Hot List 7/22

July 22nd, 2010 · · Hotlist

Dems may keep Bush tax cuts

Democrats are considering a plan to delay tax hikes on the wealthy for two years because the economic recovery is slow and they fear getting crushed in November’s election. It could mean a big reprieve for families earning $250,000 and above annually. President George W. Bush’s tax cuts will expire at the end of the year unless Congress acts to delay their sunset. Some Democrats are now arguing forcefully that a delay is a win-win plan that would help the federal budget without hurting the economy.”
Strippers, Booze and Race Riots: BP’s Cleanup Workers Run Amok in Grand Isle

I hear about the race riot at Daddy’s Money almost as soon as I arrive on Grand Isle, Louisiana. My friend and I are going to the bar tonight to catch the “female oil wrestling” oil-spill cleanup workers have been packing in to see on Saturday nights. When we stop by the office of the island’s biggest seafood distributor, he tells us that two days ago a bunch of black guys and a bunch of white guys got into a big fight at the bar. It spilled out all over the street and had to be broken up by a ton of cops. According to the Census, 1,541 people live in this slow Southern resort town. An estimated 2.9 of them are black. That was before the spill. The seafood guy gestures in the direction of the floating barracks being built on barges in the bay to house the lower-skilled cleanup workers, and says that people think the barracks will keep those workers—who are mostly black—from “jumping off” onto dry land and causing trouble. That night, dozens of men in race-segregated packs crowd around to watch strippers dance around and then tussle inside the bouncy inflatable ring set up inside Daddy’s Money. Female oil wrestlers need, obviously, to be oiled. Plastic cups full of baby oil are being auctioned off, along with the right to rub their contents all over one of the thong-bikinied gals. “I hope there’s no dispersant in that oil!” someone quips. The bidding before the first match starts at $10; it ends pretty quickly when some kid offers $100.”
Boneheaded Economic Policies of U.S. [NAFTA!] Drives Many Immigrants to Our Shores

The U.S. immigration debate tends to ignore a fundamental question: Why do so many people migrate here from Mexico and other countries in Central America? The answer is that they need to look for jobs because there aren’t enough jobs at home. Several years of the wrong economic policies have destroyed millions of jobs, both in the countryside and in cities. These economic policies tend to concentrate wealth. They’re based on what’s often called the “Washington consensus” because they’re designed and dictated from institutions based in the U.S. capital like the World Bank and the International Monetary Fund. During the last 30 years, Mexico and other countries that have followed these policies have eliminated support mechanisms to local producers, while with trade agreements like the North American Free Trade Agreement (NAFTA) and the Dominican Republic-Central America Free Trade Agreement (CAFTA) they have allowed big transnational companies to import cheaper products into their countries. That’s meant, for example, the arrival of cheap corn and other basic food staples, which crowded out local production and ultimately forced millions of small farmers off their land. Another result of NAFTA is that tens of thousands of small and medium companies, which provide 90 percent of Mexico’s jobs, have wound up bankrupt due to a lack of financial support.
Despite billions to banks, small businesses struggle for loans

Across the country, thousands of small business owners are fighting for survival and hurting for cash after getting the cold shoulder from banks over loan requests. The Troubled Asset Relief Program poured hundreds of billions of dollars into big banks to help spur business lending during the recession, but the cash infusion hasn’t prevented thousands of companies from closing their doors as banks have tightened their credit standards and purse strings. The Obama administration is pushing a $30 billion Small Business Lending Fund to address the problem. The proposal, which passed the House of Representatives in June, would provide smaller community banks with government loans that become cheaper as the banks lend more money to small businesses.”
Proof Of Gold Price Suppression

Adrian Douglas, board member of GATA, once again takes a long hard look at the gold market and provides evidence of gold price manipulation. His conclusions: * the gold price is suppressed through fractional reserve bullion banking * the gold market is selling on average 45 ounces of gold for every one ounce of real physical gold via “unallocated gold” (fractional reserve bullion banking). In other words the gold market is backed by only 2.3% gold * The true price of physical gold is currently around $54,000/oz if fractional reserve bullion banking did not exist. In the presence of fractional reserve banking with 2.3% gold backing the market price of “gold” is reduced to $1200/oz * The US dollar has a purchasing power that is 45 times over valued * The way to end gold price suppression is for investors to ensure they have allocated physical bullion preferably held outside of the bullion banking system.
Did BP Keep Drilling Even Though It Had Lost Control of the Oil Well Much Earlier?

The New York Times noted yesterday: “Even though it was more than a month before the explosion, the [Deepwater Horizon] rig’s safety audit was conducted against the backdrop of what seems to have been a losing battle to control the well. On the March visit, Lloyd’s investigators reported “a high degree of focus and activity relating to well control issues,” adding that “specialists were aboard the rig to conduct subsea explosions to help alleviate these well control issues.” As I pointed out last month: “The Deepwater Horizon blew up on April 20th, and sank a couple of days later. BP has been criticized for failing to report on the seriousness of the blow out for several weeks. However, as a whistleblower previously told 60 Minutes, there was an accident at the rig a month or more prior to the April 20th explosion: [Mike Williams, the chief electronics technician on the Deepwater Horizon, and one of the last workers to leave the doomed rig] … says going faster caused the bottom of the well to split open, swallowing tools and that drilling fluid called “mud.” “We actually got stuck. And we got stuck so bad we had to send tools down into the drill pipe and sever the pipe,” Williams explained. That well was abandoned and Deepwater Horizon had to drill a new route to the oil. It cost BP more than two weeks and millions of dollars.”
No Wonder the Outlook for the Economy is “Unusually Uncertain” … the Fed is Killing It

Fed Chairman Ben Bernanke testified that the outlook for the economy is “unusually uncertain”. That’s not surprising. The central bankers knew exactly what was going on, a full two-and-a-half years before the big bang. All the ingredients of the looming disaster had been neatly laid out on the table in front of them: defective rating agencies, loans repackaged to the point of being unrecognizable, dubious practices of American mortgage lenders, the risks of low-interest policies. But no action was taken. Meanwhile, the Fed continued to raise interest rates in nothing more than tiny increments…
US financial system support UP $700 billion in past year, watchdog

“Indeed, the current outstanding balance of overall Federal support for the nation’s financial system…has actually increased more than 23% over the past year, from approximately $3.0 trillion to $3.7 trillion — the equivalent of a fully deployed TARP program — largely without congressional action, even as the banking crisis has, by most measures, abated from its most acute phases,” the TARP inspector general, Neil Barofsky, wrote in the report. Barofsky also in the report ramped up his criticism of the Treasury’s housing relief efforts, saying that its program to reduce monthly mortgage payments for struggling homeowners was showing “anemic” participation numbers and had failed to “put an appreciable dent in foreclosure filings.” He said Treasury had refused his repeated recommendations to announce more effective goals and benchmarks for its mortgage modification program, which could reach up to $50 billion in TARP funds.
Van Hollen, ‘Corporate Candidate’ Murray Hill Spar Over Political Rights of Businesses

Eric Hensal, the designated human delegate of public relations firm Murray Hill Inc., basked in the newfound political influence corporations enjoy. “Murray Hill wants to put a logo on your candidate,” retorted Rep. Chris Van Hollen (D-Md.), telling the audience that the Supreme Court’s January decision in campaign finance case Citizens United v. Federal Election Commission will allow large corporations to gain undue influence over candidates. The exchange between Van Hollen and Hensal had the audience laughing, clapping, and, occasionally, booing and hissing.”
SEC Knew About Repos Accounting Before Lehman: Report

The U.S. securities regulator was aware of Wall Street’s potentially questionable accounting practice of classifying repurchase agreements as sales instead of borrowings long before the collapse of Lehman Brothers raised the issue, the Wall Street Journal reported. Since 2004, the Securities and Exchange Commission (SEC) has questioned 115 transactions by 102 different companies to assess if they accounted properly for repurchase agreements, or repos, among other short term trades, the Journal said citing a report prepared by research firm AuditAnalytics.com. AuditAnalytics.com has reviewed more than 115,000 comment letters the SEC had sent to companies asking questions about their securities filings, the paper said.”