Bloomberg News reports the Wall Street stealth lobby defends the $35 billion haul in derivatives. Five U.S. commercial banks (JPMorgan Chase, Goldman Sachs, Bank of America, Morgan Stanley, and Citigroup) “are on track to earn more than $35 billion this year trading unregulated derivatives contracts.”
The $592 trillion over-the-counter derivative market is one of Wall Street’s “richest fiefdoms”.
The Washington fight, conducted mostly behind closed doors, has been overshadowed by the noisy debate over health care. That’s fine with investment bankers, who for years quietly wielded their financial and lobbying clout on Capitol Hill to kill efforts to regulate derivatives…
In recent months, Wall Street firms have embarked on a lobbying campaign to influence the media and legislators.
Goldman Sachs held an off-the-record seminar for reporters in April to explain how credit-default swaps work…
JPMorgan has mobilized some corporate clients, advising them that the proposed changes could hurt their ability to hedge against losses, according to a person familiar with the matter…
Health-care reform may make it unlikely any derivatives legislation will be enacted in the near future… For Wall Street, the longer it takes to get legislation passed the better. As stock market values and the economy improve, anger at banks is likely to subside.
Outside of Wall Street, The Hill reports the AFL-CIO and some Democrats push for new tax on Wall Street transactions. They propose assessing “a small tax – about a tenth of a percent – on every stock transaction. Small and medium-sized investors would hardly notice such a tax, but major trading firms, such as Goldman, which reported $3.44 billion in profits during the second quarter of 2009, may see this as a significant threat to their profits.”
“It would have two benefits, raise a lot of revenue and discourage speculative financial activity,” said Thea Lee, policy director at the AFL-CIO.
A tenth of a percent transaction tax “could raise between $50 billion and $100 billion per year”.
Four at Four continues with an update from Afghanistan, Blackwater hired foreigners for CIA death squad contract, and India says ignore population during climate talks.
The LA Times reports U.S. Gen. Stanley McChrystal calls for overhaul of Afghanistan war strategy. His new strategy “would call for an intensified effort to train more Afghan security forces faster, pump up intelligence collection efforts and improve how that information is used and shared.”
“At the heart of the assessment is McChrystal’s belief that the military needs to follow an overhauled counter-insurgency strategy that focuses on making Afghan citizens feel safer.”
According to the NY Times, McChrystal’s plan does not call for additional U.S. troops. “American commanders say that General McChrystal’s assessment does call for a large expansion of Afghan security forces, and an acceleration of their training. There are currently about 134,000 Afghan police, and about 82,000 Afghan soldiers. Many of these units are inadequately equipped andhave little logistical capability to sustain themselves. Just how many more Afghan police and soldiers General McChrystal wants is unclear.”
“The situation in Afghanistan is serious, but success is achievable and demands a revised implementation strategy, commitment and resolve, and increased unity of effort,” General McChrystal said in a statement.
McClatchy reports the Taliban’s growth in Afghanistan’s north threatens to expand war.
Taliban insurgents have taken over parts of two northern provinces from which they were driven in 2001, threatening to disrupt NATO’s new supply route from Central Asia and expand a war that’s largely been confined to Afghanistan’s southern half, U.S. and Afghan officials said…
The insurgents now control three Pashtun-dominated districts in Kunduz and Baghlan-i-Jadid, a foothold in a region that was long considered safe. With a force estimated at 300 to 600 hard-core fighters, they operate checkpoints at night on the highway to the north, now a major supply route, local officials said, and are extorting money, food and lodging from villagers.
“The Taliban want to show the world that not only can they make chaos in southern Afghanistan, but in every part of Afghanistan,” Baghlan Governor Mohammad Akbar Barekzai said. “This is a big problem. We don’t have sufficient forces here.”
Meanwhile, the LA Times reports the Obama administration fears clock ticking on Afghanistan. In light of failing support for the war from Americans, U.S. officials have pushing, diplomatically, “to persuade NATO countries to send more forces to Afghanistan” all the while trying to prevent departures from the war zone by key NATO allies.
The Obama administration is trying to “improve Afghans’ low regard for their government, but also to reassure Americans that the $2.6 billion a month they are providing is well spent.”
Corruption is prevalent in Afghanistan, so it should come as no surprise that Increasing accounts of fraud cloud the Afghan vote, reports the NY Times. “Afghan election officials said Sunday that the serious fraud reports that they were considering had suddenly doubled – to 550 from 270, in a development likely to stoke public outrage and perhaps even delay the official results past September… As the reports of fraud widen, the legitimacy of any results is coming under increased question.”
“International election observers who have been working for months in Afghanistan said the problem was not just individual cases of ballot stuffing, but systemic and institutional corruption.”
AP reports Blackwater tapped foreigners on secret CIA assassination program. According to an anonymous former-CIA official, Blackwater (Xe) recruited foreign assassins to kill or capture people as part of its contract for the CIA “to dispatch death squads”.
“The former senior CIA official who had knowledge of the program explained that ‘you wouldn’t want to have American fingerprints on it.'”
“The former senior CIA official said that close to a dozen Blackwater ‘surrogates’ were recruited to join the death squad program. The recruits, the former official said, were not told they were working for the CIA.”
“Blackwater long has had a close and intertwined relationship with the CIA. “
The Washington Post adds Blackwater founder accused in court of intent to kill. Attorneys for Iraqis suing Blackwater for more than 20 deaths between 2005 and 2007 named Erik Prince as the man to blame.
“The person responsible for these deaths is Mr. Prince,” Susan L. Burke, an attorney for the plaintiffs, said in U.S. District Court in Alexandria. “He had the intent, he provided the weapons, he provided the instructions, and they were done by his agents and they were war crimes.”
Judge T.S. Ellis III expressed deep skepticism about the claims. “Are you accusing Mr. Prince of saying ‘I want our boys to go out and shoot innocent civilians?’ ” he asked the attorneys.”These are certainly allegations of not engaging in very nice conduct, but where are the elements that meet the elements of murder? I don’t have any doubt that you can infer malice. What you can’t infer, as far as I can tell, is intent to kill these people.”
The Guardian reports India wants population left out of climate talks. Jairam Ramesh, India’s environmental minister, said the West is using India’s “profligate reproductive behaviour” to force the country to accept “legally binding emission reduction targets”.
“Influential American thinktanks are asking why should we reward profligate reproductive behaviour? Why should we reward India which is adding 14 million people every year?” he said.
Ramesh said that at “today’s state of development” India could not and should not accept “legally binding reduction targets”. “For us this is about survival. We need to put electricity into people’s homes and do it cleanly. You in the west need to live with only one car rather than three. For you it is about luxury. For us survival.”
Meanwhile, the CS Monitor reports Our best guess about global warming may be wrong. “Scientists have been unable to reproduce” the Paleocene-Ecocene Thermal Maxium “in a climate model. In order to get the climate they suspect existed, they have to crank up carbon dioxide far beyond what they think was actually the case.”
They’re missing something – and that something may be key to understanding what happens after atmospheric CO2 increases beyond an unknown threshold. At some point, rising CO2 may trigger something else that further warms the climate. In other words, we may have significantly underestimated the effects of the CO2 now being released into the atmosphere. If the Eocene is any indication, the world is probably in for more warming than suspected.