[PAULYPOKER]

By Matt Taibbi
April 25, 2013 1:00 PM ET

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything.


You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it "dwarfs by orders of magnitude any financial scam in the history of markets."


That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.


Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It's about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.
It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks – including Barclays, UBS, BkofAma, JPMorgan Chase and the Royal Bank of Scotland – that serve on the Libor panel that sets global interest rates. In fact, in recent years many of these banks have already paid multimillion-dollar settlements for anti-competitive manipulation of one form or another (in addition to Libor, some were caught up in an anti-competitive scheme, detailed in Rolling Stone last year, to rig municipal-debt service auctions).

Though the jumble of financial acronyms sounds like gibberish to the layperson, the fact that there may now be price-fixing scandals involving both Libor and ISDAfix suggests a single, giant mushrooming conspiracy of collusion and price-fixing hovering under the ostensibly competitive veneer of Wall Street culture.

The Scam Wall Street Learned From the Mafia


Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.


"It's a double conspiracy," says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. "It's the height of criminality."


The bad news didn't stop with swaps and interest rates. In March, it also came out that two regulators – the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions – were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. "Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry," CFTC Commissioner Bart Chilton said.


But the biggest shock came out of a federal courtroom at the end of March – though if you follow these matters closely, it may not have been so shocking at all – when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants' incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.


"A farce," was one antitrust lawyer's response to the eyebrow-raising dismissal.
"Incredible," says Sylvia Sokol, an attorney for Constantine Cannon, a firm that specializes in antitrust cases.
All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings – in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP – are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing.

Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.
If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati – this is the real thing, and it's no secret. You can stare right at it, anytime you want.

Read the other 3 pages @

Read more: http://www.rollingstone.com/politics...#ixzz2SRgZR2VG

[PAULYPOKER]

The Fed by their own admittance (HERB TAYLOR vice president and CORPORATE secretary at the Federal reserve bank of Philadelphia) are above the law and have BIG BANK'S interests only in mind! Explained by Bill Still for clueless individuals like SBR's own SharpBoxing............



Published on May 5, 2013
"A Fed official gave the "Welcome" remarks at the Global Interdependence Center's meeting at the Philadelphia Fed on April 17. Bill Still dissects his remarks to illustrate how these guys can have it so wrong."
Bill Still

[Let's Go Rangers]

:

[PAULYPOKER]

The forum tard, beats his dead horse again!

Priceless.........

[SamDiamond]

There's Pauly.

Bravely changing the world one Saloon post after another.

[NrmlCurvSurfr]

There's Pauly.

Bravely changing the world one Saloon post after another.

so you don't believe financial/gov institutions manipulate markets for the good of themselves??

[PAULYPOKER]

so you don't believe financial/gov institutions manipulate markets for the good of themselves??

Sammy D is one of the most clueless sheep on the planet.......

Of course he does not believe in anything that condemns the government and it policies as true........

He is a defender of the Sheople FAITH...........

[SamDiamond]

Sammy D is one of the most clueless sheep on the planet.......

Of course he does not believe in anything that condemns the government and it policies as true........

He is a defender of the Sheople FAITH...........

I'll play along.

Suppose I am one of the sheep.

Does it change the fact that you are still SBR's Internet Warrior?

For all the complaining you are doing about the "sheep", the only answer you have is to post on a gambling board. That's it.

Between the two of us, are you really doing anything to change the world? You're posting in the fuking Saloon for cripes sake.

[SamDiamond]

so you don't believe financial/gov institutions manipulate markets for the good of themselves??

You think this is the first time a market has been manipulated?

You think John Rockefeller didn't manipulate the oil market 120 years ago? Or Cornelius Vanderbilt didn't manipulate the rail system 130 years ago?

Market manipulation is as old as this country.

The only things that have changed are the names. Instead of Vanderbilt/Rockefeller/JP Morgan, the names are now BkofAma, Sachs, Citi.

[NrmlCurvSurfr]

You think this is the first time a market has been manipulated?

You think John Rockefeller didn't manipulate the oil market 120 years ago? Or Cornelius Vanderbilt didn't manipulate the rail system 130 years ago?

Market manipulation is as old as this country.

The only things that have changed are the names. Instead of Vanderbilt/Rockefeller/JP Morgan, the names are now BkofAma, Sachs, Citi.

If you can find where I said I thought it was the first time a market has been manipulated, ill ship you a dime... judging by your response I can assume you are complacent and dont care how the actions of others affect your life? Way to stand up for yourself man...I hope you realize this sh*t affects people with money too, not just dirt hippies with signs...that saying ignorance is bliss should be this countrys motto, maybe even create a national monument where we can etch it in stone...

[SamDiamond]

If you can find where I said I thought it was the first time a market has been manipulated, ill ship you a dime... judging by your response I can assume you are complacent and dont care how the actions of others affect your life? Way to stand up for yourself man...I hope you realize this sh*t affects people with money too, not just dirt hippies with signs...that saying ignorance is bliss should be this countrys motto, maybe even create a national monument where we can etch it in stone...

So, from your response I can assume you are when you are not spending your time on SBR, you are fighting the good fight for the common man?



When did I infer that the actions of others do not affect my life or anyone else's? I'll ship you back that dime if you can point it out.

I love how the "truth-fighters" like you and Pauly seem to concentrate your efforts of spreading the word-- here--- in the Saloon--- ON SBR.

Speaking of complacent, that doesn't seem like a very effect way of spreading this truth.

[NrmlCurvSurfr]

So, from your response I can assume you are when you are not spending your time on SBR, you are fighting the good fight for the common man?



When did I infer that the actions of others do not affect my life or anyone else's? I'll ship you back that dime if you can point it out.

I love how the "truth-fighters" like you and Pauly seem to concentrate your efforts of spreading the word-- here--- in the Saloon--- ON SBR.

Speaking of complacent, that doesn't seem like a very effect way of spreading this truth.

I never said that you believe the actions of others dont affect you, I said, it appears that you are complacent towards it...And there is nothing wrong with spreading ideas, i dont spend my days thinking about this stuff or spreading it around to others, but when I see someone trying to educate people and then being ridiculed, I might jump in and try to shed some light on an otherwise rarely discussed topic...truth fighters, lol Im here because I gamble, doesn't mean we cant discuss other ideas too, it is the saloon ya know...

[SamDiamond]

I never said that you believe the actions of others dont affect you, I said, it appears that you are complacent towards it...And there is nothing wrong with spreading ideas, i dont spend my days thinking about this stuff or spreading it around to others, but when I see someone trying to educate people and then being ridiculed, I might jump in and try to shed some light on an otherwise rarely discussed topic...truth fighters, lol Im here because I gamble, doesn't mean we cant discuss other ideas too, it is the saloon ya know...

See, now that's where we disagree.

What makes you think Pauly knows the "truth" and is "educating" people? Have you seen Pauly post? There are at least 3 dozen voices inside that noggin of his. There isn't a conspiracy that he doesn't like/promote.

The title of Pauly's thread here is "Everything is Rigged".

I tried to point out-- "And?". That doesn't make me complacent. It simply means I am able to recognize things have been rigged for 236 years and 10 months in this country.

From controlling who got to vote (white land owners), to who was able to own slaves, to who controlled every natural resource. As an American-- those were the rules of the game. And Pauly can bang his keyboard as hard as he wants---NOTHING-- is going to change that. Capitalism breeds it, and I'm okay with that.

And for all the rigging that exists-- this is still the greatest country on earth.

[NrmlCurvSurfr]

See, now that's where we disagree.

What makes you think Pauly knows the "truth" and is "educating" people? Have you seen Pauly post? There are at least 3 dozen voices inside that noggin of his. There isn't a conspiracy that he doesn't like/promote.

The title of Pauly's thread here is "Everything is Rigged".

I tried to point out-- "And?". That doesn't make me complacent. It simply means I am able to recognize things have been rigged for 236 years and 10 months in this country.

From controlling who got to vote (white land owners), to who was able to own slaves, to who controlled every natural resource. As an American-- those were the rules of the game. And Pauly can bang his keyboard as hard as he wants---NOTHING-- is going to change that. Capitalism breeds it, and I'm okay with that.

And for all the rigging that exists-- this is still the greatest country on earth.

at least we can agree on something, as far as paulie goes, hes just looking after the underdog...I suppose thats why I gave any attention to this thread in the first place...I know people gain wealth by exploiting an advantage, I think most people know that...hell paulie would probably think im one of the bad guys for being part of a family who has made their fortune in oil...But, once you have enough money, you start to recognize what is important in life...I dont think it would be right to manipulate oil to 200$ just to make some extra dough, while the average joe cant afford to fill up his honda civic to make it to his crappy job...

Well Its been a long day filled with daiquiris and Nintendos and jack off magazines(by the way I checked out the teen mom porn, meh), so im going to have a few drinks and go to sleep...gotta wake up and work for 2, MAYBE 3, hours tomorrow, lol...

[PAULYPOKER]

Pauly puts the truth out there, then watches it unfold..........

Pauly knows America is finished...........

Pauly knows the middle class will be completely gone within 10 years........

Pauly knows that even those who are comfortably rich NOW, will be stripped of it by the hand of the Elite bloodline.........
This is how absolute power works my friends.......
If you are not blood,you can kiss your fortunes goodbye...........

This is where I lose most of the financially well off,for the fact this effects their own Psyche to the core........

[PaperTrail07]

What middle class.....there is the working and the non-working....the rich and the poor...the people paying interest and the people collecting it.....


"UNITED" STATES with diff laws in each state....STATE LAWS...that get federally CHUMPED whenever they Feels the NEED....

Its ALL about power....control....mindfuckking....the grip on man...

[PAULYPOKER]

Have you seen Pauly post? There are at least 3 dozen voices inside that noggin of his. There isn't a conspiracy that he doesn't like/promote.
The title of Pauly's thread here is "Everything is Rigged".

Proved you to be a clueless ass wiping,shit throwing monkey, numerous times on the above accusations........

Now I'll do it again...

The thread title is the exact title of the original report from Rolling Stone Magazine............

[PAULYPOKER]

Big banks raked in $102bn in subsidies since 2009: Report




America's biggest banks want you to believe that they get no special advantage, no subsidies, from being too big to fail. And yet people keep finding evidence of those subsidies.

The latest is World Bank economist Deniz Anginer, in a study for Bloomberg Markets magazine. Anginer estimates that the six biggest U.S. banks have saved $82 billion in borrowing costs since 2009 because investors believe the government will never let them fail and thus don't charge as much to lend them money as they do smaller banks. The report will be published in the June issue of the magazine.

Together with dirt-cheap government borrowing programs, Bloomberg estimates these banks -- JPMorgan Chase, BkofAma, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley -- have saved $102 billion since 2009 because of their size advantage.

This estimate is actually a little smaller than the $83 billion-per-year subsidy that Bloomberg View, Bloomberg's op-ed arm, touted earlier this year. In fact, several studies have come up with different numbers for the subsidy, evidence of just how tricky it is to measure.

Some observers argue that the subsidy might not exist at all. That argument is the one the big banks prefer, predictably, because they would like not to be made smaller, if it's all the same to everybody. In fact, they have paid for their own research arguing they have no subsidy.

U.S. policy makers believe there is a subsidy, though they are loath to quantify it. Federal Reserve Chairman Ben Bernanke in February confessed to Sen. Elizabeth Warren (D-Mass.) that the subsidy exists, although he disagreed with the $83 billion per year estimate. And Fed Governor Jeremy Stein last month agreed that a subsidy exists and is a problem.

Ending the subsidy and the possibility that taxpayers will have to bail out a big, failing bank is the aim of the bill introduced last month by Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.). That measure would force the biggest banks to hold more capital.

Mortified, the big banks have joined forces and hired some political helpers, including Republican Tony Fratto and Democrat Stephanie Cutter, to push back against the momentum for breaking them up, the Wall Street Journal wrote earlier this week.

Hilariously, big bank officials briefly considered pushing smaller community banks -- which don't enjoy the subsidy that the big banks get and are thus at a competitive disadvantage -- to help them with the pushback, the WSJ reported. Wisely, they dropped the idea. The Huffington Post

AN/ISHBig banks raked in $102bn in subsidies since 2009: Report

[PAULYPOKER]

Half of all US jobs created in past 3 years were low-paying




Roughly half of the jobs created in the United States in the past three years have been low-paying jobs, according to economists at the Royal Bank of Scotland, in a research note sent to clients on Monday, titled "A Closer Look At The Labor Market Recovery."

Nearly all of the 6.2 million jobs created since the job market first started its historically lousy recovery in the spring of 2010 (nearly a full year after the recession ended) have been in the private services sector, according to RBS.

And of the roughly 160,000 jobs per month created in that sector, about 80,000 of them have been "low-paying," according to RBS. "High-paying" and "average-paying" jobs account for about 40,000 jobs each, according to RBS.

RBS defines "low-paying" jobs as those paying 80 percent or less of the average private-sector wage of $20.04 per hour. Sectors that pay poorly include retail sales, leisure and hospitality and education.

Making matters worse, the percentage of people working part-time is still higher than it was before the recession, RBS points out -- nearly 19 percent of all workers, compared with 16.5 percent before the recession.

This sad breakdown helps account for why, even as corporate profits and the stock market have soared over the past three years, workers' wages have gone pretty much nowhere. Average hourly earnings have gained just 1.9 percent in the past year, not enough to keep up with inflation.

The RBS study echoes several others in recent years, including a National Employment Law Project study from August that found three-fifths of jobs created since the recession have been low-paying, roughly matching the number of middle-income jobs that were lost.

About a third of working families in the U.S., representing about 47 million people, are in low-wage jobs today, according to the Working Poor Families Project.

The lousy quality of the jobs being created has helped widen the already yawning gap between rich and poor in the U.S. And it means, as The Huffington Post's Saki Knafo reported recently, that many of the people who have been fortunate enough to find jobs in the past four years still don't make enough to feed their kids. Huffington Post

FACTS & FIGURES

The fact that the distribution of money and wealth in the United States is unfair has been evident in surveys taken since 1984, with only minor fluctuations from measure to measure. Gallup

According to a recent report by the Pew Research Center, the richest 7% of American families saw their average wealth soar 28% from 2009 to 2011, while the remaining households lost 4% of their net worth over the same period.

The U.S. pay gap is the biggest in the world, according to a recent study by AFL-CIO.

U.S. CEOs of the biggest firms made 354 times what the average rank-and-file worker earned in 2012- by far the widest pay gap in the world, according to the AFL-CIO. People’s World

Last year CEOs received an average $12.3 million while the average worker took home around $34, 645.

President Barack Obama has said his biggest goal is to revive the U.S. middle class. “Our country cannot succeed when a shrinking few do very well and a growing many barely make it”, the president said in his inaugural address. FT.com

However, Obama has been unable to fix America’s most unequal distribution of income since the 1920s. FT.com

[Darkside Magick]

Yea! deem not change: ye shall be as ye are, & not other. Therefore the kings of the earth shall be Kings for ever: the slaves shall serve. There is none that shall be cast down or lifted up: all is ever as it was. Yet there are masked ones my servants: it may be that yonder beggar is a King. A King may choose his garment as he will: there is no certain test: but a beggar cannot hide his poverty

[PAULYPOKER]

‘Financial markets corrupted by federal policy makers’

Paul Craig Roberts, an American columnist, says “in the United States the financial markets have been corrupted by the federal policy makers”.

Craig Roberts made the remarks in a phone interview with Press TV’s U.S. Desk on Tuesday when asked to comment on his new article titled “Gangster State America” which elaborates on how federal authorities and banksters in the U.S. manipulate the markets of gold and silver.

“For several years now, the Central Bank, the Federal Reserve Bank, has been fixing the bond price and interest rates,” Roberts said

“These are not market prices, these prices are determined by the Federal Reserve’s purchase, each year, of more than $1 trillion, that is $1,000 billion annually, in bonds,” he noted.

“In order to purchase this enormous amount of bonds, the Federal Reserve creates new dollars so the rate the Federal Reserve fixes the bond prices and interest rates is by printing a thousand billion new dollars each year.”

As a result, the value of the dollar is being undermined as “the demand for dollars is not growing by the amount that the Fed is creating new dollars.”

Consequently, the price of precious metals like gold and silver rises. However, the Federal Reserve uses its “too-big-to-fail” banks in order to manipulate the market of gold and silver by selling “future contracts in large amounts.”

AT/ISH

[PAULYPOKER]

Job and wage inequality is dominating the US job market



Residents walk in front of boarded up buildings on third street in a
once prosperous area where now unemployment numbers are high
in Milwaukee, Wisconsin, December 14, 2011.




In 2008, as the financial crisis ripened and the collapse of the housing market sent shockwaves through the economy, the headline unemployment rate in the United States increased from 5.0 percent to 7.3 percent. In 2009, the rate climbed as high as 10.0 percent, and edged only fractionally lower to 9.9 by December.

Maximum employment is one half of the Federal Reserve’s dual mandate, and in many ways, this astonishingly high unemployment rate has been the focus of post-crisis economics. Four distinct rounds of quantitative easing punctuated by unprecedented bond purchases were meant to amp up America’s private sector and encourage corporate growth, but the consensus on Main Street is that Wall Street has reaped the reward while working-class citizens continue to suffer.

In the most-recent Employment Situation report, the Bureau of Labor Statistics reported that the U-3 unemployment rate had fallen to 7.5 percent, just 1 percentage point shy of the Fed’s 6.5 percent target rate. Declining unemployment figures are the result of steadily improving private-sector payrolls that have offset substantial losses from public payrolls as sequestration spending-cuts trim the size of government agencies. Government payrolls at the local, state, and federal level have declined even during the recovery period.

But like most good economic news, the declining headline unemployment rate masks some concerning trends that betray overall weakness and inequality in the labor market.

The National Employment Law Project showed that while low-wage occupations accounted for 21 percent of recession-era job losses, they accounted for 58 percent of recovery job gains - and while mid-wage occupations accounted for 60 percent of recession losses, they accounted for just 22 percent of recovery growth.

What this means is that post-recession job growth is characterized by Americans taking lower-paying jobs, moving out of the middle class and into the lower class. Low-wage industries such as food services, retail, administrative support, and waste management services, constituted 43 percent of net job growth during the recovery. Within these industries, 76 percent of job growth occurred at the low end of the wage scale.

If inequality is defined by a shrinking middle class and growth at opposite ends of the spectrum, then the past decade can certainly be defined its inequality. Since the first quarter of 2011, employment has grown by 8.7 percent in lower-wage occupations and by 6.6 percent in higher-wage occupations. Meanwhile, employment in mid-wage occupations has fallen by 7.3 percent.

Meanwhile, stock markets and corporate profits are breaking records. Last week, amid increased investor confidence in the United States economy, benchmark indexes climbed to record levels. Corporate profits, as a percentage of gross domestic product, have hit a record high this earnings season, helping to push stock market gains higher. But the weak labor market, coupled with the Federal Reserve’s easy-money policy, has created a climate that benefits companies far more than it does individual workers.

Unemployment still remains stubbornly high, yet the earnings divide between the workers in the United States and the companies that employ them is growing. This inequality serves to explain why stock markets are doing well despite relatively slow economic growth; the U.S. gross domestic product has grown at less than 2 percent per year over the past few years, and that is not the kind of V-shaped recovery that creates jobs.

With a stagnant economy and nearly 11.7 million people out of work, employers feel little pressure to increase wages. Companies would rather make do with fewer employees as productivity gains have enabled them to increase sales without growing their workforces.

As a percentage of national income, corporate profits accounted for 14.2 percent of the total in the third quarter of 2012, the largest portion since 1950. Comparatively, the percentage of income distributed to employees was 61.7 percent, near the lowest level since 1966.

As Barclay’s chief United States economist Dean Maki told The New York Times in March, the widening gap accelerated during the financial crisis and subsequent recession. Corporate earnings have increased at an annualized rate of 20.1 percent since the end of 2008, he added, but disposable income has only grown by 1.4 percent annually over the same period, with inflation taken into account.

“There hasn’t been a period in the last 50 years where these trends have been so pronounced,” Maki said.

Signs of an improving job market have been manifested in recent unemployment data; according to recent Labor Department reports, employers have added 635,000 jobs in the past three months. But wage growth has been tepid. In April, hourly wages rose 4 cents to an average $23.87, an increase of about 2 percent, matching the annual pace at which wages have grown since the recovery began in mid-2009. However, taking inflation into account, the increase was virtually flat, and wages that barely keep pace with inflation do not make for a prosperous economy.

Furthermore, growth that has occurred in recent months has spread its bounty unequally; the slight gains in wages in the United States have only served to further income inequality. If the gap between corporate and personal earnings is growing, so too is the spread between high-wage earners and low-wage earners. Between the first quarters of 2001 and 2012, median real wages for lower-wage and mid-wage occupations declined by 2.1 percent and 0.2 percent, respectively, but increased for higher-wage occupations by 4.1 percent, according to the National Employment Law Project.

Partly because of this dim picture of the U.S. labor market, President Barack Obama indicated during this year’s State of the Union address that he wanted to raise the federal minimum wage to $9.00 per hour from its current level of $7.25. Currently, Washington is the only state with a minimum wage higher than $9.00. While there is no exact number on the number of workers in the United States making the exact minimum wage, together McDonald’s and Wal-Mart, the two largest low-wage employers, employ around 1.5 million people at $12 or less per hour.

AHT/HJ

[PAULYPOKER]

Cutting Social Security and not taxing Wall Street



As we move toward the fifth anniversary of the great financial crisis of 2008, people should be outraged that cutting Social Security is now on the national agenda, while taxing Wall Street is not. After all, if we take at face value the claims made back in 2008 by Fed Chairman Ben Bernanke and former Treasury Secretaries Henry Paulson and Timothy Geithner, Wall Street excesses brought the economy to the brink of collapse.

But now the Wall Street behemoths are bigger than ever and President Obama is looking to cut the Social Security benefits of retirees. That will teach the Wall Street boys to be more responsible in the future.

Most people are now familiar with President Obama's proposal to cut Social Security by reducing the annual cost-of-living adjustment (COLA). While the final formula is somewhat convoluted, the net effect is to reduce benefits by an average of roughly 3.0 percent.

Since Social Security benefits account for more than 70 percent of the income of a typical retiree, this cut is more than a 2.0 percent reduction in income. By comparison, a wealthy couple earning $500,000 a year would see a hit to their after-tax income of just 0.6 percent from the tax increase that President Obama put in place last year.

While President Obama is willing to make seniors pay a price for the economic crisis, his administration is unwilling to impose any burdens on Wall Street. Specifically, it has consistently opposed a Wall Street speculation tax: effectively a sales tax on trades of stock and derivatives. The Obama administration has even used its power to try to block efforts by European countries to impose their own taxes on financial speculation.

If the idea of taxing stock trades sounds strange, it shouldn't. The United States used to impose a tax of 0.04 percent until Wall Street lobbied to eliminate it in the mid-1960s. Many countries, including the United Kingdom, Switzerland, China, and India already impose taxes on stock trades.

The tax in the UK is 0.5 percent on stock trades (0.25 percent for both the buyer and the seller). It dates back more than three centuries. The country raises more than 0.2 percent of GDP ($32 billion in the United States) from the tax each year. The tax has not prevented the London stock exchange from being one of the largest in the world.

There are currently two bills in Congress for a similar tax in the United States. A bill by Minnesota Representative Keith Ellison would impose the same tax as the UK on stock trades and would apply a scaled rate to options, futures, credit default swaps and other derivative instruments. It could raise more than $150 billion annually or more than $2 trillion over the ten year budget window.

A second bill has been put forward by Iowa Senator Tom Harkin and Oregon Representative Peter DeFazio. This bill would apply a 0.03 percent tax to trades of stock and a wide range of other financial assets. According to the Joint Tax Committee, the bill would raise close to $40 billion a year or over $400 billion over a ten-year budget window once it is implemented.

Unfortunately the administration has consistently opposed both bills. It claims that it is concerned about the incidence of these taxes -- that ordinary investors would see large burdens from the tax. It also claims to be worried that the taxes will disrupt financial markets by making trading more costly.

Neither of these stories passes the laugh test. Ordinary investors don't trade much, and therefore are not going to feel much impact from the tax. If someone with $100,000 in a 401(k) (this is much larger than the typical 401(k)) turns it over at the rate of 50 percent annually, they would pay $15.00 each year as a result of the Harkin-DeFazio tax.

Furthermore research shows that investors reduce their trading as costs increase. This means that if the tax increases trading costs by 20 percent, then investors will reduce their trading by roughly the same amount (in this example, turnover would fall to 40 percent annually). That means that the net cost of turnover in a 401(k) will barely change for a typical investor as a result of the tax. Wall Street would just see much less business.

So the Obama administration wants us to believe that it is willing to cut the Social Security benefits of retiree living on $15,000 a year in Social Security by $450 but it opposes a Wall Street speculation tax because it is concerned that investors with $100,000 in a 401(k) may pay a few dollars a year in additional trading costs. Only a reporter with the Washington Post would believe a story like that.

The other part of the Obama administration's story is equally laughable. The cost of financial transactions has plummeted in the last four decades because of computers. Even the Ellison tax rate would just raise costs back to their mid-'80s level. The Harkin-DeFazio tax rate would probably still leave costs lower than they were in 2000.

The country certainly had a vibrant capital market and stock exchange in the 1980s, taking costs part of the way back to this level will not prevent Wall Street from serving its proper role of transferring capital from savers to borrowers. It will just clamp down on speculation.

The basic story is very simple. Wall Street bankers have a lot more political power than old and disabled people who depend on Social Security. That is why President Obama is working to protect the former and cut benefits for the latter.

AN/DT

[PAULYPOKER]

Top Fed official warns about increasing gap between rich and poor


Sarah Bloom Raskin, Federal Reserve governor, worries income and
wealth inequality may harm U.S. economic growth.



A top Federal Reserve policymaker has raised the possibility that rising inequality may restrain economic growth for several years in a sign the central bank may be worried about the increasing gap between the rich and poor.

“In my view, the large and increasing amount of inequality in income and wealth, which has been an ongoing development for decades, may have exacerbated the crisis,” Fed governor Sarah Bloom Raskin said Thursday in a speech delivered in Washington.

“More research is required to determine whether it may also pose a significant headwind to the recovery from the crisis for years to come.”

Home values rising at their pre-recession pace may help alleviate some of the wealth gap, Raskin said, but “some of the restraints on the recovery may be quite long-lasting.”

Raskin’s comments are among the most forceful to date from any current member of the Fed’s seven-person Board of Governors regarding wealth, income inequality, and how dynamics in household wealth may be impeding growth and prolonging the realization of a full-fledged recovery for millions of struggling U.S. families.

“Overall wage growth has been anemic, and many households have not seen their circumstances improve materially,” Raskin said of the current economic recovery, which began in 2009 after the so-called “Great Recession” officially ended.

The Fed thus far has focused on stimulating overall growth by keeping borrowing costs near record-lows and incentivizing investors, businesses and households to take risks, in hopes it will lead to increased purchases and investment. Fed policy tools such as lowering interest rates and purchasing U.S. Treasuries and mortgage securities, however, may be ineffective in alleviating inequality.

Raskin's comments, similar to previous speeches she delivered on inequality in March and April, may signal a growing concern within the Fed over rising wealth and income disparities. Raskin has previously said that the Fed should study how income and wealth inequality may impact monetary policy. Huffington Post

FACTS & FIGURES

Millions of Americans suffered a loss of wealth during the recession and the sluggish recovery that followed. But the last half-decade has proved far worse for black and Hispanic families than for white families, starkly widening the already large gulf in wealth between non-Hispanic white Americans and most minority groups, according to a new study from the Urban Institute. The New York Times

Roughly half of the jobs created in the United States in the past three years have been low-paying jobs, according to economists at the Royal Bank of Scotland, in a research note sent to clients on Monday, titled "A Closer Look At The Labor Market Recovery." The Huffington Post

The last five years represent the longest sustained period of low satisfaction since 1981 when Gallup began to measure satisfaction on a regular basis.

Only 24% of Americans are satisfied with the way things are going in the United States, according to a Gallup poll based on telephone interviews conducted May 2-7, 2013.



AN/DT

[PAULYPOKER]

'IRS suppressed advocates of free speech'

The Internal Revenue Service has sought to “suppress” advocates of free speech by targeting conservative groups based on their ideology, says Jim W. Dean, managing editor and columnist at Veterans Today.

Dean’s interview with the U.S. Desk on Saturday was in response to report that the IRS allegedly demanded two pro-life organizations to reveal the content of their prayers and prayer meetings, according to the Thomas More Society.

An IRS office in California ordered Christian Voices for Life of Fort Bend County, Texas to explain the content of prayers “as if they were engaging in highly offensive or criminal behavior,” the Thomas More Society said.

Agents also ordered Coalition for Life of Iowa to provide detailed information about the group’s prayer meetings.

Dean said “what we have here is a classical situation of a government institution out of control.” He added “this is just an outrage that in 2013 this can go on inside an agency like the IRS.”

Steven Miller, Washington's top tax official was fired on Wednesday as President Barack Obama sought to stem the rising tide of criticism over the IRS’s targeting of conservative groups for special scrutiny.

President Obama said on Thursday that he appointed Daniel Werfel, the current controller of the Office of Management and Budget, to succeed Miller as acting IRS commissioner.

U.S. Conservatives groups have complained about mistreatment by the IRS for years.

AHT/HJ

[PAULYPOKER]

Complaints of IRS targeting by religious groups on the rise



The number of religious groups reporting they were improperly targeted by the Internal Revenue Service (IRS) is increasing.

At least a half-dozen conservative groups say they received an unusual degree of scrutiny from the IRS, according to the Religion News Service, a non-profit news service operated out of the University of Missouri’s journalism school.

Earlier this week Rev. Billy Graham’s son made headlines with a letter to President Obama accusing the administration of targeting the Samaritan's Purse charity and the Billy Graham Evangelistic Association in an attempt to intimidate the group.

Since then, the Catholics United Education Fund and the Christian Voices for Life have reported significant delays in their applications for tax-exempt status from the IRS.

The Coalition for Life of Iowa also said that it took unusually long to receive their tax exempt status, according to the Thomas More Society, a non-profit group focused on supporting pro-life causes.

At a House hearing investigating the IRS abuses on Friday, Rep. Aaron Schock (R-Ill.) called attention to The Coalition for Life of Iowa’s complaint, citing one particular question that the group was asked by the agency.

“Their question, specifically asked from the IRS to the Coalition for Life of Iowa: ‘Please detail the content of the members of your organization’s prayers. Would that be an inappropriate question to a 501 c3 applicant? The content of one’s prayers?” asked Schock of the IRS’s former acting commissioner, Steven Miller.

Additionally, a North Carolina newsletter, the Biblical Recorder, reported receiving an audit after coming out in support of a state amendment banning gay marriage.

Graham’s group also links its allegations of being targeted by the IRS to its support of the North Carolina amendment as well as Ohio newspaper ads calling on voters to back gay marriage opponents at the polls. The group said it received a notice last year informing officials that the IRS would be reviewing their actions.

A conservative Jewish group, Z Street, operated out of Pennsylvania, also alleged that it was unfairly targeted by the IRS. The group filed a lawsuit in the U.S. District Court of D.C. in 2010 objecting to the delay and what it calls additional layers of scrutiny.

The IRS revealed earlier this week that it had devoted extra levels of scrutiny to conservative groups with words such as “Tea Party” or “patriots” in their titles as they sought to gain tax-exempt status from the agency.

The White House has adamantly said that it did not know anything about the practices, which have become the focus of separate FBI and congressional investigations. The Hill

AGB/HJ

[PAULYPOKER]

In IRS scandal, why is any political group exempt from taxes?
________________________________________ ____________________________________
I'll tell ya why...

The game is rigged for the selected Elite and if you are not on this precious list,your wealth will disappear,this is a certainty...........

It is just a matter of time..

Put your head between your legs and kiss your a$$ goodbye..........
________________________________________ _______________________________________




The Internal Revenue Service is under fire for giving extra scrutiny to conservative organizations that asked for tax-exempt status. But the scandal begs a broader question: Why are political organizations getting this government subsidy anyway?

The section of the tax code sought by the tea party groups was established for the benefit of groups that promote social welfare, generally nonprofit operations. Examples on the IRS website involve community service and groups that provide a certain local benefit.

Somewhere along the line, this longstanding classification has become a loophole exploited by groups seeking to elect Democrats, Republicans and most recently tea party candidates and like-minded groups.

Search the membership of state associations of nonprofit organizations and you’ll have to work to find any that are political in nature. The California Association of Nonprofits in San Francisco lists online more than 1,400 members, yet none have patriot, tea party, progressive or similarly political names.

Yet compare that against the applications in recent years to the IRS for this special tax-exempt status, and a good percentage of the applications appear to be organizations that are decidedly political in nature.

The IRS late Wednesday released the names of 176 applications it had approved through May 9 in its controversial specialized review process. That process is at the heart of the controversy since specialists were flagging applications that had tea party, patriot and other politically charged conservative names.

The 176 approved applications include dozens of tea party groups, as well as others with innocuous names such as Charlotte Matters, Kentucky 912 Project and Miami-Dade Taxpayers Alliance. Some appear overtly political, such as the Coalition for a Conservative Majority, both the Denver and Colorado Springs chapters, and Progressives United Inc.

All were applying for a tax-exempt designation under section 501 (c) of the tax code. This section has at least 25 tax-exempt designations, and the tea party groups were applying under a provision - 501 (c) 4 - that would treat them as social welfare organizations. This allows the groups to raise money from donors and get involved in politics, as long as that’s not their primary activity. Importantly, the donors are not disclosed publicly.

Among the existing 501 (c) 4 organizations are giant election-influencing political entities such as Crossroads GPS and Americans for Prosperity on the right, and the pro-Obama Organizing for America and Priorities USA on the left.

“There are two IRS scandals. The other is the IRS allowing big shadowy forces to meddle in elections anonymously through front groups that file false statements with the IRS,” Sen. Sheldon Whitehouse, D-R.I., said on the Senate floor Wednesday.

The investigative website ProPublica last year spotlighted the growing role of these shadowy groups and their “dark money” on campaign finance, noting that as the 2012 election approached they’d outspent traditional political action committees in the purchase of campaign ads.

Senate Finance Committee Chairman Max Baucus, D-Mont., scheduled a hearing for next week and intends to look beyond the narrower question of tea party targeting by the IRS.

“There is another important question that needs to be asked: Is there a fault in the tax code that may have contributed to the IRS taking such unacceptable steps? Do we need a better definition of what organizations qualify for tax exemptions?” Baucus asked.

House Minority Leader Nancy Pelosi, D-Calif., said Thursday that she’ll push for a legal change that returns the 501 (c) 4 to its original intention of promoting social welfare.

“So from my standpoint, I think that they should not have any political purpose. And I would hope that we could change the law on that,” Pelosi said.

Republicans aren’t talking about legal changes, instead keeping the heat squarely on the IRS behavior under existing law.

“I want to know how this happened, who was responsible for it,” House Speaker John Boehner, R-Ohio, said Thursday. “Section 7214 of the Title 26 of the U.S. Code states very clearly any officer or employee of the United States acting in connection with any revenue law of the United States who is guilty of extortion or willful oppression under the color of law shall be dismissed from office and, if convicted, be fined up to $10,000 and spend five years in jail.”

A report by the Treasury Department’s inspector general for tax administration faulted the IRS for using unclear criteria to determine tax-exempt status and recommended definitions that are more specific when an application for tax-exempt status is flagged for scrutiny.

“A lot of it is guesswork, and that’s what makes it difficult. There’s also a question of what the IRS should be doing,” said Jeremy Koulish, a researcher at the Center for Non-Profits and Philanthropy at the Urban Institute, a centrist policy think tank. “Somebody has to decide whether organizations deserve the status they are getting, and that has fallen to the IRS. But because the regulatory environment is so muddy, the evidence suggests we need more clarity in the rules.”

Earl Copilevitz isn’t so sure about that. The senior partner in the Kansas City, Mo., law firm of Copilevitz & Canter has helped establish tax-exempt organizations for years. Most of the groups that sound political in nature, he cautioned, still meet the criteria of providing a social welfare function through their education and outreach efforts.

“That’s the mouse hole they’re going through to justify the tax-exempt status,” he said, noting that issues such as gun control or abortion are closely linked to the political debate but still involve a strong social welfare component.

On the issue of qualification, the IRS itself offers a very broad disclaimer.

“Although the service has been making an effort to refine and clarify this area, (section) 501(c)(4) remains in some degree a catch-all for presumptively beneficial nonprofit organizations that resist classification under the other exempting provisions of the code,” the agency noted. “Unfortunately, this condition exists because ‘social welfare’ is inherently an abstruse concept that continues to defy precise definition.”

A tax-exempt designation for social welfare groups dates back to the Tariff Act of 1913, in part because of a push by the U.S. Chamber of Commerce for exclusion of civic groups and organizations that promoted commerce. That same year, the 16th Amendment was ratified, allowing Congress to levy federal taxes, the modern income tax was born and the tax-exempt designation gravitated to the new tax code.

For much of its history, groups under this designation were as advertised. But over the past decade, applications for this designation took on a decidedly more political nature. There were 2,774 applications for the special tax-exempt status in fiscal 2012, vs. 2,033 in fiscal 2000.

AT/HJ

[PAULYPOKER]

Banks delay to help mortgage victims



Banks have paid less than half the $5.7 billion in cash owed to troubled homeowners under nearly 30 settlements brokered by the government since 2008, delaying help to the millions of victims of discrimination and shoddy lending that epitomized the housing crisis, according to a Washington Post analysis of government data.

When the settlements were announced, with great fanfare, government officials hailed them as the long-promised reckoning with the financial industry. Regulators found that some banks had saddled borrowers with unaffordable mortgages or assigned higher rates to minorities even when they qualified for a better deal. Some banks were accused of having employees “robo-sign” foreclosure documents without reading them or having proper documentation.

But consumer advocates and lawmakers have grown increasingly frustrated by the delays in releasing the settlement funds, which they say are making it difficult for some borrowers to recover financially.

In 2011, Wells Fargo agreed to compensate up to 10,000 borrowers after the Federal Reserve found the bank was steering them into subprime loans even though they qualified for better mortgages. But no borrowers have received money yet.

Last year, BkofAma agreed to pay some borrowers between $1,000 and $5,000 for what the Justice Department called lending discrimination. The agency said the bank illegally asked some would-be home buyers who relied on disability income to provide a doctor’s letter verifying the severity of their ailment. But it’s still unclear how many people will ultimately be paid. There isn’t a full list of the victims.

The agreements are coming under increased scrutiny from state authorities who are concerned the banks are not living up to their obligations to help homeowners. The New York attorney general recently threatened to take BkofAma and Wells Fargo to court to force the banks to comply with a large national agreement to offer struggling borrowers help.

“These settlements are a reflection of the dismal response from the federal government and the banks to consumers who got bad mortgages,” said John Taylor, chief executive of the National Community Reinvestment Coalition, a consumer advocacy group. “Their needs got pushed behind taking care of the banks.”

Banking industry officials and regulators say the scale and complexity of the settlements have grown over the years, making them difficult to execute quickly. They can involve multiple agencies, banks, lawyers and consultants. In some cases, banks are still identifying people affected or waiting for borrowers to respond to notifications of eligibility. There are also a number of cases in which banks have yet to zero in on how much they will pay out.

“There’s a common misunderstanding that all this information is readily available and banks can just push a button and get the checks printed, and that’s not the case,” said Gilbert Schwartz, a banking lawyer at Schwartz & Ballen. “It requires thorough review, confirmation and validation that the amounts and the people receiving it are accurate.” Washington Post

AN/ARA

[PAULYPOKER]

Poverty rate exploding in US suburbs



The face of American poverty is now a suburban one, according to new research from the Brookings Institution.

Researchers found that the number of people living in poverty in the suburbs soared 64% between 2000 and 2010, more than twice the rate of urban areas-meaning that now more poor people live in suburbs than in cities or rural areas, although the overall poverty rate remains higher in cities, the Miami Herald reports.

Researchers say the explosion in suburban poverty is the result of many factors, including the housing bust, urban gentrification, and the loss of manufacturing jobs.

In places like Orange County, California, "everything is nicely maintained. Things look good on the surface," the director of a charity helping struggling families tells the LA Times. "But the need has just skyrocketed." Newser

FACTS & FIGURES

Brookings researchers cited a lack of reliable public transportation, thinly spread safety nets designed to help those most in need, and a lack of access to living-wage jobs among other reasons for the rise in poverty in the suburbs. Seattle Times

“When people think of poverty in America, they tend to think of inner city neighborhoods or isolated rural communities,’’ researchers said in a statement released by Brookings. “Poverty is touching more people and places than before, challenging outdated notions of where poverty is and who it affects.’’ Miami Herald

In the Philadelphia area as elsewhere, the reasons for growth in suburban poverty are described by Brookings as the loss of jobs during the recession and its aftermath, the impact of foreclosures, and a growing population of lower-income immigrants moving to the suburbs. Philly.com

The increasing number of poor in Philadelphia's suburbs means "the middle class, which traditionally moved to the suburbs over the last 40 years, has nowhere left to run to anymore as poverty becomes more of a suburban phenomenon," Alan Berube, a senior fellow at Brookings, said in an interview. Philly.com

Millions of Americans suffered a loss of wealth during the recession and the sluggish recovery that followed. But the last half-decade has proved far worse for black and Hispanic families than for white families, starkly widening the already large gulf in wealth between non-Hispanic white Americans and most minority groups, according to a new study from the Urban Institute. The New York Times

A top Federal Reserve policymaker has raised the possibility that rising inequality may restrain economic growth for several years in a sign the central bank may be worried about the increasing gap between the rich and poor. Huffington Post



AHT/AGB

[PAULYPOKER]

‘Extraordinary measures’ become standard as debt limit hit again


The United States bumped up against its borrowing limit Sunday, forcing the Treasury Department to employ “extraordinary measures” to make sure the government keeps paying its bills.

After a brief hiatus, the nation’s debt limit has returned as a major hurdle for Washington to overcome, and one that will play a central role in fiscal fights heading into the fall.

Congress agreed to suspend the nation’s $16.4 trillion borrowing limit the last time they approached it, at the beginning of the year. But that suspension expired May 19, and the limit was automatically boosted to cover the borrowing the Treasury incurred during that break that was subject to the limit.

The latest numbers from the Treasury Department indicate that limit will automatically jump about $300 billion to roughly $16.7 trillion.

With the government once again operating under a borrowing cap, the Treasury is back to employing special measures to free up space under the limit.

In a nod to how common debt-limit battles have become in recent years, Treasury Secretary Jack Lew told Congress Friday he was prepared to deploy the “standard set of extraordinary measures”.

On Friday, the Treasury stopped issuing State and Local Government Series securities (SLGS). State and local governments buy the securities as they work to refund municipal bond deals. Issuing those securities takes up space under the debt limit.

The Treasury also has the power to halt new investments in federal employee retirement funds, which would be reimbursed once the limit is hiked. It also can stop reinvesting in its Exchange Stabilization Fund used to buy and sell foreign currencies. All these moves can free up billions of dollars the government can use to meet critical bills, and give Washington time to strike a debt-limit compromise.

Lew informed Congress that the debt limit would again be in an issue in a letter sent Friday. He told congressional leaders that the Treasury is preparing to employ its extraordinary measures to free up room to maneuver under the cap, and gave a hint as tohow long Congress could haggle over raising it before a damaging default - after Labor Day.

While pinpointing an exact deadline for a borrowing boost is difficult due to “considerable uncertainty” about the government’s cash flow, Lew was confident the government could stay current until at least after the September holiday, after early estimates indicated lawmakers would be duking it out in the summer.

Lew also used the letter to offer up the White House’s initial offer in exchange for a debt-limit increase - no offer at all. Like his predecessor, Timothy Geithner, Lew was adamant that the debt limit is a matter too serious to be used as a bargaining chip, and maintained that any fiscal talks should be done separate from raising the ceiling.

But Republicans are again adamant that the debt limit be used to force fiscal concessions. While no specific demands have been made, entitlement cuts or ways to set a framework for tax reform are expected to play a role as bargaining chips in the months to come.

The good news is that the debt limit standoff can last longer than first estimated. Increased tax revenue, combined with trimmed spending brought on by the sequester, is painting a rosier fiscal picture for the Treasury to operate within.

The CBO estimated earlier this week that the deficit will be $642 billion this year - $200 billion less than previously estimated three months ago. Because of increased revenue, the U.S. will be able to take extraordinary measures to avoid hitting the $16.4 trillion debt ceiling until October or November, the CBO said. The Hill


FACTS & FIGURES

IMF chief Christine Lagarde has said the U.S. government's debt reduction plans are too abrupt, including the $85 billion in federal budget cuts known as the sequester. She said the current policies, if maintained, could lead to a contraction of 1.5 percent in the U.S. economy. AP

Treasury Secretary Jacob Lew has told Congress that the administration will begin taking steps next week to avoid a default on the nation's debt until Congress votes to raise the government's borrowing limit.

Lew repeated the administration's position that it doesn't intend to negotiate with Congress over the debt limit. A previous debt standoff in 2011 resulted in a decision by Standard & Poor's to downgrade the government's long-term credit for the first time. AP

The non-partisan Congressional Budget Office on May 17 said President Obama’s 2014 budget proposal would add $5.2 trillion in deficits over 10 years. The Hill

The CBO reports $3 billion more in spending than the White House claimed and $79 billion more in revenue over 10 years. The office said the Obama blueprint would increase the deficit this year by $27 billion, to $669 billion, and by $115 billion in 2014, to a total of $615 billion. The Hill




ARA/DB

[Grits n' Gravy]

Can't read all of Pauly's shit but the writer he is referring to in original post, Matt Tabbibi, is one of the most intelligent journalists around. He breaks things down into terms and concepts almost everyone can understand.

[PAULYPOKER]

Federal execs to get millions despite cuts



Despite the sequester-huge cutbacks in federal spending that were mandated by law in March-some high-level Federal executives are scheduled to get millions of dollars in bonuses, unless there's a law to stop them.

According to a report released Friday by the Senate Subcommittee on Financial and Contracting Oversight, the bonuses must be paid under current Congressional regulations, even with some $85 billion in government funding cuts in effect.

Senator Claire McCaskill, (D-Mo) chairperson of the subcommittee, has introduced legislation to prevent the bonuses from being handed out during the sequester. Senators Tom Coburn (R-OK) and Ron Johnson (R-WIS) are co-sponsors of the legislation.

""The idea that some of the highest paid federal government employees could be getting bonuses while others are being furloughed is outrageous," said McCaskill, on her web site. "This legislation will ensure that doesn't happen."

The bonuses would go to Senior Executive Service employees who meet certain performance criteria. The group makes up less than one percent of the federal workforce.

The SES was created in 1978 as part of a civil service reform act and is made up of executives who serve in positions just below presidential appointees. They oversee nearly 75 federal agencies.

According to the report, some $340 million in bonuses were paid out to SES members from 2008 to 2011. The bonuses came on top of annual salaries ranging from $119,000 to $179,000.

Bonuses for the vast majority of federal workers were frozen by President Obama in April because of the sequester.

In 2011, more than 6,300 cash bonuses were paid to SES members in 2011, for a total of $78 million. Among those receiving the rewards were the Nuclear Regulatory Commission, which paid more than $16,000 per worker. The Department of the Navy paid $13,000 per SES member in 2011, according to the report.

Singled out by the committee's study in handing out large bonuses was the General Services Administration, which helps manage and support the basic functioning of federal agencies. That includes finding office space, providing supplies and transportation for workers.

The GSA spent some $1.1 million in bonuses in 2011 and each SES member received an average of 1.6 bonuses for the year. The GSA has come under scrutiny in the past for its bonuses and for staging a $835,000 training conference in Las Vegas that many criticized as a misuse of federal funds.

"Last year as part of a review of all agency operations, Acting Administrator Dan Tangherlini cut executive bonuses by 85 percent," said GSA spokesman Dan Cruz in an email. CNBC

AHT/ARA

Press TV

[PAULYPOKER]

Financial lobbying controls US government: Former US senator

Former U.S. senator Mike Gravel says the United States government is being controlled by certain financial lobbying groups.

“It’s obviously the military-industrial complex and the Wall Street that control our government and the growth of its power is to protect power that they already have,” he said in a phone interview with Press TV’s U.S. Desk on Monday.

“There is still question that the American government has grown certainly beyond its means and with the exercise of power within military and within the economic arena,” the former senator said.

He made the comments after a new poll conducted by Gallup showed that the majority of Americans believe the federal government has too much power.

According to the survey, more than twice as many Republicans (76%) as Democrats (32%) say the government has too much power.

“This is not in the best interests of the American people and they react to this in polls, but they have not chosen to react to it in any substantial revolutionary fashion,” Gravel said.

AGB/AGB

[PAULYPOKER]

Banks’ lobbyists help in drafting financial bills


Kenneth E. Bentsen Jr., left, a Wall Street lobbyist,
at a House financial services panel meeting.

Bank lobbyists are not leaving it to lawmakers to draft legislation that softens financial regulations; instead, the lobbyists are helping to write it themselves.

One bill that sailed through the House Financial Services Committee this month - over the objections of the Treasury Department - was essentially Citigroup’s, according to e-mails reviewed by The New York Times. The bill would exempt broad swathes of trades from new regulation.

In a sign of Wall Street’s influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)

The lobbying campaign shows how, three years after Congress passed the most comprehensive overhaul of regulation since the Depression, Wall Street is finding Washington a friendlier place.

The cordial relations now include a growing number of Democrats in both the House and the Senate, whose support the banks need if they want to roll back parts of the 2010 financial overhaul, known as Dodd-Frank.

This legislative push is a second front, with Wall Street’s other battle being waged against regulators who are drafting detailed rules allowing them to enforce the law.

And as its lobbying campaign steps up, the financial industry has doubled its already considerable giving to political causes. The lawmakers who this month supported the bills championed by Wall Street received twice as much in contributions from financial institutions compared with those who opposed them, according to an analysis of campaign finance records performed by MapLight, a nonprofit group.

In recent weeks, Wall Street groups also held fund-raisers for lawmakers who co-sponsored the bills. At one dinner Wednesday night, corporate executives and lobbyists paid up to $2,500 to dine in a private room of a Greek restaurant just blocks from the Capitol with Representative Sean Patrick Maloney, Democrat of New York, a co-sponsor of the bill championed by Citigroup.

Industry officials acknowledged that they played a role in drafting the legislation, but argued that the practice was common in Washington. Some of the changes, they say, have gained wide support, including from Ben S. Bernanke, the Federal Reserve chairman. The changes, they added, were in an effort to reach a compromise over the bills, not to undermine Dodd-Frank.

“We will provide input if we see a bill and it is something we have interest in,” said Kenneth E. Bentsen Jr., a former lawmaker turned Wall Street lobbyist, who now serves as president of the Securities Industry and Financial Markets Association, or Sifma.

The close ties hardly surprise Wall Street critics, who have long warned that the banks - whose small armies of lobbyists include dozens of former Capitol Hill aides - possess outsize influence in Washington.

“The huge machinery of Wall Street information and analysis skews the thinking of Congress,” said Jeff Connaughton, who has been both a lobbyist and Congressional staff member.

Lawmakers who supported the industry-backed bills said they did so because the effort was in the public interest. Yet some agreed that the relationship with corporate groups was at times uncomfortable.

“I won’t dispute for one second the problems of a system that demands immense amount of fund-raisers by its legislators,” said Representative Jim Himes, a third-term Democrat of Connecticut, who supported the recent industry-backed bills and leads the party’s fund-raising effort in the House. A member of the Financial Services Committee and a former banker at Goldman Sachs, he is one of the top recipients of Wall Street donations. “It’s appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and corruption. It’s unfortunately the world we live in.”

The passage of the Dodd-Frank Act, which took aim at culprits of the financial crisis like lax mortgage lending and the $700 trillion derivatives market, ushered in a new phase of Wall Street lobbying. Over the last three years, bank lobbyists have blitzed the regulatory agencies writing rules under Dodd-Frank, chipping away at some regulations.

But the industry lobbyists also realized that Congress can play a critical role in the campaign to mute Dodd-Frank.

The House Financial Services Committee has been a natural target. Not only is it controlled by Republicans, who had opposed Dodd-Frank, but freshmen lawmakers are often appointed to the unusually large committee because it is seen as a helpful base from which they can raise campaign funds.

For Wall Street, the committee is a place to push back against Dodd-Frank. When banks and other corporations, for example, feared that regulators would demand new scrutiny of derivatives trades, they appealed to the committee. At the time, regulators were completing Dodd-Frank’s overhaul of derivatives, contracts that allow companies to either speculate in the markets or protect against risk. Derivatives had pushed the insurance giant American International Group to the brink of collapse in 2008. The question was whether regulators would exempt certain in-house derivatives trades between affiliates of big banks.

As the House committee was drafting a bill that would force regulators to exempt many such trades, corporate lawyers like Michael Bopp weighed in with their suggested changes, according to e-mails reviewed by The Times. At one point, when a House aide sent a potential compromise to Mr. Bopp, he replied with additional tweaks.

In an interview, Mr. Bopp explained that he drafted the proposal at the request of Congressional aides, who expressed broad support for the change. The proposal, he explained, was a “compromise” that was actually designed to “limit the scope” of the exemption.

“Everyone on the Hill wanted this bill, but they wanted to make sure it wasn’t subject to abuse,” said Mr. Bopp, a partner at the law firm Gibson, Dunn who was representing a coalition of nonfinancial corporations that use derivatives to hedge their risk.

Ultimately, the committee inserted every word of Mr. Bopp’s suggestion into a 2012 version of the bill that passed the House, save for a slight change in phrasing. A later iteration of the bill, passed by the House committee earlier this month, also included some of the same wording.

And when federal regulators in April released a rule governing such trades, it was significantly less demanding than the industry had feared, a decision that the industry partly attributed to pressure stemming from Capitol Hill.

Citigroup and other major banks used a similar approach on another derivatives bill. Under Dodd-Frank, banks must push some derivatives trading into separate units that are not backed by the government’s insurance fund. The goal was to isolate this risky trading.

The provision exempted many derivatives from the requirement, but some Republicans proposed striking the so-called push out provision altogether. After objections were raised about the Republican plan, Citigroup lobbyists sent around the bank’s own compromise proposal that simply exempted a wider array of derivatives. That recommendation, put forth in late 2011, was largely part of the bill approved by the House committee on May 7 and is now pending before both the Senate and the House.

Citigroup executives said the change they advocated was good for the financial system, not just the bank.

“This view is shared not just by the industry but from leaders such as Federal Reserve Chairman Ben Bernanke,” said Molly Millerwise Meiners, a Citigroup spokeswoman.

Industry executives said that the changes - which were drafted in consultation with other major industry banks - will make the financial system more secure, as the derivatives trading that takes place inside the bank is subject to much greater scrutiny.

Representative Maxine Waters, the ranking Democrat on the Financial Services Committee, was among the few Democrats opposing the change, echoing the concerns of consumer groups.

“The bill restores the public subsidy to exotic Wall Street activities,” said Marcus Stanley, the policy director of Americans for Financial Reform, a nonprofit group.

But most of the Democrats on the committee, along with 31 Republicans, came to the industry’s defense, including the seven freshmen Democrats - most of whom have started to receive donations this year from political action committees of Goldman Sachs, Wells Fargo and other financial institutions, records show.

Six days after the vote, several freshmen Democrats were in New York to meet with bank executives, a tour organized by Representative Joe Crowley, who helps lead the House Democrats’ fund-raising committee. The trip was planned before the votes, and was not a fund-raiser, but it gave the lawmakers a chance to meet with Wall Street’s elite.

In addition to a tour of Goldman’s Lower Manhattan headquarters, and a meeting with Lloyd C. Blankfein, the bank’s chief executive, the lawmakers went to JPMorgan’s Park Avenue office. There, they chatted with Jamie Dimon, the bank’s chief, about Dodd-Frank and immigration reform.

The bank chief also delivered something of a pep talk.

“America has the widest, deepest and most transparent capital markets in the world,” he said. “Washington has been dealt a good hand.”

AT/HJ

[PAULYPOKER]

Goldman Sachs CEO overpaid!
Goldman Sachs CEO awarded $26mn in 2012!



Goldman Sachs CEO Lloyd Blankfein was awarded $26 million dollars for his “performance” in 2012 while the firm slashed 900 jobs over the same period.

According to data compiled by Bloomberg, Blankfein was ranked first among 20 highest-paid North American CEOs.

The 20 CEOs’ pay increased 7.7 percent on average in 2012, compared to the previous year. Researchers included salary, stocks, and bonuses awarded for each CEO. The analysis showed that Blankfein was surprisingly awarded a 73.3 percent pay increase.

“We strongly believe in linking executive pay to performance, and the variability of executive pay at the company over the past few years is a testament to that,” said Goldman Sachs spokesman David Wells, justifying the high pay increase.

A report released earlier in May by the Senate Subcommittee on Financial and Contracting Oversight revealed that some high-level federal executives were scheduled to get millions of dollars in bonuses too, despite the sequester-huge cutbacks in federal spending.

Some $340 million in bonuses were paid out to Senior Executive Service employees that make up less than one percent of the federal workforce, from 2008 to 2011, the report said.

The bonuses came on top of annual salaries as bonuses for the vast majority of federal workers were frozen by President Obama in April because of the sequester, according to CNBC.

ISH/ARA