Weekend Economists: Wedding Bells are Breaking Up that Old Gang June 26-28, 2015

[Demeter]

With certain pronoun adjustments, this is the day!

Now civil rights are extended to any two adult people who wish to merge their families into a new one. No ifs, ands, or buts.

It's been a long time coming, but media commentary is astonished by how fast the change has happened...I won't go into all the reasons why that could be (certainly the internet is a big contributing factor), but it is a good sign for a nation in desperate need of course correction that at least one thing happened in a (somewhat) expeditious fashion. It's been decades, of course.

As a woman, and mother of daughters, I could wish that women's civil rights in pay, reproductive choice and the like had advanced equally precipitously...that may be our next social cataclysm for those politicians still riding the rails or dragging their heels. Or maybe not. We've only been at it since 1973....

But next, the TPP and all that, and JOBS! Break up the banksters and throw them out of their jobs, if not into jail. Ditch the DINOS and send them back to the pre-Stone Age, where they belong.

But let the blessings of love and family descend upon us all. I wish X could have seen this day. He would have been thrilled.







But, in the meanwhile, with this big social issue out of the way, perhaps the nation's political attention and will can be turned to matters of an economic nature, effecting all people of all ages and classes.

[Demeter]

1. I've set this up because I'm nearly over my horrible day

All it took was ditching the Kid, spending 4 hours in total boredom, and too much money. Also screwing up my work schedule.

And now, the reconstruction of a normal life can begin...

After the damn telephone-hold ordeal is over....

Sigh. Start your posts, ladies and gentlemen....I will be picking up my efforts a little later...

[Demeter]

2. Some music for the occasion...

[Warpy]

3. I wish so many of my friends who didn't make it through the 80s

could have lived to see this day. Then again, the AIDS holocaust is one reason it was allowed to happen. Everybody lost someone, even when finding out what killed them came as a shock.

However, don't expect the far right lunatics to let this go. They won't, no matter how often we remind them that they can still preach hate and refuse to perform same sex weddings in their churches. They won't let go of it because a constitutional amendment stripping citizens of their rights is their sole reason for living.

Besides, if they allowed people to think about economic issues, those people would get even angrier and realize the only person prospering from prosperity theology is the preacher and the tithes would dry up.

We'll have to hope Sanders can cut through all the religious static and get through to some of them.

[Demeter]

4. I don't think the Religious Right are going to make any hay out of this field, not any more

and they've lost the Confederate flag, and for what it's worth, Obamacare.

It's a bad time to be on the right wing of the country. Sauce for the gander....

The Millennials, children and grandchildren of the Boomers, are the biggest cohort, even bigger than the Boomers, who have been losing too many (first to war, now to bad health, suicide, and despair). Together, we are going to make real history.

Maybe we will even have an FDR figure in Bernie!

[Demeter]

5. Six Ways TPP Opponents Have Won—Even as Fast Track Advances

http://www.yesmagazine.org/people-power/six-ways-tpp-opponents-have-won-fast-track\

Critics of the TPP forged relationships with foreign allies, firmed up union positions, and forced some concessions on the secrecy of the text... AND THAT WAS JUST THE OPENING ACT!... When the White House and Republican leaders got the votes they needed in the Senate to advance “fast track” Trade Promotion Authority on Tuesday, June 23, it was crushing. All observers agree that fast track will soon become law, making it easier for President Barack Obama to pass the controversial trade pacts in the works with Pacific Rim nations and the European Union. That will be a serious setback to the movements for the environment, labor rights, and affordable pharmaceuticals, among others. But after observing painful trade votes for more than 20 years, this one left me feeling that opponents should be holding their heads higher than ever before as they regroup for the next phase of the fight. Here are a few reasons why:

1. A diverse progressive coalition showed that people power can put up a real fight against big money. The votes on fast track could not have been closer. The House vote was a razor-thin 218 to 208, while the Senate’s vote to cutoff debate passed without a single vote to spare. The opposition included all the regulars from labor, environmental, faith, immigrant, food safety, and consumer groups. But some newish players also stepped up, like the Electronic Frontier Foundation on Internet access, as well as global health, civil rights, and civil liberties groups. One result was more airtime for trade-related concerns that have been largely ignored in the past, including the anti-democratic investment rules and impacts on seafood safety, access to medicines, and climate. These new relationships will pay off in future fights. As Leo W. Gerard, international president of the United Steelworkers, put it, “Progressive forces have new energy from this fight.”

2. The battle exposed deep divisions within the United States, empowering allies in other countries. U.S. Democratic congressional leaders did not roll over for this vote, so opponents in other countries can now count them on their side. And who knows what will happen when citizens of other countries, who are likely to be hard-hit by these deals, see the final text of the agreement?

The example of the Free Trade Area of the Americas is instructive here. After 11 years of negotiations, those 34-country talks collapsed in 2005. President George W. Bush had fast-track authority to pass the FTAA, but that turned out not to matter. In the end, Brazil and other South American countries refused to give in to the U.S. corporate-driven agenda.

3. The showdown drove a shift in the discourse. House Democratic Leader Nancy Pelosi, who in 1993 voted in favor of the North American Free Trade Agreement, rebuffed intense pressure from President Obama to support fast track and called for a “new paradigm” on trade. She called for global engagement that “enables voices from all aspects of the world's economies to be heard.” Even former Treasury Secretary Larry Summers, another NAFTA promoter, stated that “A reflexive presumption in favor of free trade should not be used to justify further agreements.” There were also signs of growing alliances across political lines, with perhaps the most notable example being a joint op-ed by the libertarian Cato Institute and the progressive Public Citizen.

4. Labor unions made strong vows to punish pro-fast track Democrats. The AFL-CIO and other unions froze campaign contributions to members of Congress starting in March to pressure them to vote the right way. In the aftermath of Tuesday’s Senate vote, Communications Workers of America President Chris Shelton said, “for those who opposed the broadest coalition of Americans ever, we will find and support candidates who will stand with working families. That’s how we’ll take on the corporate Democrats who oppose a working family agenda.” Unions are a critical source of donations and boots on the ground for electoral campaigns. A strong message that labor support should not be taken for granted could change the dynamic of the party for years to come.

5. The strong opposition to Obama’s trade agenda augurs well for other progressive fights.
This battle was not just about fast track. It was a reflection of increased concern about inequality and the sense that the rules have been rigged against ordinary Americans in favor of large corporations and the wealthy. We can build on this in future efforts over taxes, budgets, labor rights, and other issues.

6. The demands to see the secret text got some results. WikiLeaks made public two draft chapters of the Trans-Pacific Partnership, giving ammo to the opposition and making many wonder why we were having to rely on Julian Assange for this information. While the fast-track bill doesn’t do anywhere near enough to respond to secrecy concerns, it does require the executive branch to make public the full text of new trade agreements for 60 days before they are sent to Congress. Then lawmakers need to wait at least another 30 days before voting.

In the TPP’s case, this could help stretch out the timeline into the heat of election season, when Democrats will be even more sensitive to pressure from their base. As Public Citizen President Robert Weissman noted, “When the inexcusable and anti-democratic veil of secrecy surrounding the TPP is finally lifted, and the American people see what is actually in the agreement, they are going to force their representatives in Washington to vote that deal down.”

Sarah Anderson wrote this article for YES! Magazine. Sarah directs the Global Economy Project at the Institute for Policy Studies.

[mother earth]

11. THIS is the absolute gamechanger, a double edged sword & if the outrage isn't stoked yet, it soon

will be, just in time to be THE campaign issue of this election, time for a great education, en masse.

[Demeter]

6. "The Appropriation of Cultures" by Percival Everett

THIS IS A SHORT STORY (FICTION) ABOUT A BLACK MAN AND THE CONFEDERATE FLAG.

I HOPE YOU READ IT AND ENJOY IT. DEMETER

https://www.graywolfpress.org/blogs/appropriation-cultures-percival-everett

[Demeter]

7. The Bankruptcy of America’s Elites

http://www.nakedcapitalism.com/2015/06/the-bankruptcy-of-americas-elites.html

If someone had used the word “elites” in 2006, they would have been seen as a hair-on-fire hysteric, long on conspiracy theories and short on sober understanding of How Things Work. But as the 1% and 0.1% amass more and more of total income and wealth, so too have they come to believe their interest diverge from those of the rest of us (and in a literal sense, they often do, since in too many cases, their wealth rests at least in part on predatory conduct). And now that that gap has become obvious, it has reshaped the role of the ruling class, as in the people who are in charge of the administrative apparatus of society. While some members of these top income groups play a direct role in running powerful organizations (CEOs of large an/or strategically important businesses, for instance), it also includes much less affluent individuals, like government officials and those who influence values and collective perceptions, like major publishers and public intellectuals.

Increasingly, these administrators, influencers, and top professionals seek to use their roles as an entry ticket to the top cohort. The prototype is the revolving door regulator, but there are plenty of other embodiments.

A recent example is Raj Date, who was the Deputy Director at the Consumer Financial Protection Bureau after having worked at Deutsche Bank, Capital One, and McKinsey. I’m told consumer groups were never comfortable with him; he was too slick to be seen as trustworthy. And he tried to elbow Elizabeth Warren aside and he grab the directorship of the new agency before Warren put a stop to that by throwing her weight behind Richard Cordray. Date founded Fenway Summer, a “venture investment firm focused on financial services.” It sought to compete with Promontory Group, a money and influence machine headed by former Comptroller of the Currency Gene Ludwig. Established readers may recall the prominent role that Promontory played in the Independent Foreclosure Review fiasco, in which Promontory walked away with over $600 million in fees for a job badly performed and never completed (for details, see Regulatory Looting, Promontory-Style: Botched Foreclosure Reviews Alone Generate More than Double Goldman’s Revenues per Employee, Bank of America Foreclosure Reviews: Why the OCC Overlooked “Independent” Reviewer Promontory’s Keystone Cops Act (Part VB)) and Bank of America Foreclosure Reviews: How Promontory Became a Shadow Regulator (Part VA).

Date just sold Fenway Summer to Promontory. As a well-recognized banking expert said via e-mail:

Not surprised. I read it as a failure of Fenway Summer. It was supposed to be a rival to Promontory, not bought out by it. I sure as hell wouldn’t pay for Raj’s advice.

But members of the elite like Raj manage to fail upwards, or at worst sideways. And that helps preserve the widening gap between them and everyone else.

This Real News Network interview with Robert Scheer, which is number six in a ten part series, discusses how the self-serving attitudes among the supposed leaders of our society became entrenched.

TRANSCRIPT AT LINK

[Demeter]

8. Caymans Exposed: Tax Havens Lucrative for Big Finance, Leave Only Crumbs for Locals

Being a tax haven isn’t all it is cracked up to be....

http://www.nakedcapitalism.com/2015/06/caymans-exposed-tax-havens-lucrative-for-big-finance-leave-only-crumbs-for-locals.html

Originally published at Tax Justice Network

Not long after a newspaper editor critical of local financial sector corruption fled the Cayman Islands, followed by apparent “tombstones” death threats, another brave journalist with the Cayman Reporter has published a fiery editorial, which rings true to many of the things we have said in the past:

The financial industry including the regulators in the Cayman Islands has a parallel universe of their own standards and beliefs. One where it does not matter what the facts are, they say and believe is the surreal reality.

This always tends to be the case in the goldfish-bowl politics of small tax havens. Local media gets captured, dissenting voices retreat, and the voice of the offshore financial sector becomes all-encompassing (read The Life Offshore chapter here for more details AT LINK.) Locals begin to believe the relentless spin, and dismiss criticism by outsiders as ill-informed and outdated. It’s a far more comfortable position to be in, than a position where one realises that so much of what’s around you is crooked, and so many of your friends are up to their necks in it. What is more, finance requires the suppression of bolshy democracy, for fear that easily-relocated “business” flees to other shores. But as these recent news articles in Cayman show, refreshing exceptions do appear. Generally, however, a Theatre of Probity is acted out, and the same message is repeated ad nauseam: ‘we are a clean, co-operative, transparent international financial centre, and the people who attack us are motivated by the politics of envy.’

The Cayman Reporter denounces the Theatre:

The Cayman Islands Monetary Authority and the Cayman Islands Financial Services needs to take another look at their strongly worded statements in the local media about their seriousness related to anti-laundering regime etc. etc.

And the article provides a whole smorgasbord of stories about rotten practices run out of Cayman. We have not seen this level of frankness from Cayman media for a long time. And there’s more to this blistering article, which is worth quoting at length:

Since the 1960’s to date, the financial industry that exists in the Cayman Islands is a choice made by the UK for the people of the Cayman Islands. The laws that govern it are the UK laws, the leadership that runs the Cayman Islands financial industry is the UKs, and the proceeds most definitely benefit the UK banking system the most. Which part of this factual statement is not known to the powers that be and their mouth piece media? Just like the $1 a day salary workers of the DRC, the majority of Caymanians are in the same category. Victims of the dark choices made for them by the FCO and the UK and supported by selected few from local population who get some crumbs from the pie.

This is so reminiscent of what we wrote in our original Finance Curse paper, in a section that questions the extent to which per-capita wealth rankings (which tend to put tax havens quite high up) reflect benefits actually flowing to locals:

Consider a small finance-dependent jurisdiction such as the Cayman Islands. A very large share of the value added being measured is generated by the activities of skilled (typically white, male) expatriates imported from overseas. . . . Whether importing foreigners who are denied full citizenship constitutes ‘national development’ is a matter for debate. The benefits for established indigenous people are typically obtained substantially through trickle-down effects and “indigenisation” policies for foreign businesses, which are invariably contentious.

Back to the Cayman Reporter:

The so-called Cayman financial industry mess that is factually proven and believed to be true is created, managed, enjoyed and protected by the UK and the FCO alone. Caymanians are as much a victim of it as any other nation in the world. Dishing out a few crumbs in the shape of some low and mid-level jobs, feel good financial donations and puffed up false pride with hollow-slogans of, ‘fifth largest’ financial centre does not mitigate the injustice perpetrated in the shape of identity disgrace as a corrupt jurisdiction, tax haven.

The constant bashing of Caymanians by the local main stream media in biased editorials and the local political leaders who are rattling out the script of the financial industry lobbyist constantly confuse and mix the two very different words in the English language, ‘entitled’ and ‘entitlement’.

The FCO and its cronies are reminded that the people of these islands are waking up to the reality that has been kept masked under many shrouds for decades.

The indigenous people of these Islands are ‘entitled’ to their freedom, their right of self-determination to choose an honorable socioeconomic system that brings laurels and social-justice to Caymanians and not the colonial puppet master who now hides behind the title of the British Common Wealth.

The forced colonial ‘entitlement’ of the colonial master and their cronies in the Cayman Islands must end.

[Demeter]

9. Supreme Court rejects Madoff trustee's appeal over $4 billion recovery

http://www.reuters.com/article/2015/06/22/us-usa-court-madoff-idUSKBN0P21GI20150622

The U.S. Supreme Court on Monday left intact a court ruling that could prevent victims of Bernard Madoff's Ponzi scheme from recouping more than $4 billion from customers who withdrew money before the enterprise collapsed.

The high court left in place a December 2014 ruling by the New York-based 2nd U.S. Circuit Court of Appeals, which said federal bankruptcy law did not let the trustee Irving Picard recoup a variety of payments that Bernard L. Madoff Investment Securities LLC made to some customers more than two years before the firm collapsed on Dec. 11, 2008.

The decision does not affect the $10.69 billion that Picard has recouped for former Madoff customers, who lost about $17.5 billion of principal.

Picard’s lawyers had said that if the appeals court decision were left intact, they would be barred directly from recovering about $2 billion and it would make it harder to seek a further $2 billion, putting a total of $4.3 billion in question.

Picard still needs to recover another $7 billion to achieve his goal of returning all the losses suffered by customers who filed claims...

[Demeter]

10. Everyone, I am beat

I'm going to bed. Pick it up in morning. TGIF!

[Demeter]

20. Wake up to 60F and rain

From a driven week to driving rain...makes one crazy!

[antigop]

12. Musical interlude: "I Love to Cry at Weddings"

OK, I think "Sweet Charity" is one of the worst musicals ever written, but the song fits the theme.

[Demeter]

15. The biggest problem with Sweet Charity was always Shirley McLaine, IMO

and the story sucks. The only things memorable are the music and the dancing.

[antigop]

13. Musical Interlude: "I Am What I Am" from "La Cage aux Folles"

John Barrowman's version:

(Dr. Who fans may recognize Captain Jack.)


The lovely Linda Eder's version:

[DemReadingDU]

14. Chapel of Love

[Demeter]

16. Why the IMF’s so hard on Greece By Pierre Briançon

IN THE WORLD OF MARRIAGES, SOME THINGS ARE NOT MEANT TO BE. THE EUROZONE IS PROBABLY THE MOST OBVIOUS EXAMPLE, THESE DAYS. MARRIAGES FOR MONEY ARE OFTEN THE WORST.

http://www.politico.eu/article/imf-greece-grexit-lagarde-dsk-sex-parties-eurozone/



The Fund regrets ever rescuing Greece. Christine Lagarde likely won't let it happen again...Dominique Strauss-Kahn thought he was saving the world. Christine Lagarde can only hope she’ll be saving her job. The impact of the International Monetary Fund’s involvement in the Greece bailouts may have had different consequences for the institution’s’ last two managing directors. But the main consequence of its controversial action since 2010 seems clear: For the Fund’s involvement in eurozone affairs, it looks like “never again.”

Strauss-Kahn, during the trial on pimping charges for which he was recently cleared in France, explained to the judges that he couldn’t have possibly attended as many sex parties as alleged by the prosecution because he was “busy saving the world.” He was the IMF’s managing director in 2010 when the Fund was called to help the eurozone devise a way to bail out Greece.

DSK’s successor Christine Lagarde, for her part, must deal with the consequences of what was a controversial involvement from the start. She has to soothe a restless IMF board where representatives of emerging countries resent the Fund’s involvement in the never-ending Greek crisis, for which it bent, if not broke, most of its long-standing rules of engagement. That may be the reason why Lagarde is appearing to be tougher with Greece than its eurozone creditors — save possibly Germany, whose finance minister Wolfgang Schäuble remains highly skeptical of Greece’s ability to ever solve its own problems.

That is showing again this week with the IMF taking a hard stance against the most recent Greek proposals that Eurozone ministers and the Commission greeted favorably last Sunday. According to a French official, IMF negotiators have raised doubt on both the principle and the feasibility of Athens’ suggestion to raise taxes in order to finance its pension systems. The Fund has always preferred spending cuts, deemed growth-friendlier than tax hikes. And in any case, due to the dysfunctional nature of the Greek state, it doesn’t trust the capacity of the current government to collect the taxes it wants to raise.

Lagarde comes up for re-election as IMF head next year. She can’t afford a split board. The European stranglehold on the IMF’s top job since its creation is being contested, and she has to show she can be tough on Europe...That involves both being tough on Greece — making sure Athens adheres to a credible program — and being tough on Greece’s creditors, by pointing out that they will have to consent to debt relief in future. That’s where the IMF disagrees with Germany, whose finance minister Wolfgang Schaüble, a supporter of the IMF stand on the Greek plan, doesn’t want to hear about debt relief for now. Looking ahead, Lagarde has until March 2016, when the current IMF program for Greece expires, to extract the institution from the Greek mess it regrets having ever stepped into.

TALK ABOUT A COMEDY OF ERRORS...SEE THE REST AT THE LINK!

[Demeter]

17. Scotland is refusing to give the Queen any more money

ANOTHER MARRIAGE BREAKING UP--THIS ONE WAS MORE LIKE A CONTINUOUS RAPE--MARRIAGE BY FORCE

http://www.businessinsider.com/scotland-is-refusing-to-give-the-queen-elizabeth-ii-any-more-money-2015-6

The Queen is set to lose out on £2 million ($3.2 million) a year because the Scottish government is refusing to give her any more money. Senior Scottish parliament sources said in no uncertain terms to several British newspapers, including The Guardian, The Telegraph, and The Times, that Scotland's parliament, now led by Nicola Sturgeon, was looking to ax handouts from the Crown Estate, north of the border.

The Daily Mail said, without citing sources, "from April 1 next year, the SNP-led Scottish government has chosen to bank the money itself." Meanwhile, an unnamed senior aide told The Guardian "originally, Alex Salmond did imply that might happen. But the new leadership said no," in response to the claim that Scotland would still give the Queen money from the Crown Estate. In The Telegraph, a senior aide said Scotland would not be giving money from the Crown Estate to the Queen: "Not through the Sovereign Grant, no." The courtier added the rest of the UK could bear the cost burden: "At the moment there's no other mechanism in place to compensate. It would be nice if the proportion was increased from the rest of the UK."

The Crown Estate is an independent commercial business that manages the Queen's property portfolio, which mainly includes land and properties. The profits are passed on to the UK Treasury, and a slice is given to the Queen. This is how the Royal household gets most of its funding. Three years ago, the government forged a deal for Buckingham Palace that meant it would be shielded from any cuts to public spending. The deal also agreed that the monarchy would receive 15% of profits of the £9.9 billion ($15.1 billion) Crown Estate, and the amount the Queen would receive would never be less than the amount received in the previous year.

This caused a massive rise in what Queen Elizabeth II received over the past three years. She got £40 million ($61 million) in the 2013-2014 financial year, 29% above the £31 million ($47.2 million) she received in 2012-2013.

MORE--THIS SHOULD PROVE INTERESTING!

[Demeter]

18. Major internet providers slowing traffic speeds for thousands across US

IT WON'T WORK, GUYS....AND YOU OF ALL COMPANIES SHOULD KNOW THAT!

http://www.theguardian.com/technology/2015/jun/22/major-internet-providers-slowing-traffic-speeds

Study finds significant degradations of networks for five largest ISPs, including AT&T and Time Warner, representing 75% of all wireline households in US...Major internet providers, including AT&T, Time Warner and Verizon, are slowing data from popular websites to thousands of US businesses and residential customers in dozens of cities across the country, according to a study released on Monday. The study, conducted by internet activists BattlefortheNet, looked at the results from 300,000 internet users and found significant degradations on the networks of the five largest internet service providers (ISPs), representing 75% of all wireline households across the US. The findings come weeks after the Federal Communications Commission introduced new rules meant to protect “net neutrality” – the principle that all data is equal online – and keep ISPs from holding traffic speeds for ransom. Tim Karr of Free Press, one of the groups that makes up BattlefortheNet, said the finding show ISPs are not providing content to users at the speeds they’re paying for.

“For too long, internet access providers and their lobbyists have characterized net neutrality protections as a solution in search of a problem,” said Karr. “Data compiled using the Internet Health Test show us otherwise – that there is widespread and systemic abuse across the network. The irony is that this trove of evidence is becoming public just as many in Congress are trying to strip away the open internet protections that would prevent such bad behavior.”

The study, supported by the technologists at Open Technology Institute’s M-Lab, examines the comparative speeds of Content Delivery Networks (CDNs), which shoulder some of the data load for popular websites. Any site that becomes popular enough has to pay a CDN to carry its content on a network of servers around the country (or the world) so that the material is close to the people who want to access it. In Atlanta, for example, Comcast provided hourly median download speeds over a CDN called GTT of 21.4 megabits per second at 7pm throughout the month of May. AT&T provided speeds over the same network of ⅕ of a megabit per second. When a network sends more than twice the traffic it receives, that network is required by AT&T to pay for the privilege. When quizzed about slow speeds on GTT, AT&T told Ars Technica earlier this year that it wouldn’t upgrade capacity to a CDN that saw that much outgoing traffic until it saw some money from that network (as distinct from the money it sees from consumers).

AT&T has strongly opposed regulation of its agreements with the companies that directly provide connectivity between high-traffic internet users and their customers. Cogent, Level3 and others have petitioned the FCC to make free interconnection to CDNs a part of the conditions for the proposed merger between AT&T and DirecTV.

“It would be unprecedented and unjustified to force AT&T to provide free backbone services to other backbone carriers and edge providers, as Cogent et al seek,” said the company in a filing replying to the CDNs’ suggestion, part of a brief opposing the merger. “Nor is there any basis for requiring AT&T to augment network capacity for free and without any limits. Opponents’ proposals would shift the costs of their services onto all AT&T subscribers, many of whom do not use Opponents’ services, and would harm consumers.”

TIME FOR SOME EMINENT DOMAIN TAKEOVERS, THEN...AND MAKE INTERNET A PUBLIC UTILITY NATION-WIDE.

FCC chairman Tom Wheeler has taken an aggressive regulatory tack when it comes to mergers in the telecommunications sector. “History proves that absent competition a predominant position in the market such as yours creates economic incentives to use that market power to protect your traditional business in a way that is ultimately harmful to consumers,” he told industry leaders at the Internet and Television Expo last month.

The dispute over traffic speeds comes as the telecoms and cable industry readies legal challenges to the net neutrality rules. Most telecoms are content letting their lobbyists, notably trade associations Cellular Telecommunications Industry Association (CTIA) and USTelecom, sue the FCC over net neutrality rules, but AT&T has been one of the few companies to sue the FCC directly.

[Demeter]

19. Trade agreements should not benefit industry only By Elizabeth Warren

http://www.bostonglobe.com/opinion/2015/06/23/warren/CJluXWm4B5VDTdUDsCkwEL/story.html

Recently Hillary Clinton joined Nancy Pelosi and many others in Congress to call on the president to reorient our trade policy so that it produces a good deal for all Americans — not just for a handful of big corporations. Here’s a realistic starting point: Fix the way we enforce trade agreements to ensure a level playing field for everyone. Many of our close allies — major trading partners like Australia, Germany, France, India, South Africa, and Brazil — are already moving in this direction. American negotiators should stop fighting those efforts and start leading them. We live in a largely free trade world. Over the past 50 years, we’ve opened up countless markets, so that tariffs today are generally low. As a result, modern trade agreements are less about reducing tariffs and more about writing new rules for everything from labor, health, and environmental standards to food safety, prescription drug access, and copyright protections.

Even if those rules strike the right balance among competing interests, the true impact of a trade deal will turn on how well those rules are enforced. And that is the fundamental problem: America’s current trade policy makes it nearly impossible to enforce rules that protect hard-working families, but very easy to enforce rules that favor multinational corporations. For example, anyone who wishes to enforce rules that impose labor or environmental standards must plead with our government to bring a claim on their behalf. Reports from the Government Accountability Office, the Labor Department, and the State Department have shown that the Clinton, Bush, and Obama administrations have rarely brought such claims, even in the face of overwhelming evidence of violations. Without strong enforcement, promises that American workers won’t have to compete against 50-cent-an-hour foreign laborers or promises that countries with terrible environmental records will raise their standards are meaningless.

But multinational corporations don’t have to plead with the government to enforce their claims. Instead, modern trade deals give corporations the right to go straight to an arbitration panel when a country passes new laws or applies existing laws in ways that the corporations believe will cost them money. Known as investor-state dispute settlement (ISDS), these international arbitration panels can force countries to pony up billions of dollars in compensation. And these awards stick: No matter how crazy or outrageous the decision, no appeals are permitted. Once the arbitration panel rules, taxpayers must pay. One of the effects of the Trans-Pacific Partnership will undeniably be increased inequality. Because of how costly these awards can be, ISDS creates enormous pressure on governments to avoid actions that might offend corporate interests. Corporations have brought ISDS cases against countries that have raised their minimum wage, attempted to cut smoking rates, or prohibited dumping toxic chemicals. Just last month, a foreign corporation successfully challenged Canada’s decision to deny a blasting permit because of concerns about the environmental impact on nearby fishing grounds, and now the company could get up to $300 million from Canadian taxpayers. Will Canada’s environmental regulators hesitate before they say no to the next foreign corporation that wants to dump, blast, or drill?

Leading economic and legal experts have called on America to drop ISDS from its trade deals. Hillary Clinton recently called ISDS “a fundamentally antidemocratic process.” The conservative Cato Institute agrees, noting that ISDS is “ripe for exploitation by creative lawyers” looking to challenge the “world’s laws and regulations.” And here lies the double standard at the heart of our trade deals: Once they sign on, countries know that if they strengthen worker, health, or environmental standards, they invite corporate ISDS claims that can bleed taxpayers dry. But countries also know that if they fail to raise wages or stop dumping in the river — even if they made such promises in the trade deal — the US government will likely do nothing. While American negotiators ignore this problem, the rest of the world is waking up and fighting back. After Phillip Morris targeted it for billions in ISDS compensation, Australia began raising significant objections to ISDS. Negotiations with Europe over a massive new trade deal have stalled in part because of objections to ISDS, including from Germany and France. India is considering abandoning ISDS. So is South Africa, after being hit with an ISDS action challenging — incredibly — its postapartheid policies promoting minority ownership in its mining sector. Brazil has flatly refused to include ISDS in any of its trade agreements.

America needs trade — but not trade agreements that offer gold-plated enforcement for giant corporations and meaningless promises for everyone else. If we truly want better deals that work for everyone, we should stop clinging to our enforcement double standard and start joining our allies in trying to level the playing field.

Elizabeth Warren is a US senator from Massachusetts.

[Demeter]

21. Sessions: They Won the Vote, But Lost the 'Trust of the American People'

http://www.weeklystandard.com/blogs/sessions-they-won-vote-lost-trust-american-people_976870.html

Senator Jeff Sessions will release this statement in response to Senate's vote to advance the fast-track trade bill:

“Americans increasingly believe that their country isn’t serving its own citizens. They need look no further than a bipartisan vote of Congress that will transfer congressional power to the Executive Branch and, in turn, to a transnational Pacific Union and the global interests who will help write its rules.

"The same routine plays out over and again. We are told a massive bill must be passed, all the business lobbyists and leaders tell how grand it will be, but that it must be rushed through before the voters spoil the plan. As with Obamacare and the Gang of Eight, the politicians meet with the consultants to craft the talking points—not based on what the bill actually does, but what they hope people will believe it does. And when ordinary Americans who never asked for the plan, who don’t want the plan, who want no part of the plan, resist, they are scorned, mocked, and heaped with condescension.

"Washington broke arms and heads to get that 60th vote—not one to spare—to impose on the American people a plan which imperils their jobs, wages, and control over their own affairs. It is remarkable that so much energy has been expended on advancing the things Americans oppose, and preventing the things Americans want.

"For instance: thousands of loyal Americans have been laid off and forced to train the foreign workers brought in to fill their jobs—at Disney, at Southern California Edison, across the country. Does Washington rush to their defense? No, the politicians and the lobbyists rush to move legislation that would double or triple the very program responsible for replacing them.

"This ‘econometarian’ ideology holds that if a company can increase its bottom line —whether by insourcing foreign workers or outsourcing production—then it’s always a win, never a downside.

"President Obama, and allies in Congress, have won this fast-track vote. But, in exchange, they may find that they are losing something far greater: the trust of the American people. Americans have a fundamental, decent, and just demand: that the people they elect defend their interests. And every issue to come before us in the coming months will have to pass this test: does this strengthen, or weaken, the position of the everyday, loyal American citizen?”

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22. Song for Lovers

[hamerfan]

24. Musical Interlude

World In Changes by Dave Mason:

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25. Puerto Rico Debt Crisis Mounts With Key Deadline Just Week Away

http://www.bloomberg.com/news/articles/2015-06-25/puerto-rico-debt-crisis-mounts-with-key-deadline-just-week-away



The pressure is building on Puerto Rico as lawmakers struggle to ease a cash crunch days before the commonwealth’s electric utility confronts a bond payment it may be unable to make.

Prices of the junk-rated island’s newest general obligations reached a record low Wednesday after David Chafey, chairman of the territory’s Government Development Bank, said he’s resigning for personal reasons. The departure, which sparked worries about a leadership void, came as a group of hedge funds asked GDB officials and the governor for a meeting to discuss terms of a planned bond sale.

As legislators struggle to pass a budget in San Juan, the power utility is set to talk with creditors in New York Thursday about restructuring $9 billion of debt. It faces a July 1 bond payment and has insufficient reserves. Meanwhile, lawmakers are considering a bill that would allow the government to suspend monthly cash deposits for repayment of general-obligation debt.

“The fiscal and economic situation in Puerto Rico has reached a tipping point,” Cesar R. Miranda Rodriguez, the commonwealth’s attorney general, said in prepared testimony to a U.S. House committee Wednesday in Washington. “The situation is truly dire.”

Puerto Rico and its agencies are saddled with $72 billion of borrowings and dwindling financial resources as the local economy shrinks. With the fiscal vise tightening, Governor Alejandro Garcia Padilla returned to Puerto Rico instead of testifying to lawmakers Wednesday in Washington, El Nuevo Dia reported. The cash crunch is pushing the commonwealth to delay tax rebates, slow payments to suppliers and borrow from a state-run insurance agency that provides disability compensation. The GDB, which lends to the commonwealth and its localities, had $778 million of net liquidity as of May 31, down from $2 billion in October. The island’s House of Representatives on Tuesday approved a measure allowing the government to forgo setting aside cash every month to repay general obligations if Puerto Rico is unable to sell notes or oil-tax bonds, according to Rafael “Tatito” Hernandez, who chairs the House Treasury Committee. The Senate, which took up the budget legislation on Wednesday, also has to pass the bill.

“It’s all steps in the direction of making the credit weaker and creating more uncertainty as we get closer to the coupon dates,” said Daniel Solender, who helps manage $17 billion as head of munis at Lord Abbett & Co. in Jersey City, New Jersey.

Tax-exempt general obligations maturing in July 2035 traded Wednesday at an average of 77.6 cents on the dollar, the lowest since they were issued at 93 cents in March 2014, according to data compiled by Bloomberg...

A study released Wednesday by a former Federal Reserve economist had some other suggestions for how to assist the U.S. territory.

The Fed has legal authority to buy Puerto Rican debt as a U.S. municipality or a foreign country, Arturo Estrella, the former Fed economist and now a professor of economics at Rensselaer Polytechnic Institute in Troy, New York, said in the report.

The central bank could extend credit to Puerto Rico government corporations under the Federal Reserve Act, his paper concludes. The Fed and the U.S. Treasury also could provide financial planning assistance to Puerto Rico, according to the research, which was part of a project funded by the Fundacion Francisco Carvajal, in Guaynabo, Puerto Rico.

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26. Greeks Line Up at Banks and Drain ATMs as Tsipras Calls Vote

http://www.bloomberg.com/news/articles/2015-06-27/greeks-line-up-at-banks-and-drain-atms-after-tsipras-calls-vote

Greece’s banks may need an injection of fresh emergency funds to operate Monday as people rushed to pull out money after Prime Minister Alexis Tsipras called a referendum that could decide his country’s fate in the euro.

Two senior Greek retail bank executives said as many as 500 of the country’s more than 7,000 ATMs had run out of cash as of Saturday morning, and that some lenders may not be able to open on Monday unless there was an emergency liquidity injection from the Bank of Greece. An official with Greece’s Capital Markets Commission, the markets’ regulator, also warned that the Athens Stock Exchange may be unable to operate on Monday without a cash injection into the banking system. A Greek central bank spokesman said it was making efforts to supply money. The European Central Bank’s governing council was expected to hold a conference call on Sunday to review the banks’ liquidity condition, said a Greek official, who asked not to be named in line with policy. The Frankfurt-based central bank said in a twitter post that it’s closely monitoring developments and would review the situation “in due course.” Some banks were placing limits in daily cash transactions. Yiota Kardogianni, a manager at a branch of Piraeus Bank SA, said cash withdrawals were limited at 3,000 euros ($3,350) daily and ATM withdrawals at 600 euros. Alpha Bank AE had set a daily limit of 5,000 euros for most of its branches since last week.

“I’m here to take my mother’s pension out before the machine runs out of cash,” said Erato Spyropoulou, who was standing in a line of about eight people at one of National Bank of Greece SA’s ATMs. “It’s very worrying what’s happening because people don’t know what they’re being asked to vote for. It’s the last nail in Greece’s coffin.”

WELL, I GUESS NEGOTIATIONS ARE OVER....MORE AT LINK

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27. What Will Greeks Vote on? The Referendum Question

http://www.bloomberg.com/news/articles/2015-06-27/what-will-greeks-vote-on-the-referendum-question-ibexrhf0

Greek lawmakers are set to decide at a midnight vote Saturday whether to approve a proposal by Prime Minister Alexis Tsipras’s government to hold a referendum on July 5, which could decide the country’s future in the euro area. If parliament gives its nod, Greek voters will be asked to rule on two complex draft documents that detail a proposal by the country’s creditors to unlock aid of as much as 15.5 billion euros for Greece in return for sales-tax increases and pension reforms. An agreement on the package has remained elusive after five months of contentious negotiations that have left the country at the brink of default when the bailout expires on Tuesday.

The hastily called vote poses significant logistical challenges that make it doubtful it could be held as early as next Sunday, experts said.

“First of all there’s an organizational and logistical challenge, to organize a vote in such a short notice,” said Aristides Hatzis, an associate professor of law and economics at the University of Athens. “Second, there’s also the question on whether the offer on which people will vote will still be on the table by the time of the referendum,” he said in a phone conversation on Saturday. “If the referendum is held indeed, which is not certain, it risks being a charade.”

According to the cabinet proposal, voters will be asked to respond to the following question:

“Greek people are hereby asked to decide whether they accept a draft agreement document submitted by the European Commission, the European Central Bank and the International Monetary Fund, at the Eurogroup meeting held on June 25.”

...The draft proposal of Greece’s creditors consists of two documents with the first called “Reforms for the Completion of the Current Program and Beyond” and the second document is called “Preliminary Debt Sustainability Analysis”, the Greek government said in its proposed question.

Neither document has been made publicly available, or translated in Greek. Bloomberg News obtained copies of both documents....MORE AT LINK

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28. NY Times Reporter Confirms Obama Made Deal to Kill Public Option

http://www.huffingtonpost.com/miles-mogulescu/ny-times-reporter-confirm_b_500999.html

For months I've been reporting in The Huffington Post that President Obama made a backroom deal last summer with the for-profit hospital lobby that he would make sure there would be no national public option in the final health reform legislation... I've been increasingly frustrated that except for an initial story last August in the New York Times, no major media outlet has picked up this important story and investigated further. Hopefully, that's changing. On Monday, Ed Shultz interviewed New York Times Washington reporter David Kirkpatrick on his MSNBC TV show, and Kirkpatrick confirmed the existence of the deal. Shultz quoted Chip Kahn, chief lobbyist for the for-profit hospital industry on Kahn's confidence that the White House would honor the no public option deal, and Kirkpatrick responded:

"That's a lobbyist for the hospital industry and he's talking about the hospital industry's specific deal with the White House and the Senate Finance Committee and, yeah, I think the hospital industry's got a deal here. There really were only two deals, meaning quid pro quo handshake deals on both sides, one with the hospitals and the other with the drug industry. And I think what you're interested in is that in the background of these deals was the presumption, shared on behalf of the lobbyists on the one side and the White House on the other, that the public option was not going to be in the final product."

Kirkpatrick also reported in his original New York Times article that White House was standing behind the deal with the for-profit hospitals: "Not to worry, Jim Messina, the deputy White House chief of staff, told the hospital lobbyists, according to White House officials and lobbyists briefed on the call. The White House was standing behind the deal".

This should be big news. Even while President Obama was saying that he thought a public option was a good idea and encouraging supporters to believe his healthcare plan would include one, he had promised for-profit hospital lobbyists that there would be no public option in the final bill. The media should be digging deeper into this story. Washington reporters should be asking Robert Gibbs if President Obama is still honoring this deal. They should be calling Jim Messina and hospital lobbyist Chip Kahn to confirm the specifics of the deal. They should be asking Nancy Pelosi and Senate Democratic leaders Dick Durbin and Harry Reid the extent of their knowledge of this deal. They should be asking Pelosi if the reason she's refusing to include a public option in the House reconciliation bill to be sent to the Senate is that there are at least 51 Senate Democrats who would vote for it and she needs to insure that a final bill with a public option does not end up on President Obama's desk where he would then have to break his deal with the hospital lobbyists and sign it, or veto it to honor his deal.

More deeply, there are serious questions about the extent to which Obama, with the help of Rahm Emanuel, used a K Street strategy to pursue health care reform. The strategy seems to have been to make backroom deals to protect the interests of the likes of the drug industry and the for-profit hospital industry in exchange for campaign cash, even if this meant reversing campaign promises to include a public option to put competitive pressure on private insurance premiums, and to allow Medicare to negotiate for lower drug prices and Americans to buy cheaper drugs from Canada. The result is a health care bill that is generally unpopular with voters. Questions need to be asked, too, about the extent to which the White House is following a similar K Street strategy with Wall Street financiers when it comes to shaping financial reform and new regulations to rein in the banks who brought the economy to its knees. Voters viscerally sense that the White House and Congressional Democrats may be as concerned with protecting special interests -- whether it's drug companies, private hospitals, or Wall Street bank -- than they are with protecting the people, and this is feeding a populist backlash against Democrats that resulted in Scott Brown's victory in Massachusetts and is making a Democratic bloodbath in the fall elections increasingly likely.

Polls indicate that about 60% of voters support a public option while only about 1/3 support the overall Democratic healthcare bill. There still time -- very little time -- for Democrats to shift course and include a public option in the final bill, even if it means going back on the White House's backroom deal with the hospital industry. If the media picks up on this story, perhaps the White House and Congressional Democrats can be embarrassed into changing course. If, on the other hand, Democrats continue to honor these special interest deals, then passing an unpopular health care bill may just be walking into a Republican trap.

FROM 2010, LEST WE FORGET

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29. Detroit: A Case Study of Oligarchs and Vigilantes Taking Over Public Safety in a Big City

http://www.nakedcapitalism.com/2015/06/detroit-a-case-study-when-oligarchs-and-vigilantes-take-over-public-safety-in-a-big-city.html

Yves here. Detroit is a preview of what happens in cities when government services, by design, are stripped to the bone so that the poor are basically left to their own devices. The results are not getting the coverage that is warranted. This post helps fill the reporting gap.

By Patrick Sheehan, a teacher, writer, and activist living in Detroit. His work has been published in Jacobin, Occupy.com, and Truth Out. Follow him @PSrealtweets. Originally published at Alternet

Highland Park is a tiny 3-square-mile municipality located within Detroit. Extremely dangerous, blighted, and 94% black, Highland Park is a concentrated example of the conditions in Detroit’s poorest neighborhoods—what some call the “Detroit of Detroit.” In late 2011, the impoverished little municipality was so deep in debt to its public electric company, DTE Energy, that the local government was forced to decommission all streetlights on its residential streets. Not only did DTE cut the power to street lights in Highland Park, it sent out workers to physically dig up and remove nearly 1,000 light-poles from the neighborhood. Highland Parkers now live in permanent, debt-induced darkness. Six miles away, in Detroit’s rapidly gentrifying downtown area, DTE Energy runs a very different public policy. The same company that repossessed 1,000 streetlights from Highland Park, condemning its residents to permanent darkness, has recently launched a pro-bono security program in the increasingly white area. On its own dime, DTE operates a public “bait car” program. It buys and sets booby-trap cars out on the downtown streets, outfitted with up to 18 hidden cameras, to lure and ultimately deter potential car theft. A partnership with downtown police assures that cops will be on the scene within 90 seconds of when the bait car is entered.

“We want to be part of something good about changing perceptions of the city of Detroit,” DTE’s chief security officer boasts of the bait-car program, “We want to be part of the revitalization of the city.”

Safety is a privilege in Detroit. Like all privileges, it gravitates toward the white and wealthy. Decades of budget cuts to public safety services alongside concentrated investment downtown has created two Detroits: downtown, white and professional, bathed in state-of-the-art private security; and the “neighborhoods,” poor and black, where public safety has become a do-it-yourself endeavor.

Turning out the Lights

In Detroit’s black neighborhoods, public safety has been sacrificed to the gods of austerity. With the city government too poor provide basic security, safety has become a private commodity, accessible to the wealthy, but far out of reach for the majority of Detroiters. The slow but massive exodus of capital and residents over the last half-century has left the Motor City broken down and overgrown in municipal debt. By the time Detroit faced its financial day of reckoning in bankruptcy court, years of budget cuts had already dismantled its most basic public services—police, fire, even streetlights—to barely functional levels.

The steady, long-term disinvestment in public safety shows through in crime rates. In a given week, Detroit averages seven murders, 226 burglaries, 92 robberies, 169 aggravated assaults, 228 cars stolen, 331 larceny thefts, 12 rapes, and 279 violent crimes — the vast majority occurring in the neighborhoods and leading to no arrests. These dark accolades have earned Detroit the most dangerous city in America honor five out of the last seven years. Absurdly underfunded emergency services are unable to keep up with the city’s record crime. In 2013, the same year Detroit led the country with 333 homicides, its police department took a $75 million— or 18% — overall haircut. Emergency Medical Services has taken similar hits. In 2005, Detroit had 303 paramedics working the streets. By 2010, the working paramedic count was cut to 188 to match a shrinking budget. The result: laughably bad 911 response times...In a city that is perpetually on fire, the poverty of the Detroit Fire Department is the stuff that writes books. Two years ago, Detroit journalist Charlie LeDuff shadowed a fire company and found pathetic underfunding. Even the fire alarm in the firehouse was broken. Since no one had come to fix it, the men had to jerry-rig a contraption where the paper pushed out of a fax machine set off a Rube Goldberg series involving a door-hinge, a screw, and an electric pad to finally ring the alarm bell. So exists the department facing the highest arson rate in the country. A 2012 budget cut closed one-fifth of firehouses and reduced fire investigation staff by half. Now one third of the 3,000 intentionally set structure fires each year in Detroit go entirely uninvestigated. Some crumbling buildings on fire on nearly abandoned blocks are not even put out.

In the poorest neighborhoods, the disinvestment piles up. When Highland Park was slapped with its first appointed emergency manager in 2001, he fired its entire municipal police force, outsourcing patrols to county officers. In 2007, the little city managed to muster up the funds to revive its police department— well, sort of. In 2012, author Mark Binelli found that the Highland Park Police Department was “headquartered in a mini-station at a strip mall, where the jail is a makeshift chain-link cage.” Now Highland Park mixes extreme poverty, improvised policing and an imposed blackout into a dangerous cocktail: some of the highest crime- and lowest arrest-rates in the country.

MORE

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30. Sorry for the skimpy posts

I'm usually fairly inert on Saturdays...but this Saturday, I'm in pain, also, maybe because it's been raining almost continuously? tomorrow is another day, as Scarlett said. Sleep well!

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31. BBC: ECB to Stop Emergency Support of Greek Banks on Monday; Bank Holiday Likely

http://www.nakedcapitalism.com/2015/06/bbc-ecb-to-stop-emergency-support-of-greek-banks-on-monday-bank-holiday-likely.html

The ECB has decided to lower the boom on Greece.

As we’ve mentioned, the ECB was well outside the intended use of the program that has served as the backstop to the Greek banking system, the Emergency Liquidity Assistance program. As its name suggests, the ELA was meant to provide support only for solvent banks, and then only for short-term liquidity crunches (this is why the ELA has to be re-approved every two weeks, but the voting rules favor continuation, since it takes a two-thirds vote of the current voting members to cut off the ELA). The ECB has continued to deem the Greek banks as solvent when they clearly weren’t. The presumed justification was that Greek banks had run up huge tabs on the ELA in the 2012 debt restructuring (the so-called second bailout) and had weaned itself off it after the refinancing was in place and contagion fears in the Eurozone had receded. The ECB was clearly uncomfortable with the continued credit extension and kept the increases to the bare minimum necessary to keep the Greek banks afloat. This practice was coupled with the ECB also apparently stoking the bank run by publicizing information about the sorry state of the Greek banks, while during the financial crisis, it kept detrimental information under wraps. The ECB might have been trying to force the Greek government to request permission to impose capital controls, which would have been damaging to the economy and thus could have hurt the Greek government’s support. It appears that the ECB was trying to throw a spanner in the works, but far short of what they were capable of doing. The past ECB moves look to have been a shot across the Greek bow that the government either did not understand or chose to ignore. But remember the critical fact: that the ELA support was premised on the idea that Greece and the creditors might come to a deal and Greece would get its bailout money. Once that matter was settled, the 2012 case showed that the cash that had been pulled out of the banks came back and the ELA use plummeted.So as long as negotiations were underway, the ECB was duty bound to keep extending ELA support. In fact, we’ve suspected that that was the biggest reason Greece kept the talks going despite the overwhelming evidence that they were going nowhere.

The European officials have interpreted the announcement of the Greek referendum on July 5 as tantamount to the termination of negotiations. As the Guardian reported:

Saturday night’s eurogroup meeting said the governments “stand ready to do whatever is necessary to ensure financial stability of the euro area”. Their meeting was the fifth to be held in 10 days. The decision to end the bailout, shunning the Greek requests to extend the rescue until after the national referendum, means that Greece is likely to go bust.

“Greece ended the negotiations unilaterally. There is no basis for further negotiations,” said Wolfgang Schäuble, the hawkish German finance minister. “I don’t see any possibility for doing anything. On Tuesday the programme ends.”

Jeroen Dijsselbloem, the Dutch finance minister who chaired the meeting in Brussels, said with his referendum decision Tsipras had “closed the door” for talks with the creditors.

The Greek government, astonishingly, appears not to have considered the possibility that the Eurozone nations would not extend the bailout, let alone the ramifications. We stated that the odds were in fact high that the request would be rejected, given the very late hour, the lack of any advanced warning, and the unpopularity in many nations, most importantly Germany, of cutting Greece slack, particularly given that they had ample opportunity to schedule a referendum prior to the bailout expiration. From the Financial Times:

Mr Tsipras stunned his nation and its international creditors by announcing the referendum, arguing only the Greek people should decide how to respond to what he called the creditors’ ultimatum. He urged a rejection at the polls, but two eurozone officials said Mr Varoufakis predicted a “yes” vote in the plebiscite during the eurogroup meeting.

Negotiators for the creditors had been preparing to present a new compromise offer to the Greek authorities that, according to one EU diplomat, included “lots of things they could sell”. But Mr Tsipras’s move dashed hopes of striking a deal at Saturday’s meeting, meaning there will be no programme in place when Greek voters go to the polls to offer a verdict on the creditors’ proposal…

In the clearest sign yet that eurozone officials are anticipating significant economic upheaval in Greece, Mr Dijsselbloem said “the situation in Greece will deteriorate very rapidly” without a bailout agreement in place.

At a post-meeting news conference, Mr Varoufakis appeared taken aback that his colleagues had cut off talks and allowed the programme to expire, saying he had anticipated negotiating up until the referendum vote so that his government could eventually campaign in favour of the deal.

It is hard to reconcile Tsipras’ defiant remarks (he and Syriza officials said they would campaign for a “no” vote) with Varoufakis’ claim that the government wanted to continue negotiations with the hope of securing a package that they could recommend. It appears that the Greek side thought that the Greek referendum would be seen as a powerful countermove and would force eleventh-hours concessions from the creditor side. As we’ve said repeatedly, it has been evident for some time that the lenders are not afraid of a default, nor are they swayed by Greek opinion (Tsipras has had approval ratings as high as 80%). Thus the Greek gambit looks to have been a serious miscalculation.

Bloomberg reports that the team that was working on the negotiations in Brussels was in the dark:

No one was more surprised about Greek Prime Minister Alexis Tsipras calling a referendum than his team of negotiators in Brussels.

Shortly before midnight on Friday in the Belgian capital, the Greeks and representatives of the European Union and International Monetary Fund, tucked away in the EU Commission’s Charlemagne building, learned via Twitter that their efforts were in vain, according to an EU official….

Up until that moment, the mood on both sides had been fairly positive, the official said. They were reaching agreement on a joint proposal to be presented to a meeting of finance ministry officials set for the next morning.

Since negotiations have broken down, the ECB has a great deal of difficulty arguing that it continues extending ELA support, particularly since powerful hardliners like Bundesbank president Jens Weidmann have been pressing for some time to restrict ELA advances. The bailout will not be extended, Greece will lose the opportunity to get €7.2 billion in bailout funds, and an arrearage on the €1,6 IMF payment due June 30 and a default on the ECB payment of €3.5 billion due July 20 is certain.

The well-connected Robert Peston of the BBC tells us that the ECB will act on Monday which will virtually force Greece to impose a bank holiday. From the BBC:

The European Central Bank is expected to end emergency lending to Greece’s banks on Sunday, the BBC understands.

The country’s banks depend on the ECB’s Emergency Liquidity Assistance (ELA). Its governing council is meeting later.

Greece will probably have to “announce a bank holiday on Monday, pending the introduction of capital controls”, a source told the BBC’s Robert Peston…

Austria’s Finance Minister Hans Jorg Schelling said a Greek exit from the euro now “appears almost inevitable”.

This report is clearly from a single source, but Peston would not run the story unless he thought his interlocutor had a good reading on how this was likely to play out. If this contact’s take pans out, a bank holiday will be a major blow, particularly coming at the start of the peak tourist season. As Nathan Tankus observed in a post earlier this month:

Two years ago in Cyprus, an emergency bank holiday was declared and capital controls installed. The bank holiday only lasted for twelve days yet supply chains started drying up instantly. An ex-Cyprus central bank governor told the Guardian:

Supplies of food are being exhausted and there are cases of raw materials like iron and timber being held up in customs because importers don’t have the cash to pay for them … No one expected, myself included, that the EU, ECB md IMF, would behave like this. Cyprus has been treated very badly … Where is the solidarity principle that is supposed to underline Europe?

Even 6 months later after the banks had reopened and capital controls were loosened, businesses were still having trouble getting basic supplies. This happened because their working capital was largely frozen and/or written down in the bail-in, or they had made payments but their suppliers were frozen because their own working capital had been largely frozen and/or written down. It is important to emphasize that their nearly two-week bank holiday was only to resolve insolvent institutions, not to build or significantly modify the payments system. Cyprus experienced a storm. It is not an exaggeration to say that freezing the Greek payments system would be like a financial hurricane and this one certainly looks to be a category five.

We will know soon enough if the ECB takes the drastic move that Peston’s contact suggests. But even if they do not take in on Monday, I had thought it was very likely that they’d end or restrict ELA support no later than June 30, when Greece goes into arrearage with the IMF. And even if Greece decided only to impose capital controls, they’d likely need to be stringent, and thus would also badly crimp business activity. Despite the belief of some readers that the Eurocrats would find a way to finesse the June 30 deadline, consistent with their past “extend and pretend” practices, we’d warned this was a hard deadline and would be very difficult to circumvent, particularly given the lack of good will on the side that would need to find the fix, that of the lenders. The endgame of the Greek negotiations is under way.


ONE MIGHT ASK: "WHAT NEGOTIATIONS?" SABER-RATTLING NEVER COUNTED AS NEGOTIATIONS IN MY BOOK.

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32. RHINOs in Charge Pat Choate

http://www.huffingtonpost.com/pat-choate/rhinos-in-charge_b_7647396.html

Please. No more GOP complaints about President Obama making Constitutional power grabs. RHINOs (Republicans in Name Only) led by Senator Mitch McConnell (R-KY) and Speaker John Boehner (R-OH) just gave the President;

1. Tacit approval to ratify a 12-nation trade agreement that covers 40 percent of the global GDP and was negotiated in secrecy by President Obama without Congressional input.
2. Agreed to allow the President to draft the implementing legislation for the Trans-Pacific Partnership.
3. Agreed to prohibit any amendments to the TPP.
4. Agreed to circumvent the treaty provisions of the Constitution and ratify this pact with a weakened Regular Order and a simple up-or-down vote.
5. Agreed to a Senate rule that for this one piece of implementing legislation cloture is banned and filibuster by any Senator is prohibited.
6. Agreed to allow this and subsequent Presidents to amend the TPP and involve other nations without any Congressional review.
7. Agreed to allow transnational corporations to challenge any U.S. federal, state or local law or regulation as "trade impeding" and allows that challenge to be heard by a tribunal composed of people who are not required to have Senate ratification and are not under the ethical requirements of the federal judiciary.
8. Agreed that there are to be no judicial reviews in the U.S. or elsewhere of these panel decisions.
9. Agreed to either change U.S. laws if required by these panels or pay fines to the plaintiff corporations from the U.S. Treasury.
10. Agreed that President Obama and his successor will have fast track authority for six years, allowing them to negotiate similar pacts with any other nation.

To add insult to Constitutional injury, the President kept secret the text of this agreement from Congress until March 2015, when only Members could view it in a guarded room in the Capitol basement. Members could not make copies; take notes or share with anyone what they had read.

It is simply unimaginable that Senator Majority Leader Lyndon Johnson (D-TX) or House Speaker Sam Rayburn (D-TX) or a succession of Republican leaders would have tolerated such a Presidential trampling of Congress's constitutional authority to regulate foreign trade or insult Congress by asking them to vote to "fast track" a secret global trade pact whose text Members could not share with advisors and constituents until after the legislative wheels were greased.

In sum, the GOP has given President Obama the largest victory of his second term and they did so over the opposition of a super majority of the President's own party. The weakening of Congressional and Judicial authority by today's GOP leadership and President Obama is historic and it weakens democracy and our entire form of Constitutional government.

When ratification of the Trans-Pacific Partnership comes to a final vote in several months, those who enacted this fast track legislation must be confronted in Washington and in their 2016 Party primaries. These Wall Street indebted congressional officials are unfit to rule our nation and must be returned to private life.

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33. On Greece and Europe: On the Delphi Declaration by MICHAEL HUDSON

http://www.counterpunch.org/2015/06/26/the-delphi-declaration/

MICHAEL HUDSON DOES GREECE...GO READ!

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34. There’s Something Wrong With The World Today and It’s 1995

A RECOUNTING OF THE BUBBLE ECONOMY SINCE 1995...WONKY, BUT WORTH A LOOK

http://www.alhambrapartners.com/2015/06/24/theres-something-wrong-with-the-world-today-and-its-1995/

THE STORY OF WHEN AND HOW WE GOT OFF THE TRACKS OF AN ECONOMY AND ONTO A ROLLERCOASTER

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35. I Am So Happy About Gay Marriage Being Legal in the US by Ian Welsh

But, yeah, sorry, but, can we talk Obama for a moment?

Obama did not support gay rights until after he was subjected to IMMENSE pressure, including public heckling and a gay donor strike. Now, I appreciate a politician who will cave to interests I believe in, but let’s be clear, this is a case of caving. My friends, above all things, supporting, trusting, and giving credit to people who do not actually have your interests in heart is what hurts you, again and again. Until you learn who you can actually trust (and for what), you are going to continue to get hurt.

Among the other news of the week was the passage of “Fast Track” legislation for the TPP trade deal. That is going to cost many of you your jobs, and it is going to make many of the rest of you poorer, even if you keep a job. People I trust on the Hill tell me that Obama has NEVER lobbied harder for anything (not even Obamacare) than he did for TPP...Obama, as a rule, is happy to give you things that the oligarchy doesn’t mind. They don’t, overall, mind gay rights. A large chunk of the oligarchy wanted Obamacare (it was and is a huge subsidy to insurance and pharma companies, among others). There is a reason the public option was never seriously considered by Obama; it was a potential threat to insurance companies.

None of this is to say Obama is all bad, he certainly isn’t. But he is not your friend if you want widespread economic prosperity, and he never has been. Nor will he ever be. Nor, to point out what should be obvious, is Hilary Clinton (also not always for marriage equality).

You set yourself up for immense hurt when you trust the wrong people with political power and it is important not to engage in revisionism about what is, after all, very recent history.

[DemReadingDU]

36. here is the link

http://www.ianwelsh.net/i-am-so-happy-about-gay-marriage-being-legal-in-the-us/

"You set yourself up for immense hurt when you trust the wrong people"

Interesting quote. There must be something going on behind the scenes. Something to blindside us.

[Demeter]

38. Ooops! thanks, and thanks for the warning

They are always seeking to pull something. They are psychopaths.

[Demeter]

37. Can we unscramble the euro mess? Can we afford not to?

AS TONTO REPLIED---WHAT DO YOU MEAN WE, WHITE MAN?

IT'S VERY SIMPLE...STRING UP A FEW BANKSTERS FROM GOLDMAN, AND THE AUSTERIAN, PUNISHING NONSENSE WILL COME TO AN ABRUPT END.

https://brianmlucey.wordpress.com/2015/06/27/can-we-unscramble-the-euro-mess-can-we-afford-not-to/

The Greek mess shows how debased the whole Euro project has become. Its time to think the previously unthinkable and consider how to unscramble the eggs. Its time to think about how to back out from the Euro. No one country can easily do this. The provisions don’t even allow for it to happen. Much talk emerges of “throwing Greece out of the Euro” but nobody knows what that means. We saw in Cyprus the introduction of massive capital controls, controls on banking transactions and transmission. For a while there was in effect a two currency regime in Cyprus. And Cyprus remained and remains in the Euro. So how can, and what would it mean in practice, Greece be “thrown out of the Euro”.

I supported the idea of the Euro. Naively, I imagined that this would be a step on the road to an ever closer union. A currency union without a functioning central bank, without a fiscal and transfer union, that is unsustainable. History is littered with the remains of mere currency unions. The Scandinavian union lasted for 54 years; the Latin Union for 62. Where are they now? So, yes, I and others thought: let's have the Euro, and then when it has settled down, move forward. But instead of the Euro being a step on the way it became an endpoint in and of itself. By denying the states the ability to devalue while neglecting to create effective economic union countermeasures the politicians of the early noughties created a monster. That monster has resulted in the worst of all worlds.

A currency union with integrated wholesale banking while retail banking remained national orientated resulted in a network of banks interconnected through the capital markets and thus exposed to the weakest link. At various times that was Ireland, Portugal, Spain…To prevent the whole house collapsing the ECB extended extraordinary liquidity, but in doing so got dragged into fiscal policy. This in turn has allowed the politicians, who run fiscal policy, to feel that they can dictate monetary policy. The whole thing is a mess and Greece the latest, most curdled, iteration. Now that the Greeks have been shown that literally nothing they can produce will satisfy the Procrustean argument of the Troika, we see that the Eurozone is in real danger of becoming a mechanism for regime change sans gunfire. Quite why the PTB think that it would be good to see a return to the dread dyad of PASOK/New Democracy, who took Greece over the brink of run, that logic escapes me.

No one country, realistically, can leave the Euro. The administrative and legal complexities of backing away are almost insurmountable. Faced with the prospect of redenomination risk deposits would flee faster than Greek deposits have done. And yet, if we will not move forward and create a economic and transfer union, and we will not go back, then we are condemned to stasis. The next eurogroup meeting should, but of course won't, begin the setting up of a technical working party. Rather than correcting the Greek homework and flinging it back with “could do better” they should consider the steps to Eurozone orderly breakup.

What would this look like? TARGET2 balances might seem an issue, with some who know better howling that the “losses” would “bankrupt” national central banks. National Central Banks with control of their own currencies cannot go bankrupt. The normal accounting and business rules simply don’t apply. So that is not an issue, at least not one that is a deal-breaker and a reason to stay. Redenomination risk of existing assets and liabilities is a problem. Irish assets and liabilities would shrink as the Punt Nua would be discounted versus the Euro, while the Neue Deutsche Mark assets and liabilities would rise. But a solution here might be to have a parallel currency, whereby existing assets and liabilities remain in Euros and all new transactions happen in the new currencies. Legal and technical barriers may be a bigger obstacle. But laws can be amended and computers reprogrammed. The American economist Barry Eichengreen feels that these barriers may be the biggest to euro breakup. I disagree.

The biggest barrier is political. Part of this is the inveterate need of politicians to be right, even when wrong. No politician easily admits error. Another part is the genuine sense that so much political capital has been poured into the Eurozone that to walk away would be folly. This is however a political sunk cost fallacy. The capital has been expended and can't be gotten back. To save face, lets not call this a Eurozone breakup but a rollback. I am not advocating Ireland “leave the euro”. We can't do a solo run. What we can do is offer to start work on the rollback. The northern Ireland peace process required technical work for years, then a situation of trust amongst the distrustful, where all jumped together. We have the political DNA to carry this out. What we lack is the political spine.

[Demeter]

39. A Sad Day for Europe

http://www.ideaeconomics.org/blog/2015/6/27/a-sad-day-for-europe

...the Troika consistently refused to engage the economic issues and evidence. Has austerity worked? Would the course preferred by the Troika result in better results for creditors? Does the hard line improve the prospects for European unity? Have the finance ministers served their respective states, or asked accountability from the banks? No, no, no, no and no. Yet the Neoliberal conviction and prescription is held ever more tightly.

Clearly austerity has not worked and has no prospect of working. Greece is in the condition it finds itself today because it, under pressure from the Troika and after signing the ill-begotten 2012 Agreement, enforced austerity as no other European state has done. The Greek people had five long years, since 2010 to witness that the actual results of attempting to shrink your way to growth are exactly as the Keynesian theory describes.

Clearly creditors are worse off. And acceptance of the Troika line would have only meant default on a larger debt. The best outcome for them (the creditors) would have been to restructure the debt into a form that allowed Greece to recover from the austerity-induced depression and get at least some return. But when the "they" who held the debt became the taxpayers of the states rather than the banks, their financial interests became secondary.

Would the capitulation demanded by Schauebel and the Troika improve prospects for success in the European experiment? That is a laughable proposition. In grim fact, the entire negotiation has been a spectacle of destroying any trust between states and giving lie to any democratic pretense under the EU. It must now be clear that the European Union, the European Central Bank and other institutions are instruments of control, not cooperation. In demonstrating the full power of their bargaining position, the Troika has exposed the depth of their devotion to a top-down Neoliberal agenda.

And there is really no debate on the economic points. The Troika does not deny that austerity was a failure. The Confidence Fairy never came. The privatizations, evisceration of labor protections and cutting of already scanty pensions did not lead anywhere but down. Nor do they deny that it would fail again. The Troika does not deny that creditors, taxpayers and economies would be better off were the terms of debt made sensible. Nor does it deny that the private banks were bailed out at the expense of European taxpayers. The Troika merely ignores the substance -- the economics, the financial realities, and the real sacrifices of the Greeks -- and moralizes from a position of no moral authority.

It is a sad day for Europe.

[Demeter]

40. The biggest threat to the economy has vanished

WHICH WAS IT? THE THREAT TO OBAMACARE? THE LACK OF CIVIL RIGHTS TO MARRY? THE GREEKS IN THE EUROZONE? WELL, NO....

http://finance.yahoo.com/news/biggest-threat-economy-vanished-104800919.html

Consumers didn't really want to spend their extra gas savings. Now, they do. The US consumer is at a turning point. Consumer spending, the bedrock of the economy and a massive component of gross domestic product (GDP), has been a headache for economists this year. But this week, we got a number of signs that the consumer is finally roaring back to life after a lackluster first half of 2015. On Thursday, we learned that personal spending rose 0.9% to a six-year high in May.

In a recent note, Deutsche Bank's chief US economist Joseph LaVorgna wrote:

"The elevated savings rate over the past several months has raised concerns amongst some policymakers that an improving labor market and low energy prices are not having the desired impact on consumer spending. In our view, these fears are overblown."

The increase in consumer savings, instead of spending, was surprising to economists. Near the end of last year and into 2015, economists were bullish on consumer spending as the price of oil crashed.

http://globalfinance.zenfs.com/en_us/Finance/US_AFTP_SILICONALLEY_H_LIVE/The_biggest_threat_to_the-90452b302cdd0f151ee6f0102c7d0263

(FRED) Oil prices crashed at the end of last year, and it took a few months for consumers to believe in the extra money in their pockets.

Oil prices peaked around June 2014, and began an unprecedented tumble of more than 50%. This somersault took gas prices along with it. Economists initially rejoiced, figuring that this meant that consumers were going to spend the extra disposable income. That did not happen. Instead, consumer savings increased. Toward the end of last year, we did see an initial jump in consumer spending, as measured by the pace of real Personal Consumption Expenditures, and highlighted by Morgan Stanley. In the fourth quarter of 2014, real PCE rose 4.4%, faster than the 2% average of the last four years. But then in the first quarter, real PCE plunged to 2.1%. Economists were baffled and began to admit that Americans were saving — not spending — the extra income that some had called a "tax break" or "windfall."

The other big sign of weak consumer spending came through in the retail-sales data, which read below expectations for much of the first half of 2015, prompting economists to say that the consumer could be a huge slowdown to economic growth. In a note last month, Morgan Stanley's chief US economist Ellen Zentner said: "Given its prominent role in the US economy, the consumer represents both the biggest upside and downside risks to growth." Things got even worse when we learned that the economy actually contracted to start the year. Economists had forecast that Q1 gross domestic product was 1%, but they were presented with an initial print of 0.2% that was later revised downward to -0.7%. (This Wednesday, the final GDP print settled at -0.2%.) Despite the quarterly slump, the upward revision brought some comfort to economists.

http://globalfinance.zenfs.com/en_us/Finance/US_AFTP_SILICONALLEY_H_LIVE/The_biggest_threat_to_the-4df26917b3138b5e09e80f6bcd36cf90

(UBS) Consumer spending is picking up.

But the real relief in the data was the upward revision to consumer spending, and what that means going forward. Consumer spending was revised to 2.1% from 1.8% in Wednesday's GDP revision.

"You cannot paint a picture of economic weakness or worrisome, lingering slack, if consumers are spending 2%-plus even if other sectors drag growth overall into negative territory," wrote Bank of Tokyo-Mitsubishi's Chris Rupkey in a client email on Wednesday after the data release.

And earlier this month, we learned that retail sales bounced back in May, rising 1.2% month-over-month and 2.7% year-over year.

"The US consumer is showing some verve," wrote Gluskin Sheff's David Rosenberg in a note to clients on Friday. "All the earlier concerns about saving the gas windfall have vanished into thin air."

http://globalfinance.zenfs.com/en_us/Finance/US_AFTP_SILICONALLEY_H_LIVE/The_biggest_threat_to_the-d72b0d1e2c43f892d569fe2dc79f5c09

(Business Insider) Consumers are feeling as good as they've felt since the financial crisis. Consumers' confidence in the economy, and signs of increased spending, come at a time when they are seeing an increase in real wage growth.

"Personal incomes advanced -0.5% for the second straight month, and as with spending, there were upward revisions back to early 2015," Rosenberg wrote. "Wages rose 0.5% too and are up a nontrivial 5% on a YoY basis. So much for lack of wage growth."

In June, the University of Michigan's consumer-sentiment index jumped to a five-month high at 96.1, prompting Rupkey to write, "now it looks like that spending spree will continue into June if the consumer puts his money where his mouth is." And so with the most recent data pointing to a stronger consumer, there's renewed confidence that the biggest threat to the economy has been dampened significantly.

ONE SWALLOW DOESN'T MAKE IT SUMMER, NOR DOES ONE DATA POINT ESTABLISH A TREND...TALK ABOUT GRASPING AT STRAWS!


I CANNOT TOP THIS PIECE FOR THE SHEER QUANTITY OF FOOLISHNESS, AND MY IRONY METER IS BROKEN (AGAIN). HAVE A GOOD WEEK, EVERYONE! I'M THINKING NEXT WEEKEND SHOULD BE EASY TO FOCUS ON SOMETHING.....

[magical thyme]

41. Top German Politician Blasts Nuland & Carter: "F##k US Imperialism"

http://www.zerohedge.com/news/2015-06-28/top-german-politician-blasts-nuland-carter-fk-us-imperialism

Here is the full translation of the (facebook) post:


“The US ‘Defense’ secretary, i.e., war minister is in Berlin. He called on Europe to counter Russian ‘aggression’. But in fact, it is US aggression which Europeans should be opposing.

“The Grandmaster of US diplomacy, George Kennan described the eastward expansion of NATO as the biggest US foreign policy mistake since WW2, because it will lead to a new cold war.

“The US diplomat Victoria Nuland said we have spent $5 billion to destabilize the Ukraine. They stoke the flames ever higher, and Europe pays for it with lower trade and lost jobs.

“Nuland says ‘F*ck the EU’. We need need an EU foreign policy that stops warmongering US imperialism.

“F*ck US imperialism!”

[Demeter]

45. He's right, of course; which means the US Military Industrial Intelligence & Commerc will not listen

and short of a really definitive revolution here at home, or a complete defeat including invasion and occupation from abroad, I do not know who or how to change any minds.

[magical thyme]

42. Greek Capital Controls Begin: Greek Banks, Stock Market Will Not Open On Monday

http://www.zerohedge.com/news/2015-06-28/greek-capital-controls-begin-banks-remain-closed-monday
Update 2: Greece's Skai reports that if/when banks reopen (supposedly on Tuesday), a 60€ withdrawal limit will be imposed.

Update: In a televised address to the nation, Greek PM Alexis Tsipras assured Greeks that their deposits are safe despite an upcoming bank holiday and despite the fact that Greek stocks will not open for trading on Monday. Tsipras also said Athens has re-applied for a bailout extension and urged Greeks to "remain calm" in the face of what is sure to be a turbulent week.
•GREEK PRIME MINISTER SAYS GREEK PEOPLE SHOULD REMAIN CALM
•GREEK PM: BANK OF GREECE PROPOSED BANK TRANSACTION RESTRICTIONS
•GREEK PRIME SAID GREECE RE-APPLIED FOR BAILOUT EXTENSION
•GREEK PRIME MINISTER SAYS DEPOSITS ARE COMPLETELY SAFE

[magical thyme]

43. Ignoring Tsipras Plea For Calm, Greeks Storm ATMs, Stores, Gas Stations

http://www.zerohedge.com/news/2015-06-28/ignoring-tsipras-plea-calm-greeks-storm-atms-stores-gas-stations
From the pix, I'd say "storm" is a bit overstated. But the lines have formed...

Just a few hours ago Greek PM Tsipras addressed his nation imploring then to "remain calm" and reassuring them that their "deposits were safe." It appears the Greeks did not believe him. Many were wondering where the Greek bank lines were for the past several months. Turns out the local depositors were merely waiting until just after the last minute to withdraw their funds... horde gas... and stack food. Greece, it appears is Venezuela - the new socialist paradise.

Tsipras implored: "Keep Calm...."

[DemReadingDU]

44. Should be an interesting week, n/t

[Demeter]

46. One in a series

Damn the follies of Goldman Sachs. They should be shut down, and their top 5 levels of management jailed for treason.