Banks Rule – and Ruin

Matt Taibbi, in his last piece for Rolling Stone, wakes us to the next, higher, floor of corporate corruption:

…banks aren’t just buying stuff, they’re buying whole industrial processes. They’re buying oil that’s still in the ground, the tankers that move it across the sea, the refineries that turn it into fuel, and the pipelines that bring it to your home. Then, just for kicks, they’re also betting on the timing and efficiency of these same industrial processes in the financial markets – buying and selling oil stocks on the stock exchange, oil futures on the futures market, swaps on the swaps market, etc.

Allowing one company to control the supply of crucial physical commodities, and also trade in the financial products that might be related to those markets, is an open invitation to commit mass manipulation. It’s something akin to letting casino owners who take book on NFL games during the week also coach all the teams on Sundays.

The situation has opened a Pandora’s box of horrifying new corruption possibilities, but it’s been hard for the public to notice, since regulators have struggled to put even the slightest dent in Wall Street’s older, more familiar scams. In just the past few years we’ve seen an explosion of scandals – from the multitrillion-dollar Libor saga (major international banks gaming world interest rates), to the more recent foreign-currency-exchange fiasco (many of the same banks suspected of rigging prices in the $5.3-trillion-a-day currency markets), to lesser scandals involving manipulation of interest-rate swaps, and gold and silver prices.

But those are purely financial schemes. In these new, even scarier kinds of manipulations, banks that own whole chains of physical business interests have been caught rigging prices in those industries. For instance, in just the past two years, fines in excess of $400 million have been levied against both JPMorgan Chase and Barclays for allegedly manipulating the delivery of electricity in several states, including California.

Rolling Stone:

Taibbi will be missed.  Here’s a link to his archive.

Corporate Vacuum of Personal Data

From The Daily Banter.

“Since June, when the first leaks from Edward Snowden went public and a debate about the National Security Agency’s activities resumed, there’s been very little if any discussion about the unchecked, unaccountable use of corporate surveillance against consumers and citizens in general.

Corporations engaged in the collection of customer data are each their own NSA, without the oversight. There’s no equivalent of the FISA Court; no warrants; no requirements for minimization; it’s not restricted to anonymous metadata; and it’s everywhere.

Recently, a series of eye-opening examples of corporate surveillance popped up in the news with, of course, none of the accompanying public outrage that invariably careens at hyperspeed through the discourse every time another Snowden document drops. Here are just a few:  READ

Corporations and Stakeholders

Many people believe, improperly, the only obligation corporations have is to maximize shareholder returns. This is a belief encouraged by repetitive assertion and open eared credulity.

But there is “no law [that] requires corporations to maximize returns to share holders

In fact … No such law in any of the 50 states even raises the topic of maximizing shareholder returns. ”

The idea that corporations exist to reward their shareholders arose not in a body of law but from the work of ideologically driven economists. In 1970, Milton Friedman wrote that business properly had but one goal: to maximize profits. The same year, Friedman’s University of Chicago colleague Eugene Fama argued that a corporation’s share price was always the accurate reflection of the enterprise’s worth, an idea that trickled down into the belief that the proper goal of a corporation was to boost its share value — particularly after most CEO salaries and bonuses became linked to that value.

Read All at WaPo

McDonalds ♥ Vietnam

It is still amazing to read how recent enmities have receded into the distance, even if not quite forgotten, how people who were thought to be the devil incarnate yesterday are happy customers, if not friends, today.  Here, yet another example.

McDonald’s, the fast-food giant, which has restaurants in more than 100 countries and will open its first Vietnam location on Saturday in downtown Ho Chi Minh City.

Vietnam has a surging middle class, and most of its 90 million citizens were born after the Vietnam War ended, in 1975. Many young Vietnamese are insatiably curious about foreign cuisine and culture, like kebabs and K-pop, and the McDonald’s opening has been widely discussed on Vietnamese websites in recent weeks.


The uncommented on tid-bit in the NY Times article is that  the ruling communist party has its entrepreneurial fingers deep in the growing pie.

McDonald’s waited a long time to open in Vietnam, given its global brand recognition and likely appeal to young Vietnamese consumers. When it did, it tagged Henry Nguyen, the son-in-law of Prime Minister Nguyen Tan Dung, as its local franchisee.

Everywhere we went on a two week trip to Vietnam in the spring of 2013, if a hotel or venue or location was high-class, the party higher-ups were behind it — the greatest example being the fine hotels, piers and boats at Ha Long bay, North Vietnam.  Everyone of these places has the party OK, if not direct investment by top officials.  Soon, Vietnam will have the same oligarch problem bringing the US economy into a state of ruin.

Court of Appeals Lifts the Curtain on Rogue Judge

Former U.S. District Judge Richard Cebull, of Montana, sent emails to personal and professional contacts that showed disdain for blacks, Indians, Hispanics, women, certain religious faiths, liberal political leaders, and some emails contained inappropriate jokes about sexual orientation, the Judicial Council of the 9th U.S. Circuit Court of Appeals found.

 Many of the emails also related to pending issues that could have come before Cebull’s court, such as immigration, gun control, civil rights, health care and environmental issues, the council found in its March 15, 2013, order.
Cebull retired at the end of last March, after the 9th Circuit Court of Appeals council, showed him their findings.  Once off the bench, the record was sealed — leaving the public without knowledge of years of very very injudicious behavior.

That prompted Judge Theodore McKee, the chief judge of the 3rd U.S. Circuit, to file a petition with the national Judicial Conference’s Committee on Judicial Conduct and Disability, asking the committee to review the council’s work and publish the original March 15 order.

Judge McKee argued that the 9th Circuit council’s subsequent rulings inappropriately concealed its original findings.

Good for Judge McKee and good, belatedly, for the council.  It turns out that

…hundreds of other inappropriate messages [were sent] from his federal email account, according to the findings of a judicial review panel released Friday.

SF Gate: Matt Volz/AP

West Virginia: Safety Ignored, Disaster Answers

CHARLESTON, W.Va. — The accidents kept coming and so did the calls for a plan to improve West Virginia’s chemical safety regulations.

Last week’s massive chemical spill into West Virginia’s Elk River was the region’s third major chemical accident in five years. It comes after two investigations by the federal Chemical Safety Board in the Kanawha Valley, also known dryly as “Chemical Valley.”

And it comes on the heels of repeated recommendations from federal regulators and a local environmental advocacy group that the state adopt rules embraced in other communities to safeguard chemicals.

All of those recommendations died a quiet death with barely any consideration by state and local lawmakers, federal regulators and local environmental groups said.

Cambodia: Garment Workers End Strike

The latest strike by Cambodian garment workers has ended with most workers going back to work after two weeks, and violent responses by police killed three during demonstrations. NY Times

It is only the latest in a string of protests by the severely underpaid workers.

The Garment Manufacturers Association in Cambodia (GMAC) recorded 131 strikes last year, not counting December, when the recent national garment strike was declared. In 2011, the factory association logged 34 strikes for the entire year.

Although apparel manufacturing heavy weights such as Adidas, Levi Strauss and Puma have signed an open latter calling for negotiations to create a wage-review mechanism it is unclear if and how it will be answered.


Antibacterials = Antihealth?

Ever since the little plastic bottles with jelly-like stuff promising to keep us ultra clean and healthy began appearing I have been skeptical.  Really?  Ordinary soap and water isn’t good enough?  Really?  Paper dust on my fingers is going to make me sick?  Really?  We’ve begun to hear some doubts about these claims in the past few years, but it seems to have finally gotten some lead time…

After years of mounting concerns that the antibacterial chemicals that go into everyday items like soap and toothpaste are doing more harm than good, the Food and Drug Administration said on Monday that it was requiring soap manufacturers to demonstrate that the substances were safe or to take them out of the products altogether.

The proposal was applauded by public health experts, who for years have urged the agency to regulate antimicrobial chemicals, warning that they risk scrambling hormones in children and promoting drug-resistant infections, among other things. Producers argue that the substances have long been proved to be safe.

“It’s a big deal that they are taking this on,” said Rolf Halden, the director of the Center for Environmental Security at Arizona State University, who has been tracking the issue for years. “These antimicrobials have taken on a life all of their own,”

NY Times: Sabrina Tavernise

And that’s not all.  Not only do soaps and toothpastes promise health through bacteria bombing there are other issues with the stuff:

Tiny plastic beads used in hundreds of toiletries like facial scrubs and toothpastes are slipping through water treatment plants and turning up by the tens of millions in the Great Lakes. There, fish and other aquatic life eat them along with the pollutants they carry — which scientists fear could be working their way back up the food chain to humans.

Yes, there is such a thing as being too clean…

Sociopaths Explain

Paul Krugman has found some wildly over-the-top complaints from the richest sociopaths in America.

Robert Benmosche, the chief executive of the American International Group [AIG — you remember that?]  “compared the uproar over [executive] bonuses to lynchings in the Deep South — the real kind, involving murder — and declared that the bonus backlash was “just as bad and just as wrong.”


Oh, there’s more!

Consumer Protection: Three Fine Grants

During last year’s Massachusetts Senate race, the banking giant JPMorgan Chase heaped more than $80,000 on Sen. Elizabeth Warren’s opponent Scott Brown. And for good reason.

The consumer watch dog agency that she conceived of and helped get running announced Thursday that it has ordered JPMorgan Chase to pay $309 million to more than 2.1 million Americans it scammed, plus a penalty of $20 million.


The refund the CFPB ordered the bank to issue includes the total fraudulent fees charged, plus interest, and amounts to about $147 a person. [A $50 is a Grant…]