News Mar 2014

From the Week of March 24 – March 30

1. Worker Coops in NYTimes Magazine. Who Needs a Boss?. Not a great article but it is notable that worker coops are getting prominent, and generally favorable, notice from the Times. And, if gives us a chance to shamelessly plug Omar Freilla’s talk at our speaker series this Sunday. If you really want information on worker coops, come hear the founder of “Green Worker Cooperatives”.

2.BBC Analysis Podcast. Eldar Shafir on Scarcity. We have previously posted on this recently published book, Scarcity, Why Having Too Little Means So Much. One of the authors appeared on the almost always worthwhile BBC show Analysis to discuss.

3. New York Times Columnist. Wealth Over Work. We don’t always love Paul Krugman, but he is giving some PR to “Capital in the Twenty-First Century,” the magnum opus of French economist Thomas Piketty regarding the dispiriting historical trend towards ever-higher returns on capital.

4. New York Times Columnist. A Nation of Takers?. Kristof is more reliably good. Here he points out some of the welfare that Wall Street tycoons and others take from the government.

5. New York Times Dealbook. UBS Suspends some traders involved in currency rigging scahdal. As we have noted before, the currency rigging, like LIBOR before it, it notable not just on its own right but because it is such a clear illustration of how Wall Street flouts the law. This lawbreaking took place for years, across many countries and banks. Isn’t this the sort of thing the RICO Act was designed for?

6. THE MEDIA EQUATION: Risks Abound as Reporters Play in Traffic
The availability of ready metrics on content is not only changing the way news organizations compensate their employees, but will have a significant effect on the news itself.

7. DEALBOOK: Deducting the Costs of a Government Settlement
A recent court ruling in a case involving Joseph P. Nacchio, the former chief executive of Qwest Communications, raises the question of how the tax code may be seen as indirectly subsidizing wrongdoing, Peter J. Henning writes in White Collar Watch.

8. DEALBOOK: A Question of What’s a Reasonable Reward
A money manager claims Coca-Cola allocated as much as $24 billion toward stock-based rewards for its senior people.

9. YOUR MONEY SPECIAL SECTION: Freelancers Piece Together a Living in the Temp Economy A Las Vegas entertainer who works a variety of jobs finds she must reinvent herself.

10. Do Too-Big-to-Fail Banks take on excess risk? The NY Fed says yes.The NY Fed came out with a number of studies of TBTF. The most notable one is the one that says they increase their risk-taking when they can count on a government bailout. (Fed studies) Taxpayer Subsidies and Too-Big-to-Fail Banks
The New York Fed has resisted calls to break up the big banks and these papers don’t come out and contradict that position, but they do make it clear that SOMETHING more needs to be done. Will it? That remains to be seen.

11. DEALBOOK: Bank of America to Pay $6.3 Billion to Settle Mortgage Securities Suit
The payment settles a lawsuit arising out of troubled mortgage-backed securities the bank cobbled together and sold to Fannie Mae and Freddie Mac in the run-up to the financial crisis.

12.DEALBOOK: Pitfalls of Reverse Mortgages May Pass to Borrower’s Heirs
The loans that promised to help older people stay in their homes in retirement are, in some cases, now pushing their children out.

13. DEALBOOK: Citigroup Fails Federal Reserve’s Stress Test for 2nd Time in 3 Years
The Fed’s decision is prompting calls for another round of changes at the top of the bank’s management and questions over whether the bank should break up its far-flung operations.

15. Proposed Housing Bill Would Create a Co-op of Mortgage Lenders
The proposal would make the lending system more like a public utility by creating a co-op of lenders that would be the sole issuer of mortgage-backed securities guaranteed by the government.

From the week of March 17-March 23

1. The Extra Environmentalist has had two very good episodes since last we noted them. The most recent is a very good explication of money and banking with the writer of (and titled) Positive Money; the one before that was on the culture of addiction, which we have talked about in connection with the Ethics, Poverty, and Finance outline, as well as when critiquing some of the stomach churning confessions of additions to money we have heard from ex-wall streeters.

2. Deal Book. Good update on some of the outrageous practices being pursued by pay day and other predatory lenders; with NY’s Superintendent of Financial Services, Ben Lawsky, again among the most active law enforcement agents going after this.

3. Counterpunch. This is a really in depth update on the recent strategies of the private prison industry, their political lobbying, and their turn to half-way houses and other forms of supervised release services to make up the hit they are taking as a result of the otherwise hopeful trend towards reducing prison populations.

4. Washington Post Blog. Great insights on how charter schools and other attacks on public schooling either by design or in practice result in increased segregation.

5. Billionaires with Big Ideas are Privatizing Science (From NYT). Extensive piece on depressing trend towards de-funding of government support of science, leaving it to rich guys to promote their own (often naive) personal scientific dream projects.

6. Income Gap, Meet the Longevity Gap (from NYT). The type of analysis found in The Spirit Level comes to two Virginia counties where massive income gaps are shown to highly correlate with health and longevity disparities.

7. On the Wrong Side of Globalization (from NYT). Joseph Stiglitz dismantles TPP.

8. HIGH & LOW FINANCE: Corporate Lies Are Increasingly Immune to Investor Complaints
A recent court ruling in Germany, along with a pending case before the United States Supreme Court, could make it harder for investors to recoup damages tied to company fraud.

9. DEALBOOK: $80 Million for 6 Weeks for Cable Chief
Rob Marcus, who became chief executive of Time Warner Cable in January, will receive nearly $80 million if the deal to sell the company to Comcast closes.

10. EDITORIAL: The Plot to Cut Food Stamps, Foiled
Republicans are furious that states have decided to be generous to the neediest families.

11. European Officials Reach Deal on Failed-Bank System
The agreement, still requiring sign-off by the European Parliament and E.U. governments, would be a big step toward a euro zone banking union.

12. DEALBOOK: Fed Official Expresses Concern on Leverage Rule
William C. Dudley, president of the Federal Reserve Bank of New York, raised the possibility that a stricter cap on the amount of borrowing that big banks can do could inhibit the Fed’s ability to conduct monetary policy, according to three people who knew about his concerns.

13. OP-ED CONTRIBUTOR: After the Protests
Social media is fueling a boom-and-bust cycle of political activism.

14. DEALBOOK: Questions Over Goldman Deal as Investors Sit in the Dark
In a fight over a hotel company that went “dark,” investors have accused Goldman Sachs of having conflicting interests, writes Jesse Eisinger in The Trade column.

15. DEALBOOK: Costly Loans Are Drawing Attention From States
States are increasing efforts to shield vulnerable Americans from short-term loans with interest rates that can exceed 300 percent.

16. DEAL PROFESSOR: Ruling Highlights Unequal Treatment in Penalizing Corporate Wrongdoers
A case involving the sale of the Rural/Metro Corporation shows how Delaware law helps directors avoid penalties for misconduct.

17. SALON. Paul Krugman wont save us: we need a new conversation about inequality. Should this be the challenge we seek to answer in our next book/video production? it is a call for regular people to take hold of the debate on inequality, release it from the grips of wonky technicians, and return its focus to what it should always have been about: class and the triumph of one over the other for the last 4 decades in engineering law and social policy to widen the gap between the rich and everyone else.

18. DEALBOOK: Bond Insurer Files Suit Against Detroit in Setback for Bankruptcy Plan
The Financial Guaranty Insurance Company wants to be paid back for the $1.4 billion it claims it loaned Detroit’s pension fund in 2005.


From Week of March 10 – March 16

1. The Spirit Level authors Richard Wilkinson and Kate Pickett look-back (in this article from the Guardian) at the success of their book on the social maladies accompanying inequality, and describe the growing body of confirming and expanding studies that have followed it.

2. Not brilliant, not unprecedented, but well written — and out of nowhere — comment, titled Passive revolution in play once again, to an Ohio newspaper on the perniciousness of unquestioned mainstream ideology.

3. Credit Suisse Documents Point to Mortgage Lapses
A newly released trove of internal emails and documents, mostly from 2006 and 2007, paint a troubling picture of how Credit Suisse operated as the housing bubble inflated.

4. After Big Bet, Hedge Fund Pulls the Levers of Power
The activist hedge fund manager William A. Ackman bet a billion dollars on the collapse of the nutritional supplement company Herbalife, then launched an extraordinary campaign to hasten that development.

5. Inside the Weirdly Bipartisan, Very Optimistic World of Prison Reform. If really take seriously the view (as this altbanker does) that a better metric of social success than GDP would be to just investigate the state of our carceral system and public hospitals, then there is room for optimism. Prison reform, as this article explains, is becoming a bipartisan issue, and real change is happening.

6. Welcome to Satan’s Ball, more great stuff on culture, ethics, politics, and finance by Chris Hedges; this time from Truthdig.

7. In a show of direct democracy, Vermont pushes for a public bank”

8. More on Eminent Domain Solutions for Underwater Houses. Ellen H. Brown, the public banking guru, posted this exchange between Robert Hockett, the Cornell Law prof. who drafted the Richmond County plan, and some doubter. It is excellent.

9. Understanding the Propaganda Campaign Against Public Education. Perhaps our next book should help bring into greater use the word “agnotology”, which is the study of the cultural production of ignorance. Anti-education privatization stalwart, Diane Ravitch, briefly posts in The Huffington Post about how it is being applied to Education.

10. Pitfalls Seen in a Turn to Privately Run Long-Term Care
New York is one of at least 26 states rolling out managed long-term-care programs under Medicaid, but the widely praised version in Tennessee has had problems.

11. Why Private Prisons House More Inmates of Color. Christopher Petrella’s study on this subject has gotten a fair amount of recent publicity, and deserves more. Basically, private prison operators are cherry-picking young, healthy, African Americans to fill their facilities, because they are less costly … and perhaps there is less political pressure to provide them quality (more expensive) rehabilitative services.

12. Would you delay buying a $30 shirt for months to save 8 cents? Me neither. Interesting debunking of deflationary fears by Dean Baker.

13. NEWS ANALYSIS: Regulators Size Up Wall Street, With Worry
Some government authorities are publicly questioning whether misdeeds are not just the work of a few bad actors, but rather a flaw that runs through the fabric of the banking industry.

14.DEALBOOK: U.S. Overstates Efforts to Prosecute Mortgage Fraud, Watchdog Says
The Justice Department has repeatedly and significantly overstated its efforts to prosecute mortgage fraud, an internal watchdog said on Thursday.

15. Senators Draft Housing Finance Overhaul
The plan, from the Democratic chairman and top Republican on the Banking Committee, will seek to make future taxpayer bailouts less likely.

16. HIGH & LOW FINANCE: A Review of Banks in Europe Gets Results
UniCredit’s announcement of a 15 billion euro loss is seen as an attempt to get out in front of a European Central Bank review of large banks.

17. California Sued Over Diversion of Money From National Mortgage Settlement
Three nonprofit groups want Gov. Jerry Brown to return $369 million used to pay down state debt, rather than help struggling homeowners.

18. F.D.I.C. Sues 16 Big Banks Over Rigging of a Key Rate
The action seeks to recover losses the rate manipulation caused to 10 banks that failed and were taken over by the agency.

From Week of March 3 – March 9

1. In The Stone That Brings Down Goliath, Ellen H Brown, the prophetess of all things public banking, comes out swinging in favor of Richmond CA’s plan to use eminent domain to write down some under-water mortgages. She is, as always, very thorough and persuasive.

2. Suffering? Well you Deserve it, is a great article by Chris Hedges in Truth out which covers so many of our points about neoliberal ethics, poverty, and true compassion … he is practically writing our planned next book. He had another shorter post on Ad Busters this week, titled the Cult of Self, on the theme of self obsessed morality and its link to finance.

3. The BBC’s In Our Time coincidentally had a podcast episode two weeks ago on Social Darwinism, a subject we plan to investigate in the Ethics, Poverty and Finance project as part of the sordid tale of theories justifying elitist ethics.

4. Thomas Greco is one of the foremost advocates and writers on the subject of complimentary currencies. He has a relatively short and entertaining blog-post titled Money, debt and the end of the growth imperative, about the “cancer” of expanding debt and the benefits of non-debt based currencies.

5. FAIR GAME: Break Up the Bank? It’s Not for You to Ask
JPMorgan Chase is trying to stop a shareholder’s proposal from going to a vote at its annual meeting.

6 . OPINIONATOR | THE GREAT DIVIDE: College, the Great Unleveler
Is higher education actually making inequality worse?

7. DEALBOOK: Citigroup Says Mexican Subsidiary Was Defrauded of as Much as $400 Million

8. ECONOMIC VIEW: In Search of a Stable Electronic Currency
Bitcoin has fluctuated wildly in value, but it could indirectly point the way toward a system of better pricing and risk management.

9. ECONOMIST: Trusting the ‘Sharing Economy’ to Regulate Itself
Rather than challenging new forms of peer-to-peer commerce, like Airbnb or Uber, government should foster the kind of self-regulation that prevails in many established industries and professions, an economist writes.

10. High-Interest Web Banks on the Rise in China
The sector’s growth is intensifying competition for deposits and putting pressure on state-run banks, which are struggling with a severe cash squeeze.

11. DEALBOOK: Market and Rates Helped Private Equity Chiefs Thrive Last Year
Lucrative payouts were helped greatly by the combination of low interest rates and high stock prices, which was ideal for selling investments.

12. Picking Up the Pace at the S.E.C.
The Securities and Exchange Commission needs to pick up the pace of its overhaul of regulation of the biggest banks, an economist writes.

13. In Banking Overhaul Fight, a Ruckus Over an Obscure Product
The banking industry has been making loud noises about the regulation of collateralized loan obligations, a little-known but risky financial product.

14. DEALBOOK: Senate Panel Considers 3 Futures Commission Nominees
The confirmation process comes at an important time for the Commodity Futures Trading Commission. The 2010 Dodd-Frank financial overhaul law expanded the agency’s supervisory powers over derivatives and complex financial instruments, many of which helped to accelerate the financial crisis.

15. Pitfalls Seen in a Turn to Privately Run Long-Term Care
New York is one of at least 26 states rolling out managed long-term-care programs under Medicaid, but the widely praised version in Tennessee has had problems.

16. The Significance of the Minimum Wage for Women and Families
Working women and their families bear the brunt of a low minimum wage, an economist writes.

17. Debunking Ryan’s poverty trap myth. Good facts and figures here for our study of poverty and poverty traps.