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Post by sandi66 on Aug 30, 2010 18:54:22 GMT -5
U.S. expands sanctions on North Korea From Scott Spoerry, CNN Senior Producer August 30, 2010 -- Updated 2252 GMT (0652 HKT) Washington (CNN) -- President Barack Obama issued an executive order Monday giving broad new authority to impose financial sanctions on North Korean entities and individuals doing business with and for the secretive communist state. Stuart Levey, Treasury Department under-secretary for terrorism and financial intelligence, said the new order "targets a wide range of illicit activities undertaken by the government of North Korea." Obama specifically named three North Korean entities, but his order covers much more ground, directing the State and Treasury departments to target any individuals or entities that facilitate North Korean trafficking in arms and related materiel; procurement of luxury goods; and engagement in illicit economic activities, such as money laundering, the counterfeiting of goods and currency, bulk cash smuggling and narcotics trafficking. This new executive order supplements existing but more limited U.S. sanctions established in 2008 by President George W. Bush, which targeted proliferators of weapons of mass destruction. And it makes it possible for the U.S. to go after individuals and companies in other countries who assist or sponsor financial relationships with the North Koreans that include any of the banned types of transactions. The action comes just days after former President Jimmy Carter returned from North Korea having secured the release of a US citizen who had been sentenced to eight years of hard labor by the government there for entering the country illegally. Robert J. Einhorn, special Advisor to the State Department for nonproliferation and arms control, told reporters that the timing of the sanctions announcement after the Carter visit was purely a coincidence. edition.cnn.com/2010/WORLD/asiapcf/08/30/us.north.korea.sanctions/?hpt=T1#fbid=E9HI7E1-l6L&wom=false |
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Post by sandi66 on Aug 30, 2010 18:59:42 GMT -5
Billion Dollar Audit Missed by Pentagon Watchdog by Pratap Chatterjee August 30th, 2010 Military auditors failed to complete an audit of the business systems of an Ohio-based contractor even though it had billed for $1 billion worth of work over the last four years, largely done in Afghanistan. Immediately after this fact came to light at a public hearing of the bi-partisan Commission on Wartime Contracting, the Defense Contract Audit Agency (DCAA) scrambled to dispatch an extra ten staff to catch up on the job. Mission Essential Personnel (MEP), which Corpwatch profiled here, supplies 6,000 translators to the U.S. military, mostly in Afghanistan. The company’s costs have not been singled out as questionable or unsupported, but the failure of the government agency to oversee taxpayer money is an indicator of widespread problems and staff shortages at this key military agency. "How does the government know we're getting our money's worth?" asked Christopher Shays, co-chair of the commission and a former member of Congress from Connecticut, at the July 26 hearing. "This was a major miss on DCAA's part," Michael Thibault, the other co-chair and a former deputy director of DCAA, told CorpWatch. DCAA has oversight over half a trillion dollars of taxpayer money every year. It is supposed to constitute the "first line of defense" against corruption when the Pentagon contracts anything from bunker-buster-bombs from Lockheed Martin, to rockets from Boeing, or when it subcontracts military support operations as it did when it paid Halliburton subsidiary, KBR, to hire Sri Lankans to clean toilets in Iraq. Despite past success – including exposing Halliburton’s inability to account for billions of dollars early in the occupation of Iraq – DCAA management has drawn fire in the last two years for giving military contractors a clean bill of health and ignoring serious problems in corporate financial systems spotted by lower ranked staff. Whistleblowers have charged that instead of actively pursuing waste, fraud, and abuse, the top ranks of DCAA were obsessed with signing off on as many audits as possible in the shortest period of time. DCAA management has also been accused of harassing and intimidating staff who have spoken out. The DCAA estimates that the savings it has made for the taxpayer plummeted from $51 for each dollar spent on staff and overhead in 1984 to just $5 today. Muzzling A Pentagon Watchdog The first shot across DCAA's bow was fired by the Government Accountability Office (GAO), the investigative arm of the U.S. Congress. In a July 2008 report that provoked alarm among politicians, the GAO gave DCAA a failing grade for not complying with government standards on 14 major audits. "This auditing agency has been exposed as being fundamentally corrupt in the way they issue audits," Democratic Senator Claire McCaskill, a former Missouri state auditor, told her fellow senators in Congress at the time. The agency’s lapses also sparked internal criticism and multiple internal upheavals as angry staffers battled management - notably in a public forum via the website of Government Executive magazine. Then in September 2009 both the GOA and the Pentagon's inspector general issued critical reports, and the Pentagon, after conducting confidential interviews with 68 DCAA staff, confirmed some allegations of staff harassment. DCAA History Founded in 1965 to provide the U.S. Air Force, Army, Navy, and Ordnance Department with uniform oversight of contractors was first headquartered in the now closed Alexandria, Virginia Cameron Station, a cold windowless building fitted with rows of steel gray desks. Even in the days before computers and modern accounting techniques, its auditors were able to catch corrupt contractors and save millions. To do their jobs, the staff sometimes had to battle their own and Pentagon management who were reluctant to criticize the big contractors. DCAA expanded quickly. By 1966, it had 3,662 staffers around the country with oversight over $21.5 billion. As the Vietnam War ramped up, the DCAA’s "Flying Squad" would fly Huey helicopters to forward bases in the jungle to check up on work done by contractors. By the end of the 1980s DCAA had more than 6,000 staff and today, with headquarters in Fort Belvoir, Virginia, it has some 300 offices and sub-offices around the world. The agency's staff still get on helicopters -- now Blackhawks and Chinooks -- in Afghanistan, Iraq, and Kuwait to visit forward bases and inspect contractor’s books. Although DCAA primarily serves the U.S. military, it also conducts audits for other agencies including the Department of Energy and the National Aeronautics and Space Administration (NASA). In the last 45 years, DCAA's oversight of contract dollars has expanded more than four-fold (adjusted for inflation) to $501 billion in proposed or claimed contractor costs that required 30,352 audits in 2008. Not surprisingly the agency staff has struggled to keep up with demand, and as far back as the 1980s, it had a six to seven year backlog to complete audits. This lag had a major impact on payments to military contractors, which were typically paid just 85 percent of costs on delivery of services, with the remaining 15 percent paid out several years later -- only if the auditors were satisfied. Mad Metrics Meltdown DCAA found an opportunity to change this record of inefficiency in 1993 when Vice-President Al Gore was appointed to head up a commission to "re-invent government" to "work better, cost less, and get results Americans care about." Under the Gore mandate, DCAA Director Bill Reed, ordered sweeping changes in how the agency conducted audits. The first step was telling auditors to catch up as soon as possible. A then senior DCAA auditor told CorpWatch how that order was implemented: "We basically closed out outstanding audits of procurement dollars by looking the other way." Next, Reed instructed his staff to focus on performance "metrics." "To put it bluntly; cheaper, faster, better," former DCAA director April Stephenson would recall later. Multiple layers of supervision and management were created to ensure that staff completed even the most complex of audits in less than 30 days. But tracking time under the new "Defense Management Information System" often took longer than the actual sped-up audit, defeating the whole purpose of making the system work better. "Mad Metrics Meltdown!” wrote a former senior auditor at DCAA to the Government Executive magazine website comment section. “The application of engineering and factory floor measurements to professional activity is a lazy, risk-aversive, anti-intellectual crutch of poor management." For staffers who were serious about their work, there was only one way to complete the auditing: "Unless I'm willing -- and I have been -- to work on my own time on weekends, I can't finish the audits within the certain hours, and I don't -- and at the end, when my performance gets rated, my supervisor will run through a summary of the audits I completed during the year and how much a percentage I ran over the budget. And if I ran more than 10 percent, I got dinged," said Diem Thi Le, a senior auditor in the Santa Ana office of DCAA in southern California with 20 years of experience at the agency. Most whistleblowers say that Reed, who ran DCAA from January 1986 to July 2008, bears the bulk of the blame. "[He] went around all the nation, all the DCAA offices, telling us that there was talk in Congress to privatize our agency, and if we don't become a lean and mean machine, we'll lose our jobs,” said Thi Le. "Looking back, I think that was a scare tactic, because then we began -- afraid of losing our jobs – we began to accept the metrics. And as you know, once you push it, you can push further and further, because the theory is if you don't do it, you don't meet the metrics, we're going to lose our jobs." Dozens of auditors who did not meet metrics -- often staff with disabilities who could not work as fast as their more able-bodied colleagues – were forced out. Conversely auditors who finished quickly got promoted. DCAA whistleblowers say that the system encouraged auditors to ignore contractor faults that slowed audits and caused missed metrics. Big military contractors quickly learned that they could easily pressure DCAA auditors to give them a clean bill of health rather than risk losing a promotion. Supervisors also discouraged auditors from submitting fraud reports without complete proof, even though the rules encourage auditors to report suspicious behavior for further scrutiny by federal criminal investigators. By the time Reed retired in 2005, his part of the government had been "re-invented" and DCAA had shrunk to its 1966 staffing level of 3,400 auditors. Firing the Director The GAO report, the Senate hearing, and the outpouring on Government Executive's website convinced DCAA management that something had to be done. In September 2008, DCAA Director April Stephenson announced what appeared to be radical changes: The agency would scrap 18 of the 19 metrics and shut down Webmetrics, a staff performance management software program. A new set of 11 new "standards" which included eight measurable "metrics" was announced. Stephenson appointed Karen K. Cash, DCAA's assistant director for operations, to follow up on staff complaints which had been invited via an anonymous website. Stephenson also sought advice from the Defense Business Board, a Pentagon advisory board set up by Donald Rumsfeld. The board, composed of senior executives from major military contractors quickly came up with several vague suggestions such as creating a new business plan, centralizing management, and hiring an ombudsperson. Last November, the Pentagon decided that Stephenson wasn't the right person to overhaul the agency. She was re-assigned and Patrick Fitzgerald, the former director of the U.S. Army Audit Agency, took over. DCAA Slows Down In fiscal 2008, the average time to complete a "contractor pricing review" was 28 days. Today the same job takes 72 days. "Some of our audits take longer because we are doing a more comprehensive job," Fitzgerald told Government Executive magazine in July. "If there are other factors that are causing us to take longer, we need to do a deep dive on those and try to figure out how mitigate or to alleviate them." As a result DCAA says it will no longer be able to keep up with the 2008 metrics -- 30,000 audits covering more than $500 billion in proposed or claimed contractor costs. To catch up on the missed audits, like the one for MEP, Fitzgerald says that DCAA has hired 500 new auditors and will add 1,000 more in the next four years. "We are also working to prioritize audit workload and make sure that high-risk audits are identified and completed in a timely manner," a Pentagon spokesperson told CorpWatch, noting that the agency was currently working to create a new strategic plan, and will re-assess the new performance measures introduced in 2008. { Auditing Mission Essential In September 2007 the U.S. Intelligence and Security Command (INSCOM) awarded Mission Essential Personnel (MEP) a five-year-contract worth up to $414 million to provide 1,691 translators in Afghanistan. MEP was a start-up company created by three men, including Chad Monnin, a U.S. Army Special Forces reservist who was injured in a parachute accident. (Procurement rules give preference to companies owned by injured veterans, even if they have no prior experience.) When the Obama administration decided to expand the war in Afghanistan last year, MEP quickly hit the ceiling of what it could bill. On May 10, INSCOM gave MEP a $679 million extension without bothering to put it up for competitive bid. MEP will also get a share of the Intelligence Support Services Omnibus III contract, a five-year contract, with a ceiling of $492 million, announced on August 10, 2010. The only two other contractors that have held multi-billion dollar contracts to supply translators to soldiers and diplomats in the Global War on Terror -- L-3/Titan and Global Linguist Services -- have both been investigated for alleged overcharging, suggesting that this type of work falls in the high risk category of government spending. Yet DCAA failed to conduct a full business systems audit for MEP. Concerned about DCAA's failure, Christopher Shays, one of the co-chairs of the Commission on Wartime Contracting told MEP CEO Chris Taylor: "You don't have to compete for it, and you, whatever your costs are, you get something plus, and you haven't had any audits." Shays assured MEP that he was not suggesting that the company had done anything wrong, re-iterating that the commission considered MEP a "a great American success story." "We currently have DCAA auditors on our property in Columbus, Ohio, working through any number of audit issues. But we welcome it," Taylor told the commission. "We are current on our 2008 and 2009 incurred-cost submissions," he added, referring to the invoices that the company sends INSCOM for payment. DCAA Director Patrick Fitzgerald told the hearing that the problem was that the contract grew quicker than expected. "Are we behind the curve? Yes. We should have been in there quicker," he told commissioners. "Our experience has shown that when contractors grow that fast, the procedures, processes, and systems have trouble keeping up with that growth, increases the risk to the U.S. government." When asked to respond the charges leveled at DCAA at the hearing, a Pentagon spokesperson emailed the following statement to CorpWatch: "We agreed with the commission that additional resources were required at MEP and have worked to ensure that additional DCAA assets are directed to MEP." The spokesperson estimated that it will complete "much of the critical audit work needed to assess MEP's business systems within the next six months." } { Overpaying for Rocket Science In September 2008, Paul Hackler, a DCAA supervisory auditor, testified in the U.S. Senate about how a Boeing subsidiary had built a manufacturing plant in the mid-1990s in Decatur, Alabama. The facility was supposed to produce 40 Delta IV rockets per year, in the hope that private cell phone operators would want to launch satellites to carry voice traffic. Unfortunately for Boeing, cell phone operators switched to land-based towers, dooming the company's $835 million investment. In 2005 Boeing's financial managers allegedly decided to recoup the costs of this failed venture from the U.S. government by folding the cost of building the 40-rocket-a-year plant into invoices it was sending to the Air Force Space and Missile Systems Center. The reason Boeing was able to get away with this was that the government had just agreed to pay Boeing a monthly retainer to maintain a satellite launch capability, even though the government was typically just buying one rocket every couple of years. "Despite our documented objections, upper management instructed us to issue an audit that failed to report numerous violations, and the Air Force awarded Boeing $270 million of past losses," said Hackler. The senators were outraged. "We're talking about serious sirens, bells, and whistles all going off at the same time," said McCaskill "I think the system is failing. I think the performance metrics are not the right ones and I think the culture of this agency has been about this red-yellow-green B.S. as opposed to how well the audits accomplish the goal of saving money. The culture is broken, the performance metrics are broken, and the oversight is broken." } www.corpwatch.org/article.php?id=15617 |
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Post by sandi66 on Aug 31, 2010 13:15:23 GMT -5
Iraq: Consensus over Power-Sharing Agreement Reached 31/08/2010 By Ma'ad Fayad London, Asharq Al-Awsat- Asharq al-Awsat can exclusively reveal from official sources that negotiations between the Iraqiya coalition, led by former Prime Minister Iyad Allawi and the National Coalition, led by Ammar al-Hakim, President of the Supreme Islamic Council, are heading towards an alliance, based on the premise that both Allawi, the Iraqiya candidate, and Dr. Adel Abdel Mahdi, a leader of the National Coalition, will [alternately] hold the positions of Prime Minister and Vice President of the Republic, according to a principle of sharing the mandate period, which is two years each. Sources in the two negotiations committees from both coalitions disclosed to Asharq Al-Awsat by telephone from Baghdad yesterday that "negotiations between (Al-Iraqiya) and the INA are proceeding well, particularly after Al-Sadr Trend which is led by Muqtada al-Sadr backed down on its objection to nominating Abdel Mahdi for prime minister", adding that "Al-Sadr Trend had objected to the IISC's nomination of Abdel Mahdi as the INA's candidate for prime minister." The sources, which preferred to remain unidentified, pointed out that the "INA, where Al-Sadr Trend has the upper hand in the decision because it has 40 seats in parliament, reached the conclusion to nominate Abdel Mahdi. This was opposed by the State of Law Coalition [SLC] which is allied to them under the National Alliance as it is insisting on nominating Nuri al-Maliki, the SLC and outgoing prime minister." They noted that "Al-Sadr Trend's agreement to nominate Abdel Mahdi came after the meeting between the leading IISC figure and Muqtada al-Sadr in Qom, Iran." They added that "Al-Iraqiya List reached deadlock with the SLC and their dialogues went into a vicious circle after the SLC's working paper underlined its nomination of Al-Maliki for prime minister which Al-Iraqiya rejects because this nomination denies its right to exercise its constitutional right of forming the government since it was the first winning list in the legislative elections." The sources went on to say that "the last meeting between Al-Iraqiya and SLC's two negotiations committees was held last night (day before yesterday) during which Al-Iraqiya refused to discuss Al-Maliki's name as the candidate. The meeting also took a negative turn after Al-Maliki's list rejected Al-Iraqiya's proposal to cancel the Accountability and Justice Commission and hand over its dossiers to the Iraqi judiciary, to have its cases dealt with through the courts, and to try any former Baathist who carried out any bad practices against Iraqis according to the established laws. But the SLC rejected this vehemently and insisted on keeping the Commission like a sword hanging over the heads of others." According to the sources, "the meeting veered from its usual framework and saw arguments between the two sides over this issue and another one concerning the SLC's accusation that the Iraqi resistance is terrorism and its refusal to acknowledge there is an honest resistance." They also said that "the road is now paved before Al-Iraqiya and INA to reach and establish an alliance that includes in it the Kurdish Alliance which both Allawi and Al-Hakim consider a principal and important partner in governing Iraq and the decision-making process and as the Alliance which is closest to them." They pointed out that "Allawi's visit today (yesterday) to Arbil and his meeting with Kurdistan Region President Masud Barzani came within the framework of discussing the establishment of an alliance between Al-Iraqiya, the INA, and the Kurdish Alliance." According to the same sources, "the closest scenario being discussed is having Allawi and Abdel Mahdi sharing the leadership of the next government, with each serving two years, without going into the details of who will serve first and with the important observation that members of government would not be liable to change when the prime minister is changed. The government's plans and programs would also be implemented in accordance with the plans that the three members of the alliance agree upon." On the reason why Al-Iraqiya was unable to reach such an agreement with the SLC, the sources explained that "there are deep fears from Al-Maliki's insistence on remaining in his post after taking over for two years if he was to serve the first two-year term or would remain in control if he served the second term, influencing the next elections and not recognizing their results, exactly as is happening today since the political process is being delayed because of his insistence on not practicing the peaceful rotation of power." They asserted that "we have clearly discovered, as all the Iraqis have felt, that Al-Maliki does not think or imagine himself outside the prime minister's post and that he refuses to acknowledge the others' rights to form the next government. This has created big security problems for the Iraqis claiming dozens of innocent people daily. In the absence of the state, everything is being ruined, especially the security, services, economic, judicial, and even social situations." They pointed out that "behind the scenes of the talks between the SLC and INA and following the latter's categorical rejection of Al-Maliki's nomination, the names of Ali al-Adib, Al-Dawa Party's deputy leader, and Haydar al-Abadi, a leading member of Al-Maliki's party, were discussed as the SLC's candidates for prime minister instead of Al-Maliki. But these ideas just remain proposals without becoming an official nomination. Al-Maliki is willing to remove from his way any member of his party or list if he felt he was seriously threatening his post; especially as he is the one who made the famous statement that "there is no better candidate than me for prime minister)." aawsat.com/english/news.asp?section=1&id=22155ty david |
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Post by sandi66 on Aug 31, 2010 15:11:12 GMT -5
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Post by sandi66 on Aug 31, 2010 23:02:16 GMT -5
Citi: Gasparino Says Pressure Forced Meet with Mayo
By Tiernan Ray
A footnote to the report yesterday by Bloomberg that Citigroup (C) has agreed to meet with CLSA Mike Mayo after apparently spurning him for 21 months: Fox Business Network’s Charlie Gasparino reports this afternoon that Mayo tells him he was offered a meeting “with key executives by the end of September.”
It’s unclear if that meeting with include CEO Vikram Pandit, reports Gasparino. Citi had no comment today, he notes.
Gasparino frames the capitulation in light of his series of articles over the last week or so:
But following several reports on FOX Business, what began as an esoteric argument over accounting became a story of corporate accountability. At issue: Whether a major company, particularly one that was bailed out and is partially owned by the federal government, can play favorites and provide access to key officials only to those analysts who tout its stock?
I should add that Gasparino had indicated in his article yesterday morning that Citi expected to meet “in due course” with Mayo, anticipating the report by Bloomberg later in the day.
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Post by sandi66 on Sept 1, 2010 5:22:36 GMT -5
Bernanke to address financial crisis inquiry panel WASHINGTON -- Bernanke will testify Thursday before the bipartisan Financial Crisis Inquiry Commission (FCIC). The panel was created by Congress to investigate the roots of the financial panic that rocked Wall Street and the global economy starting in 2008. Bernanke and other officials considered the banks “too big to fail” because they feared the banks' failures could spread panic and bring down the broader financial system. The government rescued insolvent companies such as Bear Stearns, Merrill Lynch and American International Group Inc. by brokering their sale to competitors or putting them under government control. Bernanke was a key architect of the bailouts. He worked closely with former Treasury Secretary Henry Paulson and Treasury Secretary Timothy Geithner, who was president of the Federal Reserve Bank of New York at the time. Geithner and Paulson already have testified before the FCIC. Bernanke and Geithner have argued that the problem of “too big to fail” was solved by a sweeping overhaul of financial rules that was signed into law this summer. The law includes a process for shuttering big, complex financial companies using a money from investors and loans from the Treasury Department. Critics say the change will not prevent future bailouts. They point out that the biggest banks grew larger as the government pushed them to absorb smaller players. The hearings also will include testimony from Federal Deposit Insurance Corp. Chairman Sheila Bair and Dick Fuld, who was CEO of Lehman Bros. when it filed for bankruptcy protection. www.chinapost.com.tw/business/americas/2010/09/01/270849/Bernanke-to.htm |
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Post by sandi66 on Sept 1, 2010 5:28:30 GMT -5
Mere maid service on Wall St. AS I SEE IT September 1, 2010 By Hans G. Despain Nearly a year into office, the Obama administration had failed to propose, let alone pass, any significant legislation reforming the financial system. In the heat of the July summer of 2010, President Obama signed into law new financial regulations. The consumer protections and the creation of the Consumer Financial Protection Bureau should be applauded. Little else deserves applause. Many will applaud the return of high profits for investment banks, hopefully leading to economic growth. Unfortunately, high profits with weak regulations also imply a return to financial instability. Following the financial meltdown of 2008, a general consensus existed for financial reform to prevent Wall Street from Samson-like self-destruction, bringing down Main Street and the entire economy with it. Nearly a year into office, the Obama administration had failed to propose, let alone pass, any significant legislation reforming the financial system. Meanwhile, financiers, enthusiastically desperate for government bailouts when failing, were arguing that regulations were not needed and unacceptable. Big banks are now more powerful, while the financial industry is becoming more concentrated and consolidated. Goldman Sachs, Merrill Lynch, and Morgan Stanley reported record profits in 2009. Consequently, executive pay and bonuses are at all-time highs. Treasury Secretary Timothy Geithner pushed for the establishment of government power to resolve failed giant banks in an orderly manner. This amounts to a proposal for the license to clean up after a party, making the federal government the official maid service for Wall Street. Government as maid service is bad policy and offensive to most Main Street Americans. Following the election of Scott Brown, Mr. Obama appeared to have received the message, “It is still the economy, stupid,” loud and clear. After all, Massachusetts citizens who believed the economy to be in bad shape voted for Mr. Brown by a margin of 56 percent to 39 percent. Democrats seem desperate to demonstrate a tough-on-Wall-Street agenda. Quickly after the Brown election, with his economic team behind him, Mr. Obama proposed new reforms. The face for the economic legislation was no longer “friendly to Wall Street” Mr. Geithner and Larry Summers, but Paul Volcker — symbolically moving the administration’s Wall Street policy from a “business as usual” maid service to something less offensive. The Volcker-inspired legislation suggests limitations on the size of some financial institutions and puts strict limits on access to Federal Reserve loans to traditional commercial banks. In addition, the “Volcker Rule” will bar commercial banks from engaging in high-risk investment activities. The Volckerization of policy is a modest improvement, but not enough. Volckerization amounts to saying the federal government will still clean up after the party, retaining its maid-service status, but now impose party drinking limits. The problem is Volckerization only applies to commercial banks, which is analogous to placing drinking limits on the elderly while the 16-year-olds (i.e. investment banks), and other non-elderly, have virtually no drinking limit. There simply has not been a significant level of participation in high-risk investment activity by commercial banks. Volckerization is a solution to a non-problem, or, at best, the least of our problems. The real problem is the activity of financial investment institutions and their “shadow banking” activity. The most dangerous activity from the financial investment institutions is how they retain their funds and then invest them. Investment banks retain funds in short-term and overnight markets, then invest them in highly volatile, longer-term, and illiquid (i.e. harder to sell) assets. Unregulated, such investments are a serious gamble and economically dangerous to employment on Main Street. For example, investment banks enter a money market for an overnight or short-term loan. They then take the loan and invest it in price volatile and illiquid assets. This is to borrow from Peter to pay Paul. The problems arise, or arose, when the price or interest of illiquid assets changed negatively. Whereby, the Peters are no longer willing to loan to retain the assets of Paul, freezing the entire financial system, and without bailouts, jeopardizing the whole U.S. economy. Consequently, Main Street businesses become unable to secure loans and unemployment increases sharply. The investment bank borrowing from Peter to pay Paul is left unaddressed in the final legislation. Meanwhile, national unemployment remains nearly 10 percent, foreclosures on personal mortgages continue, and the values of our homes remain depressed. To invoke the spirit of the great economist Hyman Minsky, in the last 30 years Wall Street investment bankers have won nearly every battle with authorities, but in winning the investment bankers destabilize the economy. And the real losers are those hurt by unemployment, foreclosure, increased interest rates, and inflation — in short, Main Street Americans. We deserve and need more than a maid service as official financial policy. Hans G. Despain is a professor in the Department of Economics at Nichols College in Dudley. www.telegram.com/article/20100901/NEWS/9010340/1020 |
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Post by sandi66 on Sept 1, 2010 5:34:28 GMT -5
Ron Paul questions whether there's gold at Fort Knox, NY Fed By Michael O'Brien - 08/30/10 10:21 AM ET Rep. Ron Paul (R-Texas) said he plans to introduce legislation next year to force an audit of U.S. holdings of gold. Paul, a longtime critic of the Federal Reserve and U.S. monetary policy, said he believes it's "a possibility" that there might not actually be any gold in the vaults of Fort Knox or the New York Federal Reserve bank. The libertarian lawmaker told Kitco News, a website tracking news about precious metals, that an audit was necessary to determine how much the U.S. maintains in gold reserves in case the government were to use gold to back the dollar. “If there was no question about the gold being there, you think they would be anxious to prove gold is there,” he said. “Our Federal Reserve admits to nothing, and they should prove all the gold is there. There is a reason to be suspicious and even if you are not suspicious why wouldn’t you have an audit? “I think it is a possibility," Paul said when asked if there was truth to rumors that there was actually no gold at Ft. Knox or the New York Fed. Paul had been one of the Republicans to spearhead a broader audit of the Fed as part of the Wall Street reform bill passed through Congress this year. The provision, which was weakened somewhat in the final version, found Paul joining with a number of Democrats to require the Fed to open its books and outline its assets and liabilities. The gold reserves, which Paul's new bill would audit, are generally seen as a guarantee on a nation's currency, but the U.S. moved the dollar away from being tied to the price of gold in 1972. Paul stopped short of calling for the reinstitution of the gold standard and instead called for the government to allow the use of hard currency — gold and silver tender — alongside the use of the dollar. "If people get tired of using the paper standard they can deal in gold or silver,” he said. thehill.com/blogs/blog-briefing-room/news/116341-ron-paul-plans-bill-to-audit-us-gold-reserves |
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Post by sandi66 on Sept 1, 2010 6:24:16 GMT -5
IRS Issues Guidance On FATCA, by Mike Godfrey, Tax-News.com, Washington Wednesday, September 01, 2010 The United States Treasury and the Internal Revenue Service (IRS) have stated their intent to issue guidance on the reporting requirements imposed on foreign financial institutions (FFIs) by the enactment of the Foreign Account Tax Compliance Act (FACTA) on March 18, 2010 within the Hiring Incentives to Restore Employment (HIRE) Act. They are requesting public comments on the priority issues they have identified in the preliminary guidance on the application of the FACTA. The legislation makes a number of changes to tax law affecting individuals with foreign bank accounts and assets held abroad. The FACTA provisions of the HIRE Act add a new chapter 4 to Subtitle A of the Internal Revenue Code. Chapter 4 expands the information reporting requirements imposed on FFIs, as defined in the proposed guidance, with respect to accounts held abroad by US residents. FFIs are required to deduct and withhold a tax equal to 30% of the amount of any payment to an FFI unless the FFI agrees to disclose the identity of the US residents and report on their bank transactions. The IRS intends to publish a draft FFI Agreement and draft information reporting and certification forms, which will be electronically filed. The name, address and taxpayer identification number (TIN) is required of each account holder which is a specified US person; and, in the case of any account holder which is a US-owned foreign entity, the name, address, and TIN of each substantial US owner of such entity. The account number is also required to be provided, together with the account balance or value, and the gross receipts and gross withdrawals or payments from the account. To facilitate this process, the Treasury and the IRS contemplate that the IRS will issue employer identification numbers (EINs) to participating FFIs and that participating FFIs will use these EINs to identify themselves to withholding agents. Chapter 4 is generally effective for payments made after December 31, 2012, and any US resident who holds more than USD50,000 in a depository or custodial account maintained by an FFI is required to report on any such account under this legislation. The Treasury and the IRS intend to issue definitive guidance in advance of that effective date to ensure that affected FFIs have time to implement the systems and processes necessary to comply fully with the new withholding, documentation, and reporting obligations imposed. An FFI is defined as any financial institution which is a foreign entity, and which accepts deposits in the ordinary course of a banking or similar business; holds financial assets for the account of others as a substantial portion of its business; and/or is engaged primarily in the business of investing, reinvesting, or trading in securities, partnership interests or commodities. However, there are categories of business which have been excluded for having to report or withhold under the FACTA. These include certain holding companies, start-up FFIs for the first 24 months of their operation, hedging/financial centres of a non-financial group, and the issuers of insurance contracts that have no cash value. A comprehensive report in our Intelligence Report series giving a country-by-country analysis of offshore investment funds, stock exchanges and trusts, with an analysis of the US QI regime, is available in the Lowtax Library at www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at www.lowtaxlibrary.com/asp/description_report9.asp www.tax-news.com/news/IRS_Issues_Guidance_On_FATCA____45152.html |
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Post by sandi66 on Sept 1, 2010 11:53:37 GMT -5
Ex-Lehman CEO blames government for firm's collapse Richard Fuld cites the decision 'not to provide Lehman with the support given to each of its competitors.' His testimony comes in the final set of Washington hearings by a federal panel investigating the financial crisis. September 1, 2010|9:13 a.m. Reporting from Washington — The former chief executive of Lehman Bros., whose failure in 2008 helped trigger the financial crisis, blamed the government for its collapse, saying Wednesday there was a double standard in the decision by federal officials to grant extraordinary assistance to other companies but let his go bankrupt. "In the end … Lehman was forced into bankruptcy not because it neglected to act responsibly or seek solutions to the crisis but because of a decision, based on flawed information, not to provide Lehman with the support given to each of its competitors and other nonfinancial firms in the ensuing days," Richard S. Fuld Jr. said in prepared testimony to the federal panel investigating the financial crisis. He blamed the problems of the legendary Wall Street investment bank on "uncontrollable market forces and the incorrect perception and accompanying rumors that Lehman did not have sufficient capital to support its investments." -------------------------------------------------------------------------------- Get a daily snapshot of market numbers and trends, delivered right to your mobile phone. Text BUSINESS to 52669. -------------------------------------------------------------------------------- His testimony comes in the final set of Washington hearings this week held by the he Financial Crisis Inquiry Commission. The 10-member commission -- six Democrats and four Republicans -- must deliver a report by Dec. 15 examining the causes of the crisis and the reasons for the problems at every major financial institution that was bailed out or allowed to fail. On Wednesday and Thursday, the panel is addressing the issue of institutions deemed "too big to fail" by looking at government decisions to allow Lehman Bros. to collapse but to intervene to help save Wachovia Corp., the nation's fourth-largest bank at the time, a couple of weeks later. "Many people have asked this commission whether the government during the most recent panic did the right thing to toss flotation devices to major financial firms while most of America took on water," said the panel's chairman, Phil Angelides. "The real question before us is: How did we end up with only two choices: Either bail out the banks, or watch our world sink?" The collapse of Lehman Bros. in September 2008 set off a chain reaction of events. Fed Chairman Ben S. Bernanke and former Treasury Secretary Henry M. Paulson spent the weekend of Sept. 13, trying to engineer a sale of Lehman to avoid its failure but decided not to provide government money to help secure a deal. Federal Reserve counsel Scott Alvarez told the commission that Lehman did not have the collateral required to get emergency help from the central bank and it couldn't take the risk on the company's plan to save itself. "The Federal Reserve believed it would not recover the funding it gave to Lehman," he said, "and that's why it did not extend the credit. From my perspective, there was no legal option." Fuld said that, during that weekend, the Fed expanded the type of collateral it would accept from investment banks. "Only Lehman was denied that expanded access. I submit that had Lehman been granted that same access as its competitors, even as late as that Sunday evening, Lehman would have had time for at least an orderly wind down or for an acquisition, which would have alleviated the crisis that ensued," Fuld said in his prepared testimony. Lehman's collapse sent U.S. and world stock markets plummeting and put insurance giant American International Group on the brink of collapse, which threatened more financial chaos and fears of another Great Depression. Federal officials stepped in to save AIG and then successfully pushed Congress to approve the $700-billion bailout fund to help stabilize the financial system. During that hectic time, Wachovia Corp. teetered near collapse, and federal regulators helped engineer a deal to sell it to Citigroup. Under that deal, the Federal Deposit Insurance Corp. would have been responsible for losses above $42 billion incurred by Citigroup as a result of the acquisition. The FDIC's board was ready to grant the extraordinary assistance because it determined that Wachovia's failure was a risk to the entire financial system, said John H. Corston, acting deputy director of the FDIC's Division of Supervision and Consumer Protection. But Wells Fargo & Co. then struck a deal to take over Wachovia that required no federal support after the Internal Revenue Service changed its tax rules for how banks could write off losses due to acquisitions. The commission's vice chairman, Bill Thomas, said the "extreme fundamental change in the tax code" still cost taxpayers money but allowed the Fed and the FDIC to avoid direct government support to keep Wachovia from failing. Congress quickly stopped the tax-law change shortly afterward for use by other banks. "Isn't taking money away from taxpayers … through a change in the tax code government assistance?" Thomas asked former Wachovia Chief Executive Robert K. Steel, who had noted the Wells Fargo deal required "no government support." www.latimes.com/business/la-fi-crisis-inquiry-20100902,0,2620324.story |
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Post by sandi66 on Sept 1, 2010 12:08:14 GMT -5
SEPTEMBER 1, 2010, 12:49 P.M. ET Finra Guards Against Halts Triggered by Off-Exchange Trades By JACOB BUNGE And KRISTINA PETERSON A U.S. securities regulator is taking steps to prevent erroneous trades made in dark pools and other private markets from accidentally triggering the array of safeguards introduced in the wake of the May 6 "flash crash." The Financial Industry Regulatory Authority is tightening industry practices after several of the eight trading halts initiated since early June were prompted by off-exchange transactions, including trades in shares of Citigroup Inc. and Micron Technology Inc. Finra, the industry's self-regulatory body, wants to ensure that private trades are less likely to set off the new circuit breakers that freeze all stock deals. "The idea is to try and minimize the chances of nonmarket forces from triggering major market events," said Steven Joachim, Finra's head of transparency services. Exchanges and regulators are working to expand the number of stocks covered by a new regime of circuit breakers, which are intended to limit sudden price swings. The new rules call for a five-minute timeout in trading if a stock moves more than 10% in a five-minute period, allowing market participants to reassess its price. While U.S. exchanges supervise price movements on public markets, circuit breakers can also take effect if a transaction is carried out on more lightly regulated, private venues at prices beyond the 10% threshold. Around 30% of U.S. stock trades are off-exchange, transacted on electronic venues like dark pools or executed by Wall Street banks that match up customers' buy and sell orders. These deals are submitted to trade-reporting facilities overseen by Finra, and added to the consolidated tape tracking the most recent stock prices. A market-wide halt in a particular stock can be triggered if the reported trade strays too far from the previous price. "You really don't want to have a situation where a very small trade is reported erroneously and halts trading of a very, very active name," said Jamil Nazarali, managing director at Knight Equity Markets. He pointed to a June 29 reporting error that saw a relatively tiny over-the-counter trade in Citigroup shares temporarily halt business in the heavily traded bank stock. Finra uses a price-validation process when off-exchange transactions are submitted, designed to catch seemingly anomalous trades and send them back to the senders to be double-checked. That process has had to evolve to align with the methodology of the single-stock circuit breakers, said Finra's Mr. Joachim, taking into account the percentage moves that initiate the new trading halts. "The original logic was put in many years ago when the markets were less volatile," he said. Finra has also modified what sorts of trades impact the last sale price of a stock, to allow for certain event- or derivatives-linked transactions that may push shares beyond the circuit-breaker caps. The trade in Micron shares that halted the market Aug. 5 was one such transaction, according to market observers. Knight's Mr. Nazarali said the challenge lies in ensuring the new restrictions don't prohibit real trades from going through. "There's going to be many gray areas," he said. "You want to make sure you do it in such a way that you're not filtering out something that's really a good trade." online.wsj.com/article/SB10001424052748703882304575465662993907440.html |
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Post by sandi66 on Sept 1, 2010 12:27:58 GMT -5
WRAPUP 2-US regulators see bank reforms helping avoid crises Wed Sep 1, 2010 11:59am EDT * "Too big to fail" subject of 2-day crisis panel hearing * Lehman Brothers collapse and Wachovia sale examined * Fed and FDIC officials say reforms boost their options * Fuld reiterates view that govt could have helped Lehman (Updates with details, comments from hearing) By David Lawder and Dave Clarke WASHINGTON, Sept 1 (Reuters) - U.S. bank regulators pinned their hopes on Wednesday on new powers to avert another round of bailouts should crisis strike the handful of mega-firms now even larger than those previously considered too big to fail. A commission investigating the causes of the financial crisis was told that financial reform legislation, signed into law in July, gives regulators more options, imposing stricter rules on risk-taking and management at large institutions. "The approach going forward will have to be different," said Scott Alvarez, general counsel for the U.S. Federal Reserve's board of governors. "More regulation on the front side to try to prevent the problem and more drastic solutions in the event someone gets into trouble." The Financial Crisis Inquiry Commission is holding its seventh public hearing, a two-day session focused on what to do about "too big to fail," firms that are so central to the financial system that their disorderly failure could trigger a global economic meltdown. Some financial institutions have grown even larger since the crisis, having absorbed the assets of failed competitors. "The real question before us is: How did we end up with only two choices - either bail out the banks, or watch our world sink?" said commission Chairman Phil Angelides. The financial crisis, that began with failing U.S. home mortgages, led to the collapse, bailout or government-brokered sale of major financial firms including Bear Stearns, Lehman Brothers, Washington Mutual, Citigroup and Wachovia in 2008, touching off the worst global recession in decades. Although the U.S. economy has been growing since mid-2009, lending remains constrained and unemployment high, consequences of the crisis that are likely to linger for years. The bailouts were wildly unpopular, and many politicians that supported them are still dealing with the voter backlash as November congressional elections approach. The regulatory reform, known as Dodd-Frank after the chairmen of the two committees that hammered out the provisions, was aimed at curbing excessive risk-taking by countering the perception that too-big-to-fail firms enjoy an implicit government guarantee. Some critics of the legislation argue regulators will still be highly reluctant to let a big financial firm fail. REPORT DUE IN DECEMBER Wednesday's hearing looked at the September 2008 Lehman bankruptcy, where regulators say they lacked authority to intervene and could not find a buyer, and Wachovia's government-brokered sale that began later that month. Former Lehman Chief Executive Dick Fuld will testify later on Wednesday that regulators did not grant Lehman Brothers the same assistance as its competitors, knocking out the possibility of an orderly unwinding of the firm that could have avoided aggravating the financial crisis. [ID:nN01258230] [ID:nN07249525] Thursday's session features Fed Chairman Ben Bernanke and Federal Deposit Insurance Corp Chairman Sheila Bair. The Fed gets greater powers to regulate systemically important financial institutions under the new law, while the FDIC is the agency that would liquidate a firm. The 10-member, congressionally-appointed commission is due to issue its report on the causes of the crisis by Dec. 15. Lehman's collapse was preceded by the government takeover of housing finance giants Fannie Mae and Freddie Mac. It was followed days later by extraordinary government aid to American International Group (AIG.N) as credit markets froze with fear. Wachovia, burdened with souring mortgages, also found itself unable to raise capital and was bought by Wells Fargo (WFC.N), which beat out a Citigroup (C.N) bid that would have required government assistance. The FDIC played a major role in that deal, with Bair reaching out to executives in after-hour phone calls. "September of 2008 will likely be remembered as an epochal period in the history of American finance," Thomas Baxter, general counsel for the New York Fed, wrote in prepared remarks. He is scheduled to testify later on Wednesday. FED'S DEFENSE Baxter defended the New York Fed's actions with respect to Lehman, saying it worked hard with the U.S. Treasury and other regulators to try to save it. "We did not succeed, but the effort made was serious and determined. We came very close," he said in written testimony. In the end, Lehman was sentenced to bankruptcy when no buyer for the firm emerged from a series of high pressure meetings at the New York Fed on the weekend of Sept. 14-15. No government assistance was offered. Baxter hailed Dodd-Frank provisions aimed at forcing systemically important firms like Lehman to have more capital and liquidity, adding that this was "precisely the type of medicine that Lehman needed." But Harvey Miller, an attorney for Weil, Gotshal and Manges LLP, which represented Lehman in its final days, painted a different picture, saying that Fed and Treasury officials never explained their decision not to aid Lehman. Miller said the government missed an opportunity to save billions of dollars in lost value when it opted against a government supported wind-down. This may have cost $40 billion to $50 billion up front, but it would have averted $700 billion in market losses in the first week after Lehman's bankruptcy. "The damages and harm precipitated by the Lehman bankruptcy could have been substantially reduced by innovative actions of the government. Instead, the government miscalculated and the financial system was pushed to the brink of collapse," he said, echoing statements by former Treasury Secretary Henry Paulson. Fuld, who has testified multiple times in Washington since the firm's collapse, again said in his written testimony that the government could have acted sooner to defuse the crisis of confidence that led to the storied investment bank's downfall. www.reuters.com/article/idUSN0112033120100901 |
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Post by sandi66 on Sept 2, 2010 5:30:28 GMT -5
SEPTEMBER 2, 2010 At Citigroup the Hits—and Misses—Keep On Coming A Return to Its Banking Roots Must Start at the Top Trouble at Citigroup Inc. never sleeps. After a relatively quiet summer, Citigroup is back in the news over its decision to ban banking analyst Michael Mayo. Mr. Mayo was frozen out late last month after he basically accused Citigroup of using deferred tax assets in violation of accounting rules. The upshot of Mr. Mayo's complaint is that the use of these tax assets are boosting the bank's net income, potentially making Citi seem profitable when it may not be. It isn't the biggest scandal the bank has faced, but it is a telling one. Really, the scuffle between Mr. Mayo and Citigroup hints at a deeper problem at the bank. The good news is executives are fully aware of it. The bad news is it may be impossible to solve, not least because it starts in the executive suite. That is: The post-financial-crisis Citigroup is an institution without an identity or culture. Citigroup is a hodgepodge of businesses and executives plucked from other companies or the whirlwind of acquisitions made under Sanford Weill. There is the bank, Citibank; the brokerage, Smith Barney; and the investment bank, Salomon Brothers. There are lesser names too: Associates First Capital, Golden State Bancorp and Banamex and to name a few. While Citigroup has done much to streamline and integrate those businesses, paring nonessential divisions and assets, the turmoil and upheaval in the executive ranks has been a disaster. It is a melting pot that never melted. Think of the names that have passed through Citigroup in just the past few years: Robert Rubin, Weill, Charles Prince, Gary Crittenden, Sallie Krawcheck, Todd Thomson, Win Bischoff, Marge Magner, William Rhoades—and that is a much-abbreviated list. Now, think about who is left. Raul Anaya, who heads the bank's Latin America businesses, came from Banamex in 2001. George Awad, who runs consumer finance, came from General Electric Co. in 2006. Hamid Biglari, a vice chairman at Citicorp, came from McKinsey & Co. in 2001. Michael Corbat, who heads Citi Holdings, is an old Salomon Brothers veteran. Citi defenders point out that the senior management turnover has stabilized. All but two of the bank's top 25 managers at the start of 2009 are still in their same roles. That may be stability for Citigroup. Those who came on five or more years ago old hands compared with Brian Leach, the bank's chief risk officer. He came from a hedge fund, Old Lane Partners, just three years ago. That hedge fund was purchased by Citigroup in 2007 at the height of the Wall Street bubble for $800 million. It was shut down less than a year later, but the deal wasn't a total loss. Mr. Leach's colleague and Old Lane's co-founder, Vikram Pandit, was named chief executive of Citi by the end of the year. Uncomfortable in the Spotlight Ultimately, it is Mr. Pandit who personifies the problem at Citi. He made his name as an institutional securities trader at Morgan Stanley and then as a hedge-fund manager who made his fortune in a bull market. Mr. Pandit doesn't have the ideal background for a bank that is trying to revive its Walter Wriston-era commercial-banking roots. Moreover, Mr. Pandit seems uncomfortable as the leader of one of the nation's biggest banks. He shuns most interviews, and he is prone to overreact to criticism no matter the source, be it The Wall Street Journal or a minor blog. Reports suggest Mr. Pandit is behind Mr. Mayo's ban, a charge Citigroup denies. Contrast Mr. Pandit to Jamie Dimon, head of J.P. Morgan Chase & Co. Mr. Dimon has emerged as a spokesman for the banking industry. He has fired off provoking shareholder letters and made controversial comments. Mr. Pandit has largely been silent and inaccessible in the public sphere, and that has made investors and the media skeptical. Even if he is the right executive to lead the company, there is that diversity issue. Mr. Pandit is a talented and smart guy, but he is dealing with a crowd of senior managers as diverse as the city in which it is headquarted. They have been consultants, bankers, brokers, but they have made their names at a smorgasbord of firms. Contrast Citi to Goldman Sachs Group. There is hardly a name on the management committee that hasn't been with the firm for a decade—or two. Though Goldman's image is built on the idea that it holds the best and brightest, many former Goldman executives who leave the company soon realize how valuable Goldman's culture truly is: providing cohesion, and a sense of mission. The ultimate measure is profits and in this area, there is no argument that Goldman has exceeded Citigroup. Indeed, in its decade-plus as Citigroup, it is hard to remember a year or even a quarter when profits weren't muddied by deal making (under Weill), runaway costs (under Prince), or more recently, the quality of its assets. Citigroup's greatest flaw isn't the quality of its managers, but their varied backgrounds, swift entrances and exits. Corporate culture can't be bought. Mr. Mayo is right to be skeptical. He has been covering Citi longer than anyone running it. No wonder Citi never sleeps. It is too restless. online.wsj.com/article/SB10001424052748703882304575465801101965176.html?mod=googlenews_wsj |
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Post by sandi66 on Sept 2, 2010 7:02:11 GMT -5
Ammar al-Hakim : We end of the tunnel and the formation of the Iraqi government is imminent Sotal-Iraq News - (Voice of Iraq) - 01/09/2010 Written by Abbas Dashti: (Voice of Iraq) - The secretary-general of the Supreme Council for Islamic Revolution in Iraq Ammar al-Hakim that the withdrawal of U.S. troops does not affect the methodology and programs for Iraq's future plans . He praised al-Hakim told a press conference held at the Journalists Association Kuwaiti government's position , noting that it continues to stand behind Iraq financially and morally. He pointed out that the formation of the Iraqi government has direct implications for stability in Iraq and the region , denying intervention foreign countries and the existence of other agendas on the configuration, adding that religious authority has a role indicative only. On his visit to Kuwait, he said it was a valuable opportunity to conduct serious consultations with His Highness the Amir and His Highness the Crown Prince and HH the Prime Minister and the Speaker of Parliament , in addition to meetings in an office, with elites Kuwait , where I enjoyed during my visit to these spokespersons , and in the light of these contacts , I saw that there is considerable interest By the people of Kuwait the Iraqi issue . On the formation of the government said: " It is obvious that the delay and disruption of the government over the previous months caused something of an embarrassment for the Iraqis themselves, and some sort of concern for the friends and brothers of Iraq in the region, have seen the concern is clear on this track in the consultations that we held with the Kuwaiti leadership . He added: The emergence of four electoral rolls close together in the number of seats was born happy , despite some of the complexities of these lists and reflected in the balance between political and social components and Iraqi forces. We believe that the Government of National Partnership entrance is important to achieve the government successful for the next phase , where no party or sect or ethnic group be singled out in the country therefore does not exclude or marginalize but true partnership is all they are present every decision and in managing the country against this background that consultations are taking place and have called for a table Lists round winner. End of the tunnel Hakim said : Despite the lag , which occurred during the past few months , but I think that we come to the end of the tunnel and heading in the next few days on the streams that would resolve the situation and determine the direction and form a government acceptable to all parties and strengthen the partnership between all Iraqi sects . He denied Ammar al-Hakim gossip , which says that the National Coalition against the re- installation of Nuri al-Maliki as prime minister, said: " Everyone is seeking to find a breeding ground for a candidate that would be acceptable to national that was part of the National Coalition or others, there are intensive contacts and consultations between the blocks winning that have contacts and dialogues With the Iraqi List , as well as intensive meetings with a coalition of Kurdish blocs in addition to consultations with the mass of the rule of law , and can not proceed until the government of a broad partnership implementation. And consultations with neighboring countries, said it is a continuing here we would like to give a message that Iraq is not an island in the ocean , but part of a regional system and wants to open up the area around the regional and the international community, and Kuwait, one of the countries neighboring sister , one of the milestones for consultation and exchange of views. On the security situation in Iraq has denied al-Hakim increasing crime rate , saying there was a significant decrease in the level of crime and the number of martyrs and victims in comparison to previous years, there is a remarkable development and we see that the security agencies have ambitious plans in the training and preparation , prosecution and dismantling of terrorist networks, where the discovery of many groups Terrorist , and no doubt that a large number of terrorists who are willing to Antharmen in order to deliver the damage and harm to citizens out random is not easy to control it entirely must be made more effort to reach out to this situation, U.S. forces will leave within the commitment and agreement to withdraw forces and will take the Iraqi security force is all the responsibility of providing Security for our citizens and to fill the security vacuum. Joint dialogue On some of the statements the Iraqi offensive of Kuwait Hakim said : There are sounds offensive to Kuwait from Iraq and there would be other voices insulting to Iraq from Kuwait and I think we should be in Iraq, are counting on such correct to , and I hope our brothers in Kuwait, but count on these votes, we are working hard to be The next government is able to find the meat of Arab and inter -neighborly relations . We do not want Iraq to be a nuisance to others but we want to foster a spirit of love and openness and the right of mutual interest and concern bestowed on building relations with our neighbor, Kuwait, which we have deeply rooted historical ties with the Iraqis that decent people . On Biden's visit to Iraq said that there are many officials in the region or the international community their visits to Iraq and they have different views they hear the Iraqis and hear the views of Iraqis, too, but it is important that the decision is an Iraqi decision stems from the interest of Iraq and in the circumstances of the country and its complications, and not the views of the coming Beyond the border can sometimes be first in line to be with the interests of the country. With regard to Obama's message to Sistani about forming the government denied Hakim knowingly and said: What I do know that the religious authority committed itself not to enter such details and to leave this process of political forces , but denied the shedding of innocent blood from all parties and maintained the social hierarchy. He denied wise to have the Supreme Council for Islamic Revolution in Iraq had conducted previous negotiations with Nouri al- Maliki, not even during the latter provision, noting that it was logical to whatever 's next prime minister to put the true vision and programs and safeguards to ensure that genuine partnership and then proceed to build a government partnership and wide representation And able to meet the aspirations of Iraqis and achieve the level of understanding between the Mystery of different parties. And on the return of al-Maliki for prime minister again, Mr. Hakim, the existence of some of the observations reported from the edge of a broad national , including the forces of the National Coalition , as these parties are still discussing access to the personal can provide an acceptable threshold of confidence between the parties, the Iraqi national and a focus for the formation of the Government of a broad partnership , There are many objections to al-Maliki of the parties and lists of important Iraqi political scene. Hakim said that he did not assume any operational site in the former Iraqi government and had no desire to bear in the future. currencynewshound.wordpress.com/2010/09/01/hakim-we-are-at-the-end-of-the-tunnel-and-the-formation-of-the-iraqi-government-is-imminent/ty David |
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Post by sandi66 on Sept 2, 2010 8:02:38 GMT -5
UN tribunal orders UN anti-poverty agency to pay 14 months salary to whistleblower in NKorea By Edith M. Lederer (CP) – 13 hours ago A U.N. tribunal ordered the organization's anti-poverty agency to compensate a former staffer who claimed his contract was not renewed after he made serious allegations regarding financial transactions in North Korea. In its decision obtained Wednesday by The Associated Press, the Dispute Tribunal ruled that Artjon Shkurtaj's due process rights were violated by a U.N. Development Program investigative panel questioned his credibility and trustworthiness but never gave him the opportunity to respond. The tribunal said this damaged Shkurtaj's career prospects and professional reputation and caused him emotional distress and he should be compensated with 14 months salary in line with a recommendation by the director of the U.N. Ethics Office in June 2008. It also ordered the development agency, known as UNDP, to pay an additional $5,000 for failing to promptly compensate Shkurtaj following the Ethics Office recommendation. Shkurtaj called the decision "a major victory" after a three-year effort, adding that the compensation for 14 months salary amounts to $160,000. U.N. deputy spokesman Farhan Haq said "we're studying the decision," which can be appealed. Shkurtaj, a native of Albania, told AP in 2007 that when he asked what to do with counterfeit U.S. dollars he found in the office safe on his first day working for UNDP in Pyongyang in November 2004, he never got a response. He said that when he complained that paying all North Korean salaries and program expenses in hard currency instead of local currency was against U.N. rules he was told "not to rock the boat." Shkurtaj said UNDP rules require that counterfeit money be reported to the embassy of the country involved, and since it was U.S. dollars he went to the U.S. Mission to the United Nations when he returned to New York in May 2006, which UNDP's administrator didn't like. His contract was not renewed in March 2007 and he claimed he lost his job because of his whistleblowing. But UNDP's investigative panel said in May 2008 that Shkurtaj was not a victim of retaliation. The Dispute Tribunal did not consider that issue, but it ruled that Shkurtaj's due process rights were violated because he was not informed and allowed to respond to the panel's adverse comments about him. www.google.com/hostednews/canadianpress/article/ALeqM5i9Q5c7-34dkne747Wb_2bHsTmC-g |
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Post by sandi66 on Sept 2, 2010 8:24:08 GMT -5
European Union Plans to Limit Naked Short Sales of Stocks, Government Debt By Ben Moshinsky - Sep 2, 2010 8:25 AM ET The European Union plans to limit so-called naked short sales of shares and government debt which it says can cause a “disorderly market and possible systemic risks.” Traders would be required to submit proof that they have access to the underlying security to settle a trade designed to profit from a decline in prices, according to a European Commission document obtained by Bloomberg News. The proposals require short sellers to show they “can ensure that the security can be borrowed so that settlement can be effected,” the document said. French President Nicolas Sarkozy and German Chancellor Angela Merkel called on the European Commission earlier this year to speed up curbs on financial speculation, saying some bets against stocks and government bonds should be banned as the Greek debt crisis made markets more volatile. The draft rules would also force traders to notify “significant exposures in credit default swaps that relate to EU sovereign debt issuers” to EU regulators, the document said. Credit-default swaps are derivatives that pay the buyer face value if a borrower -- a country or a company -- defaults. In exchange, the swap seller gets the underlying securities or the cash equivalent. Traders in naked credit-default swaps buy insurance on bonds they don’t own. www.bloomberg.com/news/2010-09-02/european-union-plans-to-limit-naked-short-sales-of-stocks-government-debt.htmlty joye |
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Post by sandi66 on Sept 2, 2010 15:37:16 GMT -5
Naked Shorting Will Cause U.S. Exchange Exodus (via COMTEX News Network)-- (Comment on this article at www.financialwire.net/2010/09/02/blog-watch-burrell/) -- Editorial Market Commentary -- August 5, 2010 (FinancialWire) (Investrend Forums Syndicate) (By Bud Burrell) -- Editor's note: Once again we are compelled to refer back to a history of greed-induced fiascos made possible by a severe lack of regulatory control. If anyone needs to be reminded, here's a short list for you: SEC chairman Christopher Cox invoked a one-month ban in July of 2008 against naked short selling in 19 battered financial stocks, including Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS [FREE Stock Trend Analysis]), Citigroup (NYSE: C), Lehman Brothers (OTC: LEHMQ), Credit Suisse (NYSE: CS), Merrill Lynch (DOA, as in dead on arrival), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM [FREE Stock Trend Analysis]), Fannie Mae (NYSE: FNM), and Freddie Mac (NYSE: FRE [FREE Stock Trend Analysis]), an eclectic "small group of thoughtful people" sounded the alarm about a financial system gone horribly wrong. Activist Dave Patch started InvestigatetheSEC.com in late 2003, and in early 2004 Mark Faulk began reporting on financial fraud on his website "The Faulking Truth". At around the same time, the late Gayle Essary began to utilize his own forums, Investrend and FinancialWire(tm), to bring greater exposure and an air of credibility to the cause. Others, including Bud Burrell, Bob O'Brien, Rod Young, DeWayne Reeves, Darren Saunders, Mary Helburn, and economists Suzanne Trimbath and Robert Shapiro, worked tirelessly to warn the country about the potential train wreck years before it happened. Efforts to reform our financial markets were further galvanized when Overstock (NASDAQ: OSTK) CEO Patrick Byrne, along with fellow crusaders Judd Bagley, Brent Baker, and Mark Mitchell, joined the rapidly escalating war. Forbes writer Elizabeth Moyer and Euromoney magazine's Helen Avery covered the scandal for the financial media, but the Wall Street controlled corporate media for the most part either ignored the issue or attempted to discredit those who exposed the corruption. And, once again, FinancialWire(tm) contributor Bud Burrell implores us to take a hard look at what's happening right in front of our eyes: This week, an important online news service released an article that should send shockwaves into our public markets. In very curt form, the article chronicles the many abuses of U.S. public companies by short selling manipulators, particularly through naked short selling and regular and derivative based synthetic shorting. By implication, the article recites the sheer embarrassing ineffectiveness of our regulators, who are engaged in a pattern of systematic conflicts of interest with revolving doors that are a major disgrace to our own government. Note the following August 23, 2010, article from Live Trading News International: aEUR~Naked Short Selling Dominates the Markets' "Naked Short Selling now dominates the OTC markets, having been blamed by most for monument collapses during the financial crisis, the SEC attempted to, but failed to control the process. "Naked Short Sellers focus in companies they feel are aEUR~destroyable' normally this is a company that uses their market to raise capital, the case of many Pink Sheet and OTC businesses, so it is no surprise to see that naked shorting is at an all time high. "The Naked Short Sellers move in removing any chance of small companies gaining access to any form of reasonable funding by selling the stock short, effectively increasing the float, and using the basic rules of supply and demand changing the very nature of the company's market and market price. "Many of the positive runs forward of small companies in the last 6 months have been destroyed by short sellers, when in the past the small companies could have taken advantage of improved market valuation, raised funds and moved their business models to the next level. "The chances of a small company now making it out of the woods on to a main board are limited at best. "Naked short selling was clearly the end of great companies like Lehman and Bear Stearns. "If you have any doubts, you should take a look at websites such as FailsToDeiver (http://failstodeliver.com/)." And I am not alone in this opinion. U.S. companies are going to consider leaving the U.S. with the wholesale abuse. Foreign exchanges with firm 3 day settlement or improved DVP procedures challenging manipulators are going to be rewarded with U.S. listings from U.S. listed companies withdrawing from U.S. markets. The conventional wisdom that only small companies without merit would be challenged has been proven grotesquely false. If you could know that your purchase and sales would be cleared and settled in real time with no manipulation risk, would you settle for less? If U.S. companies leave the U.S. markets, how far away will it be before U.S. investors do the same? U.S. Courts have ruled that when an investor owns a share of stock, it does not reflect an actual equity ownership interest, but rather nothing more than a securities entitlement. That is the kind of arrogant disgrace that will drive U.S. investors to give up on U.S. brokers and U.S. exchanges. ========= Source: Investrend Weblogs (http://www.investrendweblogs.net/bburrell/). (Go to www.financialwire.net/?s=brrllbby for other recent commentaries by Bud Burrell.) Bud Burrell's experience spans a diverse spectrum, including service with the U.S. Military in the Special Forces, as a Finance Officer and as a Project Finance & Accounting Officer. Burrell also pursued studies in fine arts, the Renaissance, Russian history, and Chinese culture. Following years of working on Wall Street, he worked with specialty and derivative money management consulting and research and development in IT and AI. Since then, Burrell has worked globally with major development stage companies from the IT, energy, alternative energy, bio-pharma, and general technology arenas, as well as on counterfeiting and financial fraud scandals. ========= ShareIntel(r) Shareholder Intelligence Services offers public companies a means for companies to be completely aware of all trading activity, including awareness of "phantom shares" and where such shares are originating. ShareIntel(r) describes its service as follows: "Manage Wall Street. Don't allow Wall Street to manage your company. Know who's holding, buying and selling your company's stock. Don't aEUR~fly blind.' Know who's buying your competitors' stock. Don't miss opportunities. The publicly-traded market offers great potential rewards, but those rewards don't come easily. Today's market landscape is tougher to navigate than ever before a^' and it's simply a fact that numerous companies do not survive. That fact is even more true for lesser-capitalized and development-stage public companies. The ShareIntel(r) program provides concrete, actionable solutions that give such companies an immediate and formidable competitive advantage. Without liquidity and a properly-valued, protected share price, a public company is enjoying none of the benefits of being a public company while still having to do all the work of being a public company. That's the bottom line: Liquidity. And a properly-valued, protected share price. ShareIntel(r) suite of solutions gives a public company what it needs to accomplish those key objectives a^' and to thrive, instead of just survive." For more information write to resources@investrend.com with "ShareIntel" in the subject line. ========= Equity research on any public company is available through the Shareholders Research Alliance (go to www.investrend.com/synd0004 for more information). Real-time, streaming research for companies and funds mentioned in FinancialWire(tm) news is available via the Investrend Research Syndicate (at investrend.stocksmart.com/ss/html/hpcompany.html). Current valuation analysis research for companies and funds mentioned in FinancialWire(tm) news is available via the Investrend Research Syndicate (at www.valuengine.com/rep/searchsrep?pid=42&srchfor=). FinancialWire(tm) is committed to serving the financial community through true journalism and providing relevant resources to investors. Standards-based, independent equity research on numerous public other companies is available through the Investrend Research Syndicate (http://www.investrend.com/reports) written by FIRST Research Consortium (http://www.investrend.com/FIRST) member-providers. Free annual reports and company filings for companies mentioned in the news are available through the Investrend Information Syndicate (at investrend.ar.wilink.com/?level=279). FinancialWire(tm), in cooperation with the Investrend Broadcast Syndicate, also provides complete, daily conference call and webcast schedules as a service to shareholders and investors via the FirstAlert(tm) Network's "FirstAlert(tm) Daily" (at www.financialwire.net/news-alerts/). FinancialWire(tm) is a fully independent, proprietary news wire service. FinancialWire(tm) is not a press release service, and receives no compensation from subject entities, companies, equities, or representatives thereof, for its news, opinions or distributions. Further disclosure is posted at the FinancialWire(tm) website (at www.financialwire.net/disclosures.php and www.financialwire.net/2010/04/23/safe-harbor/). Additional resources for investors are also accessible via the FinancialWire(tm) website (at www.financialwire.net/2010/04/23/investor-resources/). Contact FinancialWire(tm) directly via inquiries@financialwire.net. Copyright (C) MMX, FinancialWire(tm); All rights reserved. [ssryrsyr] [brrllbby] [cmmtry] [spclcps] [socpolspl] [edtrlx] [wtchr] [wblgi] [nvstrndnrt] [rgltryrtl] [cmplncz] [gvrncnr] [mrktqr] www.financialwire.netwww.benzinga.com/press-releases/10/09/c455019/blog-watch-naked-shorting-will-cause-u-s-exchange-exodusty gigi |
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Post by sandi66 on Sept 4, 2010 0:54:47 GMT -5
This is the first of many situations,” Matt McCormick, a banking-industry analyst and portfolio manager at Cincinnati- based Bahl & Gaynor Inc., said today on Bloomberg television. “We’re going to see other entities unwind their proprietary trading.” Goldman Sachs Said to Be Closing Principal Strategies (Update1) By Christine Harper and Saijel Kishan Sept. 3 (Bloomberg) -- Goldman Sachs Group Inc. is shutting its principal-strategies business, a group that makes bets with the firm’s own capital, to comply with new U.S. rules aimed at curbing risk, two people with knowledge of the decision said. Wall Street’s most profitable investment bank plans to hold off on announcing the wind-down while the 65 to 70 members of the global unit seek new jobs, the people said, speaking anonymously because the internal discussions about the process are confidential. Some traders and support staff may get roles within the New York-based firm, while a team in Asia may raise money for a new hedge fund, the people said. “What’s motivating people is that they need to know where they are going, and no one wants to be the last group out the door,” Gary Townsend, president of Hill-Townsend Capital LLC, said on Bloomberg Television. “It’s really the personnel decisions that are driving this to happen sooner rather than later.” Townsend’s Chevy Chase, Maryland-based investment firm specializes in financial companies. Goldman Sachs, which says about 10 percent of its revenue comes from proprietary trading, is grappling with a provision of the Dodd-Frank financial reform act that prohibits banks from risking capital by betting for their own accounts. JPMorgan Chase & Co. plans to close its prop-trading units in response to the law, signed by President Barack Obama in July. JPMorgan last month told in-house commodities traders in London that they may lose their jobs, a person briefed on the matter said this week. Four Years The Dodd-Frank Act allows banks at least four years to bring their proprietary trading activity into compliance, with a potential extension of as many as three years, according to a time line prepared by Davis Polk & Wardwell LLP, the New York law firm. Ed Canaday, a spokesman for Goldman Sachs, said he couldn’t comment. Goldman Sachs advanced $7.51, or 5.4 percent, to $147.29 at 4 p.m. in New York Stock Exchange composite trading. Earlier plans for most members of the Principal Strategies group, led by Hong Kong-based Morgan Sze, to leave together and form a hedge fund were shelved, people with knowledge of the matter said. Now Sze, 44, may set up a fund with a smaller team focused on Asia, they said. Employees in London and New York are considering different options, the people said. The team’s members in New York, led by Bob Howard, are in talks to join another asset-management firm, according to two people. Capital Raising “It’s a hard capital-raising environment for hedge funds at the moment, even more so for start-ups,” said Don Steinbrugge, managing partner of Agecroft Partners, a Richmond, Virginia-based consulting firm that advises hedge funds and investors. “Only a small percentage of funds will be successful in attracting money and I think Goldman guys will potentially be part of that.” Goldman Sachs Principal Strategies is housed within the firm’s equities division and traces its roots to the risk arbitrage team once led by Robert Rubin, 72, who later became U.S. Treasury secretary. Alumni of the division who have left to start their own hedge funds include Frank Brosens at Taconic Capital Advisors LLC, Thomas Steyer at Farallon Capital Management, Eric Mindich at Eton Park Capital Management LP, and Dinakar Singh at TPG-Axon Capital Management. New Funds In 2007, about half the members of the Goldman Sachs Principal Strategies team, led by Raanan Agus, 42, created a fund called Goldman Sachs Investment Partners that remains housed in the firm’s money-management division. Some traders who stayed in the principal-strategies unit, including its former global head, Pierre-Henri Flamand, 40, and Ali Hedayat, 35, left Goldman Sachs earlier this year to set up a London-based hedge fund called Edoma Capital Partners LLP. Congress added the prohibition on prop trading to the financial reform package this year after Obama threw his support behind the idea, which had been championed by former Federal Reserve Chairman Paul Volcker, 82. The so-called Volcker rule is an attempt to limit risky trading and investing by depositary institutions after the worst financial crisis since the Great Depression culminated in an unprecedented level of government support for the banking system. “This is the first of many situations,” Matt McCormick, a banking-industry analyst and portfolio manager at Cincinnati- based Bahl & Gaynor Inc., said today on Bloomberg television. “We’re going to see other entities unwind their proprietary trading.” To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net; Saijel Kishan in New York at skishan@bloomberg.net. Last Updated: September 3, 2010 16:06 EDT www.bloomberg.com/news/2010-09-03/goldman-said-to-shut-principal-strategies-unit-to-comply-with-volcker-rule.html |
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Post by sandi66 on Sept 7, 2010 7:13:19 GMT -5
Gates, Buffett to Issue Public Explanation for Trip to China By Bloomberg News - Sep 6, 2010 Billionaires Bill Gates and Warren Buffett will publicly explain the purpose of their planned visit to China after a newspaper reported that a number of wealthy Chinese individuals declined to attend an event hosted by the two due to concerns they’d be asked to donate to charity. Gates and Buffett, respectively the world’s second and third-richest people, will write a letter that may be released as early as this week detailing why they’ve invited Chinese billionaires to a private event during a visit to the Asian nation at the end of the month, Zhang Jing, a press officer for the Bill and Melinda Gates Foundation’s Beijing office, said by phone yesterday. “Our biggest intention for this month’s China trip is to learn how to do philanthropy in China,” Zhang said. “We would like to learn how to propel the charity business in such a big developing nation.” Gates, 54, and Buffett, 80, who Forbes Magazine estimates are worth a combined $100 billion, are aiming to press billionaires to pledge at least half of their fortunes to charity. The Beijing-based Economic Observer newspaper reported Sept. 2 that “a small number” of wealthy Chinese declined an invitation to attend a private gathering with Gates and Buffett in the capital, with some calling to ask if they’d be asked to pledge a donation at the event. The report cited Ray Yip, head of the Gates foundation’s Beijing branch. Small Number Wang Chuanfu, chairman of automaker BYD Co. which is backed by Buffett, Zhang Xin, chief executive officer of property developer Soho China Ltd., and Zong Qinghou, chairman of drinks group Hangzhou Wahaha Group Co., were among those invited, the newspaper said on its website. The report didn’t identify the individuals who decided not to attend. “So far, there are a small number of guests who are not able to turn up, but that’s quite a normal thing,” Zhang from the foundation said, declining to say who’d been invited. The Economic Observer reported on Sept. 3 that Buffett and Gates will also travel to Shanghai and the southern province of Guangdong. The two billionaires will visit companies in which Buffett holds a stake, the newspaper said, citing people it didn’t identify. www.bloomberg.com/news/2010-09-06/gates-buffett-to-issue-public-explanation-for-trip-to-china.html |
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Post by sandi66 on Sept 7, 2010 7:16:10 GMT -5
Europe's Banks Stressed By Sovereign Debts Regulators Ducked By Richard Tomlinson and Andrew MacAskill - Sep 6, 2010 7:00 PM ET Even after a 750 billion euro ($960 billion) bailout for the weaker economies in the euro zone, investors are skittish about sovereign debt -- and about the banks that hold the region’s government bonds. A default by Greece could trigger the collapse of banks with large sovereign-bond holdings, says Konrad Becker, a financial analyst at Merck Finck & Co. in Munich. “A default by one EU country would lead to an evaporation of trust in banks,” he says. “If investors aren’t willing to invest in banks anymore, then many banks will go bust in months, not years.” The new concern about the fragility of the region’s banks comes as politicians and regulators are eager to claim progress in fixing the global financial system, almost two years after credit markets cracked, Bloomberg Markets magazine reports in its October issue. The European Union has stress tested 91 lenders, giving 84 of them passing grades. In the U.S., President Barack Obama in July signed the biggest package of new U.S. banking laws since the Depression. The Basel Committee on Banking Supervision, meanwhile, is readying new capital and liquidity rules for world leaders to agree upon when the Group of 20 meets in Seoul in November. Europe, however, faces a special challenge in righting its banks: the sovereign-debt crisis. Europe’s largest financial companies hold more than 134 billion euros in Greek, Portuguese and Spanish government bonds, according to a tally in May by Bloomberg News based on interviews and company statements. Greek Debt Even after the EU and International Monetary Fund worked out the rescue plan in May, investors are still demanding a high premium for buying Greek debt. As of Sept. 3, the yield was 11.28 percent on 10-year Greek bonds compared with 2.34 percent on similar German bonds. At the end of August, the gap between the two, the yield spread, was the widest it has been since the peak in May, just before European leaders agreed on the bailout. Yields on Irish bonds jumped after Standard & Poor’s on Aug. 24 cut the country’s credit rating one step to AA-, citing concern that the rising cost of supporting Ireland’s struggling banks will increase its budget deficit. The yield spread versus German bonds climbed to the highest in at least 20 years. The hesitancy among investors also shows up in the spreads on bank bonds, with some European institutions paying higher borrowing costs compared with their U.S. counterparts. As of Sept. 2, buyers demanded an extra 383 basis points, or 3.83 percentage points, over the yield on government debt to own 5- to 10-year bonds sold by Paris-based BNP Paribas SA, according to Bank of America Merrill Lynch index data. The comparative premiums were 275 basis points for Citigroup Inc. bonds and 192 basis points for JPMorgan Chase & Co. bonds; both of those banks are based in New York. ‘Still Badly Damaged’ “We face a banking system that is still badly damaged and which is still trying to repair its balance sheets,” Bank of England Governor Mervyn King said on Aug. 11 at a press conference in London. “It has to raise funding at very high costs, and that makes it difficult for banks to lend.” Lenders have been slow to raise the capital they need. With yields on European bank debt so high, the market has shrunk. The region’s banks, including U.K. lenders, sold about 18 billion euros of debt in August, the smallest amount for the month since 2004. Many European institutions continue to rely on central banks for funding. In July, the European Central Bank loaned 132 billion euros for three months to 171 financial institutions. ECB President Jean-Claude Trichet on Sept. 2 extended emergency lending measures for banks into 2011. The bank will keep offering unlimited one-week and one-month loans until at least Jan. 18, and will offer additional three-month funds in October, November and December. Parking Money Wary of lending to each other, banks are also using the ECB to hold record amounts of their cash. On June 9, euro-zone lenders deposited a record 369 billion euros overnight at the ECB, more than in October 2008, during the credit meltdown. “The amount banks have parked at the ECB is just outrageous,” says Florian Esterer, a fund manager at Zurich- based Swisscanto Asset Management AG who invests in financial stocks, including Commerzbank AG and Royal Bank of Scotland Group Plc. The bank-stress-test results, published on July 23, should help restore investor faith in the region’s financial industry, Trichet said at a press conference on Aug. 5. Still, those examinations fell short of addressing the possibility of a default by a euro-zone country. Not Tested Regulators believe the May bailout will succeed, says David Green, who was head of international policy at Britain’s Financial Services Authority from 1998 to 2004. “It would be quite perverse for governmental agencies to assume that the program isn’t going to work,” he says. The tests covered government bonds held by banks for possible sale -- not those held as reserves on their balance sheets. Europe’s banks only have to write down sovereign debt in their reserves if there’s significant doubt about a country’s ability to repay in full or make interest payments. The region’s lenders have about 90 percent of their Greek sovereign debt on their balance sheets, according to a survey by Morgan Stanley. Europe’s governments can’t afford to question the quality of bonds they’ve sold to banks, says Chris Skinner, chief executive officer of Balatro Ltd., a financial industry advisory firm in London. “Bankers have got Europe’s governments in their pockets, primarily because politicians cannot change the way lenders do business without undermining confidence in sovereign debt,” he says. Toxic Assets While they’re stuck with their government bond holdings, Europe’s banks are also still carrying much of the troubled assets they had during the 2008 meltdown. Euro-zone lenders will have written down about 3 percent of their assets from the peak of the credit crisis by the end of 2010, compared with 7 percent for U.S. banks, the IMF estimated in April. The steeper writedowns by U.S. banks are partly because they held a higher proportion of securities, the IMF said. That doesn’t excuse the lack of candor shown by many European lenders about the unsellable assets on their books, says Raghuram Rajan, a finance professor at the University of Chicago. “European banks haven’t owned up to the large amounts of toxic debt that they hold,” says Rajan, who was chief economist at the IMF from 2003 to 2007. “The stress tests weren’t severe enough,” says Julian Chillingworth, who helps manage $21 billion at Rathbone Brothers Plc, an investment firm in London. “Many bond investors aren’t convinced the Greeks are out of the woods.” And if the Greeks haven’t emerged from their crisis yet, then neither have the European banks that hold their debt. www.bloomberg.com/news/2010-09-06/europe-s-banks-stressed-by-sovereign-debts-eu-regulators-failed-to-examine.html |
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Post by sandi66 on Sept 7, 2010 7:17:49 GMT -5
ECB's Bini Smaghi Says Global Financial Regulators Must Coordinate Efforts By Gabi Thesing - Sep 7, 2010 4:10 AM European Central Bank Executive Board member Lorenzo Bini Smaghi said global regulators must coordinate efforts when setting tighter banking rules to prevent future financial crises. “A new paradigm for new international cooperation is required from global policy makers,” Bini Smaghi said according to the text of a speech delivered in Beijing today. “Keeping an excessive focus on the domestic economy may actually exacerbate the global economic and financial imbalances, ultimately making future global crises more likely and more severe.” The collapse of Lehman Brothers Holdings Inc. in September 2008 pushed the global economy into the worst recession since the Great Depression and challenged policy makers to come up with tougher banking rules. The Basel Committee on Banking Supervision is drafting new capital and liquidity rules for world leaders to discuss at a meeting in Seoul in November. Bini Smaghi said one of the pre-crisis problems was that while the financial market became increasingly global, “supervision and regulation remained largely” national. “A key message for all of us from the crisis is that keeping an economy in order, keeping one’s own house in order, so to speak, does not necessarily insulate it from external shocks,” he said. “The key challenge faced by global policy makers is to make the system safer.” While policy makers’ focus “seems to have turned again toward very short-term targets related to growth and employment, with little consideration paid to sustainability,” surveillance can’t be “outsourced” to markets, Bini Smaghi said. “Markets can be very erratic and move in a discontinuous fashion,” he said. They “tend to undervalue risk in ‘good times’ and overvalue it in ‘bad times.’ This is why market surveillance can usefully complement, but not replace, enhanced surveillance by policy makers themselves.” www.bloomberg.com/news/2010-09-07/ecb-s-bini-smaghi-says-global-financial-regulators-must-coordinate-efforts.html |
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Post by sandi66 on Sept 7, 2010 7:47:10 GMT -5
Regulators to hash out major new finance regulations this month By Silla Brush - 09/07/10 06:00 AM ET Financial regulators are set this month for a series of crucial meetings and decisions as they hash out major new U.S. and international rules that may govern the financial world for years to come. And as they convene in Washington and Basel, Switzerland, regulators from around the world are coming under heavy lobbying pressure by the financial industry not to overreach while the global economy remains weak. In the United States, regulators are starting to lay out how they will oversee "systemic risk" and firms deemed "too big to fail." The Obama administration is also facing pressure from Democrats and consumer advocates to quickly nominate the first head of a new Consumer Financial Protection Bureau (CFPB), created as part of the Wall Street reform bill. In Basel, international regulators aim to strike a deal on new capital standards — known as Basel III — that will impact the world's largest banks and financial firms. "Everything else flows from here," said Scott Talbott, senior vice president at the Financial Services Roundtable. "Once you have a CFPB head you can start defining rules. Once you have Basel III, we'll know capital levels. And once you have the systemic risk council, the regulations can flow. These are major milestones." The Basel discussions may receive the most attention as financial officials look to forge standards before the heads of the G-20 nations meet in Seoul in November. Discussions are set for Tuesday, with U.S. officials urging higher capital and liquidity standards and requirements for banks to hold more capital. "Stronger capital standards are absolutely essential as one of the key components going forward to assure the safety of the system," Federal Reserve Chairman Ben Bernanke testified to a commission investigating the causes of the financial crisis. But overcoming international differences is a formidable obstacle, with various governments looking to shape the rules so they do not disproportionately hurt their domestic financial markets. Meanwhile, a U.S. council of financial regulators charged with overseeing "systemic risk" is set to meet for the first time in September. Treasury Secretary Timothy Geithner, who serves as chairman of the council, said in August he planned to use the first meeting to lay out a road map for implementing new regulations. The Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and other regulators have already begun to hold meetings, propose new rules and, in some cases, adopt new regulations. But the council meeting will mark the first time regulators meet in full as a public body. Wayne Abernathy, executive vice president at the American Bankers Association (ABA), said the council meeting will be an important juncture to understand how regulators attempt to collaborate as they implement new rules. "The council was not given the responsibility to coordinate the implementation of Dodd-Frank," he said, using the shorthand for the financial reform bill. "I think there has been an effort by Geithner to step into that role." The council also holds the power to determine whether large non-bank financial companies should face more stringent oversight from the Federal Reserve. The council will base its determinations on 11 factors, including a firm's leverage, interconnectedness and the value of its assets. The financial industry is closely watching those deliberations. Companies including Goldman Sachs, Citigroup, J.P. Morgan Chase and Ford Motor Credit have already begun meeting with the Federal Reserve and other regulators as they look to enact new rules on derivatives and other financial products. The administration will also face renewed calls in September from Democratic allies to nominate a consumer agency head before the party suffers expected losses in the midterm elections. Many congressional Democrats, labor unions and consumer advocates have been pushing hard for Obama to nominate Elizabeth Warren. But Sen. Chris Dodd (D-Conn.) has publicly questioned if Warren, a Harvard professor and champion of the agency, could win the 60 votes necessary to overcome procedural hurdles. The White House has said repeatedly that she is among the candidates under consideration but that the president has not yet made a decision. The Senate would have roughly a month to consider a potential nomination before recessing for the elections. If the Senate does not act before the recess, the stakes may quickly increase after Election Day. Winners in special Senate elections in Delaware, Illinois and West Virginia will be seated immediately after Election Day, rather than in January. Republican Rep. Mike Castle is considered the frontrunner for the Delaware seat and the Illinois race is a tossup, meaning Democrats may hold two fewer votes for a confirmation battle in a lame-duck session of Congress. thehill.com/blogs/on-the-money/corporate-governance/117331-regulators-to-hash-out-major-new-finance-rules-this-month |
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Post by sandi66 on Sept 7, 2010 7:52:26 GMT -5
De La Rue: licensed to kill money Posted by Izabella Kaminska on Sep 07 13:09. Oh my. The goings on at the world’s banknote printer of choice, De La Rue, are beginning to take on mystery thriller dimensions. In July, CEO James Hussey stepped down due to a problem with the firm’s paper production specifications — now resolved. On Tuesday, though, came the following filing from the company (our emphasis): De La Rue plc (the “Company”) announces further developments in its investigation of the irregularities identified at one of its paper production facilities. The Board continues to carry out its investigations of the irregularities, assisted by its external legal advisers. However, it has now been established that some of the Company’s employees have deliberately falsified certain paper specification test certificates for a limited number of customers. Banknote paper specifications have a large number of detailed parameters and the investigation has found in certain cases that a small number of them have fallen marginally short of specification. The Board stopped shipment of any affected banknote paper as soon as it became aware of the irregularities. All production is now within specification and the Company is ready, subject to customer agreement, to resume supply of fully compliant paper. The Company remains confident that neither the physical security nor the security features in the paper have been compromised. Furthermore, the Company can now report that these matters have already resulted in increased operating costs and lower volumes. The Board believes that, for the first half of the current financial year, the adverse impact on the group’s profit before tax is likely to be at least £35m. This includes some one-off costs such as stock write-offs, professional fees, rectification and production trial costs as well as some slippage of Currency volumes into the second half. The Company has reported its findings to the relevant law enforcement agencies. Quantification of the financial impact on the group for the full year and subsequent years is not possible at this stage pending the outcome of discussions with customers and the relevant law enforcement bodies. Nicholas Brookes, Executive Chairman of De La Rue, said: “The behaviour of some of our employees in this matter was totally unacceptable and contravened De La Rue’s rigorous standards. We do not tolerate such behaviour and appropriate disciplinary action is being taken. The Board has put an immediate end to the irregularities that have been identified and has appointed a new Managing Director for the Currency Division. “We are carrying out a very thorough investigation and are keeping our customers and the legal authorities fully informed. The Company reiterates that it has not found anything to suggest that either the physical security or the security features in the paper have been compromised and that the matters uncovered relate only to the certification of paper specifications at the relevant facility.” Which reads a little like doublespeak. On one hand, the ‘paper specification issues’ relate only to the certification of paper specifications at the relevant facility and it was only a small number of ‘detailed paramaters’ that fell marginally short of specification. De la Rue emphasizes that security features have not been compromised. On the other hand, the issue has been serious enough for the CEO to step down, and for the company to experience increased operating costs and lower volumes. The issues will be dealt with by ‘relevant law enforcement agencies’ rather than on an internal compliance basis. And, more worrying still: “Quantification of the financial impact on the group for the full year and subsequent years is not possible at this stage pending the outcome of discussions with customers and the relevant law enforcement bodies.” As yet we have no indication of which customers, or which banknotes, may have been affected. De La Rue, of course, sells high-security paper and printing technology for over 150 national currencies, including the Bank of England, the European Central Bank and even the Central Bank of Iraq. But there is some reason to suspect a major breakdown in quality control at the plant. The Basingstoke Gazette, where De La Rue’s printing facility is based, reported back in July that: De La Rue said investigations into the quality of the paper were still being conducted. However, a well-informed source in the village claimed the faults had occurred because cutbacks were made in the quality control department. The source, who did not want to be named, said staff at the mill had been threatened with the sack if they spoke to anyone outside the company about what had happened. The source, who did not want to be named, said staff at the mill had been threatened with the sack if they spoke to anyone outside the company about what had happened. He added: “The paper has to be absolutely pristine clean and the flow that runs through the machine has to be immaculate. That’s why they make banknotes for 150 countries around the world. It’s extremely difficult to make it that perfect. “There was a team of people who check that quality and the word is that the line of quality control was removed by orders from above.” And of course in this day and age ‘quality control’ at a banknote printing facility means more than just ensuring watermarks are effectively applied. The industry incorporates some of the most advanced technological processes to covertly mark its banknotes in ways that are not visible to the human eye, including the use of nanotechnology particles. Banknotes also have to be created with current retail banking and vendor infrastructure in mind. And not just from a security perspective, but wear and tear too. Any slippage here, and the differentiation of good banknotes and bad, may become compromised. Hence falsifying paper specifications certificates — suggesting banknotes have been created to a certain spec when they have not — could, without actually compromising security features designed to fend off forgery, be an extremely expensive affair for all involved. Not least an embarrassing and reputation-tarnishing one for De La Rue. ftalphaville.ft.com/blog/2010/09/07/336096/de-la-rue-licensed-to-kill-money/ |
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Post by sandi66 on Sept 7, 2010 7:59:18 GMT -5
German banks voice Basel regulation fears September 7, 2010 Basel rules stress that banks need money to lend moneyThe Switzerland-based Basel III committee is meeting on Tuesday to further discuss stricter banking regulations designed to prevent a repeat of the global financial crisis. The proposals for tougher rules on capital and liquidity requirements for banks have received a lukewarm welcome in Germany, where financial industry leaders say they would make it difficult for banking institutions to operate. In a statement released ahead of Tuesday's meeting, the Federal Association of German Banks (BdB) warned that an endorsement of the global regulations on the table could force German banks to reduce their lending activity in order to increase their capital base. The body said it would be "counter-productive" to insist on a strict ratio linking Germany's savings and cooperative banks' capital levels to their lending abilities, because they rely on deposits but have no real equity. The Basel committee defines core capital as only equity and retained earnings, but does not take into account the other capital contributions these banks use to finance many of the nation's small and medium-sized businesses. "Going too far would threaten the economic recovery and positive developments on the labor market," the statement said. The BdB further warned that the Basel III overhaul of the sector could see the country's top 10 banks having to raise as much as 104 billion euros ($135 billion) of fresh capital. Hesitant Germany Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Bank managers in Frankfurt are keeping a close eye on Basel Back in July, when the committee published the proposals in their draft form, Germany was the only one of 27 countries to hold out on approval, saying it would not endorse the document until it the ratio requirements had been decided. Tuesday's meeting is due to fix those ratios. The expectation is that the minimum tier one capital ratio will be upped from 4 percent to 6-8 percent, while the core tier one ratio will increase from 4 percent to 4 percent. Basel II, the predecessor to the current committee, was never implemented in either the US or Europe, and the BdB says there is a risk that Basel III will go the same way, allowing US banks to gain a competitive edge. The planned reforms will be released for final approval ahead of a G20 meeting in Seoul in November. www.dw-world.de/dw/article/0,,5980763,00.html |
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Post by sandi66 on Sept 7, 2010 8:01:51 GMT -5
September 7, 2010, 07:00 AM ET Soros Pledges $100-Million to Human Rights Watch The billionaire financier George Soros is giving $100-million to Human Rights Watch, the largest donation he has ever made to a single charity, The New York Times reports. The gift, to be announced Tuesday, is the largest received by the global rights group and the first in what Mr. Soros said would be a series of big donations to several institutions. Mr. Soros is already one of the nation's most generous donors. He ranked No. 6 on last year's Philanthropy 50, The Chronicle's list of the 50 people who gave the most to charitable causes. “I still would like to do a lot of giving during my lifetime, and doing it this way, with such size, is a step in that direction,” the 80-year-old investor told the Times. Human Rights Watch, which investigates and publicizes rights abuses worldwide, will use the money to increase the size of it staff, open new offices, and increase its influence with “emerging powers” such as China, India, and South Africa, said Kenneth Roth, the group’s executive director. philanthropy.com/blogPost/Soros-Pledges-100-Million-to/26734/ |
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Post by sandi66 on Sept 7, 2010 18:34:27 GMT -5
1 Senate Committee on Banking, Housing, and Urban Affairs, Chairman Chris Dodd (D-CT) Contact: Kirstin Brost. 202-224-7391 Summary: Restoring American Financial Stability Create a Sound Economic Foundation to Grow Jobs, Protect Consumers, Rein in Wall Street, End Too Big to Fail, Prevent Another Financial Crisis Two years ago today, Bear Stearns was collapsing. In the time since, Americans have faced the worst financial crisis since the Great Depression. Millions have lost their jobs, businesses have failed, housing prices have dropped, and savings were wiped out. The failures that led to this crisis require bold action. We must restore responsibility and accountability in our financial system to give Americans confidence that there is a system in place that works for and protects them. We must create a sound foundation to grow the economy and create jobs. HIGHLIGHTS OF THE NEW BILL Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices. Ends Too Big to Fail: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed¡¦s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses. Advanced Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy. Transparency & Accountability for Exotic Instruments: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated - including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders. Federal Bank Supervision: Streamlines bank supervision to create clarity and accountability. Protects the dual banking system that supports community banks. Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation. Protects Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses. Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefit special interests at the expense of American families and businesses. 2 STRONG CONSUMER FINANCIAL PROTECTION WATCHDOG The new independent Consumer Financial Protection Bureau will have the sole job of protecting American consumers from unfair, deceptive and abusive financial products and practices and will ensure people get the clear information they need on loans and other financial products from credit card companies, mortgage brokers, banks and others. American consumers already have protections against faulty appliances, contaminated food, and dangerous toys. With the creation of the Consumer Financial Protection Bureau, they¡¦ll finally have a watchdog to oversee financial products, giving Americans confidence that there is a system in place that works for them ¡V not just big banks on Wall Street. Why Change Is Needed: The economic crisis was driven by an across-the-board failure to protect consumers. When no one office has consumer protections as its top priority, consumer protections don¡¦t get the attention they need. The result has been unfair and deceptive practices being allowed to spread unchallenged, nearly bringing down the entire financial system. The Consumer Financial Protection Bureau „h Independent Head: Led by an independent director appointed by the President and confirmed by the Senate. „h Independent Budget: Dedicated budget paid by the Federal Reserve Board. „h Independent Rule Writing: Able to autonomously write rules for consumer protections governing all entities ¡V banks and non-banks ¡V offering consumer financial services or products. „h Examination and Enforcement: Authority to examine and enforce regulations for banks and credit unions with assets of over $10 billion and all mortgage-related businesses (lenders, servicers, mortgage brokers, and foreclosure scam operators) and large non-bank financial companies, such as large payday lenders, debt collectors, and consumer reporting agencies. Banks with assets of $10 billion or less will be examined by the appropriate bank regulator. „h Consumer Protections: Consolidates and strengthens consumer protection responsibilities currently handled by the Office of the Comptroller of the Currency, Office of Thrift Supervision, Federal Deposit Insurance Corporation, Federal Reserve, National Credit Union Administration, and Federal Trade Commission. „h Able to Act Fast: With this bureau on the lookout for bad deals and schemes, consumers won¡¦t have to wait for Congress to pass a law to be protected from bad business practices. „h Educates: Creates a new Office of Financial Literacy. „h Consumer Hotline: Creates a national consumer complaint hotline so consumers will have, for the first time, a single toll-free number to report problems with financial products and services. „h Accountability: Makes one office accountable for consumer protections. With many agencies sharing responsibility, it¡¦s hard to know who is responsible for what, and easy for emerging problems that haven¡¦t historically fallen under anyone¡¦s purview, to fall through the cracks. „h Works with Bank Regulators: Coordinates with other regulators when examining banks to prevent undue regulatory burden. Consults with regulators before a proposal is issued and regulators could appeal regulations if they believe would put the safety and soundness of the banking system or the stability of the financial system at risk. 3 LOOKING OUT FOR THE NEXT BIG PROBLEM: ADDRESSING SYSTEMIC RISKS The Financial Stability Oversight Council The newly created Financial Stability Oversight Council will focus on identifying, monitoring and addressing systemic risks posed by large, complex financial firms as well as products and activities that spread risk across firms. It will make recommendations to regulators for increasingly stringent rules on companies that grow large and complex enough to pose a threat to the financial stability of the United States. Why Change Is Needed: The economic crisis introduced a new term to our national vocabulary ¡V systemic risk. In July, Federal Reserve Governor Daniel Tarullo, testified that "Financial institutions are systemically important if the failure of the firm to meet its obligations to creditors and customers would have significant adverse consequences for the financial system and the broader economy." In short, in an interconnected global economy, it¡¦s easy for some people¡¦s problems to become everybody¡¦s problems. The failures that brought down giant financial institutions last year also devastated the economic security of millions of Americans who did nothing wrong ¡V their jobs, homes, retirement security, gone overnight. The Financial Stability Oversight Council „h Expert Members: A 9 member council of federal financial regulators and an independent member will be Chaired by the Treasury Secretary and made up of regulators including: Federal Reserve Board, SEC, CFTC, OCC, FDIC, FHFA, the new Consumer Financial Protection Bureau. The council will have the sole job to identify and respond to emerging risks throughout the financial system. „h Tough to Get Too Big: Makes recommendations to the Federal Reserve for increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity, with significant requirements on companies that pose risks to the financial system. „h Regulates Nonbank Financial Companies: Authorized to require, with a 2/3 vote, nonbank financial companies that would pose a risk to the financial stability of the US if they failed be regulated by the Federal Reserve. With this provision the next AIG would be regulated by the Federal Reserve. „h Break Up Large, Complex Companies: Able to approve, with a 2/3 vote, a Federal Reserve decision to require a large, complex company, to divest some of its holdings if it poses a grave threat to the financial stability of the United States ¡V but only as a last resort. „h Technical Expertise: Creates a new Office of Financial Research within Treasury to be staffed with a highly sophisticated staff of economists, accountants, lawyers, former supervisors, and other specialists to support the council¡¦s work by collecting financial data and conducting economic analysis. „h Make Risks Transparent: Through the Office of Financial Research and member agencies the council will collect and analyze data to identify and monitor emerging risks to the economy and make this information public in periodic reports and testimony to Congress every year. „h Oversight of Important Market Utilities: Identifies systemically important clearing, payments, and settlements systems to be regulated by the Federal Reserve. „h No Evasion: Large bank holding companies that have received TARP funds will not be able to avoid Federal Reserve supervision by simply dropping their banks. (the Hotel California Provision) 4 ENDING TOO BIG TO FAIL BAILOUTS Preventing another crisis where American taxpayers are forced to bail out financial firms requires strengthening big financial companies to better withstand stress, putting a price on excessive growth or complexity that poses risks to the financial system, and creating a way to shutdown big financial firms that fail without threatening the economy. Why Change Is Needed: As long as giant financial firms (and their creditors) believe the government will prop them up if they get into trouble, they only have incentive to get larger and take bigger risks, believing they will reap any rewards and leave taxpayers to foot the bill if things go wrong. Since the crisis began, a number of financial institutions previously considered "too big to fail" have only grown bigger by acquiring failing companies, leaving our country with the same vulnerabilities that led to last year¡¦s bailouts. Limiting Large, Complex Financial Companies and Preventing Future Bailouts „h Discourage Excessive Growth & Complexity: The Financial Stability Oversight Council will monitor systemic risk and make recommendations to the Federal Reserve for increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity, with significant requirements on companies that pose risks to the financial system. „h Volcker Rule: Requires regulators to implement regulations for banks, their affiliates and bank holding companies, to prohibit proprietary trading, investment in and sponsorship of hedge funds and private equity funds, and to limit relationships with hedge funds and private equity funds. Nonbank financial institutions supervised by the Federal Reserve will also have restrictions on their proprietary trading and hedge fund and private equity investments. Regulations will be developed after a study by the Financial Stability Oversight Council and based on their recommendations. „h Extends Regulation: The Council will have the ability to require nonbank financial companies that pose a risk to the financial stability of the United States to submit to supervision by the Federal Reserve. „h Funeral Plans: Requires large, complex companies to periodically submit plans for their rapid and orderly shutdown should the company go under. Companies will be hit with higher capital requirements and restrictions on growth and activity, as well as divestment, if they fail to submit acceptable plans. Plans will help regulators understand the structure of the companies they oversee and serve as a roadmap for shutting them down if the company fails. Significant costs for failing to produce a credible plan create incentives for firms to rationalize structures or operations that cannot be unwound easily. „h Orderly Shutdown: Creates an orderly liquidation mechanism for the FDIC to unwind failing systemically significant financial companies. Shareholders and unsecured creditors will bear losses and management will be removed. „h Liquidation Procedure: Requires Treasury, FDIC and the Federal Reserve all agree to put a company into the orderly liquidation process. A panel of 3 bankruptcy judges must convene and agree - within 24 hours - that a company is insolvent. „h Costs to Financial Firms, Not Taxpayers: Charges the largest financial firms $50 billion for an upfront fund, built up over time, that will be used if needed for any liquidation. Industry, not the taxpayers, will take a hit for liquidating large, interconnected financial companies. Allows FDIC to borrow from the Treasury only for working capital that it expects to be repaid from the assets of the company being liquidated. The government will be first in line for repayment. „h Limits & Disclosure for Federal Reserve Lending: Updates the Federal Reserve¡¦s 13(3) lender of last resort authority to allow system-wide support for healthy institutions or systemically important market utilities with sufficient collateral to protect taxpayers from loss during a major destabilizing event, but not to prop up individual institutions. The Board must begin reporting within 7 days of extending loans, periodically thereafter, and disclose borrowers, collateral, amounts borrowed unless doing so would defeat 5 the purpose of the support. Disclosure may be delayed 12 months if it would compromise the program or financial stability. „h Bankruptcy: Most large financial companies are expected to be resolved through the normal bankruptcy process. „h Limits on Debt Guarantees: To provide protection against bank runs, the FDIC can guarantee debt of solvent insured banks and thrifts and their holding companies only if the meet a series of serious checks: the Board and the Council determine that there is a threat to financial stability; the Treasury Secretary approves terms and conditions and determines a cap on overall guarantee amounts; the President must activate an expedited process for Congressional review of the amount and use of the guarantees; and fees are set to cover all expected costs and losses are recouped from users of the program. IMPROVING BANK REGULATION The bill will streamline bank supervision with clear lines of responsibility, reducing arbitrage, and improve consistency and accountability. For the first time there will be clear lines of responsibility among bank regulators. Why Change Is Needed: Today, we have a convoluted system of bank regulators created by historical accident. There are 4 federal banking agencies that oversee large systemically significant and small local national and state banks and federal and state thrifts. Experts agree that no one would have designed a system that looked like this. For over 60 years, administrations of both parties, members of Congress across the political spectrum, commissions and scholars have proposed streamlining this irrational system. „h Clear Lines of Responsibility: Replaces confusing regulation riddled with dangerous loopholes, with clear lines of responsibility. „h FDIC: will regulate state banks and thrifts of all sizes and bank holding companies of state banks with assets below $50 billion. „h OCC: will regulate national banks and federal thrifts of all sizes and the holding companies of national banks and federal thrifts with assets below $50 billion. The Office of Thrift Savings is eliminated, existing thrifts will be grandfathered in, but no new charters for federal thrifts. „h Federal Reserve: will regulate bank and thrift holding companies with assets of over $50 billion, where the Fed¡¦s capital market experience will enhance its supervision. As a consolidated supervisor, the Federal Reserve can see risks whether they lie in the bank holding company or its subsidiaries. They will be responsible for finding risk throughout the system. The Vice Chair of the Federal Reserve will be responsible for supervision and will report semi-annually to Congress. „h Dual Banking System: Preserves the dual banking system, leaving in place the state banking system that governs most of our nation¡¦s community banks. 6 CREATING TRANSPARENCY AND ACCOUNTABILITY FOR DERIVATIVES Today¡¦s bill largely reflects the November draft. Senators Jack Reed (D-RI) and Judd Gregg (R-NH) are working on a substitute amendment to this title that may be offered at full committee. Under today¡¦s proposal, common sense safeguards will protect taxpayers against the need for future bailouts and buffer the financial system from excessive risk-taking. Over-the-counter derivatives will be regulated by the SEC and the CFTC, more will be cleared through centralized clearing houses and traded on exchanges, un-cleared swaps will be subject to margin requirements and swap dealers and major swap participants will be subject to capital requirements, and all trades will be reported so that regulators can monitor risks in this large, complex market. Why Change Is Needed: The over-the-counter derivatives market has exploded¡V from $91 trillion in 1998 to $592 trillion in 2008. During the financial crisis, concerns about the ability of companies to make good on these contracts and the lack of transparency about what risks existed caused credit markets to freeze. Investors were afraid to trade as Bear Stearns, AIG, and Lehman Brothers failed because any new transaction could expose them to more risk. Over-the-counter derivatives are supposed to be contracts that protect businesses from risks, but they became a way for traders to make enormous bets with no regulatory oversight or rules and therefore exacerbated risks. Because the derivatives market was considered too big and too interconnected to fail, taxpayers had to foot the bill for Wall Street¡¦s bad bets. Those bad bets linked thousands of traders, creating a web in which one default threatened to produce a chain of corporate and economic failures worldwide. These interconnected trades, coupled with the lack of transparency about who held what, made unwinding the "too big to fail" institutions more costly to taxpayers. Bringing Transparency and Accountability to the Derivatives Market „h Closes Regulatory Gaps: Provides the SEC and CFTC with authority to regulate over-the-counter derivatives so that irresponsible practices and excessive risk-taking can no longer escape regulatory oversight. Uses the Administration¡¦s outline for a joint rulemaking process with the Financial Stability Oversight Council stepping in if the two agencies can¡¦t agree. „h Central Clearing and Exchange Trading: Requires central clearing and exchange trading for derivatives that can be cleared and provides a role for both regulators and clearing houses to determine which contracts should be cleared. Requires the SEC and the CFTC to pre-approve contracts before clearing houses can clear them. „h Safeguards for Un-Cleared Trades: Requires margin for un-cleared trades in order to offset the greater risk they pose to the financial system and encourage more trading to take place in transparent, regulated markets. Swap dealers and major swap participants will be subject to capital requirements. „h Market Transparency: Requires data collection and publication through clearing houses or swap repositories to improve market transparency and provide regulators important tools for monitoring and responding to risks. 7 HEDGE FUNDS Hedge funds that manage over $100 million will be required to register with the SEC as investment advisers and to disclose financial data needed to monitor systemic risk and protect investors. Why Change Is Needed: Hedge funds are responsible for huge transfers of capital and risk, but some operate outside the framework of the financial regulatory system, even as they have become increasingly interwoven with the rest of the country¡¦s financial markets. No regulator is currently able to collect information on the size and nature of these firms or calculate the risks they pose to the broader economy. The SEC is currently unable to examine unregistered hedge funds¡¦ books and records. Raising Standards and Regulating Hedge Funds „h Fills Regulatory Gaps: Ends the "shadow" financial system in which hedge funds operate by requiring that they provide regulators with critical information. „h Register with the SEC: Requires hedge funds to register with the SEC as investment advisers and provide information about their trades and portfolios necessary to assess systemic risk. This data will be shared with the systemic risk regulator and the SEC will report to Congress annually on how it uses this data to protect investors and market integrity. „h Greater State Supervision: Raises the assets threshold for federal regulation of investment advisers from $25 million to $100 million, a move expected to increase the number of advisors under state supervision by 28%. States have proven to be strong regulators in this area and subjecting more entities to state supervision will allow the SEC to focus its resources on newly registered hedge funds. INSURANCE Office of National Insurance: Creates a new office within the Treasury Department to monitor the insurance industry, coordinate international insurance issues, and requires a study on ways to modernize insurance regulation and provide Congress with recommendations. Streamlines the regulation of surplus lines insurance and reinsurance through state-based reforms. 8 CREDIT RATING AGENCIES Establishes a new Office of Credit Rating Agencies at the Securities and Exchange Commission to strengthen regulation of credit rating agencies. New rules for internal controls, independence, transparency and penalties for poor performance will address shortcomings and restore investor confidence in these ratings. Why Change Is Needed: Rating agencies market themselves as providers of independent research and in-depth credit analysis. But in this crisis, instead of helping people better understand risk, they failed to warn people about risks hidden throughout layers of complex structures. Flawed methodology, weak oversight by regulators, conflicts of interest, and a total lack of transparency contributed to a system in which AAA ratings were awarded to complex, unsafe asset-backed securities - adding to the housing bubble and magnifying the financial shock caused when the bubble burst. When investors no longer trusted these ratings during the credit crunch, they pulled back from lending money to municipalities and other borrowers. New Requirements and Oversight of Credit Rating Agencies „h New Office, New Focus at SEC: Creates an Office of Credit Ratings at the SEC with its own compliance staff and the authority to fine agencies. The SEC is required to examine Nationally Recognized Statistical Ratings Organizations at least once a year and make key findings public. „h Disclosure: Requires Nationally Recognized Statistical Ratings Organizations to disclose their methodologies, their use of third parties for due diligence efforts, and their ratings track record. „h Independent Information: Requires agencies to consider information in their ratings that comes to their attention from a source other than the organizations being rated if they find it credible. „h Conflicts of Interest: Prohibits compliance officers from working on ratings, methodologies, or sales. „h Liability: Investors could bring private rights of action against ratings agencies for a knowing or reckless failure to conduct a reasonable investigation of the facts or to obtain analysis from an independent source. „h Right to Deregister: Gives the SEC the authority to deregister an agency for providing bad ratings over time. „h Education: Requires ratings analysts to pass qualifying exams and have continuing education. „h Reduce Reliance on Ratings: Requires the GAO study and requires regulators to remove unnecessary references to NRSRO ratings in regulations. 9 EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE Strengthening Shareholder Rights Giving shareholders a say on pay and proxy access, ensuring the independence of compensation committees, and requiring public companies to set policies to take back executive compensation based on inaccurate financial statements are important steps in reining in excessive executive pay and can help shift management¡¦s focus from short-term profits to long-term growth and stability. Why Change Is Needed: In this country, you are supposed to be rewarded for hard work. But Wall Street has developed an out of control system of out of this world bonuses that rewards short term profits over the long term health and security of their firms. Incentives for short-term gains likewise created incentives for executives to take big risks with excess leverage, threatening the stability of their companies and the economy as a whole. Giving Shareholders a Say on Pay and Creating Greater Accountability „h Vote on Executive Pay: Gives shareholders a say on pay with the right to a non-binding vote on executive pay. This gives shareholders a powerful opportunity to hold accountable executives of the companies they own, and a chance to disapprove where they see the kind of misguided incentive schemes that threatened individual companies and in turn the broader economy. „h Nominating Directors: Gives the SEC authority to grant shareholders proxy access to nominate directors. Also required directors to win by a majority vote in uncontested elections. These can help shift management¡¦s focus from short-term profits to long-term growth and stability. „h Independent Compensation Committees: Standards for listing on an exchange will require that compensation committees include only independent directors and have authority to hire compensation consultants in order to strengthen their independence from the executives they are rewarding or punishing. „h No Compensation for Lies: Requires that public companies set policies to take back executive compensation if it was based on inaccurate financial statements that don¡¦t comply with accounting standards. „h SEC Review: Directs the SEC to clarify disclosures relating to compensation, including requiring companies to provide charts that compare their executive compensation with stock performance over a five-year period. 10 SEC AND IMPROVING INVESTOR PROTECTIONS Every investor ¡V from a hardworking American contributing to a union pension to a day trader to a retiree living off of their 401(k) ¡V deserves better protections for their investments. Investors in securities will be better protected by improving the competence of the SEC. Why Change Is Needed: The Madoff scandal demonstrated just how desperately the SEC is in need of reform. The SEC has failed to perform aggressive oversight and is unable to understand some of the very companies it is supposed to regulate. And investors have been used and abused by the very people who are supposed to be providing them with financial advice. SEC and Beefed Up Investor Protections „h Encouraging Whistleblowers: Creates a program within the SEC to encourage people to report securities violations, creating rewards of up to 30% of funds recovered for information provided. „h SEC Management Reform: Mandates an annual assessment of the SEC¡¦s internal supervisory controls and a GAO study of SEC management. „h Investment Advice: Requires a study on whether brokers who give investment advice should be held to the same fiduciary standard as investment advisers ¡V should be required to act in their clients¡¦ best interest. „h New Advocates for Investors: Creates the Investment Advisory Committee, a committee of investors to advise the SEC on its regulatory priorities and practices as well as the Office of Investor Advocate in the SEC, to identify areas where investors have significant problems dealing with the SEC and provide them assistance. „h Funding: The self-funded SEC will no longer be subject to the annual appropriations process. SECURITIZATION Companies that sell products like mortgage-backed securities are required to retain a portion of the risk to ensure they won¡¦t sell garbage to investors, because they have to keep some of it for themselves. Why Change Is Needed: Companies made risky investments, such as selling mortgages to people they knew could not afford to pay them, and then packaged those investments together, called asset-backed securities, and sold them to investors who didn¡¦t understand the risk they were taking. For the company that made, packaged and sold the loan, it wasn¡¦t important if the loans were never repaid as long as they were able to sell the loan at a profit before problems started. This led to the subprime mortgage mess that helped to bring down the economy. Reducing Risks Posed by Securities „h Skin in the Game: Requires companies that sell products like mortgage-backed securities to retain at least 5% of the credit risk, unless the underlying loans meet standards that reduce riskiness. That way if the investment doesn¡¦t pan out, the company that packaged and sold the investment would lose out right along with the people they sold it to. „h Better Disclosure: Requires issuers to disclose more information about the underlying assets and to analyze the quality of the underlying assets. 11 MUNICIPAL SECURITIES Municipal securities will have better oversight through the registration of municipal advisers and increased investor representation on the Municipal Securities Rulemaking Board. Why Change Is Needed: Financial advisers to municipal securities issuers have been involved in "pay-to-play" scandals and have recommended unsuitable derivatives for small municipalities, among other inappropriate actions, and are not currently regulated. Better Oversight of Municipal Securities „h Registers Advisors and Brokers: Requires SEC registration for municipal financial advisers, swap advisers, and investment brokers ¡V unregulated intermediaries who play key roles in the municipal bond market. Subjects financial advisers, swap advisers, and investment brokers to rules issued by the Municipal Securities Rulemaking Board and enforced by the SEC or a designee. „h Puts Investors First on the MSRB Board: Gives investor and public representatives a majority on the MSRB to better protect investors in the municipal securities market where there has been less transparency than in corporate debt markets. STRENGTHENING THE FEDERAL RESERVE The Federal Reserve will oversee the larger, more complex holding companies with assets over $50 billion and other systemically significant financial firms, where their expertise in capital markets will come into play. With this new role will come new responsibilities, but also new transparency and efforts to eliminate conflicts of interest. Strengthening the Federal Reserve „h Transparency: GAO will have authority to audit any emergency lending facility set up by the Federal Reserve under section 13(3) of the Federal Reserve Act. „h Financial Stability Function: The Board of Governors of the Federal Reserve will now have a formal responsibility to identify, measure, monitor, and mitigate risks to U.S. financial stability. „h Oversight Accountability: Creates a Vice Chairman for Supervision, a member of the Board of Governors of the Federal Reserve designated by the President, who will develop policy recommendations regarding supervision and regulation for the Board, and will report to Congress semi-annually on Board supervision and regulation efforts. „h Eliminates Conflicts of Interest in Reserve Bank Governance: No company, subsidiary or affiliate of a company that is supervised by the Federal Reserve Board will be allowed to vote for directors of Federal Reserve Banks; and their past or present officers, directors and employees cannot serve as directors. Currently the member banks elect directors, who choose the Federal Reserve Board president. Federal Reserve supervisory functions are carried out through the Federal Reserve Banks. „h Increases Accountability at the New York Federal Reserve Bank: The president of the New York Federal Reserve Bank will be appointed by the President of the United States, with the advice and consent of the Senate. The New York Federal Reserve president is a permanent member of the Federal Open Market Committee, the Bank executes open market operations and is an important source of information on capital markets, and the Bank supervises many important bank holding companies. However, the president of the New York Federal Reserve Bank is currently chosen by the Bank¡¦s directors, 6 of whom are elected by member banks in that district. banking.senate.gov/public/_files/FinancialReformSummary231510FINAL.pdfty nalmann
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Post by sandi66 on Sept 8, 2010 5:08:39 GMT -5
Why Fears That Quantitative Easing Will Lead to Hyperinflation Are Unfounded September 08, 2010 A new report on currency form Morgan Stanley examines what would happen to the dollar (and other currencies) in the event that Bernanke restarts quantitative easing: QEI resulted in the dollar falling mainly against currencies that were unlikely to ever print. So, the commodity currencies fared the best, followed by the euro, and GBP underperformed once the BoE pursued a similar policy. Something along the same lines would perhaps happen again, although we think that there would be a number of differences. First, the market might be less scared of QE. It hasn’t led to hyper-inflation as some feared (yet), and the Fed has a fairly credible exit strategy now, which wasn’t discussed prior to QEI. In a sense, exit strategy is less relevant. Second, the main problem with QEII would be that after a period of excess liquidity and abnormally easy monetary policy (as well as loose fiscal policy), the signal QEII sends is perhaps as important as the policy itself, in that it says that policymakers are genuinely worried about a double-dip scenario and a period of disinflation. Given the ongoing deflation (or at least threat of deflation), it's funny to think that people have been waving their hands about inflation or hyperinflation all this time, only to be proven wrong. But hyperinflation isn't just something that happens at wily nily. Either the conditions are created or they're not, and quantitative easing does not, alas, qualify. Here's the thing: quantitative easing just isn't that radical of a policy step. It was radical when the US went off the gold standard, switching from a hard currency to a fiat currency. But once we went fiat, quantitative easing (or negative interest rates, or Fed portfolio expansion, or whatever version of stimulant you prefer) is just part of the normal toolkit. In fact, one might argue that under a fiat currency, the whole idea of seeing 0% as a bottom-bound of interest rates is totally arbitrary. Essentially Ben Bernanke has a dial, he can turn it far to one end, or far to another. Nothing magic happens when he crosses 0 that would suddenly make hyperinflation (which, really, is a term that should only be used when the dollar is threatened with toilet paper status) a reality. Rather than fret about negative interest rates, we might do better to ask: what vestiges of the hard currency days remain in our thinking that cause us confusion about what's proper policy. All that being said, given the lack of new investment, and reluctance among banks to lend, it's very much in doubt whether QEII would actually spur the real economy. In a must-read Ambrose Evans-Pritichard piece, the pugnacious columnist slams America for not being bold enough, arguing that the Fed should toss in the kitchen sink, buying up everything from all kinds of organizations -- not just banks -- like insurance and pension funds in an effort to plump money into the economy. seekingalpha.com/article/224283-why-fears-that-quantitative-easing-will-lead-to-hyperinflation-are-unfounded |
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Post by sandi66 on Sept 8, 2010 5:44:32 GMT -5
Swiss Franc Reaches Record Versus Euro on Concern Banks, Economy Struggle Sep 8, 2010 6:03 AM ET The Swiss franc reached a record against the euro and the yen advanced to a 15-year high versus the dollar and as concern that European banks will struggle amid a slowing recovery prompted investors to seek refuge. The franc approached parity with the dollar for the first time in nine months as the MSCI World Index of shares dropped 0.4 percent. European Central Bank Governing Council member Axel Weber said today while he doesn’t expect a recession or a deflationary spiral, policy makers “shouldn’t be tempted to call an end to the crisis.” The yen also rose on speculation the Federal Reserve’s Beige Book business survey may add to evidence the U.S. economic recovery is stalling. “It’s a risk off day, and that reflects in the performance of haven currencies,” said Jane Foley, a senior currency strategist at Rabobank International in London. “There’s still a lot of concern about the global economy as well as the fiscal outlook and the health of the banking sector in the euro region.” The yen strengthened to 83.76 per dollar as of 10:55 a.m. in London from 83.83 yesterday in New York, after earlier reaching 83.35, the strongest level since May 1995. Japan’s currency was little changed at 106.29 per euro, after appreciating to 105.80, the strongest since Aug. 24. The franc appreciated 0.3 percent to 1.2787 against the euro and 0.2 percent to 1.0079 per dollar. The dollar was little changed against the euro at $1.2689. Bank Concern Concern that European banks are vulnerable to losses on some bond holdings have helped send the yield premium for Irish and Portuguese bonds over German bunds to a record today. The cost of insuring against losses on Irish government debt surged close to a record, rising 11.5 basis points to 393, according to data provider CMA. Credit-default swaps on the nation’s banks also soared. Securities firms around the world will cut as many as 80,000 jobs in the next 18 months as revenue growth begins to slow, said Meredith Whitney, the former Oppenheimer & Co. analyst who now runs her own firm. “There are still major concerns around the bank sector,” said Christopher Wheeler, a London-based analyst at Mediobanca SpA. “The uncertainty has not just gone away and certain issues about sovereign debt and capital happen to be two which have popped up and are particularly prominent at the moment,” he said on Bloomberg Television’s ‘On The Move’ with Francine Lacqua. Beige Book The Fed will today release its survey of conditions in its 12 districts, known as the Beige Book, before officials meet to review monetary policy on Sept. 21. The U.S. jobless rate is likely to approach 10 percent in coming months as the economy fails to grow enough to employ people rejoining the labor force, according to economists surveyed by Bloomberg. Japan’s current-account surplus expanded 26 percent from a year earlier to 1.68 trillion yen ($20 billion), the Ministry of Finance said, surpassing the 1.53 trillion yen surplus forecast by economists in a Bloomberg News survey. The yen has advanced 16 percent this year, the biggest gain among the developed-world currencies, according to Bloomberg Correlation-Weighted Currency Indexes. The euro has dropped 10 percent and the dollar is up 2.7 percent. The dollar weakened as signs the U.S. recovery is waning damped demand for assets in the world’s largest economy. Futures on the CME Group exchange showed a 57 percent chance the Fed will keep its target rate for overnight bank lending between zero and 0.25 percent by its June 2011 meeting, up from a 50 percent probability a month ago. Intervention Concern Gains in the yen were tempered after Japan’s Finance Minister Yoshihiko Noda said he is prepared to take “bold” steps on currencies if necessary. Noda told reporters in Tokyo the government is watching markets closely and potential measures to counter the yen’s appreciation include intervention in markets. “There may have been some players who sold the yen on his comments,” said Hisanao Sasaki, vice president of foreign exchange at Oversea-Chinese Banking Corp. in Singapore. Australia’s dollar climbed toward a four-week high versus the greenback on speculation tomorrow’s jobs report will give the central bank more reason to resume raising interest rates. The number of people employed rose by 25,000 in August and the jobless rate fell to 5.2 percent from 5.3 percent, the statistics bureau will say tomorrow according to a Bloomberg survey. The Reserve Bank of Australia kept rates on hold for a fourth month yesterday. “The employment data continues to surprise on the upside,” said Jonathan Cavenagh, currency strategist at Westpac Banking Corp. in Sydney. “The market is underestimating the chance of further tightening over the next 6 to 12 months, and that’s something that will support Aussie on any pullbacks.” The so-called aussie was 0.7 percent higher at 91.65 U.S. cents. www.bloomberg.com/news/2010-09-07/yen-near-15-year-high-as-fed-s-beige-book-may-show-u-s-recovery-stalling.html |
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Post by sandi66 on Sept 8, 2010 6:04:51 GMT -5
50 Mind Blowing Facts About America That Our Founding Fathers Never Would Have Believed If our Founding Fathers were alive today, what would they think of America? Surely they would be very proud that the United States stretches from the Atlantic to the Pacific and has built some of the most amazing cities that the world has ever seen. They would probably be surprised that the country they founded went on to become the greatest economic machine in the history of the world, and they would be absolutely astounded by things like our interstate highway system and the Internet. However, there are quite a number of things that they would be horrified about as well. The fact that over 40 million Americans are dependent on the federal government for their daily food would be deeply disturbing to our founders. Also, the fact that the U.S. government has accumulated the greatest mountain of debt in human history would be incredibly distressing to George Washington, Thomas Jefferson and the rest of the founders. But perhaps most of all, our founders would be absolutely disgusted that the land where Americans could once be free to pursue life, liberty and the pursuit of happiness has become so tightly regulated and controlled that Americans dare not even squeak without the permission of the federal government. Needless to say, our founders would certainly not understand many of our institutions or many of the advanced technologies that we have today. But without a doubt they would be able to grasp how far we have fallen as a nation and how far we have strayed from the fundamental principles that they enshrined in our founding documents. The United States is a much different place today than it was in 1776, and unfortunately many of the changes have been for the worse. The following are 50 mind blowing facts about modern America that our Founding Fathers never would have believed.... #1 In 2010, not only does the United States have a central bank, but it also runs our economy and issues all of our currency. The Federal Reserve has devalued the U.S. dollar by over 95 percent since 1913 and it has been used to create the biggest mountain of government debt in the history of the world. #2 The U.S. Court of Appeals for the Ninth Circuit has ruled that U.S. government agents can legally sneak onto your property in the middle of the night, place a secret GPS device on the bottom of your car and keep track of you everywhere that you go. #3 The 50 wealthiest members of Congress saw their collective fortunes increase by 85.1 million dollars to $1.4 billion in 2009. #4 The U.S. government has accumulated a national debt that is rapidly approaching the 14 trillion dollar mark. #5 All over the United States, asphalt roads are being ground up and are being replaced with gravel because it is cheaper to maintain. The state of South Dakota has transformed over 100 miles of asphalt road into gravel over the past year, and 38 out of the 83 counties in the state of Michigan have now turned some of their asphalt roads into gravel roads. #6 Americans now owe more than $849 billion on student loans, which is more than the total amount that Americans owe on their credit cards. #7 In 2010, Americans waste an astounding amount of food. According to a study by the California Integrated Waste Management board, 63 percent of the average supermarket's waste stream is food. When you break that down, it means that each supermarket wastes approximately 3,000 pounds of food each year. #8 The city of Cleveland plans to sort through curbside trash to ensure that people are actually recycling properly. If it is discovered that some citizens are not recycling they will be hit with very large fines. #9 Once upon a time, U.S. industry was the envy of the world. But since 1979, manufacturing employment in the United States has fallen by 40 percent. #10 Even though the U.S. population has exploded in size, the number of Americans with manufacturing jobs today is smaller than the number of Americans who were employed in manufacturing in 1950. #11 Having one out of every eight Americans enrolled in the food stamp program is now considered "the new normal" and Americans continue to drop into poverty in astounding numbers. #12 One out of every six Americans is now being served by at least one government anti-poverty program. #13 A family of four actually has difficulty surviving on an income of $50,000 a year in America in 2010. #14 Barack Obama is backing a proposal to create a national database that will store the DNA of all individuals who have been arrested, even if they end up not being convicted of a crime. #15 In 2010, it takes the average unemployed American worker over 8 months to find a job. #16 The U.S. government has made some parts of Arizona off limits to U.S. citizens because of the threat of violence from Mexican drug smugglers. The federal government has actually posted signs more than 100 miles north of the Mexican border warning travelers that certain areas are unsafe because of drug and alien smugglers. #17 One recent survey of last year's college graduates discovered that 80 percent moved right back home with their parents after graduation. #18 In one of the very first military commissions held under the Obama administration, a U.S. military judge ruled that confessions obtained by threatening the subject with rape are admissible in court. #19 The average American worker now pays literally dozens of different kinds of taxes each year. #20 In recent years the U.S. government has spent $2.6 million tax dollars to study the drinking habits of Chinese prostitutes and $400,000 tax dollars to pay researchers to cruise six bars in Buenos Aires, Argentina to find out why gay men engage in risky sexual behavior when drunk. #21 Christians are being arrested and thrown in jail in some areas of the United States for quietly passing out Christian literature on public sidewalks. #22 The Florida State Department of Juvenile Justice has announced that it will begin using cutting edge analysis software to predict crime by young delinquents and will place "potential offenders" in prevention and education programs. #23 Organic milk is now considered such a national crisis that the FDA has been conducting military style raids on Amish farmers in the state of Pennsylvania. #24 The U.S. Environmental Protection Agency recently announced that they are considering a crackdown on farm dust. #25 According to a new CDC report, nearly half of all Americans now use prescription drugs on a regular basis. #26 Oakland, California Police Chief Anthony Batts says that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer. The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism. #27 Today, Americans are losing their homes in staggering numbers. One out of every seven mortgages was delinquent or in foreclosure during the first quarter of 2010. #28 Many of our leading scientists are now calling themselves "transhumanists" and are openly proclaiming that a future where men have fully merged with machines is inevitable. #29 Americans who spend large amounts of cash are viewed as "potential criminals" by the U.S. government in 2010. #30 New full body security scanners going into airports all across the United States can actually see through our clothing and produce very clear and very detailed images of our exposed bodies as we walk through them. #31 The U.S. financial system has become a massive gambling parlor in 2010. As a result, a horrific derivatives bubble has developed that threatens to destroy our entire economy at any moment. Nobody knows exactly how big the derivatives bubble is, but low estimates place it at around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars. Once that bubble pops there simply will not be enough money in the entire world to fix it. #32 The U.S. government is spending an amount of money equivalent to approximately 25.4 percent of GDP this year. #33 Today, 10,000 people make 30% of the total income in the United States. #34 A 2006 Immigration and Customs Enforcement investigation discovered that 250 employees of the Defense Department used credit cards or PayPal to purchase images of children in sexual situations. However, the investigation also found that the Pentagon investigated only a handful of those cases. #35 According to a recent poll of Americans between the ages of 44 and 75, 61% said that running out money was their biggest fear. The remaining 39% thought death was scarier. #36 Approximately 57 percent of Barack Obama's 3.8 trillion dollar budget for 2011 consists of direct payments to individual Americans or is money that is spent on their behalf. #37 A recent Department of Justice guide for investigators of criminal and extremist groups lists "constitutionalists" and "survivalists" alongside organizations like Al-Qaeda and the Aryan Brotherhood. #38 The U.S. trade deficit has exploded to nightmarish proportions over the past two decades. Every single month tens of billions more dollars goes out of the United States than comes into it. Essentially, the United States is becoming far poorer as a nation each and every month. #39 Factories are closing in droves across the United States because the American people would rather buy things made in China. #40 Millions upon millions of good paying middle class jobs are being shipped off to China and they are never coming back. Meanwhile, U.S. politicians stand by idly and do nothing. #41 Some analysts now believe that China could become the largest economy in the world by the year 2020. #42 If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the annual U.S. government budget deficit would be somewhere in the neighborhood of four to five trillion dollars. #43 According to one recent survey, 28% of all U.S. households have at least one person that is currently searching for a full-time job. #44 The U.S. dollar continues to rapidly decline in value. An item that cost $20.00 in 1970 will cost you $112.35 today. An item that cost $20.00 in 1913 will cost you $440.33 today. #45 Major international organizations are actually proposing that the United States start considering the adoption of a truly global currency. #46 Students at a high school in Missouri have built a car that they claim can get up to 450 miles per gallon. On another note, some of the top energy experts in the world believe that thorium could solve our energy problems and supply very cheap energy for society for hundreds of thousands of years. But in today's world technologies such as these are endlessly suppressed by the rich and powerful. #47 One Colorado high school student is seeking an explanation from officials at his school after he was ordered by security guards to remove American flags from his truck because they might make other students at the high school "uncomfortable". #48 Three California high school students were recently forced to remove their American flag T-shirts on Cinco de Mayo. #49 Memorial crosses erected along Utah public roads to honor fallen state troopers have been found unconstitutional by a federal appeals court and now must be removed permanently. #50 One group of high school students made national headlines recently when they revealed that a security guard ordered them to stop singing the national anthem during a visit to the Lincoln Memorial. www.benzinga.com/10/09/461319/50-mind-blowing-facts-about-america-that-our-founding-fathers-never-would-have-believed |
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Post by sandi66 on Sept 8, 2010 18:21:01 GMT -5
* Dinar Daddy: RUMOR sent to me (Don’t know WHERE this came from) September 8, 2010 · Posted in BALANCE, RUMORS TIDBIT: Thank you Laura for sending this to me. – DD [07:54:59] Coulston: We are really getting calls left and righ and losing some because 2 on a line, so far everyone is saying the same thing and one has seen it at his bank, because that is what he does Investments and currency exchange, and the rate on the screen was $3.86 so with the Spread we shoulf get around $4.00, and Lim I believed you asked why it is not showing at CBI and I got the answer that it will be about 4 days before the rate shows up at CBI beciase that is what a lot of currency exchange places use and they delay it on ourpose, so I have no proof yet but lot more confirmations!!!!! www.theiraqidinar.com/dinar-daddy-rumor-sent-to-me-dont-know-where-this-came-from/******************* * Dinar Profits: China’s Huge Bet in Iraq September 8, 2010 · Posted in BALANCE, CHATS / POSTS China’s Huge Bet in Iraq Guest post by: Daniel Carlson of Dinar Profits To all loyal DD members, thanks for all the support! Give Dinar Profits a call at 1-866-544-4132 and mention Dinar Daddy to receive a 1,000 IQD Note FREE if you purchase at least 1/4 million! The War in Iraq has been costly for the United States to say the least, both in terms of lives lost and financially. Over the past seven years, the U.S. has spent billions of dollars and thousands of lives have been sacrificed in an attempt to restore peace and prosperity in Iraq. Only time will tell if the War in Iraq will produce lasting peace and stability that we all hope for. China also has spent billions of dollars in Iraq, however, China has invested their money in hopes of reaping huge profits. China has mostly invested in oil, infrastructure and has forgiven part of Iraq’s debt to promote a friendly trade partnership. To fuel their growth, China has invested heavily in Iraqi oil. China has snagged five contracts to explore oil fields in Iraq and also has a $3 billion deal dating back to Saddam Hussein’s regime. Iraq is poised to overtake Saudi Arabia as China’s largest supplier of oil. In addition to winning the auctions for the right to drill, China has spent millions of dollars for equipment, security and personnel to protect their investments in Iraq. While the United States have viewed investments in Iraq as risky, China has dived in head first. Some oil contracts China has signed are 20 years in length, which shows China’s confidence in its investment in the long term and Iraq’s potential to deliver fuel to power a nation growing at break neck pace. In addition, China is planning on building a $2 billion railroad through Iran to the border of Iraq that could potential carry over into Iraq. The railroad would benefit many Iranians who travel to Iraq for religious pilgrimages and trade partners. While many countries have shied away from investing in the Middle East, China has boldly made huge investments, especially in Iraq, seeking enormous returns. In addition to funding project in Iraq, China has also forgiven Iraq of 80% of its debt from the Saddam era. This lifts a huge burden off of Iraq as it focuses on rebuilding a country ravaged by war for the past seven years. Also, China’s forgiveness symbolizes the importance China places on Iraq as a trade partner. With billions of dollars worth of investments in Iraq, China understands the importance of a mutually beneficial relationship with Iraq. This is not lost on Iraq as well, Iraq sees China as a very strategic trade partner especially with its close proximity and China’s rise as a super power. China’s huge bet in Iraq looks promising and it seems as if China is doing all they can to protect and realize their investments. Daniel Carlson is a dinar specialist at Dinar Profits, call 1-866-544-4132 or visit Dinar Profits for more information www.theiraqidinar.com/dinar-profits-chinas-huge-bet-in-iraq/ |
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