Tag: ek Politics

Among other useless skills and trivia picked up in my misspent youth, I know how to use a Research Library.

What lies behind the battle over the New York Public Library

Jason Farago, The Guardian

Saturday 7 July 2012

Libraries across America are facing swingeing budget cuts and uncertain futures. But here in New York, home to the second-largest library in the country, the future is now.

The hottest cultural controversy of this already hot summer concerns the New York Public Library (NYPL), and a plan to disembowel its main building – a plan that will slice open the stacks and “replace books with people”, in the words of the NYPL system’s CEO, Tony Marx. It’s enraged writers and professors, demoralized a staff already coping with layoffs, and called the entire purpose of the system into question.

…

Unlike the borough branches, the central library does not lend books. It’s a research institution, and compared to establishments of the same caliber – the Library of Congress, say, or the collections of Harvard and Yale – it is exceptionally open. You don’t need an academic affiliation. You don’t need to pay for a reader’s ticket. You don’t even need to come up with a convincing excuse to call up Walt Whitman’s manuscripts if you want to have a rifle through. Just fill out a call slip and you can have it in about an hour.

The new Central Library Plan, though, will move 3m books (about 60% of what’s now on site) out of the central facility, to be immured in some bunker in New Jersey. Researchers have been promised that they can summon these books with a day’s notice. But the library already promises that for books currently off-site, and it doesn’t really work that way; in practice, it takes closer to two or three days.

…

What will take the place of the books? Well, the closed stacks will be smashed open to make way for a smaller lending library, to supersede the large one across the street from the main facility which the NYPL plans to sell off. That worries not just researchers but architectural preservationists. The library, designed by Carrère and Hastings, is a masterpiece of engineering; unusually, the grand reading room sits at the top of the building, perched on stacks that were state of the art in their day.

…

A research library has a different mission from a lending library; it’s there to put everything, not just the most popular volumes, at our disposal. If you hit an intriguing footnote that references another publication, or if you find an irregularity in a text and want to check it against another source, all you have to do now is grab one of the library’s stubby golf pencils, write down the title, and it’s yours. That will soon be gone, and its effect on research will be brutal if not mortal.

…

The central library plan might not be irredeemable. Several advocates have proposed a sensible alternative that would keep most of the books in town. But the NYPL has shown no inclination to listen to its own users, or even to make its deliberations public, and that is the truly worrying thing. Replacing books with people may look accessible and anti-elitist. But the real popular gesture is to keep research free for all.

Instead, on the advice of some of the world’s most profitable consultancies and a board full of oligarchs, we are being told that what we really deserve is not a world-class library, but comfy chairs and blueberry muffins.

Crossposted from The Stars Hollow Gazette

Let’s Talk Turkey About Greece

Ian Welsh

2012 May 26

• Start gun-running and other black market activities up.  European gun-running currently goes through Albania.  Greece has much better ports.  If the Euros don’t like it, they can militarize Greece’s borders at a cost much higher than feeding the Greeks.
• Become a full on black-hole for banking.  If anyone wants to store money in Greece, they can.  No questions asked, no forms needed.
• Make deals with other “pariah” and semi-pariah nations.  Start with Iran and Russia for oil (Iran will be happy to give oil in exchange for black market help).  Make a deal with various 2nd world nations for food, start with Argentina, they have no reason to love the IMF or the European Union, which promised to “punish” them for nationalizing oil in Argentina.  In exchange Greece can offer use of their fleet, for cheap, and port rights for the Russian navy.  They’ve wanted a true warm water port for some time.  Offer them a nice island in the Med with a 30 year lease.

Europe’s Downturn Creates Unlikely Smugglers

By STEPHEN CASTLE and DOREEN CARVAJAL, The New York Times

Published: July 11, 2012

For years, law enforcement officers and smugglers have played cat and mouse in Europe, where contraband cigarettes are stashed in everything from furniture shipments to loads of Christmas trees. But Europe’s four-year-old economic crisis is expanding the black market for cigarettes, robbing European Union nations of valuable revenue and drawing in a new class of smugglers.

…

Hard facts about this smuggling trade are found in the lowliest places: the garbage. In annual surveys, financed by cigarette companies, researchers fan out to major cities in 27 European nations and collect crumpled cigarette packs. In turn those packs are analyzed by laboratories to determine how many are bought across the counter and how many are counterfeit. Some boxes are so meticulously produced in China, Dubai or Eastern Europe that they contain bogus tax stamps for different nations.

The latest results of the garbage scavenging showed the black market competition had increased to record levels. In Spain, illicit sales last year soared 300 percent to more than 4.6 billion cigarettes. In the struggling region of Andalusia, they showed, contraband cigarettes commanded 20 percent of the market.

In Ireland, smugglers are robust competitors with legal cigarette companies, reaching more than 17 percent. Over all, black market cigarettes continued a steady climb for the fifth straight year, topping 10 percent of consumption or 65 billion cigarettes, according to the annual report issued in June by KPMG for Philip Morris International.

…

“A lot of people perceive this as a ‘Robin Hood’ type of fraud and that the ordinary person in the street, who has a lot less money these days, is gaining the benefit,” said Austin Rowan, head of the unit responsible for cigarette smuggling at OLAF, the European Union’s Anti-Fraud Office. “But this trade is financing organizations that are involved in other activities including drugs smuggling.”

Crossposted from The Stars Hollow Gazette

Because LIBOR Investor Fraud is so yesterday.

HSBC Reveals Problems With Internal Controls

By LANDON THOMAS JR. and MARK SCOTT, The New York Tmes

July 12, 2012

The money laundering, which a U.S. Senate subcommittee indicates was linked to terrorism and drug deals, could result in HSBC’s paying fines of up to $1 billion, according to analysts.

…

In the case of the money laundering, the U.S. authorities have been examining HSBC for several years. On Tuesday, officials from the bank are set to testify in Washington before the Senate Permanent Subcommittee on Investigations. A subcommittee spokesman declined on Thursday to discuss the investigation, but the panel’s Web site describes the agenda: “a hearing on the money laundering and terrorist financing vulnerabilities created when a global bank uses its U.S. affiliate to provide U.S. dollars, U.S. dollar services, and access to the U.S. financial system to high risk affiliates, high risk correspondent banks, and high risk clients, using HSBC as a case study.”

…

Adding another political wrinkle: HSBC’s former chairman, Stephen Green, who was in office from 2006 to 2010 when many of the money-laundering detection problems occurred, is currently the trade minister in British prime minister David Cameron’s government. Mr. Green’s office did not reply to a request for comment on Thursday.

HSBC braced for huge U.S. penalty

By Sharlene Goff, Financial Times

July 12, 2012

HSBC is to apologise to US lawmakers for failing to have appropriate controls in place to ensure it did not facilitate the financing of terrorism and other criminal activities, transgressions that analysts estimate may cost it up to $1bn in fines.

…

Mr Gulliver warned that HSBC was likely to face further action from other US authorities in coming months.

HSBC said in its 2011 annual report that fines relating to money laundering issues could be “significant”. There has been speculation among analysts that the bank could be hit with a higher charge than the $619m ING, the Dutch bank, agreed to pay to settle accusations it violated US sanctions by helping Iranian and Cuban companies move billions of dollars through the US financial system. Some have suggested it could be as much as $1bn.

HSBC chief admits bank failed to control money laundering

Dominic Rushe, The Guardian

Wednesday 11 July 2012

In the memo, first reported by Bloomberg News, Gulliver said the hearing would “reveal that in the past we fell well short of the standards that our regulators, customers and investors expect”. He said: “It is right that we be held accountable and that we take responsibility for fixing what went wrong.”

…

Last month ING, the Dutch bank, paid $619m to settle accusations it helped Iranian and Cuban companies move billions of dollars through the US financial system in violation of US sanctions. Some analysts have suggested HSBC’s fine could be far higher.

…

William Black, professor of economics and law at University of Missouri Kansas City, said: “There is a theme developing in Washington that the City of London is evil, that it has a corrupt culture.”

He said that while the view might not be fair, the JP Morgan scandal, Libor and now HSBC meant it was a theme that was likely to be developed. “We like to blame someone else,” he said.

Crossposted from The Stars Hollow Gazette

Former Congo warlord sentenced to 14 years over child soldiers

Los Angeles Times

July 10, 2012

Former Congolese warlord Thomas Lubanga was ordered to spend 14 years in prison Tuesday for enlisting children as soldiers, the first sentence handed down by the decade-old International Criminal Court.

…

Six years will be deducted from Lubanga’s sentence to cover the time since he first surrendered to the court, aggravating critics who called the sentence too light.

…

The March verdict was hailed by human rights groups as a key step toward bringing war criminals to justice. Though other tribunals have been created throughout history to punish atrocities from specific conflicts, Lubanga was the first person to be convicted and sentenced by the International Criminal Court, created a decade ago to address war crimes in places where local courts are unable or unwilling to act.

Crossposted from The Stars Hollow Gazette

European parliament rejects anti-piracy treaty

Eric Pfanner, Business Standard

Jul 06, 2012

Foes of the treaty said the vote, by an overwhelming margin in the European Parliament at Strasbourg, would probably end the prospects of European involvement in the Anti-Counterfeiting Trade Agreement, or ACTA, which has been signed by the United States, Japan, Canada, Australia, South Korea and a number of individual EU members.

…

The vote was not even close, with 478 members of Parliament opposing the treaty, only 39 supporting it and 146 abstaining, yet it leaves considerable uncertainty. Under EU law, the treaty cannot go into effect without the Parliament’s endorsement.

“It’s a crushing victory,” said Jérémie Zimmermann, spokesman for La Quadrature du Net, a group in Paris that was active in the treaty protests. “It’s a political symbol on an enormous scale, in which citizens of the world, connected by the internet, have managed to defeat these powerful, entrenched industries.”

The legality of second hand software sales in the EU

by Jas Purewal, Gamer Law

Posted on 3.7.12

The second hand sale of physical and digital software has effectively been declared legal, according to a judgment published by the Court of Justice of the European Union today.  This has the potential to have a real impact on the way that software is sold and consumed – but at the same time the case raises more questions than it answers, so we’re really not in a clear cut situation at all.

…

Essentially, the court held that, under EU law, the right of software developers to control distribution of a piece of software – whether stored physically or digitally –  is “exhausted” (i.e. lost) once the developer has been paid for it (known as a “first sale“).  This means that developers lose the ability to prohibit any second hand sale.

However, if a second hand sale goes ahead then the first purchaser must stop using her copy of the software and render it unusable, because the developer’s right to control reproduction of software is not exhausted on a second hand sale.  In order to make sure that the first purchaser stops using the software she has sold on, it is permissible for the software developer to use “technical protective measures such as product keys“.

(h/t Ian Welsh)

Verizon Playing Dangerous Game in Net Neutrality Battle

By Tony Bradley, PCWorld

Jul 3, 2012 5:13 pm

This time around, Verizon is playing the First Amendment card. The challenge, essentially, is that by limiting Verizon’s ability to choose which content to block or promote, the FCC is infringing on Verizon’s right to free speech.

There are a couple major flaws in the argument. First, an individual’s right to free speech shouldn’t apply equally to a corporation.

…

Second, the FCC net neutrality rules don’t actually inhibit an ISP’s ability to express itself freely. Under the FCC rules, Verizon is free to publish whatever content it chooses–it simply can’t block or discriminate against other content as a matter of business practice.

The fact of the matter is the vast majority of the data traversing the ISP’s network (like Verizon) doesn’t belong to the ISP in the first place. An argument could be made that by throttling or blocking traffic Verizon is actually the party guilty of stepping on the First Amendment rights of others.

…

Part of the underlying problem is the fact that the major ISPs are also content providers. Verizon has a vested interest in preventing Netflix traffic because it has its own streaming entertainment services. Comcast is owned by NBC, so it could gain a strategic advantage for its own content by throttling the bandwidth for rival networks. The simple solution is for Congress to impose regulations banning ISPs from delivering their own content, or being owned by companies that publish or deliver content.

If the net neutrality rules suggested by the FCC to keep the Internet fair and open to all seem too draconian for Verizon, perhaps the problem is that Verizon the ISP needs to be separated from Verizon the cable TV provider, or Verizon the wireless broadband provider, or Verizon the VoIP (voice over IP) phone provider.

Why is Nobody Freaking Out About the LIBOR Banking Scandal?

Matt Taibbi, Rolling Stone

July 3, 9:04 AM ET

Most intriguingly, or perhaps disturbingly, there were revelations last week that Bank of England deputy Governor Paul Tucker had a conversation with Diamond at the peak of the crisis in 2008. The conversation reportedly left Diamond, and subsequently his traders, with the impression that the bank had carte blanche to rig LIBOR downward in order to help allay spiraling public fears about the banks’ poor financial health.

…

That is explosive stuff. Members of Parliament will be grilling Tucker tomorrow about those events in what is sure to be a far more combative and entertaining legislative inquiry than the Jamie Dimon dog-and-pony show we just went through here in the states in recent weeks.

…

Anyway, the LIBOR story is leading the front pages of most of Britain’s dailies, it’s on TV, and it’s producing blistering editorials and howls of outrage amongst politicians and activists. But as compadre Yves Smith at Naked Capitalism put it, where’s the outrage here in America?

…

(T)o me what’s missing from all of this is the “Holy Fucking Shit!” factor. This story is so outrageous that it shocks even the most cynical Wall Street observers. I have a friend who works on Wall Street who for years has been trolling through the stream of financial corruption stories with bemusement, darkly enjoying the spectacle as though the whole post-crisis news arc has been like one long, beautifully-acted, intensely believable sequel to Goodfellas. But even he is just stunned to the point of near-speechlessness by the LIBOR thing. “It’s like finding out that the whole world is on quicksand,” he says.

Mirabile Dictu! Barclays CEO Bob Diamond Resigns Over Libor Scandal (Updated)

Yves Smith, Naked Capitalism

Tuesday, July 3, 2012

This sudden announcement also makes it seem much more likely that serious shoes will drop at the Wednesday hearings.

Although this news has just broken, and I’m sure there will be a ton more commentary in the next few hours, I suspect the proximate cause is that Diamond’s attempts to defend the rigging of Libor during the crisis as being tacitly approved by the Bank of England was not going to fly.

…

In other words, Diamond was saying “you can’t really blame us for this, we told everyone and no one said no.” We’ll find out soon enough, but the effort to shift blame to the regulators may be what sunk him. Paul Tucker, the deputy governor to the Bank of England to whom Diamond spoke directly on October 28, 2012, has had subordiantes issue denials of Diamond’s account.

…

The other interesting side effect is that this development, that of two heads falling in short succession at the top of one of the UK’s biggest banks, the only major institution not to receive any bailout funds, will raise the visibility of the Libor scandal in the US considerably. One correspondent has said the price manipulation goes back to 2001, and if that proves to be true, this is an even bigger cesspool that the reports so far envision. And the fact that top executives have been forced to resign from a bank that cooperated in the investigations and the settlement documents said deserved to be treated with leniency as a result, raises the question of what sort of sanctions should be meted on the executives of less cooperative and presumably equally culpable institutions.

Behold, the British establishment, panicked

Paul Mason, BBC

3 July 2012

Here is the central problem with Barclays. Its business model has become heavily reliant on the kind of investment banking Bob Diamond pioneered at Barcap, a division he created and was determined to lead to global dominance until Alistair Darling impolitely stopped his acquisition of Lehman Brothers in September 2008.

…

The results have been felt in every community in Britain. Four years ago, Barclays was lending £52bn to non-finance, non-property businesses in the UK, 27% of all loans.

Now the figure is £38bn, and just 16% of business loans. In the process the bank – single handedly – has taken £3bn of capital out of manufacturing, more than £3bn out of retail/wholesale, while ploughing an extra £10bn into home loans and £6bn into property.

…

It has reduced its exposure to British business, carries a £700bn net credit risk that is only possible because of the implicit guarantee the October 2008 bailout gave to all banks. And it is:

“(a) a machine for enriching investment bankers … with £1.5 billion in staff bonuses last year versus a pre tax profit of £3billion (b) the risks to the tax payer are not offset by corporation tax, because Barclays has used losses to minimise its payments; [paying] just £113 million in UK corporation tax in 2009.”

…

But the crisis threatens to escalate in three directions. First to the 20 other global banks who stand accused of manipulating Libor.

The scale of class-action lawsuits being readied in the United States is, say some, big enough to sink certain of these banks. We will soon hear the results of the other – regulatory and criminal – investigations into the City of London.

Second, to the City of London itself.

…

(T)he management of the bank: its board, its chairman and its CEO stood accused, effectively, of negligence. Yet again London turned out to be the dodgiest place to do business, and that was why the original slap on the wrist did not work.

So now we have a third direction of escalation. Both the SEC and FSA left unanswered questions about the manipulation of Libor for “survival” reasons.

…

By last night, that meant the Bank of England – an institution created in the Christopher Wren era – was getting calls from financial journalists of the type normally aimed at, well, people like Bob Diamond. In short order he was gone.

Such is the power of the British establishment. But its problems are not over.

Court Papers Undercut Ratings Agencies’ Defense

By GRETCHEN MORGENSON, The New York Times

Published: July 2, 2012

When Cheyne issued its various securities in 2005, Moody’s and S.& P. rated them all investment grade. Even though Cheyne’s portfolio was bulging with residential mortgage securities, some of its debt received the agencies’ highest ratings, a grade equal to that assigned to United States Treasury securities. About two years later, as mortgage losses began to balloon, both agencies downgraded Cheyne’s debt below investment grade, to what is known as junk.

After the institutions that bought Cheyne’s debt sued Morgan Stanley and the ratings agencies, Moody’s and S.& P. immediately mounted a First Amendment defense. But Shira A. Scheindlin, the federal judge overseeing the matter, ruled in September 2009 that it did not apply because the Cheyne deal was a private offering whose ratings were distributed to a small group of investors and not the public at large. Judge Scheindlin agreed with the plaintiffs, who argued that the ratings were not opinions but were misrepresentations that were possibly a result of fraud or negligence.

“The disclaimers in the Information Memoranda that ‘a credit rating represents a rating agency’s opinion regarding credit quality and is not a guarantee of performance or a recommendation to buy, sell or hold any securities,’ are unavailing and insufficient to protect the rating agencies from liability for promulgating misleading ratings,” Judge Scheindlin ruled.

The judge also ruled against the defendants’ motion that documents and depositions generated in the case should be sealed. As a result, e-mails and deposition transcripts were filed with the court on Monday, showing how closely agency officials rating the deal had collaborated with Morgan Stanley, the firm that hired them to rate Cheyne’s securities.

Former Brokers Say JPMorgan Favored Selling Bank’s Own Funds Over Others

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

July 2, 2012, 9:06 pm

Amid the market volatility, ordinary investors are leaving stock funds in droves.

In contrast, JPMorgan is gathering assets in its stock funds at a rapid rate, despite having only a small group of top-performing mutual funds that are run by portfolio managers. Over the last three years, roughly 42 percent of its funds failed to beat the average performance of funds that make similar investments, according to Morningstar, a fund researcher.

“I was selling JPMorgan funds that often had weak performance records, and I was doing it for no other reason than to enrich the firm,” said Geoffrey Tomes, who left JPMorgan last year and is now an adviser at Urso Investment Management. “I couldn’t call myself objective.”

…

There is also concern that investors may not have a clear sense of what they are buying. While traditional mutual funds update their returns daily, marketing documents for the Chase Strategic Portfolio highlight theoretical returns. The real performance, provided to The Times by JPMorgan, is much weaker.

Marketing materials for the balanced portfolio show a hypothetical annual return of 15.39 percent after fees for three years through March 31. Those returns beat a JPMorgan-created benchmark, or standard of comparison, by 0.73 percentage point a year.

The actual return was 13.87 percent a year, trailing the hypothetical performance and the benchmark. All four models with three-year records were lower than the hypothetical performance and the benchmarks.

…

Regulators tend to discourage the use of hypothetical returns. “Regulators frown on using hypothetical returns because they are typically very sunny,” said Michael S. Caccese, a lawyer for K&L Gates.

Crossposted from The Stars Hollow Gazette

Barclays fined for manipulation of Libor

By Danielle Douglas, Washington Post

Published: June 27

The British bank admits to scheming to manipulate rates to increase profits and hide the reality of its distress during the financial crisis. Regulators suspect Barclays did not act alone, but was part of a larger conspiracy to set artificially low rates for Libor and the Euro interbank offered rate, or Euribor.

The U.S. Commodities Future Trading Commission uncovered evidence of Barclays senior management and numerous traders in London, New York and Tokyo making false reports to improve the bank’s trading position dating to 2005, according to the complaint filed Wednesday. At the height of the recession, the bank submitted low figures to keep rates down and to deflect public scrutiny about its condition.

“When a bank acts in its own self-interest by attempting to manipulate these rates for profit, or by submitting false reports . . . to lower submissions to guard the bank’s reputation, the integrity of benchmark interest rates is undermined,” David Meister, director of enforcement at the CFTC, said in a statement.

Counterparites: Barclays’ $450 million LIBOR settlement

By Ben Walsh, Reuters

June 27, 2012

The importance of Libor and, to a lesser extent, Euribor, is hard to overstate. They are used to value of hundreds of trillions of dollars of financial instruments. Or as Matt Levine puts it, they “set the rates on pretty much all the loans and swaps in the world … CFTC order mentions $350 trillion of [over-the-counter] swaps, $10 trillion of loans, and $437 trillion of CME eurodollar contracts indexed to Libor alone”.

In that context, it’s fair to ask what’s $450 million compared with a scheme like that? Not much, proportionally. And Barclays won’t face criminal prosecutions, because of what the DOJ calls its “extraordinary cooperation”. Individual employees, though, are the subject of ongoing criminal investigation.

This Week in Financial Not-Crime

By: masaccio, Firedog Lake

Wednesday June 27, 2012 1:47 pm

(T)oday we learn that manipulating LIBOR isn’t a crime. Barclays Bank paid $450 million to settle charges that it deliberately manipulated the bench-mark interest rate used to establish how much people pay on $350 billion worth of credit cards, student loans and mortgages. It’s also good news for other banksters who haven’t even been sued, like HSBC, Citigroup, JPMorgan Chase and other firms that are being looked at by regulators around the world.

Apparently the manipulation ran both ways, to increase the rate artificially for direct profit, and to reflect a lower rate to hide the fact that other banks were charging Barclays more than other banks because of its perceived weakness. Still, it’s hard to see a connection between a $450 million fine and the massive profits that could come by increasing LIBOR even fractionally. If LIBOR were .1% higher on $350 billion of debt, that comes to $350 million per year. The fraud went on for at least 4 years, which in my example means $1.4 billion in profits, all going directly to the bottom line.

Quelle Surprise! Barclays Settlement on Massive Interest Rate Price Fixing Illustrates Bank Crime Pays Well

Yves Smith, Naked Capitalism

Thursday, June 28, 2012

Barclays is first to settle, and given the scale and potential profitability of this activity, the fine looks paltry: $450 million among the FSA, the CFTC, and the Department of Justice (£230 million to the US authorities, £60 million to the FSA). The DOJ has granted “conditional leniency” on anti-trust charges. Price fixing is criminal under the Sherman Act. Four top executives, including CEO Bob Diamond are also giving up bonuses this year.

…

But all we need to do is contrast this case with the municipal bid-rigging prosecution described by Matt Taibbi in the current Rolling Stone. Here you have three individuals at GE Capital going to jail for price fixing, which is crime under the Sherman Act. But they were merely the arms and legs of big banks. Where were the prosecutions of the higher ups, or of the senior officers of banks who were in on this con? We see the same pattern over and over: justice is meted out only on the foot soldiers, those far enough away from the executive ranks so as not to call into question the integrity of the system. The irony of it all is the public is well aware of how crooked the financial services industry is (the poll data alone is proof). But for the elites, it is vital that they not admit that something is rotten in Denmark, for if they did, they’d have to do something about it.

A Huge Break in the LIBOR Banking Investigation

Matt Taibbi, Rolling Stone

POSTED: June 28, 10:15 AM ET

This is unbelievable, shocking stuff. A sizable chunk of the world’s adjustable-rate investment vehicles are pegged to Libor, and here we have evidence that banks were tweaking the rate downward to massage their own derivatives positions. The consequences for this boggle the mind. For instance, almost every city and town in America has investment holdings tied to Libor. If banks were artificially lowering the rates to beef up their trading profiles, that means communities all over the world were cheated out of ungodly amounts of money.

First there were huge bid-rigging settlements for Chase, UBS, Bank of America, GE and Wachovia. Now we’ve got a $450 million settlement for Barclays for Libor manipulation, and one imagines this won’t be the end of it. Anyway, more on this to come soon, and if you’re wondering, yes, there should be a lot more press on this.

UK probing more banks for interest rate fixing

By ROBERT BARR, Associated Press

20 minutes ago

Osborne said Barclays was not the only bank to be involved in market fixing. Beyond the U.K., there are also investigations in several countries involving numerous global banking groups.

…

“Banks were clearly acting in concert,” said Andrew Tyrie, a British lawmaker who chairs the influential Treasury Committee in the House of Commons. “I fear it’s not going to be the end of the story, that we are going to find that other banks have been involved.”

…

“If Bob Diamond had a scintilla of shame, he would resign,” said Matthew Oakshott, a member of the House of Lords. “If Barclays’ board had an inch of backbone between them, they would sack him.”

Prime Minister David Cameron, when asked whether Diamond should resign, said he thinks “the whole management team have got some serious questions to answer. Let them answer those questions first.”

The massive fines are unlikely to be the end of the pain for Barclays. The cost of lawsuits related to the LIBOR scandal will likely be bigger, said Sandy Chen, banking analyst at Cenkos Securities.

“Since Royal Bank of Scotland, HSBC and Lloyds Banking Group have also been named in lawsuits, we expect they will also face significant fines and damages. We are penciling in multi-year provisions that could run into the billions,” Chen said.

Leading article: A sick banking culture that cannot be tolerated

The Independent

Friday 29 June 2012

Politicians have attempted with varying degrees of rigour to introduce rules preventing a recurrence. Mostly, in the face of determined lobbying by the banks (led in the UK by Barclays), they have retreated or watered down their proposed measures. But it is obvious now that the authorities are only scratching at the surface: a far stronger hand is required.

For a start, they should act immediately and decisively. Fining a bank has little effect: what is required is the naming and shaming and driving from office of those involved. The era of entitlement – something we hear an awful lot about in relation to those at the other end of society, on benefits – must be brought to an end for bankers. Incredibly, only one UK top banker has been punished for his bank’s role in provoking the credit crunch: Fred Goodwin lost his job and subsequently, his knighthood. Now, with a second storm engulfing the sector, that cannot be allowed to happen again. Light-touch regulation and, with it, light-touch penalties should be banished. In that respect, Bob Diamond is right: the time for mere remorse is well and truly over.

Barclays Libor fix trail leads to senior managers

By Sarah White, Reuters

Wed Jun 27, 2012 6:09pm EDT

Staff responsible for submitting rates in some instances told colleagues of “internal political” pressure to set these low, the FSA’s report shows.

Barclays “senior management at high levels” became concerned over the media scrutinizing the bank’s funding access early in the financial crisis, in August 2007.

“Senior management’s concerns in turn resulted in instructions being given by less senior managers at Barclays to reduce Libor submissions in order to avoid negative media comment,” the UK’s FSA said in its report. “The origin of these instructions is unclear.”

The U.S. CFTC said specific instructions to lower submissions came from “senior Barclays Treasury managers”. They asked submitters to provide rates at a level where Barclays wouldn’t be “sticking its head above the parapet”.

Can Bob Diamond hang on after Barclays Libor scandal?

Nils Pratley, The Guardian

Wednesday 27 June 2012 11.37 EDT

Barclays tried to manipulate a $550tn market for almost half a decade. Internal controls and risk management functions were inadequate. The compliance department failed to do its job. The bank’s actions created the risk that the stability of the UK financial system would be threatened.

Add up that collection of misdemeanours and even £290m of fines, plus a voluntary waiving of boardroom bonuses, is woefully inadequate. The outside world will want to know why no director of Barclays has offered his resignation.

…

None of the various regulators’ reports suggest that Diamond or any other executive director at Barclays knew what was going on – they, we must assume, are not the “senior management” referred to in the FSA report who gave instructions to reduce Libor submissions. But should the top brass have known what was going on? Why doesn’t the buck stop at the top when the reputation of the bank has been so badly damaged?

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.

…

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.

…

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.

…

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

…

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.

…

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.

…

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.

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.