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Michael Haltman

Will the BP oil spill in the Gulf Of Mexico make that company disappear? - 0 views

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    BP bankruptcy: As the oil continues to flow and the environmental disaster continues to grow, it is a scenario that has to be given some credence.
Michael Haltman

Tepco heading towards bankruptcy as executives leave for vacation!* - 1 views

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    As the Congress does its imitation of dealing with the debt ceiling crisis, why is it newsworthy that the Senate has canceled its holiday break?
thinkahol *

The DLC Is Dead - 0 views

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    Ben Smith of the Politico reported yesterday that the Democratic Leadership Council (DLC), the mainstay of the New Democrat movement for thirty years, is on the verge of bankruptcy and has decided to immediately "suspend operations," likely for good.
thinkahol *

Elizabeth Warren - The Two Income Trap: Why Middle-Class Mothers and Fathers Are Going ... - 0 views

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    Elizabeth Warren discusses how the dreams of the middle class american family are being depleted by the dramatic increase in bankruptcies and foreclosures. Warren discusses the role that credit card companies and ballooning interests rates have played in rapidly increasing mortgage rates as well as the how the over consumption myth is clouding our understanding of the average middle class family, who is in fact experiencing a lower standard of living than their parents and still finding themselves one payment away from losing their home. Elizabeth Warren is the Leo Gottlieb Professor of Law at Harvard Law School and chaired the Congressional Oversight Panel created to investigate the U.S. banking bailout . This program originally aired in April 2004. it is being re-aired because Professor Warren's predictions of economic disasters and the reasons for them have proven correct, and she is a candidate to head a commission to guard against recurrence. The Massachusetts School of Law also presents information on important current affairs to the general public in television and radio broadcasts, an intellectual journal, conferences, author appearances, blogs and books. For more information visit http://www.mslaw.edu
rich hilts

To the Government - Sit Down, SHUT UP and Listen or lose your jobs in 2010! - 0 views

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    Joe Biden is out selling the fact that we have to spend money to avoid bankruptcy in the health care industry. I know that most people - 75-80% like what they have. I know that all - every single employer - I have talked to is saying that they WILL dump their health care costs on the government if the issue is forced. That's 160 million insured people.
The Ravine / Joseph Dunphy

Student Debts, Stunted Lives | | AlterNet - 0 views

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    A thought to keep in mind as you read this - what happens to the already overburdened graduate whose job gets outsourced, and then can't find another because he's deemed "overqualified" for the low skilled, low wage jobs available? Answer: Look up "capitalization of interest" and then note that one can't erase student loan debt by declaring bankruptcy. What will result will be the mathematical equivalent of charging compound interest on a loan that the graduate has been deprived of the means of repaying.
thinkahol *

The Pragmatist: Current Economic Depression Requires a Very Thoughtful Default by Next ... - 0 views

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    The current high debt can only be resolved through a properly timed debt default, controlled bankruptcy, and mass restructuring in order to create: 1) an industrial base for post-default recovery2) aggressive drive to court foreign investment It is highly unlikely that American power elites will be able to successfully restructure while preserving large parts of both the political and economic architecture. That is due to 2009 economic foundations being drastically different than in 1870s, 1930s, or 1950s.
thinkahol *

Robert Scheer: Obama's Fatal Addiction - Robert Scheer's Columns - Truthdig - 0 views

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    If it had been revealed that Jeffrey Immelt once hired an undocumented nanny, or defaulted on his mortgage, he would be forced to resign as head of President Barack Obama's "Council on Jobs and Competitiveness." But the fact that General Electric, where Immelt is CEO, didn't pay taxes on its $14.5 billion profit last year-and indeed is asking for a $3.2 billion tax rebate-has not produced a word of criticism from the president, who in January praised Immelt as a business leader who "understands what it takes for America to compete in the global economy." What it takes, evidently, is shifting profit and jobs abroad: As of last year only 134,000 of GE's total workforce of 304,000 was based in the U.S. and, according to The New York Times, for the past three years 82 percent of the company's profit was sheltered abroad. Thanks to changes in the tax law engineered when another avowedly pro-business Democrat, Bill Clinton, was president, U.S. multinational financial companies can avoid taxes on their international scams. And financial scams are what GE excelled in for decades, when GE Capital, its financial unit, which specialized in credit card, consumer loan and housing mortgage debt, accounted for most of GE's profits. That's right, GE, along with General Motors with its toxic GMAC financial unit, came to look more like an investment bank than a traditional industrial manufacturing giant that once propelled this economy and ultimately it ran into the same sort of difficulties as the Wall Street hustlers. As The New York Times' David Kocieniewski, who broke the GE profit story, put it: "Because its lending division, GE Capital, has provided more than half of the company's profit in some recent years, many Wall Street analysts view G.E. not as a manufacturer but as an unregulated lender that also makes dishwashers and M.R.I. machines." Maximizing corporate profits at the taxpayer's expense is what top CEOs are good at, and after all it
Skeptical Debunker

Marshall Auerback: Memo to Greece: Make War Not Love with Goldman Sachs - 0 views

  • We know that the Obama administration will not go after the banksters that created this global financial calamity. It has been thoroughly co-opted by Wall Street's fifth column, who hold most of the important posts in the administration. Europe has even more at stake and has shown somewhat more willingness to take action. Perhaps our only hope for retribution lies there.
  • Some might believe the term "banksters" is too mean. Surely Wall Street was just doing its job -- providing the financial services wanted by the world. Yes, it all turned out a tad unfortunate but no one could have foreseen that so many of the financial innovations would turn into black swans. And hasn't Wall Street learned its lesson and changed its practices? Fat chance. We know from internal emails that everyone on Wall Street saw this coming -- indeed, they sold trash assets and placed bets that they would crater. The crisis was not a mistake -- it was the foregone conclusion. The FBI warned of an epidemic of fraud back in 2004 -- with 80% of the fraud on the part of lenders. As Bill Black has been warning since the days of the Saving and Loan crisis, the most devastating kind of fraud is the "control fraud," perpetrated by the financial institution's management. Wall Street is, and was, run by control frauds. Not only were they busy defrauding the borrowers, like Greece, but they were simultaneously defrauding the owners of the firms they ran. Now add to that list the taxpayers that bailed out the firms. And Goldman is front and center when it comes to bad apples. Lest anyone believe that Goldman's executives were somehow unaware of bad deals done by rogue traders, William Cohan reports that top management unloaded their Goldman stocks in March 2008 when Bear crashed, and again when Lehman collapsed in September 2008. Why? Quite simple: they knew the firm was full of toxic waste that it would not be able to continue to unload on suckers -- and the only protection it had came from AIG, which it knew to be a bad counterparty. Hence on March 19, Jack Levy (co-chair of M&As) sold over $5 million of Goldman's stock and bet against 60,000 more shares; Gerald Corrigan (former head of the NY Fed who was rewarded for that tenure with a position as managing director of Goldman) sold 15,000 shares in March; Jon Winkelried (Goldman's co-president) sold 20,000 shares. After the Lehman fiasco, Levy sold over $6 million of Goldman shares and Masanori Mochida (head of Goldman in Japan) sold $56 million worth. The bloodletting by top management only stopped when Goldman got Geithner's NYFed to produce a bail-out for AIG, which of course turned around and funneled government money to Goldman. With the government rescue, the control frauds decided it was safe to stop betting against their firm. So much for the "savvy businessmen" that President Obama believes to be in charge of Wall Street firms like Goldman.
  • From 2001 through November 2009 (note the date -- a full year after Lehman) Goldman created financial instruments to hide European government debt, for example through currency trades or by pushing debt into the future. But not only did Goldman and other financial firms help and encourage Greece to take on more debt, they also brokered credit default swaps on Greece's debt-making income on bets that Greece would default. No doubt they also took positions as the financial conditions deteriorated-betting on default and driving up CDS spreads. But it gets even worse: An article by the German newspaper, Handelsblatt, ("Die Fieberkurve der griechischen Schuldenkrise", Feb. 20, 2010) strongly indicates that AIG, everybody's favorite poster boy for financial deviancy, may have been the party which sold the credit default swaps on Greece (English translation here). Generally, speaking, these CDSs lead to credit downgrades by ratings agencies, which drive spreads higher. In other words, Wall Street, led here by Goldman and AIG, helped to create the debt, then helped to create the hysteria about possible defaults. As CDS prices rise and Greece's credit rating collapses, the interest rate it must pay on bonds rises-fueling a death spiral because it cannot cut spending or raise taxes sufficiently to reduce its deficit. Having been bailed out by the Obama Administration, Wall Street firms are already eyeing other victims (and for allowing these kinds of activities to continue, the US Treasury remains indirectly complicit, another good reason why one shouldn't expect any action coming out of Washington). Since the economic collapse is causing all Euronations to run larger budget deficits and at the same time is raising CDS prices and interest rates, it is easy to pick off nation after nation. This will not stop with Greece, so it is in the interest of Euroland to stop the vampires now. With Washington unlikely to do anything to constrain Goldman, it looks like the European Union, which is launching a major audit, just might banish the bank from dealing in government debt. The problem is that CDS markets are essentially unregulated so such a ban will not prevent Wall Street from bringing down more countries-because they do not have to hold debt in order to bet against it using CDSs. These kinds of derivatives have already brought down an entire continent -- Asia -- in the late 1990s , and yet authorities are still standing by and basically doing nothing when CDSs are being used again to speculatively attack Euroland. The absence of sanctions last year, when we had a chance to deal with this problem once and for all, has simply induced even more outrageous and fundamentally anti-social behavior. It has pitted neighbor against neighbor -- with, for example, Germany and Greece lobbing insults at one another (Greece has requested reparations for WWII damages; Germany has complained about subsidizing what it perceives to be excessive social spending in Greece). Of course, as far as Greece goes, the claim now is that these types of off balance sheet transactions in which Goldman and others engaged were not strictly "illegal" under EU law. But these are precisely the kinds of "shadow banking transactions" that almost brought down the global financial system 18 months ago. Literally a year after the Lehman bankruptcy -- MONTHS after Goldman itself was saved from total ruin, it was again engaging in these kinds of deals. And it wasn't exactly a low-level functionary or "rogue trader" who was carrying out these transactions on behalf of Goldman. Gary Cohn is Lloyd "We're doing God's work" Blankfein's number 2 man. So it's hard to believe that St. Lloyd did not sanction the activities as well in advance of collecting his "modest" $9m bonus for last year's work.
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    Ok, if a literal armed attack on Goldman is too far-fetched, then go after the firm using the full force of the regulatory and legal systems. Close the offices and go through the files with a fine-tooth comb. Issue subpoenas to all non-clerical staff for court appearances. Make the internal emails public. Post the names of all managers and traders on Interpol. Arrest anyone who tries to board a plane, train, or boat; confiscate their passports; revoke their visas and work permits; and put a hold on their bank accounts until culpability can be assessed. Make life at least as miserable for them as it now is for Europe's tens of millions of unemployed workers.
Skeptical Debunker

Prudential-AIG Deal Another Case of Corporate Empire Building - 0 views

  • In spite of its new whizz-bang CEO, Prudential is a slow-moving but very reliable organization with a level of integrity that is trusted by policyholders. Frankly, that's what you want in an insurance company. I have had a modest U.K. pension with one of its competitors since 1980, and I am constantly worried that some leveraged buyout (LBO) artist will step in, take it over, change the computer system so that information gets lost, outsource customer service, and drive the company into bankruptcy. If you're buying life insurance or pension services, you want a company that's not going to disappear in the next 30 years, and doesn't change its address or computer system too often. Avoid a company like the plague if it is run by whiz kids. However, that's what AIG was like. We know how AIG operated; a guy who thought betting the ranch on the credit default swap market was a good idea ran it. Its Asian operation is no doubt full of similarly clever ideas. Even in the unlikely event that everything there is on the level, the cultural clash with an old-fashioned British insurance company is huge. And why would you pay a PREMIUM for an AIG operation? Like the Kraft/Cadbury deal, Prudential's takeover of AIA is value-destroying. Also like Kraft/Cadbury, it looks likely to destroy a valuable part of the British economy that millions of people have relied upon for generations - only this time the destruction will be caused by the buyer rather than the target. As shareholders we need a new form of corporate governance. Those in management are hired hands. In the old days, large shareholders used to treat management as they would have treated their butler - and management was equally deferential to the owners of substantial percentages of the company's capital. That's how capitalism is supposed to work - with resources deployed in the interests of the owners of capital. We know that system works; economics shows us why it works. The alternative, with resources deployed to satisfy the egos and fill the pockets of the hired hands, has no theoretical justification and little practicality - just as a big country house run in the interests of the butler would be a mess. As capitalists, we must work together to restore capitalism!
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    To inattentive observers, the recent announcement that the British insurance company Prudential PLC (NYSE ADR: PUK) would pay $35.5 billion for American International Group Inc.'s (NYSE: AIG) Asian insurance operation, AIA, might seem like just another belated expansion of the old British Empire - a strange contrast to the sale of the premier British chocolate company Cadbury PLC (NYSE ADR: CBY) to Kraft Foods Inc. (NYSE: KFT) last month. Yet in reality both deals are examples of Empire-building that for shareholders is much more dangerous than the benign British variety - Empire-building by corporate management that runs contrary to capitalist ideals.
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    Monopolies - BAD (Adam Smith even said so!) Companies controlled and run by management (as if it were their own personal fiefdom and with their hands always in the "cookie jar"), rather than shareholders - BAD. BOTH ANTI-CAPITALISTIC. Both the "norm" for "the titans" of "modern [anti] capitalism". We no longer have capitalism (if that, like communism, ever existed in a more or less "pure" form!). We have a kleptocracy of the rich and corporate aristocracy (as incestuously intertwined as the European nobles ever were!).
Skeptical Debunker

Rough Water - 0 views

  • For most of the last 1,500 years, the river supported a sustainable salmon economy. Salmon were at the heart of all the Klamath’s tribal cultures, and Indians were careful not to over-harvest them. Each summer, the lower Klamath’s Yurok and Hoopa tribes blocked the upstream paths of spawning salmon with barriers; then, after ten days of fishing, they removed the barriers, allowing upstream tribes to take their share. As the salmon completed their lifecycle, dying in the waters where they’d been spawned, they enriched the watershed with nutrients ingested during years in the ocean. Among the beneficiaries were at least 22 species of mammals and birds that eat salmon. Even the salmon carcasses that bears left behind on the riverbanks fertilized trees that provided shade along the river’s banks, cooling its waters so that the next generation of vulnerable juvenile salmon could survive. “We tried to go to court, to go through the political process, but it didn’t work. …The big issues were still out there, and we still had to resolve them.” Salmon’s biological family may have started in the age of dinosaurs a hundred million years ago. They’ve survived through heat waves and droughts, in rivers of varying flow, temperature, and nutrient load – but they were as ill-prepared for Europeans’ arrival as the Indians themselves. Gold miners who showed up in the mid-nineteenth century washed entire hillsides into the river with high-pressure hoses and scoured the river’s bed with dredges. Loggers dragged trees down streambeds, causing massive erosion, and dumped sawdust into the river, smothering incubating salmon eggs. Cattle grazed at the river’s edge, causing soil erosion and destroying shade-giving vegetation. Farmers diverted water to feed their crops. The dams were the crowning blows. Between 1908 and 1962, six dams were built on the Klamath. The tallest, the 173-foot-high Iron Gate, is the farthest downstream, and definitively blocked salmon from the river’s upper quarter – after it was built, the river’s salmon population plummeted. In addition, the dams devastated water quality by promoting thick growths of toxic algae in the reservoirs. For Klamath basin farmers, however, the dams were deemed indispensable, as they generated hydropower that made pumping of their irrigation water possible.To the farmers, the potential loss of the dams’ hydropower was considered no less crippling than an end to Klamath-supplied irrigation.
  • For most of the last century, the farmers were oblivious to the damage that dams and water diversions caused downstream, while the tribes and commercial fishermen quietly seethed. The annual salmon run, once so abundant that people caught fish with their hands, was roughly pegged at more than a million fish at its peak; in recent years it has dropped to perhaps 200,000 in good years, and as low as 12,000 – below the minimum believed necessary to sustain the runs – in bad years. Spring Chinook, which once comprised the river’s dominant salmon run, entirely disappeared. Two fish species – the Lost River sucker and the shortnose sucker – that once supported a commercial fishery, were listed as endangered in 1988. Coho salmon were listed as threatened nine years later. All this has had a devastating impact on the tribes. Traditionally able to sustain themselves throughout the year on seasonal migrations of the river’s salmon, trout, and candlefish, tribal members suffered greatly as the runs declined or went extinct. For four decades beginning in 1933, the tribes were barred from fishing the river even as commercial fishermen went unrestricted. Members of the Karuk tribe once consumed an estimated average of 450 pounds of salmon a year; a 2004 survey found that the average had dropped to five pounds a year. The survey linked salmon’s absence to epidemics of diabetes and heart disease that now plague the Karuk. The 2001 cutoff left farmers without irrigated water for the first time in the Klamath Project’s history. Over the next four months, many farmers performed repeated acts of civil disobedience, most notably when a bucket brigade passed pails of banned water from its lake storage to an irrigation canal while thousands of onlookers cheered. The protests attracted Christian-fundamentalist, anti-government, and property rights advocates from throughout the West; former Idaho Congresswoman Helen Chenoweth-Hage likened the farmers’ struggle to the American Revolution.
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  • A year later, it was the tribes’ and fishermen’s turn to experience calamity. According to a Washington Post report, Vice President Dick Cheney ordered Interior Department officials to deliver Klamath water to Project farmers in 2002, even though federal law seemed to favor the fish. Interior Secretary Gale Norton herself opened the head gates launching the 2002 release of water to the Project, while approving farmers chanted, “Let the water flow!” Six months later, the carcasses of tens of thousands of Chinook and Coho salmon washed up on the riverbanks near the Klamath’s mouth, in what is considered the largest adult salmon die-off in the history of the American West. The immediate cause was a parasitic disease called ich, or “white spot disease,” commonly triggered when fish are overcrowded. Given the presence of an unusually large fall Chinook run in 2002 and a paucity of Klamath flow, the 2002 water diversion probably caused the die-off. Yurok representatives said that months earlier they begged government officials to release more water into the lower river to support the salmon, but were ignored. photo courtesy Earthjustice In 2002, low water levels on the Klamath led to the largest adult salmon die-off in the history of the American West. The die-off deprived many tribes-people of salmon and abruptly ended the river’s sport-fishing season, but its impact didn’t fully register until four years later, when the offspring of the prematurely deceased 2002 salmon would have made their spawning run. By then the Klamath stock was so depleted that the federal government placed 700 miles of Pacific Ocean coastline, from San Francisco to central Oregon, off limits to commercial salmon fishing for most of the 2006 fishing season. As a result, commercial ocean fishermen lost about $100 million in income, forcing many into bankruptcy. Even more devastating, a precipitous decline in Sacramento River salmon led to the cancellation of the entire Pacific salmon fishing season in both 2008 and 2009. The Klamath basin was in a permanent crisis. It turned out that desperation and frustration were perfect preconditions for negotiations. “Every one of us would have rolled the others if we could have,” Fletcher, the Yurok leader, says. “We all tried to go to court, to go through the political process, but it didn’t work – we might win one battle today and lose one tomorrow, so nothing was resolved. We spent millions of dollars on attorneys, plane tickets to Washington, political donations, but it didn’t make any of us sleep any better, because the big issues were still out there, and we still had to resolve them.”
  • In January 2008, the negotiators announced the first of two breakthrough Klamath pacts: the 255-page Klamath Basin Restoration Agreement. In it, most of the parties – farmers, three of the four tribes, a commercial fishermen’s group, seven federal and state agencies, and nine environmental groups – agreed to a basic plan. It includes measures to take down the four dams, divert some water from Project farmers to the river in return for guaranteeing the farmers’ right to a smaller amount, restore fisheries habitat, reintroduce salmon to the upper basin, develop renewable energy to make up for the loss of the dams, and support the Klamath Tribes of Oregon’s effort to regain some land lost when Congress “terminated” its reservation in 1962. This was a seminal moment, a genuine reconciliation among tribal and agricultural leaders who discovered that the hatred they’d nursed was unfounded. “Trust is the key,” says Kandra, the Project farmer who went from litigant to negotiator. “We took little baby steps, giving each other opportunities to build trust, and then we got to a place where we could have some really candid discussions, without screaming and yelling – it was like, ‘Here’s how I see the world.’ Pretty valuable stuff. The folks that developed those kinds of relationships got along pretty good.” Still, one crucial ingredient was missing: Unless PacifiCorp agreed to dismantle the dams, river restoration was impossible, and the pact was a well-intentioned, empty exercise. But PacifiCorp now had compelling reasons to consider dam removal. Not only was relicensing going to be expensive, but Klamath tribespeople were becoming an embarrassing irritant, in two consecutive years interrupting Berkshire Hathaway’s annual-meeting/Buffett-lovefests in Omaha with nonviolent protests that won media attention. Also, the Bush administration, customarily no friend of dam removal, signaled its support for a basin-wide agreement. Negotiations between PacifiCorp and mid-level government officials began in January 2008, but made little progress until a meeting in Shepherdstown, West Virginia four months later, when for the first time Senior Interior Department Counselor Michael Bogert presided. As Bogert recently explained, President Bush himself took an interest in the Klamath “because it was early on in his watch that the Klamath became almost a symbol” of river basin dysfunction. To Bush, the decision to support dam removal was a business decision, not an environmental one: The “game-changer,” Bogert said, was the realization that because of the high cost of relicensing, dam removal made good fiscal sense for PacifiCorp. That fact distinguished the Klamath from other dam removal controversies such as the battle over four dams on Idaho’s Snake River, whose removal the Bush administration continued to oppose.
  • In November 2008, when then-Interior Secretary Dirk Kempthorne announced a detailed agreement in principle with PacifiCorp to take down the dams, he acknowledged that he customarily opposed dam removal, but that the Klamath had taught him “to evaluate each situation on a case-by-case basis.” In September 2009, Kempthorne’s successor, Ken Salazar, announced that PacifiCorp and government officials had reached a final agreement. PacifiCorp and the many signers of the earlier Klamath Basin Restoration Agreement then ironed out inconsistencies between the two pacts in a final negotiation that ended with a final deal in January 2010.
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    Maybe the Klamath River basin would have turned itself around without Jeff Mitchell. Back in 2001, at the pinnacle of the conflict over the river's fate, when the Klamath earned its reputation as the most contentious river basin in the country, Mitchell planted a seed. Thanks to a drought and a resulting Interior Department decision to protect the river's endangered fish stocks, delivery of Klamath water to California and Oregon farmers was cut off mid-season, and they were livid. They blamed the Endangered Species Act, the federal government that enforced it, and the basin's salmon-centric Indians who considered irrigation a death sentence for their cultures. The basin divided up, farmers and ranchers on one side, Indians and commercial fishermen on the other. They sued one another, denounced one another in the press, and hired lobbyists to pass legislation undermining one another. Drunken goose-hunters discharged shotguns over the heads of Indians and shot up storefronts in the largely tribal town of Chiloquin, Oregon. An alcohol-fueled argument over water there prompted a white boy to kick in the head of a young Indian, killing him.
Michael Haltman

The Political Commentator: The financial distress level of unemployed and underemployed... - 0 views

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    Regardless of the promises made by President Obama in the State of the Union speech to improve the economy and create jobs, the pain quotient for many Americans is quite high now!
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