Copper Supply to be Choked?

This is interesting, and perhaps alarmist. It looks like the SEC is greenlighting financial instruments that buy up and hoard physical copper, which is a big change. The article says it could happen to grain or any other vital supply.

A lot of people scream for a free market, but they don't usually mean cornering markets, hoarding commodities, or any other traditionally destructive practice. It looks like something to be aware of as this one gets slipped through with no law in back of it.

Regulate Stuff?

Naw, not really. Our bureaucrats are too busy getting "massages" in Vegas.

New CFPB Chief Out of the Gate

Finally, a recess appointment when we need one most. ABC News reports on Cordray's agenda-defining speech:

“Consumers deserve to have someone who will stand on their side, who will protect them against fraud, and who will ensure that they are treated fairly in the financial marketplace,” he said. “The new consumer bureau was created to make sure these things are achieved for all Americans.”

 Let's have some more recess appointments. I think they're spelled out in the U.S. Constitution, and I don't think all of Congress is in session when one chamber (the Senate) has adjourned and left the building.

Obama Did Not Say What I Thought He Said, or Did He?

I watched some of the very puzzling 60 Minutes interview with President Obama. I so wanted his explanations to make sense. Steve Kroft seemed to repeat the Prez's poll numbers endlessly, as if that was the only issue worth asking about. Then I thought I heard something that made my brain hurt.

I checked the transcript, and here's the part of the exchange I needed played back:

KROFT: One of the things that surprised me the most about this poll is that 42%, when asked who your policies favor the most, 42% said Wall Street. Only 35% said average Americans. My suspicion is some of that may have to do with the fact that there's not been any prosecutions, criminal prosecutions, of people on Wall Street. And that the civil charges that have been brought have often resulted in what many people think have been slap on the wrists, fines. "Cost of doing business," I think you called it in the Kansas speech. Are you disappointed by that?

PRESIDENT OBAMA: Well, I think you're absolutely right in your interpretation. And, you know, I can't, as President of the United States, comment on the decisions about particular prosecutions. That's the job of the Justice Department. And we keep those things separate, so that there's no political influence on decisions made by professional prosecutors. I can tell you, just from 40,000 feet, that some of the most damaging behavior on Wall Street, in some cases, some of the least ethical behavior on Wall Street, wasn't illegal.

That's exactly why we had to change the laws. And that's why we put in place the toughest financial reform package since F.D.R. and the Great Depression. And that law is not yet fully implemented, but already what we're doing is we've said to banks, "You know what? You can't take wild risks with other people's money. You can't expect a taxpayer bailout. We're gonna ask you to set up a living will, so that if you are going down, we've already figured how to break it up, without harming the rest of the economy."

[...]  [emphasis mine]

Wait, if there were settlements signed, usually without admission of any wrongdoing, then only the settlements' terms clear the companies of criminality!

He's basically saying what the SEC usually says: Hey, we can't prosecute, because we don't have the time, resources, or people to do it. Therefore, company X, sign here, here, and here, and go with our blessing. All we want it a check.

This is a surprisingly tone-deaf statement, especially with the Occupy Wall Street movement proving at last that, yes, people are paying a tiny bit of attention.

Got to hand it to the companies that get charged, they simply pay the government to complete their coverups for them. Nice.

And as long as we've "changed the laws," we can now prosecute a greater volume of no one at a much faster pace! We can sell these settlements just like the Medieval church sold indulgences. No crime involved: Just sign here, here, and here.

JOBS, OUR BIGGEST EXPORT. FREE TRADE FOR ALL!

Headlining the keynote speakers at the forum was renowned economist Dr. Lawrence Summers, former director of the White House National Economic Council under Barack Obama. Summers, who served as president of Harvard University from 2001-2006, said in his speech that global sourcing is a key to economic success.
“There are those today who would resist the process of international integration; that is a prescription for a more contentious and less prosperous world,” stated Summers. “We should not oppose offshoring or outsourcing.”

Jobs, our biggest export!

OBAMA'S (AND DEMS') BAD MESSAGING. INTENTIONAL OR STUPID?

Okay, hurricane Irene and Obama's Huge Speech have now blown over. Let's examine the wreckage and damage caused by the latter.

I realized in a phone conversation that the Dems in general, and Prez O in particular, have a gigantic problem with messaging. Take this snippet from the New York Times:

Mr. Obama went before Congress in September to push for a $447 billion package of tax cuts and new government spending.

The centerpiece of the bill, known as the American Jobs Act, is an extension and expansion of the cut in payroll taxes, worth $240 billion, under which the tax paid by employees would be cut in half through 2012.

Opinesters are opining away over whether these tax cuts will create any jobs at all. Consumer confidence is extremely low. So, the misnamed payroll tax cut (really a cut to contributions to Social Security) might not stimulate much.

But a point is being missed by anyone I can see: When Pres. G.W. Bush eased the heavy burden on the pitiable and downtrodden wealthy, he and his amen-chorus Repubs called it a TAX CUT. When Prez O and the Dems put forth the same plan, albeit for greedy and overprivileged working people, they happily call it SPENDING which has to be PAID FOR. That's not a subtle distinction, that's an encapsulation of the last 30 years of conservative framing of the argument! The Democrats spend. Spend, spend, spend. Even when they cut taxes, that's spending. And you wonder why it's a no-win every time. The Dems are playing uphill with this brainless messaging.

Worse, in this case, it could be intentionally put that way in order to puff up a jobs bill that really spends far less than half of its total on putting anyone to work. At the center of the bill is a vacuum that must be now filled with other CUTS. Cut, cut cut. Is this a never-ending rerun?

Obama's Huge Jobs Speech Promises ... Jobs?

Looks like a round of election-year promises are packed into Obama's coming speech. This speech will be the Huge Jobs Speech, you might know.

He's given up most leverage I can think of with Congress, so I don't see much coming out it. Hope I'm proved wrong.

From Bloomberg:

“You say you’re the party of tax cuts?” Obama said before the annual Metro Detroit Central Labor Council rally. “Well then, prove you’ll fight just as hard for tax cuts for middle- class families as you do for oil companies and the most affluent Americans.”

[...]

“We’ve got roads and bridges across this country that need rebuilding,” Obama, 50, said. “We’ve got more than 1 million unemployed construction workers ready to get dirty right now. There is work to be done and there are workers ready to do it. Labor’s on board, business is on board. We just need Congress to get on board.”

What's coming up this week may turn out to be his best speech for 2009 or even 2010. In fact, I think I heard him speechifying the above points in those years. And then... drumroll... nothing.

This is the Obama pattern. Crisis, build-up to Huge Speech, delivery of the Huge Speech, nodding heads and cries of "We're saved!" and then ... nothing much of anything. Rinse, repeat.

I will not watch this next Huge Speech. At this point they're huge rehashes of past Huge Speeches, and are completely divorced from the Administration's policy making. Or lack thereof.

Obama: We Don't Need No Stinkin' Regulations

Obama overrules the EPA's clean-air regulations.

President Barack Obama on Friday scrapped his administration's controversial plans to tighten smog rules, bowing to the demands of congressional Republicans and some business leaders.

Obama overruled the Environmental Protection Agency — and the unanimous opinion of its independent panel of scientific advisers — and directed administrator Lisa Jackson to withdraw the proposed regulation to reduce concentrations of ground-level ozone, smog's main ingredient. The decision rests in part on reducing regulatory burdens and uncertainty for businesses at a time of rampant uncertainty about an unsteady economy.

That last line is a verbatim quote of the recent Republican line. Don't believe me? Try this NY Times piece:

On Monday, Mr. Perry called on Mr. Obama to halt all regulations because, Mr. Perry said, “his E.P.A. regulations are killing jobs all across America.

Wait, before you say "pre-emptive strike," read the article. Even the more moderate Republicans quoted seem to think Perry is off his rocker on this one, although I'm not sure he is on his rocker about much of anything.

So, if the Obama Administration gives in to every extreme Republican demand, the crazies won't have a platform to run on? In what world is that even close to logical?

SEC Shreds, Burns, and Zaps Evidence of Past "Non-Investigations"

Matt Taibbi reveals a whistleblower's case of dark doings at the SEC, where cover-ups are job one, and no evil deed goes unrewarded.

Flynn discovered a directive on the enforcement division's internal website ordering staff to destroy "any records obtained in connection" with closed MUIs. The directive appeared to violate federal law, which gives responsibility for maintaining and destroying all records to the National Archives and Records Administration. Over a decade earlier, in fact, the SEC had struck a deal with NARA stipulating that investigative records were to be maintained for 25 years – and that if any files were to be destroyed after that, the shredding was to be done by NARA, not the SEC.

But Flynn soon learned that the records for thousands of preliminary investigations no longer existed. In his letter to Congress, Flynn estimates that the practice of destroying MUIs had begun as early as 1993, and has resulted in at least 9,000 case files being destroyed. For all the thousands of tips that had come in to the SEC, and the thousands of interviews that had been conducted by the agency's staff, all that remained were a few perfunctory lines for each case. The mountains of evidence gathered were no longer in existence.

There's a good list of some buried cases, but it looks like there was a whole lotta greasing of wheels and other objects involved.

Shocking, but not surprising. I predict a full inquiry, and try not to laugh too loud.

Obama Plans to Put Pentagon on a Diet of Growth Hormones

An old Soviet tank rusts away in Afghanistan.

(Nothing to do with today.)

Missed this one, amidst all the austerity and shared sacrifice. From Army Times (which I've never heard of, honestly, but assume is something).

 "The Obama administration’s five-year defense plan is putting the Defense Department on a path toward serious budget problems in the future, according to new Congressional Budget Office estimates of long-term defense costs.

"Citing increased costs for operations, support and weapons, a new analysis from the nonpartisan budget office predicts the Defense Department will need a $631 billion base budget in 2015 and a $735 billion budget by 2021. The administration’s five-year defense plan proposes a $611 billion budget in 2015, growing to $694 billion by 2021."

I must research this more. If it's true, this is my vote for most under-reported.

I suppose one can say this is just a report, but then, during all the deficit hysteria, the House voted a Pentagon budget of $649B, up $17B. That was in early July, and almost completely unreported!

The recent "debate" and talk of the family budget would make sense if your family had an arsenal in the back yard while the garage and porch were falling in, the house's plumbing and heating needed fixing, and the wiring was frayed and sparking away.

Washington Post Understatement of the Year: Possible Conflict of Interest at the Fed

Read it and steam.

Obama Steps on Third Rail Without a Parachute

Oh yes he did! Unless there's a denial of the plain wording of the Washington Post article by Lori Montgomery:

“Obviously, there will be some Democrats who don’t believe we need to do entitlement reform. But there seems to be some hunger to do something of some significance,” said a Democratic official familiar with the administration’s thinking. “These moments come along at most once a decade. And it would be a real mistake if we let it pass us by.”

Rather than roughly $2 trillion in savings, the White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade . . .

Privately, some congressional Democrats were alarmed by the president’s proposal, which could include adjusting the measure of inflation used to determine Social Security payouts.

Stephen Ohlemacher via AP seems to confirm this:

One option includes a new inflation measure for Social Security that could produce savings close to $200 billion through a combination of reduced benefits and higher taxes, White House officials said Thursday.

 Low- and middle-income families could be hit.

The proposal would represent a reversal for Obama. In contrast to his pledge to target tax increases at the wealthy, high-income families would largely be spared from tax increases that would result from changing the way inflation is measured.

Looks like it's time for some magic book-cooking to will away that pesky inflation. Reversal? I've seen milder reversals in skateboard championships.

At which Nancy Pelosi goes mildly ballistic:

“You want to take a look at Social Security then look at it on its own table, but do not consider Social Security a piggy bank for giving tax cuts to the wealthiest people in our country.”

I don't know what else you'd call what's described above but that! But we've had clues for a year and a half that this has been Obama's intention all along, all the while saying the opposite over and over again. I don't know if this outrage is truly outrage, or just a bit of a dust-up so we'll think the Dems give a damn. Why is there a Democratic Party at all at this point, when all they can seem to accomplish is Stealth Republicanism(TM)?

Half a Billion Dollars "Tainted" in CityTime Scandal

I'm surprised the press hasn't linked the CityTime scandal to the massive cutbacks. Or maybe not so surprised:

 Reddy Allen and Dr Padma Allen have been indicted on federal fraud and kickback charges in relation to the scandals surrounding Mayor Michael Bloomberg administration's CityTime project to modernise the municipal payroll system.

A grand jury said on Monday that more than $600 million of the project's bloated budget is "tainted" by fraud. The couple secured a lucrative, no-bid subcontract for the CityTime that made it look like their firm, TechnoDyne, was "a successful and fast-growing company," the New York Post
reported.

Gee, another "no-bid" contract. How did that happen? Anyone know?

Sheldon Silver Gives Away the Store on Rent Regs.

He seriously sent me an email touting this gawdawful deal on rent regs.

I wrote him back that it had to be some sort of joke. 2500 is the threshold or 200K income? Not indexed?

I told him the message to anyone who works for him was that they should move. Maybe he'll be able to get recent immigrants sleeping in shifts to staff his office.

Democrats... NOW FIVE PER CENT BETTER THAN REPUBLICANS!

Greenspan Emerges From Crypt to Utter a Curse Upon Us All

He's decided that the Greeks will default, after which everything else tanks. Even if such a scenario plays out, he knows full well that people take what he says as truth, and act accordingly. Can't he stop himself?

Then in the next interview he'll champion the virtues of no regulations on anything.

Can this man be shipped to St. Helena at long last?

Robert Reich is Right, Again!

He asks, "Doesn't the White House get it?" Short answer: No. Long answer: Yes, but we can't do any of that.

Worse still, but most likely answer: Yes, and we can do some, most, or all of that for growth and job creation, but we don't want to go through the bother, and please stop asking for anything, you awful rabble who voted us in.

Mortgage Crisis, part 2. Securities based on dark matter.

Naked Capitalism collects the story well.

According to court testimony, it looks like a lot of notes did not get properly transferred into the securities, meaning many of those instruments were, perhaps, based on nothing. Let's call these things dark matter securities. That would mean that there's literally no there there, and the investors who bought pieces of these heaps of nothing now hold less than nothing, if I follow rightly.

Of course, some of those holders would have to enter the fray and find proof in their cases. Gov't looks like it's trying to frame a "settlement" that waves a magic wand over it all.

But what of the government resale of all this nonstuff? The repackaging of dark matter with a bow on it? Could be the biggest cover-up in history in progress. Nobody look behind the curtain, and somebody call the fabric store!

Tim Pawlenty Follows Fellow Sheep Off Cliff.

He'd sign Paul Ryan's Medicare decimation, according to ABC News.

He now joins Trump and Gingrich as stumblers out of the gate. This virtually dooms his prospects for getting voted for by actual people with hands.

I'm not sure what the Republicans get out of this besides a grand flame-out show of ideology. Doesn't large pharma, at least, love the program, especially without any negotiations allowed on price? What fictitious, invisible people benefit? Who is lobbying for it?

The near-universal doubling down on this strategy actually baffles me. It doesn't seem to poll well even among the base.