I have quite a few articles to share this morning, a real Saturday potpourri! So let’s get started. First up, on Thursday Attorney General Eric Holder gave a wide-ranging interview to Ari Melber of MSNBC, and quite a bit of breaking news came out of it. Here are some of the resulting headlines: NY Daily News: Eric Holder: Could talk deal with NSA-leaker Edward Snowden, but no clemency
Holder told MSNBC that the Obama Administration “would engage in a conversation” about a resolution in the case, but said it would require Snowden acknowledge wrongdoing…. At a University of Virginia forum, where Holder was asked about Snowden, he elaborated on his position, saying, “If Mr. Snowden wanted to come back to the United States and enter a plea, we would engage with his lawyers. We would do the same with any defendant who wanted to enter a plea of guilty, so that is the context to what I said.” But he stressed that the NSA leaker would not walk. “We’ve always indicated that the notion of clemency isn’t something that we were willing to consider.”
Seattle PI: Holder: Marijuana banking regulations on the way
Attorney General Eric Holder says the Obama administration is planning to roll out regulations soon that would allow banks to do business with legal marijuana sellers. During an appearance Thursday at the University of Virginia, Holder said it is important from a law enforcement perspective to enable places that sell marijuana to have access to the banking system so they don’t have large amounts of cash lying around. Currently, processing money from marijuana sales puts federally insured banks at risk of drug racketeering charges. Because of the threat of criminal prosecution, financial institutions often refuse to let marijuana-related businesses open accounts.
There’s a good piece about this at Forbes, but they won’t even let you copy their headlines anymore. Mediaite: Eric Holder: Voter ID Used to ‘Depress the Vote’ of People Who Don’t Support GOP
Attorney General Eric Holder sharply criticized state-level voter identification policies and said that he believes those policies are a “remedy in search of a problem.” He added that, while some may be arguing for voter ID in good faith, he believes that most are advocating for this policy in order to “depress the vote” of those who do not support the “party that is advancing” voter ID measures. “I think many are using it for partisan advantage,” Holder said of voter ID. “People have to understand that we are not opposed to photo identification in a vacuum,” he continued. “But when it is used in — certain ways to disenfranchise particular groups of people, whether by racial designation, ethnic origin, or for partisan reasons, that from my perspective is problematic.” He added that “all the studies” show that in-person voter fraud “simply does not exist” at a level that requires a legislative solution.
Attorney General Eric Holder waded into the controversy over former Defense Secretary Robert Gates’s new book Thursday, calling it “a mistake” for Gates to have published his recollections before President Barack Obama left the White House. “It’s my view that it’s just not a good thing thing to write a book about a president that you served while that president is still in office,” Holder said during an appearance at the University of Virginia’s Miller Center. “From my perspective I think the world of Bob Gates, but I think that the publication of that book — at least at this time — was a mistake.” [….] In the course of offering his critique of the timing of Gates’s book, “Duty: Memoirs of a Secretary at War,” Holder twice praised the former defense secretary for his leadership. “I like Bob Gates a great deal. He was a good secretary of defense,” the attorney general said.
“I think people just need to be a little patient,” Holder said, according to a transcript of an interview with MSNBC to air at noon Pacific time Friday. “I know it’s been a while. But we have other things that are in the pipeline.” [….] Holder has taken heat for telling a Senate hearing last year that some financial institutions were “so large that it becomes difficult to prosecute them” because criminal charges could hurt the U.S. and even world economies. Since then Holder has tried to emphasize that the Justice Department is not intimidated by the size of a financial institution and would bring any charges it believed it could prove.
As I said, quite a bit of news out of one interview. Good job by Ari Melber.
In other news . . .
The Economist has a brief article that provides some background on the situation in Ukraine: On the march in Kiev –The protests turn nasty and violent, but the president is not giving ground.
JANUARY 22nd was meant to mark Ukraine’s unity day, a celebration of its short-lived pre-Soviet independence. Instead, it was a day of civil unrest and perhaps the biggest test of Ukraine’s post-Soviet integrity. After two months of largely peaceful encampment on the Maidan in Kiev, the protests turned violent. Five people were reported killed and hundreds were injured. An armoured personnel carrier pushed through the streets. Clouds of black smoke and flames mottled the snow-covered ground. Never in its history as an independent state has Ukraine witnessed such violence. It was triggered by the passage of a series of repressive laws imposing tight controls on the media and criminalising the protests of the past two months. One law copied almost verbatim a Russian example, including stigmatising charities and human-rights groups financed from abroad as “foreign agents”. If Russian human-rights activists denounce their parliament as a “crazy printer” churning out repressive legislation, says Oleksandra Matviichuk of the Centre for Civil Liberties in Kiev, Ukraine has a “crazy photocopier”. The clashes show vividly the refusal of the protesters to heed such laws.
Brian Glyn Williams, the U. Mass Dartmouth professor who interacted with Boston Marathon bomber Dzhokhar Tsarnaev and recommended some sources of information on Chechnya for a report Tsarnaev was writing, has a post up at HuffPo on how the history of Chechya and Dagestan is coming back to haunt the Winter Olympics in Russia: The Dark Secret Behind the Sochi Olympics: Russia’s Efforts to Hide a Tsarist-Era Genocide. Here’s the conclusion:
The twin bombings in Volgograd in late December 2013 and an earlier one in October are clearly meant to show the Russians that the Chechen-Dagestani terrorists have reignited their terror jihad. They are also meant to remind the world of the tragedy that befell the Circassians of the Caucasus’s Black Sea shore exactly 150 years ago this winter. This is the dark secret that Russia’s authoritarian leader, Putin, does not want the world to know. Putin has thus far been very successful in conflating Russia’s neo-colonial war against Chechen separatists with America’s war on nihilist Al Qaeda Arab terrorists. Any attempt to remind the world of Imperial Russia/Post-Soviet Russia’s war crimes in the Caucasus is a threat to Putin’s pet project, the whitewashed Sochi Olympics. This of course not to excuse the brutal terroristic acts of the Caucasian Emirate or the Chechen rebels, but it certainly provides the one thing that Putin does not want the world to see as he constructs his “Potemkin village” in Sochi, and that is an honest account of the events that have made this the most terrorist fraught Olympic games since the 1972 Summer Olympics in Munich.
Remember Erik Prince, the Michigan millionaire who founded Blackwater? Guess what he’s doing these days? The WSJ has the scoop: Erik Prince: Out of Blackwater and Into China. Erik Prince —ex-Navy SEAL, ex-CIA spy, ex-CEO of private-security firm Blackwater —calls himself an “accidental tourist” whose modest business boomed after 9/11, expanded into Iraq and Afghanistan, and then was “blowtorched by politics.” To critics and conspiracy theorists, he is a mercenary war-profiteer. To admirers, he’s a patriot who has repeatedly answered America’s call with bravery and creativity.
Now, sitting in a boardroom above Hong Kong’s Victoria Harbour, he explains his newest title, acquired this month: chairman of Frontier Services Group, an Africa-focused security and logistics company with intimate ties to China’s largest state-owned conglomerate, Citic Group. Beijing has titanic ambitions to tap Africa’s resources—including $1 trillion in planned spending on roads, railways and airports by 2025—and Mr. Prince wants in…. “I would rather deal with the vagaries of investing in Africa than in figuring out what the hell else Washington is going to do to the entrepreneur next,” says the crew-cut 44-year-old. Having launched Blackwater in 1997 as a rural North Carolina training facility for U.S. soldiers and police, Mr. Prince says he “kept saying ‘yes’ as the demand curve called—Columbine, the USS Cole and then 9/11.” In 100,000 missions in Iraq and Afghanistan, he says, Blackwater contractors never lost a U.S. official under their protection. But the company gained a trigger-happy reputation, especially after a September 2007 shootout that left 17 civilians dead in Baghdad’s Nisour Square. At that point, charges Mr. Prince, Blackwater was “completely thrown under the bus by a fickle customer”—the U.S. government, and especially the State Department. He says Washington opted to “churn up the entire federal bureaucracy” and sic it on Blackwater “like a bunch of rabid dogs.” According to Mr. Prince, IRS auditors told his colleagues that they had “never been under so much pressure to get someone as to get Erik Prince,” and congressional staffers promised, “We’re going to ride you till you’re out of business.”
Awwwwww…..Poor little rich boy. Where’s my tiny violin?
Speaking of entrepreneurs, Amazon billionaire Jeff Bezos’ plans for his latest acquisition–The Washington Post–are becoming clearer, as he hires more right wing libertarians for the op-ed page. Now Pando Daily reveals what Don Graham is up to now that he’s dumped the family business: The company formerly known as WaPo moves into tech apps.
Today, the company formerly known as WaPo — now called Graham Holdings – has announced a new business endeavor in journalism. Surprisingly, said endeavor doesn’t have much to do with actual journalism at all — it falls squarely in the tech camp. It’s a content discovery app called Trove. Trove fits in the now-torrential trend of such applications. Companies like Flipboard,Prismatic, Rockmelt, and N3twork have all tread this ground long before Trove. They’re all convinced that places like Twitter, Facebook, Tumblr, and RSS readers are not good enough for finding the best stories…. The two men behind Trove have rich and storied histories. Vijay Ravindran, the CEO of Trove, served as The Washington Post’s Chief Digital Officer before the sale, and ran ordering at Amazon for seven years before that. Reuters oped columnist Jack Shafer even divpredicted (incorrectly) that Ravindran would be named the new WaPo publisher after the sale. The other Trove heavyweight is product lead Rob Malda, who is also the co-founder and former editor-in-chief of Slashdot — the predecessor of every user-focused news aggregator since, from Digg to Reddit to Hacker News.
Read all about it at the above link.
A few short takes:
In other tech news, CSM’s Security Watch reports that Booz Allen, Snowden’s old firm, looking to help US government with ‘insider threats’. Author Dan Murphy asks, “Are defense and intelligence contractors the best choice to manage a threat they’ve contributed to?” Read it and weep.
According to Fox News, gun manufacturers Smith & Wesson and Ruger will no longer do business in California because they don’t want to comply with a new CA law that allows law enforcement to trace bullets to the individual gun they came from. After all, why would gun companies want to help police catch murderers? Unbelievable!
Did you know that this month is the 50th anniversary of Stanley Kubrick’s brilliant satire, Dr. Strangelove? IMHO, it is one of the funniest movies of all time. Well, Eric Schlosser has a not-so-funny article about it at The New Yorker: ALMOST EVERYTHING IN “DR. STRANGELOVE” WAS TRUE. Don’t miss this one; it’s a must read!
Apparently the latest food craze to emerge from San Francisco is “artisanal toast.” How did toast become the latest artisanal food craze? Ask a trivial question, get a profound, heartbreaking answer. John Gravois writes about it at Pacific Standard: The Science of Society. Weird.
A silly test to take at Buzzfeed: Which Pop Diva Are You? I got Pink. I know nothing about her…but she looks kinda cool.
Finally, I posted this link in the comments recently, but I don’t know if anyone looked at it. I’m posting it again, because I think it’s absolutely adorable. It’s some glamour shots of elderly people having fun dressing up and posing as various movie heroes and heroines. Here’s just one example:
I hope you found something to tickle your fancy in this potpourri of articles. Now it’s your turn. Please post your recommended links in the comment thread, and have a wonderful weekend!
Neil Irwin of WAPO reported today that the TALF is not having the results trumpeted by the Obama administration. This is leading, again, to speculation about the relevancy of most of these plans and, of course, job security of Treasury Secretary Timothy Geithner.
In its first two months, the government’s signature initiative to support consumer lending has fallen well short of expectations, deploying only a fraction of the amount officials had hoped to extend to stimulate auto loans, student loans and credit card lending.
The slow rollout of the program has frustrated staff at government agencies working on the effort and diminished hopes that they could engineer a rapid return to healthy lending levels, according to interviews with government and industry sources. The initiative also serves as a window into the complexities of designing a giant rescue of the financial system.
The TALF is the private-public partnership that couples the funds of private investors, like hedge funds, and the FED. The hedge funds invest small amounts that are matched by much larger amounts that would presumably come from the Treasury and Tax Payers if they wind up being nonprofitable. The combined funds will supposedly purchase non-toxic, virgin, high rated rated securities to fund everything from student loans and car loans to inventory and capital loans for business. As of yet, they really have failed to do so.
Officials envisioned TALF supporting tens of billions of dollars a month in new lending, saying it could eventually total $1 trillion. But in March, when it was launched, it backed only $4.7 billion in auto loans and credit cards. For April, it logged only $1.7 billion.
Sources involved in the program said private investors have been reluctant to work with the government, which they view as an unreliable business partner. Separately, the brokerage houses that are crucial intermediaries are being exceptionally cautious in the contracts they draw up with participants in the program, in part out of wariness that any mistakes could draw the ire of Congress or the media.
In congressional testimony on Tuesday, Treasury Secretary Timothy F. Geithner said that overall progress is “pretty good” for a program in its early days. Still, he acknowledged that participation was “lower than expected” because of “concern about the conditions that come with the assistance in the program . . . and uncertainty about whether they may change in the future.”
Meanwhile, on the bank front, stupid accounting tricks abound! Which begs the question is any one stupid enough to believe the numbers? Every large financial institution appears to be jumping on the band wagon of conveniently forgetting the month of December. What does this say about the state of public accounting today and Wall Street’s gulliblity?
More bailout news today as the Fed pledges $540 billion to shore up mutual funds. The New York Times outlined the proposed plan to help provide short term debt that many money market mutual funds use to finance their investments. When the Treasury refused to bail out Lehman brothers, shares of its Reserve Fund fell below $1. This caused problems in many money market mutual funds as the investors realized their money may not be safe.
Since then, many funds have experienced redemption requests. This has caused fund managers to move to safer and more liquid sources to shore up their funds. Many fund managers no longer look to commercial paper and have switched strictly to Treasuries and other investments considered highly safe. This has squeezed lending to companies looking for bridge loans and working capital sources. The details have not been finalized, but the Fed is hoping to negoitiate the deal and is looking to JP Morgan Chase to carry out many of the required actions. This basically expands the lines of businees that taxpayers are now shoring up for financial companies.
While the Fed and Treasury have been forthcoming with plans and money, it is still uncertain when we will actually see them get around to solving the problems instead of doing triage. We are experiencing more and more situations where taxpayer money is being used to supplement private investments and loans to corporations (including the very financial corporations responsible for this mess). What we are not seeing is the increased oversight that must go along with the flow of funds into the financial sector. It is really time for Congress to act now before more money flows to these players who will not be held to account.
Corporate Governance is one of those things that should not be overlooked. The Treasury’s bailout seems to have more to do with a short term shore up of markets, than rooting out the bad players and ensuring these funds are not abused. It appears that some of the corporate governance and executive compensation rules originally part of the bail out plan have been watered down. Many in congress and the Treasury itself stated earlier that any of these financial institutions benefiting from government funds must adapt stricter corporate governance rules and executive compensation limits. Corporate Governance is a broad set of that basically protect shareholders from executive malfeasance.
The first concern with corporate governance discussed in the bailout was that executive pay should not encourage unnecessary and excessive risk. In other words, the pay should not INCENT the managers to go after short term profits that endanager the safety of the firm. Market Report states a very important point here.
The Treasury’s interim final rule requires that the compensation committee of a company’s board of directors review executive pay to make sure it doesn’t encourage management to take too many risks.The committee has to meet at least once a year with the bank’s chief risk officer to check the relationship between the institution’s risk management and executive pay and incentives, according to the rule.But the Treasury isn’t replacing any of the directors on the boards of the banks it’s investing in, or adding new directors to represent taxpayer interests. That means there’s no way for the Treasury to check if executive compensation is encouraging too much risk-taking.
On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government.
In short, Congress needs to get with it and start protecting the taxpayer’s money with much more tenacity than the protected investor’s money. Write them and tell them to strengthen the oversight of the bailout plan.