Year: 2012

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.

How About a Coat Hanger Vasectomy for Him?

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Repulsive!

After having passed a bill that would effectively outlaw abortion clinics in the United States, Mississippi State Representative Bubba Carpenter is crowing about the return of coat hanger abortions to his state:

“It’s going to be challenged, of course, in the Supreme Court and all — but literally, we stopped abortion in the state of Mississippi, legally, without having to– Roe vs. Wade. So we’ve done that. I was proud of it. The governor signed it into law. And of course, there you have the other side. They’re like, ‘Well, the poor pitiful women that can’t afford to go out of state are just going to start doing them at home with a coat hanger.’ That’s what we’ve heard over and over and over.

“But hey, you have to have moral values. You have to start somewhere, and that’s what we’ve decided to do. This became law and the governor signed it, and I think for one time, we were first in the nation in the state of Mississippi.”

These people are deeply evil.

Trying to find common ground with them makes nor more sense than trying to find common ground with the late and unlamented Osama bin Laden.

They need to be run out of the body politic.

I am a Moron

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I locked myself out of my car last night, and as a consequence (yes, I know correlation is not causation) I’m having some issues with muscle spasms in my back.

Nice locksmith.  Got into my car in about 30 seconds, but it added to my stress level, and I’ve carried stress in my body since I was 7.

Went to the chiropractor after work today.

While We Are On the Subject of Scott Walker

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We now have video of Scott Walker telling a wealthy donor that he will use divide and conquer to make Wisconsin a right-to-work red state:

A filmmaker released a video Thursday that shows Gov. Scott Walker saying he would use “divide and conquer” as a strategy against unions.

Walker made the comments to Beloit billionaire Diane Hendricks, who has since given $510,000 to the governor’s campaign – making her Walker’s single-largest donor and the largest known donor to a candidate in state history.

The filmmaker has done work on Democratic campaigns and gave $100 in 2010 to Milwaukee Mayor Tom Barrett, Walker’s challenger in the June 5 recall election.

In the video shot on Jan. 18, 2011 – shortly before Walker’s controversial budget-repair bill was introduced and spawned mass protests – Hendricks asked the governor whether he could make Wisconsin a “completely red state, and work on these unions, and become a right-to-work” state. The Republican donor was referring to right-to-work laws, which prohibit private-sector unions from compelling workers to pay union dues if the workers choose not to belong to the union.

Walker replied that his “first step” would be “to divide and conquer” through his budget-adjustment bill, which curtailed most collective bargaining for most public employee unions.

It’s rather unsurprising therefore, that a number of public safety unions, like the State Troopers Union are withdrawing their endorsements of him in 2010, and endorsing Tom Barrett. (Hereafter referred to as “The other guy”)

While such rough and tumble politics may be the reality in Wisconsin, the people of the Badger State* tend to seem themselves as practicing a more civil form of politics.

*Except for the right-wing Fox River Valley, where they have a f%$#ing monument to f%$#ing Joe f%$#ing McCarthy.

Why Not to Give to the Democratic Establishment

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The biggest political contest in the United States in the next month is the Scott Walker recall, and the Democratic National Committee is refusing to supply resources for the all critical GOTV effort:

Top Wisconsin Democrats are furious with the national party — and the Democratic National Committee in particular — for refusing their request for a major investment in the battle to recall Scott Walker, I’m told

The failure to put up the money Wisconsin Dems need to execute their recall plan comes at a time when the national Republican Party is sinking big money into defending Walker, raising fears that the DNC’s reluctance could help tip the race his way.

………

According to the Wisconsin Dem, the party has asked the DNC for $500,000 to help with its massive field operation. While the DNC has made generally supportive noises, the money has not been forthcoming, the official says — with less than a month until the June 5th recall election. The DNC did not immediately respond to a request for comment.

………

“Scott Walker has made this a national election,” the Wisconsin Dem tells me. “If he wins, he will turn his victory into a national referendum on his ideas about the middle class. It will hurt Democrats nationally. The fact that [national Dems] are sitting on their hands now is so frustrating. The whole ticket stands to lose

******************************************

UPDATE: Wisconsin Democratic Party chair Mike Tate goes on record about the dispute in a statement:

“Having received absolute support from the Democratic Governors Association, we also are in conversation with the Democratic National Committee to help in this battle against Scott Walker, a right-wing diva who has the full backing of the national corporate Tea Party movement.”

UPDATE II: Wisconsin Dems say the problem isn’t with the Democratic Governors Association, which has already committed more to the recall fight than they’ve ever committed to a Wisconsin gubernatorial election in recent history. Still no comment from the DNC.

I’m thinking that the DNC is having a hissy fit because labor is not interested in funding their national convention in a right-to-work state, but stupidity and evil are nearly as valid explanations.

Words I Never Thought That I Would Ever Say

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Good for George Lucas.

George Lucas wanted to expand his movie studios in Marin County, but has been running into a torrent of obstructionism and NIMBY from the local home owners for 25 years, and so they’ve thrown in the towel, and will be selling the land to the Marin County Foundation to create low-income housing:

He’s working with the Marin Community Foundation to instead construct affordable housing for either low-income families or seniors living on small, fixed incomes. In order to smooth along the development, he’s already given them all of the pricey technical studies and land surveys Lucasfilm spent years conducting. And we think that’s just great. Because if there’s one thing rich people will hate more than having movie magic made in their backyard, it’s poor people moving in.

Heh.

And the LCS is Beginning to Look Like a Real Dog

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Serikously, the most recent list of problems with the ships makes one wonder if they will ever be combat ready:

The Littoral Combat Ship (LCS-1) USS Freedom is plagued by extensive corrosion and manufacturing issues more recent and serious than anything the Pentagon or prime contractor Lockheed Martin has publicly acknowledged thus far.

This is based on a guided tour of the ship in dry dock, as well as sources intimately familiar with Freedom’s design, repairs and operations, U.S. Navy documents and defense analysts.

The vessel is rusting and blistered by corrosion in many areas, marred by crack repairs throughout the deckhouse and hampered by what appear to be flaws in vital piping systems.

Corrosion is particularly evident throughout the ship’s waterborne mission area, located at the Freedom’s stern, because of a large gap between the stern doors and the vessel’s deck floor, which allows water to pour in when the doors are closed. They are supposed to form a watertight seal (see photo.)

As part of its plan to address some of the Freedom’s problems, the Navy is apparently adding more sailors – a move that runs counter to the ship’s basic concept of operations, which are meant, among other things, to reduce weight and costs by deploying a ship with as few crewmembers as possible.

The vessel – the first ship of what is supposed to be the future cornerstone of U.S. surface naval power – left dry dock at the end of April for tests off the California coast. Equipment failures had cut short previous test attempts in January and February. The Freedom had been at sea 15-20 days in the 16 months before leaving pier side for the recent tests and underway 12 hr. since June 27, 2011, when it docked for recent repairs.

This is further complicated by the fact that the one of the Navy’s goals on this ship was to completely minimize crewing, which means that there is little, if any capability to fix problems as they develop:

But some members of Congress see it differently. “Making sure the stern door seals shut is shipbuilding 101,” says U.S. Rep. Jackie Speier (D-Calif.), a member of the House Oversight and Government Reform Committee. “I’m troubled that the Navy would accept so many deficiencies in a program that seems to be riddled with serious problems,” Speier said after Aviation Week shared with her staff photographs and other material gathered from the ship tour.

Navy officials and program supporters say some of the problems are due to first-of-class growing pains and the learning curve achieved by getting to know the maintenance needs of a ship that until about a decade ago was little more than a concept.

LCS is meant to be maintained differently from other Navy vessels. “Crews do minimal maintenance on board,” Capt. John Neagley, the acting LCS program manager, said during a briefing at the Navy League’s recent annual Sea Air Space conference.

And the ship’s current concept of operations, or conops, reinforces that idea. “The crew has no surplus capacity to absorb additional duties,” reads the conops, last revised in 2009. “There are no spare sailors or officers assigned to LCS.”

To further address some of the corrosion problems on both the Freedom – developed and built by a team lead by Lockheed – and the LCS-2 USS Independence – developed and built by a team lead by General Dynamics and Austal USA – the Navy has put in additional cathodic protection systems, which protect metal surfaces by making them cathodes of an electrochemical cell.

BTW, there are reports that Austal, which uses cathodic systems on its civilian high speed ferries, suggested putting in such a system for their LCS, but the Navy shot it down. (Smooth move, USN)

I don’t think that the Navy’s fetish of cutting crewing is producing a viable platform.

Me Want!

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It appears that a bloke has a bunch of late model Spitfires in Myanmar:

This story is not about JSF, or Rafale or Typhoon or Gripen but about one of the world’s legendary planes: the Spitfire, a large number of which – up to 120 – [other reports list it at just 20] were found in almost pristine condition in Burma last February and are now going to be returned to the UK.

Thanks to an English farmer’s dogged determination and willingness to spend a considerable amount of his own money, the Griffon-engined Mark XIVs Spitfires have been located and British Prime Minister David Cameron has secured a deal that will allow them to be dug up and shipped back to Britain almost 67 years after they were hidden more than 40-feet below ground.

The aircraft were discovered in February by English farmer David Cundall, 62, who has spent 15 years, travelled 12 times to Burma and spent more than £130,000 in his quest. Using radar imaging technology Cundall found the aircraft buried at a former Royal Air Force base. They had been shipped to Burma and then travelled by train to the RAF base during the war, but were never used because by the end of the war they were nearing obsolescence. Unwilling to leave high-performance, if out-dated, aircraft in a country with an uncertain future, Britain’s South East Asia command decided to bury them. As many as 120 Spitfires, original cost about £12,000, may have been disposed of in this way.

“They were just buried there in transport crates,” Cundall told the Daily Telegraph which published the story today (May 7). “They were waxed, wrapped in greased paper and their joints tarred. They will be in near perfect condition.”