Video: Fire tornado

Starts off a bit meh, and gets kind of cool around the 2 minute mark.

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JPMorgan refusing to hand over energy manipulation emails to Feds

The supposedly best run bank in the financial industry is in the thick of yet another investigation once again. Besides suggestions that JPMorgan may also be involved in the Libor criminal manipulation that has taken down three top executives at Barclays, JPMorgan is under investigation in the US for possibly manipulating the US energy market.

How many more free rides and bogus settlements that involve agreement that nobody was guilty are we going to have to see before Washington gets serious about white collar crime? The right wing and much of Washington is always in favor of throwing people into jail unless they're rich white people with high paying jobs. Until this changes we can't expect to clean up the overflowing sewage dump called Wall Street.

More on the latest Wall Street investigation via Bloomberg:

JPMorgan Chase & Co. (JPM) (JPM)’s refusal to turn over e-mails in a federal probe of potential energy-market manipulation is the latest challenge for Chief Executive Officer Jamie Dimon as the bank faces multiple investigations.

The U.S. Federal Energy Regulatory Commission sued JPMorgan July 2 to release 25 e-mails in an investigation of possible manipulation of power markets in California and the Midwest by J.P. Morgan Ventures Energy Corp., according to court filings by the Washington-based agency. FERC opened the probe in August after complaints from California and Midwest grid operators that JPMorgan’s bidding practices were abusive, the documents show.

Go down towards the bottom of the article to read more about the allegations of extracting above market prices, which would then be passed on to consumers. The banks just keep hammering away at the 99% from every angle and they won't stop until someone in the political class finds enough backbone to stop them. Will anyone step up? Read the rest of this post...

Report issued on 2009 Air France crash near Brazil

A scary report that seems to leave some key questions unanswered.  Even I know that when you get a stall warning you push down on the controls (to get the plane to pick up speed and lift - I accidentally wrote the opposite in the prior draft).  But, as the families note, if the plane was giving contradictory information to the pilots - to the point of sending off more alarms when they tried to correct the stall, it's understandable that the pilots might have responded in the wrong manner.

From a broadcast I just saw on CBS, they also note that the pilot, was who out on a schedule break, didn't come back into the cockpit for a minute and a half after the crisis started.

Also, when you take a look at the transcript, it's not entirely clear what happened when.  It'd be nice to have an experience pilot read through it and translate it into normal English, so to speak.  Check out this snippet of the cockpit conversation, nearly three and a half minutes into the crisis - it took that long until someone other than the most inexperienced pilot took over the controls.  Also, note the captain contradicting the copilot about whether to climb or not.  Up until this point, it sounds like the captain has the right idea, but he still isn't the one in charge of flying the plane - why?

When the most inexperienced pilot finally gave up the controls, he didn't give them up to the captain, who was standing right there, he gave them up to the copilot.  Why didn't the captain take over?  From the transcript of the final moments, it's not clear if the captain ever took over the controls - again, why not?

These were the final 25 seconds - it's creepy to read.

You can find the report here.

From the Christian Science Monitor:

Cockpit recordings showed that the captain was taking a scheduled break when the aircraft hit a shower of ice particles at night during an equatorial storm over the ocean, with the least experienced of two co-pilots at the controls.

The investigation has centered on the actions of this pilot and why the crew ignored dozens of audible stall alarms, as well as protocols which may have discouraged the senior co-pilot from overriding his colleague to take full control.

Flight data suggested the crew mainly pulled back on the control stick instead of pushing it forward to create more lift, which is the procedure for coping with a stall.

According to representatives of victims' families, that may have been due to faulty information displayed on a panel called the flight director, an element they said had been revealed to them by the BEA but was omitted from the press release.

By the time the captain returned, the plane was in such a dire state that the aircraft's computers gave up trying to calculate its position and turned the stall warning off.

At that point, the pilots nudged the nose forward only for the alarm to come back to life, a contradiction severely criticized by pilot unions who say it confused the crew.

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"Whites only" Christian conference kicks off

Oh, Alabama.

A controversial pastor's conference welcoming only "white Christians" is underway in Lamar County, Ala., upsetting residents of the nearby town of Winfield in the western part of the state.

Christian Identity Ministries is holding a three-day conference for so-called "white Christians" who contend they have been treated unfairly, the Rev. Mel Lewis told local TV station WSFA. Lewis, the organizer and keynote speaker, says they have the right, like any other Americans, to worship how they wish.

Ku Klux Klan flags and white supremacy slogans surround the conference, which will conclude with a cross being set on fire Friday night. Organizers say it's not a cross-burning, but rather sacred Christian cross lighting.

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Wild fires, heatwaves, crazy winds: this is what climate change looks like

The Fox News team loves mocking climate change whenever there's a snow storm (duh huh, where's the global warming now?, duh huh) but somehow they're nowhere to be found when the US is roasting under unusually hot conditions. Curious, isn't it?

But since at least 1988, climate scientists have warned that climate change would bring, in general, increased heat waves, more droughts, more sudden downpours, more widespread wildfires and worsening storms. In the United States, those extremes are happening here and now.

So far this year, more than 2.1 million acres have burned in wildfires, more than 113 million people in the U.S. were in areas under extreme heat advisories last Friday, two-thirds of the country is experiencing drought, and earlier in June, deluges flooded Minnesota and Florida.

"This is what global warming looks like at the regional or personal level," said Jonathan Overpeck, professor of geosciences and atmospheric sciences at the University of Arizona. "The extra heat increases the odds of worse heat waves, droughts, storms and wildfire. This is certainly what I and many other climate scientists have been warning about."

Now that the heatwave is destroying crops for midwestern farmers, will they finally pressure Washington to wake up to this problem? Read the rest of this post...

Video: Don't mess with this guy's fruit

A very funny video of a guy using his computer's camera at work to solve the mystery of why his fruit keeps disappearing from his desk.

This reminds me of the time that I refused to believe Chris and Joelle that their cat, Nasdaq, who's a good 18 pounds and a great lover of food, was not jumping up on the dining room table at night and stealing the other cat's food. (They were putting Sushi's food on the table to keep it away from Nasdaq, who they assumed was too fat to get up on the table with the chairs pushed in.)

Well, it seemed a tad too suspicious to me that Sushi ate all of his food every night while I was asleep - I left out a BIG bowl - and I was even more suspicious one day when Nasdaq didn't finish her breakfast, as if she had eaten already.

So, I found some motion-sensor software for my laptop and set it up overnight to catch Nasdaq in the act. And boy did I. Let's just say that Chris' little cat-girl is slightly more agile than he ever suspected.

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The Romneys are jet-skiing in New Hampshire this week

Must be nice.

Interestingly, it was Ann Romney who mocked the Obamas only a few weeks ago for taking "too many" vacations, even though when you look at the numbers the Obamas took far fewer vacations in office than the Romneys ever did (or the Bushes).  And now Ann and Mitt are off jet-skiing, with photos to boot.

And the Romneys next stop is the Olympics in London, where their horse and rider are competing because, you know, who doesn't have a horse and rider competing in the Olympics. Read the rest of this post...

Auto sales continue to grow

Maybe the GOP wants to keep talking about how bad the auto rescue was, but the facts say otherwise. Unlike the bank bailouts where it was all about protecting the lifestyle of the richest of the rich, the auto rescue was about saving middle class jobs. It worked and it Obama's plan didn't destroy families the way the Romney plan would have destroyed them and the industry. CNBC:

“The combination of new products, available credit, lower fuel prices and modest economic growth was a stronger influence on consumer behavior than economic and political uncertainty,” said Kurt McNeil, General Motors’ vice president of U.S. sales.

GM posted a solid, 16 percent year-over-year gain, June bringing the maker’s best monthly unit sales since September of 2008.

Chrysler, meanwhile, delivered its 27th consecutive monthly year-over-year increase — an increase of 20 percent — making it Chrysler’s best June in five years.

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Why we keep having power outages

While our power system is getting old, it's prohibitively expensive to upgrade it. To the tune of $100 more per month per power customer.

Above-ground lines are vulnerable to lashing winds and falling trees, but relocating them underground involves huge costs — as much as $15 million per mile of buried line — and that gets passed onto consumers.

"It's a system that from an infrastructure point of view is beginning to age, has been aging," said Gregory Reed, a professor of electric power engineering at the University of Pittsburgh. "We haven't expanded and modernized the bulk of the transmission and distribution network."

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LIBOR for Laymen—What is it and why should you care?

UPDATE: For fans of the bottom line, click here.
________

Answers to the headline questions first, then explanations.

■ What is it? LIBOR is the London InterBank Offered Rate — it's the rate at which banks loan each other money. (More on why that matters below.)

■ Why should you care? The LIBOR scandal is the biggest financial and political threat since the Masters of the Universe almost took down the world in 2007–2008.

Most U.S. mortgages were hooked to the 2008 fraud crisis. At least $800 trillion in loans and contracts are hooked to LIBOR.

When you see what the LIBOR rate actually is, you'll see why this is cheating on a monstrous scale, with monstrous consequences for the Littles as the Bigs play their money-sucking games. (Money-sucking: Sucking money out of a financial system the way you divest an orange of its juice.)

Let's take this one piece at a time.

What is LIBOR?

LIBOR is the London InterBank Offered Rate. Its two aspects (it's a rate and a benchmark) are expressed well here (some reparagraphing):

The London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. ...

It is a benchmark ... for interest rates all around the world.

Libor rates are calculated for different lending periods - overnight, one week, one month, two months, six months, etc. - and published daily at 11am by the British Bankers' Association.

Many financial institutions, mortgage lenders and credit card agencies set their own rates relative to (and typically higher than) Libor.

What to notice:

■ LIBOR is simply an interest rate on bank-to-bank loans. That's really all you need to know.

Banks need to borrow; they frequently go to other banks for loans (after all, that's where the money is).

If I'm Barclays Bank (say) and want a loan from the Royal Bank of Scotland (RBS), they charge me interest. Just like a car loan.

■ Like every other borrower, banks have borrowing costs based on their credit-worthiness. The less credit-worthy, the higher the interest rate they have to pay. Just like a car loan.

If I'm Barclays (say) and I'm suddenly not doing so well, that RBS loan comes with a higher interest rate than before. It's pretty clear, therefore, that the rate I'm being charged is a public — at least to other banks — measure of my financial condition.

Can you see where this is headed?

■ LIBOR is an average of self-reported rates.

Barklays is responsible for reporting just its own borrowing costs (the interest rates it would have to pay as a borrower), not anyone else's; Royal Bank of Scotland reports its borrowing costs; and so on with other banks. LIBOR is the average of those self-reported costs.

■ But LIBOR's not the average of real costs. It's the average of estimated, hypothetical costs.

Look at the conditionals in the definition quoted earlier (highlighted below):

The London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks.

So what is LIBOR? LIBOR is the calculated average of self-reported, unverified, estimated borrowing costs if banks were to borrow from each other at some theoretical time loosely associated with Now.

Are you noticing the incentives? Banking is all about incentives. So let's try again.

What is LIBOR? LIBOR is the sum of Lies. LIBOR is the average of all lies told by all member banks to (a) make each other think they're in better shape than they are, and (b) to sweeten the price of deals they're also on the other side of.

What's the likelihood that they're all lying? What's the likelihood that they all know they're all lying?

I'd put those odds at, carry the two ... Why, you'd have to be nuts to be on the wrong side of that bet.

Barklays has already confessed. So has RBS. There will be others, folks; this is just the start. They're all in on it.

Why does it matter if LIBOR is Lies?

The consequence of the LIBOR Lie is huge. Because this piece is already long, let's just list a few and expand later:

■ LIBOR is a benchmark — now known to be a false one. Taibbi says:

The furor is over revelations that Barclays, the Royal Bank of Scotland, and other banks were monkeying with at least $10 trillion in loans (The Wall Street Journal is calculating that that LIBOR affects $800 trillion worth of contracts).

Here's what that "monkeying with" means in the real world:

This is unbelievable, shocking stuff. A sizable chunk of the world’s adjustable-rate investment vehicles are pegged to Libor, and here we have evidence that banks were tweaking the rate downward to massage their own derivatives positions.

The consequences for this boggle the mind. For instance, almost every city and town in America has investment holdings tied to Libor. If banks were artificially lowering the rates to beef up their trading profiles, that means communities all over the world were cheated out of ungodly amounts of money.

That's fraud.

Remember, LIBOR rates are calculated for a number of lending periods — "overnight, one week, one month, two months, six months, etc." An awful lot of loans are hooked to LIBOR.

■ LIBOR presents a false financial picture of the state of its member banks. See above for that one.

This means that the banks are manipulating rates affecting hundred of trillions worth of loans and contracts for the benefit of their stock price (which is where much executive compensation is parked).

■ LIBOR is a corruptly manipulated rate. That means I can be on both sides of a deal — as the recipient of loans or contracts pegged to the LIBOR rate, and as the guy who controls the rate itself.

Or I can do LIBOR-rate favors for friends on the other side of their own deals. Fix a rate, help a friend. Presumably that "friend" will do me one back some day, and in kind.

Taibbi again from a different article (he's all over this) quoting Allison Frankel at Reuters (my paragraphing):

Barclays employees agreed to manipulate the rates they submitted to the banking authority that oversees the daily Libor report for seemingly anyone who asked them to monkey with it:

• senior Barclays officials concerned that the bank would look weak if it reported too high a borrowing rate;
• interest rate swap traders trying to improve Barclays' derivatives trading position;
• even former Barclays traders begging for favors.

We're talking naked, blatant manipulation. Here's one exchange cited in the DOJ filing:

Trader: "Can you pls continue to go in for 3m Libor at 5.365 or lower, we are all very long cash here in ny."

Libor rate submitter: "How long?"

Trader: "Until the effective date goes over year end (i.e. turn drops out) if possible."

Submitter: "Will do my best sir."

■ LIBOR is the next test of Rule of Law in the U.S.

If LIBOR manipulators aren't hauled into a U.S. court by the U.S. government and made to pay significantly; if there are no criminal prosecutions — just patty-cake wrist-slaps; if guilty LIBOR banks are given the Jon Corzine treatment, what does that say about Rule of Law in the U.S.?

It will say it's in shreds.

And more — it will hasten the day when the U.S. government has not just the reality of corrupt capture, but the appearance as well.

And that leads to no good place.

What's the bottom line?

Your bottom line is right here. (1) As stated above:

LIBOR is the sum of Lies. LIBOR is the average of all lies told by all member banks to (a) make each other think they're in better shape than they are, and (b) to sweeten the price of deals they're also on the other side of.

And (2) protecting these criminals puts the credibility of the entire U.S. government at risk ... again. Soon we won't just be a banana; we'll look like one too.

Complex as this is, it's not beyond comprehension. And this really is the next big thing in Banksters versus The World. Stay tuned.

Hoping to have helped,

GP

To follow or send links: @Gaius_Publius
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Video: How ObamaCare kills jobs (from Second City)

To ease your way back into politics after the holiday...

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Pain continues for Spanish banks

Though Spain has not yet formally requested their €100 billion bailout ($125 billion), that formality appears to be set for next week. The initial review, based on six month old data, suggested the banks had plenty of room under the bailout amount. A new review suggests that they still have room, though new questions are being asked about the calculations of potential defaults.

The Big 4 accounting firms will also be doing their own review, but let's remember that the Big 4 has been at the heart of so many scandals (or shall we say, fraud) including Enron and Parmalat to name a few. Asking the accounting industry to confirm numbers is generally a useless exercise due to their special ability to combine corruption with incompetence.

Also under discussion is whether or not the top three Spanish banks are in the clear or not. The latest report suggests they're all doing well despite their recent downgrades as well as the reality that everyone around them is falling apart. How believable does that sound to anyone else? It's like JPMorgan insisting that they didn't need the 2008 bailout when in fact they really did. When your entire industry is collapsing, everyone goes down whether you like it or not.

Drip, drip, drip...

Publication of these broad assessments has cleared the way for Luis de Guindos, economy minister, to make a formal request on Monday to his euro zone partners for a credit line of as much as 100 billion euros.

This money—a partial bailout for the crisis-stricken Spanish state—will be used to recapitalize needy banks, including Bankia, the merged group of seven savings banks that has called for 19 billion euros of emergency capital support and is being nationalized.

From Madrid to London, however, skeptical analysts say much more needs to be done, and done more quickly, to restore confidence in Spanish banks so they can revive lending to businesses and help to end a crippling economic recession.

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GlaxoSmithKline pleads guilty to criminal charges, pays $3bn

It's rare that any of the top corporate powers are hit this hard. The charges don't sound that much different from what we've seen with other pharmaceutical companies so one has to wonder what else was happening behind the scenes. We should expect the political class to return any campaign contributions received from GSK though that sounds unlikely.

The Guardian:

The company went to extreme lengths to promote the drugs, such as distributing a misleading medical journal article and providing doctors with meals and spa treatments that amounted to illegal kickbacks, prosecutors said.

"The sales force bribed physicians to prescribe GSK products using every imaginable form of high-priced entertainment, from Hawaiian vacations [and] paying doctors millions of dollars to go on speaking tours, to tickets to Madonna concerts," said US attorney Carmin Ortiz.

In a third case, GSK failed to give the US Food and Drug Administration safety data about its diabetes drug Avandia, in violation of US law, prosecutors said.

As bad as Big Pharma is, how is it that we have yet to see any criminal prosecutions or any banks admit guilt from the financial crisis? Read the rest of this post...