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Is Congress helping Wall Street loot your 401(k)?
Commentary: Conflicts of interest could cost investors $1 billion a month
Rex Nutting, Marketwatch
Nov. 1, 2013, 5:40 a.m. EDT
(special thanks to basserdan)
WASHINGTON (MarketWatch) — Democrats and Republicans seem to be falling over each other trying to prove who can best help Wall Street loot the Treasury and the 401(k)s of the American worker.
This week, the House passed two bills with bipartisan support that would benefit the financial services industry and hurt almost everyone else. Both bills are pure giveaways worth billions of dollars.
One of the bills would roll back some of the protections put in place by the Dodd-Frank Act to keep the banks from gambling with their insured deposits on very profitable but risky derivatives known as swaps.
Once it’s fully implemented, Dodd-Frank would force the banks to put most of their risky trades outside the bank into a separately capitalized subsidiary, where losses would not be guaranteed by the Federal Deposit Insurance Corp. Nor would these affiliates have access to cheap money from the Federal Reserve.
Letting the banks use insured deposits to fund these swaps lowers the banks’ costs now, and it puts the financial system at risk by giving the impression that the FDIC (and ultimately the Treasury) could protect creditors if the trades go sour, as they often do. Beneficiaries of the bill would include Citigroup, J.P. Morgan and Bank of America
The bill passed by the House on Wednesday would allow the banks to trade almost all complex derivatives without quarantining them in a separate affiliate. If you don’t think that’s potentially dangerous, remember what happened to Bear Stearns, Lehman Brothers and Merrill Lynch when their derivatives trades flopped.
A similar bill passed the House last year with little notice. Everyone knew it was dead on arrival in the Senate. What’s different this year is the revelation by the New York Times that key provisions of the bill were written by a lobbyist for Citigroup ( http://tinyurl.com/ojgvq48 ).
The House swaps bill won’t become law. The White House and the Senate won’t go that far. But the fact that 70 Democrats in the House voted for the bill (as did 22 Democrats on the Financial Services Committee) shows that we can’t rely on the Democrats to protect us from the banks’ influence. The campaign cash they offer lawmakers is too intoxicating.
As Democratic Rep. Jim Himes of Connecticut told the New York Times of the cozy relationship between Wall Street money and lawmakers’ need for campaign cash: “It’s appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and corruption.” Himes was a co-sponsor of Citigroup’s swaps bill.
The bank lobbyists and lawyers are working the Securities and Exchange Commission as well, delaying and blocking the new rules on derivatives. If they have their way, the rules will be watered down, and enforcement will be lax. And someday, a huge financial corporation will fail because Washington didn’t draw the line, putting the global economy at risk again.
The other bill passed by the House this week doesn’t have quite that much potential for global mischief, but it would be much worse for individual investors.
The bill would delay a rule the Department of Labor is preparing that would require mutual-fund companies and other companies that operate retirement plans such as IRAs and 401(k)s to start working for investors and stop working for themselves.
The rule would require that trustees of retirement accounts act as a fiduciary on behalf of the investors in the plan, rather than acting in their own self interest. The SEC is working on a parallel rule that would require that brokers also act as a fiduciary on behalf of the investors they advise.
To be a fiduciary means to put the interests of your client first. You can see why Wall Street would fight that rule, because if you put your client first, then you can’t help yourself his life savings.
Current law cheats investors by allowing their plan trustees or financial advisers to steer their retirement savings into funds owned and operated by those very same advisers. One study found that one-third of $10 trillion retirement assets are invested in poorly performing funds that are financially connected to plan trustees.
Christopher Carosa figured that these conflicts of interest cost individual investors about $1 billion per month in reduced earnings.
That doesn’t count the cost of taking conflicted advice from brokers about investments in non-retirement accounts.
Thanks to the magic of compounding, poor performance and high fees can cost a typical retiree hundreds of thousands of dollars over a lifetime.
Most of us don’t have hundreds of thousands of dollars to squander on bad advice.
Since the 1980s, we’ve increasingly told people that they are responsible for their own retirement savings. Defined-benefit pensions are gone, so retirement security depends on individuals’ prowess at investing over the long haul.
But most people are terrible at investing: they don’t save enough, they don’t know what to invest in, they don’t pay attention to yields or to fees, they are easily tricked and cheated. They need professional help.
It’s not asking too much for those professionals to act in their clients’ best interest.
Unfortunately, the financial services industry and its employees make more money when they treat customers like sheep to be shorn. They make so much money, in fact, that they could afford to buy every politician in Washington if necessary.
Rex Nutting is a columnist and MarketWatch's international commentary editor, based in Washington
http://www.marketwatch.com/story/is-congress-helping-wall-street-loot-your-pension-2013-11-01
Mexico mining tax approved, but hits political roadblock
Cecilia Jamasmie | October 31, 2013
Mining.com
Mexico's senate approved by 73 votes to 50 the broad outline of a package of tax reforms, which included a debated 7.5% charge on resource companies, and as much as 8% for gold, silver and platinum.
The lawmakers, however, decided to set aside scores of divisive sections to be processed later.
Members of the National Action Party (PAN), the main opposition party, expressed their discontent with the decision by abandoning the session as the Senate began to work through the reservations, reports CNN Mexico.
They claim the taxes will see investment in the country’s mining sector drop off dramatically, with major companies such as Canada's Goldcorp (TSX: G), (NYSE: GG) and Grupo Mexico warning they may need to take their money somewhere else.
Despite the senate tensions, the tax package was expected to be finalized later Wednesday or at some point today. Following senate approval the reforms only need to be enacted by President Enrique Peña Nieto to become a law.
“Mexico is completely pricing itself out of the market,” says Rosalind Wilson, head of the Canadian Chamber of Commerce’s mining task-force in Mexico. In an interview with The Economist, she noted that last year the country took 53% of the $1.9 billion raised on the TSX and its junior twin to finance mining in Latin America. In the first eight months of this year, the figure had fallen to 17%.
About 334,000 people work in Mexico’s mining sector, and more than 2 million are indirectly employed by it, which makes it the country's fourth largest industry in dollar income, only behind cars, oil and electronics.
http://www.mining.com/mexico-mining-tax-approved-but-hits-political-roadblock-86307/
JPMorgan Discloses Eight DOJ Probes From Asia to Madoff
By Dawn Kopecki & Hugh Son - Nov 1, 2013 10:00 PM ET
Bloomberg
JPMorgan Chase & Co. (JPM) said that the U.S. Department of Justice is conducting at least eight separate investigations into the bank’s activities, ranging from recruitment in Asia to its relationship with Ponzi scheme operator Bernard Madoff.
The largest U.S. bank disclosed for the first time in a filing yesterday that the Justice Department is examining its energy-trading practices, which were subject to a $410 million civil settlement with the Federal Energy Regulatory Commission in July. Investigations are also focusing on mortgage-bond sales, interest-rate rigging, the credit-derivatives market, and the bank’s trading loss last year, according to the filing.
U.S. Attorney General Eric Holder has said that it’s a priority for his department and for President Barack Obama to hold banks accountable. Chief Executive Officer Jamie Dimon visited Holder in September to try to negotiate a settlement of mortgage-related cases against the bank.
“The scope and breadth of risky practices at JPMorgan are mind-boggling,” said Mark Williams, a former Federal Reserve bank examiner who teaches risk management at Boston University. “Some of these probes are criminal, they’re not even just civil anymore, and I think it’s very telling about the broad risk-taking culture that was allowed under Jamie Dimon.”
Currency Trading
The eight Justice Department investigations disclosed in JPMorgan’s filing compare with one in Citigroup Inc.’s. Citigroup has disclosed two other investigations that weren’t included in the latest filing because there was no material change.
Disclosures don’t always specify whether the Justice Department is involved. For instance, both JPMorgan and Citigroup said they’re cooperating with inquiries into the currency market without saying who’s doing the investigating. The Justice Department is taking a leading role in the global probe into possible manipulation of the $5.3 trillion-a-day foreign-exchange market, a department official said earlier this week.
JPMorgan, whose $2.4 trillion in assets make it the biggest U.S. bank, last month reported its first quarterly loss under Dimon, 57, after taking a $7.2 billion after-tax charge to cover the cost of mounting litigation and regulatory probes.
The bank has tapped $8 billion of $28 billion in reserves set aside since 2010 to cover legal costs. JPMorgan said yesterday it may need as much as $5.7 billion more to cover “reasonably possible” losses in excess of the reserve, even after it added $9.2 billion in pretax cash to its litigation funds in the third quarter.
‘Wrong Message’
JPMorgan’s purchase of Bear Stearns Cos. and some of Washington Mutual Inc.’s assets during the financial crisis have contributed to the bank’s legal costs. American International Group Inc. CEO Robert Benmosche said the tough line taken against JPMorgan fails to account for the role that borrowers, regulators and government played in the crisis and may dissuade companies from making similar purchases in the future.
“No good deed will go unpunished, and I think it’s the wrong message to send, but the politicians want to punish someone here,” Benmosche, 69, said in an interview with Betty Liu on Bloomberg Television yesterday. “We’ve got to stop the rhetoric about ‘We’ve got to get the bad guys,’ because I think most of us were the bad guys.”
Mortgage Settlement
JPMorgan last week agreed to pay $5.1 billion to settle claims from the Federal Housing Finance Agency that the bank misrepresented the quality of mortgage bonds it sold to Fannie Mae and Freddie Mac. That resolved part of a $13 billion settlement the company is seeking with state and federal authorities to close multiple investigations into its mortgage-securities sales practices. The U.S. Attorney’s Office in Sacramento, California, is leading a criminal probe of the bank’s mortgage business.
Authorities in the U.S. and overseas are also looking at the bank’s employment of people referred by clients, potential clients and government officials as well as hiring “of certain former employees in Hong Kong, its business relationships with certain related clients in the Asia Pacific region and its engagement of consultants in the Asia Pacific region,” according to JPMorgan’s filing yesterday.
The U.S. Attorney’s office in Manhattan, run by Preet Bharara, is examining whether JPMorgan violated criminal anti-bribery laws in hiring the children and other relatives of well-connected politicians and clients in hopes of steering business to the firm, a person with knowledge of the investigation said in August. JPMorgan said it was cooperating with the investigations.
Madoff Role
South Korea, Singapore and India are among the locations where hiring practices are being scrutinized, the New York Times reported yesterday, citing unidentified people briefed on the matter. Investigators include authorities in the U.K., it said.
Bharara’s office is also is conducting an investigation into how JPMorgan handled Madoff’s funds and whether it turned a blind eye to his multibillion-dollar fraud, the biggest Ponzi scheme in U.S. history. Bharara is weighing a deferred prosecution agreement or fine for JPMorgan in the Madoff probe, a person familiar with the matter said last week.
JPMorgan disclosed yesterday that Bharara’s office is examining whether the bank manipulated the electricity market. The Federal Bureau of Investigation is looking into JPMorgan’s settlement with the FERC to see if any individuals committed any crimes, a person briefed on the matter said in August.
The office is also conducting an investigation into JPMorgan’s record trading loss last year by Bruno Iksil, who became known as the London whale because of the size of his trading bets.
Libor, CDS
Former JPMorgan trader Julien Grout and his former boss, Javier Martin-Artajo, both of whom are in Europe and worked with Iksil, were indicted on securities fraud charges after being accused of trying to hide some of the more than $6.2 billion in losses in their unit last year. Grout and Martin-Artajo have denied wrongdoing, while Iksil is cooperating in the investigation.
Additionally, JPMorgan is part of an industrywide investigation by the Justice Department and others looking at whether banks in the U.S. and abroad rigged benchmark interest rates tied to the London interbank offered rate, or Libor. The bank is cooperating with a probe of the credit-default swaps market that started in 2009, the company said.
The bank said that it’s also facing a civil investigation into its compliance with the Federal Housing Administration’s direct endorsement program, which streamlines origination of federally insured home loans by banks and other lenders.
To contact the reporters on this story: Dawn Kopecki in New York at dkopecki@bloomberg.net; Hugh Son in New York at hson1@bloomberg.net
To contact the editor responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net
http://www.bloomberg.com/news/2013-11-01/jpmorgan-discloses-eight-doj-probes-from-asia-to-madoff.html
Ireland: Ground Zero for the Austerity-driven Asset Grab
The Bank Guarantee That Bankrupted Ireland
by Ellen Brown
Posted on November 2, 2013
(special thanks to basserdan)
(please note: The underlined words are 'clickable' links when accessed via the link at the bottom of this page)
The Irish have a long history of being tyrannized, exploited, and oppressed—from the forced conversion to Christianity in the Dark Ages, to slave trading of the natives in the 15th and 16th centuries, to the mid-nineteenth century “potato famine” that was really a holocaust. The British got Ireland’s food exports, while at least one million Irish died from starvation and related diseases, and another million or more emigrated.
Today, Ireland is under a different sort of tyranny, one imposed by the banks and the troika —the EU, ECB and IMF. The oppressors have demanded austerity and more austerity, forcing the public to pick up the tab for bills incurred by profligate private bankers.
The official unemployment rate is 13.5%—up from 5% in 2006—and this figure does not take into account the mass emigration of Ireland’s young people in search of better opportunities abroad. Job loss and a flood of foreclosures are leading to suicides. A raft of new taxes and charges has been sold as necessary to reduce the deficit, but they are simply a backdoor bailout of the banks.
At first, the Irish accepted the media explanation: these draconian measures were necessary to “balance the budget” and were in their best interests. But after five years of belt-tightening in which unemployment and living conditions have not improved, the people are slowly waking up. They are realizing that their assets are being grabbed simply to pay for the mistakes of the financial sector.
Five years of austerity has not restored confidence in Ireland’s banks. In fact the banks themselves are packing up and leaving. On October 31st, RTE.ie reported that Danske Bank Ireland was closing its personal and business banking, only days after ACCBank announced it was handing back its banking license; and Ulster Bank’s future in Ireland remains unclear.
The field is ripe for some publicly-owned banks. Banks that have a mandate to serve the people, return the profits to the people, and refrain from speculating. Banks guaranteed by the state because they are the state, without resort to bailouts or bail-ins. Banks that aren’t going anywhere, because they are locally owned by the people themselves.
The Folly of Absorbing the Gambling Losses of the Banks
Ireland was the first European country to watch its entire banking system fail. Unlike the Icelanders, who refused to bail out their bankrupt banks, in September 2008 the Irish government gave a blanket guarantee to all Irish banks, covering all their loans, deposits, bonds and other liabilities.
At the time, no one was aware of the huge scale of the banks’ liabilities, or just how far the Irish property market would fall.
Within two years, the state bank guarantee had bankrupted Ireland. The international money markets would no longer lend to the Irish government.
Before the bailout, the Irish budget was in surplus. By 2011, its deficit was 32% of the country’s GDP, the highest by far in the Eurozone. At that rate, bank losses would take every penny of Irish taxes for at least the next three years.
“This debt would probably be manageable,” wrote Morgan Kelly, Professor of Economics at University College Dublin, “had the Irish government not casually committed itself to absorb all the gambling losses of its banking system.”
To avoid collapse, the government had to sign up for an €85 billion bailout from the EU-IMF and enter a four year program of economic austerity, monitored every three months by an EU/IMF team sent to Dublin.
Public assets have also been put on the auction block. Assets currently under consideration include parts of Ireland’s power and gas companies and its 25% stake in the airline Aer Lingus.
At one time, Ireland could have followed the lead of Iceland and refused to bail out its bondholders or to bow to the demands for austerity. But that was before the Irish government used ECB money to pay off the foreign bondholders of Irish banks. Now its debt is to the troika, and the troika are tightening the screws. In September 2013, they demanded another 3.1 billion euro reduction in spending.
Some ministers, however, are resisting such cuts, which they say are politically undeliverable.
In The Irish Times on October 31, 2013, a former IMF official warned that the austerity imposed on Ireland is self-defeating. Ashoka Mody, former IMF chief of mission to Ireland, said it had become “orthodoxy that the only way to establish market credibility” was to pursue austerity policies. But five years of crisis and two recent years of no growth needed “deep thinking” on whether this was the right course of action. He said there was “not one single historical instance” where austerity policies have led to an exit from a heavy debt burden.
Austerity has not fixed Ireland’s debt problems. Belying the rosy picture painted by the media, in September 2013 Antonio Garcia Pascual, chief euro-zone economist at Barclays Investment Bank, warned that Ireland may soon need a second bailout.
According to John Spain, writing in Irish Central in September 2013:
The anger among ordinary Irish people about all this has been immense. . . . There has been great pressure here for answers. . . . Why is the ordinary Irish taxpayer left carrying the can for all the debts piled up by banks, developers and speculators? How come no one has been jailed for what happened? . . . (D)espite all the public anger, there has been no public inquiry into the disaster.
Bail-in by Super-tax or Economic Sovereignty?
In many ways, Ireland is ground zero for the austerity-driven asset grab now sweeping the world. All Eurozone countries are mired in debt. The problem is systemic.
In October 2013, an IMF report discussed balancing the books of the Eurozone governments through a super-tax of 10% on all households in the Eurozone with positive net wealth. That would mean the confiscation of 10% of private savings to feed the insatiable banking casino.
The authors said the proposal was only theoretical, but that it appeared to be “an efficient solution” for the debt problem. For a group of 15 European countries, the measure would bring the debt ratio to “acceptable” levels, i.e. comparable to levels before the 2008 crisis.
A review posted on Gold Silver Worlds observed:
(T)he report right away debunks the myth that politicians and main stream media try to sell, i.e. the crisis is contained and the positive economic outlook for 2014.
. . . Prepare yourself, the reality is that more bail-ins, confiscation and financial repression is coming, contrary to what the good news propaganda tries to tell.
A more sustainable solution was proposed by Dr Fadhel Kaboub, Assistant Professor of Economics at Denison University in Ohio. In a letter posted in The Financial Times titled "What the Eurozone Needs Is Functional Finance”, he wrote:
The eurozone’s obsession with “sound finance” is the root cause of today’s sovereign debt crisis. Austerity measures are not only incapable of solving the sovereign debt problem, but also a major obstacle to increasing aggregate demand in the eurozone. The Maastricht treaty’s “no bail-out, no exit, no default” clauses essentially amount to a joint economic suicide pact for the eurozone countries.
. . . Unfortunately, the likelihood of a swift political solution to amend the EU treaty is highly improbable. Therefore, the most likely and least painful scenario for (the insolvent countries) is an exit from the eurozone combined with partial default and devaluation of a new national currency. . . .
The takeaway lesson is that financial sovereignty and adequate policy co-ordination between fiscal and monetary authorities are the prerequisites for economic prosperity.
Standing Up to Goliath
Ireland could fix its budget problems by leaving the Eurozone, repudiating its blanket bank guarantee as “odious” (obtained by fraud and under duress), and issuing its own national currency. The currency could then be used to fund infrastructure and restore social services, putting the Irish back to work.
Short of leaving the Eurozone, Ireland could reduce its interest burden and expand local credit by forming publicly-owned banks, on the model of the Bank of North Dakota. The newly-formed Public Banking Forum of Ireland is pursuing that option. In Wales, which has also been exploited for its coal, mobilizing for a public bank is being organized by the Arian Cymru ‘BERW’ (Banking and Economic Regeneration Wales).
Irish writer Barry Fitzgerald, author of Building Cities of Gold, casts the challenge to his homeland in archetypal terms:
The Irish are mobilising and they are awakening. They hold the DNA memory of vastly ancient times, when all men and women obeyed the Golden rule of honouring themselves, one another and the planet. They recognize the value of this harmony as it relates to banking. They instantly intuit that public banking free from the soiled hands of usurious debt tyranny is part of the natural order.
In many ways they could lead the way in this unfolding, as their small country is so easily traversed to mobilise local communities. They possess vast potential renewable energy generation and indeed could easily use a combination of public banking and bond issuance backed by the people to gain energy independence in a very short time.
When the indomitable Irish spirit is awakened, organized and mobilized, the country could become the poster child not for austerity, but for economic prosperity through financial sovereignty.
Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her blog articles are at EllenBrown.com.
http://ellenbrown.com/2013/11/02/ireland-ground-zero-for-the-austerity-driven-asset-grab/
NXT Energy Solutions
Locations of Completed Surveys
Over 250,000 Line Kms
http://www.nxtenergy.com/business_completed_surveys.php
Petrotech Journal
April - June 2012 issue
(Pages 3-4)
by: Sudhir Vasudeva (Gmd-ONGC)
http://www.petrotechsociety.org/journals/Apr-Jun-2012/
Feinstein Introduces Trojan Horse … But Tech Giants Throw Weight Behind Legislation Which Would ACTUALLY Rein In NSA Spying
By Washington's Blog
Global Research, November 01, 2013
Washington's Blog
Silicon Valley Titans See Which Way the Wind is Blowing …
The head of the Senate Intelligence Committee – NSA shill Diane Feinstein – introduced a Trojan Horse of a bill today which pretends it reins in the NSA, but would actually legalize bulk surveillance on Americans.
But the tech giants just threw their support behind a real reform bill. Specifically, Google, Apple, Microsoft, Yahoo, Facebook and AOL put their support behind the USA Freedom Act … the bill introduced by Senator Leahy and Congressman Sensenbrenner to start reining in the NSA for real.
The tech giants aren’t supporting the bill out of the goodness of their hearts, but because cooperating with the NSA has cost them tens of billions of dollars. And see this.
http://www.globalresearch.ca/wp-content/uploads/2013/11/Senator-Dianne-Feinstein-400x266.jpg
Powerful Nations and Companies Fight Back Against NSA Spying
Posted on October 24, 2013
by WashingtonsBlog
New Telecommunications Infrastructure Is Being Built to Avoid American Spying
One of India’s largest newspapers – The Hindu – reports:
Most of Brazil’s global internet traffic passes through the United States, so [the Brazilian] government plans to lay underwater fiber optic cable directly to Europe and also link to all South American nations to create what it hopes will be a network free of US eavesdropping.
A consortium of telecom and undersea cable companies competing for the contracts for the proposed BRICS cable show what they think the project should look like:
netw_geo
(BRICS stands for Brazil, Russia, India, China and South Africa.)
The BRICS countries have the muscle to pull this off. Each of the BRICS countries are in the top 25 largest economies in the world. China has the world’s 2nd largest economy, India is 3rd, Russia 6th, Brazil 7th, and South Africa 25th.
As Reuters notes:
* The BRICS countries make up 21 percent of global GDP. They have increased their share of global GDP threefold in the past 15 years.
* The BRICS are home to 43 percent of the world’s population.
* The BRICS countries have combined foreign reserves of an estimated $4.4 trillion.
* Intra-BRICS trade flows reached $282 billion in 2012 and are estimated to reach $500 billion by 2015. In 2002, it was $27.3 billion.
* IMF estimates of GDP per member in 2012, China $8.25 trillion, Brazil $2.43 trillion, Russia and India at $1.95 trillion each, South Africa $390.9 billion.
China is also dropping IBM hardware like a hot potato due to security concerns. Intel and AMD may not be far behind.
Economic powerhouse Germany is also rolling out a system that would keep all data within Germany’s national borders.
New Hardware Is Being Built to Thwart Spying
Anti-virus legend and wild man John McAffee claims that he has created a $100 hardware router which will block NSA snooping:
There will be no way (for the government) to tell who you are or where you are ….
FreedomBox has been developing a similar concept for years:
Why Chen Lin Is Buying Fracking Stocks And Selling Gold Holdings
Nov. 1, 2013
TheEnergyReport
Chen Lin, author of What is Chen Buying? What Is Chen Selling?, goes wherever he sees returns. In the summer, he bought mining stocks when the yellow metal hit $1,200 per ounce. Now, he's trading in his gold names and moving into the fracking space after a three-year hiatus. In this interview with The Energy Report, Lin names the companies he's buying to play a likely energy sector bottom and tells investors to actively manage their portfolios in the coming stock-picker's market.
Section of article:
CL: Recently I found a very interesting stock I've been accumulating. The company name is NXT Energy Solutions (OTC:NSFDF) [SFD:TSX.V]. It can fly airplanes over a field and detect if oil is present or not. It recently did a very large survey with PEMEX [Petróleos Mexicanos], the Mexican oil company. PEMEX already has seismic data on a certain field, they knew where it has oil deposits and where it doesn't. PEMEX asked NXT to fly over, and the results were shockingly good. NXT found every large field for PEMEX! The report is on the website. PEMEX is the co-author.
If NXT can continue like this, it can change the oil industry as we know it. You probably need seismic later on to pinpoint where the oil is, but you can fly a plane over a very broad space and then detect where the oil is. That will be a revolution in the oil industry. It's a very interesting company. It has a strong balance sheet. Recently it has started to go to the oil exploration companies and negotiate payment through royalties in exchange for its services. That can be a very interesting move. It's an interesting company. I think if everything's successful it has a very bright future.
TER: What is your outlook on energy in general for the next year?
CL: Like I said, I'm cautious about the oil price in 2014. The production from the U.S. and Canada is just amazing. If you read the Eagleford reports and Bakken reports you can see how many new wells are drilled. The completion techniques are getting better and deliver more oil production during the life of a well. I'm a little bit afraid the oil will fall much below $100/bbl. It's possible.
On one hand, you have very high oil prices now. Most of my energy companies are making money. They're doing fantastically. Though I'm not very confident the high oil price is here to stay. I want to remind everyone that if oil drops to below $80/bbl, the party of fracking stocks may be over. I would be careful and take profits as they go up. I'm going to watch the market month by month and see if the situation changes. I also believe that 2014 will be a stock pickers' market. If you pick the right stock with the right catalyst, a stock can go up a lot just on its own. That's what I'm looking at for 2014.
TER: Chen, thank you very much. This has been a fascinating conversation.
CL: Thank you. I appreciate it.
This interview was conducted by Tom Armistead of The Energy Report.
Chen Lin writes the popular stock newsletter What Is Chen Buying? What Is Chen Selling?, published and distributed by Taylor Hard Money Advisors Inc. While a doctoral candidate in aeronautical engineering at Princeton, Chen found his investment strategies were so profitable that he put his Ph.D. on the back burner. He employs a value-oriented approach and often demonstrates excellent market timing due to his exceptional technical analysis.
DISCLOSURE:
1) Tom Armistead conducted this interview for The Energy Report and provides services to The Energy Report as an independent contractor. He or his family owns shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Energy Report: None. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Chen Lin: I or my family own shares of the following companies mentioned in this interview: Ithaca Energy Inc., Penn Virginia Corp., Harvest Natural Resources, BNK Petroleum, Rock Energy, RMP Energy and NXT Energy Inc. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
http://seekingalpha.com/article/1797022-why-chen-lin-is-buying-fracking-stocks-and-selling-gold-holdings
Taylor MacDonald Unearths Profit-Makers in the Oil and Gas Service Sector
Source: Zig Lambo of The Energy Report (9/20/12)
Everyone agrees that high energy prices are here to stay, so most companies should perform well in the long run. But what about near-term opportunities? Taylor MacDonald, associate portfolio manager at Pathfinder Asset Management, is looking to service companies for industry outperformance. In this exclusive interview with The Energy Report, he describes why proprietary niche service companies virtually own the markets they are establishing.
Section of article:
TER: With regard to profit margins, how sensitive to oil prices are most companies at this point, relative to future exploration activities and the profits that they are making right now?
TM: Cost inflation is something that every single business space is currently experiencing, not just oil and gas. Companies must do whatever they can to become more efficient and save on exploration, development and production costs, etc. One company we are very keen on is Calgary-based NXT Energy Solutions (SFD:TSX.V; NSFDF:OTCBB), which has a disruptive, patented and patent-pending airborne survey technology for oil and gas exploration called Stress Field Detection (SFD).
SFD is a little difficult to explain, but it's essentially a jet with a passive sensor array on board that flies a grid over large swaths of land looking for drops in the gravity stress field. Surveys can be completed in one-tenth of the time and cost of 2-D and 3-D seismic surveys. This doesn't replace seismic, but rather pinpoints where to shoot the seismic. It allows companies to survey hard-to-reach areas with virtually zero environmental impact. The technology is fully proven and can be used onshore, offshore, and in mountainous terrain. It's been used and verified by Pacific Rubiales Energy Corp. (PRE:TSX; PREC:BVC), Pengrowth Corp (PGH:NYSE), Pemex (PEMEX:MSX), BP Colombia (NYSE:BP) and Ecopetrol (Colombia's national oil company).
To envision the process, imagine a river with a rock in the middle. As the river, an analogue for the stress field, reaches the rock, it will wrap around it. This means that the river, or again, the stress field, will have to change direction, which shows up in the gravity field, where the SFD can detect it. It's based on quantum physics. Flying a grid pattern, the SFD equipment measures and detects orientation changes in that stress. A trapped reservoir, for example, will affect the SFD, and allows delineation of prospective areas. The fluid could be oil, gas and/or water. The resulting data shows exactly where to shoot your 2-D and 3-D seismic.
This technology slashes permitting time, lessens environmental impact, and can literally save a company up to 90% on seismic acquisition costs. The technology only requires a flight plan, not exploration permits, which allows NXT to mobilize quickly instead of waiting up to three years just for the seismic permit. SFD also improves the success rate dramatically on wildcat exploration wells in frontier areas. NXT Energy has a growing revenue base and client list, with a rapidly increasing acceptance of the technology. It's also profitable on an earnings-per-share (EPS) basis over the last two quarters, and is a well-held and well-structured company. We think the company's future is very bright.
TER: Is this somewhat similar to airborne geophysical surveys for mineral deposits?
TM: Yes. But I would say this is much more precise in that it can tell you exactly where to find million-barrel fields. There's also the ability to locate water aquifers. Who knows where it could lead? This is one of the most interesting technologies I've seen in the business in my years in the industry.
TER: That's definitely a revolutionary technology. What else do you like in the services?
Continued ...
http://www.theenergyreport.com/pub/na/14393
Great article al44!
10 Corporations Control Nearly Everything You Buy, 6 Media Corporations Control Nearly Everything You Read or Watch
Nov. 2, 2013
Mish's Global Economic Trend Analysis
PolicyMic has a very interesting chart that shows how 10 Corporations Control Almost Everything You Buy.
click on chart for huge image
The chart was posted on Reddit as illusion of choice. I could not locate the original source.
PolicyMic explains ...
Ten mega corporations control the output of almost everything you buy; from household products to batteries.
These corporations create the chain of supplies that flow from one another. Each chain begins at one of the 10 super companies.
Here's just one example: Yum Brands owns KFC and Taco Bell. The company was a spin-off of Pepsi. All Yum Brands restaurants sell only Pepsi products because of a lifetime deal with the soda-maker.
$84 billion company Proctor & Gamble owns companies that produce everything from detergent to toothpaste. Unilever produces everything from Dove soap to Klondike bars.
It's not just the products you buy and consume, either. In recent decades, the very news and information that you get has bundled together: 90% of the media is now controlled by just six companies, down from 50 in 1983, according to a Frugal Dad infographic from last year.
It gets even more macro, too: 37 banks have merged to become just four — JPMorgan Chase, Bank of America, Wells Fargo and CitiGroup in a little over two decades, according to this Federal Reserve map.
The nation's 10 largest financial institutions hold 54% of our total financial assets; in 1990, they held 20%. As MotherJones reports, the number of banks has dropped from more than 12,500 to about 8,000.
Media Consolidation
Everything You Think, Read, or Say
I always try to find a link to the original source, but none of the links to a Frugal Dad article work.
Regardless anything you read, watch, or buy is in the hands of fewer and fewer companies. The same applies to banks.
This is another reason we need an independent news network. One is actually in the works, started by Jeremy Scahill, National Security Correspondent for The Nation magazine, and Glenn Greenwald who broke the NSA spy story.
For details, please see War Against Journalists; "We Hit the Jackpot"
Question of the Day
How long will it be, before everything to think read or say is in the pill you took today?
Top U.S. Hospitals are Opting Out of Obamacare
Posted on November 1, 2013
libertyblitzkrieg.com
In the off chance you are actually able to access the website and successfully sign up for the epic disaster that is Obamacare, you might be a bit surprised about your options when you actually encounter a medical issue. Every American that is even considering signing up for this nightmare needs to be aware of the disturbing fact that many of the top hospitals in the nation will not be accepting Obamacare related insurance plans. Even worse, in many cases it is virtually impossible to find out which doctors and hospitals are on your plan.
One of the most egregious examples of failure is the following:
Seattle Children’s Hospital ranks No. 11 on the U.S. News & World Report best pediatric hospital list. When Obamacare rolled out, the hospital found itself with just two out of seven insurance companies on Washington’s exchange.
Seattle Children’s is the only pediatric hospital in King County, and offers keys services, such as cancer care, which are not available anywhere else in the region. So if you sign up for Obamacare, good luck surviving. Fortunately, that represents only about six people at the moment.
More from U.S. News:
Americans who sign up for Obamacare will be getting a big surprise if they expect to access premium health care that may have been previously covered under their personal policies. Most of the top hospitals will accept insurance from just one or two companies operating under Obamacare.
Watchdog.org looked at the top 18 hospitals nationwide as ranked by U.S. News and World Report for 2013-2014. We contacted each hospital to determine their contracts and talked to several insurance companies, as well.
The result of our investigation: Many top hospitals are simply opting out of Obamacare.
Chances are the individual plan you purchased outside Obamacare would allow you to go to these facilities. For example, fourth-ranked Cleveland Clinic accepts dozens of insurance plans if you buy one on your own. But go through Obamacare and you have just one choice: Medical Mutual of Ohio.
Consumers, too, will struggle with the new system. Many exchanges don’t even list the insurance companies on their web sites. Some that do, like California, don’t provide names of doctors or hospitals.
“In many cases, consumers are shopping blind when it comes to what doctors and hospitals are included in their Obamacare exchange plans,” said Josh Archambault, senior fellow with the think tank Foundation for Government Accountability. “These patients will be in for a rude awakening once they need care, and get stuck with a big bill for going out-of-network without realizing it.”
Just look at Seattle Children’s Hospital, which ranks No. 11 on the U.S. News & World Report best pediatric hospital list. When Obamacare rolled out, the hospital found itself with just two out of seven insurance companies on Washington’s exchange. The hospital sued the state’s Office of Insurance on Oct. 4 for “failure to ensure adequate network coverage.”
“Children’s is the only pediatric hospital in King County and the preeminent provider of many pediatric specialty services in the Northwest,” a hospital press release said. ” Some of these specialized services not available elsewhere in our area or region include acute cancer care, level IV neonatal intensive care and heart, liver and intestinal transplantation.”
Full article here.
In Liberty,
Mike
http://libertyblitzkrieg.com/2013/11/01/top-u-s-hospitals-are-opting-out-of-obamacare/#more-9004
Big Food Is Quietly Spending Millions To Prevent GMO Labeling In The U.S.
PepsiCo, Coca-Cola, and Nestlé are among food companies spending heavily in Washington state to block new requirements for labeling foods made with genetically modified organisms.
posted on October 29, 2013 at 8:00am
http://www.buzzfeed.com/rachelysanders/big-food-spending-millions-to-prevent-gmo-labeling
Precious Metals and the Lost Generation
Posted Friday, 1 November 2013
By Dr. Jeffrey Lewis
“There are a thousand hacking at the branches of evil, to one who is striking at the roots." - Henry David Thoreau, 1846
Institutional trust and confidence continues to unravel as less and less participation, combined with isolation, threatens the middle class. As in all major crises throughout Anglo American history, the weight will be carried on the shoulders of the pragmatic caught in the middle.
The Hidden Crisis
It is unprecedented that 50 million people in the United States rely on food assistance. Or that nearly 50% of all Americans receive some form of assistance from the government.
Jobs and Production
Labor participation has fallen to levels not seen in over three decades.
October 2013 saw, in the midst of a quasi-government shutdown, a sad reality.
Two events surrounding the Electronic Benefit Transfer (EBT) of food assistance stood out. The first was the programs shut down for one day, causing shoppers to abandon grocery carts while in checkout lines. The second was the following week, when card limits were temporarily removed.
The first case was a demonstration of fear, the second one of greed and panic.
The degree of poverty among children is equally astounding. If it were not for electronic transmission of benefits, the psychological profile of the nation would be much more aligned with depression. This scenario is in comparison to the giddy celebration of equity all-time highs or the so-called housing recovery.
Stealth Inflation
The return of rational exuberance to equities is an artificially induced phenomenon. Every day, intervention via primary open market operations occurs to paint perception.
Housing has "returned" by means of the invasion of private equity and hedge fund managed, all-cash, purchases. The result has been not only a pricing out of the middle class, but the creation of a rent bubble and landlord disaster, creating even more of the disenfranchised.
Equally bizarre is the obvious rise in real inflation. Estimates of 6-7% annually are likely conservative.
CPI is a total disaster outside of ivory towers. The unevenness of asset price inflation is not lost on those who eat, use energy, or borrow for education. Health care is about to be another eye opener for those who have not had the need to know the real cost behind the broken system.
The Painful Collapse
Indeed, the middle class is becoming more and more disenfranchised by the current system. Those with retirement assets are most likely the next to be marginalized.
Pensions, 401K's, money market accounts, and savings all represent the lowest hanging fruit for a soon to be even more desperate (and cornered) monetary complex.
Disengaged, get a glimpse of the system's fragility.
Social Unrest and Economic Collapse
Much has been noted about the preparations underway (under the guidance of FEMA) to contain the potential mobility of the masses in case of disaster.
The fact that FEMA has been stockpiling ammunition is not lost on observers.
While hyperinflation or a currency crisis can take months to develop, it will ultimately catch most by surprise. Of course, those who are prepared will not be welcomed.
Hoarders will be blamed. Metals could be banned and/or taxed and, eventually, re-priced far from the futures exchanges.
The return of precious metals to monetary status will not be welcomed by those who stand to lose the most. With or without official sanction or acceptance, precious metals will serve their role once again as the reverse wealth effect kicks into high gear on the unsuspecting, and soon to be scorned, masses.
http://www.silver-coin-investor.com/
http://news.goldseek.com/GoldSeek/1383314126.php
Dollar Reserve Breaking Down – Earthquake In Markets Coming
Gold Silver Worlds | October 31, 2013
London-based investment manager John Butler was interviewed by German financial journalist Lars Schall (courtesy of Matterhorn Asset Management Zurich). Both gentlemen discussed some major aspects of international affairs.
* The first part of the interview: “The Dollar Reserve Equilibrium Is Breaking Down”
* The second part of the interview: “The Real Earthquake In Financial Markets Is Yet To Come”
The first part of the interview is focused on the U.S. dollar and the challenges that may arise in case China should back their national currency (i.e. the yuan) with gold instead the current world reserve currency (i.e. the US dollar). Butler says in the interview “If gold would be remonetized in a historical proper fashion, its price would be a lot higher.”
In the second part of the interview John Butler digs deeper into, among other topics, why precious metals are the only natural form of trusted money, the risks of gold derivatives, the prospect of trading nations refusing paper money in exchange for their exports and why the euro was perhaps in principal a fine idea, but won’t survive in its current form. He explains why the prospect of trading nations refusing paper money in exchange for their exports and why the euro was perhaps in principal a fine idea, but won’t survive in its current form.
Both interviews are must reads. Note that John Butler is the author of the book “The Golden Revolution: How to Prepare for the Coming Global Gold Standard” (more about the book). Mr. Butler has worked for over 15 years as an interest rate, currency and commodity strategist at major investment banks. He’s now the Chief Investment Officer of Amphora Capital, an independent investment and advisory firm in the City of London.
Dollar Reserve Breaking Down – Earthquake In Markets Coming
Gold Silver Worlds | October 31, 2013
London-based investment manager John Butler was interviewed by German financial journalist Lars Schall (courtesy of Matterhorn Asset Management Zurich). Both gentlemen discussed some major aspects of international affairs.
* The first part of the interview: “The Dollar Reserve Equilibrium Is Breaking Down”
* The second part of the interview: “The Real Earthquake In Financial Markets Is Yet To Come”
The first part of the interview is focused on the U.S. dollar and the challenges that may arise in case China should back their national currency (i.e. the yuan) with gold instead the current world reserve currency (i.e. the US dollar). Butler says in the interview “If gold would be remonetized in a historical proper fashion, its price would be a lot higher.”
In the second part of the interview John Butler digs deeper into, among other topics, why precious metals are the only natural form of trusted money, the risks of gold derivatives, the prospect of trading nations refusing paper money in exchange for their exports and why the euro was perhaps in principal a fine idea, but won’t survive in its current form. He explains why the prospect of trading nations refusing paper money in exchange for their exports and why the euro was perhaps in principal a fine idea, but won’t survive in its current form.
Both interviews are must reads. Note that John Butler is the author of the book “The Golden Revolution: How to Prepare for the Coming Global Gold Standard” (more about the book). Mr. Butler has worked for over 15 years as an interest rate, currency and commodity strategist at major investment banks. He’s now the Chief Investment Officer of Amphora Capital, an independent investment and advisory firm in the City of London.
Dollar Reserve Breaking Down – Earthquake In Markets Coming
Gold Silver Worlds | October 31, 2013
London-based investment manager John Butler was interviewed by German financial journalist Lars Schall (courtesy of Matterhorn Asset Management Zurich). Both gentlemen discussed some major aspects of international affairs.
* The first part of the interview: “The Dollar Reserve Equilibrium Is Breaking Down”
* The second part of the interview: “The Real Earthquake In Financial Markets Is Yet To Come”
The first part of the interview is focused on the U.S. dollar and the challenges that may arise in case China should back their national currency (i.e. the yuan) with gold instead the current world reserve currency (i.e. the US dollar). Butler says in the interview “If gold would be remonetized in a historical proper fashion, its price would be a lot higher.”
In the second part of the interview John Butler digs deeper into, among other topics, why precious metals are the only natural form of trusted money, the risks of gold derivatives, the prospect of trading nations refusing paper money in exchange for their exports and why the euro was perhaps in principal a fine idea, but won’t survive in its current form. He explains why the prospect of trading nations refusing paper money in exchange for their exports and why the euro was perhaps in principal a fine idea, but won’t survive in its current form.
Both interviews are must reads. Note that John Butler is the author of the book “The Golden Revolution: How to Prepare for the Coming Global Gold Standard” (more about the book). Mr. Butler has worked for over 15 years as an interest rate, currency and commodity strategist at major investment banks. He’s now the Chief Investment Officer of Amphora Capital, an independent investment and advisory firm in the City of London.
Secret NSA Program Gains “Bulk Access” to Google, Yahoo Data Centers
By Alex Lantier
Global Research, October 31, 2013
World Socialist Web Site
The National Security Agency (NSA) is spying on hundreds of millions of users of Google and Yahoo services, according to a report yesterday in the Washington Post based on internal documents provided by former NSA contractor Edward Snowden.
The NSA has broken into the main communication links connecting Yahoo and Google data servers worldwide. In a program codenamed “MUSCULAR,” operated jointly with Britain’s Government Communications Headquarters (GCHQ), the agencies collect and monitor all communications—involving US and non-US citizens alike—between these servers.
Because the data culling is indiscriminate, the NSA refers to it as “full take,” “bulk access” and “high-volume.” After the communications are collected, they are searched based on undisclosed criteria, with much of it sent on to permanent locations run by the NSA.
The report shatters claims by the Obama administration and American legislators that US agencies respect privacy rights and operate under strict legal oversight. Testimony by spy agency chiefs before the House of Representatives Intelligence Committee on Wednesday, aimed at defusing the diplomatic crisis over the exposure of US spying on German Chancellor Angela Merkel and hundreds of millions of phone and SMS communications in Europe, consisted of disinformation and lies.
A top secret NSA document shows that in the one-month period ending January 9, 2013 the MUSCULAR program sent back more than 181 million new records for storage at NSA headquarters in Fort Meade, Maryland. These records include both “metadata” information—such as the identity or location of the sender and receiver of messages—and the content of text, audio and video communications.
Google and Yahoo operate massive data centers around the world, backing up user information in multiple continents in order to prevent accidental data loss or system shutdowns. They also send backups of entire archives—containing years of e-mails and attachments—between various servers, which the NSA collects in bulk. NSA documents state that this allows the agency not only to intercept communications in real time, but also to take “a retrospective look at target activity.”
Google engineers speaking anonymously to the Post “exploded into profanity” when journalists showed them NSA diagrams of “Google Cloud Exploitation,” revealing how the NSA has broken Google’s encryption schemes.
“The very clear objective of the NSA is not just to collect all this, but to keep it for as long as they can,” journalist Glenn Greenwald told the Spanish daily El Mundo. “So they can at any time target a particular citizen of Spain or anywhere else and learn what they’ve been doing, in terms of who they have been communicating with.”
NSA officials contacted by the Post and by Politico refused to deny the Postreport or explain the specifics of the MUSCULAR program. An NSA spokeswoman told Politico, “NSA is a foreign intelligence agency. And we’re focused on discovering and developing intelligence about valid foreign intelligence targets only.”
The claims of the NSA have no credibility, however. Foreign Intelligence Surveillance (FISA) Court documents show that US spy agencies have already collected massive amounts of US citizens’ data and lied about it in court. (See: “FISA records document “daily violations” by government spy agencies”).
Google and Yahoo officials, who already hand over user data to the US government under the NSA’s PRISM program, said they were unaware of this further NSA infiltration of their data centers. Google released a statement declaring that it was “troubled by allegations of government intercepting traffic between our data centers, and we are not aware of this activity.”
This report is yet another indication of how the US military-intelligence complex has developed through criminal means the surveillance infrastructure of a global police state.
The vast scope of the operations and their targeting of European heads of state have exposed as lies the claims that these programs are designed to fight Al Qaeda as part of a “war on terror.” They target anyone seen as a potential threat to the strategic interests of the American ruling class, including not only European governments, but, above all, the populations of the United States, Europe and the world.
This activity has been carried out for years in brazen violation of US law, as even the FISA court, a secret court operating with no public accountability or oversight, has ruled. In 2011, when it discovered that similar methods were being used on a smaller scale to spy on data streams inside the US, FISA Court Judge John D. Bates ruled that the program was “inconsistent” with the Fourth Amendment of the US Constitution.
The US government’s attempts to reassure the public about the programs have consisted of staged disinformation sessions. Wednesday’s hearing featured a carefully worded Joint Statement for the Record issued by Director of National Intelligence James Clapper, NSA chief Gen. Keith Alexander and Deputy Attorney General James Cole.
The statement insisted that media reports about intelligence collection under Section 215 of the USA Patriot Act and Section 702 of the Foreign Intelligence Surveillance Act were “inaccurate.” In the spying carried out under Section 215, they insisted, the spy agencies “do not collect the content of any telephone calls or any information identifying the callers, nor do we collect cell phone locational information.” The Section 702 spying, it explained “targets only non-US persons overseas.”
None of these claims refute reports that Washington is engaged in massive spying against US and overseas targets. Assuming that these statements were not bald-faced lies, they would simply mean that the spies use other pseudo-legal justifications for recording telephone calls and spying on US citizens.
In the case of the bulk seizure of Google and Yahoo data, the NSA has exploited the fact that the computer centers in question are located outside of the United States, with regulations falling not under FISA, but under an executive order. The data in question, however, is the same as that located in the companies’ US centers.
“Such large-scale collection of Internet content would be illegal in the United States,” the Post writes, “but the operations take place overseas, where the NSA is allowed to presume that anyone using a foreign data link is a foreigner.”
Despite the obvious evasions and lies of the intelligence officials, the congressmen fawned on the spy chiefs on Wednesday. Democratic Representative Dutch Ruppersberger said he wanted to “thank the people of the intelligence community” and added: “NSA does not target Americans in the US and does not target Americans anywhere else, without a court order.”
As the Post revelations make clear, Ruppersberger’s claims are false and the entire hearing was a sham designed to mislead the public.
http://www.globalresearch.ca/secret-nsa-program-gains-bulk-access-to-google-yahoo-data-centers/5356258
One of the best articles on obamacare if you ask me.
Congress Just Played a Trick On American Taxpayers
Oct 31st, 2013 | By Shah Gilani
Wall Street Insights & Indictments
Happy Halloween!
It just so happens I have both a “trick” and a “treat” for you today.
First, the “trick.”
Yesterday the House passed a bill titled The Swaps Regulatory Improvement Act.
The trick is, it’s not about improving the who-really-knows-how-many trillions of dollars swaps (derivatives) market.
Instead, the bill aims to reduce restrictions under section 716 of the Dodd-Frank Act. Section 716 requires banks to spin off risky swaps out of depository institutions to subsidiaries and affiliates.
Here’s what Rep. Jeb Hensarling (R-Tex.), chairman of the House Financial Services Committee, said on the House floor yesterday: “Section 716 requires financial institutions to ‘push out’ almost all of their derivatives business into separate entities, this not only increases transaction costs, which are ultimately paid by the consumers, it also makes our financial system less secure by forcing swap trading out of regulated institutions.”
WHAT? Now that’s tricky!
Transaction costs? Those are borne by the traders at the banks and hedge funds that trade those financial weapons of mass destruction, not “CONSUMERS.” Consumers don’t trade this crap; these are not consumer products. Consumers will only pay for these weapons of mass destruction if the banks that taxpayers – the consumers of the crap banks spew out when they fail – have to bail out the banks that trade this stuff!
But it passed.
The House measure passed by a bipartisan vote of 292-122, including 70 Democrats.
The trick was neatly exposed by Rep. Maxine Waters (D-Calif.), the top Democrat on the banking panel. She fumed, “This legislation will effectively allow banks to undertake derivatives trading with depositors’ money. If the banks lose money on this sophisticated trading, systemic risk could creep back into our financial system, once again putting the economy – and the American taxpayers – at risk.”
Now that’s scary.
Next, this could be a big treat for you and me… depending on how it eventually plays out.
It’s about JPMorgan Chase’s record $13 billion settlement, the one that’s supposed to consolidate a lot of government actions against the “too big to fail” (TBTF) bank… the settlement that’s now looking like it won’t happen.
Here’s what the hang-up is.
JPM is being sued by Deutsche Bank National Trust Co. on behalf of securitization trusts seeking as much as $10 billion in damages. The case that began in 2009 alleges that JPM is responsible for crappy MBS (mortgage-backed securities) they originated, packaged, and sold to the trusts that are represented by DBNT.
JPMorgan is saying, “That wasn’t us! That crap was stuff that Washington Mutual was responsible for. We only bought WaMu because we are good Americans and their failure back when the crisis was beginning would have hurt a lot of little peeps, so get off our backs.” That’s just their preamble. They continue their defense by saying, “Your beef isn’t with us, your beef is with the FDIC. They are responsible for WaMu’s legacy liabilities.”
Ten billion dollars is a lot of money.
The FDIC is saying, “Go shove off, you losers. You bought the failed bank, the largest bank to ever fail in the U.S., with its $307 billion in assets and all those branches in California and the West for $1.9 billion to get access to all their branches and customers, where you didn’t have a presence. Altruism? Shove it.”
JPM is saying back to the FDIC, “No, you shove it!”
So what’s really going on?
John Douglas, counsel at the law firm of Davis Polk & Wardwell and a former FDIC general counsel, said in an American Banker article this morning, “This dispute has its origins in the purchase and assumption agreement between JPM Chase and the FDIC [that was] signed in 2008, where the FDIC takes the position that JPM assumed all liabilities of WaMu, and JPM asserts it has no liability for the pre-failure errors of WaMu related to these mortgage loans.”
That’s the back story. Now fast forward to the $13 billion settlement.
Of the $13 billion, $5.1 billion goes to settle claims by the Federal Housing Finance Agency over mortgages securities bought by Fannie Mae and Freddie Mac. The big settlement appears to protect the FDIC in its “corporate capacity” from future JPMorgan indemnification claims. But it could leave unresolved future claims on the WaMu receivership managed by the FDIC.
In other words, if JPM settles in the big picture deal and pays the claims related to WaMu that it’s saying should be paid by the FDIC, the lawyers for Deutsche Bank will argue that JPM and not the FDIC has to pay them.
The “treat” for me – and a lot of you and other peeps who aren’t big JPM fans – would be if they actually settle for the $13 billion and in doing so expose themselves in the Deutsche case and remove the FDIC from harm’s way. That would be a treat, not because the bank might have to pay billions more (though that’s okay with me on account of the fact it further exposes them and other banks to similar lawsuits for the pain they inflicted across the globe), but because it relieves the FDIC of having to potentially pay.
Because who backs the FDIC if they run out of money? The taxpayers.
Enough said.
Shah
http://www.wallstreetinsightsandindictments.com/2013/10/congress-just-played-a-trick-on-american-taxpayers/
Leaked Documents Reveal the Secret Finances of a Pro-Industry Science Group
The American Council on Science and Health defends fracking, BPA, and pesticides. Guess who their funders are.
—By Andy Kroll and Jeremy Schulman | Mon Oct. 28, 2013 3:00 AM
The American Council on Science and Health bills itself as an independent research and advocacy organization devoted to debunking "junk science." It's a controversial outfit—a "group of scientists…concerned that many important public policies related to health and the environment did not have a sound scientific basis," it says—that often does battle with environmentalists and consumer safety advocates, wading into public health debates to defend fracking, to fight New York City's attempt to ban big sugary sodas, and to dismiss concerns about the potential harms of the chemical bisphenol-A (better known at BPA) and the pesticide atrazine. The group insists that its conclusions are driven purely by science. It acknowledges that it receives some financial support from corporations and industry groups, but ACSH, which reportedly stopped disclosing its corporate donors two decades ago, maintains that these contributions don't influence its work and agenda.
Yet internal financial documents (read them here) provided to Mother Jones show that ACSH depends heavily on funding from corporations that have a financial stake in the scientific debates it aims to shape. The group also directly solicits donations from these industry sources around specific issues. ACSH's financial links to corporations involved in hot-button health and safety controversies have been highlighted in the past, but these documents offer a more extensive accounting of ACSH's reliance on industry money—giving a rare window into the operations of a prominent and frequent defender of industry in the science wars.
According to the ACSH documents, from July 1, 2012, to December 20, 2012, 58 percent of donations to the council came from corporations and large private foundations. ACSH's donors and the potential backers the group has been targeting comprise a who's-who of energy, agriculture, cosmetics, food, soda, chemical, pharmaceutical, and tobacco corporations. ACSH donors in the second half of 2012 included Chevron ($18,500), Coca-Cola ($50,000), the Bristol Myers Squibb Foundation ($15,000), Dr. Pepper/Snapple ($5,000), Bayer Cropscience ($30,000), Procter and Gamble ($6,000), agribusiness giant Syngenta ($22,500), 3M ($30,000), McDonald's ($30,000), and tobacco conglomerate Altria ($25,000). Among the corporations and foundations that ACSH has pursued for financial support since July 2012 are Pepsi, Monsanto, British American Tobacco, DowAgro, ExxonMobil Foundation, Phillip Morris International, Reynolds American, the Koch family-controlled Claude R. Lambe Foundation, the Dow-linked Gerstacker Foundation, the Bradley Foundation, and the Searle Freedom Trust.
FY2013 grants received as of 11/30/12 (p. 4)
Dr. Gilbert Ross, the group's executive director, declined to answer specific questions about ACSH's fundraising. He did not dispute the authenticity of the documents provided to Mother Jones. (Multiple corporations listed as donors on these documents confirmed they had supported ACSH.) Ross says the group doesn't disclose its backers because "the sources of our support are irrelevant to our scientific investigations." According to Ross, "Only science-based facts hold sway in our publications, even if the outcome is not pleasing to our contributors."
As Mother Jones reported in 2005, Ross was previously convicted for defrauding New York State's Medicaid program of roughly $8 million. His medical license was temporarily revoked and a jury sentenced him to 46 months in prison, of which he served 23 months. Ross currently has his license and is allowed to practice.
Elizabeth Whelan, a Harvard-trained public-health scientist, founded ACSH in 1978 as a counterweight to environmental groups and Ralph Nader's consumer advocacy movement. "ACSH protects consumer freedom from a variety of unscientifically based activist organizations—such as the Natural Resources Defense Council, Center for Science in the Public Interest, and Environmental Working Group—that use 'junk science' and hyperbole about risk to promote fears about our food, pharmaceuticals and chemicals, and other environmental and lifestyle factors," ACSH says on its website. "Their agenda is to limit or dismantle many technological achievements that contribute to consumer choice and good health."
The documents say that ACSH staffers should approach potential corporate financial backers with pitches geared toward specific issues.
From the start, ACSH has faced questions about its funding. It was launched with $100,000 in seed money from the Sarah Scaife Foundation, which has also supported the Heritage Foundation, the American Legislative Exchange Council, and Americans for Tax Reform, among other conservative groups. By the early 1980s, ACSH's donors included Dow, Monsanto, American Cyanamid, Mobil Foundation, Chevron, and Bethlehem Steel. In 1984, Georgia-Pacific, a leading formaldehyde maker, funded a friend-of-the-court brief filed by ACSH in an industry-backed lawsuit that overturned a ban on formaldehyde insulation.
When ACSH was founded, Whelan stated that the council "intends to remain free from financial ties with corporations with a financial interest in the topics we are investigating." Initially, ACSH disclosed its donors, and it was obvious that the group embraced numerous causes connected to its funders. ACSH defended the chemical Alar, used to regulate the growth of apples—and accepted donations from Uniroyal, which manufactured and sold Alar. It also opposed new mandatory nutrition labeling requirements—and pocketed money from Coca-Cola, General Mills, Kellogg Co., Nestle USA, and the National Soft Drink Association.
ACSH maintains that it doesn't accept donations from corporations or trade associations earmarked for specific research projects—that is, that there's no quid pro quo. But in a March 1992 internal memo obtained by Consumer Reports, Whelan wrote that ACSH staffers would ask the Calorie Control Council, a trade group backed by diet food and drink companies, and McNeil Specialty Products, a Johnson & Johnson subsidiary that owned the US marketing rights to Splenda (an artificial sweetener), for contributions to underwrite the dissemination of a research paper touting artificial sweeteners. (Splenda was then seeking approval for sale in the United States.)
The newly revealed documents say that ACSH staffers should approach potential corporate financial backers with pitches geared toward specific issues. Last year, the documents note, the group planned to "seize opportunities to cultivate new funding possibilities (Prop 37, CSC, and corporate caving, etc.)." Proposition 37 was a 2012 California ballot initiative mandating the labeling of genetically modified foods. (It failed.) "CSC" is shorthand for the Campaign for Safe Cosmetics, a consumer watchdog group that seeks to eliminate dangerous chemicals from cosmetic products. The documents suggest ACSH planned to mention CSC in its fundraising pitches to L'Oreal, Avon, and Procter and Gamble.
Lately, ACSH has become a vocal player in the debate over hydraulic fracturing, or "fracking." In February, the council posted an outline of a "systematic, objective review" it intends to publish on the scientific literature covering the potential health effects of fracking. In an April op-ed for the conservative Daily Caller website, Whelan criticized Gov. Andrew Cuomo (D-N.Y.) for dithering on whether to allow fracking in New York State and asserted that "publicity savvy activists posing as public health experts are spearheading a disingenuous crusade to prevent the exploitation of the vast quantities of natural gas." Fracking, Whelan wrote, "doesn't pollute water or air."
The Daily Caller story included no disclosure of the funding ACSH has received from the energy industry. Big energy companies and ACSH go way back: In the 1992 memo, Whelan called ACSH "the great defender of petrochemical companies." On an ACSH-run Facebook page supporting fracking, the group acknowledges accepting "money from industry," but it does not indicate which companies have donated or how much. According to the ACSH documents, it received a $37,500 donation in 2012 from the American Petroleum Institute related to "fracking." That year, it also received other energy industry funds, including $18,500 from Chevron and $75,000 from the ExxonMobil Foundation.
The ACSH documents list ConocoPhillips as a "projected" donor for "fracking/general" and say ACSH should pitch the National Petrochemical & Refiners Association, a "past supporter," around the issue of fracking.
According to the documents, ACSH was awarded a grant for fracking work from the Triad Foundation ($35,000 for "gen/fracking"). Triad has supported the Heritage Foundation and the Heartland Institute, a nonprofit that has worked to refute climate science. The Bodman Foundation also gave $40,000 to support a forthcoming ACSH study titled "Hydraulic Fracturing: Myths and Realities." Bodman is a reliable supporter of conservative causes, doling out five-figure sums to the American Enterprise Institute, Hudson Institute, and National Center for Policy Analysis.
ACSH expected to receive $338,200 from tobacco companies between July 2012 and June 2013. Reynolds American and Phillip Morris International were expected to give $100,000.
Though ACSH has often taken industry-friendly positions on public health issues, it has long campaigned against smoking. In 1993, Elizabeth Whelan wrote in the Wall Street Journal—a frequent home for ACSH op-eds—in favor of a "user's fee" on smokers to fund health-care reform. Three years later, ACSH published a book called Cigarettes: What the Warning Label Doesn't Tell You, with chapters detailing how smoking makes men infertile, causes blindness, and leads to brittle bones. Ross, ACSH's medical director, has backed a call for the film industry to slap an "R" rating on any movie with smoking in it.
Yet more recently, the agendas of ACSH and Big Tobacco have overlapped, thanks to the growing market for tobacco alternatives, including e-cigarettes and other smoke-free products. As ACSH has courted tobacco companies large and small for financial support, it has touted e-cigarettes—some being manufactured by subsidiaries of major tobacco companies—as a safer alternative to cigarettes. And the documents show that ACSH planned to receive a total of $338,200 from tobacco companies between July 2012 and June 2013. Reynolds American and Phillip Morris International were each listed as expected to give $100,000 in 2013, which would make them the two largest individual donations listed in the ACSH documents. (Reynolds confirmed making a $100,000 donation to ACSH in 2012 and donating additional money in 2013. Phillip Morris confirmed donating to ACSH in 2012 and 2013 but didn't disclose the amounts.)
Ross has stumped for e-cigarettes on TV and radio appearances and in op-eds, writing this month for Forbes that e-cigarettes are a "nascent public-health miracle" and urging US regulators to embrace e-cigarettes—which use liquid nicotine to deliver a smokeless hit for users—as an alternative to cancer-causing traditional cigarettes. Ross' op-ed was timely. Any day now, the FDA is expected to announce new plans to regulate the $1.5 billion e-cigarette industry, which saw its sales triple this year.
But Ross' op-ed does not disclose ACSH's financial support from big tobacco companies like Altria and Reynolds that own e-cigarette-making subsidiaries. Nor does it mention that ACSH, as the fundraising documents suggest, is using the e-cigarettes issue to court potential new funders such as VMR Products and its subsidiary V2 Cigs, Green Smoke, and 21st Century.
In the Forbes op-ed, Ross criticizes nonprofit groups campaigning against e-cigarettes, huffing that they are "heavily funded by pharmaceutical companies in the business of selling near-useless cessation drugs—a fact which they conveniently neglect to disclose." It was a bold charge, given ACSH's own record on the disclosure of industry donations.
http://www.motherjones.com/politics/2013/10/american-council-science-health-leaked-documents-fundraising
Federal Reserve To Delay Commodity Regulation Until Next Year
Posted byElan Mendel on Oct 30, 2013
cftclaw.com
According to Reuters, it seems unlikely that the Federal Reserve will be detailing their plans on commodity regulation until after next month’s Senate hearing over the rigging of the aluminum market. A final decision on commodity regulation should be expected early next year.
After receiving complaints from MillerCoors, the Federal Reserve is looking into a decade old rule that allows large banks to trade physical commodities. According to MillerCoors and other large aluminum manufacturers, banks trading stocks in aluminum were driving up the price through their control of warehouses.
Although they are waiting until after the hearing to move forward, the Federal Reserve will not be taking market manipulation into account, leaving the issue up to the Commodity Futures Trading Commission (CFTC) and the Federal Energy Regulatory Commission (FERC).
The review of commodity regulation rules has many banks feeling the heat. Many feel that the Federal Reserve will implement new rules that will drive up the cost of business for trading. This fear has already led some banks to sell their positions and give up on the physical commodities industry all together.
The Federal Reserve will also not be doing much to change the significant amount of scope in the industry some banks have over others. Banks who changed their status to bank holding companies allowed them to grandfather in their commodity trading activates, including the storage and transportation of commodities, saying that they may change some orders, but are unlikely to change the law as a whole.
http://www.cftclaw.com/2013/10/federal-reserve-delay-commodity-regulation-year/
VALDOR TECHNOLOGY ACQUIRES ASSETS OF VIDEOWARE, INC.
October 30, 2013
Valdor Technology International Inc. (“Valdor”) (TSX-V: VTI) is pleased to report that Valdor has entered into a Binding Letter of Intent (the "LOI") for the acquisition of all of the business and assets of VideoWare, Inc. (“VideoWare”), a wholly owned subsidiary of ViewCast.com, Inc. (“ViewCast”), of Grapevine, Texas.
Under the terms and conditions of the LOI, an Asset Purchase Agreement (the “Agreement”) will be prepared whereby Valdor will pay to VideoWare a total of US$1,250,000 (the "Purchase Price") of which US$1,000,000 will be paid on or before the target closing date of December 2, 2013 and an additional US$250,000 will be paid on or before 60 days thereafter. A 7% royalty will be paid to ViewCast on gross sales from the VideoWare business to a maximum of US$1,750,000 over a five year period. Completion of the Agreement will be subject to: 1) the completion of due diligence by each party to the terms and conditions related to and defined in the Agreement; 2) the completion of a financing by Valdor; 3) the receipt of all requisite TSX Venture Exchange approvals and/or consents and; 4) the approval by the Boards of Directors of all parties to the Agreement. Valdor intends to fund the acquisition of the VideoWare business and its assets through a combination of debenture and equity financing. Specific details of the funding will be announced in a future news release. All information contained in this news release relating to VideoWare and its business and operations is based on information provided to Valdor by VideoWare.
About VideoWare: The future of television is streaming video and the Directors and Management of Valdor believe that now is the time to enter this compelling business sector. In addition to the price versus value argument supporting Valdor making this acquisition: 1) the streaming video industry is converting to fibre optics; 2) the same customers of this acquisition company are a market for fibre optic components, unrelated to their video streaming and; 3) management of the company, that will be part of the acquisition, has significant experience and contacts in the fibre optics industry, within North America.
About the Fibre Optics Industry: Fibre optics is the future of communications. The signal transmission business is in the early stages of a fibre optics bull market. All signal transmission, in their many and various forms, are being converted from electrical to fiber optics. A comprehensive global report on the fibre optic components market projects that it will reach US$42 billion by the year 2017.
About Valdor Technology International Inc.: (www.valdortech.com): Valdor is a high technology fibre optic components company specializing in the design and manufacture of fibre optic connectors, laser pigtails, splitters, and other optical and optoelectronic components, including some that use the Valdor proprietary and patented Impact Mount™ technology. Valdor specializes in harsh environment products and in particular splitters and connectors. Valdor’s business plan incorporates growth by acquisition.
For information on Valdor’s product lines please visit www.valdor.com.
ON BEHALF OF THE BOARD OF DIRECTORS
OF VALDOR TECHNOLOGY INTERNATIONAL INC.
http://marketsmart.ca/technology/media/latest_news/index.php?&content_id=781
Insurance Companies Profit from Obamacare
Oct. 30, 2013
Insurance Companies Profit from Obamacare
No one can reasonably deny that the major Insurance Companies were the driving force behind the writing of the Affordable Care Act legislation. "The health care industry spent nearly $500 million lobbying for health care issues in 2012, and $243 million so far in 2013." Obamacare or Corporate-care: The Writing of the Affordable Care Act, sums up the process.
"Essentially, the ACA was designed to write the for-profit health care system into law, increase corporate profits, and to discourage people from demanding a health care system that would actually provide real health care coverage for all. The ACA wasn’t written to fix a broken system – it was written to ensure that the broken system would be kept in place. After all, from the standpoint of the health care industry, the system is working just fine for their profits."
Since the public insurance providers are enjoying a jump in their stock values and a protected rise in premiums, the normal conclusion is that Obamacare is the big winner in the socialization of medicine. Before going any further, The Health Care Blog raises a curious issues regarding Obamacare in the article, Does Obamacare Limit Profits for Health Insurance Companies in Your State?
"The ACA imposes a minimum medical loss ratio (MLR) on all insurers. The MLR is the amount of money spent on covered person medical care divided by the total revenue received through premiums.
The ACA requires health insurers in the individual and small group market to spend 80 percent of their premiums (after subtracting taxes and regulatory fees) on medical costs. The corresponding figure for large groups is 85 percent.
Even though the MLR is a national law, it may not apply in your state. Why? Because many States are petitioning for a waiver.
Why did these States receive waivers? For a variety of reasons, but one of the reasons is due to the fact that some states have a less competitive medical market. Maine, for instance, requested a MLR of 65%. The reason was that State only has two large commercial insurers, Anthem Blue Cross Blue Shield (with 49% of the market) and MEGA Life and Health Insurance Company (with 33% of the market)."
Now put this argument into a proper perspective. WHY should insurance companies profit at all, and WHY is it necessary for private companies to issue insurance for medical coverage to begin with?
Readers of Negotium know this series advocates free enterprise economics. However, the mandate requirements in Obamacare are nothing more than a guarantee for insurance companies to terminate current catastrophic coverage and offer highly expensive policies that include unnecessary treatment.
With this reality in mind, as the horror reports come in daily, sticker shock is forcing Middle America into untenable decisions. Add the practice of reducing employment to part time status and that train wreck is becoming more like the black plague.
The medical care alternative is not universal Medicaid for an impoverished population. However, the article Rush on Medicaid could spell trouble for ObamaCare’s health, cites "The Democrat and Chronicle newspaper reports that in New York, nearly 24,000 of the 37,000 newly enrolled residents are going into Medicaid, which millions of New Yorkers are already on. Just 13,313 chose private plans."
Such blowback dooms the failed experiment. When your heart stops pumping, a bypass will not work. It is time to look for a transplant.
One such option outlined in the essay, Could nonprofit health insurance plans be the real reformers?, is a viable alternative would be the fostering of nonprofit health insurance CO-OPs (Consumer Oriented and Operated Plans) throughout the country.
The Affordable Care Act might even facilitate a medical graft.
"They could even hasten the day when the big investor-owned corporations cede the marketplace to nonprofits and move on to other ways of earning a profit.
The reform law provides a total of $3.4 billion in loans for local groups that meet high eligibility criteria, so several more prospective CO-OPs will be selected in the months ahead. We’re not talking about grants here. The start-up money must be repaid to the government — with interest. All of the CO-OPs will have to offer coverage through the Internet-based marketplaces (exchanges) the reform law requires states to establish by January 1, 2014.
If all goes as planned, every state will have at least one CO-OP. And there are reports that at least one plan already has negotiated a good rate with local hospitals by explaining how CO-OPs can help them reduce the amount of uncompensated care they incur every year by treating uninsured patients."
In the real world, the lobbyists for the mega corporatists own the politicians. In spite of this influence, the uproar of the citizenry is building, by the fallout from the Obamacare weapon of mass destruction. The normal fallout shelters for the careerists "pols" will not protect them from the wrath of a sickly public, who cannot afford medical coverage.
Add to this diagnosis, Obamacare Causes Doctor to Retire.
"The Deloitte Center for Health Solutions survey of more than 600 physicians, which found "Six in 10 physicians (62 percent) said it is likely many of their colleagues will retire earlier than planned in the next one to three years."
The prescription for a long-term solution is to promote alternative medicine that reduces a damaging dependency on pharmaceutical drugs. The side effect disclaimers need to extend to the practice of medicine itself. Excluding homoeopathy alternatives coverage from patient’s choice only perpetuates the for profit hospital model. Charity medicine, now viewed with the same disdain as bloodletting, by the medical establishment, is a prime causality of the Obamacare. The lobotomy culture never will cure the mental illness of the eugenics cult.
Insurance companies will play divine with their clout of who qualifies for payment of treatment. In an interview, The God Factor Interview, Obama states: "If there’s a senior citizen in downstate Illinois that’s struggling to pay for their medicine and having to chose between medicine and the rent, that makes my life poorer even if it’s not my grandparent." Well, your health insurance donors will not suffer, only the rest of us.
James Hall – October 30, 2013
Subscribe to the BATR Realpolitik Newsletter
http://www.batr.org/negotium/103013.html
Still Feel Confident About Collecting Your Pension After This?
WEDNESDAY, OCTOBER 30, 2013 5:41 PM
If your answer to that question is affirmative, I suggest you take a good hard look at what's coming out of Detroit these days. Why don't we just call it a bail-in model, not unlike Cyprus, where the waters are tested for forcing parties who historically thought they were safe from cuts, find they no longer are.
And if you think Detroit is the only American city that has these kinds of problems, think again. It's merely the first, count on it. It's not just an American issue either, of course, and although retirements plans are set up in myriad different ways, they have one thing in common: they are in essence pyramid schemes, eat your heart out Charles Ponzi, and it's just a matter of time before the walls start crumbling.
But it's not just that. The game is stacked and fixed in favor of certain parties at the cost of others. We can all grasp how, without even knowing any details, because we should know how America, and the world at large, works these days. All games are fixed.
If you still have trouble understanding what is going on here, please do read Nicole Foss' Promises, Promises ... Detroit, Pensions, Bondholders And Super-Priority Derivatives from early September. Here's one quote from that article:
Promises that cannot be kept will not be kept. It is as simple as that. To complicate matters, however, the architecture of the financial system prioritizes promises, in a perhaps counter-intuitive, and certainly self-serving, manner. This will make the task of allocating extremely scarce resources to stakeholders lower down the financial food chain very much more difficult. It is time for a good look at the range of promises made, the competing needs of the recipients, the leverage enjoyed by powerful players in shoring up their own position, and the real world implications for municipalities far beyond Detroit.
And here's another one:
Both pensioners and general obligation bond holders argue that they should have priority in claiming from the city's inadequate assets in bankruptcy. However, a different class of creditor has legally senior status. Holders of financial derivatives enjoy super-priority in bankruptcy. Thanks to changes to bankruptcy law in 2005, they are not subject to the 'automatic stay' provision intended to prevent a disorderly grab for collateral by competing creditors. As such, they are able to press their claim immediately, prior to bankruptcy proceedings and therefore before claims by competing creditors are considered. This may potentially leave nothing for other creditors to divide during subsequent proceedings.
The piece below is from Fox of all sources, but in this case that doesn't make much difference: it is abundantly clear what's going on. Still, it's curious to say the least that this comes out only now there's a trial going on to determine whether or not Detroit is indeed bankrupt, and is eligible to file for it.
Detroit bankruptcy proposal would leave pensioners with 16 cents on the dollar
It was the politicians, and not longtime city workers like Olivia Gillon, who brought Detroit to the brink of insolvency, but now Gillon can only watch as lawyers negotiating the Motor City's bankruptcy bid place a new value on her hard-earned pension: 16 cents on the dollar.
The beleaguered city, facing debt of as much as $20 billion and led by a state-appointed manager, tried nearly a year ago to renegotiate with creditors. When those talks broke down, the city filed for bankruptcy last July, but the filing was ruled unconstitutional by a judge. A series of state and federal rulings followed, culminating in a trial that began last week in which the city must show it is eligible to enter bankruptcy. That's when the frightening magnitude of the "haircut" being sought for some 21,000 retirees emerged.
"It’s wrong on every possible level," Gillon, 68, told FoxNews.com. "I earned my pension. I retired expecting it and I feel that I should have it."
The retirees include police officers, firefighters and other municipal workers, but not teachers, who are covered by a state-administered system. The affected workers have been promised some $3.5 billion in pension payments and another $6 billion in health care benefits, money most agree the city can't pay. But for a retiree counting on a modest annual pension of, say $30,000, the proposed cut would leave him or her with $4,800. Of all the once-proud city's creditors, including banks, vendors and bondholders, retired workers are the least able to take the hit, said Gillon.
"Some people are going to be hit hard," Gillon told FoxNews.com. "I’ll have to change the way I live."
Gillon is a member of the Detroit Retired City Employees Association, which, together with the Retired Detroit Police & Fire Fighters Association, represent about 70% of the city’s approximately 21,000 retirees. Along with the Michigan chapter of the American Federation of State, County & Municipal Employees, they are fighting the bid by claiming the city of Detroit has not proven it is insolvent, has not negotiated in good faith with its creditors and the bankruptcy filing violates the state constitution protecting retirement benefits for public workers.
Bob Gordon, who represents the two pension funds, argued in court last week that the city can restructure without cutting pensions, which are protected by the state in a manner that he said is "binding" and "impermeable." The Michigan state constitution does contain a provision that bans any action that threatens to cut the pension benefits of public employees, but several experts have said the federal bankruptcy code would trump the state statute, especially if the city can demonstrate it has no way of making an estimated 100,000 creditors whole.
The Michigan-based Mackinac Center for Public Policy, which sounded a warning about Detroit's fiscal problems more than a decade ago, said the old-style defined benefits pensions that have long been a centerpiece of civil service leave pensioners at the mercy of politicians.
"It’s just another example of the flaws of a defined pension system," said Ted O’Neil, a Mackinac analyst. "The problem with putting trust in government to invest and save your money is that they don’t always make the best choices."People who worked hard for their pension many end up being scapegoats," he added.
Indeed, the Mackinac 2000 study looks prophetic now: "If Detroit's future expenditures were relatively stable, this financial snapshot still would be cause for concern. But the city is looking at two new outlays of monstrous proportions: funding the pension obligations of current and future city employees, which could cost up to $3 billion, and fulfilling requirements under several federal environmental acts, which will cost billions more," read the report.
The 16 cents on the dollar estimate could be a message to unions, which previously refused to negotiate cuts.
Reading this reminded me of a very old song, I can't remember the name or artist, it goes something like this:
"They're coming to take it away, hi hi, ha ha."
http://www.theautomaticearth.com/Finance/still-feel-confident-about-collecting-your-pension-after-this.html
15 years of facts add up to the same thing: gold manipulation
Cambridge House
Published on Oct 30, 2013
Head of Congressional Intelligence Committee: “You Can’t Have Your Privacy Violated If You Don’t KNOW Your Privacy Is Violated”
Submitted by George Washington
10/30/2013 19:07 -0400
The chair of the House Intelligence Committee – Mike Rogers – said yesterday in an NSA spying hearing which he led that there is no right to privacy in America.
Constitutional expert Stephen I. Vladeck – Professor of Law and the Associate Dean for Scholarship at American University Washington College of Law – disagreed.
Here’s the exchange:
Rogers: I would argue the fact that we haven’t had any complaints come forward with any specificity arguing that their privacy has been violated, clearly indicates, in ten years, clearly indicates that something must be doing right. Somebody must be doing something exactly right.
Vladeck: But who would be complaining?
Rogers: Somebody who’s privacy was violated. You can’t have your privacy violated if you don’t know your privacy is violated.
Vladeck: I disagree with that. If a tree falls in the forest, it makes a noise whether you’re there to see it or not.
Rogers: Well that’s a new interesting standard in the law. We’re going to have this conversation… but we’re going to have wine, because that’s going to get a lot more interesting…
Placeholder Gold vs Physical Gold – Spot The Massive Disparity
Grant Williams | October 29, 2013
In his latest edition of Things That Make You Go Hmm (subscription is highly recommended), Grant Williams explains how he has been watching several gold market trends unfolding throughout this past year. Many of the figures do not add up, he explains. Despite clear evidence of massive demand for physical gold, “The Gold Price” has continued to trade poorly.
However, the longer this situation persists, the more definitely it will resolve itself; and it’s very hard to see how that resolution ends in anything but higher prices.
Demand levels from Asia continue to soar while production increases just a couple of percent each year; and leaving aside Indian festivals and increasing central bank purchases, the fiat alternative to gold bullion — the US dollar — is coming under renewed pressure in the wake of the Taper That Never Was and the appointment of Janet Yellen as Ben Bernanke’s successor.
The following is an excerpt from Grant Williams his latest report, in particular his analysis on the gold market: East vs West, physical gold vs “placeholder” gold.
Westerners aren’t used to the kind of inflation levels, government confiscation, and currency volatility so common in places like India; and so the need to own gold as protection isn’t fully appreciated in the West.
Westerners pay lip service to gold’s being “an inflation hedge” or “a currency” or “a safe asset”, but these terms are used in an extremely abstract way by the vast majority of the investing public, who see gold as mostly just another trading vehicle. Yes, there are Western investors who have a deeper understanding of the reasons for owning physical gold, but they are a tiny minority.
Perhaps the simplest way to illustrate this point is to look at trading volumes in gold ETFs — a simple, effective way of renting gold for the short term for punters investors — to see how Western and Eastern volumes compare.
For the purposes of this exercise, there’s nowhere better to go than the heavyweight champion of the gold ETF world, GLD:
GLD Daily traded volume 2012 2013 physical market
Source: Bloomberg
As you can see from this chart, the average daily turnover of GLD on the NYSE is a little shy of 11 million shares. At current prices, that is roughly US$1,419,127,163 or $1.4 billion. Every day.
Fortunately, the GLD ETF is also listed on the Tokyo, Hong Kong, and Singapore stock exchanges; so a comparison is extremely straightforward.
What do the volumes in Asian trading of paper shares offering “ownership” of gold custodied in the London vault of HSBC look like?
Well, they look like this:
GLD Daily traded volume Asia 2012 2013 physical market
Source: Bloomberg
Now, eagle-eyed readers will have noticed that I didn’t include the average lines for the three Asian exchanges. The reason for that is simple: they are so close to the X axis as to be almost invisible.
To provide a clear picture of the contrast between GLD volumes on the Western and Eastern exchanges, what I will do instead is show the average daily turnover on all four exchanges as dollar figures on the same chart (below).
I actually had to delete the line that demarcated the X axis, because, with a 1pt stroke on it in Adobe Illustrator, it became too difficult to see the bars for Japan, Hong Kong, and Singapore; so the chart looks a little strange.
What’s that? The Asian exchange volumes are a little difficult to make out? Ah… well, in that case, let me clarify it for you:
The volume on the NYSE is approximately 700x that of both Tokyo and Hong Kong and a mere 350x that of Singapore.
In short, Asians like their gold to be heavy, shiny, and made of … well, gold.
GLD Daily traded volume all 2012 2013 physical market
Source: Bloomberg
This massive disparity in appetite for “placeholder gold” is just one side of the coin, however; and India is just one of the Eastern countries that has been soaking up copious amounts of physical gold in recent months.
Why? Well, I’ll hand it back to S. again, as he finishes his article with something of a flourish:
The economic establishment wails that gold does not obey its policies. Gold defies government policies because of the disconnect between the policies and the people. Indians revere, not simply love, gold. But the State policies are founded on the economic theories of the West which treat gold like any other commodity for trade and profit. It is no surprise that the theories, which work in the West but not here, project gold as India’s villain.
Yet, gold has emerged as the winner in economics — successfully hedging inflation and beating the stocks and banks. With the unalterable basic facts about gold in India known, the real challenge is how to frame a practical and workable policy for gold and how to ensure that gold imports do not affect the macro economy. Gold buying by Indians is seen as weakening India. But buying is economic power as well — in fact, the ultimate economic power is a nation’s market. Yet, surprisingly, India has not put to use its enormous power as one quarter of the world’s retail market for gold. India has to strategise and use its huge market to overcome the weakness of its people for gold. How to do it is the challenge and a topic by itself.
Indeed. How do you get the gold out of Indian citizens’ hands and into government coffers? I can think of one way, but I wouldn’t advocate trying it.
The evidence of physical gold’s being sucked ever more violently from West to East grew hugely this past week when figures were released for gold exports to Switzerland through London:
(Reuters): A surge in gold exports from the United Kingdom to Switzerland this year may largely be the result of metal sold out of exchange-traded funds being shipped for re-refining before making its way to Asia, according to Australian bank Macquarie.
UK gold exports to Switzerland, Europe’s major bullion refining hub, jumped to 1,016.3 tonnes in the first eight months of this year, data from European Union statistics agency Eurostat shows, from 85.1 tonnes in the same period of 2012…. A surge in gold exports from the United Kingdom to Switzerland this year may largely be the result of metal sold out of exchange-traded funds being shipped for re-refining before making its way to Asia, according to Australian bank Macquarie.
UK gold exports to Switzerland, Europe’s major bullion refining hub, jumped to 1,016.3 tonnes in the first eight months of this year, data from European Union statistics agency Eurostat shows, from 85.1 tonnes in the same period of 2012…. Asia is by far the world’s largest centre for physical gold demand, with China and India between them responsible for nearly half of global gold fabrication demand, which includes jewellery manufacture.
Buying in Asia shot higher in the second quarter of the year after a sharp drop in gold prices, which spurred consumer demand.
“Given the outflows from ETPs, strong demand in Asia and refining capacity in Switzerland, it is possible the metal is headed for Asia through Switzerland,” Barclays Capital analyst Suki Cooper said.
That is a twelve-fold increase in bullion traffic between the primary vault in London and the major refineries in Switzerland.
Extraordinary.
Now, we don’t know with absolute certainty where that gold is ultimately bound — but we know it isn’t Switzerland. If we throw into the mix the widely covered movement of gold into China through HK, a picture begins to emerge of an incredible wave of physical metal heading from West to East, even as the price continues to languish.
One of the primary sources of supply in this steady transfer of physical bullion has been the GLD warehouse. I’ve touched on the subject of the incredible vanishing ETF gold holdings before, but it’s worth revisiting the phenomenon and reminding readers of a chart I included in the July 16th edition of Things That Make You Go Hmmm…, entitled “What If?“:
gold price comex inventories 2011 2013 physical market
Source: TTMYGH/Bloomberg/COT
This chart shows the precipitous drop-off in both ETF holdings and gold stored in the COMEX warehouses.
The gold in London is heading somewhere — and it’s heading there via Switzerland, by the looks of it.
Taking that chart a step further, we find yet more evidence of a major disconnect between the two biggest precious metals ETFs, GLD and SLV. As you can see from the first chart below, the prices of both “monetary metal” ETFs have performed pretty badly so far this calendar year, with GLD falling a chunky 20%:
GLD SLV 2013 physical market
Source: Bloomberg
The extent of this decline is cited by mainstream commentators as the reason for the hollowing out of the amount of metal held in custody on behalf of the GLD ETF. The silver ETF has fared even more poorly, with its customary volatility pushing it 27.5% lower year-to-date.
Tough times to be a precious metals bull, to be sure.
Now, however, take a look at the total reported physical metal holdings of all precious metals ETFs. (These figures extend wider than simply GLD and SLV and take into account all the major competing products.)
gold silver physical holdings 2012 2013 physical market
Source: Bloomberg
Notice anything?
Yes… holdings of silver in ETFs have actually increased as the price has fallen nearly 30%, while gold bullion in custody has plummeted.
Now, if there’s anybody out there who can explain this phenomenon to me, I am genuinely interested in hearing any and all plausible explanations.
I said “plausible”, folks.
This draining of physical metal was always going to cause stresses somewhere in the machinery at some point — it was only a matter of time — and the Indian central bank’s “war on gold” seems to have been the final straw.
As the RBI’s working group so neatly summarized on page 9 of their 224-page paper: ”Demand for gold is not strictly amenable to policy changes and also is price inelastic due to varied reasons.”
Of course, despite the fact that gold isn’t “strictly amenable to policy changes,” nor does it have any price elasticity, the Indian government went ahead and made a raft of policy changes designed to curb gold buying. The upshot?
(Bloomberg): Gold premiums in India, the world’s largest user, climbed to a record as jewelers rushed to secure supplies to meet soaring demand during festivals and weddings amid government curbs on imports.
The fees paid by jewelers to banks and other importers climbed to as much as $120 an ounce over the London price this week compared with a discount of $60 a month earlier, said Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation. Premiums may surge to $150 to $200 if the shortage persists, he said.
The raw material scarcity is worsening as imports slumped after the government linked shipments to re-exports in July and increased tax on overseas purchases for a third time this year to curtail demand. Purchases of gold and silver tumbled to $800 million last month from $4.6 billion a year earlier, the Commerce Ministry said Oct. 9.
“There is a shortage in the market and there will be panic in the market with each passing day” if supplies don’t increase, Bamalwa said. “The government is comfortable because import of gold is reduced but it’s a problem for consumers. Gold is in our culture and we can’t change that.”
Those final ten words are the key.
There now exists something of a perfect storm in the physical gold market as we move deeper into the Indian festival season.
Demand at this time of the year in the subcontinent is “inelastic” (as the geniuses at the RBI eventually surmised). The GLD ETF has already lost nearly 35% of its bullion this year; China has been hoovering up as much physical gold as it possibly can (through Hong Kong and, most likely, Switzerland); and we are now set to move into what has been, for the last 40 years, the strongest part of the year with regard to the price performance of gold (driven largely by that Indian festival season).
http://goldsilverworlds.com/physical-market/placeholder-gold-physical-gold-spot-massive-disparity/
basserdan just wanted to thank you for all the great informative articles you posted on obamacare. You were against it from day one and you were spot on!
Warning On Obamacare
Edge Trader
Sept. 30, 2013
As people learn that the Obamacare trap will cause them to lose their current insurance, and ensure that their cost of the poorer available health care will increase significantly.
That aside, the WARNING to which the headline refers is something we just learned. Everyone who signs up for this disastrous [un]health care act does so under penalty of perjury. It is a one-way contract that each signer obligates by “voluntarily” signing under such penalty clause, just like signing an IRS tax form. Once anyone does that, [s]he is on the financial hook. Always remember, signing is voluntary.
There is also a somewhat hidden clause that failure to pay either premiums or costs, we are unsure which, means the government can take any money due from your tax refund. Things like that happen once one voluntarily signs up for a corporate government “benefit.” One never gets the benefit of any doubt, either.
Know what you are signing up for, folks, for this government product has been sold to everyone, backed by lies and deceit, standard operating procedure for the corporate federal government.
edgetraderplus.com
Are we Seeing a Squeeze Now on Silver Supply?
Vanessa Collette interviews the Silver Guru David Morgan at the 11th Annual Silver Summit
David Morgan | October 30, 2013 - 9:08am
Obamacare Sticker Shock
By Stephen Lendman
Global Research, October 30, 2013
Obama sold smoke and mirrors. He makes used car salesmen look respectable by comparison. His Affordable Care Act (ACA) provides unaffordable coverage.
Millions of households have to pay 40% or more out-of-pocket. It’s for co-pays and deductibles. It’s on top of costly premiums.
Coverage for 50-year-olds making $46,100 is $10,585. Co-pays and deductibles add up to another $6,250.
Healthcare in America is double its cost in other developed countries. It’s increasingly less affordable. Little is done to constrain annual price hikes. It wasn’t always this way. A previous article explained.
In 1960, healthcare as a percent of GDP was 5.1%. In 2002, it was 15%. In 2011, it was 17.9%. By 2020, it’ll exceed 20%.
Between 1960 and 2009, average annual healthcare spending rose from $147 per person to $8,086. It reflected a 55-fold increase.
In inflation-adjusted 2010 dollars, it increased annually from $1,082 to $8,218 – a 7.6-fold rise.
In 1942, Christ Hospital, NJ charged $7 per day for a maternity room. Today it’s $1,360.
In 1980, a typical US hospital room cost $127. Today it’s multi-times higher.
A 2011 survey of 11 Ohio hospitals found daily hospital room prices ranged from $688 – $2,425. Cost averaged $1,393. The median price was $1,322.
ACA escalates costs higher. Doing so prices millions out of expensive care when it’s most needed. Others will get much less than they expected.
They can get whatever they want by paying for it out-of-pocket. Most households can’t do so.
Over 23% of Americans are unemployed. Rigged Department of Labor numbers claim otherwise.
Most others are underemployed. Main Street is suffering from protracted Depression level conditions.
Most working Americans live from paycheck to paycheck. They barely earn enough to get by. Many can’t do so without help. Safety net protections are being cut. Millions of working households are impoverished.
They can’t afforded anything more than bare bones healthcare. It leaves them woefully uninsured or underinsured against catastrophic illnesses.
Insurers and other predatory providers game the system for profit. Healthcare is a fundamental human right.
Obamacare commodifies it more than ever. It’s a huge provider giveaway. It shifts costs unfairly to consumers. Healthcare giants wrote the law that way.
Obama asked them to draft legislation Congress would pass. It’s one of the all-time greatest scams. It makes consumers pay for what insurers should provide. For them it’s the holy grail. For ordinary people it’s a matter of life, debt or death.
ACA rips off Americans. It’s a healthcare rationing scheme. It offers inadequate or unaffordable coverage. It scams instead of protects. It leaves millions uninsured entirely. It leaves America’s most disadvantaged in no-man’s land.
It’s part of Obama’s plan to destroy social America. He’s in lockstep with Republicans and most Democrats. They want it entirely eliminated.
They want it dismantled piece by piece. They’re turning America into a dystopian backwater. It’s no longer fit to live in.
Depriving people of healthcare when most needed is a crime against humanity. Add another to Obama”s rap sheet.
Prepare for sticker shock. America’s media noticed. On October 13, the Chicago Tribune headlined “Obamacare deductibles a dose of sticker shock.”
If “33-year old single father (Adam Weldzius) wants the same level of coverage next year he has now with the same insurer and the same network of doctors and hospitals, his monthly ($233) premium will more than double.”
“If he wants to keep his monthly payments in check, (he’s) looking at an annual deductible for himself and his 7-year-old daughter of $12,700.”
It’s triple the $3,500 he’s currently paying. Many Illinoisans face the same dilemma. They’ll pay thousands more dollars next year for coverage. Most will get less bang for the buck.
A Tribune analysis showed 21 of the 22 lowest cost Cook County Illinois exchange plans have annual individual deductibles exceeding $4,000 for individuals and $8,000 for families.
Consumers must pay these costs before insurance benefits begin. They’re much higher than what millions can afford. They’re not what they expect or deserve.
Suburban Chicago insurance broker Rich Fahn calls Obamacare a “major sticker shock for most of my clients and prospects.”
“I’m telling (them) that everything they know historically about health plans has changed.”
“They either have to pay more out-of-pocket or more premiums or both. It’s an overwhelming concern.”
It’s impossible for millions to cope. They’re priced out of vital care.
Cook County plans with cheapest monthly premiums have deductibles up to $6,250 for individuals and $12,700 for families. It’s the maximum Obamacare allows.
On October 26, the Los Angeles Times headlined “Some health insurance gets pricier as Obamacare rolls out.”
Californians “are discovering what Obamacare will cost them – and many don’t like what they see.”
Sticker shock confronts them. “(E)xperts say sharp price increases have the greatest potential to erode public support.”
Some households may forego coverage. Penalties are cheaper than having it. Defections in large enough numbers could cause rates to skyrocket more than already.
Anthem Blue Cross president Pam Kehaly got a letter from an irate policy holder. She “was all for Obamacare until (she) found out” she faces a 50% rate hike. It’s before huge deductibles and co-pays.
Obama’s “(i)f you like your plan, you can keep it” was one of his many lies. His verbatim 2009 promise was:
“So let me begin by saying this: I know that there are millions of Americans who are content with their health care coverage. They like their plan and they value their relationship with their doctor.”
“And that means that no matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period.”
“If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.”
He lied! Insurers are canceling millions of policies. They don’t comply with Affordable Care Act (ACA) provisions. They involve much higher costs.
According to healthcare expert Bob Laszewski, about 16 million Americans will lose their current coverage because of Obamacare.
Rules are very complex. Older grandfathered plans must comply with stringent rules.
“(I)f you had an individual plan in March of 2010 when the law was passed and you only increased the deductible from $1,000 to $1,500 in the years since, your plan has lost its grandfather status and it will no longer be available (when it’s) renewed in 2014.”
“Millions of people are now receiving letters from their carriers saying they are losing their current coverage and must re-enroll in order to avoid a break in coverage and comply with the new health law’s benefit mandates – the vast majority by January 1. Most of these will be seeing some pretty big rate increases.”
Obama promised lower ones. At a February 2008 Columbus, Ohio campaign stop, he said:
“We are going to work with you to lower your premiums by $2,500.”
“We will not wait 20 years from now to do it, or 10 years from now to do it. We will do it by the end of my first term as president.”
At yearend 2012, premiums were about $3,000 higher. It’s a $5,500 differential.
Annual increases are certain. Healthcare already is unaffordable for millions. Many more will be priced out ahead.
At best, they’ll get inadequate bare bones coverage. At worst, it’ll be too little to matter when it’s most needed.
On March 23, 2010, Obama signed ACA into law. Insurers began hiking premiums accordingly.
In 2011, they rose 9.5%. Experts attributed much of the hike to Obamacare. It assures escalating higher prices. Federal mandates increase them dramatically. Consumers bear the cost.
So far, about 1.5 million Americans lost coverage. Millions more will without plans complying with Obamacare mandates.
Most Americans will be way underinsured because plans offering proper coverage are unaffordable.
Employers are substituting part-time/temp workers for full-time ones. Doing so lets them cut or eliminate healthcare coverage.
It forces employees to buy their own. Sticker shock awaits them. Serious illness may kill them. Fast food healthcare doesn’t work.
What good is insurance forcing policy holders to pay for treatments they can’t afford? Obamacare works for providers, not people.
It’s lose-lose for them. It forces them into coverage. It doesn’t work when most needed. It leaves them high and dry on their own.
It makes healthcare increasingly less affordable. Incomes have been stagnant for decades. They don’t keep pace with inflation.
It’s rising far more annually than artificially rigged low numbers. Millions more will be priced out of vitally needed care. Inability to get it assures pain, suffering and death.
A Final Comment
On August 22, 2012, Illinois State Senate candidate Barbara Bellar summed up Obamacare in one notable sentence, saying:
“We’re going to be gifted with a healthcare plan we are forced to purchase, and fined if we don’t, which purportedly covers at least 10 million more people, without adding a single new doctor, but provides for 16,000 new IRS agents, written by a committee whose chairman says he doesn’t understand it, passed by a congress that didn’t read it, but exempted themselves from it, and signed by a president who smokes, with funding administered by a treasury chief who didn’t pay his taxes, for which we will be taxed for four years before any benefits take effect, by a government which has already bankrupted Social Security and Medicare, all to be overseen by a surgeon general who is obese, and financed by a country that’s broke.”
Note: Bellar’s comments weren’t entirely right. Social Security and Medicare aren’t bankrupt. They work as intended. They’ve done so for decades. They’re sound and secure if properly administered. They’re targeted for elimination.
Bellar was close enough on most of what she said. She made her point.
She’s a Republican. She’s a former nun. She’s a small business owner. She supports transparency, accountability and ethics reform in government.
She’s no one’s puppet, she says. She’s an attorney and family practice physician.
She has a way with words. She treats patients “from cradle to grave, from diapers to diapers, from womb to tomb.”
Her Obamacare summation went viral on YouTube. It didn’t help.
She defeated her 2012 primary challenger. She lost decisively in November’s general election.
Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net.
His new book is titled “Banker Occupation: Waging Financial War on Humanity.”
http://www.claritypress.com/LendmanII.html
Visit his blog site at sjlendman.blogspot.com.
Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.
It airs Fridays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.
http://www.progressiveradionetwork.com/the-progressive-news-hour
http://www.dailycensored.com/obamacare-sticker-shoc
http://www.globalresearch.ca/obamacare-sticker-shock/5356106
Little-known facts about the importance of silver in technology
MINING.com Editor | October 27, 2013
This infographic by SBC Gold shows how silver has wended its way into many key technologies.
http://www.mining.com/web/little-known-facts-about-the-importance-of-silver-in-technology/
Obamacare Fallout. Medical Privacy Rights are Violated
By Stephen Lendman
Global Research, October 27, 2013
Obama’s signature program is rife with inequities. It makes a dysfunctional system worse.
It rations healthcare. It’s unaffordable. It leaves millions uninsured. It leaves millions more underinsured. It compromises privacy. A little noticed disclaimer states:
“You have no reasonable expectation of privacy regarding any communication or data transmitting or stored on this information system.”
Medical privacy rights are violated. NSA and other US spy agencies will have full access to Americans’ medical history. They have lots more than that. More information below.
On October 24, Infowars headlined “CIA-Funded Software Company Manages Private Data for Healthcare.gov,” saying:
In-Q-Tel is a CIA venture capital firm. It’s “heavily invested into Socrata. (It’s a) software company (providing) data collection and management for Healthcare.gov and Medicare.gov.”
It announced a “strategic investment and technology development agreement with In-Q-Tel (IQT).”
Both “entities will work together to further develop Socrata’s data consumerization platform for internal business analysts in data-rich organizations.”
“Users of Socrata’s technologies can transform raw data from multiple sources into more sophisticated and useful resources.”
Socrata will work with NSA, CIA and other US spy agencies. They’ll do so to transform raw data into what’s more easily used.
Healthcare.gov obtained information includes place of residence, social security number, bank account numbers, other financial information, medical history, place of employment, earnings, immigration status, military background, criminal record if any, phone numbers and email addresses.
US spy agencies get it all. They can use it any way they wish. Obamacare is more than ripoff healthcare. It violates core constitutional rights. It exploits unprincipally. It does so secretly. It does more harm than good.
On October 24, Acting Man.com headlined “Obamacare Side Effect – Doctors Abandon the Health Care Insurance System Altogether,” saying:
Many apparently “had enough.” They’re opting out. They’re fed up with bureaucratic red tape. Obamacare makes it worse than ever. They’re going cash only.
They’re able to spend more time with patients. They don’t need extra staff help dealing with increasing amounts of paperwork.
Doing so requires treating more patients to cover costs. It results in less time spent on proper care.
Doug Nunamaker is a family physician. “The paperwork, the hassles, it just got (too) overwhelming,” he said. “We knew we had to find a better way to practice,” he added.
He charges flat monthly fees. It’s the equivalent of cheap insurance. For children, it’s $10. For adults up to age 44, it’s $50. Seniors pay $100.
He advises patients to carry high-deductible insurance coverage. It’s needed in case emergencies, serious illness or expensive treatments.
His patient list numbers 400 – 600. Before it was 2,500 – 4,000. He needed volume to cover expenses. He’s comfortable with more time for treatment.
“My professional life is better than expected,” he said. “My family life and personal time are better. This is everything I wanted out of family medicine.”
Small numbers of doctors operate this way. Others join them annually. American Academy of Family Physicians data show 4% did so in 2012. In 2010, it was 3%.
A 2013 Medscape survey found 6% of physicians practicing this way. Burdensome Obamacare mandates suggest increasing numbers opting out ahead.
They want less bureaucracy. They want more time for patients. They don’t want Washington or predatory insurers telling them how to practice. They want doctors and patients alone deciding.
At the same time, healthcare advocates raise concerns. Cash only medicine perhaps will end up excluding many less well off patients. Everyone should have equal access. Universal single-payer alone provides it.
Bureaucratic red tape is eliminated. Insurers don’t provide healthcare. Doctors do. Medicare’s original design worked as intended.
Enrolling was simple. It still is. Enormous savings are achieved. Universal coverage assures comprehensive affordable care.
Predatory middlemen are excluded. Doing so saves $400 billion or more annually. Using it for care instead of profits covers everyone.
Marketplace medicine prioritizes profits. It does so at the expense of equitable treatment. It lets private insurers game the system. It lets them rip off enrollees freely.
Commodified healthcare falls short. It has no place in free societies. Obamacare makes it less equitable than ever.
Powerful interests blocked earlier US healthcare reform efforts. In 1917, 15 states introduced health insurance coverage for all legislation.
Eight others established commissions to study doing so. Proposals were weak and confusing. They were dead on arrival.
In the 1930 and 1940s, government-sponsored health insurance resurfaced. The issue remained contentious. Industry giants again blocked change.
Post-war, employer-provided coverage increased. Retirees, the disabled, unemployed, and others were uninsured. Years of debate followed. Medicare and Medicaid resulted.
In 1965, amendments to Titles XVIII and XIX respectively of the 1935 Social Security Act established them. Efforts to cover everyone failed. Prospects today are far dimmer than then.
Obamacare eliminates the possibility. Healthcare giants writing the law designed it that way. On June 28, 2012, a Physicians for National Health Program press release said:
”What is truly unrealistic is believing that we can provide universal and affordable health care in a system dominated by private insurers and Big Pharma.”
“The American people desperately need a universal health system that delivers comprehensive, equitable, compassionate and high-quality care, with free choice of provider and no financial barriers to access.”
Convoluted arguments upheld ACA’s controversial individual mandate provision. Americans have no say. They’re required to buy coverage from private insurers. They have to whether or not they want it.
They’re cheated. They get much less than they pay for. Independent experts believe America’s least advantaged at left in no-man’s land.
Federal subsidies are woefully inadequate. They’ll get inadequate coverage at best. They’ll be denied expensive treatments if needed.
Imagine the world’s richest country mandating it. Everyone can get whatever they want based on the ability to pay. Inability means too bad, out of luck.
Ninety-year old Dr. Quentin Young is a longtime Physicians for National Health Program (PNHP) leading member. His newly released autobiograpy is titled “Everybody In, Nobody Out: Memoirs of a Rebel Without a Pause.”
”Had I been in Congress, I would have unequivocally voted against Obamacare,” he said. “It’s a bad bill.”
“We rather think because of its ability to enshrine and solidify the corporate domination of the health system, it’s worse than what we have now.”
Worse or better is immaterial, he stressed. “The health system isn’t working in this country – fiscally, medically, socially, morally.”
“I don’t have any sympathy for the idea that the president had to compromise because his opposition was strong.”
“Winning is not always winning the election. Winning is making a huge fight and then taking the fight to the people – re-electing people who are supporting your program and defeating those who aren’t.”
PNHP examined Obamacare mandate by mandate. It’s nightmarish in complexity. It’s fundamentally inequitable.
“To this day,” said Young, “much to the chagrin of many of our friends who wanted reform, I remain adamant in my rejection of Obamacare.”
Young and other single-payer advocates deplore private insurers. They game the system for profits. They deny or delay expensive treatments. They overcharge, underinsure, and exploit people unfairly.
Obama could have done things different, said Young. “He could have stuck to all the virtues of single payer.”
He acted polar opposite. He sold out the way he did to Wall Street. US consumers are stuck with what demands rejection.
Millions will learn how much to their chagrin. Young expects a dirty fight ahead to change things.
“I’m sure the battle over health care reform isn’t going away,” he said. Odds against winning today perhaps are greater than ever.
Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net.
His new book is titled “Banker Occupation: Waging Financial War on Humanity.”
http://www.claritypress.com/LendmanII.html
Visit his blog site at sjlendman.blogspot.com.
Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.
It airs Fridays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.
http://www.progressiveradionetwork.com/the-progressive-news-hour
Screen-traded fiat gold could get very violent wake-up call
Posted on October 26, 2013 by MK
Usagold.com
by Michael J. Kosares
“This could turn into a very violent wake-up call for [screen-traded gold]. People talk about ‘fiat currencies’, but we also have ‘fiat gold.’ Volatility is too cheap right now.” — Gold refiner quoted by John Dizard in his Financial Times column this weekend
Note: This post is a follow-up to last weekend’s China’s London-Zurich-Hong Kong gold conduit — a major financial coup d’etat
In the initial Reuters report on the London-Zurich-Hong Kong-Shanghai gold pipeline, Macquarie gold analyst Matthew Turner suggested that the 1016 metric tonne United Kingdom export (up from 85 tonnes the previous year) might have been shipped to Switzerland for refining into “smaller bars more attractive to Asian consumers or to be vaulted there instead.” Though vaulting cannot be ruled out, the recasting explanation makes considerably more sense given the times and the extraordinary amount of gold being imported by China – over 1500 tonnes so far this year according to research published by the Koos Jansen website. It is difficult to imagine a scenario in which China would be interested in vaulting gold in the West – particularly at a time when the West is experiencing difficult financial and economic circumstances.
On the other hand, we know that four of the world’s top gold refineries are located in Switzerland — Valcambi, Pamp, Argor-Heraeus and Metalor. Roughly 70% of the world’s annual gold production is refined in Switzerland and it is considered the center of the world’s gold refinery business. Its bars are trusted on the world’s gold exchanges by the top banks, bullion dealers, jewelry manufacturers, and nation states alike. If Turner is right about recasting the bars into Asia-friendly units, and I think he is, Switzerland would be the place to do it, particularly in light of the volume reportedly being re-refined. In my view, China intends for this gold to be transported to and remain in the East otherwise it would not have gone to the trouble to have it recast into Asia friendly bars.
To gain a deeper understanding of what China might be up to, some background is essential. Let’s start with the trading units at the two major Chinese exchanges involved in the gold trade – the Hong Kong Gold and Silver Exchange and the Shanghai Gold Exchange (SGE) – because that goes a long toward explaining why the 1016 tonne export made an initial stop in Switzerland before moving on to China.
The tael is the standard unit of weight on the Hong Kong exchange. It equals 1.20337 troy ounces, or 37.4290 grams, fineness in the past has been 99% but this standard has been upgraded to 99.99% to conform to international trading standards. According to gold expert Timothy Green’s The Gold Companion (1991), the standard trading sizes on the Hong Kong exchange is five and ten taels. The basic contract is 100 taels, or 120.377 troy ounces, as opposed to the standard 100 troy ounce contract on U.S. futures’ exchanges.
The Hong Kong Gold Exchange is an outlet for much of Asia and the tael trading units, once again according to The Gold Companion are used in China, Taiwan, South Korea, Thailand and Viet Nam. The SGE is the only gold exchange in China and its contract-trading unit is the kilo bar (32.15 troy ounces), once again a significant deviation from the western exchange standard.
Dragon’s hoard includes Chinese people, Peoples Bank of China
Should this scenario prove to be accurate, most of the metal moving from London to Asia through Switzerland will more than likely end up in the hands of consumers in the form of jewelry and small bars. What few people realize is that all of this activity is fully sanctioned by the Chinese government and the Peoples Bank of China (PBOC). In fact, once again according to the Koos Jansen website, the Shanghai Gold Exchange is owned by the PBOC and as a result any gold imported and stored at the exchange for future delivery is, indirectly at least, gold inventory at China’s central bank. SGE widely publicizes itself as a “delivery market” thus the smaller and familiar kilo bar size as its chief trading unit makes a great deal of sense.
If, as the smaller bar sizes suggest, the UK-Swiss aspect of the pipeline functions as a bar resizing operation, then we may have a long way to go before China’s official sector (central bank) needs are satisfied simply because so much of it is going directly to Chinese consumers. It also implies that the demand we have already seen, as large as it is, could be just the tip of the iceberg. It is no secret that the Chinese people have a traditional, transcending attachment to gold. That same attitude, it should be kept in mind, permeates almost the whole of Asia, and as more and more people partake in the fruits of Asia’s rise economically the demand for gold is likely to grow with it. China is likely to take advantage of any drop in the price to load up as it did in the April-August, 2013 time period. In one of my early articles on China’s burgeoning interest in gold (June, 2009), I indicated that Chinese demand would likely put a floor under the market for many years to come. The statistics below bear that out.
Drawing again from the Koos Jansen analysis, the China Gold Market Report – authored by the key players in China’s gold market, including analysts for the SGE – lists the following distribution of physical metal through the Shanghai exchange in 2011:
456.66 tonnes – Jewelry manufacturing
53.22 tonnes – Industrial raw materials
21.55 tonnes – Gold coins
213.85 tonnes – Investment gold bars
13.52 tonnes – Other, unnamed industrial purposes
284.88 tonnes – Net investment (??) “…[D]emand arising from the transfer process of gold as an investment tool (This might be the portion that goes to central bank reserves.)
Total = 1043.68 tonnes
To offer a measuring stick that might give that number additional meaning – the total equals roughly 40% of annual mine production, one-eighth the U.S. gold reserve, and nearly one-third Germany’s reserve. (Keep in mind, too, we are talking 2011 numbers not 2013 numbers after the latest massive imports.)
Fiat currency, fiat gold
John Dizard’s column in this weekend’s Financial Times explores the unsettling developments in the physical gold market and what problems they might impose on the paper gold market. Though the column itself is a very positive one for gold’s prospects, it runs under a negative headline that has little to do with the content: Cry of negative gofo heralds trouble for gold. The words “paper traders” should have been added to end of the headline, because that is clearly the point Dizard is making.
He points to the very situation we have just covered in depth on the China connection, and talks about the shortage of kilo bars globally, the recasting of 400 troy ounce LBMA/ETF (exchange traded fund) bars, and the upside down forward rate on physical gold. Dizard poses the question, “Could the gold flow back from those kilo bars to recasting as good delivery 400oz bars?” In other words, does the London-Zurich-Hong Kong-Shanghai pipeline run in both directions? An unidentified gold refiner answers: “Much of that has been converted to jewelry. It would be a lengthy process. Those are pretty sticky hands…This could turn into a very violent wake-up call for [screen-traded gold]. People talk about ‘fiat currencies’, but we also have ‘fiat gold.’ Volatility is too cheap right now.”
Final note
One more point of interest before I put this piece of the China analysis to rest: HSBC, the multinational bank headquartered in London, is the chief storage facility for the largest gold ETFs. As mentioned in my previous article, much of the gold transferred to Switzerland by HSBC came out of the ETFs. In addition, HSBC is an important trading member in the daily London Gold Market Fixings. Founded by Sir Thomas Sutherland in the British colony of Hong Kong in 1865, HSBC stands for the Hong Kong Shanghai Banking Corporation.
____________
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http://www.usagold.com/cpmforum/2013/10/26/fiat-gold-could-get-very-violent-wake-up-call/
Germany, Brazil enlist 19 more countries for anti-NSA UN resolution
Published time: October 26, 2013 19:05
Edited time: October 27, 2013 16:24
Twenty-one countries, including US allies France and Mexico, have now joined talks to hammer out a UN resolution that would condemn “indiscriminate” and “extra-territorial” surveillance, and ensure “independent oversight” of electronic monitoring.
The news was reported by Foreign Policy magazine, which has also obtained a copy of the draft text.
The resolution was proposed earlier this week by Germany and Brazil, whose leaders have been some of the most vocal critics of the comprehensive spying methods of the US National Security Agency.
It appears to have gained additional traction after the Guardian newspaper published an internal NSA memo sourced from whistleblower Edward Snowden on Friday, which revealed that at least 35 heads of state had their phones tapped by American intelligence officials.
One of those is likely German Chancellor Angela Merkel. Earlier this week the White House failed to deny that her personal cell phone had been tapped in the past, though it claims that it no longer listens in on Merkel’s private conversations.
Other countries involved in the talks reportedly include Argentina, Austria, Bolivia, Cuba, Ecuador, Guyana, Hungary, India, Indonesia, Liechtenstein, Norway, Paraguay, South Africa, Sweden, Switzerland, Uruguay and Venezuela.
Navanethem Pillay - United Nations High Commissioner for Human Rights.Navanethem Pillay
While the document does not single out the US as the chief electronic spy, its text seems to be a direct response to alleged NSA practices.
The draft says that UN member states are “deeply concerned at human rights violations and abuses that may result from the conduct of extra-territorial surveillance or interception of communications in foreign jurisdictions.”
Snowden’s leaks over the past months have revealed that NSA intercepts data directly from data cables stationed around the world. Internal documents also showed that American intelligence staff did not need a warrant or any other legal basis to freely spy on a non-US citizen.
The proposed document also claims that “illegal surveillance of private communications and the indiscriminate interception of personal data of citizens constitutes a highly intrusive act that violates the rights to freedom of expression and privacy and threatens the foundations of a democratic society.”
As opposed to the targeted spying of the past, where agencies would tap a specific phone or intercept letters addressed to a person, new technologies mean that almost all data that passes through the internet is saved onto the NSA servers. This includes private emails, web searches, and personal data of billions of people. NSA agents then fish out the needed information with precise searches.
The resolution, which is expected to be presented in front of the U.N. General Assembly human rights committee before the end of the year, turns NSA’s activities into an issue of fundamental rights as opposed to international diplomacy, requiring the High Commissioner for Human Rights to produce a report on the problem. The draft also asks to institute “independent oversight mechanisms” that would curb the untrammelled surveillance, though it does not specify how such a secretive activity could be effectively supervised.
http://rt.com/news/nsa-un-resolution-talks-788/
Legal Glitch "Has The Potential To Sink Obamacare"
by Tyler Durden on 10/26/2013 21:38 -0400
As if the technological problems facing Obamacare were not enough, a potentially major "legal glitch" could cause the healthcare law to unravel in 36 states. As the LA Times reports, The Affordable Care Act proposes to make health insurance affordable to millions of low-income Americans by offering them tax credits to help cover the cost. To receive the credit, the law twice says they must buy insurance "through an exchange established by the state." But 36 states have decided against opening exchanges for now. Critics of the law have seized on the glitch. They have filed four lawsuits that urge judges to rule the Obama administration must abide by the strict wording of the law, even if doing so dismantles it in nearly two-thirds of the states. And the Obama administration has no hope of repairing the glitch by legislation as long as the Republicans control the House..."This has the potential to sink Obamacare. It could make the current website problems seem minor by comparison," noted on policy expert.
Via LA Times,
...
President Obama's healthcare law also has a legal glitch that critics say could cause it to unravel in more than half the nation.
...
Apparently no one noticed this when the long and complicated bill worked its way through the House and Senate. Last year, however, the Internal Revenue Service tried to remedy it by putting out a regulation that redefined "exchange" to include a "federally facilitated exchange." This is "consistent with the language, purpose and structure … of the act as a whole," the Treasury Department said.
...
But critics of the law have seized on the glitch. They have filed four lawsuits that urge judges to rule the Obama administration must abide by the strict wording of the law, even if doing so dismantles it in nearly two-thirds of the states. And the Obama administration has no hope of repairing the glitch by legislation as long as the Republicans control the House.
...
"This is a problem," said Timothy Jost, a law professor at Washington and Lee University. "This case could have legs," although "it was never the intent of Congress to establish federal exchanges that can't do anything. They were supposed to have exactly the same powers."
Michael Carvin, the Washington lawyer leading the challenge, says the wording of the law is what counts. "This is a question of whether you believe in the rule of law. And the language here is as clear as it could possibly be," he said.
...
"This has the potential to sink Obamacare. It could make the current website problems seem minor by comparison," Cannon said.
Defenders of the law say the courts are being used as part of the political campaign against the law.
"This is definitely heating up. It is now the major focus of the Republican strategy for undoing the Affordable Care Act," said Simon Lazarus, a lawyer for the Constitutional Accountability Center. "The lawsuits should be seen as preposterous," he said, because they ask judges to give the law a "nonsensical" interpretation.
...
"They are betting on getting five votes at the Supreme Court," Lazarus said. "I don't think it will happen."
http://www.zerohedge.com/news/2013-10-26/legal-glitch-has-potential-sink-obamacare
This Is The Best Thing to Happen at the SEC - Ever
Oct 10th, 2013 | By Shah Gilani
On Monday, we talked about Tom Hayes.
That’s the former big-shot trader at UBS and Citigroup who’s accused of fraudulently manipulating interest rates to make millions for himself and his bank.
Now we’re hearing news he just lawyered up with a high-profile new firm in the U.K. According to the Wall Street Journal, his new lawyers have a “reputation for mounting aggressive defenses in financial-fraud cases.” This means there’s a good shot Hayes is going to plead not guilty. And there’s a very good shot he’s going to get away scot-free.
Here we go again!
We’ve all had enough of bad actors in the financial services arena getting away with nothing more than a wrist-slap. Many of you have written to me here to voice that outrage, and I’m with you.
These guys have stockholders pay their lawyers, settlement costs, and billions in fines, and then pimp and pander their way back on the gravy train to amp up their schemes and bonus pools. It happens almost every time.
It’s got to change. And – surprise – there just might be some hope on the horizon.
I just found a ray of sunshine, emanating from (out of all places) the Securities and Exchange Commission. They have a new leader and a new strategy that may finally pierce the black hearts of the vampires who suck the economic life out of all of us.
Please don’t miss this.
Mary Jo White, the new chairman of the SEC, addressed the Council of Institutional Investors at their fall conference in Chicago two weeks ago. Her message was clear as a bell and no doubt sent shivers down many a crooked spine.
Because most of us don’t understand why a lot of these bad actors aren’t behind bars, I’ve excerpted several passages from Mary Jo’s presentation that explains why not and – most importantly – what she’s doing to change that.
Here’s M.J. telling us what we don’t know and what we hoped we would hear one day.
When we resolve cases, we need to be certain our settlements have teeth, and send a strong message of deterrence. That is why in each case, I have encouraged our enforcement teams to think hard about whether the remedies they are seeking would sufficiently redress the wrongdoing and cause would-be future offenders to think twice.
We obviously cannot put offenders in jail like a U.S. Attorney can. And in many cases, the law limits the penalties the SEC may obtain to amounts that both we and the public think are too low. Under current law, we cannot assess a penalty based on investor losses, but are limited instead to the usually much lower figure based on the ill-gotten gains of a defendant.
That is why I support, as did my immediate predecessors, legislation introduced in Congress that would allow us to seek penalties based on either three times the ill-gotten gains or the amount of investor losses – whichever is greater. Among other things, the proposed legislation also would authorize us to seek additional penalties if the wrongdoer is a recidivist – a repeat offender who has been undeterred by prior enforcement actions. These would be very powerful, additional tools.
Demand Accountability
Another principle of an effective enforcement program is the recognition that there are some cases where monetary penalties and compliance enhancements are not enough. An added measure of public accountability is necessary, and in those cases we should demand it.
Until recently, the SEC – like most other federal agencies and regulators with civil enforcement powers – settled virtually all of its cases on a no-admit-no deny basis. Generally, a party would pay a hefty penalty and agree to an injunction against future misconduct, but neither admit nor deny the wrongdoing asserted by the SEC in a court complaint or set forth as findings in an order instituting administrative proceedings.
In most cases, that protocol makes very good sense. It makes sense because the SEC can get relief within the range of what we could reasonably expect to achieve after winning at trial. By settling, the agency is able to eliminate all litigation risk, resolve the case, return money to victims more quickly, and preserve our enforcement resources to redeploy to do other investigations – ordinarily, a significant win-win. But sometimes more may be required for a resolution to be, and to be viewed as, a sufficient punishment and strong deterrent message.
In 2012, the SEC changed the no-admit-no-deny language as it applied to settlements with parties that have pled guilty in a related criminal action. In these cases, we now explicitly reference these admissions in the SEC settlement. It was a first step towards greater accountability, and a good one.
But when I started at the SEC, I re-examined our approach and concluded that there are certain other cases not involving any parallel criminal case where there is a special need for public accountability and acceptance of responsibility.
As you might expect, much of my thinking on this issue was shaped by the time I spent in the criminal arena, where courts cannot accept a guilty plea without the defendant first admitting to the unlawful conduct. Anyone who has witnessed a guilty plea understands the power of such admissions – it creates an unambiguous record of the conduct and demonstrates unequivocally the defendant’s responsibility for his or her acts.
But what about resolutions that do not require a guilty plea?
In 1994, when I was a U.S. Attorney, I entered into the first-ever deferred prosecution agreement (DPA) with a company – a tool the Department of Justice frequently uses today. Essentially, a DPA is an agreement that the government will file a criminal charge, but defer its prosecution for a period of time during which the party must demonstrate good behavior and satisfy the other terms of the agreement. These terms can include very significant payments of money, enhanced compliance requirements, and sometimes an outside monitor.
Back in 1994, there was no template for those agreements. Nothing required an admission or confession of wrongdoing. But I decided in that particular case that a public admission of wrongdoing was required for the resolution to have sufficient teeth and public accountability. So considering this history, it should not be surprising that I would follow that same approach in my new role as Chair of the SEC.
Since laying out this new approach, the most frequent question we get is about the types of cases where admissions might be appropriate.
Candidates potentially requiring admissions include:
Cases where a large number of investors have been harmed or the conduct was otherwise egregious.
Cases where the conduct posed a significant risk to the market or investors.
Cases where admissions would aid investors deciding whether to deal with a particular party in the future.
Cases where reciting unambiguous facts would send an important message to the market about a particular case.
To reiterate, no-admit-no-deny settlements are a very important tool in our enforcement arsenal that we will continue to use when we believe it is in public interest to do so. In other cases, we will be requiring admissions. These decisions are for us to make within our discretion, not decisions for a court to make.
Pursue Individuals
Another core principle of any strong enforcement program is to pursue responsible individuals wherever possible. That is something our enforcement division has always done and will continue to do. Companies, after all, act through their people. And when we can identify those people, settling only with the company may not be sufficient. Redress for wrongdoing must never be seen as “a cost of doing business” made good by cutting a corporate check.
Individuals tempted to commit wrongdoing must understand that they risk it all if they do not play by the rules. When people fear for their own reputations, careers or pocketbooks, they tend to stay in line.
Of course, there will be cases in which it is not possible to charge an individual. But I have made it clear that the staff should look hard to see whether a case against individuals can be brought. I want to be sure we are looking first at the individual conduct and working out to the entity, rather than starting with the entity as a whole and working in. It is a subtle shift, but one that could bring more individuals into enforcement cases.
When we do bring charges against individuals, we also need to consider all the possible remedies to prevent future wrongs. One of the most potent tools the SEC has is a court order imposing a bar on an individual – a bar from, for example, working in the securities industry or serving on the board of a public company. Such an order not only punishes past actions, but also can reduce the likelihood that the defendant can defraud and victimize the public again.
Thank you, M.J. For the first time in a long time, we have something to look forward to.
Leave your comments below.
Shah
Posted in Washington
http://www.wallstreetinsightsandindictments.com/2013/10/this-is-the-best-thing-to-happen-at-the-sec-ever/
John Kaiser's Strategies for Success in a Bloody Market
Source: JT Long of The Gold Report (7/8/13)
With so many junior mining companies going into hibernation, John Kaiser of Kaiser Research Online fears that the entire mining sector could fall dormant. In this interview with The Gold Report, he outlines approaches to discovery and development that smart, nimble companies are deploying to stay alive. Whether precious, base or critical metals, or in jurisdictions as exotic as Morocco and as familiar as Nevada, these are the basics required for survival in today's brutal market.
Section of article:
JK: Golden Arrow Resources Corp. (GRG:TSX.V; GAC:FSE; GARWF:OTCPK) just produced a resource estimate for a silver-zinc-lead deposit that has more than $3B worth of metals, the Chinchillas project. Its black mark right now is that it is in Argentina. Golden Arrow's exit strategy is that its project is near and similar to Silver Standard Resources Inc.'s (SSO:TSX; SSRI:NASDAQ) Pirquitas mine. The company will continue basic work and, hopefully, be bought out by Silver Standard.
Golden Arrow also has projects in Peru, $10M working capital, not a lot of shares outstanding and an experienced, well-rounded management group. It is the sort of company that I would expect to survive and possibly deliver a windfall sometime in the next few years.
TGR: In addition to silver, this is zinc-lead play. Is that a good thing?
JK: Yes. Zinc is one of the few base metals where, because mines are shutting down and new mines are slow to come onstream, zinc will be in deficit in the next three to five years. Today, there are mountains of zinc in warehouses, but zinc consumption is also much higher and increasing.
Zinc is one of the few metals I expect to rise over the next couple of years regardless of the macroeconomic trends. We could see stronger zinc prices in the next year or so. That would attract capital to zinc plays, of which there are very few.
TGR: Golden Arrow plans to release a PEA early next year. What do you hope to see from that?
JK: We hope to see a positive net present value (NPV) and reasonable capital and operating cost estimates.
The market does not trust many of the cost numbers used in PEAs. That is one reason that even though these companies show significant NPVs at trailing average metal prices lower than spot price, the market has been unwilling to assign anything near the value implied by the economic study. The recent bad press about the quality of cost assumptions in economic studies will hopefully make future economic studies more reliable.
TGR: What number do you use for the gold price when you look at feasibility studies?
JK: I use the whole range: the trailing average, lower and higher numbers.
I treat juniors as leveraged options on the future price of the metal. If you plug in $2,000/oz gold, some projects end up being 10 or 20 times more valuable than they are now. If gold continues at its current price, these companies may have an intrinsic value of zero. I like to see at what gold price the internal rate of return drops below 15%, and the net present value drops to zero. I prefer using a 10% discount rate rather than the 5% rate favored by many analysts.
Painful as this market has been to my picks and portfolio, it has a certain beauty. The valuations of the juniors are so cheap, that if we did get a positive outcome or if the economy started to grow again and metal prices rose for reasons that are perceived as sustainable over the longer term, these companies would see very rapid price increases. And there is an abundance of information available through the 400+ economic studies we have picked apart.
But you have to buy these stocks without knowing when the metal price will turn up. Once it turns, there is no stock available. If you want to bottom fish, you have to take the timing risk.
Continued...
http://www.theaureport.com/pub/na/15425