Black hole at center of Milky Way about to have dinner

You'll have to go over and look at it, the video is too large to post - it's very cool though. Read the rest of this post...

Congress working over holidays to jam through SOPA

As usual, Congress has its priorities in order. Whatever it takes to support the 1%, you can count on Congress to be there with open hands. Somehow when it comes to supporting the 99% neither party can muster up enough energy to ever get serious. The crumbling middle class is an afterthought but for Congress - both parties - the middle class are a bunch of chumps who keep voting for the same crowd. It's no surprise that Americans dislike Congress so much and want to see them all voted out. TechDirt on the SOPA debate:

Despite the fact that Congress was supposed to be out of session until the end of January, the Judiciary Committee has just announced plans to come back to continue the markup this coming Wednesday. This is rather unusual and totally unnecessary. But it shows just how desperate Hollywood is to pass this bill as quickly as possible, before the momentum of opposition builds up even further.

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Nobel economist: alliance between banks and government at the heart of eurozone crisis

It's frustrating to watch the same old culprits at the center of yet another economic crisis. Nobel economist Edmund Phelps believes that this time we don't bail out the banks or else they will never learn. The failure of Bush/Paulson and then Obama/Geithner to change the dynamics of the problem and let the bankers continue to live their lifestyle was a mistake. Phelps also dismisses the usefulness of Dodd-Frank. It's not a long interview so click through to get it all. Deutsche Welle:

But aren't the banks at the heart of this whole mess? We wouldn't be worried about Greece if the European banks had not overpurchased Greek debt. If the banks had been more prudent in buying all this sovereign debt the problem could have been solved a long time ago by just giving the bond holders a haircut. The whole trouble is that the bond holders are the banks or at least were until they were trying to divest themselves of bonds in recent weeks. To give a haircut to the banks might bring down the banking system. I think the political story here is there has been an alliance for mutual gain between the governments and the banks. In this alliance for mutual gain the banks would buy up immense quantities of sovereign debt instead of lending to small businesses for innovation. They were not required to hold any capital against such assets and pressure was no doubt put on the ratings agencies to give all this sovereign debt a triple AAA rating. And this was also great for the governments and lots of governments took advantage that they didn't have to pay as high interest rates as they would otherwise have to pay. And they began borrowing a great deal. I think this alliance between the banks and the governments lies at the heart of the eurozone crisis.

This is exactly why the Occupy movement needs to step up the pressure on the political class since they are very much a part of the problem. This is not a left or right, Democrat or Republican problem but a political class problem. They're all addicted to the money from the financial industry and that includes the Obama campaign who is swimming in Wall Street cash. Read the rest of this post...

Stunning testimony in Penn State rape case

I grew up in Pennsylvania and while I never cared for Penn State, Joe Paterno or their football program, I always had a certain respect for the program. Penn State football seemed to be above the fray that you see at other football factory schools. Joe Paterno spoke in court yesterday about the reports of being told of an alleged incident involving Paterno's top assistant and the testimony was about as surprising as many had suspected. It's unthinkable to even imagine anyone including even the most diehard Penn State fan, could still support Paterno. It's about as pathetic as the excuses made by the Catholic church. What was Paterno thinking?

Today, we have some answers to the crucial question from the coach's mouth after Paterno's testimony from earlier this year — in which the now-former Penn State icon told a grand jury that he had been informed about an incident of "a sexual nature" between ex-defensive coordinator Jerry Sandusky and a young boy in 2002 — was read for the first time in open court Friday. In the testimony, Paterno said he "knew inappropriate action was taken by Jerry Sandusky with a youngster" after a meeting with then-graduate assistant Mike McQueary, who allegedly saw Sandusky sexually abusing a boy in a locker room shower the previous night, but did not inform police and waited at least a day to inform his boss, athletic director Tim Curley, because he "didn't want to interfere with their weekends."

I wonder how the weekend went for the victim? Read the rest of this post...

Nearly 1 of 2 Americans poor or low income

This should be a complete embarrassment to the political class but they will no doubt continue to ignore this crisis. It's not healthy to keep focusing on the 1% and pretending as though the middle class is collapsing but that's what will happen. It's not asking too much to have Washington focus on this, is it?

Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.

The latest census data depict a middle class that's shrinking as unemployment stays high and the government's safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families.

"Safety net programs such as food stamps and tax credits kept poverty from rising even higher in 2010, but for many low-income families with work-related and medical expenses, they are considered too 'rich' to qualify," said Sheldon Danziger, a University of Michigan public policy professor who specializes in poverty.

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Jon Corzine update: MF Global told CME it used customer funds

There are MF Global stories coming fast and thick. (Background here, if you need to catch up; bottom line is that Top 0.1% golden boy and MF Global CEO Jon Corzine appears to have used customer funds to pay off the firm's losses in bets made with its own money.)

This post will offer some headlines and links, just as a way to keep you abreast of this rapidly-moving story. My comment below; all emphasis mine.

■ CME was MF Global's regulator. Start here, with Yves Smith's wide-ranging post, "CME to Customers: Drop Dead". Ms. Smith makes several points in the post, the most important being the change in customer-mindedness in modern "capitalism" (my nasty quote-use). But note this:

CME ... is under the hot lights in the wake of the MF Global debacle. Legislators are trying to get in front of the unhappy mob of wronged customers and call it a parade. And an obvious focus of inquiry is the self regulated derivatives exchange, the CME Group, which also oversaw futures commission merchants like MF Global. Worse, MF Global had gotten a clean bill of health from the CME in its last audit.

Smith quotes CME's response:

“In the case of MF Global, we did everything we could within our regulatory power, but MF Global broke exchange rules and government regulations designed to protect customer funds. Because the firm failed to comply with regulations, that does not mean the system failed,” the group said.

Note their defense: in essence, "It's not our fault because they fooled us," as if not getting fooled weren't the goal of regulation. (Even so, see below; they weren't fooled.)

■ CEO Jon Corzine's defense: I know nothing.
Earlier this week, Corzine testified before a Congressional committee (Agriculture, if you can believe it) that wants "answers on what happened". There Corzine offered the Sgt. Schultz defense: "I know nothing" (h/t Naked Capitalism):

Mr. Corzine told the House Agriculture Committee that he was “stunned” when he learned late on Oct. 30 that about $1 billion of customer money could not be located, a discovery that thwarted a sale of the firm and led to its filing for bankruptcy. Regulators and the Federal Bureau of Investigation are now hunting for the money and examining potential wrongdoing at the firm. ...

“I never intended to break any rules,” said Mr. Corzine, dressed in a dark suit but without his trademark sweater vest. [This is a fashion mag?] “I know I had no intention to ever authorize the transfer of segregated moneys. I know what my intentions were.”

The same article offers this grace note:

Mr. Corzine has not been accused of any wrongdoing.

Of course not.

■ MF Global was a concern of the NY Fed since 2009. This information comes from the Financial Times Thursday (December 15). You may need a (free) subscription to get the link to work. The key part:

The Federal Reserve Bank of New York expressed concerns over MF Global’s internal controls as far back as 2009, more than two years before the brokerage declared bankruptcy in October and an estimated $1.2bn in customer funds was discovered missing.

The New York Fed’s reservations led it to delay by one year MF Global’s application to become a so-called “primary dealer” and join a select group of 21 banks and investment firms authorised to trade directly with the central bank[.] ... Although the Fed eventually approved MF Global’s request, following a visit by Jon Corzine, the broker’s then chief executive, to the central bank’s branch in New York, the Fed’s concerns underscore the depth of regulators’ worries that the company lacked appropriate controls over risk-taking and effective oversight of traders’ activities.

I guess when you're a poster boy for the Top 0.1% like Jon Corzine, you swing serious pipe in meetings with the Fed. Mostly, it's the Fed swinging pipe.

■ MF Global told CME it used customer funds. Which brings us to Friday (December 16). From Bloomberg:

MF Global Holdings Ltd. used about $700 million of customer funds to “meet liquidity issues” in the days prior to its bankruptcy, according to CME Group Inc., which had auditing authority over the failed futures broker.

CME Group detailed its dealings with MF Global in documents released yesterday by the oversight panel of the House Financial Services Committee. Christine Serwinski, chief financial officer for North America at MF Global, and Edith O’Brien, a treasurer, told Mike Procajlo, an exchange auditor, at around 1 a.m. on Oct. 31 in Serwinski’s Chicago office that the customer money was transferred on Oct. 27 and Oct. 28 and possibly Oct. 26, according to a CME Group timeline.

“About $700 million was moved to the broker-dealer side of the business to meet liquidity issues in a series of transactions on Thursday, Friday and possibly Wednesday,” Serwinski and O’Brien told Procajlo hours before the firm filed for the eighth-largest bankruptcy following record quarterly losses and $6.3 billion in trades on European sovereign debt.

The same story says Corzine is sticking to his story:

The former senator and governor of New Jersey said he doesn’t know what happened to the money.

And that's where we are. CME, the "frontline regulator," says it knows nothing. Corzine says he knows nothing and ordered nothing. Documents show CME, in fact, did know something.

What's my point?

First, to bring you up to date. In a country with real Rule of Law, CME and its relevant execs would be brought to a court for trial. In addition, a case against Jon Corzine would be vigorously developed, and he'd be charged in an actual attempt to convict. The outcome would depend on his defense, not on his Top 0.1% Club Card (and sweater vest).

At the very least, he'd have to explain himself before a judge and jury, someone with power to incarcerate him for theft and lying. At most, he'd serve time like any other lying thief.

Second, and most important, this story is a poster child for actual Rule of Law (as opposed to the banana-republic, pretend kind). There's no question at this point the money was stolen. It's impossible to believe that Corzine "knew nothing."

But as noted, Jon Corzine has a Top 0.1% Club Card:

He's Top 0.1% in spades: a Goldman CEO, a senator, a governor, and a major Dem fundraiser in an election year. If he does see a jail or a courtroom, it will be revolutionary.

And that's my main point. This is an Occupy story, a rule of law story, and you should be watching it closely.

Will CME be charged? Will Jon Corzine be indicted? If he gets off with "public embarrassment" as his punishment, we'll have public pre-election proof that, no matter the party in power, there's no rule of law for the New Barons that own more and more of this country and its political structure.

(Why do I say "no matter the party in power"? Corzine is a major Obama/Dem fundraiser. If Obama & the Dems don't give him the Weiner's Wiener treatment, you'll know he's protected by ... guess who.)

GP Read the rest of this post...

The Ramones - Sheena Is A Punk Rocker

If your holiday shopping isn't yet done, you're going to need a jolt of The Ramones with that morning coffee before running out. We're all done here, but then again, we rarely exchange gifts at home for Christmas. We've stocked up gifts over the year when we found good sales and will wrap them up for nieces, nephews and the godchildren. The cats much prefer a few tasty treats from a holiday meal and that will be the plan for next weekend. I still have to figure out when to prepare the Christmas meal and then, what we're going to eat. Besides shucking a few dozen oysters I haven't figured the menu. Read the rest of this post...

British PM calls for return to Christian values

Oh please, give it a rest already. We've seen so many child rape stories from the Catholic church and they also claim to have Christian values. We also watched a so-called Christian president invade two countries and wage war on the middle class so you'll have to excuse me if I vomit when listening to such trash. How about Cameron sticks to the plan which is supposedly to get the UK back on track economically and have people working again. This is just another distraction because he probably realizes that problem is not going away any time soon.

"Whether you look at the riots last summer, the financial crash and the expenses scandal, or the ongoing terrorist threat from Islamist extremists around the world, one thing is clear: moral neutrality or passive tolerance just isn't going to cut it anymore." He said people were unwilling to distinguish right from wrong. "The absence of any real accountability, or moral code, allowed some bankers and politicians to behave with scant regard for the rest of society. And when it comes to fighting violent extremism, the almost fearful passive tolerance of religious extremism that has allowed segregated communities to behave in ways that run completely counter to our values has not contained that extremism but allowed it to grow and prosper."

Maybe Cameron has missed it, but it's all too common to see religion used for hateful purposes in the US, which is supposed to be a lot more religious than the UK. The Bush administration who was supposed to be monitoring the financial crisis was run by right wing Christians in case anyone forgot. Read the rest of this post...