Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
When Cities Go Bankrupt: Stockton, California
By ON C. OGG - 247WallSt.com
Companies go bankrupt all the time. Owning a business comes with risks like solvency, credit, operational, and management (among other risks). But the thought of a government entity going bankrupt seems hard to imagine. All it requires is a lack of revenues and a poor economy, and suddenly a city or county can find itself unable to pay its employees, ongoing bills, contractors, and even its interest payments on municipal bonds.
Meredith Whitney took a lot of heat for predicting the demise of many municipalities even though some municipalities have gone bankrupt. Chalk up one more: Stockton, California.
U.S. economy likely needs more help: Fed's Evans
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve likely will have to take further steps to boost the economy, the central bank's leading advocate for so-called quantitative easing said Wednesday.
"At some point, we are likely to need to do more," Chicago Fed President Charles Evans said in an interview with reporters. Evans isn't a voting member this year on the Federal Open Market Committee.
Bank downgrades trigger billions in collateral calls
27 June 2012 | By Christopher Whittall - IFRE.com
A series of ratings downgrades from Moody's last week has created an unwelcome but manageable liquidity squeeze on three major banks, by forcing them to post billions of dollars in additional collateral against derivatives exposures.
Moody's completed its rating review of international banks last Thursday and downgraded three major derivatives dealers below the crucial Single A threshold, which will likely have led to hefty collateral calls from counterparties.
How State Spending Cuts Are Killing the Economy
By Jordan Weissmann - TheAtlantic.com
President Obama might have been wrong to say the private sector was "doing fine," but he couldn't have been more right when he pinpointed the public sector as one of the biggest weaknesses in the economy. State and local governments have cut more than 100,000 jobs over the past year, and it's doing a number on the economy: [see graph]
Jim O'Neill: Everyone could be "taken down" by euro crisis -
Jim O'Neill, chairman of Goldman Sachs Asset Management, says there is a simple, political solution to the crisis in the euro zone. But if politicians fail to fix it, Europe's struggle could engulf the entire world economy. (June 25, 2012)
European Disunion Faces Endgame
[Google title for free article pass]
By SIMON NIXON - WSJ.com $$
One test of whether proposals for European banking, fiscal and political union circulated ahead of Thursday's summit will calm the crisis is to ask a simple question: Do the proposals make it more likely that France raises its retirement age to 67? It was only recently reduced to 60 for some workers.
Put another way, will the proposals make it more likely that struggling Italian companies can lay off underperforming workers without the say-so of a judge? Or, to labor the point, will they make it more likely Spain shuts down the branches of failed banks rather than keeping them afloat?
Germany offers vision of federalism for the European Union
By Anthony Faiola and Michael Birnbaum - WashingtonPost.com
BRUSSELS — Political posters in Rome are comparing her to Hitler. A popular British magazine dubbed her "Europe's most dangerous leader." But could German Chancellor Angela Merkel — the frugal physicist foisting tough austerity on the region's hard-hit economies — really be the most pro-European leader in Europe?
Merkel arrives here Thursday for a European Union summit, with the stoic 57-year-old raised in East Germany again seen as the chief stumbling block to a shock-and-awe response to the region's debt crisis. Jealously guarding the purse strings of Germany — an anchor of economic might and stability in a region adrift in financial trouble — the leader nicknamed "Frau Nein" by the European press is resisting calls to roll out a bevy of measures seen as possible quick fixes to the crisis.
* * * * *
A nationwide bid-rigging scam
in the municipal bond markets...
The Scam Wall Street Learned From the Mafia How America's biggest banks took part in a nationwide bid-rigging conspiracy - until they were caught on tape
By Matt Taibbi - RollingStone.com
Someday, it will go down in history as the first trial of the modern American mafia. Of course, you won't hear the recent financial corruption case, United States of America v. Carollo, Goldberg and Grimm, called anything like that. If you heard about it at all, you're probably either in the municipal bond business or married to an antitrust lawyer. Even then, all you probably heard was that a threesome of bit players on Wall Street got convicted of obscure antitrust violations in one of the most inscrutable, jargon-packed legal snoozefests since the government's massive case against Microsoft in the Nineties – not exactly the thrilling courtroom drama offered by the famed trials of old-school mobsters like Al Capone or Anthony "Tony Ducks" Corallo.
But this just-completed trial in downtown New York against three faceless financial executives really was historic. Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.
Matt Taibbi and Yves Smith
The tangled web of banks and government with Rolling Stone's Matt Taibbi and Yves Smith of the website Naked Capitalism Matt Taibbi and Yves Smith
China Embraces Ponzi-Bonds
by MIKE WHITNEY - CounterPunch.org
China is preparing to launch a program that will create the same complex debt-instruments that triggered the global financial crisis in 2008. The pilot program will allow banks to convert pools of loans into securities via off-balance sheet securities firms called Special Purpose Vehicles (SPV) or Structured Investment Vehicles (SIV). The process, which is called securitization, helps banks to circumvent capital requirements by hiding debt on off their books, thus, allowing them to increase leverage by many orders of magnitude. Securitization turbo-charges credit expansion while concealing the risks from shareholders, investors and depositors.
Why Barclays coughed up so much for Lie-bor Egregious behavior led to massive settlement
WASHINGTON (MarketWatch) — Even by Wall Street standards, the decision by Barclays to pay nearly a half billion dollars to make American and British regulators end lawsuits was a steep one.
But a reading of the evidence stacked against the firm, now cleverly dubbed "Lie-bor," explains why.
The emails and phone calls regulators uncovered tell the whole — if grammatically challenged — story of how the bank manipulated a key interest rate, called LIBOR, so that derivatives traders could maximize the value of their positions and so senior managers could lie about the bank's financial health in the midst of the crisis.
'Audit the Fed' bill advances in House
By Stephen Dinan-The Washington Times
The House oversight committee voted Wednesday to demand a broad audit of the Federal Reserve system by congressional investigators - a major move lawmakers said is designed to bring accountability to the murky workings of the independent board.
The bill was sponsored by Rep. Ron Paul, the Texas Republican who turned the push for an audit into a powerful campaign slogan and whose criticism of the Fed's monetary policy drew hundreds of thousands of voters into the political process.
More than 60 banks attacked in massive cyber fraud ring
SKY NEWS/NEWSCORE - NYPost.com
LONDON -- About $75 million has been stolen from bank accounts in a massive cyber bank heist after fraudsters raided dozens of financial institutions around the world.
According to a joint report by software security firm McAfee and Guardian Analytics, more than 60 firms have suffered from what it has called an "insider level of understanding."
Peter Schiff: America the next Greece?
Peter Schiff, CEO and chief global strategist at Euro Pacific Capital, explains why Washington's Keynesian approach to stimulating the economy has led to more overspending and excessive debt levels, during a Fraser Institute policy briefing on June 5 in Vancouver.
Hard to understand why Fed won't do more, Evans says
By Ann Saphir
CHICAGO | Wed Jun 27, 2012 3:02pm EDT
(Reuters) - Chicago Federal Reserve Bank President Charles Evans, one of the U.S. central bank's strongest advocates for further monetary policy easing, said Wednesday he is flummoxed by the Fed's timidity in the face of high unemployment and low inflation.
At its policy-setting meeting last week, Fed officials sharply slashed their gross domestic product forecasts for 2012 and 2013 and marked down the outlook for inflation.
Those changes to the U.S. central bank's summary of economic projections, or SEP, suggest progress on its twin goals of full employment and stable prices is slowing if not stalled.
One on One with John Williams
By Greg Hunter's USAWatchdog.com
Anyone who thinks the U.S. is in recovery should stop listening to the mainstream media and listen to John Williams. He heads up Shadowstats.com, and is one of the few economists who crunches the numbers to give unvarnished true statistics. Adjusted for real inflation of about 7%, Williams says, "GDP has plunged, and we have been bottom bouncing" ever since the financial crisis started. Williams says, "The next crash will be a lot worse (than 2008) because it will push us into the early stages of hyperinflation." He predicts this will happen "by the end of 2014– at the latest." Long before 2014, Shadowstats.com thinks there is a good chance of "panic selling of the U.S. dollar," if the Federal Reserve starts another round of money printing (QE3) to save the system and the big banks.
If Americans 'Vote Their Wallets,'
What Will That Mean in November?
By Rich Smith, The Motley Fool - DailyFinance.com
Once upon a time (circa 1992), a certain political pundit coined the clever phrase "It's the economy, stupid," whispered it in Bill Clinton's ear, and cemented Democrats' hold over the White House for the next eight years. Ever since, politicians have taken the advice to heart.
In an election year, voters are expected to "vote their pocketbooks" -- incumbents tend to win in good economies, and challengers in bad ones. One study published earlier this year argued that "economic and institutional factors [account for] about 75% of the variation of the popular vote in presidential elections since 1916."
Top Democrat Says
Skipping National Convention Is A Good Idea
By PEMA LEVY - TalkingPointsMemo.com
A top Democrat tasked with winning back the House of Representatives isn't upset with vulnerable Democrats who have decided to skip the party's national convention in Charlotte, N.C. — a growing list that includes several candidates DCCC Chairman Steve Israel is helping win election to the House in November.
In fact, the chairman thinks it's a great idea.
"If they want to win an election, they need to be in their districts," Israel said at a Reuters event in Washington Tuesday. "I don't care if the president was at 122 percent favorability right now," he said, disregarding the idea that poll numbers are keeping Democrats away. "I think [candidates] should be in their districts."
First, Don't Vote Celente Launches 2nd American Revolution:
Puts His Money Where His Heart Is
Gerald Celelnte, Trends Journal - LewRockwell.com
KINGSTON, NY, 26 June 2012 – Gerald Celente's forecast is clear – The 2nd American Revolution is on the horizon. And this American Patriot has done more than just sign up to join the fight, he's established its headquarters.
Inspired by its potent symbolic value, Celente has purchased the 1750s "Franz Roggen House," a stately stone colonial set on the northeast corner of John and Crown Streets, in Kingston's historic Stockade District. This is the only intersection in the United States that boasts pre-revolutionary stone buildings on all four corners.
Oh, really... think again, Mr. President. White House: 'Millions and millions and millions of dollars'
of ads turned Americans against Obamacare
By Charlie Spiering - WashingtonExaminer.com
On the eve of the Supreme Court ruling on Obamacare, White House Press Secretary Jay Carney was asked why he thought a recent WSJ/NBC poll showed that 37 percent would be pleased if the law was ruled unconstitutional. Only 22 percent said they would be disappointed.
In response, Carney referenced the "sheer volume" of negative advertising against the health care bill, citing the "millions and millions and millions of dollars" that was spent to "discredit" Obama's signature achievement.
Patrick Kennedy warns of Tea Party "rampage"
if SCOTUS upholds Obamacare
By Philip Klein - WashingtonExaminer.com
Patrick Kennedy, a former representative from Rhode Island and son of the late Ted Kennedy, warned in a fundraising email for Congressional Democrats that if the U.S. Supreme Court upholds President Obama's health care law, then "dangerous Tea Party extremists will go on a rampage."
The fundraising email was sent out Wednesday afternoon, to raise money for the Democratic Congressional Campaign Committee's "Health Care Rapid Response Fund" ahead of Thursday morning's expected ruling by the Supreme Court on the constitutionality of the health care law.
Tax Hikes in Obamacare: How Will SCOTUS Rule?
By Ryan Ellis and John Kartch - ATR.org [PDF]
Obamacare law contains 20 new or higher taxes on American families and small businesses
On the eve of the Supreme Court's decision on Obamacare, taxpayers are reminded that the President's healthcare law is one of the largest tax increases in American history.
Obamacare contains 20 new or higher taxes on American families and small businesses. On Thursday, Americans for Tax Reform will do a full analysis of the tax implications of the Court's decision.
Arranged by their respective effective dates, below is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Obamacare, where to find them in the bill, and how much your taxes are scheduled to go up as of today:
NY's $51.71-an-hour summer job
By RUSSELL SYKES - NYPost.com
The small Hudson Valley city of Poughkeepsie is now home to some of the best-paying summer jobs ever: $51.71 an hour.
That's right: $51.71 an hour.
The project started off as perfectly sensible. The work involves restoring Fallkill Creek, damaged in last summer's post-Hurricane Irene flooding. To get the job done and put up to 150 unemployed young people to work, the state Labor Department tapped a federal storm-cleanup grant.
So far, so good: There's work that needs to be done, people who need work and a way to pay for it all.
But $51.71 an hour?
Clearing debris and lifting heavy objects isn't easy, but why pay temporary manual laborers the same hourly rate as a skilled employee in a $100,000-a-year full-time job?
Karl Marx on a Credit Card: Priceless Karl Marx Credit Cards Prove a Hit in Eastern Germany
By Sophie Duvernoy, Reuters - DailyFinance.com
Two decades after the fall of the Berlin Wall, some eastern Germans are once again carrying round images of Karl Marx -- if only in their pockets.
The disappearance of communist former East Germany has not deterred them from using credit cards emblazoned with the image of the man who foretold the end of capitalism and the triumph of communism.
More than a third of customers at Sparkasse Bank in Chemnitz opted for the picture of a bronze bust of the bearded 19th-century German-born philosopher, bank spokesman Roger Wirtz said.
Betty Crocker faces boycott for endorsing gay marriage
By Paul Bedard - WashingtonExaminer.com
The Washington-based National Organization for Marriage, created to fight gay marriage proposals, is betting that Betty Crocker would be on their side. Because on Tuesday, the activist group announced a boycott of General Mills, owners of the Betty Crocker brand, which this month announced its opposition to a ban on same-sex marriage in Minnesota, their headquarters.
"We value diversity. We value inclusion," the food producer said in a letter, making it one of the biggest corporate voices for same-sex marriage.
The FBI's Secret Surveillance Letters to Tech Companies
By Jennifer Valentino-DeVries - WSJ.com
Just what kind of information can the government get with a so-called "national security letter" – the tool that allows investigators to seek financial, phone and Internet data without a judge's approval?
The letters let the Federal Bureau of Investigation get information without going before a judge or grand jury if it's relevant to a national security investigation. The letters have been around since the 1980s, but their use grew after the Sept. 11, 2001 terrorist attacks and passage of the USA Patriot Act. Tens of thousands of the requests are sent each year, but they are generally subject to strict secrecy orders.
Big Blue is turning into your Big Brother
By John Crudele - NYPost.com
Everyone knows that IBM is a venerable computer company, but few people realize that it is a bigger snoop than TMZ.
Take, for instance, this past Memorial Day weekend. Before that holiday, IBM put out something it calls the Social Sentiment Index. The gauge predicted that there would be a big increase in people traveling because more folks were talking about going somewhere.
But how'd the Armonk, NY-based computer giant know what people were talking about? Simple — it was monitoring public opinion by reading your online messages.
Colorado wildfires: Several fires explode across Front Range
By Jeremy P. Meyer - DenverPost.com
A three-day-old wildfire erupted with catastrophic fury Tuesday, ripping across the foothills neighborhoods of Colorado Springs, devouring an untold number of homes and sending tens of thousands fleeing to safety in what was shaping up as one of the biggest disasters in state history. "This is a firestorm of epic proportions," said Colorado Springs Fire Chief Richard Brown. The Waldo Canyon fire in El Paso County — which had been growing in the forested hills on the city's west side — blew into an inferno late in the afternoon, raging over a ridge toward densely populated neighborhoods.
An apocalyptic plume of smoke covered Colorado's second-largest city as thousands of people forced to evacuate clogged Interstate 25 at rush hour trying to get to their homes or to get out of the way.
Fight to save Air Force Academy Colorado wildfire's night of terror
leaves thousands displaced, tough battle continues
AP - WashingtonPost.com
COLORADO SPRINGS, Colo. — Fire crews fought to save the U.S. Air Force Academy and residents begged for information on the fate of their homes Wednesday after a night of terror sent thousands of people fleeing a raging Colorado Springs wildfire.
More than 30,000 have been displaced by the fire, including thousands who frantically packed up belongings Tuesday night after it barreled into neighborhoods in the foothills west and north of Colorado's second-largest city. With flames looming overhead, they clogged roads shrouded in smoke and flying embers, their fear punctuated by explosions of bright orange flame that signaled yet another house had been claimed.
Trauma of Colorado's Waldo Canyon fire:
'It's in our neighborhood'
Denver Post Staff
As the Waldo Canyon fire burned out of control Wednesday, stories emerged of harrowing escapes from the flames, heartbreaking realizations that homes were gone forever, and heroic efforts by residents of Colorado Springs to help their besieged neighbors. Here are some of those stories:
Brian Holcombe was talking on a cell phone with his wife when she got the news that the flames had crossed over the Flying W Ranch no more than 50 yards from their home.
Has Your Computer Been Violated? The Coming Internet-Based Global War
by RUSSELL D. HOFFMAN - CounterPunch.org
If you think your computer might be vulnerable to hackers…. you're probably right.
Almost every week these days, I get an email from someone's infected computer, asking me to open an attachment. It was a local reporter's system last week. Maybe it will be yours next. Maybe it will be mine.
Major corporations are hacked with frightening regularity. Passwords and identities are stolen, credit card numbers are distributed. Lives are disrupted. It happens all the time.
Computer security software is notoriously difficult to install and maintain.
The #1 vulnerability?
Users who never even change the default passwords! (Usually username: admin, password: admin)
'Girls Who Code' Seeks to Train Women for Tech Fields
By Shira Ovide - WSJ.com
A shortage of female workers in science and engineering has long posed an image problem for Silicon Valley. Now a one-time congressional candidate is trying to make a difference, starting with a summer training program in New York City.
A new organization calledGirls who Code is starting an eight-week program in July for 20 high-school-age girls, who will learn how to build websites and mobile apps and start their own companies. There will also be workshops on topics such a financial literacy, computer science and robotics. The group said it has financial backing from companies including Google, eBay, General Electric and Twitter.
Buy Your Very Own Tuscan Village (on eBay!)
By Megan Garber - TheAtlantic.com
Pratariccia is a medieval village that is perched on hilltops above Tuscany's Casentino Valley. It's owned, currently, by a religious order. It's also, pretty much, empty: Fifty years ago, as Italy experienced an economic boom, the settlement's farmers and shepherds abandoned it for factory work. Now, Pratariccia is a ghost town. But a really, really beautiful one.
For years, Pratariccia's owners have been trying to sell it -- in all, a collection of 25 cottages and nearly 20 acres of land. And for the low, low price of €2.5 million (just over $3 million). And while that would seem to be, given that it buys you an entire town in Tuscany, a pretty good deal ... Pratariccia's owners have had trouble selling the village through traditional real estate agencies.
1 in 5 smartphones will be NFC-capable by 2014 R.I.P., Credit Cards: New Tech May Signal the Death of Plastic
By The Motley Fool - DailyFinance.com
On a frigid February evening in 1949, a New York City businessman named Frank McNamara made an embarrassing mistake that would end up forever changing the world.
Among other things, this fateful error would ultimately spawn a $2.5 trillion industry, redefine the way business was done in nearly every country on Earth, and launch countless Fortune 500 companies.
It's an interesting story, to be sure, but perhaps even more intriguing is the fact that there's now a groundbreaking technology out there that could bring the 63-year-old industry McNamara unwittingly created to its knees.
The iPhone Turns Five Forget the shouting about 'open' or 'closed' systems.
The magic is in the dynamics of platform competition.
By THOMAS W. HAZLETT - WSJ.com
On June 29, 2007, thousands of fan-boys and -girls camped in long lines to inhale a wisp of sweet techno fairy dust. The new iPhone rocked the world. Revolutionary in design, function and ecosystem, it set off the mobile data tsunami. In three days, Apple sold a million of them. The Economist asked: "Where would Jesus queue?"
The iconic innovation of the Information Age, however, inspired a fierce counterattack. Columbia University Law Prof. Tim Wu condemned the iPhone business model as "iPhony." The handset was cool, he said, but the business model tied the customer to AT&T's wireless network (where Apple struck a four-year exclusive deal) and to iTunes (Apple's content store). Soon the Apple App Store would deepen the master-slave relationship.
High-Tech Glasses Steal Show
At Google Developer Conference
By CARL FRANZEN - TalkingPointsMemo.com
Google executives on Wednesday announced a host of new products and services at the company's developers conference, but none quite as surprising or potentially revolutionary as a pair of prototype high-tech glasses, Google Glass, which Google will begin shipping in early 2013, exclusively to U.S. software developers who attended the event, at a cost of $1,500 per pair.
These prototype devices are known as Google Glass "Explorer Edition." The company has not yet said when the product will be available for general consumers, but with a pledge to ship physical pairs of the glasses, they do not appear to be vaporware.
Google Glass and the genesis of the hive mind
By VentureBeat.com - WashingtonPost.com
During today's stunt-filled Google Glass demo, I found myself inexplicably perturbed — even profoundly depressed.
The charismatic Sergey Brin sprinted onstage at Google I/O, wearing the futuristic device; he was joined by extreme sportsters and a redheaded product lead who looked every inch the futuristic power-creative. Together, they showed the possibilities offered by Glass: constant connectivity, a human's-eye view of every aspect of life, sharing without ceasing.
The crowd of nerdcore developers and press exploded in applause at every interval. They were eating it up.
'UFO' at the bottom of the Baltic Sea
'cuts off electrical equipment when divers get within 200m'
By EDDIE WRENN - DailyMail.co.uk
The divers exploring a 'UFO-shaped' object at the bottom of the Baltic Sea say their equipment stops working when they approach within 200m.
Professional diver Stefan Hogerborn, part of the Ocean X team which is exploring the anomaly, said some of the team's cameras and the team's satellite phone would refuse to work when directly above the object, and would only work once they had sailed away.
He is quoted as saying: 'Anything electric out there - and the satellite phone as well - stopped working when we were above the object.
'And then we got away about 200 meters and it turned on again, and when we got back over the object it didn't work.'
Russian heartland fears NATO transit
By Kathy Lally - WashingtonPost.com
ULYANOVSK, Russia — The people of Ulyanovsk, a poverty-stricken city sitting high on the banks of the mighty Volga River, are having a hard time accepting the idea that NATO is their friend and that they should help the alliance extricate itself from Afghanistan.
Russia is officially anti-NATO. Most Russians fear it. They say the West betrayed them: Soviet President Mikhail Gorbachev let the Iron Curtain fall along with the Berlin Wall on his understanding that the military alliance would not move eastward.
U.S. Border Patrol Agents Are Being Trained
To Run Away And Hide If Someone Starts Shooting
By Michael Snyder - EndOfTheAmericanDream.com
U.S. border patrol agents have incredibly dangerous jobs and they are the first line of defense for our homeland. But instead of training and equipping them properly to defend themselves and all the rest of us, the Obama administration is actually attempting to turn them into spineless jellyfish. If you can believe it, U.S. border patrol agents are now actually being trained to run away and hide if they encounter an "active shooter" in a public location. If they are cornered by the shooter, they are being trained to "throw things" at the shooter. What in the world is happening to this country? We might as well not even have borders. The Obama administration has made it abundantly clear that it has absolutely no intention of protecting our borders or of enforcing our immigration laws. Protecting our borders is one thing that the U.S. Constitution requires the president to do, but Barack Obama and several other past presidents have steadfastly refused to do this. So just what in the world is going on here?
The American War Racket
by Bill Bonner, Daily Reckoning - LewRockwell.com
Normandy, France – One of the advantages of moving overseas is that you see home more clearly. We came to France last week. Already, America comes into clearer focus.
The French press seems fascinated by the relationship between Francois Hollande's two mistresses. The former – a candidate for president herself – dumped him when he took up with the latter. The former is also the mother of Hollande's 4 children, which complicates things further.
The latter hates the former. The former hates the latter.
What Did Turkey Think Syria Would Do?
Syria and the Phantom
by CONN HALLINAN - CounterPunch.org
What was that Turkish F-4 Phantom II up to when the Syrians shot it down?
Ankara said the plane strayed into Syrian airspace, but quickly left and was over international waters when it was attacked, a simple case of carelessness on the part of the Turkish pilot that Syrian paranoia turned deadly.
But the Phantom—eyewitnesses told Turkish television that there were two aircraft, but there is no official confirmation of that observation—was hardly on a Sunday outing. According to the Financial Times, Turkey's Foreign Minister, Ahmet Davutoglu, told the newspaper "the jet was on a test and training mission focused on Turkey's radar defense, rather than Syria."