Month: December 2014

Finally!

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Following the exchange of Alan Gross and the Cuban 5 3, (More on that in a subsequent post) Obama has announced that the US and Cuba will be establishing formal diplomatic relations:

President Obama on Wednesday ordered the restoration of full diplomatic relations with Cuba and the opening of an embassy in Havana for the first time in more than a half-century as he vowed to “cut loose the shackles of the past” and sweep aside one of the last vestiges of the Cold War.

 The surprise announcement came at the end of 18 months of secret talks that produced a prisoner swap negotiated with the help of Pope Francis and concluded by a telephone call between Mr. Obama and President Raúl Castro. The historic deal broke an enduring stalemate between two countries divided by just 90 miles of water but oceans of mistrust and hostility dating from the days of Theodore Roosevelt’s charge up San Juan Hill and the nuclear brinkmanship of the Cuban missile crisis.

 “We will end an outdated approach that for decades has failed to advance our interests, and instead we will begin to normalize relations between our two countries,” Mr. Obama said in a nationally televised statement from the White House. The deal, he added, will “begin a new chapter among the nations of the Americas” and move beyond a “rigid policy that is rooted in events that took place before most of us were born.”

We must also thank the Super-Pope for helping this along:

Pope Francis encouraged the talks with letters to Mr. Obama and Mr. Castro and had the Vatican host a meeting in October to finalize the terms of the deal. Mr. Obama spoke with Mr. Castro by telephone on Tuesday to seal the agreement in a call that lasted more than 45 minutes, the first direct substantive contact between the leaders of the two countries in more than 50 years.

I am liking this Pope more and more.

Of course, the dead enders and political cowards, like Senators Bob Menendez and Marco Rubio, are having a hissy fit over all this, but both as a matter of policy and a matter of politics, they are simply wrong.

This policy has been in place for longer than I’ve been alive, and it has never worked.

The fact that it is also a hearty f%$# you to the most radical elements of the Cuban emigre community, the nut-jobs who gave us the Elian Gonzalez cluster f%$#.

BTW, if you really hate the Castro regime, we need to let the banksters in to destroy the regime.

The CIA never could, but the crooks that we coddle on Wall Street can overthrow the Castros.

Win

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This is epic. Brad and Dallas Woodhouse are brothers and pundits. One is a Democrat, and the other is a Republican, and while they were on CSPAN, their mom called in to berate them for fighting at family gatherings:

Everybody knows that the best part about CSPAN is the unpredictable nature of the show’s call-in segments, where regular hosts and guests do an admirable job of fielding unusual questions with no advance warning. But brothers Brad and Dallas Woodhouse are now the champions of awkward CSPAN calls, after the politically divided brothers ended up taking a call from their mom.

“Oh God, it’s mom,” Dallas Woodhouse said as soon as “Joy” from North Carolina started to speak.

“You’re right, I’m from down south,” she said. “And I’m your MOTHER.”

She’d called to take issue with something her kids said on air: That the brothers’ political bickering — you see, one is liberal, and the other is conservative — is typical of most families. “I don’t know many families that are fighting at Thanksgiving,” she said. “I’m hoping you’ll have some of this out of your system when you come here for Christmas. I would really like a peaceful Christmas.”


Epic

It is Impossible to Avoid the Conclusion that Black Lives Didn’t Matter Much at all to the Magazine.

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This is an Actual TNR Cover

In case you haven’t heard, there has been a kerfluffle at that bastion for white Ivy League affirmative action The New Republic, with the firing of  Franklin Foer as editor.

A significant portion of the deadwood on their masthead, along with other staff, resigned in protest.

While they consider it to be drawing an ethical line in the sand, it is, in fact, a mark of their missing ethics.

The fact that they were still on that masthead after years of racism and disregard for the minority community at TNR is how their stand should be viewed, as Ta-Nehisi Coates so ably states:

………

 Earlier this year, Foer edited an anthology of TNR writings titled Insurrections of the Mind, commemorating the magazine’s 100-year history. “This book hasn’t been compiled in the name of definitiveness,” Foer wrote. “It was put together in the spirit of the magazine that it anthologizes: it is an argument about what matters.” There is only one essay in Insurrections that takes race as its subject. The volume includes only one black writer and only two writers of color. This is not an oversight. Nor does it mean that Foer is a bad human. On the contrary, if one were to attempt to capture the “spirit” of TNR, it would be impossible to avoid the conclusion that black lives don’t matter much at all.

 That explains why the family rows at TNR’s virtual funeral look like the “Whites Only” section of a Jim Crow-era movie-house. For most of its modern history, TNR has been an entirely white publication, which published stories confirming white people’s worst instincts. During the culture wars of the ’80s and ’90s, TNR regarded black people with an attitude ranging from removed disregard to blatant bigotry. When people discuss TNR’s racism, Andrew Sullivan’s publication of excerpts from Charles Murray’s book The Bell Curve (and a series of dissents) gets the most attention. But this fuels the lie that one infamous issue stands apart. In fact, the Bell Curve episode is remarkable for how well it fits with the rest of TNR’s history.

(emphasis mine)

I just need to note here, as I always do, that, in his late teens, the co-author of The Bell Curve, Charles Murray, burned a cross next to the local police station.

This event in his early life provides necessary context for the fact that most of his professional career has been about putting an academic gloss on racism.

Coates makes the point that the genteel racism of the magazine is not limited to the actions, and tenure, of the contemptible Marty Peretz:

Two years later, Washington Post writer Richard Cohen was roundly rebuked for advocating that D.C. jewelry stores discriminate against young black men—but not by TNR. The magazine took the opportunity to convene a panel to “reflect briefly” on whether it was moral for merchants to bar black men from their stores. (“Expecting a jewelry store owner to risk his life in the service of color-blind justice is expecting too much,” the magazine concluded.)

 TNR made a habit of “reflecting briefly” on matters that were life and death to black people but were mostly abstract thought experiments to the magazine’s editors. Before, during, and after Sullivan’s tenure, the magazine seemed to believe that the kind of racism that mattered most was best evidenced in the evils of Afrocentrism, the excesses of multiculturalism, and the machinations of Jesse Jackson. It’s true that TNR’s staff roundly objected to excerpting The Bell Curve, but I was never quite sure why. Sullivan was simply exposing the dark premise that lay beneath much of the magazine’s coverage of America’s ancient dilemma.

Read the rest.

BTW, after you read this, you might want to read Wonkette’s Rebecca Schoenkopf’s take on this.

While Coates’ analysis is trenchant and thoughtful, Wonkette is just delightfully snarky and very funny.

One Thing Worse than Being a Whiny Bitch is Being a Whiny Bitch with Permission to Shoot People

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The Patrolmen’s Benevolent Association, New York City’s largest police union, on Friday called on cops to keep Mayor Bill de Blasio away from police officers’ funerals.

The union published a notice on its website urging officers to keep de Blasio or City Council Speaker Melissa Mark-Viverito away, the New York Daily News reported on Friday.

“DON’T LET THEM INSULT YOUR SACRIFICE!” the notice reads.

Officers can download a form to request that de Blasio and Mark-Viverito not attend their funerals “in the event that you are killed in the line of duty.”

“Due to Mayor de Blasio and City Council Speaker Melissa Mark-Viverito’s consistent refusal to show police officers the support and respect they deserve, I believe that their attendance at the funeral of a fallen New York City police officer is an insult to that officer’s memory and sacrifice,” the form reads.

and

A Cleveland police union has demanded that the Cleveland Browns football team apologize for a player who wore a T-shirt before Sunday’s game protesting the police shootings of two black people.

Browns wide receiver Andrew Hawkins wore a shirt reading “Justice for Tamir Rice And John Crawford III” during pre-game warmups. Rice, who was just 12 years old, died last month after a Cleveland police officer shot him when he mistook the boy’s toy gun for a real weapon. Crawford, 22, was shot dead by police in August at an area Wal-Mart while he was holding an air rifle.

Cleveland Police Patrolman Union President Jeff Follmer sent local TV station WEWS a statement after Sunday’s game that called for an apology from the NFL team. “It’s pretty pathetic when athletes think they know the law,” the statement read, as quoted by WEWS. “They should stick to what they know best on the field. The Cleveland Police protect and serve the Browns stadium and the Browns organization owes us an apology.

Seriously.  If a member of the police force cannot deal with the rather anodyne statements about controversial use of force by the department, they need to find another line of work.

I would suggest that they apply to be professional  Klein Bottles, because with their heads so far up their asses, there would be very little adjustment.

We are the Texas of the Developed World

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I am paraphrasing the late Molly Ivins here, but the fact that the United States antediluvian approach to child care is driving women out of the workplace, and so making us less competitive than other members of the developed world, should be an subject of national shame:

Since Kerry Devine, 32, and her friends began having children, she has noticed a stark difference between her female friends in Auburn, Wash., where she lives, and those in England and Cyprus, where she grew up. In the United States, they almost all stopped working outside the home, at least until their children were in school. Yet, she says, she can’t think of a friend in Europe who left work after her children were born.

Ms. Devine quit her job after she had her first child, a girl, four years ago, because she thought 12 weeks of maternity leave was too short. “I just didn’t want to leave her in day care or pay for the expenses of it,” she said. When she gave birth to twin boys this year, a return to work — she had been a property manager for apartment buildings — looked even less plausible.Since Kerry Devine, 32, and her friends began having children, she has noticed a stark difference between her female friends in Auburn, Wash., where she lives, and those in England and Cyprus, where she grew up. In the United States, they almost all stopped working outside the home, at least until their children were in school. Yet, she says, she can’t think of a friend in Europe who left work after her children were born.

Ms. Devine quit her job after she had her first child, a girl, four years ago, because she thought 12 weeks of maternity leave was too short. “I just didn’t want to leave her in day care or pay for the expenses of it,” she said. When she gave birth to twin boys this year, a return to work — she had been a property manager for apartment buildings — looked even less plausible.

Her story would have played out differently, she said, if she had been living in her native England. Like many European countries, Britain offers a year of maternity leave, much of it paid, and protections for part-time workers, among other policies aimed at keeping women employed.

One would think that the supporting family values would actually involve supporting people who actually have a family, but the “family values” crowd seems to think that all they need to do is to tell women what to do with their ovaries, and hate te ghey, and it is Mission Accomplished.

F%$# that

Guess What? The Senate Report Reveals that Torture Worked?

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At least it works if your goal is to force a prisoner to lie about Saddam Hussein’s connections to Al Qaeda to justify our invading Iraq:

………

Such is the case with the “debate” on whether torture “worked” following the release of the Select Committee on Intelligence report on the CIA’s “Detention and Interrogation Program.”

On the one side, we have among others Dianne Feinstein: “The big finding is that torture doesn’t work and shouldn’t be employed by our country” she told PBS. Similarly, a headline in the Hill tells us: “McCain: ‘I know from personal experience’ torture doesn’t work.”

Then, we have six former directors and deputy directors of the CIA claiming the “interrogation program” “saved thousands of lives” by helping to capture al-Qaeda members. On this score, the Intelligence Committee report seems to have the goods, quoting CIA emails. While the former CIA directors claim a string successes based on torture: “KSM [Khalid Sheik Muhammed] then led us to Riduan Isamuddin, aka Hambali, East Asia’s chief al Qaeda ally and the perpetrator of the 2002 Bali bombing in Indonesia — in which more than 200 people perished.” But the report quotes a CIA official’s internal emails: “Frankly, we stumbled onto Hambali.”

But that doesn’t mean Feinstein and McCain are right and that’s the end of story. The truth is that torture did work, but not the way its defenders claim. It worked to produce justifications for policies the establishment wanted, like the Iraq war. This is actually tacitly acknowledged in the report — or one should say, it’s buried in it. Footnote 857 of the report is about Ibn Shaykh al-Libi, who was captured in Afghanistan shortly after the U.S. invasion and was interrogated by the FBI. He told them all he knew, but then the CIA rendered him to the brutal Mubarak regime in Egypt, in effect outsourcing their torture. From the footnote:

“Ibn Shaykh al-Libi reported while in [censored: ‘Egyptian’] custody that Iraq was supporting al-Qa’ida and providing assistance with chemical and biological weapons. Some of this information was cited by Secretary Powell in his speech at the United Nations, and was used as a justification for the 2003 invasion of Iraq. Ibn Shaykh al-Libi recanted the claim after he was rendered to CIA custody on February [censored], 2003, claiming that he had been tortured by the [censored, likely ‘Egyptians’], and only told them what he assessed they wanted to hear. For more more details, see Volume III.” Of course, Volume III has not been made public.

So, while CIA head John Brennan now says it’s “unknowable” if torture lead to information that actually saved lives, it’s provable that torture lead to information that helped lead to war and destroyed lives.

………

This was somewhat acknowledged in the other Senate report on torture, released by the Armed Services Committee in 2008. It quoted Maj. Paul Burney, who worked as a psychiatrist at Guantanamo Bay prison: “A large part of the time we were focused on trying to establish a link between al-Qaeda and Iraq and we were not successful. The more frustrated people got in not being able to establish that link … there was more and more pressure to resort to measures that might produce more immediate results.” The GTMO Interrogation Control Element Chief, David Becker told the Armed Services Committee he was urged to use more aggressive techniques, being told at one point “the office of Deputy Secretary of Defense [Paul] Wolfowitz had called to express concerns about the insufficient intelligence production at GTMO.”

So, torture works if you are planning to create false intelligence to justify a phony war which leads to the biggest military and diplomatic disaster in US History.

So it was all about amusing Dick Cheney.

They generate false intel, and Dick gets that war that he wanted so badly.

Linkage

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John Cleese on Stupidity:

And Just to Prove that there is No Event that Uber Won’t Use an Excuse for Price Gouging………

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The internet based limo service jacked up its rates in Sydney in response to the hostage crisis there:

Uber briefly charged its users in downtown Sydney a minimum $100 to escape an armed hostage crisis, a result of automatic surge pricing meant to get more drivers online.

An executive in the city’s Central Business District (CBD) sent Mashable screenshots of the Uber app that showed the company was charging up to four-times the normal rate because “demand is off the charts.”

“I have never, ever seen it at four-times [the normal rate] and I’m a 1% top Uber user,” said Matthew Leung, the user in contact with Mashable. “I understand the way the business works — higher the demand, higher the charge — but four-times at $100 minimum is ridiculous. Almost price gouging at its worst.”

Another customer shared a screenshot of their “wack” fare estimate that showed a trip from an area just blocks from the siege to the airport would cost $145-185. That journey would normally cost less than $100, according to Uber’s website. “This is price surging,” he wrote in a comment to Mashable.

After Mashable published a story on the price hikes, the company reversed course and announced that all riders in the area would be free, and that anybody who had been charged the higher amount would be refunded.

I can hear Uber’s CEO, Travis Kalanick, saying, “And I would have gotten away with it too, if it weren’t for you meddling kids.”

Seriously,  Uber, and its Ayn Rand worshiping CEO are simply too evil to trust with your money.

Sydney? Seriously?

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I have to say that if terrorists were going to make an attack, Sydney, Australia would be the last place that I would expect:

At least one gunman is holding staff and customers hostage at a cafe in the Australian city of Sydney.

Hundreds of armed police have sealed off the normally busy Martin Place in the central business district.

Earlier, at least three people were seen inside the Lindt cafe with their hands up against a window, and holding up a black flag with Arabic writing.

Australian Prime Minister Tony Abbott has described the “terrifying” incident as “deeply concerning”.

It is not yet confirmed as a terrorist attack, though the fact that the hostage takers appeared to have displayed the black Jihadi flag would imply that this is likely.

It’s just plain weird.

Obama Must Hate Warren Right Now

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Elizabeth Warren’s campaign against Wall Street insider Antonio Weiss’ nomination for undersecretary for domestic finance for the US Treasury is picking up steam:

Under pressure from progressive groups to reject Wall Street influence, three more Senate Democrats yesterday turned against the nomination of Antonio Weiss for a senior post at the U.S. Treasury Department.

President Barack Obama’s choice of Weiss, an investment banker at Lazard Ltd. (LAZ), has put him at the center of an ideological fight within the Democratic Party over the finance industry’s clout in Washington.

The attacks are coming from Democrats who say the Obama administration relies too much on Wall Street veterans to fill important regulatory posts. They are criticizing Weiss, in particular, for his role in engineering tax-lowering inversion deals for U.S. companies.

The opposition yesterday from Joe Manchin of West Virginia, Jeanne Shaheen of New Hampshire and Al Franken of Minnesota further complicates the nomination for the administration and Democratic leaders. After defending Weiss’s Democratic bona fides and accepting his campaign contributions, they’ll have to turn to Republicans to get him into office.

“This fits the administration’s pattern of choosing Wall Street insiders to senior policy positions instead of those with strong consumer protection or community bank and credit union experience,” Manchin said on the Senate floor yesterday.

There are now note enough Democratic votes to 

Neither Shaheen nor Manchin are representatives of the “Democratic Wing of the Democratic Party,” and the fact that they are bucking the President is a big deal.

It appears that the idea that someone who has no background in domestic finance is a good selection for the undersecretary for domestic finance, simply because they are a big Democratic donor, and they have a background in the financial industry is no longer as universally held as it used to be.

It also appears that people are finally getting the idea that multimillion dollar payouts from the financial industry for people who go into government service is implicitly corrupt.

Good.

Any discomfort that Barack Obama might experience because a portion of the Democratic Party has realized that he is Wall Streets biggest fan is well deserved.

Welcome to the Handmaiden’s Tale

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A judge in Minnesota just gave a free pass to employers who don’t want to cover contraceptives. I’m wondering when a Jehovah’s Witness gets to deny coverage for blood transfusions:

A federal judge in Minneapolis ruled Monday that the owner of Hastings Ford and Hastings Chrysler Center does not have to pay for health insurance coverage for certain contraceptives such as Plan B, ella emergency contraceptive and certain kinds of IUDs.

Douglas Erickson said in a lawsuit that contraceptives that prevent a fertilized egg from being implanted in a woman’s uterus violate his belief that life begins at conception. Erickson’s businesses have 63 full-time employees and about 15 part-timers.

The ruling by U.S. District Judge Paul Magnuson is the latest in a string of decisions involving family-owned businesses that have sued to become exempt from a portion of the federal Affordable Care Act because of their religious beliefs.

………

Planned Parenthood of Minnesota and North and South Dakota issued a statement Tuesday after the ruling became public.

“It’s unbelievable that we are still fighting for access to birth control in 2014, with some politicians who want to get rid of the birth control benefit completely,” the statement said. “We know firsthand that access to birth control is both a health care and economic concern for women.”

Here’s a hearty f%$# you to the Supreme Court over the Hobby Lobby decision.

I’ll Go With the Under on Net Neutrality

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The cable companies pet FCC commissioner has estimated the cost of net neutrality regulations to consumers at $17 billion, while an open internet advocacy group has pegged the cost at $0:

After a dramatic shift in the debate over net neutrality last month, many expect the FCC will reclassify internet providers so as to bar them from giving special treatment to some websites over others. The question now becomes how much (if at all) the agency’s decision, which turns on an arcane process called Title II, will cost consumers.
Depending on who you ask, the answer is that Title II, which would treat internet providers akin to public utilities, will be ruinously expensive — or will have little financial impact at all. Among the Cassandras, you can count Republican FCC Commissioner Ajit Pai:

 “It will cost $17 billion in new fees,” Pai told an audience of telecom lawyers in Washington on Friday, warning that consumers’ monthly internet bills are set to soar.

Pai’s number, which has also popped up on the Wall Street Journal‘s editorial page and in other right-leaning outlets, is lifted from a purported study by the Progressive Policy Institute, a think tank that has reportedly taken funding from AT&T.

………

Like so much else in the pitched debate over net neutrality, however, the $17 billion number may have been ginned up for political purposes. According to Free Press, a nonpartisan advocacy group for open internet, the figure represents a misleading worst-case scenario that will never come to pass.

As the group points out, reclassification does not appear to require any new consumer fees. Such fees, it they do appear, will instead be the result of a separate set of decisions by the FCC and various governments.

I have no doubt that the PPI has taken funding from AT&T.  After all, their parent organization, the now defunct Democratic Leadership Council (DLC) was funded by the Koch brothers.

Also note that most of the $17 billion involved is on a separate regulatory ruling, and that the FCC has made it very clear that they will engage in regulatory forbearance, and not impose the charges that Mr. Pai is mentioning, but these charges have nothing to do with reclassification of Title II.

Even if there are a few buck additional charges, it would well worth it to prevent “Cable Company F%$#ery.”

Quote of the Day

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Good Point

It’s funny, I just made this movie about a guy who triumphs over the inhuman conditions in his imprisonment in an authoritarian country, and I don’t think they did half that sh%$ to him.

— Jon Stewart

Jon Stewart is rightly appalled.

He just did a movie about torture, and the elements of the state security apparatus in Iran were more humane, and less brutal, than those of the United States.

Our torture, and the support for it, both tacit and explicit, exhibited by both Barack Obama and George W. Bush, are going to bear bitter fruit for the us for decades.

Not Enough Bullets

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As former federal regulator Bill Black notes, the second circuit court decision effectively legalizes insider trading:

We know that insider trading is an activity in which cheaters prosper. We know that Wall Street and the City of London are dominated by a fraudulent culture and we know that firm culture is set by the officers that control the firm. We know that the Department of Justice (DOJ) has allowed that to occur by refusing to prosecute any of the thousands of senior bank officers who became wealthy by leading the three most destructive financial fraud epidemics (appraisals, “liar’s” loans, and fraudulent sales of these fraudulently originated mortgages to the secondary market) in history. No one is surprised that Wall Street’s elites have also engaged in widespread efforts to rig the stock markets so that they can shoot fish in the barrel through insider trading. Unlike the three fraud epidemics, one DOJ office, the Southern District of New York, has brought a series of criminal prosecutions against these officers.

 Wall Street’s court of appeals (the Second Circuit) has just issued an opinion not simply overturning guilty verdicts but making it impossible to retry the elite Wall Street defendants that grew wealthy through trading on insider information. Indeed, the opinion reads like a roadmap (or a script) that every corrupt Wall Street elite can follow to create a cynical system of cutouts (ala SAC) that will allow the most senior elites to profit by trading on insider information as a matter of routine with total impunity. The Second Circuit decision makes any moderately sophisticated insider trading scheme that uses cutouts to protect the elite traders a perfect crime. It is a perfect crime because (1) it is guaranteed to make the elite traders who trades on the basis of what he knows is secret, insider information wealthy absent successful prosecutions and (2) using the Second Circuit’s decision as a fraud roadmap, an elite trader can arrange the scheme with total impunity from the criminal laws. The Second Circuit ruling appears to make the financial version of “don’t ask; don’t tell” a complete defense to insider trading prosecutions. The Second Circuit does not simply make it harder to prosecute – they make it impossible to prosecute sophisticated insider fraud schemes in which the elites use junior cutouts to create (totally implausible) deniability.

The New York Times article on the decision was entitled “Two Insider Trading Convictions Are Overturned in Blow to Prosecutors.” The title is partially correct. The real blows, however, were to investors, the already crippled integrity of Wall Street, and every honest trader on Wall Street who cannot possibly compete with his rivals who cheat through the “sure thing” of insider trading now that the Second Circuit has written an opinion explaining how to corrupt the entire system with impunity from the criminal laws.

………

The Second Circuit decision admits that the prosecutors presented evidence established a massive conspiracy designed to allow Wall Street elites to profit by engaging in insider trading, a conspiracy that greatly enriched the defendants that were convicted in the case under appeal.

“At trial, the Government presented evidence that a group of financial analysts exchanged information they obtained from company insiders, both directly and more often indirectly. Specifically, the Government alleged that these analysts received information from insiders at Dell and NVIDIA disclosing those companies’ earnings numbers before they were publicly released in Dell’s May 2008 and August 2008 earnings announcements and NVIDIA’s May 2008 earnings announcement. These analysts then passed the inside information to their portfolio managers, including Newman and Chiasson, who, in turn, executed trades in Dell and NVIDIA stock, earning approximately $4 million and $68 million, respectively, in profits for their respective funds.”

The Second Circuit was not distressed that senior Wall Street officials received information that was clearly insider information that they knew they should not have access to. The insider information they were provided was the crown jewels – two major corporations’ soon to be announced “numbers” – at least one of which was sure to be a major surprise to the markets. A senior trader that knows “the number” in advance, particularly when he knows that the number will be a surprise, can shoot fish in a small barrel with a large shotgun. The insider information allows the senior trader to reduce the risk of loss to trivial levels while increasing the probability of gain to near certainty. The trader makes a fortune by cheating, not through any unusual skill. The senior trader knows that no employee of any publicly traded corporation is permitted to release such secret and proprietary insider information to investors.

The Second Circuit was not distressed that the senior Wall Street officials did not react to being provided what was clearly insider information by demanding to know how their analysts got the information and instructing them that their actions violated the firms’ ethical standards and would lead to their termination if it were ever repeated. The firm’s ethics manuals banned the senior traders from trading on the basis of insider information. Instead, of serving as ethical leaders in training the analysts not to engage in such behavior and instead of following their firm’s ban on trading on the basis of insider information, the senior officers engaged in a cynical financial version of “don’t ask; don’t tell.” The analysts and the senior officials that traded on the inside information understood the wisdom of the old line “ask me no questions and I’ll tell you know lies.” The senior officers proceeded to profit by exploiting this advantage over honest investors while minimizing the risk of a successful prosecution not by being ethical, but by consciously maintaining (not remotely) “plausible deniability.”

………

But worse will soon come. The Second Circuit’s decision is a “how to” manual on how elites Wall Streeters can become wealthy through insider trading with impunity from the criminal laws. The Second Circuit opinion shows that using a “cutout” is the key to achieve the “sure thing” of enormous wealth through insider trading without financial or legal risk. The Second Circuit lays out the game plan. The little folks in the organization develop the contacts with insiders in publicly traded firms. The analysts function initially like any good intelligence agent recruiting an asset. These assets have insider information of their employers, the publicly traded corporations. The analyst develops a rapport with the employee or exploits an existing tie. The analyst shows the employee a very good time – a taste of how good his life can be if he plays ball. But the analyst doesn’t make any explicit promises or deals. (In the case decided by the Second Circuit others cutouts earlier in the insider trading chain made the corrupt payments to the employees.) The Wall Street senior officers who grow wealthy by trading the insider information will make sure that the analysts are well cared for – discretely and at a later date.

The analyst then has to do one thing and avoid doing a second. Both are simple. The analyst needs to signal to his superior that the information is reliable. The government complaint against SAC show one the innumerable means of sending that signal. The government’s appellate brief contains the text of an email in which an analyst explicitly conveyed the reliable track record of the leakers of the inside information to the senior traders so that they could be sure they had a “sure thing” by investing on the basis of the inside information.

The analyst needs not to explicitly tell the senior officer conducting the trade that the insider information was the product of a deal in which the employee who leaks the insider information was explicitly promised a quid pro quo to the leaker. Again, the government complaint against SAC and the government appellate brief in the case reversed by the Second Circuit show in detail how simple it is to design systems of not making these matters explicit. That is why the Second Circuit ruling imperils prosecutions in every case in which the insider trading scheme was done with even modest cleverness.

………

The Second Circuit’s reasoning has the perverse effect that the more corrupt individuals engaged in the insider trading scheme the more likely the scheme is to be declared lawful as long as the traders use their corrupt colleagues as cutouts. Note that the Second Circuit reasoning does not simply make it harder to prosecute sophisticated insider trading schemes – it holds that the actions of the elite traders who know that they are achieving the “sure thing” of immense insider trading profits on the basis of deliberate leaks of that information are not unlawful and cannot be prosecuted. The Second Circuit has created the perfect crime and publicized how to shape the scheme to insure wealth and impunity through creating widespread chains designed to corrupt the markets, employees of the publicly traded corporations, and the Wall Street firms.

The tone of the opinion is particularly galling. The Second Circuit is not even mildly distressed by the result. It expresses disdain for the idea that Wall Street elites should not be able to enrich themselves with complete impunity from the laws through corrupt arrangements such as those proven at the trial. The opinion consciously deliberately creates a straw man argument designed to hide the fact that insider trading schemes of this make it impossible for honest competitors to prevail through skill and hard work.

I’m hoping that someone manages to take them down before the banksters destroy us all.

Welcome to Our Police State

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And now the cops are sending SWAT teams to check on the license of hair stylists:

On Tuesday, a three-judge panel of the U.S. Court of Appeals for the 11th Circuit issued a ruling on the sort of issue you’d hope a federal appeals court would never need to rule on — whether the government should be allowed to use SWAT-style tactics to perform regulatory inspections.

At issue were a series of police raids on barbershops around the city of Orlando. The raids were basically fishing operations for drug crimes and to recruit confidential informants. All of the raided shops were black- or Hispanic-owned. The problem is that, because they were fishing expeditions, the police didn’t have enough evidence to obtain a warrant. Instead, the police asked an occupational license office to send along an inspector. Voila! These were no longer drug raids. For the purposes of the Fourth Amendment, they were now officially licensure inspections that just happened to include armored cops storming the businesses as if they were harboring an ISIS sleeper cell.

………

I’ve since posted about incidents in which SWAT teams were sent to raid someone suspected of credit card fraud and a woman involved in an ongoing zoning dispute with the local government. Of course, we’ve also seen hundreds of SWAT-style raids on people in the medical marijuana business, even though they pose little threat to police or the public. There have also been SWAT raids on doctors and patients suspected of crimes involving prescription painkillers, even though, again, there’s little reason to think these suspects are dangerous. Last year, a spokesperson for the St. Louis County, Mo., police department told a local TV station that all felony warrants there are now served with SWAT teams, regardless of the crime.

Am I the only one who thinks that this is completely nuts?

And We Have a Couple More Credit Union Failures

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It’s been a over a month since we’ve had a bank failure Friday, there has not been a bank failure since early November, but we just had a couple more credit union failures:

  1. Metropolitan Church of God Credit Union, Detroit, MI
  2. Health One Credit Union, Detroit, MI

Here is the Full NCUA list.

I’m still not sure why the ratio between credit union failures and bank failures is some where between 3 and 4:1.

Why Does Maureen Dowd Still Have a Job?

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It’s one thing to ask for comment from a subject of a story, but preclearing the story with your subject before publication is not journalism, it’s PR:

Leaked emails from Sony suggest that New York Times columnist Maureen Dowd promised to show Sony Pictures co-chair Amy Pascal’s husband, Bernard Weinraub, — a former Times reporter — a version of a column featuring Pascal before publication.

The end result was a column that painted Pascal in such a good light that she engaged in a round of mutual adulation with Dowd over email after its publication. It also scored Pascal points back at the studio, with Sony’s then-communications-chief calling the column “impressive.”

The exchanges were uncovered in a trove of Pascal’s emails released as part of a massive hack on Sony carried out by the group known as “Guardians of Peace.” The column, published after the Academy Awards earlier this year, lamented how “Oscar voters and industry top brass are still overwhelmingly white, male and middle-aged.”

I’ve never understood the allure of MoDo.

She writes about the great issues of the day like a middle schooler dissing another girl’s choice of shoes.

I expect that her job is safe,. but I really hope that her editor cuts her a new one about this.

If This Isn’t Suborning Perjury, It’s Still a Violation of Legal Ethics

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One of the things that prosecutors are not supposed to do is to encourage a witness to lie. It’s called suborning perjury, and it is a crime.

On a marginally lower level of corruption and malfeasance is knowingly putting a witness on the stand who you know will lie.

In what is surprisingly unsurprising news, it turns out that the St. Louis prosecutors office called a witness to testify in the Michael Brown killing who they knew to be lying:

So, you are Prosecutor Bob McCulloch. You have a grand jury investigation with the entire world watching. One of your witnesses in support of the officer is revealed by the FBI to have made up her entire account. What do you do?

Apparently you present a discredited witness to the grand jury anyways. He played the FBI interview, which revealed that Witness 40’s car was not at the location, that 40 could not have exited in the manner described, that 40 did not even tell anyone her story until over two weeks after the shooting. They tore her apart, showing that she changed her story several times while sitting on the stand. For example, in her interview, 40 claimed to have made no contact to the police for two weeks, then later claimed that she did contact them several times before agreeing to be a witness. And that is not the only occasion they caught her changing her story, with other times her lack of knowledge of the crime scene, how her journal and testimony did not match, how the exit for the complex did not exist where she claimed all being revealed. That interview, found on pages 86-184 of Grand Jury Testimony Volume 15, completely discredits her as a witness.

Then, fully knowing this, Bob McCulloch brought her before the grand jury, and entered her hand written journals filled with racist language into the record. And this testimony, by a discredited witness, is the one cited by right-wing media outlets in their attempts to support former Ferguson officer Darren Wilson. Claims of Michael Brown charging like a bull? Her account, and only her account.

 Seriously, why does Bob McCulloch still have a law license?