On Topic – Division of Power – The Press 5:11

Crossposted from The Stars Hollow Gazette

JP Morgan Managers Being Told Trade Loss is $9 Billion

Posted by Teri Buhl

Tue 26 Jun 2012

This morning the New York Times Dealbook rewrote my scoop about a possible $9bn loss for JPM and didn’t credit me for reporting this first. They’ve done journalism theft like this before when I was scooping them at the New York Post during the financial crisis. Times reporters like Andrew Ross Sorkin led the scoop stealing behavior during 08 and this morning I see him doing the same thing on CNBC. Scoops are assets for journalist and I don’t appreciate the New York Times taking my hard-earned research and sourcing and using it as their own without a mention or link to my original reporting. If you think this is wrong- write them, comment on their sites or tweet about it. Only together we can hold other journalist accountable and demand accuracy.

(h/t Dashiell Bennett @ Atlantic Wire)

JPMorgan Trading Loss May Reach $9 Billion

By JESSICA SILVER-GREENBERG and SUSANNE CRAIG, The New York Times

June 28, 2012, 2:30 am

To put the size of the loss in perspective, JPMorgan logged a first-quarter profit of $5.4 billion.

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The chief investment office – which invests excess deposits for the bank and was created to hedge interest rate risk – brought in more than $4 billion in profits in the last three years, accounting for roughly 10 percent of the bank’s profit during that period.

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More than profits are at stake. The growing fallout from the bank’s bad bet threatens to undercut the credibility of Mr. Dimon, who has been fighting major regulatory changes that could curtail the kind of risk-taking that led to the trading losses. The bank chief was considered a deft manager of risk after steering JPMorgan through the financial crisis in far better shape than its rivals.

“Essentially, JPMorgan has been operating a hedge fund with federal insured deposits within a bank,” said Mark Williams, a professor of finance at Boston University, who also served as a Federal Reserve bank examiner.

Japan’s appetite for whale meat wanes

Justin McCurry in Osaka, The Guardian

Thursday 14 June 2012 05.19 EDT

Junko Sakuma, a freelance journalist, said the body responsible for selling meat from Japan’s controversial “scientific” whaling programme had failed to sell 908 tonnes of the 1,211-tonne catch, despite holding 13 public auctions since last October.

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Sakuma said the oversupply of whale meat, despite pockets of demand for the highest quality produce, had made Japan’s lethal research programme unsustainable.

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Late last year, it was revealed the government used 2.28bn yen (£18.5m) from the 11 March earthquake recovery fund, on top of its existing $6m (£3.87m) annual subsidy, to pay for the most recent Antarctic hunt.

The fisheries agency said the use of the fund was justified because one of the towns destroyed by the tsunami was a whaling port.

This is about the 3rd year in a row of declining catches and failure to sell even a majority of the harvest.

Complex thinking goes beyond primates: Dolphins understand zero, elephants rescue each other

By Associated Press

June 24

Dolphins are so distantly related to humans that it’s been 95 million years since we had even a remotely common ancestor. Yet when it comes to intelligence, social behavior and communications, some researchers say dolphins come as close to humans as our ape and monkey cousins.

Maybe closer.

“They understand concepts like zero, abstract concepts. They do everything that chimpanzees do and bonobos can do,” said Lori Marino, a neuroscientist at Emory University who specializes in dolphin research. “The fact is that they are so different from us and so much like us at the same time.”

Shell gears up for new Arctic quest

By Jennifer A. Dlouhy, Houston Chronicle

Sunday, June 24, 2012

In Valdez, about 800 miles from Shell’s planned Arctic wells, the company has spent weeks training recruits how to deploy inflatable booms to corral floating crude so skimmers can suck it up.

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But while federal regulators have approved Shell’s broad drilling plans and signed off on the company’s emergency plans for the region, the technology for sopping up spilled oil hasn’t been tested publicly in U.S. Arctic waters in 12 years, and the results weren’t encouraging.

During that earlier test, skimmers failed and floating ice slipped under booms meant to corral crude.

Shell tries to contain skepticism in Arctic

By Jennifer A. Dlouhy, Houston Chronicle

Sunday, June 24, 2012

Shell’s sizable armada doesn’t carry enough equipment to satisfy environmentalists who argue that existing technology can sop up only a small percentage of spilled crude, even from calm, warm seas. They warn that the equipment’s success rate might be worse in the Arctic, especially if waters are slushy or covered in ice.

Federal regulators have approved Shell’s oil spill response plans for the region, which describe a scenario for recovering 95 percent of the oil spilled. It would use an under-water containment system including a capping stack – an array of valves and other equipment that would be lowered to the ocean floor to plug a gushing well – along with skimmers, booms, chemical dispersants and burn-off of floating crude.

Mike LeVine, the Pacific senior counsel for the conservation group Oceana, scoffed at the 95 percent target.

He noted that only 8 percent of the oil was removed after the Exxon Valdez spill and 10 percent from spills in the Gulf of Mexico.

“The idea they could somehow magically get to 10 times that seems absurd to us,” LeVine said.

Oil Trades Below $80 for a Third Day on Economic Outlook

By Sherry Su and Ben Sharples, Bloomberg News

Jun 25, 2012 7:58 AM ET

Oil traded below $80 a barrel for a third day in New York amid concern that Europe’s debt crisis will curb demand for fuels.

Futures slid as much as 1.2 percent as George Soros warned that a failure by European Union leaders meeting this week to produce drastic measures could spell the demise of the bloc’s shared currency. Developed economies are running into the limits of monetary policy, the Bank for International Settlements said in its annual report yesterday. Oil earlier rose as much as 1.2 percent after Tropical Storm Debby approached oil and gas installations in the Gulf of Mexico.

“The outlook for oil remains negative while concerns remain about the economic outlook in Europe weigh on demand,” Michael Hewson, a London-based analyst at CMC Markets, which handles about $240 million a day in U.S. crude contracts, said today in an e-mail. “Investors remain skeptical that EU leaders will be able to agree on anything tangible to alleviate the current crisis.”

TransCanada wins 1 of 3 US nods for Keystone line

Reuters

Wed Jun 27, 2012 12:07am IST

CALGARY, Alberta, June 26 (Reuters) – The U.S. Army Corps of Engineers has granted TransCanada Corp one of three permits it needs to build the $2.3 billion southern section of the Keystone XL pipeline, a project President Barack Obama had pledged to move forward quickly.

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The southern section would carry 830,000 barrels a day of crude to Texas refineries from the glutted Cushing, Oklahoma, storage hub with the aims of helping to raise deeply discounted prices and providing the region more secure oil supplies.

My emphasis.

On Topic – Division of Power – Interest Groups 3:48

PBS Newshour

Getting Away with It

Paul Krugman and Robin Wells, The New York Review of Books

July 12, 2012

When Obama was elected in 2008, many progressives looked forward to a replay of the New Deal. The economic situation was, after all, strikingly similar. As in the 1930s, a runaway financial system had led first to excessive private debt, then financial crisis; the slump that followed (and that persists to this day), while not as severe as the Great Depression, bears an obvious family resemblance. So why shouldn’t policy and politics follow a similar script?

But while the economy now may bear a strong resemblance to that of the 1930s, the political scene does not, because neither the Democrats nor the Republicans are what once they were. Coming into the Obama presidency, much of the Democratic Party was close to, one might almost say captured by, the very financial interests that brought on the crisis; and as the Booker and Clinton incidents showed, some of the party still is.

On Topic – Division of Power – The President 3:31

I hate to advocate drugs, alcohol, violence, or insanity to anyone, but they’ve always worked for me.

– Stockton

On Topic – Division of Power – Congress 3:59

Crossposted from The Stars Hollow Gazette

PBS Newshour

The Great Abdication

By PAUL KRUGMAN, The New York Times

Published: June 24, 2012

I’m hearing more and more about an even more fateful year. Suddenly normally calm economists are talking about 1931, the year everything fell apart.

It started with a banking crisis in a small European country (Austria). Austria tried to step in with a bank rescue – but the spiraling cost of the rescue put the government’s own solvency in doubt. Austria’s troubles shouldn’t have been big enough to have large effects on the world economy, but in practice they created a panic that spread around the world. Sound familiar?

The really crucial lesson of 1931, however, was about the dangers of policy abdication. Stronger European governments could have helped Austria manage its problems. Central banks, notably the Bank of France and the Federal Reserve, could have done much more to limit the damage. But nobody with the power to contain the crisis stepped up to the plate; everyone who could and should have acted declared that it was someone else’s responsibility.

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None of this should be happening. As in 1931, Western nations have the resources they need to avoid catastrophe, and indeed to restore prosperity – and we have the added advantage of knowing much more than our great-grandparents did about how depressions happen and how to end them. But knowledge and resources do no good if those who possess them refuse to use them.

On dark weeks The Daily Show and The Colbert Report post video mash-ups.  This weeks are from The Daily Show and posted on 5/21.

On Topic – Division of Power – The Supreme Court 4:52

Adapted from The Stars Hollow Gazette

I’d never impugn Bernie except on the flimsiest of motives.  He’d never cheat a company of its assets by bribing a banker to sell them under market and structure the deal so the bank paid the bribe and Bernie got to put a $ million or three in his pocket for his trouble.

That would be unethical.

So we’ve been following the Gerhard Gribkowsky case since August 2011.

As you may recall it’s alledged that Bernie Ecclestone paid Gerhard a bribe of $44 Million so that the sale of the Kirsh Group’s interest in Formula One was not only below market value, but also so they would not participate in any profit sharing.  Bernie’s counter-contention was that it was merely an extortion payment to hide the fact that he and his wife were evading $3.2 BILLION in taxes on the family trust fund.

Well, Wednesday Gribkowsky admitted accepting the bribe in Court-

Ex-BayernLB Banker Admits Taking Bribe on Formula 1 Sale

By Karin Matussek, Business Week

June 20, 2012

Gribkowsky told the Munich Regional Court today the indictment against him was “in most parts” correct. He made his declaration after closed chamber negotiations between the court, prosecutors, and his defense lawyers. In exchange for his confession, the judges informally agreed Gribkowsky would get a prison term of 7 years and 10 months to 9 years, Presiding Judge Peter Noll said at the hearing.

Prosecutors last year charged Gribkowsky, who managed Munich-based BayernLB’s interest in Formula One, with accepting bribes, breach of trust and tax evasion. They claim he received $44 million in bribes to steer the sale of the bank’s 47 percent stake in the racing circuit to CVC, a U.K.-based buyout firm, and also agreed to a sham contract under which Ecclestone received a kickback. Until today, Gribkowsky denied the claims.

“It took me a long time to come to terms with what I have done and to admit even to myself: Yes, it was bribery and yes, I should have paid tax,” Gribkowsky said in his first comments to the court since the trial began in October. “Still today I have troubles accepting this as a reality.”

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Ecclestone, who is being investigated by Munich prosecutors over the issue, has said he was caught up in a sophisticated shakedown and bribed Gribkowsky because he feared the banker might tell U.K. tax authorities about a family trust controlled by his then wife.

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BayernLB’s 47 percent share was sold for 840 million euros ($1.07 billion). Ecclestone asked for a kickback of $100 million from BayernLB for his role in setting up the sale, Gribkowsky told the judges. Gribkowsky reduced the amount to $66 million in negotiations and said he agreed to it knowing he had the power to reject Ecclestone’s demand completely.

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Because Ecclestone didn’t want cover the cost of the bribes, Gribkowsky set up another scam to funnel money from BayernLB to the Formula One executive, according to the indictment. The bank manager signed a sham contract under which BayernLB had to pay Ecclestone a kickback of $41.4 million and another $25 million to his then wife’s trust, prosecutors claim.

Banker Admits Formula One Bribe

By LAURA STEVENS and DAVID CRAWFORD, The Wall Street Journal

June 20, 2012, 5:15 p.m. ET

Mr. Gribkowsky was arrested early last year after Munich prosecutors launched a probe into allegations that he accepted bribes from Mr. Ecclestone to divest BayernLB’s stake in Formula One for far below the actual value.

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BayernLB, Lehman Brothers Holdings Inc. and J.P. Morgan Chase & Co. secured a combined 75% equity stake in Formula One in 2002, part of a debt settlement plan from the bankruptcy of German media company Kirch Group.

F1 : Ecclestone in crisis as Gerhard Gribkowsky Formula 1 bribery affair develops

F1SA

Friday, 22 June 2012 09:41

The reinvigorated Formula One bribery affair has raised questions not only about the viability of the sport’s planned floatation, but about whether Bernie Ecclestone will lose his job or even face jail in Germany.

“Will Ecclestone go to Hockenheim?” the Die Welt newspaper, obviously musing a potential arrest now that former Formula 1 banker Gerhard Gribkowsky has confirmed the Formula 1 Chief Executive’s payments to him were indeed bribes, wondered.

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German lawyer Sewarion Kirkitadze told Bild that Ecclestone ultimately face a prison sentence of “up to ten years”.

“He should also expect the prosecutor to prepare an international arrest warrant and an extradition request.”

Formula 1: Bernie Ecclestone Seeks Nothing Wrong in Paying Banker £28M

Auto Racing Daily

Jun 23, 2012

Bernie Ecclestone said that he had been “a bit stupid” to pay a German banker $44million (£28million) following the sale of Formula One to present owners CVC Capital Partners six years ago but insisted once again that he had done nothing wrong.

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“I have always said that we gave him money but it was not for what he said,” said the 81 year-old, who appeared as a witness at the trial in November. “He was shaking me down a bit and saying I had control of a family trust which was not true. He was doing the best he could. I was a little bit stupid – normally I would have told him to get lost.” Telegraph.co.uk

Ecclestone, 81, told Reuters that Gribkowsky had been putting him under pressure over his tax affairs. He paid some 10 million pounds ($16 million) to the banker to “keep him quiet” and not as alleged to smooth the sale of the Formula One stake to private equity firm CVC Capital Partners.

Ecclestone puts brave face on Gribkowsky’s £28m bribe confession

David Tremayne, The Independent

Saturday 23 June 2012

As investment banker Gerhard Gribkowsky awaits sentence in Germany after confessing to taking a $44m (£28m) bribe, allegedly from Bernie Ecclestone, there has been inevitable speculation whether Ecclestone can escape being dragged further into the sport’s latest cause célèbre. It has already led to a delay in the proposed flotation of F1 in Singapore even though the $10bn (£6.4bn) valuation sought by rights holder CVC Capital Partners had been achieved by a recent sale of shareholdings to American investors.

Theoretically if somebody is found guilty of receiving a bribe then the person making the bribe can also be charged but, for Ecclestone, Valencia has been business as usual and he does not appear to have a care in the world. He blamed Gribkowsky for “shaking him down” while testifying at the Bavarian banker’s preliminary hearing, and his attorney Sven Thomas issued a statement after Gribkowsky’s confession claiming that it would have no impact on the prosecutors’ investigation into Ecclestone’s dealings.

Formula One chief Bernie Ecclestone faces fresh allegations over £28 million ‘bribe’

By Tom Cary, F1 Correspondent, The Telegraph

10:31PM BST 20 Jun 2012

If Munich’s state prosecutors decide to go after Ecclestone, sources have indicated they might try to agree a financial settlement rather than go through a lengthy and costly trial with a billionaire in his eighties.

Should they press charges, it remains unclear what action, if any, CVC will decide to take. Ecclestone told The Daily Telegraph earlier this year that the private equity firm “could get rid of me tomorrow if it wanted to”.

These are extremely delicate times in the sport. CVC has sold more than £1.3billion worth of shares over the past few months ahead of a mooted flotation on the Singapore stock exchange later this year, although it says it intends to remain F1’s controlling shareholder. CVC declined to comment on Wednesday night.