October 31, 2011
By Catalina Camia
A video of GOP presidential hopeful Rick Perry, rambling and making jokes, has gone viral on YouTube.
The Texas governor spoke Friday to Cornerstone, an influential conservative group in New Hampshire. Video highlights of his remarks, facial expressions and hand gestures — interspersed with a plug for his flat tax plan — made the rounds this weekend. The video has now been viewed more than 190,000 times on YouTube.
At one point, Perry was given some maple syrup and called it “liquid gold.”
“If they print any more money in Washington, the gold is gonna be good,” Perry says.
October 31, 2011
The Washington Post
By Lori Montgomery
Last year, as a debate over the runaway national debt gathered steam in Washington, Social Security passed a treacherous milestone. It went “cash negative.”
For most of its 75-year history, the program had paid its own way through a dedicated stream of payroll taxes, even generating huge surpluses for the past two decades. But in 2010, under the strain of a recession that caused tax revenue to plummet, the cost of benefits outstripped tax collections for the first time since the early 1980s.
Now, Social Security is sucking money out of the Treasury. This year, it will add a projected $46 billion to the nation’s budget problems, according to projections by system trustees. Replacing cash lost to a one-year payroll tax holiday will require an additional $105 billion. If the payroll tax break is expanded next year, as President Obama has proposed, Social Security will need an extra $267 billion to pay promised benefits.
But while talk about fixing the nation’s finances has grown more urgent, fixing Social Security has largely vanished from the conversation.
Lawmakers in both parties are ducking the issue, wary of agitating older voters and their advocates in Washington, who have long targeted politicians who try to tamper with federal retirement benefits. Democrats lost control of the House last year in part because seniors abandoned them in protest over Medicare cuts in Obama’s much-contested health-care act, and no one in Washington has forgotten that lesson.
October 31, 2011
The Washington Times
By The Washington Times
The Transportation Security Administration (TSA) has always intended to expand beyond the confines of airport terminals. Its agents have been conducting more and more surprise groping sessions for women, children and the elderly in locations that have nothing to do with aviation. It’s all part of TSA’s Visible Intermodal Prevention and Response (VIPR) program, which drew additional scrutiny following an Oct. 18 blitz in Tennessee.
As part of a “statewide safety operation,” TSA employees fondled travelers at bus terminals in Nashville and Knoxville, hunting for “security threats.” Truckers were harassed at four Volunteer State highway locations between the hours of 10 a.m. and 2 p.m. – prime time for terrorism, apparently.
Brian Gamble, a Florida firefighter, caught one of these intrusive VIPR operations on video after he got off a train in Savannah, Ga., earlier this year. “They had the scanners and everything there,” Mr. Gamble told The Washington Times. “They had them pull up their shirts, patted them down, wanded them. There were a couple ladies in our group getting searched. … It’s kinda ridiculous when you’re coming off a train – it doesn’t make any sense.”
Expect a lot more touching in the months ahead. “TSA conducted more than 8,000 VIPR operations in the past 12 months, including more than 3,700 operations in mass-transit and passenger-railroad venues,” boasted TSA Administrator John S. Pistole in June testimony before the Senate. His 2012 budget calls for expanding VIPR by 50 percent.
That means more searches, but it doesn’t mean more safety. As the Government Accountability Office (GAO) noted, “TSA had measured the progress of its VIPR program in terms of the number of VIPR operations conducted, but had not yet developed measures or targets to report on the effectiveness of the operations themselves.” That’s a nice way to say that TSA is acting for action’s sake.
October 31, 2011
By Emma Haak
The Transportation Security Administration has spent $56.8 billion on air travel since 9/11. Here, a look at who’s getting a cut, and whether it’s really paying off.
Amount: $30 million for machines that puffed air onto travelers and “sniffed” them for explosive residue. Deployment stopped in 2006, after they were deemed slow and unreliable.
Amount: $1.2 billion to fund the Transportation Threat Assessment and Credentialing Program (since 2005), which includes employee background checks. Nonetheless, two TSA agents were busted in February for stealing $160,000 in cash from checked bags.
Amount: $13.5 billion to employ human screeners (since 2007), who have intercepted some 50 million carry-on dangers, including hacksaws, nunchucks, and alligators. The most popular excuse: “Someone else packed my bags for me.”
Amount: $2.8 billion for explosives-detection equipment (since 2007) from companies such as General Electric and L-3 Communications, which in July thwarted one man’s plan to fly with a half-ounce of C4.
Amount: $122 million for full-body scanners from Brijot Imaging Systems, L-3 Communications, Rapiscan Systems, and others. Although the x-ray images aren’t supposed to be stored or saved, 100 leaked onto the Internet last November.
October 31, 2011
Mish’s Global Economic Trend
With news of a “voluntary” haircut on Greek bonds of 50%, it’s time to look ahead to the next big trouble spots. By measure of 10-Year government bond yields, Portugal at 11.8%, Italy at 6.02%, and Spain at 5.51% (as compared to Germany at 2.18%), Portugal, Italy, and Spain clearly have critical issues.
Moreover, the economic data from Spain is continuously awful. For example Spain’s Unemployment “Unexpectedly” Rises to 21.52%
The number of unemployed persons increased by 144,700 in the third quarter, bringing the total number of unemployed amounted to 4,978,300 people, according to Labour Force Survey (EPA) released today by the National Statistics Institute (INE). Spain has not seen such a high unemployment rate since the fourth quarter of 1996.
Austerity measures and economic reforms in the “Club-Med” Euro states are much needed. However, the short and intermediate-term effect will not be good for sovereign debt yields, budget targets, or GDP.
Spain and Portugal are accidents waiting to happen (sooner rather than later), and judging from bond yields alone, it is safe to add Italy to that mix.
The euphoria of a “settlement” (that fixes nothing) in regards to the crisis in Greece will soon give way to the massive number of even larger problems elsewhere in the Eurozone.
October 31, 2011
The New York Times
By MERIBAH KNIGHT and BRIDGET O’SHEA
Thomas Burton remembers exactly when he closed on his West Wilcox Street home. It was Sept. 6, 1962, at 3 p.m. Eager to begin a homeowner’s life with his wife and their six children, he got off early from his shift as a driver for C&K Snacks to make the closing.
“This was my first house,” he said. “I couldn’t forget that date.”
Decades later, his children are grown and the 30-year mortgage has been paid off. But the neighborhood is a far cry from what it used to be.
The street has been transformed — six foreclosed and abandoned homes now sit on Mr. Burton’s block. There are 28 vacant buildings on West Wilcox, which is less than a mile long.
Early Monday morning, Mr. Burton, 77, raked leaves outside his front door. On his front steps, two planters of impatiens were still blooming in mid-October. Directly across the street stood a woeful-looking boarded-up two-flat — the architectural mirror image of his own home, down to the stone facade, the columns’ moldings and the porch’s oval window. The door and windows are boarded up and scrawled with graffiti.
“It’s sad,” Mr. Burton said, shaking his head. “It’s truly sad.”
According to city data, there were nearly 15,000 abandoned buildings in Chicago as of Oct. 20, most of them a result of foreclosures. Three neighborhoods account for 20 percent of the total: Englewood, West Englewood and Austin.
The city lost 200,000 residents from 2000 to 2010, according to census data. In the area immediately surrounding Mr. Burton’s house, population has dropped by 26 percent. And though some residents are gone, those who remain do not necessarily want to raze the vacant buildings left behind.
The empty buildings are magnets for gang activity, depressing the value of nearby properties. Drug abuse violations and burglaries are the most common crimes taking place in abandoned properties, police report. In Austin, burglaries and illegal drug use make up 74 percent of the 66 incidents reported in the past three months. In Englewood, those crimes were 58 percent of the 85 reported cases of illegal activity. In West Englewood, drugs and burglaries constituted 43 percent of 78 incidents.
“Vacant homes create so many risks to a neighborhood,” said Charles Brown, a retired Chicago police officer living in Englewood. “Murders — we’ve found people dead in them. Attempted murder, rape, all kinds of things. They catch on fire and burn up the house next door — firemen get hurt.”
Jonathan Martin is very familiar with the foreclosed two-flat at 4336 West Wilcox, across from Mr. Burton. He was hired to inspect it by the bank that now owns the property, and he has visited regularly for the past 10 months. In that time squatters have moved in, mold has grown and thieves have stripped nearly all of the copper piping and plumbing.
October 31, 2011
By Jesse Eisinger
Back when the Financial Crisis Inquiry Commission was doing its work, I would check in periodically with someone who worked there to find out how it was going.
“Good news!” my source would joke. “We got the guy who caused it.”
That is the way I felt last week when the Securities and Exchange Commission announced that it had, well, agreed to a measly $285 million settlement with Citigroup over the bank having misled its own customers in selling an investment it created out of mortgage securities as the housing market was beginning its collapse.
In addition, the S.E.C. accused one person — a low-level banker. Hooray, we finally got the guy who caused the financial crisis! The Occupy Wall Street protestors can now go home.
After years of lengthy investigations into collateralized debt obligations, the mortgage securities at the heart of the financial crisis, the S.E.C. has brought civil actions against only two small-time bankers. But compared with the Justice Department, the S.E.C. is the second coming of Eliot Ness. No major investment banker has been brought up on criminal charges stemming from the financial crisis.
To understand why that is so pathetic and — worse — corrupting, we need to briefly review what went on in C.D.O.’s in the years before the crisis. By 2006, legions of Wall Street bankers had turned C.D.O.’s into vehicles for their own personal enrichment, at the expense of their customers.
These bankers brought in savvy (and cynical) investors to buy pieces of the deals that they could not sell. These investors bet against the deals. Worse, they skewed the deals by exercising influence over what securities went into the C.D.O.’s, and they pushed for the worst possible stuff to be included.
The investment banks did not disclose any of this to the investors on the other side of the deals, or if they did, they slipped a vague, legalistic disclosure sentence into the middle of hundreds of pages of dense documentation. In the case brought last week, Citigroup was selling the deal, called Class V Funding III, while its own traders were filling it up with garbage and betting against it.
By the S.E.C.’s own investigations of and settlements with Goldman Sachs, JPMorgan Chase and Citigroup, and by reporting like my ProPublica work with Jake Bernstein and early stories by The Wall Street Journal, we know that these breaches were anything but isolated. This was the Wall Street business model. (Goldman, JPMorgan and Citigroup were all able to settle without admitting or denying anything, which, of course, is part of the problem.)
Neither the Citigroup settlement nor any of the others come close to matching the profits and bonuses that these banks generated in making these deals. And low-level bankers did not, and could not, act alone. They were not rogues, hiding things from their bosses.
Last week’s S.E.C. complaint makes clear that the low-level Citigroup banker that it sued, Brian H. Stoker, had multiple conversations with his superiors about the details of Class V. At one point, Mr. Stoker’s boss pressed him to make sure that their group got “credit” for the profits on the short that was made by another group at the bank.
Pause, and think about that. The boss was looking for credit, but as far as the S.E.C. was concerned, he got no blame.
The S.E.C. did not respond to a request for comment, so we are left to wonder what explains its failure to reckon adequately with the pervasive problems. Contrary to expectations, the embattled and oft-assailed agency has done almost everything right with structured finance investigations, taking aim at abuses related to C.D.O.’s and other complex deals.
The S.E.C. has also devoted adequate resources to the issue. It put together a special task force on structured finance, sending the proper signal of the agency’s priorities both internally and externally. The task force is staffed by bright people, an invigorating mix of young go-getters and experienced hands. Those people have understood for years what was wrong with the C.D.O. business on Wall Street.
O.K., so what is it? Risk aversion.
Based on the major cases the S.E.C. has brought, a pattern has emerged. It is making one settlement per firm and concentrating on only the safest, most airtight cases. The agency’s yardstick seems to be, who wrote the stupidest e-mail? Mr. Stoker of Citigroup wrote an incriminating e-mail that recommended keeping one crucial participant in the dark. Goldman’s Fabrice Tourre, the other functionary the agency has sued, wrote dumb things to his girlfriend.
But the S.E.C is not the G-mail G-man. It is the securities police. Imprudent e-mailing is not the only way to commit securities fraud.
Maybe the agency hopes that private litigation will take up the slack. It cannot investigate and wring a prosecution or settlement out of every corrupt deal. Instead, it has long aimed to plant a flag and let private litigants take care of the rest.
But private litigation has failed. One problem is that the defrauded institutions often committed their own sins. In a monstrous daisy chain, C.D.O.’s bought pieces of other C.D.O.’s. These investments were run by management companies. They might have been the victim in one C.D.O., but complicit in the predations of another.
October 31, 2011
By Les Leopold
What are the Occupy Wall Street protesters angry about? The same things we’re all angry about. The only difference is the protestors turned their anger into public action. Occupy Wall Street lit the embers and the sparks are flying. Whether it turns into a genuine populist prairie fire depends on all of us.
Now is not the time for wonky policy solutions, as the media meatheads are calling for. Rather, it’s time to air our grievances as loudly as possible, which is precisely what Wall Street and its minions fear the most. Here’s a brief list of why we should be angry and the charts to back it up.
1. The American Dream is imploding…
The productivity/wage chart says it all. From 1947 until the mid-1970s real wages and productivity (economic output per worker hour) danced together. Both climbed year after year as did our real standard of living. If you’re old enough, you will remember seeing your parents doing just a bit better each year, year after year. Then, our nation embarked on a grand economic experiment. Taxes were cut especially on the super-rich. Finance was deregulated and unions were crushed. Lo and behold, the two lines broke apart. Productivity continued to climb, but wages stalled and declined. So where did all that productivity money go? To the rich and to the super-rich, especially to those in finance.
2. Our wealth is gushing to the top 1 percent…
Actually the top tenth of one percent. Because of financial deregulation and tax cuts for the rich, the income gap is soaring. Here’s one of my favorite indicators that we compiled for The Looting of America. In 1970 the top 100 CEOs earned $45 for every $1 earned by the average worker. By 2006, the ratio climbed to an obscene 1,723 to one. (Not a misprint!)
3. Family income is declining while the top earners flourish…
As women entered the workforce, family income made up for some of the wage stagnation. But now even family incomes are in trouble. Meanwhile, the incomes of the richest families continue to rise.
October 31, 2011
By Paul Joseph Watson
A Department of Homeland Security-funded surveillance drone deployed against insurgents in Afghanistan that can also be used to tase suspects from above has been unveiled by the Montgomery County Sheriff’s office and will be operational within a month.
“At $500,000 a pop, Montgomery county spent $250,000 to get the UAV. The rest was covered by a Department of Homeland Security grant,” reports KBTX.com.
Although its initial role will be limited to surveillance, the ShadowHawk Unmanned Aerial Vehicle, previously used against suspected terrorists in Afghanistan and East Africa, has the ability to tase suspects from above as well as carrying 12-gauge shotguns and grenade launchers.
“We look forward to utilizing it in a variety of capacities that protect our employees from harm to the extent possible and to enhance the protection to our citizens and their safety,” said Montgomery County Chief Deputy Randy McDaniel.
The ShadowHawk is a 50lb mini drone chopper that can be fitted with an XREP taser with the ability to fire four barbed electrodes that can be shot to a distance of 100 feet, delivering “neuromuscular incapacitation” to the victim. The drone can travel at a top speed of 70MPH and can operate for 3.5 hours over land and sea.
A video clip of the drone shows off its impressive maneuverability as it tails a suspect attempting to evade capture with sophisticated object tracking technology. Another video shows the drone conducting surveillance of two individuals involved in a firearm transaction.
October 31, 2011
By the CNN Wire Staff
An Alabama pharmaceutical company issued a voluntary nationwide recall Friday for “multiple lots” of birth control pills due to what it described as a systemic “packaging error.”
A spokesman for Qualitest Pharmaceuticals said that “there are no immediate health issues currently” because of the packaging problems. Rather, he said, the chief concern is that women may unintentionally become pregnant after taking the oral contraceptive.
“The unintended consequence of pregnancy is really the issue,” spokesman Kevin Wiggins said. “That’s why the company took a drastic action.”
Wiggins said the recall involves 1.4 million packages that have been distributed to pharmacists and customers since last year.
According to a statement for the Huntsville-based company, “select blisters (found inside the pill box) were rotated 180 degrees within the card, reversing the weekly tablet orientation.” This helped to leave the pills’ lot number, as well as the expiration date, “no longer visible.”
“As a result of this packaging error, the daily regimen for these oral contraceptives may be incorrect and could leave women without adequate contraception, and at risk for unwanted pregnancy,” the company said.
A pharmacist noticed the issue and contacted the company by phone, Wiggins explained.
Qualitest urged those with such products to begin using a “non-hormonal” form of birth control and consult a health care provider or pharmacist. Pharmacies have been told to contact those who have gotten the faultily packaged pills.
The recall affects these products: Cyclafem 7/7/7, Cyclafem 1/35, Emoquette, Gildess FE 1.5/30, Gildess FE 1/20, Orsythia, Previfem and Tri-Previfem.