Today is the last day of 2013. Tonight at midnight, we’ll bid adieu to another year. I can’t say I’m sorry to see this one go.
There will be lots of celebratory fireworks in cities around to world tonight; the revelry has already begun in New Zealand. USA Today:
New Zealand rang in the New Year with multicolored fireworks erupting from Auckland’s Sky Tower at midnight Tuesday as thousands of cheering revelers danced in the streets of the South Pacific island nation’s largest city.
Early pyrotechnic shows erupted over Sydney Harbor, dazzling hundreds of thousands viewers ahead of the main event in Australia and Dubai will later try to create the world’s largest fireworks show to ring in 2014.
Unfortunately we’ve also seen some scarier explosions in the past couple of days. Yesterday afternoon there was another accident in North Dakota involving the transport of crude oil. The Minneapolis Star-Tribune reports: Cassleton, N.D. residents flee town after oil train explosion. So far the evacuations are still voluntary and only about 65% of the 2,400 residents of Cassleton have left their homes.
The explosion happened shortly after 2 p.m. Monday after a BNSF grain train derailed and crashed into a crude oil train near Casselton, which is 20 miles west of Fargo, causing tank cars to explode in towering mushroom-cloud flames. No one was injured in the crash….
In the initial hours after the explosion, authorities told residents to stay indoors to avoid the smoke. Later, when residents were urged to evacuate, some drove to Fargo, where a shelter had been set up for them.
BNSF spokeswoman Amy McBeth said the train carrying grain derailed first, then knocked several cars of the oil train off adjoining tracks. BNSF said both trains had more than 100 cars each….
“It was black smoke and then there were probably four explosions in the next hour to hour and a half,” said Eva Fercho, a Casselton resident who saw the fiery aftermath.
The cars were still burning as darkness fell, and authorities said they would be allowed to burn out.
The derailment happened amid heightened concerns about the United States’ increased reliance on rail to carry crude oil. Fears of catastrophic derailments were particularly stoked after last summer’s crash in Quebec of a train carrying crude from North Dakota’s Bakken oil patch. Forty-seven people died in the ensuing fire.
The explosions Monday afternoon sent flames and black smoke skyward outside of Casselton, about 40 kilometres west of Fargo. Investigators couldn’t get close to the blaze and official estimates of how many train cars caught fire varied….
Ryan Toop, who lives less than a kilometre away, said he heard explosions and drove as close as about two city blocks to the fire, which erupted on a day when temperatures were below zero.
“I rolled down the window, and you could literally keep your hands warm,” Toop said.
The tracks that the train was on pass through the middle of Casselton, and Cass County Sheriff’s Sgt. Tara Morris said it was “a blessing it didn’t happen within the city.”
No kidding. I’d say that’s a pretty big understatement. Here’s some raw video of the explosion.
In Russia, there are fears that two suicide bombings on Sunday and Monday signal “that a terrorist campaign may have begun that could stretch into the Winter Olympics.” AP via ABC News:
In the wake of Sunday’s bombing at the city’s main railway station and Monday’s blast on a trolleybus, police reinforcements and Interior Ministry troops have been sent into the city, regional police official Andrei Pilipchuk was quoted as telling the Interfax news agency. He said more than 5,200 security forces are deployed in the city of 1 million.
The Health Ministry said three more victims died on Tuesday, raising the toll to 34 — 18 from the station bombing and 16 from the bus. Officials said 65 other people were hospitalized with injuries.
Volgograd authorities have canceled mass events for New Year’s Eve, one of Russia’s most popular holidays, and asked residents not to set off fireworks. In Moscow, festivities were to go ahead but authorities said security would be increased.
There has been no claim of responsibility for either bombing, but they came only months after the leader of an Islamic insurgency in southern Russia threatened new attacks on civilian targets in the country, including on the Winter Games that are to begin Feb. 7 in Sochi.
After their enthusiastic defense of the racism, sexism, pedophilia, and homophobia of Duck Dynasty’s Phil Roberts, you’d think right-wingers would hesitate to attack a mild commentary involving race on MSNBC, but you’d be wrong.
MSNBC host Melissa Harris-Perry and the panelists on her Sunday morning show drew criticism Monday for poking fun at a Romney family photo that included their adopted African-American grandson, Kieran Romney.
Harris-Perry had the panelists attempt to caption a Romney family photo, which included all of Mitt Romney’s grandchildren.
Harris-Perry joked that Kieran Romney would marry Kanye West’s daughter, North West.
“Could you imagine Mitt Romney and Kanye West as in-laws?” she asked.
Panelist and comedian Dean Obeidallah said the photo “really sums up the diversity of the Republican party.” And actress Pia Glenn started singing “one of these things is not like the other.”
Steve Benen took a look back at the Sunday political talk shows to see what proportion of the guests were from the Democratic and Republican parties. We knew this already, but it’s stunning to see it in a graphic.
The general impression is rooted in fact: the Sunday shows love Republicans. “Meet the Press,” “Face the Nation,” “This Week,” “State of the Union,” and “Fox News Sunday,” hoping to reflect and help shape the conventional wisdom for the political world, collectively favor GOP guests over Democratic guests every year, but who were the big winners in 2013?
The…chart shows every political figure who made 10 or more Sunday show appearances this year, with red columns representing Republicans and blue columns representing Democrats. For 2013, the race wasn’t especially close – House Intelligence Committee Chairman Mike Rogers (R-Mich.) easily came out on top, making 27 appearances this year. That works out to an average of one appearance every 1.9 weeks (or 2.25 Sunday show appearances a month, every month for a year).
Incredible, isn’t it? Newt Gingrich doesn’t even hold any office and, as Benen points out, “hasn’t served in public office since resigning in disgrace 15 years ago” was in third place in front of Dick Durbin, the supposedly powerful Senate Majority Whip.
According to Mike Konczal of The New Republic, 2013 Was a Bad Year for Wall St. Lobbyists.
Last year, nobody thought that banks would face tougher holding requirements for capital, that regulations of the financial derivatives markets would advance, or that the final Volcker would be a pretty good start instead of an incoherent mess. Yet that is what appears to have happened in 2013. So what caused it? And how it might apply to future political goals?
The successes of 2013 were partially driven by the failures of Wall Street in 2012. The multi-billion dollar trading losses from JPMorgan Chase known as the “London Whale” changed the dynamics for financial reform in a way that took a year to realize. JPMorgan had been leading the charge against reform, arguing that the effort was over-harsh and destructive, and that Wall Street had already cleaned up its act on its own. Indeed, the big concern in 2012 was that Wall Street would convince enough moderate Democrats that Dodd-Frank had gone too far in certain respects, and that Congress would stop regulatory action before it was even completed. This fell apart right alongside the multi-billion dollar losses in JPMorgan’s position. Though various bills to remove parts of Dodd-Frank would pass the House by Republican votes, these efforts failed to generate moderate Democratic votes in the Senate after the Whale trade became public.
Read the rest at the link.
Hey did you know that dolphins like to get high? Read about it at The Independent: Dolphins ‘deliberately get high’ on puffer fish nerve toxins by carefully chewing and passing them around.
In extraordinary scenes filmed for a new documentary, young dolphins were seen carefully manipulating a certain kind of puffer fish which, if provoked, releases a nerve toxin.
Though large doses of the toxin can be deadly, in small amounts it is known to produce a narcotic effect, and the dolphins appeared to have worked out how to make the fish release just the right amount.
Carefully chewing on the puffer and passing it between one another, the marine mammals then enter what seems to be a trance-like state.
The behaviour was captured on camera by the makers of Dolphins: Spy in the Pod, a series produced for BBC One by the award-winning wildlife documentary producer John Downer.
Hey, why is that surprising? Lots of animals probably enjoy altered states of consciousness. Have you ever seen a cat on catnip? What about a big cat?
Finally, I highly recommend these two posts on the NSF/Snowden story by NSFWCORP writers now publishing at Pando Daily, Mark Ames and Yasha Levine respectively.
Now it’s your turn. What stories are you following today? Please post your recommended links in the comment thread.
I hope 2014 will be a great year for all of you!!
Good Morning!! Let’s see what’s going on out there in the world.
A federal grand jury has indicted Tucson shooter Jerad Loughner.
Jared Loughner was indicted by a federal grand jury Wednesday in Tucson on a three-count indictment for attempting to kill U.S. Rep. Gabrielle Giffords and two of her aides, Pamela Simon and Ron Barber. The announcement came from U.S. attorney Dennis K. Burke’s office.
Burke said, “This case also involves potential death-penalty charges, and Department rules require us to pursue a deliberate and thorough process. [Wednesday]’s charges are just the beginning of our legal action. We are working diligently to ensure that our investigation is thorough and that justice is done for the victims and their families.”
According to the indictment, Loughner, 22, attempted to assassinate Gabrielle Giffords, a member of Congress, and attempted to murder two federal employees, Ron Barber and Pamela Simon.
A conviction for attempted assassination of member of Congress carries a maximum penalty of life in prison, a $250,000 fine or both, according to Burke’s office.
That happened really quickly, didn’t it?
Have you heard there’s more snow coming for the Midwest and Northeast? Oh joy. Right now they are saying 3-5 inches for Boston. That’s not too bad, except for the fact that we already about about 2-1/2 feet piled up everywhere. Oh well… check the story to see what might be coming your way.
According to the Wall Street Journal, poor poor Goldman Sachs is hurting.
Goldman Sachs Group Inc.’s profit slide of 52% in the fourth quarter showed the securities giant’s size and swagger aren’t enough for it to escape the tightening squeeze of a regulatory overhaul and jittery clients and investors.
The New York company suffered its third quarterly profit decline in a row, hurt by lower revenue from its vaunted trading and investment-banking businesses. Fourth-quarter net income fell to $2.39 billion, or $3.79 a share, from $4.95 billion, or $8.20 a share, a year earlier.
Oh those nasty regulations! Is anything like that really happening? I’m confused. Oh wait. It’s not really regulations, it’s just the Wall Streeters’ fears of risk or something.
Like its rivals, Goldman is being hurt by the reluctance of many institutional investors, wealthy individuals, companies and other clients to take risks because they still are reeling from losses during the crisis. Hedge funds are weaning themselves from some of the leverage used to make big bets, and U.S. companies are holding more than $2 trillion in stagnant cash.
As a result, demand for the vast inventory of stocks, bonds and other investments that Goldman buys and sells on behalf of customers, generating commissions and other fees for the firm, fell in the latest quarter. Trading-related revenue shrank 31% to $3.64 billion from $5.25 billion in 2009’s fourth quarter.
Whatever… A bunch of rich people whining. Just what you wanted to hear about with your morning coffee, I’ll bet.
The Governor of Alabama doesn’t consider me among his brothers and sisters. Shock!
Alabama Republican Governor Robert Bentley said in a Martin Luther King Jr. Day message Monday that he does not consider Americans who do not accept Jesus Christ as their savior to be his brothers and sisters.
“There may be some people here today who do not have living within them the Holy Spirit,” Bentley said shortly after taking the oath of office, according to the Birmingham News. ”But if you have been adopted in God’s family like I have, and like you have if you’re a Christian and if you’re saved, and the Holy Spirit lives within you just like the Holy Spirit lives within me, then you know what that makes? It makes you and me brothers. And it makes you and me brother and sister.”
”Now I will have to say that, if we don’t have the same daddy, we’re not brothers and sisters,” he continued. “So anybody here today who has not accepted Jesus Christ as their savior, I’m telling you, you’re not my brother and you’re not my sister, and I want to be your brother.”
Awww… I’m really hurt.
Didja hear the new Republican House voted to repeal the useless Republican style health care non-reform bill?
The vote passed Wednesday 245-to-189 — with unanimous GOP support, plus three Democrats. But the repeal bill is destined to die in the Senate, so Republicans will use their newly acquired power in the House to wage a long-term campaign to weaken the law.
The next steps — hearings, testimony from administration officials, funding cuts — lack the punch of a straight repeal vote, but Republicans said they will keep at it, hoping the end result is the same: stalling implementation of the $900 billion law.
Republicans promise to hold a series of hearings and oversight investigations into the law, attempt to repeal individual provisions and craft an alternative health care plan. Some of the first issues they will tackle are the cost of the law, the mandate on larger employers to provide coverage and the impact of the legislation on the states.
But the GOP is expected to be thwarted at every turn by the Democratic-controlled Senate — and ultimately President Barack Obama, who has said he is willing to “improve” the law but “we can’t go backward.”
At least while they’re fooling around with Obamacare, they’re not repealing Social Security….
Sooooo…. what are you reading this morning? Anything cheerful happening?
There is no doubt that we have had a major world wide financial collapse drastically affecting many innocent people in terms of livelihood and life long savings. It is fair to say that if the regulators had done their job, the country would have not had the hard landing that was experienced in 2008. The 2010 Financial Reform Bill kicked the can down to the Regulators for implementation and the bankers still have influence. This article takes a look at who the regulators were and how they did or did not do their job. The Obama people in the regulator domain are identified along with examples of Bush regulator failures. Hopefully this will give insight into what is being done to preclude another crisis
The financial industry has a gaggle of regulators, each with its politically protected turf.
From Wikopedia: Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system.
Regulation is an unnecessarily a complex subject. It is important to understand that in some cases financial entities can choose their regulator. Some regulators were much more lenient and in many cases banks switched to them, hence the term Regulatory Arbitrage. The following are the major Federal regulators: FED, SEC, OCC, OTS, FDIC, CFTC and FINRA described below. Except for the FED, most of these organizations have direct or indirect ties to the Treasury organization.
FED – Federal Reserve System
From Wikopedia: Its duties today, according to official Federal Reserve documentation, are to conduct the nation’s monetary policy, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to depository institutions, the U.S. government, and foreign official institutions.Current chairman is Ben Bernanke, the former chairman was Alan Greenspan. Much more on Mr Greenspan later.
SEC – Securities and Exchange Commission
From Wikopedia: It holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation’s stock and options exchanges, and other electronic securities markets in the United States. Mary Schapiro is the current Chair. Predesessors were; Christopher Cox – 2005-2009, William H. Donaldson – 2003-2005, Harvey Pitt – 2001-03
OCC – Office of Comptroller of the Currency
From Wikopedia: US federal agency established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States. Current Acting Chairman is John Walsh. Previous Chairman were John C. Dugan – (2005 – 2010) John D. Hawke, Jr. – (1998–2004)
OTS – Office of Thrift Supervision ( recently folded into OCC)
From Wikopedia: United States federal agency under the Department of the Treasury. It was created in 1989 as a renamed version of another federal agency (that was faulted for its role in the Savings and loan crisis). Like other US federal bank regulators, it is paid by the banks it regulates. The OTS was initially seen as an aggressive regulator, but was later lax. Declining revenues and staff led the OTS to market itself to companies as a lax regulator in order to get revenue.
FDIC – Federal Deposit Insurance Corporation
From Wikopedia: United States government corporation created by the Glass-Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. The FDIC insures deposits at 7,895 institutions. The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in receiverships (failed banks).
Sheila Bair is the current chairman of the FDIC and is viewed as a serious regulator with the right incentives for all concerned.
CFTC – Commodity Futures Trading Commission
From Wikopedia: The stated mission of the CFTC is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.
CFTC is considered to be the primary regulator for Credit Default Swaps in the Dodd Frank regulation scheme.
FINRA – Financial Industry Regulatory Authority
From Wikopedia: In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization (SRO). FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD). Though sometimes mistaken for a government agency, it is a non-governmental organization that performs financial regulation of member brokerage firms and exchange markets.
Previously run by Mary Shapiro, FINRA has been critisized as being a ineffective regulator. Most notable was their (and SEC) allowing Bernie Madow to continue for 10 years to operate despite being warned by a whistle blower. When testifying before congress, the whistle blower (Harry Markopolos) said SEC was incompetent, FINRA was corrupt.
It must be said that Financial Regulation in the United States is done by committee of political bureauocrats. It is important to be aware of the fact that many of them are funded by fee’s assessed to the agencies they regulate. So opportunity for Regulatory Capture and Regulatory Arbitrage is prevalent in these agencies. The clear example is Office of Thrift Supervision bowing to their clients. The opposite example is that of Sheila Bair who tries to do the right thing for her clients despite critisizm.
The European Union appears to be serious about stopping the hedge fund casino where you get to bet on the failure of countries to meet their sovereign debt obligations with other folks’ money. It also wants to increase regulation that provides more transparency which should–theoretically–lead to increased protection from moral hazard and insiders with inside information acting against the best interests of other investors. Would you consider this action to be protectionist? (i.e. against free trade agreements?) Once again, I’m turning to the UK’s Financial Times for more information.
Tim Geithner, US Treasury secretary, has delivered a blunt warning to the European Commission that its plans to regulate the hedge fund and private equity industries could cause a transatlantic rift by discriminating against US groups.
A letter sent by Mr Geithner this month to Michel Barnier, Europe’s internal market commissioner, makes it clear that the European Union is heading for a clash with Washington if it pushes ahead with what the US – and Britain – fear could be a protectionist law.
As we see the continual watering-down of financial regulation met to rein in the worst of credit abuses in the country, we now see our government arguing against reining-in the casino-style side bets of the hedge funds. The UK is raging against the reform machine too.
The draft EU directive would impose tighter restrictions on hedge funds, private equity and other alternative investment funds. It has caused alarm in the City of London, where some in the industry say it is a thinly veiled attempt by France and Germany to undermine the UK’s dominance of financial services.
Okay, so this is my question. How is this going to undermine the dominance of the UK and US investment houses? How does this stop them from competing for business? The answer is in one clause that may or may not be the real issue here.
Mr Geithner warns that US hedge funds, private equity groups and banks could be discriminated against if proposals to restrict the access of EU investors to funds based outside the 27-country bloc are included in the final law.
So-called “third country” elements of the directive would force non-EU funds to comply with the new rules if they wish to market themselves at all within the EU. The directive could also force EU-based private equity and hedge funds to use only locally based banks as custodians and depositaries.
Contentious areas also include rules on remuneration, limits on borrowing, the disclosure of sensitive information and the regime for depositaries.
Paul Myners, UK financial services minister, told a meeting of private equity executives on Wednesday that he would fight “line by line and minute by minute” to defend the free movement of capital. But he also warned that “nobody in this room is going to get the directive they want”.
One senior private equity executive said the UK needed to take a stand before others would rally behind it.
I can see how portions could restrict the movement of capital from one country to another if investors are forced to use local banks. However, asking the UK and US hedge funds to comply with the EU rules doesn’t seem any different than asking FORD or GM to comply with the tougher MPG or emissions standards by the EU or for that matter asking US food companies to restrict certain ingredients either. Most other U.S. industries comply with EU rules daily. One major example is the use of the metric system. So, why can’t Goldman Sachs and JP Morgan just shut up and comply?
Here’s what is more likely at the heart of the argument.
The momentum for a ban on naked CDS is getting stronger. Germany and France on Wednesday called on the European Union to consider banning speculative trading in credit default swaps and set up a compulsory register of derivatives trading, the FT reports. Angela Merkel and Francois Fillon sent a letter to Jose Barroso yesterday, asking for an immediate investigation of the role and effect of speculative trading in CDSs in the sovereign bonds of European Union member states. Fillon assured after talks in Berlin, that both governments are “very much in agreement in tackling extreme speculation”.
Earlier this week, Mario Draghi indicated that tighter regulation of CDS could become a G20 issue when he confirmed that the subject will be on the agenda of the Financial Stability Board (FSB), Reuters reports.
An inquiry must be opened into the role and impact of speculation linked to credit default swaps trading in EU government bonds as soon as possible to determine any market abuse, the heads of four countries said.
The move stops short of repeating recent calls for an immediate ban on selling CDS contracts to ‘naked’ buyers who have no interest in the underlying asset — thereby making it easier to find broad backing from the bloc’s finance ministers who will discuss CDS markets next Tuesday.
In a joint letter to European Commission President Jose Manuel Barroso and Spanish Prime Minister Jose Luis Rodriguez Zapatero, dated March 10, Germany, Luxembourg, France and Greece also called for more transparency on derivative markets.
The moves would be aimed at preventing undue speculation, enhancing transparency and improving the safety of derivative transactions, according to the letter, which was released by the office of French President Nicolas Sarkozy on Thursday.
So is Geithner complaining about the provision to restrict business in certain countries to local banks or the restrictions on some of the more exotic and toxic financial innovations? That would include the ones that have troubled both Greece and Iceland.
Meanwhile, Bloomberg reports that Senator Future Lobbyist of America member Chris Dodd is about ready to unveil his version of Financial Reform. This reflects his compromise with Republican committee member Bob Corker. Have I mentioned recently that nothing particularly good ever comes from compromising with a right wing nut? Oh, yes, that would be yesterday’s post where we talked about Corker’s goal of exempting payday lenders from regulation meant to stop lending abuse. Still, let’s go to Bloomberg for the latest controversy in OUR financial industry reform.
The new Dodd bill will include some elements negotiated with Corker. For example, it won’t propose the stand-alone agency, which Corker opposed, and will probably put the consumer unit in the Federal Reserve with an independent budget, a director appointed by the president and some enforcement powers, according to a person with direct knowledge of the plan.
“It has always been my goal to produce a consensus package,” Dodd said in the statement. “And we have reached a point where bringing the bill to the full committee is the best course of action to achieve that end.”
Notice the difference in the content between the EU talks and the US version. The EU is talking about serious regulation and the US is creating another level of bureaucracy within the FED with “some enforcement powers”. This is like trying to protect some one from AIDS by handing them a virginity pledge to sign when they ain’t no virgin.
It has to be the power of the FIRE lobby. All you have to do is read any of the academic literature on the financial industry to know that standardization of process and translucency, along with making investors have skin in their game creates stronger and deeper financial markets. While we are shuffling decks on the Titanic, the Europeans are looking at the engines. I just wish I had more control over my pension plan (which unfortunately has to be a selection of professionally ‘managed’ screwed up funds rather than letting me have my own money to invest as I see fit.
Who is going to stop Wall Street before they kill again?