Banks continue to ignore rules they don't like, including risk and pay

Surprise, surprise! To observers of the corrupt modern world of finance, this comes as no surprise. They pick and choose when to follow rules because they know that they are the masters of the universe. Because they generated so much money in the past and they provide so much campaign money, they can scare the political class into submission any time they like.

Jamie Dimon is offering his own excuses and meaningless words to the US Senate because he knows that he can say almost anything without ever being held accountable. The man still sits on the board at the NY Fed and has a substantial likelihood of sticking around for as long as he likes.

How easy would it be for any of us to pick and choose when we want to follow regulations or the law?

Banks are failing to comply with global rules requiring them to peg bonuses to long-term company performance, the regulatory task force of the Group of 20 leading economies said on Wednesday.

The G20 approved principles in the aftermath of the 2007-09 financial crisis to stop bonuses from encouraging excessive risk taking.

They force banks to limit how much of a bonus can be paid up front in cash, with the rest deferred and paid in shares that can only be sold over time.

Read the rest of this post...

Jamie Dimon translated: Regulation that could have helped banks, and America, is useless

There he is, the all-American jerk named Jamie Dimon.

As this excellent CNBC column points out, the always-arrogant Dimon was all over the place today on the Volcker Rule during testimony in the US Senate. At one point he actually said that he had no idea what the Volcker rule even is.

What was missing from the discussion was any remorse for potential problems that bad trades might have on the US taxpayers.

The $3 billion trading loss won't bring down JPMorgan, but after the 2008 fiasco, any large trading loss has to set off alarm bells and make people wonder what else may be hiding in there.

Remember that Dimon denied any problem weeks before the loss was announced, so his word is about as bad as it gets on Wall Street. After the taxpayers saved their precious lifestyle just a few short years ago, any normal person would have shown some concern for those still struggling, and have found a way to apologize for the added stress. But no, that's not the Jamie Dimon or Wall Street way. We didn't get any apology until today, when Jamie's behind was finally dragged in front of Congress.

More on the flip-flopping Jamie Dimon's bizarre meeting with the Senate:

Instead, and incredibly, Dimon contended twice that he didn’t know what the Volcker rule says. “I don’t know what the Volcker Rule is, it hasn’t been written yet,” the regaled banking chief told senators today.

Note to Mr. Dimon and his handlers: The proposed rule, mandated by the Dodd-Frank legislation, was published in November in the Federal Register and opened for public comment. Financial regulators are now in the process of finalizing it. That, after all, is why there’s a discussion. If the trade and the losses inform the rule, there’s still time to change it.

At least somewhat contradictorily, the chief of JPMorgan had earlier said it wasn’t clear that the rule would have prevented the trade. A little later he said, “It may very well have stopped parts of what this portfolio morphed into.” Which is it? Does he not know what’s been in the proposed rule that’s been available for seven months, or does he know enough about the rule to say it would not have prevented the trade?

As CNBC notes, fortunately for Dimon, the senators were as clueless as Dimon. Or at least we hope it was clueless though there's reason to believe it was a convenient moment of being clueless. There are campaign contributions to be won, after all. Read the rest of this post...

Lance Armstrong may lose his medals

I can't wait for Chris to weigh in (who is a cyclist himself, and no friend to Armstrong).

From USA Today:

Lance Armstrong faces new doping charges brought against him by the U.S. Anti-Doping Agency.

Armstrong, who retired from competitive cycling in 2011, confirmed on Twitter on Wednesday that he was informed of the charges in a letter sent by USADA.

His seven Tour de France titles could also be in jeopardy, the Washington Post first reported in a story published Wednesday on its website. The newspaper obtained a copy of a letter sent to Armstrong on Tuesday that says blood samples collected in 2009 and 2010 were "fully consistent with blood manipulation including EPO use and/or blood transfusions."

Read the rest of this post...

Ratings agency: Spain to ask for more cash, Italy bailout coming

The European Union did an effective job of kicking the can down the road for a few years but now it appears as though the road is coming to an end. The recent Spanish bailout never sounded like it would be enough considering the depth of the employment and real estate problems in Spain. The poorly implemented Spanish bailout is once again being pinned on Merkel, who has a knack for making a bad situation worse. It's also hardly a surprise that Italy is yet again the topic of bailout rumors but this time, the bailout looks much closer to reality.

CNBC has more on the crisis from Sean Egan of Egan-Jones.

Poor credit quality of banks usually goes hand-in-hand with poor government finances as the two institutions are “joined at the hip”, Egan told CNBC Asia’s “Squawk Box” on Wednesday. That’s the case for most countries such as the U.S., the U.K., Switzerland and Ireland; Spain and Italy are no exceptions, he said.

“It makes little sense to separate the banks’ credit quality from the governments’ credit quality because quite often, they support each other and that’s certainly the case in Italy and Spain,” he said. “We think that Spain will be back at the table, asking for more than the 100 billion euros ($125 billion) that they just asked for, and we think that Italy will also come to the table within the next 6 months.”

Read the rest of this post...

UK accuses Google of deliberately capturing private data

It's not exactly the "don't be evil" that Google used to talk about. If true, whoever approved this stupid move (and it was reportedly at high levels) overlooked the legal impact of grabbing this data and holding onto it. The legal action around the world is going to be very expensive for Google and it was completely avoidable. The Guardian:

Google is facing increasing pressure after the information commissioner launched an investigation into claims that it orchestrated a cover-up of its capture of emails, passwords and medical records of people in the UK.

The UK data watchdog has written to Google demanding answers after it emerged that the search engine firm knew its Street View cars could harvest personal information as they photographed homes across the globe.

The information commissioner's office said it was likely that highly private data – including email messages and browsing history – was secretly and deliberately captured from internet users in the UK. Google will now have to explain whether it misled regulators over the saga, which has hounded the company for more than two years.

Read the rest of this post...

Obama admin to US court: The drone kill program is so secret, it may not even exist

You read that headline right. Ari Melber at Politico has this story (Melber often publishes at The Nation and is excellent, in my opinion).

Some background — You may recall all the stories about Obama's drone war, the tale with the many layers. (Our post on that is here.)

Obama, the candidate with Osama bin Ladin's head on the point of his spear, is swaggering it about that he's got him a kill list and he uses drones to do the manly deed. His Kill List Minder, John Brennan, seems to have been leaking that (a) he, Brennan, is in charge of the list; but (b) he's only serving Obama, king of the kill itself.

That burnishes Brennan's cred internally (he's first among subordinates, a valued position) while burnishing his boss's big stick in an election season ("I'm just doing what the big guy wants, so shine that light his way please"). Clever; very clever.

Our write-up of that complex dance credits Marcy Wheeler for first catching the double game Brennan is playing with the press. Wheels within wheels, as it were, in the Executive branch.

By the way, if the prose in this description sounds lurid, it's done deliberately, to reflect the very broad lizard-strokes by which this manliest game is played in the primitive centers of testosterone voters in an election season.

There really are, in other words, real echoes of Conan the Barbarian swirling through everyone's brain:

Mongol General: This is good, but what is best in life?

Mongol: The open steppe, fleet horse, falcons at your wrist, and the wind in your hair.

Mongol General: Wrong! Conan! What is best in life?

Conan: To crush your enemies, see them driven before you, and to hear the lamentation of their women.

We are in the Conan era of American Exceptionalism, and the Drone War is the point of that spear. (See the end of this post for further proof.)

Back to Ari Melber and his story. Obama's drone kill program (no that's not hot prose; it's sober description) is being challenged in court. What's Obama doing? He's saying the drone war is so secret, it may not even exist.

Melber (my emphases):

Washington has many “secrets,” but few secrets. The Obama administration will face a test on the difference this month, in a case probing a major national security program.

The administration is defending a federal court challenge to one of its most significant operations in the war against Al Qaeda: the drone program of targeted killings. President Barack Obama’s lawyers insist the entire program is a “secret” — so it can’t even be hauled into court in the first place.

We know the program exists, however — thanks to the president’s own statements. ...

Definitely Kafka land. We read on:

Washington insiders are focused on who is leaking. ... To win its case under current law, however, the White House must do more than say it didn’t authorize the recent leaks. It must prove that no one in the administration has “officially acknowledged” the program.

In their court filings, Obama’s lawyers made two big claims that will surprise anyone who clicks through the day’s headlines.

Not only do they say no government officials have acknowledged the drones — they double down and declare that there may not even be a drone program.

This is what Team Transparancy has come to. As a reminder, this was issued by the White House some time back (emphasis his):

My Administration is committed to creating an unprecedented level of openness in Government. We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in Government.

Government should be transparent.

Tangled webs. Kafka.

Please click through to Melber's piece; there's more and it's interesting. Melber has a good eye for this stuff, and a good mind.

I want to close with a joke by one of my favorite stand-up comics. He's new to the stage but very good, very polished. Best "Obama" I've seen (I'm serious).

This comment is especially close to the manly theme of this post. You may have seen it, but it's worth rewatching:



Can you feel the Conan? Sends a thrill.

GP

To follow or send links: @Gaius_Publius Read the rest of this post...

Obama Girl meet Obama Boy

Okay, this cracked me up.


(H/t Towleroad.)

What this video is based on, all - all 25m views worth:

Read the rest of this post...

How GOP Cong. Mica made the TSA, and your national security, his own personal pork

GOP Cong. John Mica

To hell with national security.  There's pork in them there hills!

Sure, the Transportation Security Agency is meant to stop terrorists from causing another September 11 in which they kill thousands of US citizens, and this time maybe even destroy the White House or the Congress, like they wanted to do last time.

But national security is nothing compared to pork security.

GOP House committee chair John Mica has been pushing for years for the TSA to be privatized.

As Chris wrote yesterday, with all the problems the TSA has, it's not entirely clear why anything would improve under private management.  If anything, at least now TSA has to worry about the ire of the administration and Congress when they strip search granny, but after they're privatized, kiss any real government oversight goodbye.

Privatizing the TSA just doesn't make any sense, unless you do some research - something The Hill didn't bother doing in yesterday's article about this story.  But privatize it we are going to do, because Congressman Mica got some legislation passed earlier this year making it so.

Now why would he do that?

Maybe because one of the main contractors who would profit from privatizing the TSA is a campaign donor to Congressman Mica and one of his constituents.

From my earlier post on Mica's TSA conflict of interest, in which the Washington Post was burying Mica's conflict as well:

What the Washington Post doesn't tell you, until the end of the story, is that one of the big private contractors is in the House Transportation chairman's own district.

Covenant, based in Mica's home district in northeastern coastal Florida, has airport screening contracts in Sioux Falls, S.D., Tupelo, Miss., and seven small airports in northern and eastern Montana. Its deal at San Francisco International is by far its largest. Covenant employs nearly 1,100 people in the bay area, who make up nearly all of its 1,150 workers. The last four-year contract, from 2006 to 2010, totaled $314 million. A new contract has been put out for competitive bids. Meanwhile, Covenant is operating on a two-month contract ending in February.

Um, kind of a relevant fact that deserves to be highlighted a tad earlier. Rather than a story about airports ditching TSA, you may have a story about an incoming House committee chair trying to base our entire airport counter-terror security on who donates to his campaign - oh yeah, the post didn't tell you that one either, the president of the private contractor is also a donor to incoming Chairman Mica's campaign. Too bad the Washington Post didn't bother checking:

And a recent check of donations shows that Gerald Berry of Covenant Aviation donated to Mica again in 2011.

And what do you know, according to news reports "all signs are pointing to Covenant Aviation Security" getting the TSA privatization contract in Mica's own backyard.

Whodathunkit!

What's especially interesting about Mica's Covenant having the inside track is that Covenant is not without controversy:

[I]n 2006, according to a government report, Covenant was caught cheating on performance tests at San Francisco International Airport.

Hard to believe a company caught cheating on performance tests would have the inside track on new TSA contracts. So how did they manage it?

Now, in most of the world, if a politician were lobbying for something on behalf of someone who gave them money, we'd send that politician to jail - or at the very least they'd recuse themselves from the matter. We certainly wouldn't make them the chair of an entire committee, and we certainly wouldn't accede to their demands when the national security of the country was at stake.

But this is the way Washington works.  Especially in the Republican party.

Members of Congress are guided by (controlled) their constituents and their campaign donors, even when the subject of debate is national security. And when the constituent and donor is a corporation, the sky's the limit!

Whether or not a privatized TSA helps stop the next September 11 is not what is foremost on a (corrupt) congressman's mind, when the opportunity presents itself to turn America's first line of defense against the next Mohammed Atta into their own personal pork dinner.

Pass the gravy, Cong. Mica. Read the rest of this post...

$1 billion per day leaving Greek banks

Angela Merkel can take a bow for creating such confusion in the market. Rather than be serious about addressing the problem a few years ago, she chose to try and make a point that doesn't apply and then made sure to give the bankers a sweet deal during negotiations. Look at all of the money she saved Germany and the EU with that strategy. Brilliant job, huh?

Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger election on Sunday that many fear will result in the country being forced out of the euro.

Bankers said up to 800 million euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumors that a radical leftist leader may win the election.

The last published opinion polls showed the conservative New Democracy party, which backs the 130 billion euro ($160 billion) bailout that is keeping Greece afloat, running neck and neck with the leftist Syriza party, which wants to cancel the rescue deal.

Read the rest of this post...