Month: May 2012

Good.

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About a week and a half ago, I blogged about how the black hat orthodox community in Brooklyn has been engaging in a systematic program of intimidation and harassment against people who report allegations of the child abuse to the police.

I called them despicable and evil, and I said that I hoped that the Brooklyn DA would go after these instances of intimidation.

Well, my wish has been granted, Brooklyn DA Charles Hynes is opening up a criminal investigation into these allegations:

The Brooklyn district attorney, Charles J. Hynes, is setting up a panel of prosecutors and investigators to crack down on witness intimidation in child sexual abuse cases in the borough’s ultra-Orthodox Jewish community.

Speaking on NY1 on Thursday night, Mr. Hynes said he was asking the panel to “come up with some alternatives to break down this wall of intimidation.”

He criticized elements in the ultra-Orthodox Jewish community over their treatment of sexual abuse victims.

“The level of intimidation is not found nearly as much in organized crime,” he said. “It’s extraordinary just how relentless these people can be.”

“There is no concern for the victim in parts of these communities,” he added. “Everything is for the abuser, and that’s the horrible thing that we have to deal with.”

It was a shift in tone for Mr. Hynes, who in the past has praised ultra-Orthodox Jewish leaders for helping to fight crime in their neighborhoods.

Hopefully, this is real, and not a task force for appearances sake only.

Nothing will change though, until we start seeing the senior rabbis behind this behavior, those with big names and many disciples, are brought up on formal charges.

Trust Timothy “Eddie Haskell” Geithner to Do the Right Think…

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When there is absolutely no alternative to doing the right thing.

It looks like little Timmy is Treasury Secretary speak to tell Jamie Dimon to get the f%$# off the board of the New York Bank of the Federal Reserve following his little $2 billion (actually $3 billion) screw-up at JP Morgan Chase:

In an interview Thursday on PBS NewsHour, Jeffrey Brown and Treasury Secretary Tim Geithner had the following exchange:

“JEFFREY BROWN: Do you think Jamie Dimon should be off the board [of the New York Federal Reserve Board]?

TIMOTHY GEITHNER: Well, that’s a question he’ll have to make and the Fed will have to make. But again, on the basic point, which is it is very important, particularly given the damage caused by the crisis, that our system of oversight and safeguards and the enforcement authorities have not just the resources they need, but they are perceived to be above any political influence and have the independence and the ability to make sure these reforms are tough and effective so we protect the American people, again, from a crisis like this. And we’re going to, we’re going to do that.”

In the diplomatic language of Treasury communications, Mr. Geithner just told Jamie Dimon to resign from the New York Fed board (here is the current board composition).  It looks bad – and it is bad – to have him on the board of this key part of the Federal Reserve System at a time when his bank is under investigation with regard to its large trading losses and the apparent failure of its risk management system.  (Update: Mr. Dimon is on the Management and Budget Committee of the NY Fed board; here is the committee’s charter, which includes reviewing and endorsing “the framework for compensation of the Bank’s senior executives (Senior Vice President and above)”.)

Simon Johnson thinks that Dimon will ignore him, and I agree.

Geithner is the banksters bitch, and is not sincere in his request.  He just wants the appearance of getting tough on malfeasance in the financial sector, not the reality.

The National Review: America’s Source for Crappy Journalism

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They had a scoop that Elizabeth Warren, founder of the Consumer Financial Protection Bureau and Senate Candidate had plagiarized another book.

The problem was that they missed the fact that Warren’s book was published first:

The National Review says Elizabeth Warren is guilty of the gravest crime a writer can commit: Plagiarism. Katrina Trinko compares passages from “All Your Worth: The Ultimate Money Lifetime Plan,” Warren’s book with her daughter, Amelia Warren Tyagi, with passages from “Getting on the Money Track,” a book by Rob Black. The passages line up perfectly. The wording and even the punctuation are identical. It’s plagiarism all right. Except it looks very much like Warren is actually the victim.

The National Review headline says “Plagiarism in Elizabeth Warren’s 2006 book.” The body refers to Warren publishing the book “in 2006″ and Black’s book coming out in 2005. That’s true! Except that in 2006 the paperback of Warren’s book was published. The hardcover came out in March of 2005. Black’s book seems to have come out, if Amazon is correct, October 14 2005. (Or, according to Barnes and Noble, July 2005?) Months after Warren’s book. Unless there was an earlier published hardcover version that I can’t find on Amazon, it seems like Black most likely plagiarized Warren.

The National review has since retracted the story.

Another Shoe Drops for JP Morgan

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That $2 billion that they lost in obscure casino games? Well now it’s at least 3 billion:

The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses.

When Jamie Dimon, JPMorgan’s chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan’s distress, fueling faster deterioration in the underlying credit market positions held by the bank.

A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations.

We’re going to end up bailing out these ratf%$#s in the next few years, mark my words.

It will either be directly, or indirectly through their counter-parties.

Well, What Do You Know, The DoJ Gets One Right

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The Justice Department has vigorously defending the right of the general public to videotape police officers on duty:

As police departments around the country are increasingly caught up in tussles with members of the public who record their activities, the U.S. Justice Department has come out with a strong statement supporting the First Amendment right of individuals to record police officers in the public discharge of their duties.

In a surprising letter (.pdf) sent on Monday to attorneys for the Baltimore Police Department, the Justice Department also strongly asserted that officers who seize and destroy such recordings without a warrant or without due process are in strict violation of the individual’s Fourth and Fourteenth Amendment rights.

The letter was sent to the police department as it prepares for meetings to discuss a settlement over a civil lawsuit brought by a citizen who sued the department after his camera was seized by police.

In the lawsuit, Christopher Sharp alleged that in May 2010, Baltimore City police officers seized, searched and deleted the contents of his mobile phone after he used it to record them as they were arresting a friend of his.

I am very surprised.

Pleased, but surprised.

I’d like to see some prosecutions of overzealous cops, but I would consider this highly unlikely.

The EU Bureaucracy Isn’t Completely Stupid

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The EU’s financial services regulator is proposing allowing for a binding shareholder vote on executive compensation:

Shareholders in Europe’s listed companies will be given a binding vote on pay while those who invest in banks will gain powers to set a cap on bonus levels, under plans being drawn up by senior EU officials.

The initiative from Michel Barnier, the EU’s top financial services regulator, would hand bank investors the voting power to curb “morally indefensible” pay and limit the gap between the lowest and highest paid. Banks would also be forced to disclose their top 20-30 earners.

The French commissioner outlined his plans in an interview with the Financial Times in which he laid out his response to pay rebellions that have rattled executives at Barclays , Citigroup and AstraZeneca .

“I like that expression – the shareholder spring – or even a regulation spring, a rule-making spring,” he said. “I’m very attentive to this movement which I see as very positive. It corresponds with what I’ve been doing for the last two years. We need to put responsibility and transparency everywhere.”

Your mouth to God’s ear, Mr. Barnier.

They Own Us

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Too hot for TED

When someone gives a TED talk suggesting that lower taxes on the very wealthy actually makes out economy worse off, because the middle class is the real engine of job growth.

The response of TED was to refuse to release the video of the talk:

TED, the nonprofit organization that organizes and promotes wonky web videos on varying issues known as “TED talks,” has reportedly decided not to publish a video on income inequality in which venture capitalist Nick Hanauer declares, “Rich businesspeople like me don’t create jobs.” TED organizers deemed the talk too “politically controversial,” and in an email obtained by the National Journal, TED curator Chris Anderson told Hanauer that “we couldn’t release it, because it would be unquestionably regarded as out and out political. We’re in the middle of an election year in the US. Your argument comes down firmly on the side of one party.

It’s the super-rich’s world, they just allow us to rent a space in their attic.

BTW, the “Curator” of TED posted his his response online. The phrase, “Whiner” comes to mind. (Be sure to read the comments, they realy cut him a new one)

Basically, this was cut because the thesis makes the moneybags who back TED feel bad. The “Masters of the Universe” really think that they are different and special.

Thus they cannot abide being described as an effect rather than a cause.

I Approve of this Act of Populist Pandering

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Mario Andrew Cuomo has proposed putting a cap on executive pay at non-profits that get state contracts:

New York proposed regulations Wednesday to limit spending by state contractors, including a $199,000 executive pay cap that can be exceeded only with a special waiver or using money other than state tax dollars.

The proposals by 13 agencies cover contractors — many of them nonprofits providing social services — that receive more than $500,000 in state support annually representing at least 30 percent of their total funding. A contractor could pay executives more than $199,000 from other funds as long as salaries are below the top 25 percent in the field.

“These regulations will allow the state government to identify and stop the few providers that pocket taxpayer dollars rather than use them to serve the public,” Gov. Andrew Cuomo said in a prepared statement. In January, he issued an executive order to limit reimbursable costs by service providers who account for roughly one-third of the state’s $132.5 billion budget, noting one downstate provider of early intervention special education drew a salary of $2.2 million and a $1 million shareholder distribution.

Now, start applying it to for profit’s as well.

How the ECB Will Destroy the Euro Zone

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It’s now beginning to look like Greece will end up leaving Euro Zone.

The problem is that the EU is a consensus body, so Greece would have to agree to leave.

The solution is therefore to create conditions that are so onerous that Greece will have to leave.

The problem is that the only way that they can really do this is by crashing their banking system so that the only alternative is to leave the currency union.

The problem is that everyone knows this, and so we are seeing a slow-motion bank run in Greece, and we’re likely to see one in the rest of the peripheral nations:

Clever, huh? The only hitch is that, now that the game plan is becoming clear, rational Greeks are not choosing to wait for an EZ attack before withdrawing their funds from Greek banks and transferring them somewhere, anywhere, else. There is a gradually accelerating bank run taking place which is likely to reach criticality before a Greek-EZ policy showdown can take place.

There is a broader lesson here. By threatening to choke the Greek banking system, the EZ implicitly threatens to do the same for Spain or even Italy. They can say otherwise, but why should depositors in shaky peripheral banks believe them? Withholding euros from peripheral banking systems is a gun that goes off before it is fired. Simply brandishing this weapon is causing havoc and speeding the demise of the entire zone.

Better to put the gun away and do what should have been done all along: have the ECB assume the lender of last resort function for all EZ banks, with centralized financing of deposit insurance in particular. Don’t use the threat of a financial panic as a policy tool.

Greece should never have been a part of the Euro Zone, and considering the fact that they have more in common with the 3rd (corruption, dynastic politics, tax evasion, huge underground economy, etc.) world than they do with Western Europe, it’s arguable that they should never have been brought into the EU.

But most of the problems here, and what will cause the collapse of the Euro if it is not corrected, is that the basic system is fundamentally flawed.

It is pro-cyclical, it seems to be structured primarily for the financial industry, and it has no mechanism to address imbalances between member states.

If they continue on this path, it won’t just end the Euro Zone, it could cause a breakup of the EU.

So Not Shocking

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Matt Taibbi is looking at documents from the Overstock.com case against the banksters, and discovers some remarkably informative unintentional release of information:

The lawyers for Goldman and Bank of America/Merrill Lynch have been involved in a legal battle for some time – primarily with the retail giant Overstock.com, but also with Rolling Stone, the Economist, Bloomberg, and the New York Times. The banks have been fighting us to keep sealed certain documents that surfaced in the discovery process of an ultimately unsuccessful lawsuit filed by Overstock against the banks.

Last week, in response to an Overstock.com motion to unseal certain documents, the banks’ lawyers, apparently accidentally, filed an unredacted version of Overstock’s motion as an exhibit in their declaration of opposition to that motion. In doing so, they inadvertently entered into the public record a sort of greatest-hits selection of the very material they’ve been fighting for years to keep sealed.+

………

The lawsuit between Overstock and the banks concerned a phenomenon called naked short-selling, a kind of high-finance counterfeiting that, especially prior to the introduction of new regulations in 2008, short-sellers could use to artificially depress the value of the stocks they’ve bet against. The subject of naked short-selling is a) highly technical, and b) very controversial on Wall Street, with many pundits in the financial press for years treating the phenomenon as the stuff of myths and conspiracy theories.

Now, however, through the magic of this unredacted document, the public will be able to see for itself what the banks’ attitudes are not just toward the “mythical” practice of naked short selling (hint: they volubly confess to the activity, in writing), but toward regulations and laws in general.

“F%$# the compliance area – procedures, schmecedures,” chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.

We also find out here how Wall Street professionals manipulated public opinion by buying off and/or intimidating experts in their respective fields. In one email made public in this document, a lobbyist for SIFMA, the Securities Industry and Financial Markets Association, tells a Goldman executive how to engage an expert who otherwise would go work for “our more powerful enemies,” i.e. would work with Overstock on the company’s lawsuit.

(%$# mine)

Here’s the nickel version.

Short selling works as follows:

  • Locate the requisite shares of stocks.
  • Borrow them (and pay a fee).
  • Sell the borrowed shares.
  • Wait.
  • Buy shares, and return to borrower.

If the share price falls in the interim, you make money.

If it rises, you lose money.

Fairly simple and straightforward, and legal.

What isn’t legal is naked shorting, where you sell the shares, but have never borrowed them.

At one point, because of naked shorts, 107% of all outstanding shares were for sale, with the obvious effect of depressing the stock price (supply and demand), which pretty much guarantees a profit by short sellers, and you do not have to pay fees to borrow the stock.

It’s a win-win for everyone, except of course, the poor dupes who think that they won’t get ripped off by the banksters when they try to invest.

Something We Can All Agree on Regarding Israel

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That Representative Joe Pitts (R-PA) should have nothing to do with any initiative involving Israel, nor, for that matter, should he be allowed to cut his own meat:

It seems that Congressman Joe Pitts (R-PA) is a tad out of the loop on matters of Middle East peace. If it were up to him, Israelis and Palestinians would restart peace talks under the guidance of their respective leaders, Ariel Sharon and Yasser Arafat.

His advice does not seem to take into account the fact that Arafat died in 2004 and Sharon has been in a coma since 2006.

“With the global war against terrorism, it is now incumbent on Prime Minister Ariel Sharon and Palestinian Authority (PA) Chairman Yasir Arafat to clamp down on Palestinian extremists that have perpetuated violence and to restart a peace process that has collapsed,” wrote Pitts in a recent, rather outdated response letter to a constituent.

Perhaps Pitts should try to address some other burning issues from the 1990s, like making Newt Gingrich shut the f%$# up.

Hmmmm …… Things haven’t changed as much over the past 15 years as I’ve thought.

Greeks to Hold New Elections

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Roll Stewart!

They couldn’t form a coalition, so there will be a caretaker government followed by a new election. It appears that the left leaning SYRIZA party rejected the proposal for a “government of technocrats”.

What a surprise, the group they are saying here is to allow the EU (the Germans, really) to take over the country and democracy be damned.

Jon Stewart nails it when he notes that nearly 70 years after the end of WWII, the Germans rule Europe.

Appeals Court Rules That Disclosure required for 501(c)4 Contributions

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The DC Circuit has refused a stay from a circuit court decision requiring that 501(c)4s disclose donors if they make political ads:

Big news from the D.C. Circuit in this order and opinion. The opinion for two of the three judges explaining the reasons for denying the stay lean heavily on how the challengers to the district court ruling are unlikely to succeed in their legal arguments on appeal. The court also stresses the values of disclosure, reaffirmed on an 8-1 vote by the Supreme Court in Citizens United. [UPDATE Bloomberg BNA reports: “Attorneys for two groups sponsoring political ads, which intervened in the case to try to preserve FEC rules allowing them to keep their donors confidential, had no immediate comment about a possible appeal of the stay ruling by the D.C. Circuit panel.”]

But this open a host of unanswered questions about how 501c4 groups and other groups which run issue ads will deal with these new disclosure requirements.(I’m talking here not about political committees such as Crossroads GPS, which masquerade as social welfare groups, but real 501c4s that occassionally get involved with issue adss.) I expect this stay request to now end up before the Supreme Court, where the outcome may be different.

If further stay attempts fail, and if there are no emergency FEC rules put in place (and the FEC’s frequent 3-3 deadlocks mean new rules are unlikely), we could well see 501c4 groups [UPDATE: and importantly 501c3 groups] creating new separate funds to run these ads, so that the groups need disclose the names of only those donors funding these ads (rather than all of their donors).

You need to remember that before Karl Rove’s super PAC used the 501(c)4 fig leaf to hide its donors, they raised a pitiful amount of money (IIRC, less than 100 Grand).

For real non-profits, if they want to participate in electioneering, it’s just a matter of separating the funds and donations. For something like Rove’s Crossroads operations, which serve primarily as a way to launder money, it really complicates things.

While We Are On the Subject of Mississippi

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The governor of North Carolina has invoked the Magnolia State as a synonym for a backwards society:

North Carolina Governor Beverly Perdue says Tuesday’s passage of Amendment One makes the state look like Mississippi. Perdue made the remarks in response to a question from WITN’s Brittany Gunter while in Greenville Friday morning.

On Tuesday, 61% of the state’s voters approved the constitutional amendment which bans same sex marriages. State law already prohibits gay marriages.

The governor, a Democrat who said leading up to the vote that she was against the amendment, told WITN that the result is wrong for the state.

“People around the country are watching us, and they’re really confused to have been such a progressive forward thinking economically driven state that invested in education and that stood up for the civil rights people including the civil rights marches back in the 50s and 60s and 70s,” said Perdue. “People are saying what in the world is going on with North Carolina, we look like Mississippi.”

Yes. Yes you do look like Mississippi, and yes, this is a bad thing.

Why Yes, Antonin Scalia has Gone Nuts

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It appears that there is a growing consensus on this matter:

In January, Supreme Court Justice Antonin Scalia accused the U.S. Environmental Protection Agency of “high-handedness.” He was just getting warmed up.

Over the next 3 1/2 months, Scalia asked whether federal immigration policy was designed to “please Mexico,” fired off 12 questions and comments in 15 minutes at a government lawyer in a case involving overtime pay, and dismissed part of Solicitor General Donald Verrilli’s defense of President Barack Obama’s health-care law as “extraordinary.”

Scalia’s tone this year, particularly in cases involving the Obama administration, is raising new criticism over the temperament of a justice who has always relished the give-and- take of the Supreme Court’s public sessions. Some lawyers say Scalia, a 1986 appointee of Republican President Ronald Reagan, is crossing the line that separates tough scrutiny from advocacy.

“His questions have been increasingly confrontational,” said Charles Fried, a Harvard Law School professor who served as Reagan’s top Supreme Court advocate. While the justice has always asked “pointed” questions, in the health-care case “he came across much more like an advocate.”

Scalia’s approach is fueling the perception that the biggest cases this term, including health care, may be influenced by politics, rather than the legal principles that he and other justices say should be their guide. A Bloomberg News poll in March showed that 75 percent of Americans think the court’s decision on the 2010 law will be based more on politics than on constitutional merit.

Scalia has always been a partisan political hack, but lately, he’s not even trying to pretend that he has an open mind.