Saturday, February 22, 2014

Credit Suisse Admits Guilt in Settling With S.E.C. -

Credit Suisse Admits Guilt in Settling With S.E.C. -

"Credit Suisse on Friday became the latest big bank to admit wrongdoing to the Securities and Exchange Commission, striking a deal over its failure to comply with a cardinal rule of the financial industry.

The bank, based in Zurich, was accused of
advising clients in the United States without first registering at the
S.E.C. Credit Suisse paid $196 million to settle with the federal
agency, which requires banks and other firms that offer investment
advice to comply with basic registration rules.
“The broker-dealer and investment adviser
registration provisions are core protections for investors,” Andrew J.
Ceresney, director of the S.E.C.’s enforcement division, said in a
While the penalty is significant, the
admission of wrongdoing underscored the importance of the case. It is
the fifth such admission since the S.E.C. — in an important reversal —
modified its longstanding policy of letting defendants settle without
“admitting or denying” wrongdoing."

Fed knew about Libor rigging in 2008 - Telegraph

Fed knew about Libor rigging in 2008 - Telegraph


The US Federal Reserve knew about Libor rigging three years before the
financial scandal exploded but did not take any firm action, documents have

According to newly published transcripts of the central bank’s meetings in the
run-up to and immediate aftermath of the collapse of Lehman Brothers, a
senior Fed official first flagged the issue at a policy meeting in April

William Dudley expressed fears that banks were being dishonest in the way they
were calculating the London interbank offered rate – a global benchmark
interest rate used as the basis for trillions of pounds of loans and
financial contracts.

“There is considerable evidence that the official Libor fixing understates the
rates paid by many banks for funding,” he said.

He added that a newspaper report, which lifted the lid on some degree of
manipulation, appeared to have triggered “an outbreak of veracity among at
least some” bankers, who started reporting accurately the interest rates
they offer each other, which are used to calculate Libor.

Three years after his remarks, it emerged that traders at more than a dozen
banks, including Lloyds, Royal Bank of Scotland and Barclays, had routinely
been trying to fix the official Libor rate in order to boost their own
bonuses and profits.

The scandal impacted the finances of tens of millions of ordinary households
and businesses, and dealt a devastating blow to the banking industry.
Financial institutions have paid more than $5bn (£3bn) in fines to settle
the matter with regulators in the US, UK and the European Union. A dozen
individuals have been criminally charged, and many others lost their jobs –
including Barclays’ chief executive Bob Diamond and chairman Marcus Agius,
who both resigned over the issue.

The transcript of the Fed’s April 2008 meeting raises questions about why the
central bank did not move to properly tackle the scandal. There was no
official regulator for Libor at the time, and officials at the US Federal
Reserve tried to blame British authorities for allowing the benchmark
interest rate to get out of control in the first place."

Get Off the (Google) Bus · LRB

A look at the Google bus blockade in SFO -

Get Off the Bus · LRB 20 February 2014 - Rebecca Solnit

"One of the curious things about the crisis in San Francisco –
precipitated by a huge influx of well-paid tech workers driving up
housing costs and causing evictions, gentrification and cultural change –
is that they seem unable to understand why many locals don’t love them.
They’re convinced that they are members of the tribe. Their confusion
may issue from Silicon Valley’s own favourite stories about itself.
These days in TED talks and tech-world conversation, commerce is
described as art and as revolution and huge corporations are portrayed
as agents of the counterculture.

That may actually have been the
case, briefly, in the popular tech Genesis story according to which
Apple emerged from a garage somewhere at the south end of the San
Francisco Peninsula, not yet known as Silicon Valley. But Google set
itself up with the help of a $4.5 million dollar government subsidy, and
Apple became a giant corporation that begat multimillion-dollar
advertising campaigns and overseas sweatshops and the rest that you
already know. Facebook, Google, eBay and Yahoo (though not Apple) belong
to the conservative anti-environmental political action committee Alec
(the American Legislative Exchange Council).

The story Silicon
Valley less often tells about itself has to do with dollar signs and
weapons systems. The industry came out of military contracting, and its
alliance with the Pentagon has never ended. The valley’s first major
firm, Hewlett-Packard, was a military contractor. One of its
co-founders, David Packard, was an undersecretary of defence in the
Nixon administration; his signal contribution as a civil servant was a
paper about overriding the laws preventing the imposition of martial
law. Many defence contractors have flourished in Silicon Valley in the
decades since: weapons contractors United Technologies and Lockheed
Martin, as well as sundry makers of drone, satellite and spying
equipment and military robotics. Silicon Valley made technology for the
military, and the military sponsored research that benefited Silicon
Valley. The first supercomputer, made by New York’s Remington Rand, was
for nuclear weapons research at the Bay Area’s Lawrence Livermore
National Laboratory.

The internet itself, people sometimes
remember, was created by the military, and publicly funded research has
done a lot to make the hardware, the software and the vast private
fortunes possible. Which you wouldn’t know from the hyperlibertarian
language of the tech world’s kings. Even the mildest of them, Bill
Gates, said in 1998: ‘There isn’t an industry in America that is more
creative, more alive and more competitive. And the amazing thing is that
all this happened without any government involvement.’ The current
lords talk of various kinds of secession, quite literally at the
Seasteading Institute, an organisation that’s looking into building
artificial islands outside all national laws and regulations. And taxes.
Let someone else subsidise all that research."



So there’s a disconnect in values and goals: Silicon Valley workers
seem to want to inhabit the anti-war, social-justice, mutual-aid heart
of San Francisco (and the Bay Area). To do so they often displace San
Franciscans from their homes. One often hears objections: it isn’t the
tech workers coming here who are carrying out the evictions. But they
are moving into homes from which people have been evicted. Ivory
collectors in China aren’t shooting elephants in Africa, but the
elephants are being shot for them. Native sons and daughters also work
in the industry, and many of the newcomers may be compassionate,
progressive people, but I have seen few signs of resistance, refusal to
participate, or even chagrin about their impact from within their ranks.

may be the year San Francisco turned on Silicon Valley and may be the
year the world did too. Edward Snowden’s revelations began to flow in
June: Silicon Valley was sharing our private data with the National
Security Agency. Many statements were made about how reluctantly it was
done, how outraged the executives were, but all the relevant companies –
Yahoo, Google, Facebook – complied without telling us. These days it
appears that the NSA is not their enemy so much as their rival; Facebook
and Google are themselves apparently harvesting far more data from us
than the US government. Last year, Facebook’s chief security officer
went to work for the NSA, and the New York Times said the move

the increasingly deep connections between Silicon Valley and the agency
and the degree to which they are now in the same business. Both hunt
for ways to collect, analyse and exploit large pools of data about
millions of Americans. The only difference is that the NSA does it for
intelligence, and Silicon Valley does it to make money.
corporations doing this are not the counterculture, or the underground
or bohemia, only the avant-garde of an Orwellian future.
City of
Refuge, a church serving people of colour and queer people, left San
Francisco, a city that has long considered itself a refuge, last
September and moved to Oakland. ‘It became clear,’ its pastor said,
‘what the neighbourhood was saying to us: This is not a haven for social
services.’ The current boom is dislodging bookstores, bars, Latino
businesses, black businesses, environmental and social-services groups,
as well as longtime residents, many of them disabled and elderly. Mary
Elizabeth Phillips, who arrived in San Francisco after getting married
in 1937, will be 98 when she is driven out of her home of more than half
a century.

In many other places eviction means you go and find a
comparable place to live: in San Francisco that’s impossible for anyone
who’s been here a while and is paying less than the market rate. Money
isn’t the only issue: even people who can pay huge sums can’t find
anything to rent, because the competition is so fierce. Jonathan Klein, a
travel-agency owner in his sixties living with Aids, jumped off the
Golden Gate Bridge last year after being driven out of his home, with
his business in the Castro facing eviction. ‘EVICTION = DEATH’, a sign at the memorial said, echoing the old ‘SILENCE = DEATH’ slogan of the Aids-activist era.

it comes to buying a home, your income needs to be nearly one and a
half times higher in San Francisco than in the next most expensive city
in the US. What began as vague anxiety a couple of years ago has turned
into fear, rage and grief. It has also driven people to develop
strategies aimed at changing the local and statewide laws that permit
the evictions.

When a Google bus was surrounded on 9 December, it made the news all
over the English-speaking world. Though what the blockaders wanted
wasn’t so easily heard. They were attacked as people who don’t like
carpools, by people who don’t get that the buses compete with public
transport and that their passengers displace economically vulnerable San
Franciscans. It’s as though death came riding in on a pale horse and
someone said: ‘What? You don’t like horses?’ Many of the displaced then
become commuters but they don’t have luxury coaches pulling up in their
neighbourhoods to take them to their jobs and schools in San Francisco:
they drive, or patch together routes on public transport, or sink into
oblivion and exile. So the Google bus and the Apple bus don’t reduce
commuting’s impact. They just transfer it to poorer people.

Francisco was excoriated again and again by lovers of development and
the free market for not being dense enough, on the grounds that if we
just built and built and built, everyone would be happily housed. ‘Let
San Francisco have the same housing density as Tokyo & Taipei, both
earthquake zones, then watch rental costs crater,’ a tech worker
tweeted. (His feed also features photographs of a toy mule, the mascot
of the company he works for, and occasional outbursts aimed at Edward
Snowden.) Another day he insisted with the blithe confidence Silicon
Valley seems to beget (as well as the oversimplification Twitter more or
less requires): ‘Higher minimum wage and looser, pro-development zoning
laws, housing problem in San Francisco goes away. Simple as that.’
(Minimum wage would have to be more than $50 an hour for someone to be
able to buy a house in San Francisco, or to ensure that a $3200 a month
rent accounted for no more than a third of their pre-tax income.)

Francisco is already the second densest major metropolitan area in the
US, but this isn’t mentioned much, nor is the fact that the densest, New
York, is also unaffordable and becoming more so even in its outer
boroughs, despite a building boom. Meanwhile San Francisco developers
are building 48,000 more units of housing in the few cracks and
interstices not already filled in, mostly upscale condominiums far out
of most people’s reach, and most of which won’t be available in time to
prevent the next round of evictions.

How do you diagnose what is
wrong with San Francisco now? People bandy about the word
‘gentrification’, a term usually used for neighbourhoods rather than
whole cities. You could say that San Francisco, like New York and other
US metropolises, is suffering the reversal of postwar white flight:
affluent people, many of them white, decided in the past few decades
that cities were nice places to live after all, and started to return,
pushing poorer people, many of them non-white, to the margins.

can also see the explosion as a variation on the new economic divide,
in which the few have more and more and the many have less and less: a
return to 19th-century social arrangements. (It gets forgotten that the
more generous arrangements of the 20th century, in much of Europe and
North America, were made in part to sedate insurrectionary fury from
below.) It’s the issue to which Occupy Wall Street drew our attention."



On the afternoon of 21 January, the city’s Municipal Transportation
Agency held a meeting to discuss putting in place a pilot programme to
study the impact of the buses and limit them to two hundred bus stops in
the city. As the San Francisco writer Anisse Gross has pointed out, if
you evade your fare on a bus, you get fined $110; if you pull a car in
at a bus stop, you get fined $271; if you just pay your fare it’s $2 per
person. But if you’re the Google bus you will now pay $1 to use the
public bus stop. This pissed off a lot of people at the hearing. Not
everyone, though. Google had dispatched some of its employees to

The corporation’s memo to the passengers had been leaked
the previous day. The memo encouraged them to go to the hearing on
company time and told them what to say:

If you do
choose to speak in favour of the proposal we thought you might
appreciate some guidance on what to say. Feel free to add your own style
and opinion:

My shuttle empowers my colleagues and I to reduce our carbon emissions by removing cars from the road.
If the shuttle programme didn’t exist, I would continue to live in San Francisco and drive to work on the peninsula.
I am a shuttle rider, SF resident, and I volunteer at …
idea of the memo was to make it seem that the luxury buses are
reducing, not increasing Silicon Valley’s impact on San Francisco. ‘It’s
not a luxury,’ one Google worker said of the bus: ‘It’s just a thing on
wheels that gets us to work.’ But a new study concludes that if the
buses weren’t available, half the workers wouldn’t drive their own cars
from San Francisco to Silicon Valley; nearly a third wouldn’t be willing
to live here and commute there at all.
There’s a new job category in San Francisco, though it’s probably a low-paying one: private security guard for the Google bus."

All the President’s Middlemen | The Nation

All the President’s Middlemen | The Nation

"Health-care isn’t the first boon that President Obama tried to give
us through a public-private partnership. When he took office, more than
25 percent of US home mortgages were underwater—meaning that people owed
more on their houses than they could get if they tried to sell them.
The president offered those homeowners debt relief through banks. Now
he’s offering healthcare through insurance companies.

In both cases, the administration shied away from direct government
aid. Instead, it subsidized private companies to serve the people. To
get your government-subsidized mortgage modification, you applied at
your bank; to get your government-mandated health coverage, you buy
private insurance.

Let a Hundred Middlemen Bloom
In other countries with national health plans, a variety of
independent healthcare providers—hospitals, doctors and clinics, among
others—deliver medical care, while the government doles out the
compensation. They let a hundred healthcare providers bloom, but there’s
only a single payer. If the US moved to single-payer healthcare, however, what would happen to the private health insurance business?

In the 1990s, the conservative Heritage Foundation floated the idea
of extending health coverage to more Americans via government exchanges
or “connectors
that would funnel individual buyers to competing, for-profit health
insurance companies. In other words, let a hundred middlemen bloom.

On the face of it, such a plan would seem expensive, since it means
supporting two bureaucracies, one of which would be obliged to take
profits for investors. Meanwhile, doctors would still have the expense
of trying to collect from multiple insurers with reasons to stall. But
the Heritage plan
had one great advantage. Since Harry Truman, American presidents have
tried unsuccessfully to get us national healthcare. The exchange system,
however awkward it might be, pacified the insurance companies, which
had previously spent millions of dollars to defeat other plans for
“socialized medicine.” With the support of those companies for a program
that not only kept them in the picture but also promised to deliver
millions of new, subsidized customers, Obama gave us a national
healthcare law.

The danger is that it essentially makes insurance companies our
medical receptionists, a profit-making face that greets sick people
whenever they try to use their government healthcare. That gives private
companies a lot of power to make the government look bad.

That’s why it’s important to understand how banks used Obama’s
mortgage subsidy program to sabotage debt relief and discredit
government. If we grasp how they pulled that off, we may be able to
protect the present health plan and someday even get genuine
single-payer healthcare out of it. So here’s the story.

The Home Affordable Modification Program (HAMP) offered banks
government incentives—cash bonuses—to lower the principal or interest on
underwater mortgages. Of course, health insurance companies don’t
actually provide healthcare, but banks did provide the underwater
mortgages, so, however ill-advised or fraudulent they were, those
institutions obviously had a role in negotiating their modification. The
HAMP partnership was structured so that the government’s role was to
provide cash incentives to banks, while participating banks would be
required to accept and process the applications of those who were eager
to modify their onerous mortgages. Whether they granted a modification
was, however, strictly up to them."


Friday, February 21, 2014

Exclusive: The Rags-To-Riches Tale Of How Jan Koum Built WhatsApp Into Facebook's New $19 Billion Baby - Forbes

Interesting background of the WhatsApp founder. Very interesting that Koum signed the Facebook deal at Socia Sevices offices in Mountain View. Can we say that WhatsApp would not have existed without the social net? 

The Rags-To-Riches Tale Of How Jan Koum Built WhatsApp Into Facebook's New $19 Billion Baby - Forbes

Thursday, February 20, 2014

More Americans Now View Afghanistan War as a Mistake - Gallup poll

More Americans Now View Afghanistan War as a Mistake

"For the first time since the U.S. initially became involved in Afghanistan in 2001, Americans are as likely to say U.S. military involvement there was a mistake as to say it was not."

Trend: Looking back, do you think the United States made a mistake sending troops to fight in Afghanistan in 2001?