Global Articles on what is going on...posted daily

[sandi66]

NEWSMAKER-Australia's first woman PM an old-school Labor leader
Thu Jun 24, 2010 3:15am EDTBy Mark Bendeich

SYDNEY June 24 (Reuters) - Australia's new prime minister, Julia Gillard, has become the first woman to lead her country, but her leadership style evokes the past, not the future.

A quick-witted politician, with a broad Australian accent and a working-class pedigree, Gillard is in many ways an old-school Labor Party politician, more reminiscent of Labor prime ministers from the 80s and 90s than her bookish predecessor, Kevin Rudd.

Like previous Labor prime ministers Bob Hawke and Paul Keating, Gillard stands in stark contrast to Rudd, a Mandarin-speaking ex-diplomat who broke the mould as a Labor leader in 2006 when he took control of a then demoralised opposition.

Rudd won a landslide election victory in 2007, ousting veteran conservative leader John Howard, and then dominated the opinion polls until, suddenly, last April the fairy tale ended.

Thanks to a few big policy failures, Labor's "Prince Charming" began losing the confidence of voters and, just as suddenly, Gillard was emerging as a new but much more familiar Labor hero, a working-class politician with a talent for plain-speaking.

Where Rudd once told lawmakers about "evidence-based policy" and explained in heavy detail the complexities of his tax or climate-change policies, Gillard stood in parliament on Thursday and launched straight into vintage Labor rhetoric.

"I grew up in a home of hard-working parents," began the 48-year-old daughter of a former policeman and rail clerk.

"I believe in a government that rewards those who work the hardest, not those who complain the loudest," she added.

"I believe in a government that rewards those who, day in and day out, work in our factories and on our farms, in our mines and in our mills, in our classrooms and in our hospitals, that rewards that hard work, decency and effort."

Gillard arrived in Australia, aged four, in the 1960s from south Wales, a cradle of Britain's own Labour movement. Her father had gone to work before finishing school, his family too poor to support him through higher education.

Gillard initially lived in a migrant hostel in the rural town of Adelaide before her father bought a house. She studied law at university, where she got involved in politics and then became a partner in a law firm specialising in class actions and personal injury cases before working as a political adviser.

CONSENSUS BUILDER

Gillard was first elected to parliament in 1998, and quickly rose to become a leading light of the Labor left, becoming shadow health minister in 2003 and then backing Rudd for the leadership in return for the deputy Labor leadership.

Gillard kept in Rudd's shadow until this year's opinion-poll meltdown when, without apparent hesitation or squeamishness, she made her move just months away from a general election, just as Hawke did on the eve of another election in the early 1980s.

Gillard seems to model her leadership style on the Hawke era, when cabinet forged policy by consensus -- another departure from Rudd, whose corporate-style management rankled Labor MPs.

"Her consultation skills are fantastic," said one senior industry figure who negotiated opposite Gillard on labour-market reforms. "She is bloody good," he told Reuters.

That will be good news for global miners that are threatening to pull more than $20 billion in investment unless the government overhauls its proposed 40 percent mine-profits tax. Gillard has refused to drop the tax so must negotiate a solution quickly.

Even if Gillard shares Hawke's famed negotiating skills, and Keating's sharp wit, she also faces a challenge that no previous Australian leader has ever known: being a woman in power.

She has long attracted headlines for her hair, which she recently restyled and dyed an auburn shade instead of its natural ginger, her partner who is a hairdresser and her decision not to have children.

One conservative lawmaker even once remarked her unmarried status made her unfit to govern. He later apologised for the comment but, in the socially conservative heartland of middle-class Australia, it can be an issue.

"She's not married is she? No children either," remarked Elvie Santos, a legal secretary, when asked during her lunch break on Thursday whether she liked Gillard.

But she added: "Let's give her a try. You never know."

www.marketwire.com/press-release/Habanero-Successfully-Intersects-Mineralized-Targets-With-Drill-Program-Keno-Hill-Silver-TSX-VENTURE-HAO-1281005.htm

[sandi66]

June 24, 2010

China’s Yuan Should Be in Reserve Basket
Hong Kong. China’s yuan could rapidly become an internationally used currency and an alternative to the US dollar in central bank reserves, the Asian Development Bank said on Thursday.

At the same time Beijing restated its rejection of US claims its currency was undervalued, saying a stronger yuan will not ease America’s yawning trade deficit as officials prepared to face off on the issue at the G-20 summit in Canada this weekend. The US says the weak yuan hurts American exports despite China loosening controls on the currency.

The ADB said the “yuan has yet to become an international currency. It could become one much more quickly than many anticipate,” the ADB said in a joint study with Columbia University.

“The internationalization of the yuan has the potential to become an alternative to the US dollar — as did the euro — and help nudge the global reserve system toward a multicurrency reserve structure,” it said. On Thursday, the People’s Bank of China said the yuan was likely to rise about 3 percent against the dollar by the end of this year, assuming the euro stayed around current levels against the US unit.

The ADB study, undertaken by 11 economists from around the world, including academics Joseph Stiglitz and Barry Eichengren, did not provide a timeline for when the yuan could become a reserve currency. Most analysts expect it to be fully convertible by 2020, the target date set by Beijing to make Shanghai an international financial center.

Global financial markets have focused intensely this week on the yuan after China’s central bank pledged to increase currency flexibility after pegging the yuan to the US dollar for nearly two years.

The ADB study, entitled “The Future Global Reserve System — An Asian Perspective,” recommended having Asia’s vast currency reserves play a more important role in stabilizing the global financial system, through swap lines, the International Monetary Fund’s Special Drawing Rights and other borrowing.

The financial crisis, which originated in the US housing market, has sparked a growing discussion among policy makers and academics that the world should no longer rely on a single, dominant currency as it has done since the end of the gold standard. The ADB study endorsed the use of capital controls as a tool to strengthen management of an economy, with a caveat that they are temporary and coordinated.

“These controls on the flow of capital tend to be more effective when done on a coordinated basis across countries that are targets of rapid capital movements, rather than individual countries reacting unilaterally,” the study said.

Taiwan implemented capital controls in November 2009, and Indonesia took steps to manage capital inflows last week. South Korea is planning to tighten currency derivative trading caps for foreign banks.

The ADB said a common Asian currency was not a realistic goal, and regional monetary coordination should stop short of pegging currencies in the region.


Reuters

www.thejakartaglobe.com/business/chinas-yuan-should-be-in-reserve-basket/382406

[sandi66]

Thursday, June 24, 2010 9:36 AM

When the G20 speaks, read between the lines
Kevin Carmichael

Here we are, on the eve the summit. Reading the headlines and scanning the blogs, it feels something like that climatic scene in Braveheart.

Reuters has Europe digging in and getting ready to defend its austerity measures. Over at the New York Times, former International Monetary Fund chief economist Simon Johnson, face painted blue and white, is rallying the Obama administration to stand firm against this “Wall Street wisdom” that “southern European-style austerity is needed now” by arguing that Paul Krugman should be made the White House budget director.

Who says the G20 summit is going to be boring?

A senior U.S. official, speaking on the condition of anonymity, told me and a group of international reporters in Washington earlier this week that all this drama is in fact a media creation. There are no serious splits between the U.S. and the Germans on the economy; that while Germany has announced some budget cuts, they are relatively small and don’t take effect until next year. Speaking in New York on Monday, Canadian Finance Minister Jim Flaherty also played down the conflict, saying Canada agrees with the U.S. that too fast a rush to fiscal consolidation would squeeze what remains a “fragile” recovery.

Exaggerated or not, all this has made for great debate.

At the Worthwhile Canadian Initiative economics blog, they’ve been going at it here and here over what lessons Canada’s experience in the mid-1990’s has for the current situation.

In the Reuters story, European Central Bank President Jean-Claude Trichet defends the austerity movement as necessary because “confidence is the key factor today.” For Messrs. Krugman and Johnson, the key factor is economic growth. They are unconvinced there’s enough of it yet for governments to turn their attentions to shrinking demand from the public sector.

The G20 leaders - or more properly, their negotiators - will find a way to resolve this debate through a communique that makes it look like everyone’s perspective is the correct one. The key will be reading between the lines.

www.theglobeandmail.com/news/world/g8-g20/blog-global-view/when-the-g20-speaks-read-between-the-lines/article1615959/

[sandi66]

Gillard Breaks With Tax Policies That Doomed Rudd

By Gemma Daley - Jun 24, 2010

Julia Gillard began her job as Australia’s first female prime minister by promising to smooth relations with mining, its biggest industry.

The 48-year-old Wales-born lawyer took office today after ousting Kevin Rudd, whose slump in opinion polls threatened to make their Labor Party the nation’s first one-term government in 80 years. Rudd stepped down rather than face a party vote.

Gillard moved to fix two of Rudd’s most unpopular decisions by pledging to revive the carbon-trading system he shelved in April and agreeing to open negotiations with the mining industry on a proposed tax increase that had sparked widespread protests among companies, workers and politicians, including members of Rudd’s own party.

“The change of leadership will mark a major change in the management style of the government,” said Paul Brennan, senior economist at Citigroup Inc. in Sydney. “The change of leadership may increase the government’s chances of being re- elected.”

Gillard’s ascension to the nation’s top job was welcomed by BHP Billiton Ltd., Rio Tinto Group and Fortescue Metals Group Ltd., which had led the fight against the 40 percent so-called super-profits tax. Melbourne-based BHP, the world’s biggest mining company, said in a statement it was “encouraged” by the appointment and will suspend its advertising against the proposed tax.

Rising Shares

Investors also bet Gillard will compromise on the tax, which had accelerated Rudd’s slump in approval polls. BHP shares rose 1.3 percent in Sydney trading, Perth-based Fortescue gained 2.5 percent and London-based Rio added 1.7 percent. They later slid in London trading.

“Gillard has launched her leadership with a conciliatory tone toward the mining industry,” said Roland Randall, vice president of research and strategy at TD Securities in Singapore. “As a new leader, she can compromise without loss of face.”

Gillard said at the press conference that she will call an election within the coming months, “throw open” her doors to talks with mining companies and make climate change a central plank of her election platform.

“It is as disappointing to me as it is to millions of Australians that we don’t have a price on carbon,” she said. “If elected as prime minister I will re-prosecute the case for a carbon price.”

Parliamentary Career

Gillard’s political career got off to a stuttering start. After failing in three attempts to win Labor endorsement to stand for parliament, she took a job as chief of staff to Victorian state opposition leader John Brumby.

She finally won endorsement for the Labor Party in 1998, winning the Melbourne seat of Lalor. In opposition, she served as the party’s spokeswoman on health, squaring off against the Liberal Party’s Tony Abbott.

Now, the two will face off in the coming election. The 52- year-old Abbott, a former Rhodes scholar and priest trainee, was elected leader of the Liberal Party in December, after overthrowing Malcolm Turnbull.

When Rudd, 52, ran for the Labor leadership in 2006, he enlisted Gillard as his deputy. The pair led Labor to a landslide victory in November 2007, ending John Howard’s almost 12 years in power.

Gillard joins powerful female politicians such as New South Wales state premier Kristina Keneally, Queensland state leader Anna Bligh and deputy opposition leader Julie Bishop.

Feet on the Floor

“I’m aware I’m the first woman to sit in this role but I didn’t set out to crash my head against any glass ceilings,” she said today. “I keep my feet on the floor.”

Gillard said she grew up in a “hard-working family” that taught her people should be rewarded for their efforts. Today, she restated her goal that every child should be able to access a quality education, a pledge including in her maiden speech to parliament in 1998.

Her parents, John and Moira, who moved to Australia in 1966 to escape the cold Welsh winters that frequently left their four-year-old daughter with bronchial pneumonia, watched from their home in Adelaide as Gillard was sworn in Australia’s 27th prime minister.

“When I see Julia we’ll probably both cuddle and probably shed a tear or two, we are very proud,” her father John said in a phone interview today. “We’re very proud of her.”

School Cheers

About 100 children at Adelaide’s Unley High School Resource Center today cheered as they watched the swearing-in. Gillard graduated in 1978 with an A for Chemistry and English and B+ for Physics, Economics and Mathematics, principal Susan Cameron said as she read from Gillard’s report card.

“She studied hard and the students today were gripped by the coverage of this exciting day,” Cameron said in an interview.

Gillard studied at the University of Adelaide and Melbourne University where she graduated in 1986 with degrees in arts and law. She then joined law firm Slater & Gordon in Werribee, Victoria in 1990, practicing industrial law. The firm now has a meeting room named after her in its Melbourne office.

“She argued with the same charm and humor we see in her style today,” said Carol Johnson, who was in student politics with Gillard at Adelaide. “We knew she’d go far but we didn’t think she’d go this far this quickly.”

Gillard’s partner, Tim Mathieson, a hair stylist who works on her flame-red bob, congratulated Gillard today with a hug and a kiss as she was sworn in at Government House.

Gillard has had to fight criticism she wasn’t qualified to be a leader because she didn’t have children. Liberal Senator Bill Heffernan had to apologize for saying in May 2007 that Gillard was unfit to be deputy prime minister because she was “deliberately barren.”

“You’re either working at this intense high level or you’re having kids,” Gillard responded in an interview then with the Australian Broadcasting Corp.

www.bloomberg.com/news/2010-06-24/gillard-first-female-australian-premier-breaks-with-rudd-mining-tax-plan.html

[sandi66]

Banker Who Blew Whistle Over Tax Cheats Seeks Pardon

By David Voreacos - Jun 24, 2010

Bradley Birkenfeld, once a UBS AG banker who handled a $200 million investment for a billionaire client, now makes 12 cents an hour mopping floors at the federal prison in Minersville, Pennsylvania.

Sleeping in a bunk bed in a dormitory-style building with 35 other inmates is far from the reward Birkenfeld says he deserves for exposing a massive tax-evasion scandal at UBS, the biggest Swiss bank. He told U.S. authorities how UBS bankers came to the U.S. to woo rich Americans, managed $20 billion of their assets, and helped them cheat the Internal Revenue Service.

Birkenfeld, 45, has asked President Barack Obama to commute a 40-month term he began in January at Schuylkill Federal Correctional Institution for his part in the conspiracy. He is seeking payment from the IRS whistleblower program and wants the U.S. Department of Justice to punish prosecutors who wouldn’t grant him immunity before his 2008 indictment and guilty plea.

“I delivered and documented this entire scandal, the largest in U.S. history,” Birkenfeld said in one of two prison interviews with Bloomberg News. “I’m the most famous whistleblower in the history of the world. It’s a question of doing the right thing, and that’s what I did.”

His disclosures preceded UBS’s decision to pay $780 million to avoid prosecution, admit it fostered tax evasion from 2000 to 2007, and turn over data on 250 secret accounts to the IRS. UBS later agreed to reveal data on another 4,450 accounts, a transfer upheld last week by the Swiss Parliament. For lifting the veil on Swiss bank secrecy, Birkenfeld said, he’s a hero, not a criminal.

Whistleblower Results

Prosecutors filed criminal tax charges against 16 UBS clients in the U.S., two UBS bankers, and three others accused of enabling the hiding of offshore assets. At least 150 other people are being investigated, according to the Department of Justice. Last year, 15,000 Americans sought to avoid prosecution by telling the IRS about offshore accounts.

Birkenfeld’s chief prosecutor, Kevin Downing of the department’s tax division, and his main UBS client, California billionaire Igor Olenicoff, take a different view of his actions.

Downing told a U.S. judge last August that, while prosecutors wouldn’t know about the “massive tax scheme” without Birkenfeld, he deserved 30 months in prison for initially refusing to detail his own role in the fraud and for not revealing his work with Olenicoff. Birkenfeld, Downing said, also wasn’t useful as a witness. The judge gave Birkenfeld 40 months.

Olenicoff, a real-estate developer who pleaded guilty in December 2007 to filing a false tax return, got two years of probation and paid $52 million in back taxes and penalties.

Billionaire Lawsuit

He sued UBS, Birkenfeld and others for racketeering. Olenicoff, who declined to comment, claims in his lawsuit that Birkenfeld defrauded him by investing some of his $200 million in thinly traded stocks without his knowledge.

Birkenfeld said he spends his days reading, exercising and talking to other white-collar inmates at his prison camp without bars. A neurosurgeon’s son from Brookline, Massachusetts, Birkenfeld is 6-feet 4-inches, weighs 220 pounds, and has piercing blue eyes framed by a goatee and a high hairline.

A U.S. citizen, he attended the Thayer Academy in Braintree, Massachusetts, and then Norwich University, a military college in Northfield, Vermont. He then got a master’s of business administration at the American Graduate School of Business in Vevey, Switzerland.

Currency Trader

Before spending 15 years in Swiss banking, Birkenfeld worked as a currency trader at State Street Bank & Trust Co. in Boston. His said his whistle blowing began there.

While at State Street, he said, he went to the Federal Bureau of Investigation to report what he considered illegal activity in 1994. The FBI investigated. No charges were filed.

Birkenfeld said he was offered a full-time job at the Boston office of the FBI. A former law enforcement official with knowledge of that relationship said that while Birkenfeld gave useful information to the bureau, he was not offered a job.

He then worked in private banking at Credit Suisse Group AG and Barclays Plc before joining UBS in 2001. He persuaded Olenicoff to move his assets to UBS from Barclays.

Birkenfeld was one of as many as 60 UBS bankers who criss crossed the U.S. trolling for rich clients, even though they lacked a required Securities and Exchange Commission license, he later told U.S. Senate investigators. They visited art shows, yachting regattas and golf and tennis tournaments, he said.

Encrypted Laptops

UBS trained bankers to avoid detection by regulators, urging them to carry encrypted laptop computers and falsely state on travel forms that they were entering the country for pleasure, not business, he said. The bank admitted it helped clients circumvent U.S. securities restrictions by referring them to outside advisers who set up sham companies in tax havens such as the British Virgin Islands, Hong Kong and Panama.

By 2005, Birkenfeld said, he was blowing the whistle again. He sent a memo to his superiors at UBS about a “very serious matter” regarding his compliance with UBS policies. He sent similar e-mails to top executives in the legal and compliance departments.

In October 2005, he resigned. Five months later, he wrote to Peter Kurer, then UBS’s general counsel, to say top management “actively encouraged” practices “forbidden” by the bank, according to the letter. The bank later reached a severance agreement with Birkenfeld over a disputed bonus, he said.

UBS spokeswoman Karina Byrne declined to comment.

Asked if he ever doubts himself, Birkenfeld said: “Absolutely not. I’m very sure of myself. I’m well educated and well traveled, and I think it’s important to understand that if I take on a mission, I’m going to see it to the end. I’m not going to be intimidated by the DOJ or UBS management.”

Whistleblower Award

When Birkenfeld decided to tell the Justice Department and IRS about UBS, he hired a Washington law firm, Schertler & Onorato LLP. Birkenfeld sought an IRS whistleblower award that allowed informants to be paid as much as 30 percent of tax proceeds collected based on their information. The IRS won’t disclose how much additional revenue it has reaped since the UBS crackdown.

On March 28, 2007, an attorney at the firm, David Dickieson, e-mailed a tax prosecutor, Karen Kelly, to say he had a client with a “once in a career case.” Three weeks later, he and partner David Schertler wrote a memo to prosecutors.

‘Extremely Wealthy’

They identified their client only as the “Salesman,” and said he worked at a large financial institution called “the Vault.” The institution offered services to “extremely wealthy” clients who didn’t declare their accounts to the IRS, they told the agency. They referred to one client as Slick the oil trader, saying he had more than $100 million in assets.

Prosecutors agreed to take Birkenfeld’s information in a session called a proffer, at which his statements couldn’t be used against him unless he lied. Birkenfeld wanted immunity. Prosecutors declined, saying they had to hear his story and corroborate it before they could agree to not charge him, Birkenfeld said.

Over three days in June 2007, Birkenfeld gave prosecutors details of how the UBS cross-border business helped rich Americans evade taxes, he said. He said he gave them the identity of Slick, a client of another banker. Birkenfeld said he couldn’t provide other names without immunity or a subpoena because of Swiss law forbidding disclosure of client information.

Changing Rules

“They told me they wouldn’t prosecute me,” Birkenfeld said. “Kevin Downing told me that in the first meeting. They refused to give me a subpoena or immunity until they saw that I was the real deal, as they said. They kept changing the rules of the game and said ‘We won’t give you immunity.’”

Prosecutors had “an easy way to solve” Birkenfeld’s dilemma, said one of his current attorneys, Dean Zerbe.

“Why didn’t they just give him a subpoena so he would speak?,” Zerbe said.

Birkenfeld said he returned to Switzerland and continued to provide documents to prosecutors as they probed his claims. By late August 2007, Dickieson e-mailed prosecutors to say UBS suspected Birkenfeld was talking to investigators, putting him “truly at risk” because the case was “threatening some very powerful people.”

Proffer ‘Terminated’

Downing and Kelly weren’t budging on immunity. They wrote to Dickieson on Sept. 6, 2007, to say Birkenfeld “terminated his proffer with the Tax Division regarding alleged criminal conduct” at UBS. They said they declined to grant immunity and could continue the proffer if Birkenfeld chose to do so.

Downing was a lead prosecutor in the indictment of 19 defendants in the largest criminal tax-shelter case in U.S. history, including 17 former partners and employees at KPMG LLP. In 2007, a U.S. judge dismissed charges against 13 defendants, saying prosecutors violated their constitutional right to counsel by pressuring KPMG not to pay their legal bills. The judge said prosecutors were following Justice Department policy at the time. Three defendants were convicted at trial.

Birkenfeld said he lost faith in the Department of Justice and decided to speak to the Senate Permanent Subcommittee on Investigations and its chairman, Senator Carl Levin, a Michigan Democrat.

That fall, the Senate committee gave Birkenfeld the subpoena he sought, and he gave investigators his story and client details, including those on Olenicoff. He also spoke to investigators from the IRS and the SEC.

‘So Stubborn’

“Everybody but the DOJ was friendly to me,” Birkenfeld said. “I just felt they were being so stubborn and then they were trying to make me out to be the bad guy when I was trying to help them. I didn’t break off the proffer. They failed to live up to their end of the bargain.”

Downing said Birkenfeld’s lawyers insisted he wouldn’t continue talking to prosecutors without immunity.

“He decided to not take advantage of the opportunity that was offered and tell us about his own involvement in the UBS tax fraud scheme,” said Downing, 44, a senior trial attorney who led the UBS prosecution. “He particularly failed to tell the Department of Justice about his involvement in offshore banking for Igor Olenicoff.”

Immunity, he said, starts with the proffer agreement.

“You only get immunized for the crimes you tell us about,” Downing said. “But you have to tell us about them. Had he told us the truth about his involvement, in all likelihood he would have been given immunity.”

Indictment, Arrest

The standoff continued into early 2008, when prosecutors secured an indictment of Birkenfeld from a federal grand jury in Fort Lauderdale, Florida. He was arrested in April 2008 at Boston’s Logan International Airport as he flew from Geneva for a high school reunion and meetings with Senate investigators and the SEC.

Birkenfeld helped prosecutors before pleading guilty two months later. At his plea, Birkenfeld said UBS made $200 million a year handling $20 billion in assets. He said he toted customer checks to deposit in European banks, and bought diamonds for a client, bringing them to the U.S. in a toothpaste tube. In an interview, Birkenfeld said the client wasn’t able to travel.

“I wasn’t smuggling them,” he said. “I was just bringing them.”

In the summer of 2008, prosecutors held the head of the cross-border banking business, Martin Leichti, on a material witness warrant and debriefed him over four months. By February 2009, UBS lawyers were in court admitting the bank’s wrongdoing to avoid prosecution.

Birkenfeld’s Sentencing

At Birkenfeld’s sentencing, Downing said Olenicoff would have been in jail had Birkenfeld told the truth about him. Downing also said he told Birkenfeld’s lawyers that he would seek a court order compelling him to disclose client information, which would give him protection from prosecution in Switzerland.

Birkenfeld said Downing lied on several fronts at that hearing before U.S. District Judge William Zloch. Downing said: “I’m a federal prosecutor speaking to a district court judge. The truth is what we deal in.”

Birkenfeld said Schertler & Onorato, the first of three law firms he hired, engaged in legal malpractice.

“Clearly, they made representations to me that were false that I was going to get immunity, and they had great contacts in the DOJ,” Birkenfeld said. “That was the whole reason why I retained them from the outset.”

The firm declined to comment. Birkenfeld wouldn’t discuss whether he may sue the firm.

Pardon Review

Andrew Ames, a spokesman for the Justice Department pardon attorney, said Birkenfeld’s application is under review and he couldn’t comment further. IRS spokesman Dean Patterson said he couldn’t discuss the case of Birkenfeld or any other individual.

U.S. law allows the IRS to reward whistleblowers after a confidential administrative review of their application. It may deny or reduce awards if a whistleblower “planned and initiated” tax cheating.

Birkenfeld’s case is being watched closely by other whistleblowers and their lawyers, said Washington attorney Erika Kelton of Phillips & Cohen LLP.

“He is obviously a very important whistleblower and a controversial figure, so people are very interested to see what the IRS does in this case,” Kelton said.

India, Philippines

Birkenfeld said that if he gets the IRS whistleblower award, he hopes to set up a nonprofit foundation and do charitable work in India and the Philippines, two countries where he has traveled extensively. He said that when he leaves prison, he intends to live in Europe or Asia. Birkenfeld said he “walked away” from a $1 million house in Zermott, Switzerland, after his arrest.

“I don’t trust my government,” he said. “That’s why I lived in Switzerland for 15 years. How could I possibly trust our government after what I’ve been through? I have no desire to live in a country that treats its people this way.”

The case is U.S. v. Birkenfeld, 08-cr-60099, U.S. District Court, Southern District of Florida

www.bloomberg.com/news/2010-06-24/ubs-banker-who-blew-whistle-on-swiss-secrecy-over-tax-cheats-seeks-pardon.html

[sandi66]

June 24, 2010, 10:04 AM ET.

Euro Debt Crisis Ain’t Over, or, PIIGs at the Public Trough

The nearly $1 trillion in bailout funds, the ban on naked short selling, the austerity programs of Germany and others — none of it has put Europe’s debt crisis to rest.

Credit default swaps (CDS) for Greece today were at an all time high, rising 33 basis points to 966.90, report the folks at CMA, while numerous European firms saw widening credit spreads, including Spain’s Banco Santander (STD) , higher by 10 points at 214.

And banks mired in PIIGS paper are feeding intensely at the public trough: Bloomberg’s David Oakley and Ralph Atkins late yesterday report that banks in Greece, Portugal, Ireland and Spain “account for more than two-thirds of the increase in lending to eurozone financial institutions,” by the European Central Bank since 2008.

Those banks have borrowed a combined 225 billion Euros, the authors report, out of a total 332 billion increase in lending since June of ‘08.

Meantime, European equities traded broadly lower, with the FTSE 100 off 0.7%, at 5,143. Germany’s DAX was off 0.6% at 6,167.

blogs.barrons.com/stockstowatchtoday/2010/06/24/euro-debt-crisis-aint-over-piigs-cds-spread-wide-banks-still-struggle/

[sandi66]

The Buyers’ Strike in the Securitization Markets


Thursday, June 24, 2010




One of the dead bodies in plain sight that generally goes unremarked upon in polite company is the buyers’ strike in the securitization market. Issuance of private label (as in non-government guaranteed) residential mortgage backed securities has collapsed, with government entities insuring 96.5% of all home mortgages in the first quarter 2010. The commercial mortgage bond market is a shadow of its former self.

One could take the view that the moribund state of the private mortgage securitization market is a side effect of the government’s aggressive efforts to prop up the housing market. In other words, the terms private uninsured investors would require are sufficiently far away from what the authorities are willing to offer that they are not competitive.

Would that that were true, but the state of play is even worse. Starting in 2004, many traditional “real money” private mortgage investors began pulling back.

In 2005, derivatives players started colonizing the residential mortgage market, with disastrous effects.

Private RMBS were increasingly sold not to arm’s length investors, but to collateral managers of CDOs (who got funding from dealers), and to conduits.

The problem, fundamentally, is one the Fed recognized in 2008: banks needed to raise a tremendous amount of equity. From an April post:


John Dizard, in “Fed plan is spoilt by its backing of hypocrites,” returns to a notion he has brought up in some recent Financial Times articles, namely, that the amount of funds that banks need to rebuild their balance sheets is so large that it cannot be obtained without some form of government sponsorship. Note that that does not necessarily imply explicit payments or subsidies; it could take the form of calling in favors (assuming we have any left), guarantees, or other forms of intervention.

Dizard provides more support for his view by dissecting the Fed’s plan to save the finance business. And what is that plan? Banks must raise $200 billion in the next two quarters.

Dizard treats this fantasy with more dignity than it warrants, puncturing the notion that this goal is even remotely attainable.
Moreover, that delusion presupposes that financial concerns are even willing to seek more equity right now. Many are asserting that they don’t need more dough, thank you very much, because sales of stock-linked paper would be highly dllutive. Hhhm, wonder if this point of view has anything to do with the prevalence of option-based incentive comp. It couldn’t possibly, since pliant boards will no doubt re-issue the options at more favorable strike prices. Dizard also points out that shrinking balance sheets to conform with shrunken capital bases isn’t very workable either.

Dizard uses this discussion to make a broader, more disturbing observation:
despite the nasty dose of reality inflicted by the markets, regulators and central bankers are still co-opted by the industry and are acting as enablers rather than seeking real solutions, no doubt because they might inflict pain on their charges.


Yves here. Fast forward to 2010. Central bankers seem unwilling to confront some fundamental problems, all of which point to the politically unacceptable conclusions:

1. Chris Whalen of Institutional Risk Analytics contends that large banks, in real, risk adjusted terms, are destroying value. That means they must do a combination of cut pay, which is the biggest expense (which no one at these organizations is even remotely prepared to consider), and/or shrink their balance sheets so as to improve their returns on capital
2. Securitization volumes increased in significant measure due to bad practices: poor due diligence, misratings, the ability to camouflage risk and dump it on unsuspecting parties. Some of the once-critical outlets for risk, namely AIG and the monolines, have been blown up, plus investors have smartened up and are unlikely to be fooled a second time, at least on anything remotely approaching what took place in the bubble years. But all the things that investors want, such as better underwriting standards, having parties in the securitization pipeline retain a meaningful piece of the deals, would make the economics of securitization much less attractive.

So the result is a much smaller securitization market, with much more costly credit.

The real problem is that this is the end state after credit excesses: a return to healthier practices means more costly, less readily available debt. As Gillian Tett describes in the Financial Times today, the authorities stepped in to prevent that outcome, yet appear unwilling to accept the fact that there is no going back to status quo ante, circa early 2007, nor should they want that outcome.

From the Financial Times:


In the first seven years of the past decade, the securitisation sector expanded at a stunning pace…But since the onset of the financial crisis, these markets have collapsed…

So far, few non-bankers have really noticed this collapse, largely because governments have stepped into the breach, papering over the gaping hole. In the US, for example, the Federal Reserve has bought $1,250bn of mortgage-backed securities. In Europe, the Bank of England and ECB have gobbled up mortgage-backed bonds, and other securitised assets, via repo deals. Before 2007, eurozone banks sold more than 95 per cent of their securitised products to private sector investors; now it is under 5 per cent – with the rest going mostly to the ECB.

The crucial question is: how long will this pattern continue? Unsurprisingly, all western central banks are deeply uncomfortable about the fact that they, in effect, have replaced, or become, the securitisation sphere. They are thus looking for exit strategies and urging the banking industry to restart the securitisation machine…

In 2007, when bankers were guzzling champagne, a large source of the demand for securitised bonds came from quasi “invented” buyers – that is, banks and bank-funded vehicles that were developing investment strategies to take advantage of regulatory and rating agency loopholes, fuelled by artificially cheap loans.
Cheap funding has since vanished and governments are determined to close all those loopholes. As a result, those invented buyers have disappeared.

That need not spell the end of securitisation, per se. After all, there are still real money investors out there, such as pension funds, which could buy securitised bonds. But if these real investors reappear, they will demand much better returns. That means the market will be smaller in future, and funding costs will rise.

That leaves G20 leaders with an unpalatable choice: either the government continues to replace the securitisation market indefinitely, to maintain credit growth, or it must adjust to a world where credit is far more rationed and costly. That first option is hated by most central bankers. However, the second is disliked by most politicians, too.


Yves here. So far, political expediency is clearly prevailing.


www.nakedcapitalism.com/2010/06/the-buyers-strike-in-the-securitization-market.html




ty joye

[sandi66]

noir.bloomberg.com/apps/news?pid=20601109&sid=aMamIKPcAJDg


China Rare Earth Limits Said to Be Targeted by U.S. (Update2)

By Mark Drajem


June 22 (Bloomberg) -- China’s restrictions on the export of rare earths used in the manufacture of cell phones and radar are being targeted by the U.S. Trade Representative for a potential trade case, according to industry representatives.

The U.S. has asked business groups and unions to provide evidence that China is hoarding these elements for a case that may be filed at the World Trade Organization, according to the people, who asked not to be identified because the talks were confidential.

China controls 97 percent of production of the materials, known as rare earth elements, giving it “market power” over the U.S., the Government Accountability Office said in a report in April. China restricts exports of the elements through quotas and export taxes of as much as 25 percent, the GAO said.

“The export restraints can artificially lower China’s domestic prices for the raw materials due to significant domestic oversupply,” the U.S. trade office said in its annual report on overseas trade barriers in March.

Nkenge Harmon, a spokeswoman for the U.S. Trade Representative’s office, declined to comment. China’s Ministry of Commerce didn’t immediately reply to a faxed request today for comment.

Environmental Protection
China restricts the mining and export of rare earths to protect the environment and minimize pollution, Liu Aisheng, director of the Chinese Society of Rare Earths, said today in a telephone interview from Beijing. The society is composed of Chinese academics who study the industry.

“It’s pointless for the U.S. government to complain to the WTO about China’s restrictions,” Liu said. “Chinese policy is unlikely to lead to severe supply shortages given that China will continue to export and other countries will also catch up in production as long as there’s demand.”

U.S. Trade Representative Ron Kirk and Commerce Secretary Gary Locke are scheduled to testify about China at the Senate Finance Committee tomorrow, following growing criticism from lawmakers that China’s trade policies discriminate against American producers.

“If Congress is concerned about enforcement of trade rules, then WTO cases demonstrate the approach we have been talking about,” John Frisbie, president of the U.S.-China Business Council, said in an interview. Frisbie said he didn’t know if the U.S. would file a WTO case.

G-20 Summit
The U.S. trade office put together a trade complaint against China over credit-card processing in March, and has yet to file it. Chinese President Hu Jintao is set to meet with President Barack Obama and other world leaders at the Group of 20 meeting in Toronto on June 26-27.

Rare earths are a group of 17 chemically similar metallic elements, including lanthanum, cerium, neodymium and europium. The U.S. was self-sufficient in these materials until the mid- 1980s, when lower labor and regulatory costs helped China’s climb to dominance, the U.S. Geological Survey said in a report.

The elements are used in radar, high-powered magnets, mini hard-drives in laptop computers, catalytic converters for vehicles, electric-car batteries and wind turbines.

A rare-earth mine in the U.S., in Mountain Pass, California, shut down most operations in 2002.
Molycorp Inc., which owns the mine, plans to reopen it this year, the company said in a prospectus yesterday.

‘New Equilibrium’
“China’s rare earths deposits are big, but it’s not the only country that has deposits,” the Chinese Society of Rare Earths’s Liu said. “Gradually, supply and demand will reach a new equilibrium.”

Global consumption of rare-earth elements “is projected to steadily increase due to continuing growth in existing applications and increased innovation and development of new end uses,” Molycorp said in a regulatory filing.

The European Union released a report this month saying that supplies of raw materials such as rare earths, while “essential for the EU economy,” are “increasingly under pressure.”

The U.S. and EU filed a joint complaint last year against Chinese curbs on the export of raw materials such as magnesium, coke and zinc used in making steel and other goods.


To contact the reporter on this story: Mark Drajem in Washington at [e-mail].

Last Updated: June 22, 2010 03:18 EDT


ty joye

[sandi66]

Banks get more time to meet new capital rules
Kim Dixon and Rachelle Younglai
WASHINGTON
Thu Jun 24, 2010 1:50pm EDTWASHINGTON (Reuters) - Lawmakers clinched a deal on Thursday to give big banks more time to comply with tighter capital rules and largely exempted firms with less than $15 billion in assets.

The deal, agreed to by House and Senate negotiators finalizing the landmark financial overhaul bill, would give big bank holding companies 5 years to abide by a measure disqualifying riskier securities from meeting stiffer capital standards.

The Senate unanimously voted for the new standards, sponsored by Moderate Republican Susan Collins, that required that Tier 1 capital at bank holding companies comprise only equity and not hybrid instruments such as trust preferred securities. Such securities are equity-like securities that also make quarterly interest payments and qualify as debt for tax purposes.

The House panel earlier voted to weaken the provision by grandfathering, or exempting, all firms which had counted the securities as assets.

Under the compromise, firms with assets of $15 billion and less could count their current holdings of trust preferred securities as part of Tier 1, but not any new investments.

Moody's said the new deal would disqualify $118 in trust preferred securities from Tier 1 treatment.

Tier 1 capital is a measure of a bank's strength and is based on a core equity relative to assets. Bank capital requirements are designed to protect against potential losses.

Collins, a moderate Republican often wooed by Democrats in the Senate, was one of four Republicans to vote for the Senate version of the legislation. As a key swing vote, Democrats may need her vote for the final bill.

The Collins idea is strongly backed by Federal Deposit Insurance Corp Chairman Sheila Bair.

Banks argue the provision would lead to more bank failures and oppose the Collins measure. Critics also say strict capital provisions should not be written in legislation, which is less flexible than rules passed by bank regulators.

Senator Blanche Lincoln, a key player in talks on regulating derivatives, had backed a higher exemption limit to give some banks from her state of Arkansas a break from new capital requirements in the financial reform bill.

Among those banks is Arvest Bank Group Inc of Bentonville, Arkansas -- a bank predominantly owned by the Walton family of Wal-Mart Stores Inc.

tinyurl.com/2a7kh5n

[sandi66]

Thursday, June 24, 2010
TURNER / RAP STATEMENT ABOUT CA DRIVER'S LICENSE ~NOT~ CONFIRMED
Rumormill News


Reader: TURNER / RAP STATEMENT ABOUT CA DRIVER'S LICENSE ~NOT~ CONFIRMED
Posted By: hobie <Send E-Mail>
Date: Thursday, 24-Jun-2010 12:19:55 (Thanks, R.
Reader Ray refers to statements made by Tim Turner of the Restore America Plan and another party, found in these posts:


RESTORE AMERICA PLAN - TIM TURNER TRANSCRIPT
Seawitch -- Thursday, 24-Jun-2010 07:43:11

RESTORE AMERICA PLAN - EXCITING UPDATE -- IT IS HAPPENING!
Seawitch -- Wednesday, 23-Jun-2010 17:59:34
Reader Ray writes:
***************************************************************************
Re:California drivers license
I read somewhere today that the state of california had just announced that drivers licenses were not required unless for commercial uses.
Unlike many, I confirm as much as possible....evidently dmv was not notified of this because I called them to make sure.
After calling, I tried to find the information I had just read and gave up after a few minutes. I want to point out that the person who made this quote is either a dreamer, liar,or maybe just wrong. At any rate, I would be wary of anything posted by this person.
Ray


Posted by John MacHaffie at 9:27 AM

[sandi66]

Karl Rove Press Conference in Toronto on June 25th
TORONTO, June 24 /CNW/ - Karl Rove is coming to Toronto to a closed address the G-20 Summit for Faith and Business Leaders at 7:00pm at 50 Gervais Drive. However at 6:40 Mr. Rove will speak to the press commenting on the G-20 and the moral question of massive spending and debt.

Organizer Charles McVety says "in 18 months the G-20 leaders have wasted 7 trillion dollars of stimulus spending, much of it on frivolous agenda driven projects. If you stack one hundred $100 bills, they would be a half an inch high. $7 trillion dollars is a stack of $100 bills, five hundred thousand miles high, sky high reckless spending to the moon and beyond."

Co-organizer Brian Rushfeldt, Canada Family Action, says "massive immoral debt mandated by G-20 leaders is fiscal child abuse of future generations and maternal exploitation placing women and children in financial peril." Rushfeldt goes on to express concern that "forcing Canada to abide by G-20 and United Nations social policy undermines Canadian democracy and sovereignty."

Details are at www.g20.ca.


For further information: Charles McVety, 416.456.0096; Brian Rushfeldt, 403.471.2150



www.newswire.ca/en/releases/archive/June2010/24/c8107.html

[sandi66]

www.businessinsider.com/whats-next-for-the-fed-nothing-its-officially-become-useless-2010-6


What's Next For The Fed? Nothing, It Has Officially Become Useless


The Pragmatic Capitalist

Jun. 23, 2010, 1:45 PM


Today’s Fed decision is largely a non-event. The consensus believes the Fed will leave rates unchanged and is unlikely to alter their language too much as global double dip concerns have increased in recent months:



“The FOMC announcement for the June 22-23 FOMC policy meeting is expected to leave the fed funds target rate unchanged.

With continued market skittishness over sovereign debt problems in Greece and other European countries, the Fed is likely to be cautious about plans for unwinding its expanded balance sheet. Fed watchers likely will focus on statement wording regarding the status of the economy-notably any signs of labor market improvement.”


But as the seemingly endless zero interest rate

policy continues some at the FOMC are beginning to get antsy about the Fed potentially being behind the 8 ball as they were in 2002 and heading into the recession. Of course, I think we are looking more and more Japanese. The problems in Europe have almost certainly compounded our problems and that likely means the Fed will be even more hesitant to raise rates. A recent SF Fed paper confirms this thinking.
They believe the current environment is similar to Japan:



“some worry that maintaining a large Fed balance sheet with substantial holdings of securities as assets and bank

reserves as liabilities could trigger an unwelcome rise in inflation expectations and inflation. However, the doubling of the Fed’s balance sheet has had no discernible effect on long-run inflation expectations measured in the Survey of Professional Forecasters. This insensitivity of inflation to an enlarged central bank balance sheet is consistent with Japan’s decade-long spell of price deflation.”


They conclude that ZRIP is justified perhaps as far as 2012:



“Many predict that the economy will take years to return to full employment and that inflation will remain very low. If so, it seems likely that the Fed’s exit from the current accommodative stance of monetary policy will take a significant period of time.”

The Fed is looking more and more powerless to me as we look more and more like Japan.

tinyurl.com/37bl2pf


ty joye

[sandi66]

Gov. Chris Christie on McChrystal's Downfall, Battle With Teachers' Unions

Thursday, June 24, 2010

This is a rush transcript from "Your World With Neil Cavuto," June 23, 2010. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: The tumult over the general.... How would one Chris Christie handle this? I spoke exclusively with New Jersey's Republican governor just moments ago.

(BEGIN VIDEOTAPE)

GOV. CHRIS CHRISTIE, R-N.J.: I understand, as an executive and a commander in chief of the National Guard here in New Jersey, that, you know, if you're the commander in chief, you — you have to be the person in charge.

Now, there are also times when you're going to want robust debate and advice that differs from yours if you're a commander in chief from the people on the ground who are giving you that advice. And I insist on that myself, not only on domestic issues, but on issues regarding our National Guard.

CAVUTO: You know, Governor, there are people who say insubordination is insubordination. Challenging your boss is challenging your boss. The closest analogy I could make to you, sir, is when you kept on your education commissioner, Bret Schundler, when he had gone ahead and made some deals with — with union heads that you were not a fan of. And you immediately challenged him on that and said that he operated without your authority.

But you didn't fire him. Is there a distinction?

CHRISTIE: Well, you know, listen, again, I think that goes to the relationship. Bret and I had a number of really direct conversations about those decisions that he made...

CAVUTO: What does direct mean?

CHRISTIE: It means I didn't mince any words.

(LAUGHTER)

CAVUTO: OK.

CHRISTIE: And — and in the end, I concluded that Bret understood that he had made a mistake, and that that mistake wasn't going to happen again. And so that's the decision that I made, when you also balance it against the value that I think Bret Schundler will bring to our administration in terms of his ambition on school reform, which we need to have in New Jersey.

And what an articulate spokesmen he's been for that over the last almost two decades in New Jersey. You have to balance all those things out — the benefits of the person and the mistake that was made.

And, in my judgment, with Bret, once I had his assurance that that was something that wasn't going to happen again that it really was, legitimately, just an error in judgment on his part, I felt confident in keeping him on.

But that's kind of my point with the president and General McChrystal. I also have a relationship with Bret where I — when I sat across from him, I believed he was telling me the truth. I think that's what the president probably is going to try to get at today with General McChrystal and why the history of the relationship is probably really important.

In my judgment, keeping Bret Schundler was the right thing to do.

I'm happy to have him on board. No one is going to live life without making mistakes. I certainly make them. So does everybody else. As long as you believe those are honest, genuine mistakes, I think people, you know, should get a second chance.

CAVUTO: You have just put the finishing touches — and there's broad agreement on the principles — of a pretty substantial New Jersey budget, the smallest in five years, at around $29.4 billion.

And you did it all without a single tax increase, and this in the face of developments in Washington where just today, Governor, they're talking about that so-called $250,000 threshold for hiking taxes isn't gospel. Dianne Feinstein of California had said maybe $200,000, could go lower. It's not sacrosanct. That's the president's pledge, not Democratic leaders' pledge.

What do you make of that?

CHRISTIE: Well, listen, I can only talk about what we've done in New Jersey.

And I just think that we're at a point in our economic life here in our state — and — and, candidly, across the country, where increased taxes is just the wrong way to go. The people of our state are not convinced that state government, county government, local government has done all they can with the money we already give them, rather than the money that we have before.

And so...

(APPLAUSE)

CHRISTIE: You know, we got together...

(CROSSTALK)

CAVUTO: Sorry, Governor. I should explain to those wondering where the crowd — we're here with a large forum, town hall meeting that the governor is going to be holding shortly, so there are a good few hundred people in this room. And so, when they react, you're going to hear it.

But I'm sorry.

CHRISTIE: Listen, I — so that's why I made the — made the commitment back in March. I said we are going to balance an $11 billion budget deficit in a $29 billion budget, so by percentage, the largest budget deficit in America, by percentage, larger than California, larger than New York, larger than Illinois. And we're going to balance that without raising taxes on the people of the state of New Jersey.

They've had their taxes raised 115 times in the last eight years, and yet we still have this deficit that we're dealing with.

So, to me, I just think raising taxes to close these holes is something that is counter to getting private sector economic growth, so we can put people back to work in good-paying private sector jobs.

That's what we have to do in New Jersey. And, you know, I think what we have done, in cooperation with the legislature, in being able to do this, Republicans and Democrats, is to — to show folks in New Jersey that we get it and we have to do better with what they're already giving us. And, in fact, in my view, over the next number of years, we should be taking less from them, not more.

CAVUTO: This invariably leads to folks saying you side with the rich. When you vetoed a millionaire's tax, which actually wouldn't have affected those earning as little as $400,000, it was immediately met with hue and cry that you were on the side of fat cats.

The New Jersey Education Association president said: "The choice could not be more stark: tax cuts for millionaires or full school funding for New Jersey kids."

CHRISTIE: Well, let's be clear, the millionaires tax, as they called it, was allowed to expire by Governor Jon Corzine and the Democrats in the legislature in December of last year, before I was even governor. And what I said was, they wanted to pass that tax. That was their choice to extend this tax. They chose not to because they wanted to play politics.

And they thought, wait, we can get a two-fer here, you know? We can raise the taxes and get more money to spend to expand our programs, and we can force the governor to do something we know he doesn't want to do and said he won't do, which is raise taxes on anyone in New Jersey.

And I said to them, you made your choice. You didn't want to take the revenue when you had a governor who would sign it. You're not going to get it now, because raising taxes on businesses in New Jersey, which that would have done, and individuals in New Jersey, is not what's going to make our private sector grow.

We already have the worst tax burden of any citizens in America, when you combine all of our taxes. So raising taxes on anybody — because, believe me, today, they're going to raise taxes on those people. Next year, they will come back and raise taxes on somebody else. And then it's going to get into your pocket.

Someone has to stay on the line and say, no, we can do this by cutting spending and reducing the size of government. That's what I was committed to doing. So, all these other things are just politics and false choices.

And I think they thought that a governor, like Jon Corzine, who, when they pushed, I would fall over. They misevaluated this governor.

(CHEERING AND APPLAUSE)

CAVUTO: When the governor of a very important state comes to one of its smallest towns to send a message, those who love him make it very clear they love him. Those who don't make it very clear why they don't.

What you're about to hear next from the governor of New Jersey is a reason why unions are no big fans of one Chris Christie.

CHRISTIE: You know, what would be fair would be for the teachers union to stand up and take the first step. And they even haven't done that. So, I'm not making any promises.

(APPLAUSE)

(CROSSTALK)

UNIDENTIFIED FEMALE: (OFF-MIKE)

CHRISTIE: Let me finish my answer. Let me finish my answer. Let me finish my answer. OK?

I am not going to make any commitments to the teachers union to do anything until they do something that's other than in their own self- interest. And everything they have done so far is in their self-interests, and that's it.

(APPLAUSE)

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

CAVUTO: Gibbstown, New Jersey, population 4,000, give or take a few.

This is the latest forum for Governor Chris Christie of New Jersey to sort of meet people and get in touch with the people. These audiences are not screened. They can be his supporters. Invariably, there are more than a few critics. He takes on one and all. And, invariably, what happens in rooms like these become of the stuff of YouTube sensations.

The governor at forums that are as obscure on paper as any you have ever heard of has become a political rock star because of what happens in rooms like this.

CAVUTO: What do you make of teachers? Because they really seem to dislike you.

CHRISTIE: I love teachers. No, listen, that's wrong. Teachers don't dislike me. The teachers union dislikes me. And there's a real difference between teachers and the teachers union.

CAVUTO: So, you think there's a disconnect between the teachers and the union?

CHRISTIE: I think there's absolutely a disconnect and I know it both anecdotally...

CAVUTO: But they're out for blood, right, Governor.

(CROSSTALK)

CAVUTO: I mean, they're out to say you're starving kids in the classroom, that you're taking away every program known to man.

CHRISTIE: Sure. Sure. Of course they are.

They're wrong. And they're dramatizing it, and they're playing to the grandstand. And they're playing to their own constituency. I get all that.

CAVUTO: But do you think that criticism — and they have waged it in the press and elsewhere — is what's hurting your poll numbers?

CHRISTIE: No. I think the fact that I have to make really hard choices, that I've cut every department in state government, and every one of those cuts affects some people directly.

We're having a 9 percent reduction in spending year to year from last year to this year. That's unprecedented in New Jersey.

And, so, when you make those hard choices, you know that they're going to anger some people or disappoint some people or hurt some people. I don't like doing that. But this is the job I got hired to do. And if I capitulate, if I continue to kick the problem down the road to my children or my grandchildren, then I will have failed in this job.

And so that's why I said right from the beginning, I don't care about reelection, because if you care about reelection too much, then you look at every one of those polls you're talking about, Neil, and you go, ooh, maybe I should back off a little bit, tack a little this way, tack a little that way.

No. This is who I am. This is what I got elected to do. And at the end of it, this state will be in a better place. It doesn't mean that I will necessarily be reelected, because I will anger special interest groups that are powerful in this state.

But I am not going to back off of what I promised to do. That's my covenant with the people of the state. And — and if it means my poll numbers drop, that's the way it goes. And if it means in four years that they say I want someone else to be governor, that's the way it goes.

I got four kids between 6 and 16. And you know what that means. I'm working for the rest of my life anyway.

(LAUGHTER)

CHRISTIE: So, if it's this job or something else, it doesn't matter.

(APPLAUSE)

CAVUTO: Well, join the club on that.

(APPLAUSE)

CAVUTO: Governor, you — you have taken on unions of all sorts since coming in. And many union leaders have targeted you in attack ads that have gone viral nationally themselves.

And one of the things that typical union members will say — or the ones they talk to for these ads is: I paid into these benefits. These are benefits I was promised years ago, and now along comes Chris Christie to say, well, I'm not going to get them. He's broken a covenant. He's broken a promise.

Never mind it was never your covenant or your promise. You've inherited a lot of this. What do you think of that argument that public workers feel you have a bulls-eye on them?

CHRISTIE: Well, first of all, the argument is simply not true, because what I'm doing is trying to change the pension system in New Jersey so the pensions is actually there for them.

Our pension system is $46 billion in debt — $46 billion in debt. If we don't change, that pension won't be there for the people who are complaining about it right now. And I...

(CROSSTALK)

CAVUTO: But are you addressing the pensions for those who come on the rule now or are you feeling that everyone who is on the payroll now, everyone who has a benefit now, everyone has to give a pound of flesh?

CHRISTIE: Well, what I have — what we've done so far is change the words for new hires.

And we did that in the first 60 days. And that was something people said could never be done, is to change these pension and benefit rules...

(CROSSTALK)

CAVUTO: But the real money is in the established...

(CROSSTALK)

CHRISTIE: Well, that's right. And that's why we have to go to the next step.

And I've said this. And the legislature has said we have to move to the next step. We've been pretty busy. We did pension and benefit reform in the first 60 days. Now we're going to balance an $11 billion budget deficit without a tax increase. Then we're moving to what we're going to talk about today, which is constitutionality capping people's property taxes at no greater increase than 2.5 percent per year, and the only way they can do it is if the voters themselves vote to increase their taxes.

And then, after we're done with that, we'll move on to dealing with additional pension and benefit reform.

But, in the end, remember something. The public sector has been shielded from this recession in New Jersey. People all across New Jersey have lost their jobs. If they have kept their jobs, they're paying more for their benefits. They're making less money. They've at least had their — their salaries frozen, if not cut, and had hours reduced. And yet their property taxes continue to go up. Why?

Because we have continued to give public sector workers 4 percent and 5 percent increases, despite the fact that there's zero inflation. We have continued to say that the teachers union is right, that teachers, in the main, should have to pay nothing — nothing — for family health coverage, medical, dental and vision.

I mean, there's no one in the world who has this deal. And the property taxpayers, the ones who have lost their jobs, the ones who have had their hours reduced, the ones who are paying more for their own health benefits, if they have them, they're the ones picking up the tab.

Now, listen, shared sacrifice is shared sacrifice. And the public sector unions have been shielded from that, and it's got to stop.

(CHEERING AND APPLAUSE)

(END VIDEOTAPE)

CAVUTO: A very feisty audience watching this interview at this forum, before he formally kicked it off. This man, who has only been in office a few months in the Garden State, growing questions as to whether he should aim higher.

I will ask him about that and the buzz around whether a Governor Chris Christie should ever be a President Chris Christie.

(COMMERCIAL BREAK)

CAVUTO: Hey, General McChrystal, join the club, CEOs all but saying today, welcome to life in the crosshairs, big guy. The president's no fan of ours either.

Back to New Jersey Governor Chris Christie, who told me today, you know what? Those CEOs have a point.

(BEGIN VIDEOTAPE)

CAVUTO: The Business Roundtable today had a rather scourging attack on the administration for being anti-business and holding CEOs of all types to — to unfair criticism. I'm cutting to the chase here, Governor. But their underlying message and the headline was, lay off.

What do you think of that?

CHRISTIE: Well, listen, I think everybody has got to be held responsible for their conduct. Corporate CEOs have to be held responsible for their conduct, too. They have an obligation to their shareholders and to the public at large to act in a legal and responsible way that helps to make our society a better place.

And so I think corporate CEOs have to be held responsible when they've done things wrong.

But we also cannot make the business community in America or the business community in New Jersey the scapegoat for every problem by going into their pocket for more money, because, in the end, it's those businesses, both small and large, and the people who start them and run them that create the new jobs that are going to take our unemployment down from near 10 percent, where it is now, to something much more manageable, putting more people to work and then...

CAVUTO: But should they be regulated more? Should they be watched more, scrutinized more?

CHRISTIE: I don't know that it's more, but what I will tell you is that I think they need to be watched.

Now, listen, this is coming from a former U.S. attorney what brought a lot of tough cases against a lot of corporations while I was U.S. attorney, because, you know, sometimes, like any other group of people, people in business misbehave. They break the law. They cut corners. And when they do, they should be held to account for what they do.

Now, I don't know that we need more laws, OK? You know, when you're in Congress, all you want to do is pass more laws. When you're a legislator, just pass more laws. You know, there's been a law against bribery in America of a public official for over 150 years.

But most of my cases when I was U.S. attorney were on bribery of public officials. Is there anybody left who doesn't know it's against the law to take an envelope of cash in return for doing something?

(LAUGHTER)

CHRISTIE: I mean...

CAVUTO: Well, apparently Congress.

CHRISTIE: Well, but then you...

(LAUGHTER)

CHRISTIE: Here's the — here's the thing, though.

I mean, so, we have to be smart about the laws that we pass. I think we have to be much more vigilant about enforcing the laws that are already there, and doing it aggressively.

(APPLAUSE)

CAVUTO: Obviously, that — that registered, but it's now made you a bit of a — a cult sensation on the Internet. There are videos of you, as you know, Governor, that have become viral.

(LAUGHTER)

CAVUTO: And you've become a YouTube sensation. Folks have...

CHRISTIE: My — my teenagers are thrilled.

(LAUGHTER)

CAVUTO: Exactly. Exactly.

And one of the things that come up I, here's a guy who's doing everything Republicans say they stand for, but he's actually doing it. And, invariably, that leads to talk of a Governor Christie maybe being a President Christie.

What do you say?

(CHEERING AND APPLAUSE)

CAVUTO: Don't let the applause...

CHRISTIE: Yes, yes.

CAVUTO: ... prevent an answer.

CHRISTIE: Yes. No, listen, not going — not going to happen.

CAVUTO: What do you mean not going to happen?

CHRISTIE: You know, I want to be governor of New Jersey. I ran for governor of New Jersey.

CAVUTO: Well, so did Woodrow Wilson.

CHRISTIE: I want to be governor of New Jersey.

I understand that, but I'm not Woodrow Wilson.

(LAUGHTER)

CHRISTIE: And I think nobody could confuse me with Woodrow Wilson.

I — I think — listen...

(LAUGHTER)

CHRISTIE: You have to be really, in your gut and in your heart, ready to be president of the United States, if you decide to run for that.

And — and I simply do not have the desire to do it, nor do I think I'm ready. You know, four years ago, there were a lot of people who wanted me to run for governor in 2005, when I was U.S. attorney. And I made the decision, even though many in my party were urging me to do it, not to run, because I loved the job I was in, and I didn't think I was ready to be governor.

CAVUTO: But you already now, Governor, have more experience than Barack Obama when he announced he was running.

(CHEERING AND APPLAUSE)

CHRISTIE: Well...

(CHEERING AND APPLAUSE)

CHRISTIE: That — that doesn't mean — that doesn't mean that I'm ready. That doesn't mean that I'm ready.

CAVUTO: How about...

CHRISTIE: In my judgment — I mean, Neil, this is really important, because...

CAVUTO: OK.

CHRISTIE: ... in my judgment, if you're going to try to do something like that, you have to absolutely believe in your heart and in your mind that you want to do it and that you're ready to do it.

And I want to be governor of New Jersey. I want to do this job for as long as the people allow me to do it. This is a state where I was born and raised, and I love being here. I love living here with my family. I love coming home to my own house every night. I love being with my kids and being, like I was this weekend, at the little league fields and at my son's baseball field watching them play.

And, if I run for president, none of that — none of that is available to me. You give over your entire life.

I'm ready to be governor of the state of New Jersey. I feel comfortable doing it. I feel challenged by it. And I am ready to do the best job I can for the people of this state. And as for...

(CROSSTALK)

CAVUTO: But have you looked at the field right now?

CHRISTIE: No.

CAVUTO: It's not a very impressive bunch.

CHRISTIE: Well, listen...

CAVUTO: I'm just...

(CROSSTALK)

CHRISTIE: ... I'm not going to get into evaluating the field.

CAVUTO: No, no, no, no. I'm asking you to — I'm sorry. I — I just — another thing that came up is, hey, he would make a heck of a running mate.

(LAUGHTER)

CHRISTIE: Is there anybody around who thinks I could be a number two to anybody?

(LAUGHTER)

(APPLAUSE)

CHRISTIE: I mean, it would be kind of hard. I kind of have my own views. It's kind of tough for me to be number two to anybody. So I — you know...

CAVUTO: Well, Teddy Roosevelt was a pretty good number two.

CHRISTIE: Yes, well, I don't know. Teddy didn't have to do it for too long. The president got shot, and he wound up being president.

CAVUTO: Well, that's a very good point.

CHRISTIE: So, you know, he didn't have to be number two for too long.

Listen, I think you've got to know what you do well. I decided a year-and-a-half ago that I wanted to be governor of New Jersey, and that I was willing to fight for it. And I — we had quite a fight here, as you know, for me to win this election. There were — most people in the state where, if you asked them beforehand, didn't think I was going to win this thing.

We have won it, and now we're doing exactly what I promised we would do. That's exciting and invigorating for me. I want to serve the people of the state where I was born and raised. And now is the time for me to focus on being governor.

And so, that's why I have said very clearly to people that, while I'm flattered by all this — I really am — you know, and who wouldn't be? But, on the one hand, I know who I am.

(END VIDEOTAPE)

CAVUTO: We shall see, as they say.

www.foxnews.com/story/0,2933,595246,00.html



ty onceuponatime and gigi

[sandi66]

Unemployment Extension Appears Dead | Cloture Fails on H.R. 4213 UPDATED

June 24, 2010

Washington, D.C. (Jun 24) – The Senate vote on cloture on H.R. 4213 Jobs Extenders and Closing Tax Loopholes Act of 2010 has failed.

Prior to the vote Senator Snowe (R-ME) after a long-winded speech to defend herself against an article in today’s NY Times, the Senator emphatically stated she was voting against cloture. It would appear that once again, the GOP robots have lined up to vote against their own bill.

Once again, the Republican Party is more concerned about protecting tax shelters for the rich over support for America’s working class.

The minority party is once again calling on the Senate to re-write their own bill, H.R. 4213 and offset any emergency spending with Stimulus funds that are unavailable for use. This is one loud and clear message being sent by the GOP, “We do not want to directly help the over 24 million unemployed or underemployed Americans.”

The unemployed can soon expect to see an increase in their COBRA payments as well. The direct consequence will be millions of men, women, and children going without healthcare as well as, food, shelter, and a chance of stability in their lives.

Exactly what is it the Republican Party wants Americans unemployed to do is the question. It is obvious that the big money bankrolls sponsoring their seats in the Senate have more influence over their decisions then common sense and decency.

With nearly 1 million Americans having already exhausted their standard weeks and extended unemployment compensation benefits, with millions more to follow in less than a week, a national emergency needs to be declared by President Obama to at least get FEMA camps set-up to handle the flood of homeless American families.

These families will still need food, medical care, and shelter as much as any other homeless human being on this planet that the United States so quickly dishes out materials and cash to provide for those suffering.

It is once again a sad day for America; the Republican Party has once again proven that only the wealthy in the United States needs to be taken care in the form of tax breaks and credits. As more and more American’s go without, credit ratings will decline, mortgages will foreclose, and credit cards and medical payments go unpaid. This decision by the Republican Party has just caused more damage than any single action ever taken by any foreign or domestic enemy in the history of the United States of America.

God bless and help America’s unemployed and underemployed, for the Republican Party has just condemned them to a life undeserving of any.

WNV Update 7:13 p.m.
- Senator Levin (D-MI) just stated on the Senate floor that the Democratic Leadership is NOT giving up it’s fight for the unemployed… No word on a way around the GOP filibuster was announced…

worldnewsvine.com/2010/06/unemployment-extension-appears-dead-cloture-fails-on-h-r-4213/

[sandi66]

2010 Unemployment Extension Joke -- Mitch McConnell Labels H.R. 4213 'Deficit Extenders Act'

Published June 24, 2010

Senate Minority Leader Jokes About the National Deficit While Millions of Unemployed Fall Off Benefit Rolls

Another day in the Senate and yet another day of lackadaisical musings, debates, and speeches from senators who seem unaware of their sauntering and sluggish approach to passing an extension to unemployment benefits provision in the current American Jobs and Tax Loopholes Act of 2010 (which is called by various other names, like the Tax Extenders Bill and the Unemployment Extension Bill). C-Span's coverage of the day began with House Minority Leader Mitch McConnell (R-KY) couching the unemployment benefits extension bill in terms that his fellow Republicans understand and making a small joke, calling the measure the "H. R. 4213 Deficit Extenders Act."

After Senate Majority Leader Harry Reid (D-NV) took to the floor and made an appeal for his fellow senators to "do the right thing" and pass the latest revision of the tax and benefits extension act, the Senate Minority Leader stood and reiterated the same lines about deficit spending, national debt, and increased taxes the united Republicans have stated for the past several months. Senator Mitch McConnell also charged Democrats with not wanting to pass alternative pieces of legislation, stating Democrats only wished to pass something that would increase the federal deficit.

As can be seen on C-Span, Senator McConnell spent just a little over a minute on the Unemployment Extension Bill before moving on to other matters...

But what Senator McConnell does not mention is the failings of all of the various pieces of legislation, regardless of the numbers that they do or do not add to the national debt. He also does not mention that the Republican stance has been a complete stonewall to anything that the Democrats have proposed thus far, even though the Democrats have pared the overall bill down considerably in efforts to reach a compromise. As late as Wednesday, Democrats were working on cutting the Medicaid provision, which is designed to alleviate the burden of Medicaid assistance burdens on the individual states. And although Republicans have helped cut and pare, the last call for cloture ended in a unanimous vote of "no" for the Republicans.

Political systems depend on diplomacy, politicking, and willingness to compromise -- something the current group of Republican senators seem unwilling to do.

It is certain that Senator Mitch McConnell is a standing-room-only sellout at the comedy clubs, but it is doubtful that the Kentucky Republican would elicit so much as a small giggle out of the millions of people that are currently awaiting the Senate to come to some sort of agreement on the "Deficit Extenders Act" and extend until November the unemployment benefits those same millions rely on to pay their basic bills and pay their rents and mortgages. In just the month of June, an estimated 1.2 million people nationwide have and will find their unemployment benefits suspended. In Mitch McConnell's home state of Kentucky, the unemployment rate stand at 10.4%, with nearly 216,000 people out of work. Thousands have and will lose their eligibility throughout June and the coming weeks as well.

But Senator Mitch McConnell can afford to make ideological jokes about legislation that means so much to so many. He is one of the Senate's many millionaires and can very well afford to stand steadfast on ideological points. He also has nearly five more years before his current senatorial term is over, so he is relatively safe from the ire of his unemployed constituents.

The good citizens of the state of Kentucky may want to consider a process known as referendum and recall.

Now that would be amusing...

******

Source:

"Senate Session, June 24, 2010," C Span Television

www.associatedcontent.com/article/5520610/2010_unemployment_extension_joke_mitch_pg2.html?cat=9

[sandi66]

Dealing with derivatives pushes lawmakers into late-night talks over Wall St. regulation bill

June 24, 2010 - 10:03 PM

WASHINGTON (AP) - Lawmakers negotiated behind closed doors late into the evening Thursday, seeking a compromise on a contentious Wall Street restriction that would force large bank holding companies to spin off their lucrative derivatives business.

Obama administration officials were trying to broker talks between Sen. Blanche Lincoln, D-Ark., the leading advocate of the regulation, and moderate House Democrats and members of the New York congressional delegation opposed to her plan.

"We're listening to the concerns," Lincoln said.

The provision stood out as the last major sticking point in a sweeping overhaul of financial regulation. Congressional leaders were eager to wrap the bill up Thursday, with hopes of getting final House and Senate passage before July 4.

"There have been conversations all day," said Rep. Barney Frank, the chairman of the House-Senate panel assembling the bill. "They are a lot closer than they were, and I believe we will get a deal."

But Rep. Collin Peterson, D-Minn., the chairman of the House Agriculture Committee and an ally of Lincoln's on the provision, was more downbeat after participating in some of the talks.

"They're not making a lot of progress," Peterson said. "Somehow or another we have to do something."

Aiming to clear a deadlock on another potential obstacle, Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, proposed limits on the ability of banks to carry out high-risk trades or invest in hedge funds and private equity funds.

The House-Senate panel has been working into the evening over the past two weeks to resolve differences between the two bills. The legislation aims to avoid a recurrences of the 2008 financial meltdown by requiring a regulatory council to look for threats to the system, by creating a consumer protection bureau, forcing large failing firms to liquidate and policing financial instruments that have been largely unregulated.

But Dodd and Frank left the most contentious issues for last. Lobbyists, government regulators and administration officials ducked in and out of the panel's meeting room, holding sidebar meetings with lawmakers over details in the bill.

The derivatives issue was proving to be the most nettlesome. Derivatives are complex securities often used by corporations to hedge against market fluctuations. But they also have become speculative instruments for financial institutions, the most notorious of which were credit default swaps that hedged against loan failures.

Lincoln would force large bank holding companies — firms like JPMorgan Chase and Bank of America — to place their derivatives business in subsidiaries with their own source of funds. Banks object, saying it would cost them billions and send derivatives trades to foreign markets.

Lincoln, however, managed to win a primary challenge in Arkansas with ads depicting her as tough on Wall Street, after liberal critics had depicted her as being too cozy with banks. She still faces a difficult election in November.

Her talks with House Democrats focused on potential compromises that would place limits on some, but not all, derivatives transactions involving banks.

After hours of private negotiations, Dodd appeared to have found some common ground on other banking trade limits. The Obama administration has pushed for the restrictions on bank trades, a proposal especially championed by former Federal Reserve Chairman Paul Volcker.

Dodd's proposal would permit banks to carry out trades designed to hedge against market fluctuations. The proposal also would bar banks from betting against their clients on certain investments deals.

Bank holding companies would be allowed to invest in hedge funds and private equity funds but would be limited to investing no more than 3 percent of their capital in the hedge fund or private equity fund. There are no such conditions on banks now. Negotiations were ongoing.

House and Senate negotiators were checking off agreements on smaller differences between the bills.

They agreed on new standards for what banks keep in reserve to protect against losses, carving out a grandfather exception for banks with assets of less than $15 billion. The Securities and Exchange Commission has been working on new regulations and the negotiated provision requires the SEC to consider the result

Ending a protracted fight, senators and House members agreed to authorize the SEC to adopt rules that give shareholders of publicly owned companies the right to nominate candidates for corporate boards of directors. They also agreed to require regulators to study whether stock brokers should be more accountable for the advice they give clients and use the study results in writing new rules.

In another side skirmish, big banks succeeded in a last-ditch lobbying effort to kill a House proposal to add ailing mortgage giants Fannie Mae and Freddie Mac to the type of firms that would be subject to liquidation at financial industry expense.

The government took over Fannie and Freddie in 2008 after they suffered heavy loan losses in the housing crash. Their collapse has cost $145 billion and the Obama administration has pledged to cover unlimited Fannie and Freddie losses through 2012, lifting an earlier cap of $400 billion.

www.canadianbusiness.com/markets/market_news/article.jsp?content=D9GI0SS00

[sandi66]

House, Senate clawing to Wall Street bill finish

June 24, 2010: 9:57 PM ET


WASHINGTON (CNNMoney.com) -- Lawmakers are closing in on melding two different versions of Wall Street reform.

On Thursday evening, lawmakers had just started to tackle one of the last and more controversial issues: Cracking down on the big banks' investment activities and risky bets. After that, lawmakers planned to discuss regulating the risky investments known as derivatives.

However, negotiations stalled for another hour around 9 p.m. ET on the most controversial issues. Top White House and Treasury officials were holed up with Democrats in backrooms talking about how to crack down on risky bets.

When conference chairman Rep. Barney Frank, D-Mass., was asked whether lawmakers had reached a deal on controversial issues, he pointed to the gaggle of staffers and lawmakers crowded around Sen. Christopher Dodd, D-Conn., and said: "Does it look like people celebrating a deal?"

"There have been conversations all day," Frank said. "I think we'll get a deal."

For nearly two weeks, a negotiating committee of 43 lawmakers has been reconciling the House and Senate versions of the most sweeping overhaul of the financial regulatory system since the 1930s.

The Wall Street reform bills aim to strengthen consumer protection, shine a light on complex financial products, create a new process for taking down giant, failing financial firms, and make them stronger to prevent such failure.

Lawmakers leading the talks continue to insist that the panel is on track to complete negotiations by Thursday evening, with the goal of preparing the bill for final passage by each chamber next week.

However, with two hours left in Thursday, lawmakers still faced a lot of ground to cover.

Lots to do
The biggest outstanding issues involve the so-called Volcker Rule -- first proposed by former Federal Reserve Chairman Paul Volcker -- which would prevent banks from owning hedge funds and trading for their own accounts.

Lawmakers are also considering an even tougher provision that prevents big banks from making risky bets and having access to emergency taxpayer-backed loans. As originally proposed by Sen. Blanche Lincoln, D-Ark., that ban would have required banks to spin off their departments that trade derivatives. But lawmakers haven't discussed this issue yet.

Earlier in the evening, the Senate released draft language of a measure to limit giant Wall Street banks that take commercial deposits from sinking more than 3% of what's called "tangible common equity" into hedge funds or private equity funds. Tangible common equity is considered a conservative measure of bank financial strength, counting only capital from common shares.

Additionally, any banks' investments in a fund can't be more than 3% of any particular fund's capital.

The provision would not go into effect until either two years after Congress passes the bill or roughly 21 months later -- a period linked to other time periods allowed for regulators to craft the new rules.

Senate Banking Chairman Sen. Christopher Dodd, D-Conn., said he was trying to strike the right balance of limiting risky banking activities without preventing banks from financial firms from proper hedging against legitimate risks.

"We think the overall effect of the amendment we're offering is to strengthen the limitations of proprietary trading," Dodd said.

It was unclear Thursday afternoon how lawmakers would receive the measure. After Dodd briefly explained it, the panel took a break to allow senators to vote.

Later Thursday night, lawmakers are scheduled to tackle general differences on the bills that aim to shine a light on derivatives.

Both bills push many derivatives onto clearinghouses and exchanges that can better pinpoint the value of the securities and create firewalls between buyers and sellers. However, the House version allows more leeway for financial firms to avoid exchanges and avoid posting collateral on such contracts.

Pro-consumer groups have been pushing lawmakers to instead adopt the more stringent Senate version of the bill, which includes an exemption for so-called commercial end-users, such as an airline that is trying to hedge against the changing price of jet fuel

Wall Street firms, however, would be shut out from that exemption. The financial industry has long opposed the measure, as it would take a bite out of profits within their trading business.

As of Thursday afternoon, lawmakers were still debating several other minor pieces of the bill, including ways to provide additional rights to shareholders at publicly-traded companies. The Senate currently wants to limit access to corporate voting measures to large shareholders. House lawmakers spoke out against the proposal Thursday.

Progress made
The panel has made progress on many items of contention.

Resolution fund: On Wednesday, lawmakers agreed to go with a Senate measure to pay to unwind failing financial firms by taxing banks after a major collapse. But lawmakers plan to require some sort of repayment plan get lined up before any money goes toward taking down a failing firm.

Capital cushions: They're also on track to weaken a Senate provision requiring banking parent companies to bulk up their capital cushions with assets that can be more easily converted to cash. The Senate measure would cause all banks to have to raise a lot of money. House negotiators are concerned about the impact, especially on smaller banks and pitched ways to weaken the measure.

Lawmakers are moving toward allowing those bank holding companies with less than $15 billion in assets to "grandfather" in existing assets under existing rules. But banks would have to move toward tougher standards for new securities within five years, starting no later than two-and-a-half years from now.

Consumer protection: They also agreed to house a consumer protection regulator inside the Fed and give it power to regulate credit cards and mortgages, but not auto dealers who make auto loans.

Fiduciary duty: Lawmakers also still must decide several key issues, including how to hold accountable those stockbrokers who cater to retail investors.

The House had wanted to require brokers to behave more like other investment advisers, forcing them to act in the best interest of their clients, even if their clients are small-time investors, including individuals and municipalities. The weaker Senate version would study the issue. Lawmakers agreed to a six-month study of the issue, and then authorized the Securities and Exchange Commission to come up with a way to hold stockbrokers more accountable.

Annuities: Lawmakers also agreed to strip from SEC oversight the regulation of life insurance products called equity-indexed annuities. These are contracts in which customers pay a lump sum upfront in exchange for monthly income over time, pegged to some index. Fixed and equity-indexed annuities are considered insurance and regulated at the state level.

The SEC has been trying to step in and start regulating these products, after complaints that some seniors don't understand the full extent of fees that can hit the value of the investment.

money.cnn.com/2010/06/24/news/economy/Wall_Street_Reform/

[sandi66]

Congress Moves Toward Financial Regulatory Regulatory Reform

Posted 5:00 AM 06/25/10

Rep. Barney Frank (D-MA), chairman of the House Financial Services Committee, made good on his pledge to keep lawmakers working all night on the financial regulatory reform bill.

Democratic and Republican lawmakers worked into sunrise Friday morning -- under continuous CSpan coverage -- to reach a fractured agreement over financial regulatory reform. The so-called "Fin-Reg" bill hands President Barack Obama a solid political victory heading into the mid-term elections.

Deep into Friday morning, the joint Senate and House committee debated the minutiae of financial reform. Lawmakers argued about financial derivatives and the Volcker rule, two areas many economists have said need action in the wake of the financial crisis at the heart of the worst recession in decades.

At 3:30 a.m., Sen. Blanche Lincoln (D-Ark.) reportedly made a deal to soften the derivatives measure in her proposal to the riskiest firms, paving the way for a compromise. That arrangement could not be independently confirmed. At 4:50 a.m. Rep. Frank moved to accept the Senate offer to combine the Senate and House bills. At 5 a.m. Sen Chris Dodd, the retiring Connecticut Democrat and Finance Committee leader (pictured), took charge of the hearing, arguing for a deal. At 5:06 a.m, the lawmakers received a standing ovation from their staffs. And that was it.

Late Night Legislators

Beginning at 9:45 a.m Thursday, members worked until daylight Friday morning to secure an agreement.

By 4 a.m. Friday morning, Chairman Frank announced that the committee had run out of printer paper and drew cheers from dozens of bleary-eyed staffers when he joked that in the future the committee would "tweet" legislative drafts.

Racing to beat the clock ahead of the Fourth of July recess next week, lawmakers worked furiously to reconcile two bills intended to reign in Wall Street excesses and regulatory lapses that contributed to the financial collapse at the heart of the recession.

Democrats insisted that action was necessary. "Doing nothing is a choice, but it's an unacceptable choice," said Sen. Dodd.

Middle of the Night Tactics?

Democrats favored a bill requiring the big financial firms to split off their banking business activity from their proprietary -- or personally enriching -- trading activities. The idea was to force the big national banks to focus on serving their customers, rather than trading on their own account.

Republicans accused Democrats of using middle-of-the-night-tactics to strong-arm through a measure they said bears little resemblance to the issues at hand. GOP members argued the law would deprive investors of much needed access to capital, because they won't be able to use derivative products to finance their operations or otherwise hedge their investments.

The compromise bill seeks to bolster consumer protections and increase transparency of the derivatives -- financial instruments based on underlying securities -- which have been blamed for the financial crisis. Toward the end, Republicans appeared powerless to stop the bill.

Wrangling Over Derivatives, Proprietary Trading

Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) refused to back down on her insistence that derivatives reform be part of the package.

For over one year, Congress has been grappling with how to deal with derivatives, the financial instruments that have been blamed for much of the financial crisis. Derivatives are useful financial tools that allow market players to spread risk around the market. But many in Congress -- and the public -- want lawmakers to crack down on the most sophisticated derivative instruments, which have been blamed for the financial tumult.

Lawmakers also vigorously debated the so-called Volcker Rule, proposed by former Federal Reserve Chairman Paul Volcker, which would separate the banking and proprietary trading functions of the major banks. Republicans showed little appetite for the Volcker Rule, which they say would hamstring the most profitable bank on Wall Street.

In one of the by-products of the agreement, Rep. Frank and Sen. Dodd said that a provision outlawing Hollywood movie futures has been accepted.

www.dailyfinance.com/story/congress-moves-toward-financial-regulatory-regulatory-reform/19530673/

[sandi66]

June 25, 2010, 4:28 a.m. EDT ·

House-Senate panel nears sweeping reform of big banks
A final vote on bill in House and Senate could come next week

WASHINGTON (MarketWatch) -- House and Senate lawmakers on a committee to work out differences in two different, sweeping bank reform bills were near approval early Friday of the most significant increase in the regulation of U.S. banks since the Great Depression, placing new restrictions on the nation's biggest lenders, reining in the Federal Reserve and crafting new consumer protections.

The mammoth legislative package looks set to give the Obama administration a significant triumph in its efforts to reign in Wall Street after a financial crisis drove the economy to the brink of destruction in September 2008.

According to a draft, it requires "too-big-to-fail" banks to install new capital and leverage limits, instructs the government to conduct unprecedented on-going audits of the Federal Reserve's lending programs, as well as a one-time audit of its emergency response programs.

Also included in the sweeping package, is a tough "Volcker rule" -- named for former Fed chief Paul Volcker -- that would limit insured banks' speculative proprietary trading activities.

The controversial proposal would also force big banks to divest their major interests in hedge funds and private equity firms, allowing them to hold no more than 3% of a fund's capital. A big bank's investments in hedge funds and private equity could not exceed more than 3% of its common equity, however big banks could have as long as seven years to comply.

Derivatives, consumer protection
The House-Senate bill also includes a controversial measure that requires big banks to divest certain derivatives units into separately capitalized affiliates.

"The time has come for the financial community to realize they are the means and not the ends," said House Financial Services Committee Chairman Barney Frank, (D., Mass).

The package seeks to limit conflicts of interest by prohibiting big banks for a year from betting against mortgage-backed securities and other packaged securities they sell.

The legislation also sets up an independently funded Consumer Financial Protection Bureau with an annual budget of $850 million. The consumer entities would supervise and regulate mortgage and credit-card products, including payday lenders and others that have so far escaped regulation.

However, lawmakers exempted auto dealers which make car loans from the new agency.

Long road's end
The reconciled bill will have to be approved by both the House and Senate, with a vote scheduled in the House for Tuesday. Congressional leaders expect a final bill to be approved by Congress and sent to President Obama for approval before July 4.

Negotiators had been working furiously, late into the night, seeking to complete work on reconciling the two bills by the end of the week, partly so that the Obama administration could bring a completed bank reform bill to a summit of the Group of 20 major economies in Toronto over the weekend.

Republicans expressed concern that the U.S. may be put at a competitive disadvantage globally if other G-20 countries don't impose similarly tough big bank restrictions on their own financial institutions.

They argued the overall bill will have the impact of driving derivatives and banking overseas, limiting access to credit in the U.S. and hurting job creation.

"It would be a disaster if we were to go on this road alone," said Rep. Spencer Bachus (R., Calif).

The combined bill creates a system to dismantle a failing Lehman Brothers-like megabank, so that its collapse doesn't unsettle the markets.

www.marketwatch.com/story/house-senate-panel-nears-sweeping-big-bank-reform-2010-06-25?reflink=MW_news_stmp

[sandi66]

Goldman Sachs Group pips Morgan Stanley on mergers
Economy

Written by Roberta Murray
Friday, 25 June 2010

Morning Business News, Friday 25 June: Goldman Sachs Group, US banking reform, Rolls Royce, UK economic recovery and savings rates.


Goldman Sachs Group Inc (NYSE:GS) is the most successful mergers and acquisitions adviser so far this year.

The accolade will be a welcome one for Goldman Sachs after months of public relations setbacks.

Goldman Sachs was sharply criticised for its bonus payments and for quotes by its chief executive Lloyd Blankfein that the bank was doing "God's work".

It also faces a fraud case brought by US regulators, the Independent reports.

Goldman has overtaken last year's M&A leader Morgan Stanley, although its US rival advised more clients, and earned an estimated $940.2m in fees this year.

US financial reform
US banks and hedge funds will be hit with a $19bn fee to pay costs associated with financial reform, Barney Frank, chairman of the US House financial services committee, said late on Thursday, the FT reports.

The proposed levy emerged as an unwelcome surprise for the industry deep into a late-evening congressional session to finalise landmark Wall Street reform legislation. Banks with more than $50bn in assets and hedge funds with more than $10bn will be required to pay into the fund as a proportion of their assets.

Rolls Royce Group
Rolls-Royce Group (LON:RR) has warned of “severe disruptions” to its engine manufacturing work because of new European rules that could threaten production lines at the world’s biggest aircraft maker. In a letter to its 7,000 global suppliers sent last month, the company said that there was a danger of a “non-availability” of vital substances that could endanger the production of its aerospace engines, the FT reports.
UK economic recovery at risk

The UK’s economic recovery is at risk if the nation’s banks do not move swiftly to raise the £750bn-£800bn needed to refinance their borrowings due by the end of 2012, the Bank of England warns on Friday. UK banks have greater refinancing needs over the next two years than lenders based in the US, Germany, France or Italy, according to the Bank’s Financial Stability Report, its twice-yearly statement on the nation’s financial system, the FT reports.

Families saving more than they spend
Families are banking more money than they are borrowing for the first time in more than 20 years, a Bank of England report shows. Households last year put £24bn into deposit accounts and took out £20bn in new loans. It is the first time since 1988, when the current records began, that savings exceeded new borrowing, the Telegraph reports.

www.dofonline.co.uk/content/view/4684/152/

[sandi66]

Derivatives Compromise Breaks Financial Regulation Impasse

By Phil Mattingly - Jun 25, 2010

U.S. lawmakers reached a compromise on a measure that will force banks to move their swaps-trading desks to subsidiaries, clearing the way for a final agreement on the biggest overhaul of financial regulation since the 1930.

Banks including JPMorgan Chase & Co. and Citigroup Inc. will be permitted to maintain swaps operations used to hedge risk under an accord announced today during House-Senate talks to resolve differences over the regulatory legislation. The deal ended a standoff over a provision crafted by Senator Blanche Lincoln, an Arkansas Democrat, that was among the most contentious in the debate over new rules for Wall Street.

The compromise plan will give banks two years to push out to subsidiaries trading of non-investment grade entities, commodities and credit-default swaps not cleared through an exchange. The bill also requires most derivatives to be cleared and traded on exchanges.

“There are people who want more restrictive language than I do, and there are those who want to open up the barn door,” Lincoln said today. “We have reached a good compromise.”

During a 20-hour session that began at 9:30 a.m. yesterday, House and Senate negotiators also reached agreement on the so- called Volcker rule, President Barack Obama’s plan for banning proprietary trading and restricting investments by U.S. banks.

The final language on Volcker, named for former Federal Reserve Chairman Paul Volcker, allows banks to invest as much as 3 percent of their Tier 1 capital in private-equity and hedge funds. Investments can’t exceed 3 percent of a fund’s capital.

The original language in the Senate bill would have barred banks, their affiliates and holding companies from sponsoring or investing in private-equity or hedge funds.

Lincoln Provision

Lincoln, who leads the Senate Agriculture Committee, accepted a proposal crafted by her staff, the Treasury Department and House Democrats that would let banks trade interest-rate swaps, foreign exchange swaps and instruments deemed as “hedging for the bank’s own risk.”

Lawmakers, in negotiations over the broad derivatives proposal, agreed to changes to a provision that would have placed a fiduciary duty on swaps dealers. Representative Barney Frank, the Massachusetts Democrat leading the negotiations, proposed replacing the fiduciary requirement with a “code of conduct” that dealers would be required to follow.

“Not that there should be no rules, but rather than a fiduciary standard, we’d have a code of conduct,” Frank said.

End-Users

Businesses that use derivatives to hedge risk from producing or consuming commodities, deemed “end-users,” would be exempt from the clearing requirements as long as the swap met generally accepted accounting principles for hedging, and the firm wasn’t deemed a financial entity.

Frank also added a measure providing for any leftover costs of the legislation to be paid by the largest financial firms, including Goldman Sachs Group Inc., JPMorgan Chase and Citigroup. He said the Federal Deposit Insurance Corp. would impose risk-based assessments on the largest financial firms to cover the shortfall. The industry would need to cover about $19 billion, said Frank.

White House and Treasury Department officials worked into the early morning hours with House-Senate conferees to craft a compromise on the Lincoln proposal, after spending much of the last two days negotiating with staff members.

Representative Collin Peterson, the Minnesota Democrat who chairs the House Agriculture Committee, outlined the agreement to the conference committee, which he helped craft with Lincoln’s staff, a group of House Democrats representing the New York delegation and the New Democrat Coalition.

‘Best Compromise’

Frank said he thought the language went “a little further than I would go, but it’s the best compromise we can get.”

The banking industry focused had much of its lobbying efforts on removing the swaps-desk provision, including a personal appeal to lawmakers by JPMorgan Chief Executive Officer Jamie Dimon. Banking officials said the original proposal would have introduced more risk into the system by eliminating a primary hedging mechanism and would restrict bank capital at a time of economic stress.

Besides the financial industry, it was opposed in its original form by Volcker, Federal Reserve Chairman Ben S. Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair. Supporters, including Nobel Laureate Joseph Stiglitz and three Federal Reserve Bank presidents, said it was necessary to prevent banks from passing their risks to taxpayers.

Derivatives, such as stock options, are financial instruments based on the value of another security or benchmark. Some instruments, including contracts that insured mortgage- backed bonds, have been blamed for fueling a financial crisis that led to the worst recession since the Great Depression.

www.bloomberg.com/news/2010-06-25/derivatives-compromise-breaks-impasse-over-u-s-bill-on-finance-regulation.html

[sandi66]

House, Senate lawmakers finalize deal on bank bill

Atlanta Business News 6:01 a.m. Friday, June 25, 2010

WASHINGTON — House and Senate negotiators have completed a sweeping overhaul of banking regulations and aim to send it to President Barack Obama by July 4.

Lawmakers finished assembling the bill early Friday out of versions passed earlier by the House and Senate. The bill represents the most ambitious rewrite of Wall Street rules since the Great Depression.

The legislation, a priority of the president, sets up a warning system for financial risks and creates a consumer financial protection bureau to police lending. It forces large failing firms to liquidate and sets new rules for financial instruments that have been largely unregulated.

The House and Senate are expected to vote on the final bill next week.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) — U.S. House and Senate negotiators broke through logjams as they worked in a packed hearing room to wrap up a sweeping overhaul of financial regulations in time to get it to President Barack Obama by July 4.

Lawmakers cut deals in public and behind closed doors for days, culminating with a marathon session Thursday that continued into early morning Friday. Lobbyists, aides and Obama administration officials kept close watch throughout the extraordinary proceedings.

The legislation, an Obama priority, would be the biggest rewrite of Wall Street regulations since the Great Depression. It aims to prevent a recurrence of the 2008 financial meltdown that aggravated a national recession and pushed unemployment to 10 percent.

As they worked toward the home stretch early Friday, negotiators softened a Wall Street restriction that would force large bank holding companies to spin off their lucrative derivatives business.

The deal, negotiated between the White House and Sen. Blanche Lincoln, D-Ark., eliminated one of the last major sticking points in a sweeping overhaul of financial regulations. Congressional leaders were eager to wrap the bill up, with hopes of getting final House and Senate passage next week.

The White House also wanted the agreement in place in time for Obama's meeting with leaders from the Group of 20 nations this weekend in Toronto. The G-20 is working on regulatory regimes and the administration hoped the president could attend with a template in hand.

The legislation requires a regulatory council to look for threats to the system, creates a consumer protection bureau, forces large failing firms to liquidate and polices financial instruments that have been largely unregulated.

It would assess a fee on large banks and hedge funds to pay for the $19 billion (€15.5 billion) costs of the bill.

The House-Senate panel numbered 43 total negotiators, though not all attended at all times. By early Friday, senators and House members toiled in shirt sleeves, ties loosened, stifling yawns as they negotiated some of the most complex aspects of the bill.

Lincoln's derivatives issue proved the most nettlesome. Derivatives are complex securities often used by corporations to hedge against market fluctuations. But they also have become speculative instruments for financial institutions, the most notorious of which were credit default swaps that hedged against loan failures.

Initially considered a short-lived measure, the spin off provision gained currency after it survived in the Senate. Lincoln's surprise primary victory this month gave her added leverage to demand its survival.

But in the House, moderate Democrats and members of the New York congressional delegation fought to remove it. Several still opposed the final compromise.

Under the agreement banks would only spin off their riskiest derivatives trades. Banks to keep some of their lucrative business based on trades in derivatives related to interest rates, foreign changes, gold and silver. They could even arrange credit default swaps, the notorious instruments blamed for the meltdown, as long as they were traded through clearing houses. Banks also would be allowed to trade in derivatives with their own money to hedge against market fluctuations.

It prohibits any federal assistance to banks to prevent losses that result from derivatives trading activity.

Negotiators also limited the ability of banks to carry out their own high-risk trades or invest in hedge funds and private equity funds.

The highly complex provisions represented fundamental changes in banking business. While the deal cut into some of the lucrative aspects of bank holding companies, the changes adopted by the negotiators blunted some of the harshest measures.

Bank holding companies that have commercial banking operations would not be permitted to trade in speculative investments. But negotiators agreed to let bank holding companies invest in hedge funds and private equity funds, setting an investment limit of no more than 3 percent of their capital. There are no such conditions on banks now.

The proposal also would bar banks from betting against their clients on certain investments deals.

www.ajc.com/business/house-senate-lawmakers-finalize-555731.html

[sandi66]

China wants to double trade with Canada by 2015

Thu Jun 24, 2010 7:24pm EDT

* Bilateral trade now totals $29 billion

* Canada keen to diversify exports as U.S. struggles

* Deal reached on opening Chinese market to Canadian beef

* Encana, Cameco also land agreements (Adds deal on beef trade. Figures in U.S. dollars)

By Simon Rabinovitch

OTTAWA, June 24 (Reuters) - China, the world's biggest exporting nation, wants to double its trade with Canada to $60 billion by 2015, President Hu Jintao said on Thursday.

Hu made his remarks during a meeting with Canadian Prime Minister Stephen Harper, whose Conservative government is trying hard to boost ties with Beijing.

"I have agreed with Prime Minister Harper that we should take active measures to make our countries' two-way trade volume reach a target of $60 billion by 2015," said Hu, who noted that bilateral trade last year totaled $29 billion.

The Canadian government said later that China had opened its market to Canadian beef in a staged process. Canada is the first country affected by BSE, commonly known as mad cow disease, to regain access to the Chinese market for beef.

In their public comments, neither Harper nor Hu mentioned irritants in the trade relationship. China continues to restrict Canadian canola with blackleg disease to a few ports away from its rapeseed growing areas.

Ottawa recently persuaded China to extend those limited provisions but would like Beijing to lift all restrictions. Harper raised the issue on a visit to China in late 2009.

China's restrictions on Canadian beef exports have also been an irritant. Under the deal announced on Thursday, Canada said China would initially open its markets to Canadian boneless beef, derived from animals under 30 months old, as well as beef tallow for industrial use.

OTHER DEALS ON URANIUM, GAS

Canada, which sends 75 percent of all exports to the United States, is eager to diversify into other markets to offset weak demand from its main customer.

Canadian firms doing big business in China include plane and train maker Bombardier Inc (BBDb.TO) and engineering firm SNC-Lavalin Group Inc (SNC.TO).

As China's energy consumption booms, it is looking to Canada as a stable supplier of resources, and Chinese companies over the past year have begun increasing their investment in Canada's oil sands.

In a separate deal announced on Thursday, Encana Corp (ECA.TO), Canada's largest natural gas producer, and state-owned China National Petroleum Corp agreed to negotiate a joint venture to develop the Canadian company's shale-gas properties in northern British Columbia. [ID:nN24198120]

Canadian miner Cameco Corp (CCO.TO) said it had struck a framework agreement that could lead to supplying uranium to plants under construction by China Guangdong Nuclear Power Holding Co

www.reuters.com/article/idAFN2421732020100624?rpc=44

[sandi66]

Emotional finish to Wall St reform marathon
By Tom Braithwaite in Washington

Published: June 25 2010 11:31 | Last updated: June 25 2010 11:31

At 5.06am lawmakers voted to name the financial reform bill after Barney Frank and Chris Dodd, the chairmen of the House financial services and Senate banking committees.

Nearing the end of the marathon reform effort, Mr Frank stood, walked over to his partner Jim Ready, embraced him, wiped a tear from his eye and sat down to finish regulating Wall Street.

It had been an emotional 20 hours trapped in a Senate conference room with lawmakers debating legislative text worth billions of dollars for the largest US banks. Not all of those emotions were pleasant or serious.

At 4am Mr Frank announced that his staff had run out of paper. It was not the most serious threat to financial reform, which has taken over a year and consumed forests of trees, but it was yet another last-ditch hurdle.

Many hours earlier a priest in full clerical garb, arrived in the Senate conference room, looking out of place in the suited crowd of government officials and financial lobbyists.

Father Juan Molina, foreign policy advisor to the United States Conference of Catholic Bishops, had not come to pronounce the last rites to the legislation, he told the Financial Times but to check on the progress of an obscure provision that introduces checks on companies trading minerals from the Democratic Republic of Congo.

He was a calming man and might have been useful at 5am when Blanche Lincoln, the Senate agriculture chairman, leapt from her seat, waving her arms, to berate her fellow Democrats for killing a minor provision sought by the Commodity Futures Trading Commission, which enjoys the protection of her committee.

That is a dawn turf war in Washington DC. The rare public conference committee may not spark a rush of copycats – few who attended the days of sessions to finalise the legislation will argue for a repeat.

And Congress will stick to its preference for private deals. But it did assemble an eclectic cast of characters and forced them to do at least some of their lobbying in public as temperature soared above 80 degrees Fahrenheit when the air conditioning was switched off. Gary Gensler, the lithe chairman of the CFTC, kneeled by Ms Lincoln’s side – feeding lines in the final tense hours of debate.

Federal Reserve lawyers led by chief counsel Scott Alvarez scurried around, flicking hurriedly through new versions of texts. On the sidelines Republican aides remonstrated with Michael Barr, the Treasury official supervising the reform as they argued about the form of the $19bn bank levy.

Neal Wolin, the deputy Treasury secretary, stepped in to say: “It’s fine Michael” in the manner of a man in a bar dragging his friend away from a fight.

www.ft.com/cms/s/0/7a66cb1e-8042-11df-8b9e-00144feabdc0.html

[sandi66]

Friday, June 25, 2010 - 06:48

US's Geithner Praises Early Morn Conf Comte OK of Fin Reform

WASHINGTON (MNI) - The following is a statement from Treasury Secretary Tim Geithner following the early morning passage by the House-Senate Conference Committee of a sweeping new rule book for Wall Street and the banking industry:

"We commend Congress and specifically Chairman Dodd, Chairman Frank, Chairwoman Lincoln and Chairman Peterson for completing their work within Conference and bringing us this close to enacting meaningful financial reform.

"Today, due to the President's leadership and Congress' resolve, the finish line is in sight.

"The bill that has emerged from Conference is strong. It represents the most sweeping set of financial reforms since those that followed the Great Depression. It establishes the greatest consumer financial protections in American history. It prevents financial firms from taking risks that will threaten the economy. And it provides the government with significant new tools to better protect taxpayers from the damage of future financial crises.

"We urge Congress to carry the momentum forward and move swiftly towards final passage.

"The progress made over the past two weeks is enormously important for the country and provides crucial momentum for global financial reform. As the President travels to Toronto to attend the G-20 Summit, Congress has shown that America is ready to lead by example.

"All Americans have a stake in this bill. It will offer families the protections they deserve, help safeguard their financial security and give the businesses of American access to the credit they need to expand and innovate.

"This is a good day for them and for the cause of financial reform."

** Market News International Washington Bureau: 202-371-2121 **

imarketnews.com/?q=node/15536

[sandi66]

Obama Funds $20M In Taxpayer Dollars To Immigrate Hamas Refugees To US

By Audrey Howard on June 23, 2010, 12:42 pm


HB 1388 PASSED. You just spent $20,000,000 to move members/supporters of Hamas, a terrorist organization, to the United States ; housing, food, the whole enchilada. Whether you are an Obama fan, or not, EVERYONE IN THE U.S. needs to know….

Something happened… H.R. 1388 was passed, behind our backs . You may want to read about it… It wasn’ t mentioned on the news… just went by on the ticker tape at the bottom of the CNN
screen.

Obama funds $20M in tax payer dollars to immigrate Hamas Refugees to the USA . This is the news that didn’t make the headlines…

By executive order, President Barack Obama has ordered the expenditure of $20.3 million in “migration assistance” to the Palestinian refugees and “conflict victims” in Gaza . The “presidential determination,” which allows hundreds of thousands of Palestinians with ties to Hamas to resettle in the United States was signed and appears in the Federal Register.

Few on Capitol Hill, or in the media, took note that the order provides a free ticket replete with housing and food allowances to individuals who have displayed their overwhelming support to the Islamic Resistance Movement (Hamas) in the parliamentary election of January 2006. Now we learn that he is allowing thousands of Palestinian refuges to move to, and live in, the US at American taxpayer expense.

These important, and insightful, issues are being “lost” in the blinding bail-outs and “stimulation” packages.

Doubtful? To verify this for yourself: www.thefederalregister.com/d.p/2009-02-04-E9-2488

PLEASE PASS THIS ON… AMERICA NEEDS TO KNOW

WE are losing this country at a rapid pace.

WE HAVE to do SOMETHING before November, IF we still have the vote then. At the way it’s going who knows?

www.americasnewsonline.com/obama-funds-20m-in-taxpayer-dollars-to-immigrate-hamas-refugees-to-us-906/

[sandi66]

G8: David Cameron must stand up for reform

25.06.10

David Cameron's first taste of international summitry, at the G8 and G20 meetings in Canada this weekend, finds world leaders still grappling with the fall-out from the 2008 financial crisis.

Since then there has been agreement on the need for orchestrated international action to reform the banking system but little action.

Mr Cameron is right, given this slowness, to hint today about the dangers of “grand talking shops”. It is precisely because the G20 meeting in London in April last year achieved so little in the way of concrete measures that leaders are still talking about banking reform now, more than a year later. Nevertheless, it is the banks themselves that have created the greatest barriers to change.

The main point at issue in the so-called Basel III reforms is a demand for banks to keep higher volumes of liquid funds to cushion them against financial shocks. That would be expensive for the banks and they have resisted the proposal, instead suggesting greater oversight of their activities. They have also been highly critical of new taxes introduced by several countries including, this week, the UK.

The Chancellor, George Osborne, was right to resist that pressure and Mr Cameron should push for proper reforms this weekend. We want to see a healthy and profitable banking sector: it would be counter-productive for reforms to hobble the banks too far. Nevertheless, the bankers must take a large share of the blame for our continuing economic woes. It is in their own long-term interests, as well as those of the global economy, to have regulation that lowers the risk of future financial disasters.


We need migrants

Reports of Conservative divisions over immigration policy reflect serious concerns. Next week the Home Secretary, Theresa May, launches a consultation on the Government's plans to place an annual cap on non-EU migrant numbers. She is adamant that the Government has not changed in its intention to get tough on immigration. But other senior ministers have voiced worries over the potential impact on business.

The critics reflect real concern among business leaders that the manifesto pledge to put a cap on numbers is far too rigid. In London, the potential damage is especially clear. Our city's economy has benefited enormously from increased migration over the past decade, while for the City in particular, a significant part of its success has been its ability to attract international talent.

During the election campaign, Labour's perceived laxness on immigration was reckoned to be one reason for disaffection among its core white working-class vote. Immigration does present challenges, for example in terms of the greater burden on public services. Policy needs to be made openly, with proper public debate; that it was often not under the previous government was one cause of the issue's toxicity for Labour. But it is essential that the UK, and London especially, send a clear message that we remain open for business: the new rules must allow the immigration that our labour market needs.


Sun and football

On any sunny summer weekend like the one now beginning, London is a joy, a whole city out enjoying its parks, gardens and barbecues. But this weekend we have the additional attractions not just of Wimbledon but of England's make-or-break World Cup game with Germany on Sunday. Enjoy the sunshine — and don't let the tension get to you.

www.thisislondon.co.uk/standard/article-23849269-g8-david-cameron-must-stand-up-for-reform.do

[sandi66]

President Obama official schedule and guidance, June 25, 2010. To Canada for G-8, G-20 summits
By Lynn Sweeton June 25, 2010 4:40 AM | Permalink | Comments (0)
THE WHITE HOUSE
Office of the Press Secretary
_______________________________________________________________________________________
FOR IMMEDIATE RELEASE
June 24, 2010

DAILY GUIDANCE AND PRESS SCHEDULE FOR
FRIDAY, JUNE 25, 2010

In the morning, the President will travel to Muskoka, Canada for the G8 Summit. The departure from the South Lawn is open press. There will be travel pool coverage of the arrival at Lester B. Pearson International Airport in Toronto and at the Deerhurst Resort Landing Zone in Muskoka, Canada.

In the afternoon, the President will attend the G8 Leaders working lunch at Deerhurst Resort. This lunch is closed press. The President and G8 Leaders will then take a G8 Family Photo. There will be a limited pool spray at the top. Later, the President will participate in a G8 working session with African Outreach Leaders and a G8 working session with African Outreach Leaders and Extended Outreach Leaders. There will be a limited pool spray at the top of these sessions. Following these working sessions, the President, G8 Leaders, Africa Outreach Leaders and Extended Outreach Leaders will take a G8 Family Photo. There will be a limited pool spray at the top.

In the evening, the President and G8 Leaders will meet with My Summit 2010 Youth. There will be a limited photo spray at the top. The President and G8 Leaders will then participate in a G8 Working Dinner. This dinner is closed press.


In-Town Travel Pool
Wires: AP, Reuters, Bloomberg
Wire Photos: AP, Reuters, AFP
TV Corr & Crew: ABC
Print: NY Daily News
Radio: AURN

Out-of-Town Travel Pool
Wires: AP, Reuters, Bloomberg
Wire Photos: AP, Reuters, AFP
TV Corr & Crew: ABC
Print: Wall Street Journal
Radio: NPR


EDT

7:30AM In-Town Travel Pool Call Time

8:50AM THE PRESIDENT departs the White House en route Andrews Air Force Base
South Lawn
Open Press (Pre-set 8:15AM - Final Call 8:30AM - North Doors of the Palm Room)

9:10AM THE PRESIDENT departs Andrews Air Force Base en route Toronto, Canada
Andrews Air Force Base
Out-of-Town Travel Pool (Call Time 7:45AM - Virginia Gate, Andrews Air Force Base)

10:30AM THE PRESIDENT arrives in Toronto, Canada
Lester B. Pearson International Airport
Travel Pool Coverage

11:20AM THE PRESIDENT arrives in Muskoka, Canada
Deerhurst Resort Landing Zone, Muskoka, Canada
Travel Pool Coverage

12:15PM THE PRESIDENT attends the G8 working lunch
Deerhurst Resort
Closed Press

2:00PM THE PRESIDENT and G8 Leaders take a G8 Family Photo
Deerhurst Resort
Limited Pool Spray at the top

2:45PM THE PRESIDENT participates in G8 Session with African Outreach Leaders
Deerhurst Resort
Limited Pool spray at the top


4:45PM THE PRESIDENT participates in a G8 working session with African Outreach Leaders and Expanded Outreach Leaders
Deerhurst Resort
Limited Pool spray at the top

5:45PM THE PRESIDENT, G8 Leaders, African Outreach Leaders and Extended Outreach Leaders take a G8 Family Photo
Deerhurst Resort
Limited Pool spray at the top

7:30PM THE PRESIDENT and G8 Leaders meet with My Summit 2010 Youth
Deerhurst Resort
Limited Pool spray at the top

7:45PM THE PRESIDENT attends the G8 Working Dinner
Deerhurst Resort
Closed Press

9:15PM THE PRESIDENT attends the G8 Working Dinner
Deerhurst Resort
Closed Press

###

blogs.suntimes.com/sweet/2010/06/president_obama_official_sched_348.html

[sandi66]

What U.S. financial overhaul means for the Fed

Fri Jun 25, 2010 6:17am EDT

(Reuters) - After being subject to harsh criticism for lapses during the financial crisis, the U.S. Federal Reserve emerged from an overhaul of financial regulations with a broader role in policing system-wide risk and most of its zealously guarded independence intact.

Politics

The reforms are part of a broader regulatory overhaul meant to prevent a repeat of the 2007-09 financial crisis that tipped the economy into a deep recession and triggered massive taxpayer bailouts of big banks.

Lawmakers from the U.S. House of Representatives and Senate have melded versions of regulatory reform and are expected to send a bill to President Barack Obama to sign into law before the July 4 holiday.

Following is a look at provisions that affect the Federal Reserve:

CONSUMER PROTECTION

An independent Bureau of Consumer Financial Protection would be set up within the Fed. It would be funded by the Fed, although it could turn to Congress if it saw the need for funding. The agency would have power to write and enforce consumer protection rules. The Fed would not be able to intervene in actions of the bureau or review or delay its rules.

SYSTEMIC RISK REGULATION

The Fed would be part of an inter-agency Financial Stability Oversight Council chaired by the secretary of the Treasury to watch for dangers that could roil the wider financial system, giving the Fed some powers to take action. The Fed could be put in charge of supervising large non-bank financial firms the council deems systemically risky. It would be able to break up those firms to guard against risks.

EMERGENCY LENDING

The Fed could no longer use its emergency lending authority to help a specific company, as it did during the crisis with Bear Stearns and American International Group. Instead, it would have to create a lending facility open to firms of a certain type, as it did with Wall Street investment banks and commercial paper markets.

AUDITS AND DISCLOSURE

The Fed's emergency lending during the 2007-09 crisis would be subject to a congressional audit, as would any future special emergency lending. The Fed would be required to make public information about borrowing at emergency facilities a year after each facility closes.

Borrowing at the Fed's discount window and transactions at its open market desk would be made public after a two-year lag. Both of those facilities, whose operations are part of the Fed's ongoing activities, would be subject to congressional audit.

GOVERNANCE

The president would name a Fed vice chairman for supervision. Bankers supervised by the Fed who serve on the boards of directors of the 12 regional Fed banks would lose the ability to vote for the presidents of those regional Fed banks. Lawmakers agreed to an audit of Fed system governance by the Government Accountability Office.

www.reuters.com/article/idUSTRE65O1HN20100625

[sandi66]

Europe Backs New EU-US Data Sharing Deal

06/25/2010

Agreement at last: Europe nears controversial deal on allowing bank data transfer to US.
The European Parliament is on the brink of a controversial deal on sharing bank transfer information across the Atlantic, pushed for by the US to track terrorist finances. The data sharing compromise will put an end to months of disagreement between the EU and the US.

The European Council and European Parliament on Thursday gave the go-ahead to a new draft for the SWIFT data-sharing deal with the US. The long-disputed agreement, lobbied for by the US as way of tracking terrorist finances, is likely to pass through the European Parliament on July 7.


An earlier draft, mooted by the European Commission in mid-June, was thrown out by the EU for infringing on Europeans' privacy rights. Since then, the European Parliament has negotiated a number of concessions on privacy from Washington.

Members of parliament and commentators have expressed their confidence that the breakthrough agreement would be passed. "We have a highly desirable deal for European citizens," Claude Moraes, a member of European Parliament from Britain, told Reuters.

In 2006, the Belgium-based Society for Worldwide Interbank Financial Telecommunication (SWIFT) admitted it had been covertly cooperating with US authorities following the 9/11 terror attacks on US targets. The revelation angered European politicians and citizens and prompted SWIFT to keep all data on European transactions within Europe as of the start of this year.

Bomb Plots Detected

Between 2001 and 2009, however, US investigators had access to the names, addresses and account numbers of millions of EU citizens transferring money abroad.

High-level US officials have been pushing for a new deal, stressing that the information sharing has unearthed numerous terrorism leads, included plots which targeted Europe, such as the thwarted plan to blow up trans-Atlantic flights leaving the UK in 2006.

Adam Szubin, the US Treasury Department official who oversees efforts at tracking terrorist financing, said the latest rounds of negotiations between the EU and the US were tough, prompting the US to make a number of "difficult" and "substantial" concessions.

For the first time, the US has agreed that an independent European observer is allowed to keep tabs on how the US investigators conduct the searches in the encrypted data. Moraes dubbed the move "historic".


Europol, the EU's police co-operation agency, will also be included in the data transfer process, empowered to rule on whether to grant data requests from the US Treasury.

Still, Social Democrats in the European Parliament are still pushing for last-minute changes to the draft while the Green Party criticized the other parties for "giving in" to US demands.

Liberals and conservatives have welcomed the compromise. Alex Alvaro, a German member of European Parliament from Germany's pro-business Free Democrats, called the agreement a "breakthrough." He praised the deal for encompassing "security requirements but also respects the privacy of EU citizens." Birgit Sippel, a German MEP from the Social Democrats, also voiced support, pointing out that, "keeping track of bank transfers for terror investigations is also important for the EU."

www.spiegel.de/international/europe/0,1518,702841,00.html