Steve Jobs, Google CEO plotted ‘gentlemen’s agreement’ to keep wages down

RT
Published time: January 25, 2014

Two of the most powerful people in the technology world secretly and perhaps illegally coordinated business strategies in which they agreed not to poach each other’s employees, thereby keeping salaries low, according to emails unveiled in federal court.

Apple founder Steve Jobs and Google CEO Eric Schmidt apparently kept a secret pact to institute a “no-hire” policy in which each executive promised not to recruit each other’s workers. Yet the tech superstars are just two of the business leaders to be implicated in the wink-wink agreement, which reportedly included Google, Apple, Intel, Adobe, Intuit, and Pixar.
According to Pando Daily journalist Mark Ames, the scheme began in early 2005, when the need for Silicon Valley engineers was at an all-time high. The deal’s consequences became so pervasive that the US Department of Justice launched an antitrust investigation in 2010, which laid the groundwork for a class action lawsuit filed on behalf of more than 100,000 Silicon Valley employees who allege they were deprived of over $9 billion since 2000.

The US 9th Circuit Court of Appeals refused to throw out the class action suit over the objections of executives at Apple, Google, Intel, and Adobe. The emails in question were unsealed Tuesday by Judge Lucy Koh, the same judge who presided over the Samsung-Apple patent lawsuit.

Jobs, who died in 2011, seems to be the principal architect behind the illegal conspiracy. Yet Schmidt, according to an email from Google senior advisor Bill Campbell dated February 27, 2005, “got directly involved and firmly stopped all efforts to recruit anyone from Apple.”

Schmidt is also said to have told his Senior Vice President for Business Operation Shona Brown to only mention the pact “verbally, since I don’t want to create a paper trail over which we can be sued later.”

Google founder Sergey Brin was also strong-armed when he approached members of Apple’s Safari team about working for Google. Jobs, in an emailed quoted by Pando Daily, cited the “gentlemen’s agreement” when threatening Brin, stating: “If you hire a single one of these people that means war.”

Testifying in court, former Palm CEO Edward Colligan said Jobs enforced the no-poaching policy by threatening to hire away Palm employees, or worse.

“Mr. Jobs also suggested that if Palm did not agree to such an arrangement, Palm could face lawsuits alleging infringement of Apple’s many patents,” Colligan said.

Colligan swore he told Jobs the scheme was “likely illegal” and that Palm Inc. – a computer hardware firm eventually obtained by HP – would not be “intimidated” by a patent battle.

“If you choose the litigation route, we can respond with our own claims based on patent assets, but I don’t think litigation is the answer,” Colligan testified to telling Jobs, as quoted by Reuters.

A jury trial has been set for May 27 in San Jose, California.

US Housing: Is the Recovery Real?

Speculators Chasing Yield
by MIKE WHITNEY

“If it weren’t for the activity of investors, including large hedge funds, there would be no market recovery.”

– Larry Roberts, O.C. Housing News

There’s no doubt that housing prices are going up. According to Corelogic, home prices have risen nearly 10 percent in the last year. And sales have been improving, too. In fact, in the last year alone, sales for new “single-family” homes are up 28.9 percent (437,000 homes) while sales for existing homes have increased by 9.1 percent year-over-year. (4.92 million units)

At the same time, inventory is at a 13-year low, which is pushing prices even higher. Across the country, inventory is down 25.3 percent, but it’s much worse in some of the nation’s hotter markets. According to CNBC:

“Listings are down 31 percent in Seattle from a year ago, down 32 percent in Denver, down 20 percent in Houston, down 37 percent in Boston, according to local Realtor associations….

“At the moment it’s a seller’s market again,” said David Fogg, a real estate agent in Burbank, CA. “Very low inventory, very low interest rates, almost no bank inventory of homes, it’s crazy out there. Every good property I’ve listed this year has brought 10-50 offers and sales prices 10-20 percent over comps. Cash is King.” (CNBC)

So, if sales and prices are going up, and inventory is shrinking, then how can anyone dispute that housing is finally recovering?

While it’s true that the data don’t lie, it’s also true that there’s more in the data than meets the eye. For example, did you know that there are currently 9.8 million vacant housing units in the US, but only 1.74 million of those homes are listed for sale on the MLS? That’s less than 20 percent of the total. So where did the rest of the homes go? Did they just vanish into the ether or are they being kept off the market for some other reason, like to keep prices artificially high?

And as we said earlier, inventories are down 25.3 percent from 2012. There are two reasons for this. First, the banks are holding most of their distressed properties off the market to keep prices high. Second, the banks are controlling the number of underwater homeowners who are allowed to sell via short sales, that is, to sell their home for less than the current price of the mortgage. In other words, the banks control the whole shooting match. If the banks want prices to go up, they simply reduce the supply and prices edge higher. So far, the plan appears to be working.
Housing experts figure that roughly 40 percent of the people who would normally put their houses up for sale, are unable to do so because they are still underwater on their mortgage and the amount they’d get from the sale would require them to borrow money to pay the balance. Who wants to do that? It’s cheaper to just stay in the house and stop making the mortgage payment, which is what millions of people have done. Now they’re waiting for the bank to foreclose, but the banks are in no hurry because foreclosing would just add to their mountain of distressed inventory which would push prices down further. So millions of delinquent borrowers are presently living in their homes for free as they have been for the last two or three years. The “housing recovery” cheerleaders rarely mention this part of the story.

And another thing; while it may sound like houses are selling like hotcakes, the truth is far different. New home sales are less than one-third of what they were at their peak (1.4 million), while existing home sales are merely back to what they were in January 2002 before housing ballooned into a humongous bubble. In other words, the Fed’s record low rates, Obama’s mortgage modification programs, and FHA’s meager 3.5% down payment policy, have barely pushed sales back up to their historic trend. Does that sound like a strong recovery to you?

When you read about the great housing recovery, you should take it with a grain of salt. Take a look at this chart and you’ll see why.

See that little squiggle at the end of the red line? That’s the housing recovery. That’s what $1.5 trillion dollars worth of mortgage backed securities (MBS) will buy you these days. Such a deal!

Now check out this excerpt from The Burning Platform:

“The contrived elevation of home sales and home prices has been engineered by the very same culprits who crashed our financial system in the first place. This has been planned, coordinated and implemented by a conspiracy of the ruling oligarchy – the Federal Reserve, Wall Street, U.S. Treasury, NAR, and the corporate media conglomerates. Ben’s job was to screw senior citizens and drive interest rates low enough that everyone in the country could refinance, attract investors and flippers into the market, and propel home prices higher. Wall Street has been the linchpin to the whole sordid plan. They were tasked with drastically limiting the foreclosure pipeline, therefore creating a fake shortage of inventory. Next, JP Morgan, Blackrock, Citi, Bank of America, and dozens of other private equity firms have partnered with Fannie Mae and Freddie Mac, using free money provided by Ben Bernanke, to create investment funds to buy up millions of distressed properties and convert them into rental properties, further reducing the inventory of homes for sale and driving prices higher. Only the connected crony capitalists on Wall Street are getting a piece of this action. The Wall Street big hanging dicks have screwed the American middle class coming and going. The NAR and media are tasked with what they do best – spew propaganda, misinform, lie, cheerlead and attempt to create a buying frenzy among the willfully ignorant masses. ….. Mortgage applications by real people who want to live in a home are no higher than they were in 2010 when home sales were 33% lower than today. Mortgage applications are lower than they were in 1997 when 4 million existing homes were sold versus the 5 million pace today. The housing recovery is just another Wall Street scam designed to bilk the American middle class of what remains of their net worth.” (“It’s always the best time to buy”, The Burning Platform)

The whole article is a must read for anyone who’s at all interested in housing or government-Wall Street collusion. The author points to another disturbing trend too, the fact that firsttime homebuyers have vanished from the marketplace. Firsttime homebuyers and “move up” buyers used to make up the majority of all housing sales. Now they’ve been replaced by over-extended FHA borrowers (leveraged at 30 to 1) and private equity speculators who represent a full 30% of the market. This new dynamic won’t last, mainly because rising prices reduce profit margins causing speculators to shift to other forms of investment.

Case in point: Just look at Las Vegas where the big Wall Street investors have been buying everyhing that’s not nailed to the floor. This is from Realty Check:

“The Las Vegas market is being fueled by investors, but even the investors can’t find the great bargains anymore….(Mike Brunson, a local appraiser) called Las Vegas the Titanic of the real estate market. It was once thought unsinkable, and even now that the worst is over, he still thinks the market is on a well-provisioned life raft, not on solid ground.

“The only thing that concerns me is that we have been here before and the market itself is not what is driving the price increases. It’s not that we have new employers coming in and creating tens of thousands of new jobs that are leading to people buying new houses. It’s ‘Las Vegas is on sale,’ and investors are buying up everything they can in the used market…..

Brunson… still worries about the fundamentals, such as the slow economic growth and the fact that so much of the funding for new home sales is coming from low down payment, government-backed mortgages.” (“What’s Fueling the Housing Boom in Vegas?” Realty Check)

Brunson crystalizes the views of the housing skeptics (like me), that is, that a recovery that depends on speculators “chasing yield” instead of “organic growth” from working people looking for a place to live, is bound to fail. It’s only a matter of time. Any tightening of rates by the Fed or stock market correction will send the speculators racing for the exits.

Here’s more from Dave Dayen at The New Republic:

Analysts insist that REO-to-rental does not represent a bubble, that the rental revenue streams will satisfy investors and prevent a mass sell-off. But any disruption in the economy would affect the market for rental housing, leading to longer vacancies and lower returns on investment. And the textbook definition of a bubble consists of speculation chasing an appreciating asset. This is precisely what we have in REO-to-rental. In the words of analyst Josh Rosner of Graham Fisher, “the speculative boom has returned.”Investors have begun to pull out of one of the leading edge markets, Phoenix, as most of the foreclosed properties worth purchasing have been snapped up. The big run-up in prices there could collapse as demand collapses, depressing prices and putting the recovery in jeopardy. And any economic downturn would increase rental vacancies and send this entire market reeling. We may not only have a bubble, but already the beginnings of a bust….” (“Your new landlord lives on Wall Street“, Dave Dayen, The New Republic)

Once the PE parasites have stripped the carcas to the bone; they’ll move on to other prey. It’s the nature of the beast. That means that all the markets that rallied in the last 9 months, will see a sharp drop off in demand in 2013 as investment dries up and prices flatten out or retreat. The investment craze is on a very fixed time-line. If lending standards don’t ease, prices will fall. It’s a sure-thing. Low interest rates alone will not keep prices high.

Even so, Fed chairman Ben Bernanke’s zero rate policy (zirp) has helped to fuel another destructive bubble that is setting up borrowers for more excruciating losses. Take a look at the bubble that is developing in California. This is from an article titled More Bubble Trouble in California?:

“In Southern California, home sales have jumped 14 percent over last year and the median price is up 16 percent, some 25 percent in Orange County. We may not quite be at 2007 super-bubble levels but we’re getting there, particularly in the more desirable areas.

Yet, before opening the champagne, we need to look at some of the downsides of this asset recovery. We are not seeing much new construction, particularly of single-family homes, so the supply is not being replenished as inventory sinks. Meanwhile, many of the homebuyers are not families seeking residences, but flippers, Wall Street types and foreign investors. A remarkable one-in-three Southern California home purchasers paid with cash, up from 27 percent from last year.

It’s clear that this increase is not being fueled primarily by income growth among middle-class Californians; these “prices are rising disconnected from household incomes,” notes one analyst….

This leads to what is becoming the biggest problem facing the state – a decline in the rates of affordability. The previous bubble left us a legacy of more-affordable housing, an advantage we may now be losing….The groups hit hardest by this scenario will be middle- and working-class Californians, particularly above the age of 30-35, most of whom desire to own their own home. Unable to qualify, or unwilling to overleverage, many will be forced either to give up their dreams or look elsewhere, taking their talents and, eventually, their offspring, with them.” (“More Bubble Trouble in California?”, Joel Kotkin, New Geography)

As always, the Fed’s meddling creates clear winners and clear losers. In this case, working people are getting shafted while Ben’s facebook friends make off with the lion’s share of the loot. Some things never change.

There’s no way to dispute that prices and sales have been improving. Interest rate stimulus, inventory suppression, and unprecedented speculation have reversed the downward trend and lifted housing off the canvas. But it’s going to take more than that to produce a sustainable housing recovery. It’s going to take a strong economy where unemployment is low and wages are growing.

Don’t hold your breath.

Total Housing Activity Chart: http://advisorperspectives.com/dshort/charts/index.html?guest/2012/LR-Home-TotalActivityIndex-112812.PNG

Monsanto Gets Its Way in Ag Bill

A New Level of Corporate Collusion with Government

by JIM GOODMAN


“The Farmers Assurance Provision” is the title of a rider, Section 733, inserted into the House of Representatives 2013 Agriculture Appropriations Bill. Somehow, as a farmer, I don’t feel the least bit assured.

The only assurance it provides is that Monsanto the devil and the rest of the agriculture biotech industry will have carte blanche to force the government to allow the planting of their biotech seeds.
In addition, the House Agriculture Committee’s 2012 farm bill draft includes three riders – Sections 1011, 10013 and 10014. These amendments would essentially destroy any oversight of new Genetically Modified (GMO) crops by the United States Department of Agriculture (USDA).

If these riders had been in place during the review of GMO alfalfa, Monsanto the devil could have requested – no they could have compelled – the Secretary of Agriculture to allow continued planting of GMO alfalfa even though a federal court had ruled commercialization was illegal pending completion of an environmental impact study.

Essentially, the riders would prevent the federal courts from restricting, in any way, the planting of a GMO crop, regardless of environmental, health or economic concerns. USDA’s mandated review process would be, like court-ordered restrictions, meaningless. A request to USDA to allow planting of a GMO crop awaiting approval would have to be granted.

Wow, who’s next to get in on a deal like this, the drug companies?

Not only will the riders eviscerate the power of USDA and the authority of the courts, but it will also permanently dismiss any input from other agencies, such as the Food and Drug Administration (FDA), Fish and Wildlife Service or Environmental Protection Agency (EPA).

Does Congress really believe it has the right to remove the court’s power of Congressional oversight? Doesn’t that violate the separation of powers guaranteed in the Constitution?

The trade group behind the riders, Biotechnology Industry Organization (BIO), insists that the riders do not, in any way, reduce regulatory requirements for new GMO crops. What? They only eliminate any oversight from the judicial branch – that’s sort of a big thing.

The approval process for new GMO crops is not without its perceived delays. As limited as it may be, review takes time but getting new GMO crops approved is a cakewalk.

StarLink corn and Liberty Link rice slipped through the approval process only to have major contamination and health issues after commercialization. Once a crop is in the USDA pipeline, approval is a near certainty.

BIO insists the riders are necessary to avoid delays in approval. Of course, delays cost them MONEY, which is obviously all they are concerned about. If they were concerned about environmental impacts, or food safety, wouldn’t they request input from EPA and FDA?

So, the “Farmer Assurance “ thing – using farmers as their poster children — is quite disingenuous. The biotech industry cares about farmers because farmers are their meal ticket.

Farmers are not stupid; we’ve learned that the promises of biotech were short lived at best and to various degrees, simply false. The new GMO crops are basically the old GMO crops, just redesigned to resist different, more toxic herbicides while having become less effective at killing insect pests.

No, the Farmer Assurance Provision and the Farm Bill riders – are not about farmers, nor are they about speeding needed crops to the waiting public. They’re about getting fast rubber stamp approval for new, profitable GMO crops.

These riders are an effort to end run Congress, the Courts and the Constitution.

Corporate collusion with government is not new, but this takes it to a new level. By allowing corporations to subvert the Constitution, Congress is saying that corporate influence and profits are more important than the best interests of the people.

Corporations are not people, my friends, despite the Supreme Court’s Citizens United decision.

Libor Fraud Systemic: Entire Economy based on Fraud says Frmr Reagan Asst SecTreas.Paul C. Roberts

The economy is based on fraud, and another bigger, much worse collapse is inevitable. Eye opening stuff.--jef

About Dr. Paul Craig Roberts

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy for the Reagan administration and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following.

+++++++++++++++

Getting Wall Street Off of Main Street
Shrinking Wall Street
by MOSHE ADLER

If you want to make Adam Smith, the founder of economics, and George Stigler, the Nobel Prize winning economist, spin in their graves, say the words “LIBOR scandal.”  LIBOR – London Interbank Offered Rate — is, as everyone learned this past week, the benchmark interest rate that members of the British Bankers Association collude to set. In 1776, in The Wealth of Nations, Smith wrote “[p]eople of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”  Smith would have banned the British Bankers Association altogether. But almost 250 years later, what does the Bank of England, do?  It blesses the collusion by “supervising” it.

Why would George Stigler spin in his grave?  Because to him, the LIBOR “scandal” would be nothing but regulation as usual.  It is routine for regulators to be captured by the executives of the industry they regulate, Stigler explained in his article “The Theory of Economic Regulation.”  The benefits from regulator malfeasance are concentrated on a small group of individuals–the executives of the industry–whereas the costs of such  malfeasance are diffused among tens and hundreds of millions of members of the public.   Because the executives have a huge monetary incentive to prevent the regulator from doing his or her job, they are willing to invest large amounts to get what they want.  LIBOR is just the latest example of Stigler’s theory at work.

The Bankers Association and LIBOR should never have been permitted to exist to begin with.  What did Timothy Geithner do in 2008 when, as the head of the Federal Reserve Bank of New York, he discovered that to improve their profits the banks were setting the benchmark at levels that did not reflect market forces?   Here was an opportunity to ban the Bankers Association and end LIBOR, but instead Geithner wrote a private letter to the Bank of England asking it to establish “procedures designed to prevent accidental or  deliberate misreporting.”  Certainly his discretion was a good career move; it’s hard to imagine that a whistleblower could have gone on to serve as Secretary of the Treasury.

Reforms of the regulations of the financial industry fail one after the next, and bankers continue to rob their clients and to destabilize the economy. So what can be done about Wall Street?

The most remarkable thing about Wall Street is that while it flourishes, working people wither.  How can this be?  The reason for this is the near-zero-interest-rates policy of Ben Bernanke, the chairman of the Fed.  A five year Certificate of Deposit pays now on average less than 1% a year and that has made it impossible for savers to save, except by putting their savings into stocks; this is why the prices of stocks are high.  The ones who benefit from these high prices the most are the executives, because they use these  bloated stock prices to justify their outlandish “compensation.”  As social policy, however, forcing people to buy stocks has no justification.

When individuals buy stocks it is called “investing,” but this is a misnomer, because people are not buying investment goods (e.g., machines, structures, intermediate goods, etc.).  Their trades with the people who sell them stocks are zero-sum games, not economic investments.  The correct policy would be to channel savings toward economic investment, both private and public.  In order to accomplish this, the government should take two steps.  First, it should pay on its bonds an interest rate that, after correcting for inflation, is equal to the average long term growth of real GDP per capita.  What is this rate?  In the years 2001-2010 the average rate of real growth of the economy was only .62%. But that decade saw the bursting of two bubbles, first the dot com bubble, in 2000, and then the subprime bubble, in 2007.  The real growth rate of 2% a year that existed from 1970 to 2000 is a better estimate of the long term growth rate, and the government should pay this rate (in real terms) on its bonds.  (Under this formula a five year bond that was issued in May 2009 would have paid 4% in May 2010, 5.5% in May 2011 and 3.8% in May 2012.)  In order to attract customers away from government bonds to their own CDs and bonds, banks and corporations would have to offer similar or even better terms to savers. And in order to be able to make money themselves, the banks and the corporations would have to finance investments that earn even higher returns still. Furthermore, only deposits that finance real economic investment should be insured by the government.  This will prevent banks from using regular deposits for mergers and acquisitions.  Savers and banks would, of course, be free to trade in stocks, but they would have to do so without government subsidies.

There is an additional step the government should take.  Because the trading of stocks is a zero-sum-game rather than true economic investment, the government should further discourage it by ending the tax deferment to retirement plans (401k) that “invest” in the  stock market instead of channeling that money to government bonds or certificates of deposit.

But what does all of this have to do with the regulation of Wall Street?  First, when savers are no longer forced to give their money to gambles in stocks, the share of the public that has a stake in Wall Street will be far smaller.  And when Wall Street no longer has captive clients, it will have to become more transparent and behave more honestly. Consumers will thus become the regulators.  Even a new, weaker and therefore more honest, Wall Street would still have to be regulated, and this regulation would still have the challenges that Stigler identified. But the damage from the regulatory failures that are sure to continue would be miniscule in comparison to those we have now.  Best of all, a weaker Wall Street would mean stronger investments, both private and public, lower executive “compensation,” and, as a result, as much healthier economy for the rest of us.

LIBOR-gate: Here Come The Arrests

by Tyler Durden on 07/22/2012 - ZERO Hedge


For over four years, virtually everyone in the finance industry knew that Libor was manipulated.

The stench of manipulation rose to the very top and thanks to a document release of formerly confidential information, we now know for a fact that even the Fed was in on it - recall that as part of production, the Fed provided a transcript of an April 2008 phone call between a Barclays trader in New York and Fed official Fabiola Ravazzolo, in which the unidentified trader said: "So, we know that we're not posting um, an honest LIBOR." And yet without any tangible, black on white evidence, there was no catalyst for pursuing legal action.

That all changed when in a desperate attempt to protect its ass, Barclays decided to rat out everyone by settling with regulators, and "turn state" producing e-mail based evidence, most of it quite visual (after all what is more tangible to the common man that evil bankers sipping on Bollinger), which essentially threw years of quiet cartel cooperation under the bus. As a result, regulators, enforcers, and legal authorities, many of whom were in on this manipulation from the beginning, no longer had an excuse to not pursue civil and criminal charges against perpetrators, who until recently were footing the tabs at various gentlemen's venues and ultra expensive restaurants. And while the imminent waterfall of civil prosecution will force bank litigation reserves to go through the roof, here comes, with a very long delay, the criminal charges.

As Reuters reports, here come the arrests.

But before we get into it, we wanted to share something mildly curious involving that British Bankers Association: the entity that until recently at least, was implicitly in charge of the Libor fixing, submission, and distribution process (also the entity that will quite soon be non-existent).

It involves the BBA's self-professed Governance process and obligations. The extract below shows what it is currently.

All aspects of the operation and management of bbalibor as a benchmark are the responsibility of the independent Foreign Exchange and Money Markets Committee ('FX&MM Committee'). This includes design of the benchmark and the governance and scrutiny of all bbalibor data and all panel bank contributions. BBA LIBOR Ltd undertakes the day to day running of the benchmark under the supervision of the Foreign Exchange and Money Markets Committee. As of 1st January 2010, BBA LIBOR Ltd. has been governed by an independent Board.

Thomson Reuters - the 'Designated Distributor' of BBA LIBOR - is tasked with collecting the daily submissions that are inputs into the bbalibor process and submitting them to rigorous checks before publishing the resulting calculation to the market. If any bank submission falls outside a defined set of parameters, Thomson Reuters will consult the contributor and request confirmation that the rate provided is correct, thus allowing any simple typing errors to be amended promptly. These parameters are agreed by the FX&MM Committee and are regularly reviewed to ensure they reflect prevailing market conditions and maintain the highest level of scrutiny over the rates.

There is a named individual at each bank responsible for submitting the daily bbalibor rates to Thomson Reuters and this will be the person responsible for the bank's cash - usually their title is 'treasurer' or similar. There is written guidance on what information that person should take into account when calculating that day's rates for his or her bank. As all contributor banks are regulated, they are responsible to their regulators, rather than BBA LIBOR Ltd. or the FX&MM Committee, for maintaining appropriate procedures for contributing, including the maintenance of internal chinese walls.

The reason we have bolded the third paragraph is that if one had gone to the BBA's Governance section as recently as a few weeks ago, or prior to Liborgate becoming front page news, the paragraph read something totally different. However, courtesy of the Way Back Machine, we have a great idea of just what the BBA quietly and under the radar tried to change vis-a-vis its own obligations and responsibilities in the Libor scandal. This is what the third paragraph said before.

BBA LIBOR Ltd. receives the fixings and underlying contributor data at the same time as all other live data recipients and monitors all submissions into the fixing process. Any anomalous rates are queried with the submitting bank, and a log of these queries is kept and given to the FX&MM Committee on a periodic basis, who may choose at their discretion to follow up these queries in line with established governance and scrutiny procedures.

Up until literally minutes ago, the question to be asked was why was this change made on the page, on a governance page of all places, a change which shirks responsibility and accountability and begs the question, did BBA log any queries of anomalous rates, did the FX&MM Committee follow up on any queries, or are they simply trying to bury something here? Now, thanks to Reuters, we know.

With arrests on deck, the BBA is doing everything it can to distance itself from what it knows with absolute certainty is about to be a shitstorm of epic proportions:

U.S. prosecutors and European regulators are close to arresting individual traders and charging them with colluding to manipulate global benchmark interest rates, according to people familiar with a sweeping investigation into the rate-rigging scandal.

Federal prosecutors in Washington, D.C., have recently contacted lawyers representing some of the individuals under suspicion to notify them that criminal charges and arrests could be imminent, said two of those sources who asked not to be identified because the investigation is ongoing.

Defense lawyers, some of whom represent individuals under suspicion, said prosecutors have indicated they plan to begin making arrests and filing criminal charges in the next few weeks. In long-running financial investigations it is not uncommon for prosecutors to contact defense lawyers for individuals before filing charges to offer them a chance to cooperate or take a plea, these lawyer said.

The prospect of charges and arrests of individuals means that prosecutors are getting a fuller picture of how traders at major banks allegedly sought to influence the London Interbank Offered Rate, or Libor, and other global rates that underpin hundreds of trillions of dollars in assets. The criminal charges would come alongside efforts by regulators to punish major banks with fines, and could show that the alleged activity was not rampant in the banks.

Actually what it will show is that criminal activity was not only rampant, but everyone knew about it, certainly the regualtors, and most certainly the Fed and the BOE. After all how could they not: they are the ultimate entities who manipulate rates. But for them it is a matter of "policy." As such they are desperate to throw anyone under the bus, as long as public attention is redirected from them.

So where will the first arrests come? Why the world's biggest bank of course.

The source familiar with the regulatory investigation in Europe said two traders who have been suspended from Deutsche Bank were among those being investigated. A Deutsche Bank spokesman declined to comment.

Then, once DB is down and out, next it will be a turn to not only break up of the IR derivative trading cabal in Geneva, which Zero Hedge exposed first, but also extract a solid fee from the Swiss banks in the process.

The Financial Times reported on Wednesday that regulators were looking at suspected communication among four traders who had worked at Barclays, Credit Agricole, HSBC and Deutsche Bank.

And so the tide turns, as banks, all of which should have ended up as bailed out utilities in the aftermath of the Lehman collapse, will now be forced to fork over billions in cash to the same governments and administrations that bailed them out in the first place, under the guise of civil and criminal penalty disgorgement in what will almost certainly end up as the biggest financial settlement in history, one which will leave most of the world's banks sorely undercapitalized and force the Basel implementation of various capital requirements to be scrapped indefinitely.

But for now, the public will get its circus (if not corn bread: its price is about to shoot right to the moon courtesy of prayer not being a viable strategy when it comes to procuring rain... or central bank intervention) courtesy of an imminent procession of perp walks. We, for one, having waited nearly 4 years for just this, can't wait.

Did the White House Direct the Police Crackdown on Occupy?

Documents Show How White House and Democrats Worked to Protect the Banks Against Protests
by DAVE LINDORFF


A new trove of heavily redacted documents provided by the US Department of Homeland Security (DHS) in response to a Freedom of Information Act (FOIA) request filed by the Partnership for Civil Justice Fund (PCJF) on behalf of filmmaker Michael Moore and the National Lawyers Guild makes it increasingly evident that there was and is a nationally coordinated campaign to disrupt and crush the Occupy Movement.

The new documents, which PCJF National Director Mara Verheyden-Hilliard insists “are likely only a subset of responsive materials,” in the possession of federal law enforcement agencies, only “scratch the surface of a mass intelligence network including Fusion Centers, saturated with ‘anti-terrorism’ funding, that mobilizes thousands of local and federal officers and agents to investigate and monitor the social justice movement.”

Nonetheless, blacked-out and limited though they are, she says they offer clues to the extent of the government’s concern about and focus on the wave of occupations that spread across the country beginning with last September’s Occupy Wall Street action in New York City.

The latest documents, reveal “intense involvement” by the DHS’s so-called National Operations Center (NOC). In its own literature, the DHS describes the NOC as “the primary national-level hub for domestic situational awareness, common operational picture, information fusion, information sharing, communications, and coordination pertaining to the prevention of terrorist attacks and domestic incident management.”

The DHS says that the NOC is “the primary conduit for the White House Situation Room” and that it also “facilitates information sharing and operational coordination with other federal, state, local, tribal, non-governmental operation centers and the private sector.”

A better description for a fascist police state network could not be written.

Remember, this vast yet centralized operation — what Verheyden-Hilliard describes as “a vast, tentacled, national intelligence and domestic spying network that the U.S. government operates against its own people” — was in this case deployed not against some terrorist organization or even mob or drug cartel, but rather against a loose-knit band of protesters, all conscientiously and publicly committed to nonviolence, who were exercising their Constitutionally-protected right to gather in public places and to speak out against the crimes and abuses of the corporate elite and the politicians who are bought and paid by that elite.

Among the documents obtained by the PCJF in this second batch of responses to its FOIA filing is one from the NOC Fusion Center Desk dated Nov. 5, 2011, which collects at the federal level and then distributes the names and contact information of a group of Occupy protesters who were arrested during a demonstration in Dallas, TX against Bank of America, one of the nation’s biggest predatory lenders. Although none of the seven arrested were charged with any serious crime (six were charged with “using the sidewalk!”), their names and contact information were widely disseminated by the DHS.

Fusion Centers, a post-9-11 creation, are a federally-funded joint project of the DHS and the US Justice Department which are designed to share intelligence information among such federal agencies as the DHS, the FBI, the CIA and the US Military, as well as state and local police agencies. By their nature they are designed to circumvent legal constraints on various agencies, for example the ban on CIA domestic spying, or the Posse Comitatus Act, which bars active military activity within the borders of the US. There are currently 72 Fusion Centers around the US.

Another group of documents shows that on November 9, two days after a demonstration by 1000 Occupy activists in Chicago protesting social service cuts in that city, the NOC Fusion Desk relayed a request from Chicago Police asking other local police agencies what kind of tactics they were using against Occupy activists. They specifically requested that information be sought from police departments in New York, Oakland, Atlanta, Washington, D.C. Denver, Boston, Portland OR, and Seattle — all the scene of major Occupation actions and of violent police repression.

Realizing that it would look bad if it assisted in such coordination overtly, higher officials in the DHS ordered the recall of the request but then simply rerouted it through “law enforcement channels,” where presumably it would be harder for anyone to spot a federal role in the coordination of local police responses. In response to that order, the documents show that the duty director of the NOC wrote that he would “reach out” to “LEO LNOs (liaison officer) on the floor” to assist. Verheyden-Hilliard explains that LEO is FBI’s nationally integrated law enforcement, intelligence and military network.

On December 12, when Occupy planned anti-war protests at various US ports, Verheyden-Hilliard says the new documents show that the NOC “went into high gear” seeking information from local field offices of the Department of Homeland Security about what actions police in Houston, Portland, Oakland, Seattle, San Diego, and Los Angeles planned to deal with Occupy movement actions.

Another document shows that earlier, in advance of a planned Occupy action at the Oakland, CA port facility on Nov. 2, DHS “went so far as to keep the Pentagon’s Northcom (Northern Command) in the intelligence loop.”

Given the subterfuge revealed in these documents that went into trying to create the illusion that the DHS was and is not coordinating a national campaign of spying, disruption and repression against Occupy activists, it is almost comical to find documents that show the DHS was in “direct communication with the White House” to obtain advance approval of public statements by DHS officials denying any DHS involvement in anti-Occupy actions.

These documents show that both DHS and one of that department’s police arms, the Federal Protective Service (FPS) were in direct contact with Portland, Oregon’s police chief and mayor, discussing how to deal with protesters who were in part on federal property. The coordination between the feds and the local police and political authorities were intense. Yet the approved statement sent to DHS from the White House read:

Any decisions on how to handle specifics (sic) situations are dealt with by local authorities in that location. If a protest area is located on Federal property and has been deemed unsanitary or unsafe by the General Services Administration (GSA) or city officials, and they make a decision to evacuate participants — the Federal Protective Service (FPS) will work with those officials to develop a plan to ensure the security and safety of everyone involved.

There was, comically, also a White House-approved DHS “background” statement, too! (Typically background statements by federal officials are supposed to be used when they want to tell a journalist the true situation but don’t want to have that statement attributed to them or their department. Having it pre-approved by the White House defeats that purpose and is simply a manipulation of the media.)

The faux “background” information included the following–a flat-out lie:

DHS is not actively coordinating with local law enforcement agencies and/or city governments concerning the evictions of Occupy encampments writ large.

Tellingly, the documents also include a Dec. 5 copy of the “Weekly Informant, ” an intelligence report published by the DHS’s Office for State and Local Law Enforcement. The issue includes an update from the Police Executive Research Forum (PERF) concerning the activities of the Occupy Movement. PERF, Verheyden-Hilliard notes, is the group that the federal government claims organized a series of multi-city law enforcement calls to coordinate the police response to Occupy, which led immediately to the wave of violent crackdowns. It was at those meetings that police were advised among other things to act at night, to use aggressive tactics and weapons like tasers and pepper spray, and to take steps to remove journalists and cameras from the scene of crackdowns.

The overall sense from these latest documents is that Washington and the DHS, along with the FBI, was the nexus of the crackdown, orchestrating it, encouraging it, and attempting to cover its tracks.

The documents among other things expose the massive hypocrisy of the Obama administration and the Democratic Party, which this election year have tried to co-opt and claim as their own the anti-fat-cat theme of the “We are the 99%”-chanting Occupiers, while actually acting in the interest of Bank of America and its fellow financial sector mega-firms in trying to crush the movement itself.

To see all the new FOIA documents, go to the PJIF website.

Put Geithner Behind Bars

The Video That Will Put Geithner Behind Bars
03-15-2010

By Mike Whitney - Information Clearing House

If this doesn’t convince you that the Timothy Geithner knew about the securities shenanigans that were going on at Lehman, than I don’t know what will.

Keep in mind, that Geithner ran Lehman through 3 “stress tests” prior to bankruptcy; all of which Lehman failed, and yet, nothing was done. Anton R. Valukas–the examiner who wrote the 2,200 page investigative-report which was released on Thursday– has provided plenty of information detailing Lehman’s “materially misleading” accounting and “actionable balance sheet manipulation.”

In other words, they cooked the books.

Eves Smith at Naked Capitalism sums up what was going on like this:

“Quite a few observers… have been stunned and frustrated at the refusal to investigate what was almost certain accounting fraud at Lehman. ….The unraveling isn’t merely implicating Fuld (Lehman CEO) and his recent succession of CFOs, or its accounting firm, Ernst & Young, as might be expected. It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and Sarbox violations….

We need to demand an immediate release of the e-mails, phone records, and meeting notes from the NY Fed and key Lehman principals regarding the NY Fed’s review of Lehman’s solvency. If, as things appear now, Lehman was allowed by the Fed’s inaction to remain in business, when the Fed should have insisted on a wind-down ….. at a minimum, the NY Fed helped perpetuate a fraud on investors and counterparties.

This pattern further suggests the Fed, which by its charter is tasked to promote the safety and soundness of the banking system, instead, via its collusion with Lehman management, operated to protect particular actors to the detriment of the public at large.

And most important, it says that the NY Fed, and likely Geithner himself, undermined, perhaps even violated, laws designed to protect investors and markets. If so, he is not fit to be Treasury secretary or hold any office related to financial supervision and should resign immediately. (Naked Capitalism)

Repeat: “Accounting fraud”, “collusion”, “aiding and abetting.” These are serious charges by a usually restrained blogger.

And this is from Zero Hedge:

“Lehman has become merely the latest example of all that is broken with today’s crony capitalist system…. The evident conclusion is that the core driver of modern capitalist society is fraud at its very core, and nothing short of a massive revolutionary overhaul of the political system, which is the number one defender .. of very lucrative bribes and kickbacks originating from the same rotten Wall Street that (is) nothing but a sham filled with toxic assets” Zero Hedge

This story isn’t going away. Someone has to go to jail. It’s clear that Geithner acted as the “chief facilitator” of industrial scale securities flim-flam which led directly to the Great Crash of ‘08. He needs to be held accountable for his actions.