Tuesday, March 20, 2012

Another Hidden Bailout: Helping Wall Street Collect Your Rent


Tuesday, March 20, 2012 by Rolling Stoneby Matt Taibbi
Here's yet another form of hidden bailout the federal government doles out to our big banks, without the public having much of a clue.

This is from the WSJ on Monday:
Some of the biggest names on Wall Street are lining up to become landlords to cash-strapped Americans by bidding on pools of foreclosed properties being sold by Fannie Mae... 
While the current approach of selling homes one-by-one has its own high costs and is sometimes inefficient, selling properties in bulk to large investors could require Fannie Mae to sell at a big discount, leading to larger initial costs.


In con artistry parlance, they call this the "reload." That's when you hit the same mark twice – typically with a second scam designed to "fix" the damage caused by the first scam. Someone robs your house, then comes by the next day and sells you a fancy alarm system, that's the reload.

In this case, banks pumped up the real estate market by creating huge volumes of subprime loans, then dumped a lot of them on, among others, Fannie and Freddie, the ever-ready enthusiastic state customer. Now the loans have crashed in value, yet the GSEs (Government Sponsored Enterprises) are still out there feeding the banks money through two continuous bailouts.

One, they continue to buy mortgages from the big banks (until recently, even from Bank of America, whom the GSEs were already suing for sales of toxic MBS), giving the banks a permanent market for home loans.

And secondly, they conduct these quiet bulk sales of mortgages, in which huge packets of home loans are sold to banks at a "big discount."

By now we've come full circle. Banks create the loans, make money selling them off on the market at high prices, then come back and buy them again when they're low. When the GSEs are in the middle of this transaction, it makes mortgage lending a basically risk-free proposition: Banks get paid for creating home loans and they end up owning valuable property on the cheap, but in between, they offshore the market risk to a government entity and/or to the idiot individual who bought the home mortgage in the first place.

Even better, many of the banks/investors who buy these home loans back from Fannie/Freddie will rent out their properties instead of reselling them, which can vastly increase their revenue streams. From the WSJ:
Economists at Goldman Sachs estimate the annual yield on an investment on rental property nationwide averages about 6.3%, but can exceed 8% in cities that were hit hard during the housing bust, including Las Vegas, Detroit and Tampa. By contrast, mortgage bonds have average yields of just over 3%, and investment-grade corporate bonds are yielding about 3.5%, according the Barclays Capital U.S. Investment-Grade Index.

It gets better:
Warren Buffett, considered a sage investor and chief executive of Berkshire Hathaway Inc., said in an interview with CNBC-TV last month that he would buy up "a couple hundred thousand" single-family homes if he could do so easily, given the high yields on rental investments.

Another potential buyer, according to the article, is John Paulson, the pillaging hedge-fund billionaire who was behind Goldman's notorious "Abacus" deal (in which Goldman allowed Paulson to pack a portfolio full of loser mortgages he was shorting before those same mortgages were dumped on a pair of Euro banks).

So congratulations, America, your quasi-governmental housing entity is about to subcontract out mass-landlording/slumlording jobs to the likes of John Paulson and Warren Buffett, so that they can add to their bottom lines collecting rent payments in the middle of a nationwide housing slump.
As one hedge fund analyst put it to me: "Help inflate the bubble, create a foreclosure crisis, buy homes in bulk, and rent them out to the same average homeowner."

Is this what we had in mind when we created the "ownership society" – helping billionaires collect your rent?

Corporate-Driven Report Exemplifies Failed Thinking on US Education

Tuesday, March 20, 2012 by The Washington Post
Condi Rice-Joel Klein report: Not the new A Nation at Risk
by Valerie Strauss

A new report being officially released today — by a Council of Foreign Relations task force chaired by Joel Klein and Condoleezza Rice — seems to want very much to be seen as the new A Nation at Risk, the seminal 1983 report that warned that America’s future was threatened by a “rising tide of mediocrity” in the country’s public schools.

It’s a pale imitation.

The U.S. Education Reform and National Security report, to be sure, has some similar language and themes of a Nation at Risk. It says (over and over) that America’s national security is threatened because America’s public schools aren’t adequately preparing young people to “fill the ranks of the Foreign Service, the intelligence community, and the armed forces” (or diplomats, spies and soldiers).

But it takes a very different view of the public education system than the authors of A Nation at Risk, who sought to find ways to improve public schools and treat the system as a civic institution. The new report seems to look at public schools as if they are the bad guys that need to be put out of business, with a new business taking over, funded with public dollars.

A Nation at Risk made some basic recommendations, which included improving the curriculum, raising expectations for all children and improving the teaching force.

The Klein-Rice report makes three broad recommendations to fix the stated problem.

It calls for:
  • expanding the Common Core State Standard initiative to include subjects beyond math and English Language Arts;
  • an expansion of charter schools and vouchers
  • an annual “national security readiness audit” that would look at how schools are addressing the country’s needs through increased foreign language programs, technology curriculum and more.
The report cites lots of statistics that paint public schools in the worst possible light, and continues the trend of comparing America’s educational system with that of high-achieving countries — but doesn’t note that these countries generally don’t do the kinds of things these reformers endorse. Its recommendations would lead to further privatization of public schools and even more emphasis on standardized testing.

Any reader of this blog may recall a post I recently did where I spelled out what the report would say well before it came out. I was pretty much on target. How did I know? The president of the Council on Foreign Relations, Richard N. Haass, chose Klein and Rice to be the co-chairs, according to Anya Schmemann, the council’s task force program director. And he most certainly knew what kind of report he would get.

Klein was chancellor of of New York City public schools for eight years, running it under the general notion that public education should be run like a business. He closed schools, pushed the expansion of charter schools and launched other initiatives before resigning in 2010 after it was revealed that the standardized test scores that he kept pointing to as proof of the success of his reforms were based on exams that got increasingly easy for students to take. Now he works for Rupert Murdoch.

When one member of the commission suggested that people with dissenting views be brought before the panel to present other ideas, and Diane Ravitch’s name came up, Klein vetoed it, members of the panel said. Ravitch is the leading voice against the test-based accountability movement and “school choice,” but Klein, who has long had tense relations with the education historian, didn’t want the panel to hear from her.

Rice was secretary of state under president George W. Bush. She has expressed her admiration for Bush’s key education initiative No Child Left Behind, which ushered in the current era of high-stakes testing but has now been called a failure by both Republicans and Democrats.
And talk about stacking the deck! The task force had 30 members, including a long list of people who support the kind of reform Klein implemented in New York. They include Wendy Kopp, founder of Teach for America; Margaret Spellings, former secretary of education; Jonah M. Edelman of Stand for Children, and Richard Barth of the KIPP Foundation. There were some members with differing perspectives, including Stanford University’s Linda Darling-Hammond and American Federation of Teachers President Randi Weingarten, but they were in the small minority.

Here’s the complete list of committee members. Five of the members have astericks by their names, indicating that they wrote dissents to the report.

Carole Artigiani*, Global Kids, Inc; Craig R. Barrett, Intel Corporation; Richard Barth, KIPP Foundation; Edith L. Bartley, United Negro College Fund; Gaston Caperton, The College Board; Linda Darling-Hammond*, Stanford University; Jonah M. Edelman, Stand for Children; Roland Fryer Jr., Harvard University; Ann M. Fudge; Ellen V. Futter*, American Museum of Natural History; Preston M. Geren, Sid W. Richardson Foundation; Louis V. Gerstner Jr.; Allan E. Goodman, Institute of International Education; Frederick M. Hess, American Enterprise Institute for Public Policy Research; Shirley Ann Jackson, Rensselaer Polytechnic Institute; Joel I. Klein, News Corporation; Wendy Kopp, Teach For America; Jeffrey T. Leeds, Leeds Equity Partners, LLC; Julia Levy, Culture Craver; Michael L. Lomax, United Negro College Fund; Eduardo J.PadrĂ³n, Miami Dade College; Matthew F. Pottinger, China Six LLC; Laurene Powell Jobs, Emerson Collective; Condoleezza Rice, Stanford University; Benno C. Schmidt, Avenues: The World School; Stanley S. Shuman, Allen& Company LLC; Leigh Morris Sloane, Association of Professional Schools of International Affairs; Margaret Spellings, Margaret Spellings and Company, Stephen M. Walt*, Harvard Kennedy School; Randi Weingarten*, American Federation of Teachers.

Here's Your Job Application. Now Give Us Your Facebook Password

Tuesday, March 20, 2012 by Common Dreams
Employers asking for employees' Facebook passwords; ACLU calls it "gross breach of privacy"

Some companies and government agencies are demanding Facebook passwords from prospective employees during job interviews. Civil liberties advocates including the ACLU have slammed the practice as a violation of privacy. Unfortunately, for many who are unemployed or under-employed, the pressure to submit to such a request may be high.

Orin Kerr, a George Washington University law professor and former federal prosecutor, told the Associated Press, "It's akin to requiring someone's house keys," and called it "an egregious privacy violation."

Frederic Wolens, a Facebook spokesperson, gave a statement to MSNBC indicating that an employer asking for a prospective employee's login information would violate the terms of Facebook. "Under our terms, only the holder of the email address and password is considered the Facebook account owner. We also prohibit anyone from soliciting the login information or accessing an account belonging to someone else."

Students have not been immune to this privacy invasion either. A minor student in Minnesota was coerced into giving her Facebook and email login information to school authorities, prompting a lawsuit from the ACLU-Minnesota.

* * *


The Daily Mail: Revealed: How colleges and employers ask for candidates' Facebook and email passwords during job interviews
Rather than trying to get around the pesky password protections of Facebook and email accounts, certain government agencies and colleges are cutting straight to the source.
Some extremely inquisitive employers are asking candidates to hand over to them their email and Facebook login information when they apply for a job.

Others strongly request that the candidate opens their pages in front of them and allow their would-be bosses to scroll through their private information during the interview. [...]

They say that while ‘shoulder surfing’, as the practice is called, may technically be voluntary, the vast majority of applicants feel obligated to open up their lives to their employers or risk losing the job.
* * *


Alexis Madrigal: The Atlantic
Should Employers Be Allowed to Ask for Your Facebook Login?
The ACLU calls this policy "a frightening and illegal invasion of privacy" and I can't say that I disagree. Keep in mind that this isn't looking at what you've posted to a public Twitter account; the government agency here could look through private Facebook messages, which seems a lot like reading through your mail, paper or digital.


* * *


Meredith Curtis: ACLU
Want a job? Password, please!
Maryland corrections officer Robert Collins approached the ACLU of Maryland late last year, disturbed that he was required to provide his Facebook login and password to the Maryland Division of Corrections (DOC) during a recertification interview. He had to sit there while the interviewer logged on to his account and read not only his postings, but those of his family and friends too.

"We live in a time when national security is the highest priority, but it must be delicately balanced with personal privacy," said Collins. "My fellow officers and I should not have to allow the government to view our personal Facebook posts and those of our friends, just to keep our jobs." [...]

The demand for Facebook login information is not only a gross breach of privacy for Officer Collins and his friends, it raises significant legal concerns under the Federal Stored Communications Act and Maryland state law, which protect privacy rights and extend protections to electronic communications.



* * *


ACLU-MN files lawsuit against Minnewaska Area Schools
St. Paul, Minn. – Today, the American Civil Liberties Union of Minnesota filed a lawsuit in Federal District Court against Minnewaska Area Schools and the Pope County Sheriff's office for violating the constitutional rights of a minor student. R.S's free speech and privacy rights were violated by the school district in two separate instances involving Facebook. (To protect the privacy of the minor defendant, she will be referred to as R.S.)

In early 2011 R.S. posted a comment, while at home, on her Facebook page about her dislike of a school staff member. The school learned about the comment, and R.S. received a detention and was forced to write an apology to the staff member. She was disciplined again when she cursed on her Facebook page, complaining that someone reported her to the school. This time she was given an in-school suspension and was prohibited from attending a school field trip. The ACLU-MN contends that these sanctions violate her First Amendment right to freedom of speech.

In a second incident R.S. was brought into a school administrator's office where she was coerced to turn over (against her will) login information to her Facebook and email accounts because of allegations that she had online conversations about sex with another student off-campus. Present at the search was a local deputy along with two school officials. During this process, R.S. was called a liar and told she would be given detentions if she did not give the adults access to her accounts. R.S.'s mother was not informed about the search until after it happened. The Deputy and school officials did not have a warrant to search R.S.'s private accounts. The ACLU-MN alleges in their suit that this violated R.S.'s Fourth Amendment right to be free from unreasonable search and seizure. [...]

"Students do not shed their First Amendment rights at the school house gate," stated Charles Samuelson, Executive Director for the ACLU-MN. "The Supreme Court ruled on that in the 1970s, yet schools like Minnewaska seem to have no regard for the standard."


* * *


MSNBC: Govt. agencies, colleges demand applicants' Facebook passwords
Employers and colleges find the treasure-trove of personal information hiding behind password-protected accounts and privacy walls just too tempting, and some are demanding full access from job applicants and student athletes. [...]

Student-athletes in colleges around the country also are finding out they can no longer maintain privacy in Facebook communications because schools are requiring them to "friend" a coach or compliance officer, giving that person access to their “friends-only” posts. Schools are also turning to social media monitoring companies with names like UDilligence and Varsity Monitor for software packages that automate the task. The programs offer a "reputation scoreboard" to coaches and send "threat level" warnings about individual athletes to compliance officers. [...]

 on colleges, while spreading quickly among athletic departments, seems to be limited to athletes at the moment. There's nothing stopping schools from applying the same policies to other students, however. And Shear says he's heard from college applicants that interviewers have requested Facebook or Twitter login information during in-person screenings. [...]

The practice seems less common among employers, but scattered incidents are gaining attention from state lawmakers. The blog Tecca.com last year showed what it said was an image of an application for a clerical job with a North Carolina police department that included the following question:

"Do you have any web page accounts such as Facebook, Myspace, etc.? If so, list your username and password."

Waking Life

You Don’t Need a Clock to Know What Time It Is
by RANDALL AMSTER

With each passing day, the news grows increasingly grim. In recent weeks alone, we’ve seen women’s rights under assault as reactionary forces seek to turn the clock back by decades. Half a world away in Afghanistan, corpses are defiled and more are brutally created, without even their ages or innocence sufficient to protect them. Meanwhile, back at home, Congress passes and President Obama signs a new law that further restricts the ability of “we the people” to say or do anything that might stem the tide of the insanity. It’s all such a familiar tune, one that plays out with flawless precision in nearly every turn of the news cycle.

Meanwhile, the blogosphere buzzes along, chronicling the morass and the madness with vigor. The headlines read like an excruciating autopsy of democracy and justice in the late, great United States — and a horrifying blueprint for how to decimate that portion of the planet’s inhabitants who have the misfortune of living atop, amid, or around something that we covet. Naked fascism here and wanton destruction there, with each solidifying the other in our hearts and minds as the gears of consumer culture blithely grind about their business with clocklike precision. Tick: the Dow Jones goes up! Tock: another celebrity melts down! And hardly anyone seems to really know what time it is…

Or maybe everyone does, at least on some level, with a great many simply choosing to ignore the alarm bells in favor of the bells and whistles on their latest consumer gadget. The rising tide (both literal and figurative) that threatens to consume us all is best confronted by ignoring it. The blood on one’s hands comes right off with the newest antibacterial, sanitizing, scented concoction. The news may be forbidding, but it’s merely a minor inconvenience since there are so many creature comforts expressly not forbidden. Tales of disease, despair, and destruction are little more than reality noir stories told to occasionally add a touch of macabre and cinĂ©ma vĂ©ritĂ© to one’s halcyon Netflix queue.

Swipe across that touchscreen, scroll down with that mouse, click that ad banner, pull that lever in the booth, change that channel repeatedly, post a link to that viral video, accept that new credit card offer, text while in that drive-through line, gas up the car and eat up from the microwave. Modern life is a veritable hall of mirrors for narcissists, complete with the rush of affirmation from every “like” attained and text message received with a sonorous chime. It’s all so smooth and slick and seamless, how we’ve gone in less than one generation from people having time to ones being had by it. Yes, you can buy time, share it on vacation, put it on a sheet at work, use it for making a bomb, or turn it into an uncritical magazine — but at the end of the day, there is no longer an end of the day.

We are on the clock, all the time, everywhere we go. The line between work and play has blurred to such an extent that there’s a likely gym at your office and (if there’s not) people are closing deals on handheld devices while at the gym, giving new meaning to the notion of “working out.” Even on social calls one can hear the faint “tap tap” of keystrokes in the background, as an overworked friend multitasks while you’re busy baring your soul between your own multiple, endless tasks. It’s all just so routinely riveting, so crassly compelling, so miraculously mundane, so five minutes ago. Forever a step behind, never quite catching up, no bottom to that inbox, no time to stop and think.

Yet it’s strangely comfortable, after all, ceaselessly cascading from one inconsequential calamity to the next. Can we keep this up, culturally or individually? It’s a new survival-of-the-fittest motif: those who are more cognitively dissonant and functionally distracted will succeed in this brave new world, while those with slower chronometers, active consciences, or stop-and-smell-the-roses ethics are consigned to the breakdown lane on the information superhighway. The fortunate ones whizzing by at 4G (or more) might be tempted into rubbernecking as the broken-down vehicles pile up on the side, but they’re probably too busy texting while driving to notice.

And so it goes. Nero may have fiddled while Rome burned, but we’ve got him beat by a micro-processed mile. The apocalypse is already being televised, routinized, digitized. It’s not coming; it already came and went, and hardly anyone even looked up to take notice. The world ended not with a whimper but a tweet: #IMoverIT. Heck, there’s not even time for punctuation anymore, unless it’s part of an emoticon. theres prolly no need 4 an ! aftr yr doomsday anyway LOL :>)

Seriously? It’s like everyone is pushing toward the bow of the Titanic to snap a photo of that massive iceberg up ahead with their cellphone cameras. Yeah, post that iceberg to your profile, and caption it something ironic like: “Super chunk of ice, way cool!” No matter that the Doomsday Clock stands at five minutes to midnight — that’s an eternity when things move at the speed of micro-circuitry. It’s all an abstraction anyway, a live-action film version of reality; even war is played with joysticks like a cutting-edge video game. There’s no there there anymore; it’s all right here in the palm of your hand. Hickory dickory dock, just mouse over the clock icon for a free music download!

Hey, I love science fiction as much as anyone, and I’m not averse to technology altogether. But technology should be a tool for us to use, not the other way around. Let’s face it: we’re losing the texture of reality, and not even the blatant brutality of ongoing genocide, ethnocide, and ecocide is able to shake us free from our self-imposed slumber at this point in time. Is it too late, in any event? I think not — but the day is dawning and time is running out. We can still correct our course, by learning to use technology for liberatory rather than repressive ends, and by striving to decouple our actual selves from our virtual selves more and more each day. Go on a digital diet, and stick to it.

Ultimately, this move by itself still won’t turn the tide, but at least it puts us back in the mix. The impetus of “forced obsolescence” is a contrivance of the power-mad in our midst, yet we need not stand idly by while their actuaries place us in the “liabilities” column. Come on folks, Christmas morning is over and we need to clean up the living room and put the toys away for a while. Read a book, take a walk, tell a story, share a home-cooked meal, converse with friends and family — anything but the incessant, obsessive, stupefying machinations of the virtual veil. The clock is ticking, the hour is late, the alarm is sounding, and it’s time to wake up and meet the world anew.

Wall Streets Reloads With Toxic Bonds


Financial Crisis, Round Two
by MIKE WHITNEY
“Despite the Dodd-Frank financial reform bill and its directive to address this issue, the problem of bank runs in the shadow system has not yet been solved.”
–Mark Thoma, Professor of Economics, University of Oregon, February 13, 2012.
Wall Street is at it again.

In the last few months, the nation’s biggest banks and investment firms have resumed the same perilous activities that crashed the financial system and plunged the economy into the deepest slump since the Great Depression. According to a number of recent reports, there’s been a steady uptick in the type of risky bond deals that preceded the repo market bank run in 2008 leading to the default of 106-year old financial giant Lehman Brothers. With interest rates locked at zero percent and gradual improvements in the economic data, investors have been scouring the markets for better returns on their investments. This search for higher yield has triggered a gold rush on risky assets which has increased the probability of another major cataclysm. Here’s the story from CNN Money:

“The risky bond deals that were a hallmark of the pre-financial crisis boom are staging a comeback as investors continue to hunt for ways to find higher rates of return. 
And companies are willing to meet the demand. Roughly $58 billion of high yield, or junk, bonds have been issued by 95 corporations since January. That’s the fastest start in 15 years, according to Dealogic. 
Investment grade bonds, which offer a lower, albeit more stable yield, have also continued to attract investor interest. Since January, about $150 billion of corporate bonds have been issued by 315 companies, according to Dealogic. While that’s slightly faster than the past two years, it’s well behind the pace set in 2007, 2008 and 2009.” (“Bonds: Risk is back!”, CNN Money)
Trillions of dollars in bailouts, subsidies and other corporate welfare has restored many of the Too Big to Fail banks back to health, allowing them to reengage in transactions which, once again, put both the financial system and the broader economy in danger. And, although there have been modest efforts to re-regulate the system–particularly Dodd-Frank–the new laws fall well-short of what’s needed to decrease the vulnerabilities in the shadow banking system or to increase confidence in the bonds that are at the center of this latest investment binge. Congress has failed to pass legislation that would improve the underwriting standards of the loans that are pooled in these bonds to make sure that borrowers have the ability to repay their debts. Absent stricter standards, there’s certain to be a repeat of the collapse in the secondary market which followed the implosion in subprime mortgages. It’s deja vu all over again. Here’s more from International Financing Review:

“As the credit crisis recedes and underwriting standards begin to loosen, bonds backed by consumer debt such as auto loans, credit card payments, and student loans are becoming increasingly risky, Moody’s said on Thursday. 
Relaxed underwriting standards, more complex structures, and new untested market participants are just three of the trends suggesting that risk is on the rise for some sectors of the asset-backed securities market, Moody’s said in a report…. 
With credit standards slipping in asset classes such as subprime auto loans, and risky crisis-era structural features showing up in transactions, credit rating agencies need to make sure they are keeping up with the deteriorating credit standards and rating the these bonds appropriately – which means withholding their coveted Triple A rating if it is not deserved, or making sure there are other features that mitigate the risks, said Moody’s.” (“As crisis fades, risk returns to asset-backed debt – Moody’s”, IFR)

Easy money, looser credit and poor underwriting standards: Where have we heard that before? And all this is by-design, the inevitable result of a monetary policy that feeds liquidity into an overbloated financial system that neither creates value nor provides capital for productive activity. The present arrangement merely transfers the wealth from working people to a class of investors who’ve become a danger to themselves and society. Here’s more from the IFR:
“The riskiness of securitizations is still low and has not approached the level it reached in the early to mid-2000s…ABS reached its issuance peak in 2006 at US$754bn. However, if the normal pattern of the credit cycle plays out, the easing of credit that took place in 2011 will persist into 2012 and beyond… 
Originators have begun to ease underwriting standards…. in sectors such as subprime auto-loan securitizations, where underwriting is returning to its pre-recession norm, losses on loan pools backing auto ABS are bound to increase.” (“As crisis fades, risk returns to asset-backed debt – Moody’s”, IFR)

As we have noted in earlier articles, subprime auto securitization and student loans represent most of the gains in the recent credit expansion. Loans that are bundled and sold to investors are used numerous times-over as collateral (rehypothecation) so that banks and financial institutions can maximize leverage. This same “gearing” process was all the rage until 2007 when two Bear Stearns hedge funds unexpectedly defaulted precipitating a run on the shadow system that wiped out over $4 trillion in equity in less than a year.

Other signs that Fed chairman Bernanke’s loosy-goosy monetary policy is inflating another asset bubble include the fact that banks have doubled the volume of their credit card solititations since 2010 “with an increased emphasis on offerings to individuals with less than pristine credit histories.” In other words, the banks don’t care whether they get their money back provided they can offload the unpaid debt onto gullible investors in the form of bundled loans. The former head of the FDIC, William Seidman, figured this scam out long before the dot.com bubble burst and issued this warning to regulators:
“Instruct regulators to look for the newest fad in the industry and examine it with great care. The next mistake will be a new way to make a loan that will not be repaid.”
If only someone had been listening.

IFR also reports that private equity high-rollers are joining in the fray by loading up on junk paper that promises slightly better returns than low yielding CDs or US Treasuries. Here’s the clip:
“The entrance of players … with higher risk profiles is a sign that competition for asset origination will increase”….Additionally, small originators and issuers with low credit quality have been getting back into the game, and their ability to honor representations and warranties may be limited."
“Too Big To Fail” ensures that any investment in high-yield garbage bonds is a reasonably safe bet due to the fact that US taxpayers now guarantee Wall Street against any substantial loss. That implicit backstop includes all manner of financial institutions including insurers, PE, hedge funds etc. The Fed has wrapped its arms around the entire system while transferring trillions of dollars in red ink from the balance sheets of these foundering Wall Street casinos onto its own.

This below-the-radar surge in financial offal has spread to the same complex assets that were at the heart of the crisis, collateralized debt obligations or CDOs. The big boys–Goldman and Barclays–have been inquiring about the $47 billion in AIG assets held by the New York Fed. Some of these assets have already been sold off in, what appeared to many to be, secret auctions. Even so, there’s more dreck where that came from which has piqued the interest of other banks and brokerages. Here’s more from the Wall Street Journal:
“The $47 billion face value in assets, held by the Federal Reserve Bank of New York, are the same kinds of financial instruments that … caused record losses across the financial industry. Plunging values of the securities, called collateralized debt obligations, or CDOs, caused AIG’s near collapse and a government rescue in 2008. The $182 billion bailout was widely criticized because a chunk of taxpayer aid was funneled through AIG to large banks.

Now, amid rising investor demand for riskier, higher-yielding assets, attempts by Wall Street firms to buy those same assets may spark further controversy. Some large banks were on the winning end of bets with AIG over the instruments during the crisis, and benefited from the insurer’s bailout….

Banks that bought credit-default swaps from AIG on the CDOs had inundated AIG with demands for collateral when the housing downturn caused market prices of the CDOs to nose dive. The New York Fed’s move made more than a dozen U.S. and foreign banks whole on their bets with the weakened insurer. Some of those banks, including Goldman and Barclays, are now the same ones interested in buying the securities, people familiar with the matter said.” (“Banks Want Fed to Iron Out ‘Maiden’”, Wall Street Journal)
Wow. So all 12 banks were paid 100 cents on the dollar for bogus insurance policies (CDS) that were essentially worthless since AIG did not have the resources to repay the claims. And now these same banks want to buy the remaining AIG assets at firesale prices? That’s what you call the double whammy.

The reason that most people can’t grasp how serious these new developments are, is because their understanding of the financial crisis remains sketchy. The Crash of ’08 had less to do with subprime mortgages and Lehman Brothers than it did with the flawed architecture of a shadow system that performs the same tasks as traditional banking, but is unregulated, undercapitalized and hopelessly crisis-prone. ”What happened in September 2008 was a kind of bank run,” said Robert E. Lucas, of the Minneapolis Fed.

“Creditors lost confidence in the ability of investment banks to redeem short-term loans, leading to a precipitous decline in lending in the repurchase agreements (repo) market.” Yes, but there’s more to it than that. The reason that “creditors lost confidence” was because they knew the banks were using bonds that were comprised of dodgy loans to people who had no ability to repay the debt. In other words, there was a moment of enlightenment (when two Bear Stearns hedge funds stopped redemptions) when the main players suddenly realised that the entire $10 trillion shadow banking system and repo market was propped up on a foundation of pure quicksand. (ie–”bad loans”) That’s when the race for the exits began.

And now, not even 4 years later, the banks are at it again, buying up toxic bonds by the boatload. We’re back to Square One. Barring a dramatic reversal in the present policy, (which is extremely unlikely) it’s hard to see how another disaster can be averted.

Monday, March 19, 2012

Police State Blues

Monday, March 19, 2012 by Common Dreams
"Our rights do not end where the caprice of authoritarian bullies begins."
by Phil Rockstroh


At mid-evening, on Saturday, March 17, upon the six-month anniversary of the occupation of Zuccotti Park in Lower Manhattan, the NYPD -- because the department suffered no ill consequences from their search and destroy mission launched, in the late fall of 2011, to scour Liberty Square of liberty -- initiated another brutal operation to expel OWS activists from the premises, and to discourage, in general, those who might venture attempts to exercise their right to free assembly and free expression across the whole of the city of New York as winter proceeds into spring.

In a police state, unjust actions by authoritarian bullies, operating at the behest of privileged bullies in power, act by caprice and will escalate their level of brutality by the degree that the public at large reacts with support and indifference to the state's assaults on civil liberties and common decency.

Bear in mind, police agencies, devoid of oversight, comprise a legal form of gang activity; therefore, when one is witness to their acts of brutality, and, as outraged protesters are apt to do, shower their ranks with taunts of "shame, shame, shame" -- rather than experiencing feelings of remorse, brutish individual officers regard the scolding as a badge of honor.

Why? Because they view OWS as a rival gang -- not a force of democratic passion and outrage.

The defining creed of a violent gang, such as the NYPD, is to ensure their own survival by the modus operandi of violently crushing perceived rivals.

If rank and file police officers ever surrender their arms and change sides, this event will have come to pass because the institutions of power that direct their actions (and that issue their paychecks) will begin to collapse. Anything you can do to challenge and to help facilitate the end of the reign of exploitation and terror that is the neoliberal international superstate will, in turn, prove helpful in achieving the goal of ceasing the brutality inherent to the U.S. police state.

But, and I hope I'm wrong in positing this dismal augury, there will be much blood lacquering the pavements of the city of New York, and scores of other municipalities, worldwide, before that day arrives.

At our best, as a species, we human beings use our minds and imaginations to bring less suffering to the world; at our worst, we use said attributes to rationalize causing so much of it.

Although not widely acknowledged by mainstream opinion shapers, the struggle to retake the public commons by activists facing hostile local municipalities and their police enforcers and the imperative to reduce mankind's destruction of the ecological balance of the earth are related issues, of which the implications extend far beyond the political realm. The unfolding of these matters determines how you spend your days…from when you rise in the morning, to what you eat, to which locations you proceed during the day, to when and how you sleep at night…right down to the state of your health and the condition of your soul.

To those who proffer the excuse, "in my heart, I know you're right, but I have to be a realist about this": you're letting a crackpot realist mindset falsely frame the matter. Given that the heart is more than a pump -- it is the alpha and omega point of the soul of the world i.e., animus mundi, perhaps, you are confused regarding the nature of reality.

Moreover, you sound like George F. Babbitt…giving a book report on Hannah Arrent's conception of the banality of evil from Eichmann in Jerusalem, and you have missed the point. Apropos: Evil is maintained by mundane means, by people who see themselves as normal and who live ordinary lives.

And it seems to be what you're actually trying to express is closer to the following: I feel overwhelmed and powerless about the situation. Addressing it makes me feel uncomfortable, so I'll just accept the matter, maybe grouse about it a bit, but I'll continue to accept the small comforts the system proffers and I'll hope that will serve as balm to my empty, troubled soul.

The Cartesian fallacy that one's joy and suffering are almost exclusively a private matter -- the idea that the process all takes place in one's own mind and body and has no connection to any larger order -- has diminished perception and has stressed the environment to the tipping point. This is the dismal litany of Industrial/Commercial Age false consciousness: the paramount function of the intellect is to reduce the vast and proliferate criteria of life down to the "bottom line."

But anyone who posits the concept that life can and should be reduced to only self-serving, mechanistically controllable verities has much to learn from 20th century death camps, and, moreover, should take note of our present day analogs of Auschwitz: the so-called industrial "farming industry"; the practices of deep sea "fishing" by trawlers (i.e, strip-mining the world's oceans); deep water oil-drilling practices; and fracking. The list goes on and on, and finds an analog in the mechanistic suppression of dissent by militarized police forces.

Yet the agenda of the corporate/police/commercial/militarist state is to preserve and expand these practices, the very practices that keep its populace alienated, locked into benumbing, destructive habits that leave individuals hollow, anomie-prone, and addicted to distraction. Withal, the acceptance of a way of life that is dependent on a habitual disengagement from the very acts that maintain one's culture necessitates the construction of an imprisoning wall of psychological separation between oneself and reality.

To awaken to reality is to suffer…allowing oneself to experience feelings of despair, powerlessness, and rage. Speaking the truth sets you free, because emotion engenders motion.

If witnessing peaceful protesters being beaten by police, manacled with zip cuffs (a device that by its structural makeup ensures a loss of circulation) and transported to jail on trumped-up charges, fails to get your blood up, then your absent soul can be located exchanging banalities at a mental dinner party with Adolf Eichmann.

To express indifference or to be an apologist for the quotidian evils of our time is reprehensible. Like the "good Germans" of the 1930's, you might believe your codified hatreds and commodified longings, manifested by the industrial and military power of the state, will deliver and preserve freedom…but these beliefs, maintained by systems of mechanized force, will, in time, come to debase everything you hold dear.

How can an individual gain a modicum of empathy for the plight of the planet and for those brutalized by the operatives of state oppression when he refuses to gaze upon his own degraded condition?

At this point, the awakening of your heart comes down to a cultural imperative. Even if you don't quite know where you're going at first, by moving in the direction of what your heart yearns for, you begin to reveal to yourself who you are. Thus, you wander off the banal path of empty obligation and self-serving rationalization -- then, even in moments of doubt and confusion, you can make a home in being lost.

"Show your wounds," exhorted artist Joseph Bueys. The wound becomes the womb, poets tell us.

Pain and sorrow can induce one to seek out and to join the chorus of a larger order…to give full-throated sorrow to songs emanating from the suffering earth.

You can join this chorus or elect to be self-cast as a supernumerary in a lethal farce that assigns you the dubious role of being both oppressor and oppressed.

The earth's song, at this juncture, is one of soul-rending lamentation and sacred vehemence.

This song needs you to lend your voice.

And I submit this lyric as the song's refrain, a riff of the blues inspired by the less than inspired acts of our men and woman uniformed in blue: "Our rights do not end where the caprice of authoritarian bullies begins."

When the Rich Jump Ship

Don't Toss Them a Lifeboat (Tell them to tear their asses1--JEF)
by DAVID MACARAY


In the wake of the 2008 financial meltdown, one of the arguments you heard Republican economists and Wall Street executives repeatedly use to defend the amounts of money being paid investment bankers and hedge fund managers was that if these guys didn’t receive exorbitant salaries and bonuses, they would be forced to leave the U.S. and find jobs elsewhere, presumably in Western Europe and Hong Kong. In other words, if we don’t pay them what they demand, they’ll find someone who will.

Even though a simple examination reveals that federal income taxes are lower than they’ve been in many decades, you also hear something similar in regard to raising the taxes on the very rich. You hear pundits say that if we did that, if we nudged their brackets any higher, we’d risk having these people close up shop and abandon the country. Give these armchair pundits credit for being able to something that silly with a straight face.

Instead of being cowed by those absurd threats—instead of being intimidated into abandoning plans for a fairer tax system and stricter regulations on the banking industry—we should greet those condescending arguments with delight. In truth, those defections would not only be welcomed, they would prove salutary because they would give ambitious men and women on the lower rungs the opportunity to move into the top spots.

There’s a corollary to that replacement argument. Wall Street cautions us that, should these financial prodigies leave the industry, the newbies who replace them wouldn’t be nearly as competent or reliable. That line of reasoning may have worked a few years ago, but it doesn’t today. Ever since we learned that it was those very “prodigies” who precipitated the financial disaster that almost destroyed the world’s economy, and required a trillion-dollar taxpayer bailout just to keep us afloat, that old, “We’re too damned talented to be replaced” argument has pretty much lost its luster.

Unfortunately, despite all the hand-wringing and chest-pounding, most of these Wall Street vultures aren’t going anywhere. They can huff and puff all they like, but on Monday morning they’ll show up for work just like the rest of us for the simple reason that they have no place to go. If they honestly believe all they have to do is report to Zurich, briefcases in hand, and they’ll be offered multi-million dollar banking gigs, they’re even more arrogant than we thought. Those European banking jobs are already taken. By Europeans.

But it would be wonderful if they did leave. These soulless whores may, technically, be citizens of the U.S., but by no index are they patriotic Americans. These ultra-materialistic people are cultural eunuchs. They have no sense of honor, no sense of community pride, no sense of “belonging.” They not only live rarefied, privileged lives in gated mansions or penthouses far, far away from the “herd,” but given a choice, they would rather watch America’s great industrial cities fall into decay and despair than voluntarily part with so much as a nickel of their own money.

More condescension: Those Wall Street executives who argued that we’d be losing invaluable “expertise” if we allowed these guys to get away are the same Wall Street execs who argue that if the very wealthy were, in fact, to leave the United States because of higher taxes, they would take their money with them, and that would put a sizeable dent in the economy. That’s a bad argument.
It’s already happened. Wealthy people already have their money squirreled away in places believed to bring them the maximum return. If one of those places happens to be the U.S., then lucky us, because that’s where they’ll keep it. But they’re far more likely to have money invested in convoluted off-shore bank accounts or foreign businesses. And that’s where it will remain, no matter where they live or work.

Let’s be clear. If the very rich threaten to jump ship, we need to do everything in our power to ensure they carry out that threat. What a cathartic moment that would be! The entrenched, inbred, self-perpetuating moneyed class being abruptly vacated—and new blood, new ideas, new faces and new ethnicities rushing in to replace it. Ain’t that what America was supposed to be all about?

The Perils of Fracking

Environmental and Health Risks Greater Than Claimed by Gas Industry
by WALTER BRASCH

The natural gas industry defends hydraulic fracturing, better known as fracking, as safe and efficient. Thomas J. Pyle, president of the Institute for Energy Research, a pro-industry non-profit organization, claims fracking has been “a widely deployed as safe extraction technique,” dating back to 1949. What he doesn’t say is that until recently energy companies had used low-pressure methods to extract natural gas from fields closer to the surface than the current high-pressure technology that extracts more gas, but uses significantly more water, chemicals, and elements.

The industry claims well drilling in the Marcellus Shale will bring several hundred thousand jobs, and has minimal health and environmental risk. President Barack Obama in his January 2012 State of the Union, said he believes the development of natural gas as an energy source to replace fossil fuels could generate 600,000 jobs.

However, research studies by economists Dr. Jannette M. Barth, Dr. Deborah Rogers, and others debunk the idea of significant job creation.

Barry Russell, president of the Independent Petroleum Association of America, says “no evidence directly connects injection of fracking fluid into shale with aquifer contamination.” Fracking “has never been found to contaminate a water well,” says Christine Cronkright, communications director for the Pennsylvania Department of Health.

Research studies and numerous incidents of water contamination prove otherwise.
In late 2010, equipment failure may have led to toxic levels of chemicals in the well water of at least a dozen families in Conoquenessing Twp. in Bradford County. Township officials and Rex Energy, although acknowledging that two of the drilling wells had problems with the casings, claimed there were pollutants in the drinking water before Rex moved into the area. John Fair disagrees. “Everybody had good water a year ago,” Fair told environmental writer and activist Iris Marie Bloom in February 2012. Bloom says residents told her the color of water changed (to red, orange, and gray) after Rex began drilling. Among chemicals detected in the well water, in addition to methane gas, were ammonia, arsenic, chloromethane, iron, manganese, t-butyl alcohol, and toluene. While not acknowledging that its actions could have caused the pollution, Rex did providefresh water to the residents, but then stopped doing so on Feb. 29, 2012, after the Pennsylvania Department of Environmental Protection (DEP) said the well water was safe. The residents vigorously disagreed and staged protests against Rex; environmental activists and other residents trucked in portable water jugs to help the affected families. The Marcellus Outreach Butler blog (MOB) declared that residents’ “lives have been severely disrupted and their health has been severely impacted. To unceremoniously ‘close the book’ on investigations into their troubles when so many indicators point to the culpability of the gas industry for the disruption of their lives is unconscionable.”

In April 2011, near Towanda, Pa., seven families were evacuated after about 10,000 gallons of wastewater contaminated an agricultural field and a stream that flows into the Susquehanna River, the result of an equipment failure, according to the Bradford County Emergency Management Agency.

The following month, DEP fined Chesapeake Energy $900,000, the largest amount in the state’s history, for allowing methane gas to pollute the drinking water of 16 families in Bradford County during the previous year. The DEP noted there may have been toxic methane emissions from as many as six wells in five towns. The DEP also fined Chesapeake $188,000 for a fire at a well in Washington County that injured three workers.

In January 2012, an equipment failure at a drill site in Susquehanna County led to a spill of several thousand gallons of fluid for almost a half-hour, causing “potential pollution,” according to the DEP. In its citation to Carizzo Oil and Gas, the DEP “strongly” recommended that the company cease drilling at all 67 wells “until the cause of this problem and a solution are identified.”

In December 2011, the federal Environmental Protection Agency concluded that fracking operations could be responsible for groundwater pollution.

“Today’s methods make gas drilling a filthy business. You know it’s bad when nearby residents can light the water coming out of their tap on fire,” says Larry Schweiger, president of the National Wildlife Federation. What’s causing the fire is the methane from the drilling operations. A ProPublica investigation in 2009 revealed methane contamination was widespread in drinking water in areas around fracking operations in Colorado, Texas, Wyoming, and Pennsylvania. The presence of methane in drinking water in Dimock, Pa., had become the focal point for Josh Fox’s investigative documentary, Gasland, which received an Academy Award nomination in 2011 for Outstanding Documentary; Fox also received an Emmy for non-fiction directing. Fox’s interest in fracking intensified when a natural gas company offered $100,000 for mineral rights on property his family owned in Milanville, in the extreme northeast part of Pennsylvania, about 60 miles east of Dimock.

Research by a team of scientists from Duke University revealed “methane contamination of shallow drinking water systems [that is] associated with shale-gas extraction.” The data and conclusions, published in the May 2011 issue of the prestigious Proceedings of the National Academy of Sciences, noted that not only did most drinking wells near drilling sites have methane, but those closest to the drilling wells, about a half-mile, had an average of 17 times the methane of those of other wells.

“Some of the chemicals used in hydraulic fracturing—or liberated by it—are carcinogens,” Dr. Sandra Steingraber told members of the Environmental Conservation and Health committee of the New York State Assembly. Dr. Steingraber, a biologist and distinguished scholar in residence at Ithaca College, pointed out that some of the chemicals “are neurological poisons with suspected links to learning deficits in children,” while others “are asthma triggers. Some, especially the radioactive ones, are known to bioaccumulate in milk. Others are reproductive toxicants that can contribute to pregnancy loss.”

An investigation by New York Times reporter Ian Urbina, based upon thousands of unreported EPA documents and a confidential study by the natural gas industry, concluded, “Radioactivity in drilling waste cannot be fully diluted in rivers and other waterways.” Urbina learned that wastewater from fracking operations was about 100 times more toxic than federal drinking water standards; 15 wells had readings about 1,000 times higher than standards.

Research by Dr. Ronald Bishop, a biochemist at SUNY/Oneonta, suggests that fracking to extract methane gas “is highly likely to degrade air, surface water and ground-water quality, to harm humans, and to negatively impact aquatic and forest ecosystems.” He notes that “potential exposure effects for humans will include poisoning of susceptible tissues, endocrine disruption syndromes, and elevated risk for certain cancers.” Every well, says Dr. Bishop, “will generate a sediment discharge of approximately eight tons per year into local waterways, further threatening federally endangered mollusks and other aquatic organisms.” In addition to the environmental pollution by the fracking process, Dr. Bishop believes “intensive use of diesel-fuel equipment will degrade air quality [that could affect] humans, livestock, and crops.”

Equally important are questions about the impact of as many as 200 diesel-fueled trucks each day bringing water to the site and then removing the waste water. In addition to the normal diesel emissions of trucks, there are also problems of leaks of the contaminated water.

“We need to know how diesel fuel got into our water supply,” says Diane Siegmund, a clinical psychologist from Towanda, Pa. “It wasn’t there before the companies drilled wells; it’s here now,” she says. Siegmund is also concerned about contaminated dust and mud. “There is no oversight on these,” she says, “but those trucks are muddy when they leave the well sites, and dust may have impact miles from the well sites.”

Research “strongly implicates exposure to gas drilling operations in serious health effects on humans, companion animals, livestock, horses, and wildlife,” according to Dr. Michelle Bamberger, a veterinarian, and Dr. Robert E. Oswald,a biochemist and professor of molecular medicine at Cornell University. Their study, published in New Solutions, an academic journal in environmental health, documents evidence of milk contamination, breeding problems, and cow mortality in areas near fracking operations as higher than in areas where no fracking occurred. Drs. Bamberger and Oswald noted that some of the symptoms present in humans from what may be polluted water from fracking operations include rashes, headaches, dizziness, vomiting, and severe irritation of the eyes, nose, and throat. For animals, the symptoms often led to reproductive problems and death.

Significant impact upon wildlife is also noted in a 900-page Environmental Impact Statement (EIS) conducted by New York’s Department of Environmental Conservation, and filed in September 2011. According to the EIS, “In addition to loss of habitat, other potential direct impacts on wildlife from drilling in the Marcellus Shale include increased mortality . . . altered microclimates, and increased traffic, noise, lighting, and well flares.” The impact, according to the report, “may include a loss of genetic diversity, species isolation, population declines . . . increased predation, and an increase of invasive species.” The report concludes that because of fracking, there is “little to no place in the study areas where wildlife would not be impacted, [leading to] serious cascading ecological consequences.” The impact, of course, affects the quality of milk and meat production as animals drink and graze near areas that have been taken over by the natural gas industry.

Christopher Portier, director of the National Center for Environmental Health, calls for more research studies that “include all the ways people can be exposed [to health hazards], such as through air, water, soil, plants and animals.”

The response by the industry and its political allies to the scientific studies of the health and environmental effects of fracking “has approached the issue in a manner similar to the tobacco industry that for many years rejected the link between smoking and cancer,” say Drs. Bamberger and Oswald. Not only do they call for “full disclosure and testing of air, water, soil, animals, and humans,” but point out that with lax oversight, “the gas drilling boom . . . will remain an uncontrolled health experiment on an enormous scale.”

Dr. Helen Podgainy, a pediatrician in Coraopolis, Pa., says she doesn’t want her patients “to be guinea pigs who provide the next generation the statistical proof of health problems as in what happened with those exposed to asbestos or to cigarette smoke.”

Sunday, March 18, 2012

Fracking: Pennsylvania Gags Physicians

by: Walter Brasch, Dissident Voice 
Sunday 18 March 2012

This is Part One of a Three-Part Series.

A new Pennsylvania law endangers public health by forbidding health care professionals from sharing information they learn about certain chemicals and procedures used in high volume horizontal hydraulic fracturing. The procedure is commonly known as fracking.

Fracking is the controversial method of forcing water, gases, and chemicals at tremendouspressure of up to 15,000 pounds per square inch into a rock formation as much as 10,000 feet below the earth’s surface to open channels and force out natural gas and fossil fuels.

Advocates of fracking argue not only is natural gas “greener” than coal and oil energy, with significantly fewer carbon, nitrogen, and sulfur emissions, the mining of natural gas generates significant jobs in a depressed economy, and will help the U.S. reduce its oil dependence upon foreign nations. Geologists estimate there may be as much as 2,000 trillion cubic feet of natural gas throughout the United States. If all of it is successfully mined, it could not only replace coal and oil but serve as a transition to wind, solar, and water as primary energy sources, releasing the United States from dependency upon fossil fuel energy and allowing it to be more self-sufficient.

The Marcellus Shale—which extends beneath the Allegheny Plateau, through southern New York, much of Pennsylvania, east Ohio, West Virginia, and parts of Maryland and Virginia—is one of the nation’s largest sources for natural gas mining, containing as much as 500 trillion cubic feet of natural gas. Each of Pennsylvania’s 5,255 wells, as of the beginning of March 2012, with dozens being added each week, takes up about nine acres, including all access roads and pipe.

Over the expected life time of each well, companies may use as many as nine million gallons of water and 100,000 gallons of chemicals and radioactive isotopes within a four to six week period. The additives “are used to prevent pipe corrosion, kill bacteria, and assist in forcing the water and sand down-hole to fracture the targeted formation,” explains Thomas J. Pyle, president of the Institute for Energy Research. However, about 650 of the 750 chemicals used in fracking operations are known carcinogens, according to a report filed with the U.S. House of Representatives in April 2011. Fluids used in fracking include those that are “potentially hazardous,” including volatile organic compounds, according to Christopher Portier, director of the National Center for Environmental Health, a part of the federal Centers for Disease Control. In an email to the Associated Press in January 2012, Portier noted that waste water, in addition to bring up several elements, may be radioactive. Fracking is also believed to have been the cause of hundreds of small earthquakes in Ohio and other states.

The law, an amendment to Title 52 (Oil and Gas) of the Pennsylvania Consolidated Statutes, requires that companies provide to a state-maintained registry the names of chemicals and gases used in fracking. Physicians and others who work with citizen health issues may request specific information, but the company doesn’t have to provide that information if it claims it is a trade secret or proprietary information, nor does it have to reveal how the chemicals and gases used in fracking interact with natural compounds. If a company does release information about what is used, health care professionals are bound by a non-disclosure agreement that not only forbids them from warning the community of water and air pollution that may be caused by fracking, but which also forbids them from telling their own patients what the physician believes may have led to their health problems. A strict interpretation of the law would also forbid general practitioners and family practice physicians who sign the non-disclosure agreement and learn the contents of the “trade secrets” from notifying a specialist about the chemicals or compounds, thus delaying medical treatment.

The clauses are buried on pages 98 and 99 of the 174-page bill, which was initiated and passed by the Republican-controlled General Assembly and signed into law in February by Republican Gov. Tom Corbett.

“I have never seen anything like this in my 37 years of practice,” says Dr. Helen Podgainy, a pediatrician from Coraopolis, Pa. She says it’s common for physicians, epidemiologists, and others in the health care field to discuss and consult with each other about the possible problems that can affect various populations. Her first priority, she says, “is to diagnose and treat, and to be proactive in preventing harm to others.” The new law, she says, not only “hinders preventative measures for our patients, it slows the treatment process by gagging free discussion.”

Psychologists are also concerned about the effects of fracking and the law’s gag order. “We won’t know the extent of patients becoming anxious or depressed because of a lack of information about the fracking process and the chemicals used,” says Kathryn Vennie of Hawley, Pa., a clinical psychologist for 30 years. She says she is already seeing patients “who are seeking support because of the disruption to their environment.” Anxiety in the absence of information, she says, “can produce both mental and physical problems.”

The law is not only “unprecedented,” but will “complicate the ability of health department to collect information that would reveal trends that could help us to protect the public health,” says Dr. Jerome Paulson, director of the Mid-Atlantic Center for Children’s Health and the Environment at the Children’s National Medical Center in Washington, D.C. Dr. Paulson, also professor of pediatrics at George Washington University, calls the law “detrimental to the delivery of personal health care and contradictory to the ethical principles of medicine and public health.” Physicians, he says, “have a moral and ethical responsibility to protect the health of the public, and this law precludes us from doing all we can to protect the public.” He has called for a moratorium on all drilling until the health effects can be analyzed.

Pennsylvania requires physicians to report to the state instances of 73 specific diseases, most of which are infectious diseases. However, the list also includes cancer, which may have origins not only from chemicals used to create the fissures that yield natural gas, but also in the blow-back of elements, including arsenic, present within the fissures. Thus, physicians are faced by conflicting legal and professional considerations.

“The confidentiality agreements are worrisome,” says Peter Scheer, a journalist/lawyer who is executive director of the First Amendment Coalition. Physicians who sign the non-disclosure agreements and then disclose the possible risks to protect the community can be sued for breech of contract, and the companies can seek both injunctions and damages, says Scheer.

In pre-trial discovery motions, a company might be required to reveal to the court what it claims are trade secrets and proprietary information, with the court determining if the chemical and gas combinations really are trade secrets or not. The court could also rule that the contract is unenforceable because it is contrary to public policy, which places the health of the public over the rights of an individual company to protect its trade secrets, says Scheer. However, the legal and financial resources of the natural gas corporations are far greater than those of individuals, and they can stall and outspend most legal challenges.

Although Pennsylvania is determined to protect the natural gas industry, not everyone in the industry agrees with the need for secrecy. Dave McCurdy, president of the American Gas Association, says he supports disclosing the contents included in fracturing fluids. In an opinion column published in the Denver Post, McCurdy further argued, “We need to do more as an industry to engage in a transparent and fact-based public dialogue on shale gas development.”

The Natural Gas committee of the U.S. Department of Energy agrees. “Our most important recommendations were for more transparency and dissemination of information about shale gas operations, including full disclosure of chemicals and additives that are being used,” said Dr. Mark Zoback, professor of geophysics at Stanford University and a Board member.

Both McCurdy’s statement and the Department of Energy’s strong recommendation about full disclosure were known to the Pennsylvania General Assembly when it created the law that restricted health care professionals from disseminating certain information that could help reduce significant health and environmental problems from fracking operations.

The Banks Win, Again

New York Times Editorial - March 17, 2012

Last week was a big one for the banks. On Monday, the foreclosure settlement between the big banks and federal and state officials was filed in federal court, and it is now awaiting a judge’s all-but-certain approval. On Tuesday, the Federal Reserve announced the much-anticipated results of the latest round of bank stress tests.

How did the banks do on both? Pretty well, thank you — and better than homeowners and American taxpayers.

That is not only unfair, given banks’ huge culpability in the mortgage bubble and financial meltdown. It also means that homeowners and the economy still need more relief, and that the banks, without more meaningful punishment, will not be deterred from the next round of misbehavior.

Under the terms of the settlement, the banks will provide $26 billion worth of relief to borrowers and aid to states for antiforeclosure efforts. In exchange, they will get immunity from government civil lawsuits for a litany of alleged abuses, including wrongful denial of loan modifications and wrongful foreclosures. That $26 billion is paltry compared with the scale of wrongdoing and ensuing damage, including 4 million homeowners who have lost their homes, 3.3 million others who are in or near foreclosure, and more than 11 million borrowers who are underwater by $700 billion.

The settlement could also end up doing more to clean up the banks’ books than to help homeowners. Banks will be required to provide at least $17 billion worth of principal-reduction loan modifications and other relief, like forbearance for unemployed homeowners. Compelling the banks to do principal write-downs is an undeniable accomplishment of the settlement. But the amount of relief is still tiny compared with the problem. And the banks also get credit toward their share of the settlement for other actions that should be required, not rewarded.

For instance, they will receive 50 cents in credit for every dollar they write down on second liens that are 90 to 179 days past due, and 10 cents in credit for every dollar they write down on second liens that are 180 days or more overdue. At those stages of delinquency, the write-downs bring no relief to borrowers who have long since defaulted. Rather than subsidizing the banks’ costs to write down hopelessly delinquent loans, regulators should be demanding that banks write them off and take the loss — and bring some much needed transparency to the question of whether the banks properly value their assets.

The settlement’s complex formulas for delivering relief also give the banks too much discretion to decide who gets help, what kind of help, and how much. The result could be that fewer borrowers get help, because banks will be able to structure the relief in ways that are more advantageous for them than for borrowers. The Obama administration has said the settlement will provide about one million borrowers with loan write-downs, but private analysts have put the number at 500,000 to 700,000 over the next three years.

The settlement’s go-easy-on-the-banks approach might be understandable if the banks were still hunkered down. But most of the banks — which still benefit from crisis-era support in the form of federally backed debt and near zero interest rates — passed the recent stress tests, paving the way for Fed approval to increase dividends and share buybacks, if not immediately, then as soon as possible.

When it comes to helping homeowners, banks are treated as if they still need to be protected from drains on their capital. But when it comes to rewarding executives and other bank shareholders, paying out capital is the name of the game. And at a time of economic weakness, using bank capital for investor payouts leaves the banks more exposed to shocks. So homeowners are still bearing the brunt of the mortgage debacle. Taxpayers are still supporting too-big-to-fail banks. And banks are still not being held accountable.

FDA scandal re: Approval of Deadly Drug by Board with Pharma Ties

Board members with drug maker ties voted to approve drug that's killing women
Thursday, March 15, 2012 by: Tony Isaacs


(NaturalNews) An investigation by the Washington Monthly and the British Medical Journal has found that at least four members of an advisory board which voted to approve a drug used in birth control pills had either done work for the drugs' manufacturer or received research funds from the manufacturer. Though the four committee members disclosed their ties to the FDA, the FDA decided that the ties did not matter and did not make the disclosures public. Tragically, the drugs the committee endorsed have been killing the women who take them.

The birth control pills Yaz and Yasmin contain a drug called drospirenone, which the FDA advisory committee endorsed last December. According to the Alliance for National Health (ANH), women who take drospirenone are nearly seven times more likely to develop thromboembolism (obstruction of a blood vessel by a blood clot, which can cause deep vein thrombosis, pulmonary embolism, stroke, heart attack, and death) than women who do not take any contraceptive pill. Women who take drospirenone have twice the risk of developing thromboembolism than women who take widely prescribed contraceptive pills containing levonorgestrel.

FDA OK's votes by members with financial ties to drug makers but not members who oppose dangerous drugs

Each of the four advisory board members with ties to the pills manufacturer voted in favor of the pills. The committee's decision that the drug's benefits outweighed the risks was decided by a four-vote margin. Interestingly, while the FDA allowed the four members with financial ties to vote on the drug, it barred another member and former researcher, Sidney M. Wolfe, from voting on the grounds that he had "an intellectual conflict of interest". Based on several years of data, Wolfe had advised his readers six years earlier not to take Yaz. Because of this "conflict", he was barred from voting.

In other words, the FDA apparently believes that there is no conflict when someone gets paid by a drug manufacturer but there is a conflict when someone has researched a drug and found it to be dangerous.

The FDA also failed to provide the panel with recently unsealed court documents which revealed that former FDA commissioner David Kessler had accused Bayer of hiding data on blood clot risks associated with the birth control pills. The court documents also revealed that Kessler reported that Bayer paid $450,000 to a high profile gynecologist to sponsor the pill, including off-label use of the drug, during her book tour.

It is far from the first time that the FDA has approved a dangerous drug or overlooked conflicts of interest. It is also far from the first time that drug companies have hid evidence of harm. Think of Vioxx, Fosamaxx, Avandia, and Gardasil to name just a few examples.

It is a common practice for drug companies to pay doctors and scientists to endorse their drugs, the same as it is common for drug companies to offer kickbacks and rewards to doctors who prescribe their drugs. Drug companies also pay doctors, researchers, and other medical experts for "consulting jobs" and speaking engagements to the tune of several hundreds of millions of dollars - which is considered legal despite the obvious blatant conflict of interest.

With Yaz being the top-selling birth control pill in the US, Bayer has quite the strong vested interest in getting endorsements for Yaz and Yasmin. Though thousands of women have filed lawsuits against Bayer, saying they were injured by Yaz or Yasmin, as we have seen with other highly profitable dangerous drugs, drug makers typically consider such lawsuits merely part of the price of doing business.

Sources included:
http://www.anh-usa.org/fda-huge-conflicts-of-interest-with-big-pharma/
http://www.washingtonmonthly.com
http://www.naturalnews.com/034443_FDA_advisory_panel_corruption.html
http://www.allgov.com

Panetta Confirms US Involvement in Potential Israeli War on Iran

'Obviously' the US Would Take Action
by Jason Ditz, March 16, 2012

Confirming what has always been the implicit way in which the US is going to get sucked into its next major war, Secretary of Defense Leon Panetta confirmed that the US would definitely involve itself in a war on Iran if Israel decided to launch one.


“Obviously Israel is an independent country, and they’ll make whatever decisions they make on their own based on what they think is in their national interests,” Panetta said, adding that “if they should make that decision, that obviously the United States would take action” to protect its interests in the region.

Though Panetta has sought to duck the question in most interviews, insisting only that there was “common cause” with Israel before going on about how the time to attack Iran has not yet arrived.

President Obama has repeatedly made similar statements about “having Israel’s back,” but the reality of what this entails, a commitment to another massive war and potential open-ended occupation, seems to have so far been carefully kept out of the conversation.

RIAA chief: ISPs to start policing copyright by July 1

Comcast, Time Warner, and Verizon are among the ISPs preparing to implement a graduated response to piracy by July, says the music industry's chief lobbyist.
by Greg Sandoval March 14, 2012, CNET

NEW YORK--The country's largest Internet service providers haven't given up on the idea of becoming copyright cops.

Last July, Comcast, Cablevision, Verizon, Time Warner Cable and other bandwidth providers announced that they had agreed to adopt policies designed to discourage customers from illegally downloading music, movies and software. Since then, the ISPs have been very quiet about their antipiracy measures.

But during a panel discussion before a gathering of U.S. publishers in New York today, Cary Sherman, CEO of the Recording Industry Association of America, said most of the participating ISPs are on track to begin implementing the program by July 1.

Supporters say this could become the most effective antipiracy program ever. Since ISPs are the Internet's gatekeepers, the theory is that network providers are in the best position to fight illegal file sharing. CNET broke the news last June that the RIAA and counterparts at the trade group for the big film studios, had managed to get the deal through--with the help of the White House.

Sherman told attendees of the Association of American Publishers' annual meeting that planners had always said that setting up an antipiracy program like this could take a year. He told CNET following his panel that the process isn't as easy as turning on a switch.

"Each ISP has to develop their infrastructure for automating the system," Sherman said. They need this "for establishing the database so they can keep track of repeat infringers, so they know that this is the first notice or the third notice. Every ISP has to do it differently depending on the architecture of its particular network. Some are nearing completion and others are a little further from completion."

The program, commonly referred to as "graduated response," requires that ISPs send out one or two educational notices to those customers who are accused of downloading copyrighted content illegally. If the customer doesn't stop, the ISP is then asked to send out "confirmation notices" asking that they confirm they have received notice.

At that time, the accused customers will also be informed of the risks they incur if they don't stop pirating material. If the customer is flagged for pirating again, the ISP can then ratchet up the pressure. Participating ISPs can choose from a list of penalties, or what the RIAA calls "mitigation measures," which include throttling down the customer's connection speed and suspending Web access until the subscriber agrees to stop pirating.

The ISPs can waive the mitigation measure if they choose and not one of the service providers has agreed to permanently terminate service.

The partnership with the major bandwidth providers was years in the making and the deal pumped lots of confidence into the entertainment sector. After the White House and state and federal lawmakers showed support for the deal, leaders at the RIAA and Motion Picture Association of America (MPAA) believed they had the momentum to get antipiracy legislation passed in Congress.

They were wrong of course. The Stop Online Piracy Act and Protect IP Act were run off the rails mostly by the tech sector. It will be interesting to see how the tech sector reacts once accused Internet pirates begin having their Web access suspended.

No Room for the Poor in Conservative VS Liberal Interchange

Sunday, March 18, 2012 by the Kent-Ravenna Record Courier
by Caroline Arnold

In the present political circus it seems that liberals mostly want to tweak the status quo to get better deals (cheaper, less polluting energy, safer water, air & food, universal medical care & education) for themselves and their immediate neighbors. They also want to stop global warming and raise taxes on the rich.

Conservatives seem to want the private sector to manage the economy, control education, health care and prisons; they also want control of women’s bodies, voter registration laws to limit voting by poor people, lower taxes for the rich, cuts to Social Security, Medicare and the Affordable Care Act for everyone else. And they expect Ivy League schools for their children, student loans at high interest for the middle classes, and minimal training for poor kids to be obedient workers and consumers or professional killers in the armed forces.

But I see hardly any political commitment on either side to the world’s poor and illiterate, to the billions of humans whose lives are blighted by wars, energy extraction, trade policies and economic myths, to the unemployed and homeless of our own communities, to the "illegal aliens" who cross political borders in search of better lives, or to refugees fleeing floods, droughts or famines.

One of the reasons I can’t spend much time on the gas-drilling/fracking issue is that I don’t see in it the "preferential option for the poor" that I believe should be central to all our social, political and economic activities in a world of seven billion souls – half of them hungry – on a planet that we are literally and figuratively burning up.

The abortion and contraception issues are also all about the poor, especially women. Middle class and wealthy women have money, cars, medical coverage, information systems and other resources to prevent, manage or end pregnancies. But right wing, righteous people – mostly men – want to make sure not a penny of their money goes to help poor women they have already judged to be immoral and irresponsible (if not altogether perverted and evil) and who must not be allowed to exercise their own consciences or make their own choices.

One thing Obama has got right is handing off the costs of contraception to the insurance industry. It’s right because if they get a big piece of the public’s money, they should provide the services. It’s also right, perversely, because private insurers recognize that contraception saves everyone’s money – theirs first, then down the line to saving money on medical services, and finally to saving public money on health care, schools and prisons.

Then there is the black comedy of abortion: Save at all cost the lives of all beating hearts, but allow men in power to target and kill any human being without even the inconvenience of due process or justification; punish women who use contraception, but train young men to be efficient and committed killers.

And so this week an American soldier slaughtered 16 Afghan children and adults. This week the Obama administration justified the murder of a citizen and his teen-aged son without any due process of law or public disclosure of their crimes.

This week the Israeli army killed 25 Palestinians. No Israeli deaths were reported; apparently Israel’s anti-missile system "Iron Dome" (provided by the US) had deflected some Palestinian missiles. The dead Palestinians were referred to only as "terrorists."

Men in power are presently prosecuting Bradley Manning and targeting Julian Assange (not even an American citizen) under the 1917 Espionage Act for "assisting the enemy." What enemy? All of us who have a right to transparency in government?

Middle-aged and old men are competing with one another to determine every aspect of the future in advance – from women’s control over their own bodies to corporate control of elections, from who may be killed without due process to who can profit from oil and gas extraction, from the cheapest way to educate children to what levels of global warming are acceptable for future profits; from the imposition of austerity on the 99% to bailing out banks with public money.

Men in power today are not willing to let women, the poor, or the young determine their own future, choose their own values, exercise their own free will, pursue as much education as they can need, make their own mistakes, experiment with new technologies, explore better ways to manage our communities, states, and resources, or dream new ways of living together on a fragile planet.

By the time you read this, we may have a war in Iran. Or the US may have decided to get out of Afghanistan, or a tsunami may have struck, a nuclear power plant gone critical, or a world leader assassinated. None of those events is very likely, but it is certain that in those four days, some 84,000 poor children worldwide will die of starvation, and about 2,.200 American women will discover unwanted pregnancies. And the US will spend $1,640,000,000 on wars, weapons and waste in Iraq and Afghanistan.

Perhaps President Obama should be forced to watch sonograms of the beating hearts of those he targets for extrajudicial assassination?

DHS Terror Document Lists Yawning, Goose Bumps As Suspicious Behavior

Pretty soon, we'll all be defined as terrorists...for waking up in the morning or something else just as stupid.--jef

The guide encourages participants to “look for signs of nervousness in the people you come in contact with.” “Signs will become particularly evident in a person’s eyes, face, next and body movements.”

The document then lists examples of suspicious behavior indicative of terrorism, which include, “Exaggerated yawning when engaged in conversation,” “glances,” “cold penetrating stare,” “rigid posture,” and “goose bumps”.

Of course, any of these behaviors could be explained by a million other circumstances and the likelihood that they are indications of terrorist activity is virtually zero.

The document was obtained from the New Jersey Office of Homeland Security & Preparedness that lists banal bodily activities such as yawning, staring and goose pumps as “suspicious activity” indicative of terrorism.