Tag: ek Politics

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

– Stockton

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.

…

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.

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.

Breaking: Egyptian Election Commission Declares Morsi President

By: Scarecrow, Firedog Lake

Sunday June 24, 2012 7:39 am

First a bonus track-

Green Shoots

Doing The Unthinkable

Terence Burnham is dead wrong.  Krugman actually does prefer Option B (“devalue through a new Spanish currency”)-

What are Spain’s alternatives here? Well, if they still had their currency, their own currency, the answer would be devalue, let the peseta drop, Spanish exports would become a lot more competitive, they’d be well on their way to recovery. They don’t have their own currency, so people are saying: Well, you have to do all this stuff to stay within the Euro. At some point you say: Well, you know if your answer to our problem is just ever more suffering, ever more you know… 25 percent, 50 percent youth unemployment. If that’s your notion of a solution, then maybe although it would be a very terrible thing to have the Euro breakup, maybe that’s better than what we’re doing. So that’s becoming a real possibility now.

An innovation in free speech.  I know I’d much rather watch advertisements than most ‘entertainment’ programming.

American Idol.  Case closed.

Paul Solmon is an ignoramus who never studied Samuelson.

GLOBAL MARKETS-Stocks, oil, gold fall on growth worries

By Caroline Valetkevitch, Reuters

June 21, 2012

NEW YORK, June 21 (Reuters) – Global stocks fell more than 1 percent and Brent crude hit its lowest since December 2010 on Thursday following data showing Chinese, European and U.S. manufacturing activity had slowed further.

The weak data came just a day after the Federal Reserve extended its monetary stimulus program aimed at boosting the U.S. economy.

U.S. stocks added to losses after Goldman Sachs recommended shorting the benchmark S&P 500 index. All three major U.S. indexes were on track for their worst day since June 1.

Gold fell and was on track for its biggest decline in more than three months, hurt by global economic worries, while the U.S. dollar rose against the euro and yen as the Fed’s move disappointed investors who had hoped for a more aggressive policy.

Business activity across the euro zone shrank for a fifth straight month in June and Chinese manufacturing contracted, while weaker overseas demand slowed U.S. factory growth, surveys showed.

Moody’s Said to Be Poised to Announce Bank Downgrades Today

By Howard Mustoe, Bloomberg News

Jun 21, 2012 2:04 PM ET

Moody’s Investors Service has told banks it may later today announce downgrades of the credit ratings of as many as 17 lenders and securities firms with global capital markets operations, according to two people with knowledge of the plans.

…

The company said in February it may lower the ratings of firms including UBS AG (UBSN), Credit Suisse Group AG (CSGN) and Barclays Plc (BARC) as part of a review of how Europe’s sovereign debt crisis was hurting more than 100 lenders. Any downgrades could raise borrowing costs and force banks to increase collateral.

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UBS, Credit Suisse and Morgan Stanley (MS)’s credit ratings may be cut by as many as three levels, Moody’s said in February. Barclays, BNP Paribas SA (BNP), Credit Agricole SA (ACA), HSBC Holdings Plc (HSBA), Goldman Sachs Group Inc. (GS), Deutsche Bank AG (DBK), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C), and Royal Bank of Canada (RY) may be lowered by two, Moody’s said.

Bank of America Corp., Royal Bank of Scotland Group Plc (RBS) and Societe Generale SA (GLE) may be lowered by one grade, it said.

Oil falls below $90 for first time since Dec 2010

By Gene Ramos and David Sheppard, Reuters

Thu Jun 21, 2012 4:04pm EDT

NEW YORK (Reuters) – Brent crude oil slid nearly 4 percent in heavy trading on Thursday, dropping below $90 a barrel for the first time in 18 months as weak economic data from China, the United States and Europe pointed to prospects for slower oil demand.

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Other major commodities also tumbled as gloomy global data darkened the demand outlook for raw materials.

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“Supply is outstripping demand and whatever other data you see out there won’t change that,” said Dominick Chrichella, senior partner at the Energy Management Institute in New York.

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China’s factory sector shrank for an eighth straight month in June as export order sentiment hit its weakest since early 2009, according to a survey indicating the country’s economic trough may extend well into the third quarter.

U.S. jobs data added to the gloom with little change last week in the number of Americans filing new unemployment claims.

Data also showed U.S. manufacturing grew in June at its slowest pace in 11 months, with hiring in the sector hobbled as overseas demand for U.S. products weakened, compounding the dreary economic outlook in the world’s largest oil consumer.

Business activity across the euro zone shrank for a fifth straight month in June, according to the closely watched Markit Flash Composite Purchasing Managers Index.

…

“Really, what we’ve been calling ‘downward momentum’ would now be better described as ‘panic selling,'” said Tom Mooney at Southeast Energy in Houston, Texas.

“Even the most convinced bulls have had to face the reality that, at least for now, their portfolio has been getting ripped up, no doubt with margin calls forcing some to get out.”

Dow down -250.82.  Maria Bartiromo is a hopeless shill, even now plaintively whining “Isn’t there any valuation at which you’d buy banks?”

As Mubarak Lay Dying

Posted by Lawrence Wright, The New Yorker

June 20, 2012

Sixty years ago, a group of military officers, led by Gamal Abdel Nasser and Anwar Sadat, forced Farouk I, an Ottoman leftover who styled himself King of Egypt and Sudan, Sovereign of Nubia, Kordofan, and Nubia, to rush to his yacht and seek exile in Monaco. In this effort, they were assisted by the C.I.A., which was dismayed by the decadence and corruption that characterized Farouk’s reign. The operation was known informally as “Project FF”-Fat Fucker. It was one of the many attempts to steer Egypt in what American policymakers think might be the right direction. They must look back at that period with a sense of woe-if, indeed, they ever reflect on history at all.

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Nasser’s charisma and energy awakened the entire region to the postcolonial era, but he failed to find an accommodation with the Islamic trend, and he turned to Israel as a scapegoat. Sadat, his successor, had the courage to reach a peace treaty with Israel. He saw the foolishness of depending on the Soviet Union as an ally and socialism as an economic model. He also tried to find a way to incorporate the Islamists into civil society, at least by letting them out of prison, and they responded by murdering him.

Hosni Mubarak, who now may be dying-Tuesday, he was briefly reported clinically dead-was an excellent military officer, and a capable bureaucrat, but he had no independent vision and no idea how to escape the impediments to progress that the original coup had imposed. Immediately after Sadat’s assassination, in 1981, Mubarak imposed emergency rule, which essentially authorized unbridled dictatorial power masked by a façade of democratic elections. Under his rule, freedom of speech and assembly were tightly constrained. These restrictions on liberty crushed other forms of political expression, so that the Islamists-the Muslim Brotherhood and more radical forms of political Islam-became the only real way to voice opposition to Mubarak’s reign. Military dictatorship and Islamism became the axis upon which Egyptian politics revolved.

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The decision by the Egyptian military to dissolve a freely elected parliament earlier this month-predicated on a court decision by Mubarak holdovers-amounts to a second military coup. Once again, it has been assisted by the American decision to continue to support the antidemocratic forces that have retarded the development of Egypt. A moderate Islamist government, responsive to the social needs of the country, is the best that the U.S. can expect now, and what the people of Egypt have demanded by their votes.

America is unlikely to have any influence on the future of Egypt if it continually opposes and demonizes the longing of Egyptians to achieve real democratic expression, with all its hazards. Sixty years of unaccountable military dictatorship have shown how sterile the alternative is. … (I)t’s time to pull the plug on American support of this antidemocratic, military regime.

Of course it could merely be a bathroom slip and fall.  Nothing to see here.

Guilt

I am guilty,

But not in the way you think.

I should have earlier recognized my duty;

I should have more sharply called evil evil;

I reined in my judgment too long.

I did warn,

But not enough, and clear;

And today I know what I was guilty of.

Albrecht Haushofer

PBS News Hour

A Mythical Anniversary

June 18, 2012, 3:34 pm

I tried to knock down the simply insane conventional wisdom then gelling among Very Serious People. Intellectually it was, I think I can say without false modesty, a huge win; I (and those of like mind) have been right about everything.

But I had no success in deflecting the terrible wrong turn in policy. Moreover, as far as I can tell none of the people responsible for that wrong turn has paid any price, not even in reputation; they’re still regarded as Very Serious, treated with great deference.

Rachel Maddow

Myths of Austerity

Published: July 1, 2010

When I was young and naïve, I believed that important people took positions based on careful consideration of the options. Now I know better. Much of what Serious People believe rests on prejudices, not analysis. And these prejudices are subject to fads and fashions.

…

This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination – specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy.

…

So the next time you hear serious-sounding people explaining the need for fiscal austerity, try to parse their argument. Almost surely, you’ll discover that what sounds like hardheaded realism actually rests on a foundation of fantasy, on the belief that invisible vigilantes will punish us if we’re bad and the confidence fairy will reward us if we’re good.

Colbert Report

Interest Rates: Varieties of Error

June 19, 2012, 8:57 am

Originally, claims that deficits would drive up rates weren’t based on arguments about solvency; they were based on the “crowding out” claim that the government would be competing with the private sector for a limited supply of savings. Then, when the promised rate spike failed to materialize, this was attributed to Fed purchases, with the claim that rates would spike when those came to an end. Wrong, and wrong again. As I wrote at the time, all this represented a basic misunderstanding of how the economy works.

Now, maybe there’s a solvency issue, and bond vigilantes will turn on America over that – although of course this keeps not happening either to us or to anyone else with their own currency. But you do need to know that many of the people making the solvency argument originally made a completely different argument – one that was completely wrong.

Frederik Pohl and Cyril M. Kornbluth, 1955

Wikipedia–

(I)n this novel corporate lawyers… have gained a stranglehold on the world. Business Law is an extremely lucrative career, while Criminal Law pays enough to afford some of the luxuries of life but not enough to save for the future.

Success means living in a luxurious automated “bubble home” constructed by “GML”, a corporation which is nominally public but whose shares are never traded openly. All work contracts include GML housing as part of the pay scale. Not having a contract job means having to live in a community such as “Belly Rave”, originally a post-war suburban development for returning soldiers, now a slum ruled by teenage gangs. Its original name was “Belle Rêve”.

For the common people, there are bread-and-circuses entertainments in the form of gladiatorial games of various kinds, with monetary rewards for the winners. Some games pit elderly people against each other armed with padded clubs, but others are more deadly.

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(T)he “public assistance” system … ensures that nobody starves, without actually making life worth living. … (R)esidents indulge in a kind of barter, or petty theft, extortion, and gang crime, or simply anaesthetize themselves with liquor.

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Wall Street… has become a hybrid stock-market and public casino.

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The plan Bliss hatches is to bankrupt GML rather than indulge in a proxy battle. Mundin is dispatched to sabotage certain GML houses, including the model in the Smithsonian, at the same time spreading rumors through his political connections.

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(T)hey return to Wall Street where Mundin starts a run on the market by carefully selling off large chunks of the GML stock. After a while the selling takes on a life of its own.

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As the market collapses, the plotters are left with large amounts of cash, which they use to buy up GML and other companies at bargain prices. At the end they are counting their riches and savoring their triumph.

Not currently in print.  Copies in very good+ condition available @ Rudy’s Books for $2.50.

To make a long story short, I once got assigned to cater a volunteer party out of the otherwise discardable leftovers from the rentier crowd.

Once that was done I swore I’d never eat slave food again.