Business Insider CEO: Wall Street Is Just A Bunch
Of Kids Playing With Dynamite

post from Crooks and Liars on 14 May 2012 10:00:09 AM. © Crooks and Liars

Business Insider CEO, Henry Blodget, says what we now know is the truth: Wall Street is just a bunch of kids playing with dynamite. And where does the buck stop? Not with CEO Jamie Dimon! It stops somewhere over there, with some other people?who will no doubt collect a golden parachute and get a better job at a hedge fund:

Wall Street can't be trusted to manage?or even correctly assess?its own risks.This is in part because, time and again, Wall Street has demonstrated that it doesn't even KNOW what risks it is taking. In short, Wall Street bankers are just a bunch of kids playing with dynamite.
There are two reasons for this, neither of which boil down to the "stupidity" that most people generally assume is involved. The bankers who place these bets are anything but stupid.
The first reason is that the gambling instruments the banks now use are mind-bogglingly complicated. Warren Buffett once described derivatives as "weapons of mass destruction." And those weapons have gotten a lot more complex in the past few years.
The second reason is that Wall Street's incentive structure is fundamentally flawed: Bankers get all of the upside for winning bets, and someone else?the government or shareholders?covers the downside.
The second reason is particularly insidious. The worst thing that can happen to a trader who blows a huge bet and demolishes his firm?literally the worst thing?is that he will get fired. Then he will immediately go get a job at a hedge fund and make more than he was making before he blew up the firm. Meanwhile, if the trader's bet works?and the bigger the better?he'll look like a hero and collect an absolutely massive bonus. If you had those incentives, you would do exactly the same thing that Wall Street traders do: Bet the company, day after day. (It's not your company, after all, so who the heck cares?)
So, what's the solution? It's very simple. Congress needs to:
Radically increase bank capital requirements, so even massive bets can't threaten the system
Once again, separate "banking" from Wall Street gambling. Glass Steagall worked very well for 70 years?let's bring it back.
Lay out a plan, in advance, to manage the failure of even the largest financial institutions?by stepping in, seizing the bank, firing management, zeroing out shareholders, haircutting bondholders, and then injecting new SENIOR capital (fully protected) and re-floating or selling off the firm. This will allow the entity to keep operating, and it will stick the losses where they belong?with the idiots who bought the bank's stock or loaned it money. Meanwhile, the systemic threat will be eliminated.
That's the answer. And now that JP Morgan has proven that even "the best" banks haven't the faintest idea what they're doing (or don't care), it's time for Congress to finally make it happen.That nothing changed after the financial crisis is outrageous. But if nothing happens now, our entire government should resign in shame.

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http://crooksandliars.com/susie-madrak/business-columnist-wall-street-just-b

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National Security Brief: May 14, 2012

post from ThinkProgress on 14 May 2012 10:00:05 AM. © ThinkProgress

– A Pentagon-funded study found that the U.S.-trained and -funded Afghan police that follow U.S. soldiers into town to establish government authority are failing and often susceptible to corruption and other temptations of lucrative organized crime.

– Insurgents assassinated a former Taliban official turned member of the Afghan High Peace Council aimed at reconciling the government and Taliban insurgency in what a fellow Council member called a “big loss.”

– The Wall Street Journal reports that “international donors called on Sunday for an inquiry into potential mismanagement of the United Nations-administered trust fund that helps pay for Afghanistan’s fledgling police force.”

– The European Union imposed a new round of Sanctions on Syria Monday, highlighting frustrations with the length of time it is taking United Nations’ mission leader Kofi Annan to broker a ceasefire.

– An estimated 10,000 people followed a group of a dozen Russian writers leading a march through Moscow — a “test stroll” to see if police interfered, which they did not — in opposition to President Vladimir Putin’s newly re-established government.

– U.S. Special Operations Command (SOCOM) wants to form a global network linking special operations forces of allied and partner nations with regional coordination centers to combat terrorism.

– Human Rights Watch today accused NATOP of failing to acknowledge the scope of collateral damage it caused during the campaign that helped oust former Libyan leader Muammar Qaddafi.

– A unnamed source “from an IAEA member country that is severely critical of Iran’s assertions that its nuclear activities are peaceful” provided the Associated Press with a drawing “based on information from inside an Iranian military site” showing an explosives chamber of the the type needed for nuclear weapons related tests.

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http://thinkprogress.org/security/2012/05/14/483474/national-security-brief-may-1
4-2012/

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Morning Briefing: May 14, 2012

post from ThinkProgress on 14 May 2012 10:00:05 AM. © ThinkProgress

A new poll shows that most Americans support same sex unions by a large margin, whether in the form of civil unions or full marriage equality. Sixty two percent of Americans believe in some form of union for gay and lesbian couples, with thirty eight percent believing in full marriage equality and twenty four percent supporting civil unions or something similar, according to a new New York Times/CBS News poll.

Three high-ranking executives at JPMorgan Chase are expected to resign this week following their roles in the bank’s recent $2.3 billion loss from risky trades. Ina Drew, the bank’s chief investment officer and one of Wall Street’s most powerful women, will be among the departures.

Democratic Massachusetts Senate Candidate Elizabeth Warren is calling for JP Morgan CEO Jamie Dimon’s resignation from the Federal Reserve Bank of New York, arguing his position on the board represents a conflict of interest.

More than 230,000 Americans in half a dozen states lost crucial unemployment benefits over the weekend according to a new report, the latest casualties of Republican-backed cuts to federal programs designed to help workers who cannot find jobs.

Tea Party activists are turning their focus to electing far-right Republicans to the U.S. Senate, including several who will not commit to backing Senate Republican Leader Mitch McConnell (R-KY).

Greece is moving closer than ever to dropping out of the Euro Zone after the new Parliament has repeatedly failed to form a new government. Though elections were less than 10 days ago, the country is now hurtling towards a new round after insurgent parties rejected the austerity plan of the former ruling party.

The European Union imposed new sanctions on Syria today, hoping to curb funding for the regime after diplomatic efforts have failed to deescalate the mounting violence.

The Chief of Staff to Florida Gov. Rick Scott (R) resigned amid allegations of improper influence peddling and steering of no-bid contracts to friends.

Mitt Romney?s son Josh was in attendance at the Arizona Republican Convention on Saturday to try and secure the state?s 29 winner-take-all delegates for his father, but Rep. Ron Paul (R-TX) supporters didn?t take kindly to his speech, repeatedly booing him and cutting his remarks short.

And finally: Will Ferrell reprised his role as Geroge W. Bush on this weekend’s Saturday Night Live, playing Joe Biden’s semi-imaginary friend.

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http://thinkprogress.org/politics/2012/05/14/483455/morning-briefing-may-14-2012/

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GOP Rep. Lankford Explains Why It Should Be Legal
To Fire Someone For Being Gay: ‘It’s A Choice Issue’

post from ThinkProgress on 14 May 2012 10:00:05 AM. © ThinkProgress

Rep. James Lankford (R-OK) told ThinkProgress last week that he believes someone should be able to be fired for his or her sexual orientation.

In a conversation on Capitol Hill, Lankford expressed his strong belief that being gay is a choice, and that LGBT workers should not be protected from workplace discrimination because it’s something they can change. “You don’t walk up to someone on the street and look at them and say, ‘gay or straight?’” Lankford said:

STRASSER: Would you support a law that says you can’t fire someone for their sexual orientation –
KEYES: Similar to protections for people on race or gender?
LANKFORD: Well, you’re now dealing with behavior and I’m trying to figure out exactly what you’re trying to mean by that. Because you’re dealing with — race and sexual preferences are two different things. One is a behavior-related and preference-related and one is something inherently — skin color, something obvious, that kind of stuff. You don’t walk up to someone on the street and look at them and say, “Gay or straight?”
KEYES: But you think that even if you can’t see they’re that way, you don’t think someone is born gay necessarily?
LANKFORD: Do I personally? No. I don’t. I think it’s a choice issue. Are tendencies and such? Yes. But I think it’s a choice issue.

Watch it:

Being gay is actually not a choice, according to the American Medical Association, the American Association of Pediatrics, the American Psychological Association, and all other accredited medical organizations. A large percentage of LGBT workers have experienced discrimination at work and many have been fired because of their sexual orientation.

Though Lankford will surely vote against it, a bipartisan group of senators released a letter yesterday calling on Congress to hold hearings about putting a non-discrimination law in place. The Senate Health, Education, Labor & Pensions Committee will take up the issue later this month.

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http://thinkprogress.org/lgbt/2012/05/14/482200/lankford-fired-gay/

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U.S. Coal Generation Drops 19 Percent In One
Year, Leaving Coal With 36 Percent Share Of Electricity

post from ThinkProgress on 14 May 2012 10:00:04 AM. © ThinkProgress

Power generation from coal is falling quickly. According to new figures from the U.S. Energy Information Administration, coal made up 36 percent of U.S. electricity in the first quarter of 2012 — down from 44.6 percent in the first quarter of 2011.

That stunning drop, which represented almost a 20 percent decline in coal generation over the last year, was primarily due to low natural gas prices. As EIA explains, natural gas generation will climb steadily this year, while coal will see a double-digit drop by the end of 2012:

Natural?gas?fired generation continues to expand its share of total generation at the expense of coal?fired generation. During the first quarter of 2012, natural gas accounted for 28.7 percent of total generation compared with 20.7 percent during the same quarter last year. In contrast, coal?s share of total generation declined from 44.6 percent to 36.0 percent over the same period.
Prices for natural gas delivered to the electric power industry fell by 7.5 percent in 2011, which contributed to a significant increase in the share of natural?gas?fired generation. EIA expects this trend to continue in 2012, with electric power sector coal consumption falling by 14 percent. Natural gas in the electric power sector grows by almost 21 percent in 2012, primarily driven by the increasing relative cost advantages of natural gas over coal for power generation in some regions.

EIA also projects that coal production at mines will fall by more than 10 percent this year. However, with prices falling due to an increase in secondary inventories, the agency predicts that domestic consumption may rise by just over 1 percent next year.

The U.S. coal industry if facing major headwinds. The current drop in generation is mostly due to competition from natural gas. But there are other factors that will assist in pushing coal out of the electricity mix: An aging fleet of plants, cost-competitive renewables, new clean air regulations, and a strong anti-coal movement are working together to reduce the attractiveness of coal. Since 2010, plant operators have announced 106 retirements of coal facilities — representing 13 percent of the U.S. fleet, according to the Sierra Club.

The continued decline in domestic coal generation is good news for reducing greenhouse gas emissions. Carbon dioxide emissions from the fossil fuel sector are expected to decline by almost 3 percent this year — continuing the 1.9 percent decrease seen in 2011. Emissions from natural gas will rise by 5.5 percent, while emissions from coal will fall by almost 12 percent.

Read The Full Article:
http://thinkprogress.org/climate/2012/05/14/483432/us-coal-generation-drops-19-pe
rcent-in-one-year-leaving-coal-with-36-percent-share-of-electricity/

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POLL: 62 Percent Support Same-Sex Relationship
Recognition

post from ThinkProgress on 14 May 2012 10:00:04 AM. © ThinkProgress

A new CBS News/New York Times poll shows that 62 percent of Americans support legal recognition for same-sex relationships. Support was split between marriage equality and civil unions, as the poll didn’t force a choice between marriage and nothing. Still, only 33 percent said that same-sex relationships should have no legal recognition. Among younger people, support for marriage equality (53 percent) far exceeded support for civil unions (17 percent). A poll last week found that 51 percent of Americans agree with President Obama’s support for marriage equality.

Read The Full Article:
http://thinkprogress.org/lgbt/2012/05/14/483456/poll-62-percent-support-same-sex-
relationship-recognition/

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One Month Ago, Dimon Called Critics Of Big Bank
Trading ‘Infantile’ And ‘Nonfactual’

post from ThinkProgress on 14 May 2012 10:00:04 AM. © ThinkProgress

The fallout from JP Morgan’s $2 billion trading loss is continuing today with the news that three of the bank’s executives will exit the firm. CEO Jamie Dimon is in full disaster management mode, appearing on NBC’s Meet the Press yesterday to push back on claims that JP Morgan’s mess shows that there is still too much risk in the banking system.

Just last month, JP Morgan economist Blythe Masters insisted that the bank was not engaged in trading for its own benefit. Dimon meanwhile, was deriding the proponents of regulations to rein in risky trading as “infantile,” as the New York Times’ Gretchen Morgenson reported:

The loss, and the embarrassment it held for Jamie Dimon, the bank?s imperious chief executive, came just one month after a private dinner party in Dallas at which he assailed two respected public figures who have pushed for policies that would make banks like JPMorgan smaller and less risky.
One was Paul Volcker, the former Federal Reserve chairman, whose remedy for risky trading by too-big-to-fail banks is known as the Volcker Rule. The other was Richard W. Fisher, president of the Federal Reserve Bank of Dallas, who has also argued that large institutions should be slimmed down or limited in their risky trading practices. [...]
During the party, Mr. Dimon took questions from the crowd, according to an attendee who spoke on condition of anonymity for fear of alienating the bank. One guest asked about the problem of too-big-to-fail banks and the arguments made by Mr. Volcker and Mr. Fisher.
Mr. Dimon responded that he had just two words to describe them: ?infantile? and ?nonfactual.?

Not only has JP Morgan belittled those trying to ensure that the nation’s biggest banks can’t threaten the economy with their risky trading, but it has actively lobbied to water down new rules governing these trades. And Dimon is still claiming that the Volcker Rule, meant to prevent banks from trading for their own account with taxpayer-backed dollars, is unnecessary. But as Businessweek’s economic editor, Peter Coy, wrote:

The need for a risk-reducing rule something like the Volcker Rule is obvious. Banks have a special obligation to avoid risk because their failure can drag down the entire economy. JPMorgan is able to borrow cheaply because lenders understand that the federal government will not let it default. In fact, it has been officially declared ?too big to fail.? In return for the trampoline of taxpayer dollars?once implicit, now explicit?JPMorgan and other too-big-to-fail banks have no choice but to accept some constraints on their freedom of action.

But it sure doesn’t seem like Dimon will be swayed by that argument anytime soon.

Read The Full Article:
http://thinkprogress.org/economy/2012/05/14/483467/dimon-critics-infantile/

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Former National Review Writer Claims White
Supremacy Is ‘One Of The Better Arrangements History Has Come Up With’

John Derbyshire

Last month, the conservative National Review fired its longtime contributor John Derbyshire after Derbyshire published a column in another publication instructing parents on how to train their children to be racists. Although the National Review did the right thing in eventually firing Derbyshire, it published the author for years despite a long history of racist and sexist views. Derbyshire argued in 2009 that women should not vote, and he proclaimed as far back as 2003 that he is a proud “racist.”

Derbyshire, however, appears to have learned nothing from his high-profile firing. In a column for the white nationalist site VDARE.com, Derbyshire offers unqualified praise for white supremacy:

The enemies of conservatism are eager to supply their own nomenclature. “White Supremacist” seems to be their current favorite. It is meant maliciously, of course, to bring up images of fire-hoses, attack dogs, pick handles, and segregated lunch counters?to imply that conservatives, especially non-mainstream conservatives, are cruel people with dark thoughts.
Leaving aside the intended malice, I actually think “White Supremacist” is not bad semantically. White supremacy, in the sense of a society in which key decisions are made by white Europeans, is one of the better arrangements History has come up with. There have of course been some blots on the record, but I don’t see how it can be denied that net-net, white Europeans have made a better job of running fair and stable societies than has any other group.

As a reminder, this man who now openly praises a racial caste system wrote for one of the nation’s top conservative publications for nearly 12 years.

Read The Full Article:
http://thinkprogress.org/justice/2012/05/14/483521/former-national-review-writer-
claims-white-supremacy-is-one-of-the-better-arrangements-history-has-come-up-with/

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The Austerions

Readers should imagine the Austerions speaking in full, booming voices, with the reverb cranked up high.

(Click for larger image)

Order a signed print of this cartoon from the artist

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http://feeds.dailykos.com/~r/dailykos/index/~3/J6FOTZEu5kA/-The-Austerions

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RNC Head Reince Priebus Signals Partys Support
for ENDA on Meet the Press

I expect that the professional anti-LGBTs will not like what head of the Republican National Committee, Reince Priebus, had to say about employment nondiscrimination and the LGBT community Sunday on Meet the Press.[...]

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http://feedproxy.google.com/~r/firedoglake/fdl/~3/wBcF1r63Ev0/

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