MESS of MERS

2011-02-16T03:09:00.005+10:00

Guambat has written before about MERS, an uncommon concoction of financial wizardry that simply ignored centuries of the common law of conveyance.

It was a scheme intended to grease the wheels of real estate mortgage securitization, by depriving local governments across the USA of the control (and revenues) of recording title, and along the way, depriving many mortgage debtors of their due process, and, perhaps, some lawyers of their licentious licenses.

In much the same manner that the credit implosion served as a reality check for the mark to model dreamers, a bankruptcy court has thrown a cold bucket of reality on Le MERS.

Merscorp Lacks Right to Transfer Mortgages, Judge Says

Merscorp Inc., operator of the electronic-registration system that contains about half of all U.S. home mortgages, has no right to transfer the mortgages under its membership rules, a judge said.

“MERS’s theory that it can act as a ‘common agent’ for undisclosed principals is not supported by the law,” Grossman wrote in a Feb. 10 opinion. “MERS did not have authority, as ‘nominee’ or agent, to assign the mortgage absent a showing that it was given specific written directions by its principal.”

Grossman said Select Portfolio had to show that U.S. Bank owned both the note and the mortgage, and there was no evidence that it held the note. The judge disagreed with Select Portfolio’s argument that U.S. Bank held the note because the note “follows” the mortgage, which it said U.S. Bank owned.

“By MERS’s own account, the note in this case was transferred among its members, while the mortgage remained in MERS’s name,” Grossman wrote. “MERS admits that the very foundation of its business model as described herein requires that the note and mortgage travel on divergent paths.”

A WSJ real estate blog elaborated:

U.S. Bankruptcy Judge Questions Legal Claims of MERS

At issue was whether U.S. Bank had legal standing to foreclose. The loan was originated by First Franklin in 2006 and MERS became an agent for First Franklin, which ultimately transferred the loan to Aurora Bank and later to U.S. Bank. Both of those banks are members of MERS, which allowed it to also act on behalf of those agents, according to MERS’s lawyers.

“By MERS account, it took no part in the assignment of the Note in this case, but merely provided a database which allowed its members to electronically self-report transfers of the Note,” wrote Judge Grossman. “[T]here is nothing in the record to prove that the Note in this case was transferred according to the process described above other than MERS’s representation that its computer database reflects that the Note was transferred to U.S. Bank.”

“The documentation provided to the Court in this case…is stunningly inconsistent with what the parties define as the fact of this case,” Judge Grossman wrote. The theory that MERS “can act as a ‘common agent’ for undisclosed principals is not support [sic] by the law.”

The opinion also rejected any argument that MERS’s reach was so broad and deep that it should receive favorable treatment from the judiciary:
The Court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States. However, the Court must resolve the instant matter by applying the laws as they exist today. It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices. MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.

Laurence Platt, a banking industry attorney at K&L Gates in Washington, said the Agard case represented an “outlier that goes against years of decisions by New York courts that find assignments from MERS to be consistent with New York law.”

A spokeswoman for MERS also said that a separate decision on Friday by a U.S. Bankruptcy Court judge in Kansas had affirmed MERS’s ability to foreclose on behalf of Countrywide Financial Corp. In the case, the judge wrote that the court had received “uncontroverted evidence” that MERS was acting as an agent for Countrywide, allowing MERS to act on its behalf.

Suite deal or abuse of process?

2011-02-16T03:00:00.003+10:00

Payments to U.S. Rivals Let Chinese Furniture Makers Skirt Import-Duty Review (WSJ)

Each year since 2006, U.S. furniture "makers" have asked the Commerce Department to review the U.S. duties paid by Chinese manufacturers on imports of wooden bedroom furniture. Many Chinese firms, fearing a steep rise in duties, agreed within months each time to pay cash to their U.S. competitors in return for being removed from the review list.

"Everybody in the industry in the U.S. and China understands that these payments are clever shakedowns," said William Silverman, a lawyer representing U.S. furniture retailers, big importers of Chinese products, at an October hearing of the U.S. International Trade Commission.

Representatives of the furniture makers, including La-Z-Boy Inc. and Vaughan-Bassett Furniture Co., say the payments are legal. Late last month, those two companies and about 15 other U.S. furniture makers sought the latest review, listing 110 Chinese firms.

In a note included in a December ITC report, Commissioner Daniel Pearson said the settlements create "additional costs and distortions" in furniture trade, "with little evidence that these distortions have yielded any benefits to the industry overall, the U.S. consumer, or the U.S. taxpayer."

Commissioner Charlotte Lane said at the October hearing that she was "very, very troubled" by the settlements, adding: "I cannot figure out for the life of me how they are actually legal."

She might consider "abuse of process" to figure out if they are not.

Maybe if US furniture "makers" actually made furniture ...?

Monopsony

2011-02-14T01:09:00.002+10:00

Guambat learned a new word today from the erudite New York Times. Monopsony. It's "a single buyer with life-or-death power over its vendors".

Think government contracting. Think Pentagon. Read this article:

From Pentagon, a Buy Rating on Contractors

In economic terms, the Pentagon is a “ monopsony,” a single buyer with life-or-death power over its vendors. If the Pentagon wants the military industry to be healthy and profitable, it can pretty much ensure that outcome.

Monopsony or not, why should the Pentagon be talking up the stocks, even implicitly, of the companies it buys from? Why was Mr. Carter going out of his way to talk to investors and analysts? Didn’t he have more important things to do?

The answer, I eventually learned, has to do with something that happened a very long time ago, and goes under the category of “Be careful what you wish for.” Let’s just say that banking isn’t the only industry where the government has allowed a handful of companies to become too big to fail.

The article tells us that back in 1993, government officials invited defense industry executives to a "Last Supper" where they were told they would need to start merging to cut down on the costs of overhead being passed on to the government buyers.

The Last Supper has become part of the lore of the military industry — though partly that’s because Mr. Aspin’s prediction about tighter Pentagon budgets turned out to be so wrong. “On the day George W. Bush took office,” said Loren B. Thompson, a well-known military consultant, “defense spending was around $300 billion.”

Today it is more than double that amount, around $700 billion. The wars in Iraq and Afghanistan — not to mention the Pentagon’s voracious appetite for expensive weapons systems, and the lack of competition among the remaining contractors — have been a gold mine for the Big Five.

Not surprisingly, for most of the first decade of the 21st century, the stocks of these companies soared. But after peaking in 2008, they came crashing back to earth. Which, for the Pentagon, has turned out to be a problem. These companies need access to the capital markets, which is more difficult when their stocks are down. And the Pentagon simply can’t allow them get into serious financial difficulty; there are just too few of them. “What we can’t afford from the defense perspective is a sick industry,” said Jacques S. Gansler, a former procurement official for the Pentagon who teaches at the University of Maryland.

Recognizing that leaner times lay ahead, Defense Secretary Robert M. Gates made a speech last May acknowledging that Pentagon budgets were unlikely to rise substantially any time soon, and laid out a plan to create new efficiencies and increased competition among the companies.

taxpayers and shareholders are decidedly not in alignment: the tougher the Pentagon gets with its contractors, the better it is for taxpayers and the worse it is for shareholders. And yet it can’t get too tough, because if it is, the companies will start running into financial trouble, which means the stocks will sink even further and the companies will start to have trouble raising capital.

This is the bind created by the Last Supper.

Now can you see why the Pentagon has taken to talking up the industry to the investment community? With one side of its mouth, the Pentagon is saying it is going to be more tough-minded in its approach to military contractors than ever before. But with the other side of its mouth, it is telling investors not to worry: the profits will be there, no matter what.

The sidling up to investors actually began last October, when the deputy defense secretary, William J. Lynn III, held a private meeting for about a dozen Wall Street analysts, laying out the Pentagon’s cost-cutting plans in astonishing detail. Indeed, according to Reuters, which uncovered the meeting, the analysts were sworn to secrecy. Although this would seem to violate, at the least, the spirit of transparency that Americans expect of market participants, notes of the meeting became public only after Reuters exposed it. (A military consultant named James McAleese published his notes on his Web site a few days after the Reuters story broke.)

Whatever the ethics of this meeting — and the Pentagon insists that nothing new was divulged during the session — it appears to have had an effect. If you look at the stock charts of the Big Five, you’ll see that they all started to rise around October. Imagine that.

Guambat is reminded of another word: symbiosis.

Support Our Troops? Nah, screw 'em

2011-02-11T05:24:00.004+10:00

There is a US Federal law that offers certain legal protections to military personnel and their families against the usual rude intrusions of civilian life. It's called the The Servicemembers' Civil Relief Act. See this and this.

The Big Banks, which the troops seemingly protect don't always return the favor, or care about the law -- until, that is, they get caught. This is true, or so it seems, about JP Morgan and BofA, from the looks of these stories:

New Program to Help Military Homeowners, Bank of America Announces

I received an email last month from Sgt. Keith Oliver – a soldier currently deployed in Iraq. He told me that after Bank of America had reduced his payments for two years the bank suddenly came back and said he owed about $19,000 or else he would face foreclosure.

He kept calling the bank to explain he was deployed but Oliver said he bounced from one department to another until finally he contacted us at “GMA” to ask for help.

When we called Bank of America it quickly realized the error and fixed the situation with Oliver.

Bank of America announced this morning on “GMA” that it will help members of the military who have trouble meeting their mortgage payments by creating a new program to assist those active duty soldiers.

“What we’re going to do is set up a program of our own that allows us to reduce their principal if they get in trouble, extend their payments, bring their rates down,” Larry DiRita, a spokesman for Bank of America, said.

“Our goal is, look, if you are a military person, you are deployed, you don’t need to be worrying about your house. If you do find yourself in a distressed situation let us know and we will start working with you right away,” he told me.

Chase spends $2M to fix errors on military mortgages

Marine Capt. Jonathon Rowles, now assigned to South Korea, alleges Chase committed a number of violations, including failing to give the proper effective date of the interest rate reduction, repeatedly requiring him to re-apply for protections, and trying to collect on inaccurate account balances.

Rowles alleged that Chase Home Finance, a subsidiary of JPMorgan Chase, failed to reduce his interest rate to 6% on the effective date of his active-duty status and required him to re-apply for protections no less than four times a year after that. He also alleges that starting in April 2009, Chase tried to collect "an inaccurate account balance" resulting from "its own systemic errors in servicing the loan," according to the lawsuit, filed July 6 in U.S. District Court in Beaufort, S.C.

Chase has advertised itself as a military-friendly bank since at least 2005, when it began touting its Home Finance Military Mortgage program, which offers a discount on closing costs in home purchases or refinancing for military members and retirees.

Bank ends student loan deferrals for troops, then reverses decision

the bank was contacted by the wife of a soldier serving in Afghanistan, and she was told the bank decided in December to stop allowing active-duty troops to delay paying their student loans.

"They informed me that they are no longer deferring private student loans for active duty military personnel," said Kerri Napoli, whose husband, Army Pfc. Andrew Napoli, is now serving near Kandahar.

After repeated conversations with Chase, Napoli says she told the bank last month that she had contacted NBC News. The next day, she says, the bank told her it would grant her husband an exception to the new policy and defer his loan.

The bank also has had second thoughts about ending a program aimed at helping U.S. troops with their family finances. After NBC News contacted the bank about why it had stopped allowing deferred payments, a Chase official said that decision was being reversed and the program would be reinstated.

J.P. Morgan Apologizes for Military Foreclosures

A J.P. Morgan Chase & Co. executive, at a U.S. House hearing Wednesday, apologized for wrongly foreclosing on military families and overcharging thousands for mortgages, as lawmakers weigh whether new legislation is needed to help prevent military personnel from losing their homes and getting hit with high interest rates.

She said the company is embarrassed over the matter, and apologized for the bank's errors.

But lawmakers didn't sound satisfied. In a heated exchange, California Rep. Bob Filner, the top Democrat on the panel, made it clear he doesn't think an apology is enough.

"You broke the law. How are we going to hold you accountable?" Rep. Filner said. "Everything is impersonal. Nobody is ever responsible and yet these people's lives are turned upside down. You can't just apologize...and then, this is over."

Chase initially found it overcharged at least 4,000 military personnel in active service and took the homes of 14. However, Chase's testimony Wednesday shows the firm has now found more problems--it said it overcharged 4,500 active-duty military members and wrongly foreclosed on 18.

Lawmakers at the hearing voiced concern that Chase, a company that received funds from the government's 2008 financial-industry government rescue program, would have made such errors. They were also concerned that the problem could be rampant, with other banks overcharging military personnel and threatening to take their homes just as the federal government is trying to combat the nation's foreclosure crisis.

Banks reminded on military personnel protections

Holly Petraeus, wife of Gen. David H. Petraeus, the top American military commander in Afghanistan, pointed the firms to the Servicemembers Civil Relief Act, which limits the interest rates that banks can charge those in the military and prevents them from foreclosing on homes of active duty service members without a judge's expressed authorization and a formal hearing where the homeowner is represented.

The recently-tapped head of military issues for the new Consumer Financial Protection Bureau, sent a letter to the nation's 25 largest banks Tuesday urging them to comply "with important legal protections for military personnel."

Elizabeth Warren, the Harvard law professor helping to set up the new consumer watchdog, appointed Petraeus to the post early last month.

Chase's people are trying to spin the story down a few notches. Forget the harassment and foreclosures. There really isn't all that much money at issue here, is their subliminal message, reported the the WSJ article noted above:

Stephanie Mudick, executive vice president of J.P. Morgan's office of consumer practices, told the House Committee on Veterans' Affairs the bank has so far sent the 4,500 overcharged service members $2.4 million including interest, and the median payment has been $70 plus interest.

Chump change.

Chumps, indeed.

The foxes attempting to guard the FCICing chicken house

2011-01-30T19:37:00.006+10:00

William Black has a guest post on Barry Ritholz' Big Picture blog, which joins the throng examining the entrails and intrigue of the Financial Crisis Inquiry Commission (FCIC) report. His contribution here is to provide background on the team of ~~party hacks~~ "investigators" who wrote the report.

How can the Architects of the Crisis Investigate it?

The Commissioners were chosen along partisan lines.

Each of the Republicans commissioners was a proponent of financial deregulation and was appointed to the Commission by the Republican Congressional leadership to champion that view. Three of the Republican commissioners were architects of financial deregulation. For example, the Republican congressional leadership appointed Wallison to the commission because they knew that he was the originator and leading proponent of the claim that Fannie and Freddie were the Great Satans that had caused the current crisis. The fourth member, Representative Thomas, voted for the key deregulatory legislation when he was in Congress and was a strong proponent of deregulation.

The Republican commissioners’ desire to ban the use of the word “deregulation” in the Commission’s report is understandable. There was no chance that they would support a report that explained the decisive role that deregulation and desupervison played in making the crisis possible. Wallison was a major architect of three successful anti-regulatory pogroms (primarily, but not exclusively, led by Republicans) that created the criminogenic environments that led to our three most recent fraud epidemics and financial crises (the S&L debacle, the Enron era frauds, and the current crisis). The Republican congressional leadership appointed Wallison to the Commission in order to place the nation’s leading apologist for deregulation in a position where he could defend it. President Bush appointed Harvey Pitt to be SEC Chairman because he was the leading opponent in America of the SEC Chairman Levitt’s efforts to make the SEC a more effective regulator. In each case, “mission accomplished.”

Each of the Republican commissioners was in the impossible position of having to investigate and judge their own culpability for the crisis. The Republican politicians who selected them for appointment to the Commission knew that they were placing them in an impossible position and ensuring that the Commission would either give deregulation a pass or split along partisan lines and lose some of its credibility. The proverbial bottom line is that the Commission would fail to identify the real causes of the crisis and the control frauds that drove it would continue to be able to loot with impunity.

In contrast, only one of the six Democratic commissioners was involved in financial institution regulation or deregulation. None of the Democrats was known as a strong proponent of any particular view about the causes of the crisis prior to their appointment. Brooksley Born was head of the Commodities Futures Trading Commission (CFTC) under President Clinton. She famously warned of the systemic risks that credit default swaps (CDS) posed.

Her efforts to protect the nation were squashed by the Commodities Futures Modernization Act of 2000, which deliberately created regulatory “black holes” by removing the CFTC’s authority to regulate many trades in financial derivatives. Enron exploited one of these black holes to create the California energy crisis of 2001. The largest banks and AIG exploited the black hole to trade CDS.

While the squashing of Brooksley Born was a bipartisan effort (Senator Gramm and Alan Greenspan were the most prominent Republicans in the effort), it was led by the Clinton administration – Messrs. Rubin and Summers at their arrogant, anti-regulatory worst.

By appointing Born to the Commission, the Democrats were admitting their error and ensuring that one of the Democratic Party’s great embarrassments – passage of the Commodities Futures Modernization Act – would be exposed. The Democrats were fostering rather than seeking to forbid discussion of their dirty laundry by appointing someone with a proven track record of taking on her own party.

We are witnessing in the multiple Republican apologias for their anti-regulatory policies an example of why we fail to learn the correct lessons from the crises. The groups most in the thrall of the dogma appoint true believers in theoclassical economics to the body that is supposed to find the truth.

As Jonathan Weil wrote in Bloomberg a few days ago (again, HT to Barry),

To examine the causes of the financial crisis, Congress created a bipartisan panel of 10 political appointees led by Democrat Phil Angelides, a former California state treasurer. What was needed was a nonpartisan investigation directed by seasoned prosecutors (like Pecora was) who know how to cross-examine witnesses and get answers.

Ferdinand Pecora, the chief counsel who led the Senate Banking Committee’s landmark hearings on the 1929 stock market crash, wrote a memoir years later called “Wall Street Under Oath.” A good title for this week’s report would be Wall Street on the Couch.” It remains to be seen whether the commission will make public all the investigative materials it accumulated, as the Pecora Commission did in 1934.

Whereas Pecora had no fixed deadline, Congress gave the crisis commission until December 2010 to complete its inquiry. Witnesses who didn’t want to cooperate fully could simply milk the clock. The panel got a budget of less than $10 million to investigate all the causes of the financial crisis. Lehman’s bankruptcy examiner got $42 million to produce a 2,200-page report on the failure of a single company.

Barry Ritholz, who has been writing about many of the faults found in the FCIC for years, culminating in his Bailout Nation book (one of few books Guambat is reading recently), has been keeping close tabs on the FCIC fallout.

Iran's New Year's Resolution: To just hang in there

2011-01-30T05:43:00.001+10:00

Opinion: Meanwhile, Iran is hanging one person every eight hours

Iran is quietly and efficiently hanging people at an alarming rate. The tempo has increased since the New Year, with 66 victims as of today and counting.

"Australian" is a race?

2011-01-22T11:59:00.002+10:00

Australia is, to Guambat's knowledge, the only country in the world to basically close for a horse race. That's the extent of their racist character, as far as Guambat is concerned. (Struth, there's rednecks, ockers and various others, many of particular ethnic persuasion, with intolerant ethnic predilections, but let's no go there here.)

But a bloke in the UK is claiming he's being "racially" harassed because of his Australian origins. Guambat reckons that's a bit of a long bow.

Aussie suing for race abuse after workmates call out 'G'day, sport'

They regularly greet him by saying ‘G’day, sport’ and ‘Is your girlfriend called Sheila?’.

Other phrases include ‘throw another shrimp on the barbie’ and jokes about kangaroos.

He has been off sick since August with depression and is attending counselling sessions.

Aw, right. Taking a sickie. Fair dinkum, that is Aussie, Mate.