Posts Tagged ‘Obama Administration’
By Rachelle Younglai
WASHINGTON | Sat May 14, 2011 5:52pm EDT
A divided Congress has run out of time to raise the debt limit before Monday’s deadline, forcing Geithner into an emergency reallocation of funds so the government can meet its obligations, including payments to Treasury bondholders.
Those measures are only expected to give the government until August 2 before it will start defaulting on payments including those on Treasury debt, an event that could trigger chaos in world financial markets.
“A default would inflict catastrophic, far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment,” Geithner said in a letter, dated Friday, to Democratic Senator Michael Bennet.
The Obama administration and lawmakers are battling over how to curb the mounting U.S. debt, with Republicans refusing to increase the debt limit without deep spending cuts.
In some of his most stark language to lawmakers so far, Geithner said a default or missed payments would not only increase borrowing costs for the U.S. government but also for average Americans, businesses and local governments.
“An increase in Treasury rates would make it more costly for a family to buy a home, purchase a car or send a child to college,” he said. “It would make it more expensive for an entrepreneur to borrow money to start a new business or invest in new products and equipment.”
The world’s biggest economy is recovering only gradually after the 2007-09 financial crisis but some 13.7 million Americans are out of work and higher gasoline and food prices are threatening to slow the recovery.
If Congress does not increase the borrowing cap by August, Geithner will be forced to start choosing which payments to make first.
Missing or delaying payments on a host of obligations, including those to businesses for goods and services and bond payments to investors, would result in a massive and abrupt cut in federal spending and aggregate demand, the letter warned.
“The abrupt contraction would likely push us into a double-dip recession,” Geithner said.
The U.S. government bond market has so far remained calm about the risk of a default. But Geithner and Federal Reserve Chairman Ben Bernanke have repeatedly urged Congress to act quickly to raise the debt limit.
The U.S. government is borrowing approximately $125 billion per month. As of Thursday, the country was $38 billion below the debt ceiling.
Read the entire article HERE.
By Joe Klein
Thursday, Mar. 03, 2011
“Three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail,” said Charles Ferguson, accepting a well-deserved Oscar for Inside Job, his documentary about the great Wall Street heist. “And that’s wrong.” Of course it is — but that shouldn’t be a surprise. To put bad guys in jail, you need police and prosecutors. The financial police we have, agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), have been laughably inept in the era of financial deregulation. The SEC wasn’t even able to spot the broad-daylight highway robbery committed by Bernard Madoff. And so, in 2010, the Obama Administration nudged through Congress the Dodd-Frank financial-reform bill, which was designed to put real cops, with real regulatory heft, on the financial beat. And now, in 2011, the Republican House seems intent on quietly gutting the bill under the sordid camouflage of budget cutting. “They’re defunding the police after we had the biggest bout of looting in history,” an Administration official told me. “That’s just crazy.”
Let’s review the outrage: the heart of the financial collapse was a fraudulent effort to sell home mortgages to people who couldn’t afford them. Some of these mortgages were truly mind-boggling — no money down (but a hefty interest rate hidden in the thicket of contractual codicils), no documentation (like proof of job and salary). The mortgages were then thrown together into giant, opaque bond packages and sold again as solid investments. (The ratings agencies, Moody’s and Standard & Poor’s, were essentially unindicted co-conspirators in the scam.) And those packages were then sliced up, resold and transformed into exotic derivatives, which were bet on by bond traders and investors. (See “The Demise of Bernie Madoff.”)
Confused? Well, that was the point. According to Michael Lewis, whose book The Big Short is a riveting encyclopedia of the disaster, even the SEC was confused by the actual contents of the most far-fetched packages, called collateralized debt obligations (CDOs). Wall Street spewed terms like collateralized debt obligation in order to mislead: a more accurate abbreviation might have been RCLs —repackaged crappy loans. When the crappy loans couldn’t be repaid, the housing market, Wall Street and the American economy imploded. The Wall Street traders pocketed hundreds of millions in profits; the American taxpayer, and homeowner, picked up the losses.
The Dodd-Frank law was an imperfect remedy. It didn’t restructure the big banks, which are still too big to fail. It didn’t tax or outlaw the casino-game derivatives. But it did boost the power of the SEC and CFTC to regulate derivatives trading, and it set up a new agency, the Consumer Financial Protection Bureau (CFPB), to protect consumers from the shyster army peddling tricky mortgages, usurious credit-card rates and unscrupulous payday-check-cashing shops. The agencies need larger payrolls to perform those functions, and the Republican House has now stripped much of that money from the federal budget. “It’s a back-alley maneuver,” says Representative Barney Frank, whose name is on the law. “Unlike health care or environmental regulation, the Republicans didn’t try a frontal assault. They hid behind the budget, which means that they’re embarrassed by this. They don’t want people to know that they’re letting Wall Street off the hook.” (Read “Strapped Consumers Paying Credit-Card Bills Before Mortgages.”)
But what about the Democratic-majority Senate? Can’t it restore the funds for the financial police? Maybe, maybe not. Wall Street has some reliable Senate Democratic defenders, like New York’s Charles Schumer. And there are a whole lot of higher-visibility — and more easily comprehensible — battles for Senate Democrats to fight. “I expect the President will take a stand soon,” says Illinois Senator Dick Durbin, who chairs the Appropriations subcommittee that funds the regulatory agencies. “He’ll probably emphasize the three areas he mentioned in the State of the Union speech: education, research and development, and infrastructure.” And Wall Street regulation? “Well, I hope he does,” Durbin says. “But you run into the problem of message overload. Will the public understand the importance of the issues at stake?” (See “Protesting the Bailout.”)
And then there’s the question of Elizabeth Warren, the Harvard law professor who invented the idea of the Consumer Financial Protection Bureau and should be its first director. The Administration seems undecided on whether to appoint her, fearing a Senate confirmation battle that could last for months. “The banks are scared to death of her,” one Senator told me. “She speaks in clear, simple sentences. That terrifies them.”
Which means this is a fight worth having — and a way to dramatize the complicated issues at the heart of regulatory reform. The President should appoint Warren. The Senate should be forced to vote on her, so the public will know who really wants to clean up Wall Street and who doesn’t.
Read the entire article HERE.
submitted by Tyler Durden
03/01/2011 20:55 -0500
Ten days ago, when we first looked at the Libyan investment authority (its sovereign wealth fund), we asked “Which US Banks Are Managing Billions For The $32 Billion Libyan Sovereign Wealth Fund?” Based on Wikileaks data, it was disclosed that various US banks manage billions for the country which has just seen $30 billion of its assets largely frozen (although this is merely half of its total deposits). Obviously, we had “some” banks in mind, most of the variety whose directors believe they are above the law and can share inside information with criminal intent with utter disdain for the law. Now, courtesy of Marcus Baram of the Huffington Post we find that the usual suspects are, naturally, all here: among the key banks that serve as advisors and asset managers are Goldman Sachs (and not just anyone, but Jim “Revolutions are Bullish” O’Neill’s GSAM, Citi and JP Morgan. The only question now is how long before we get some sort of public statement out of the likes of Lloyd Blankfein and Jamie Dimon: on the 22nd we said: “perhaps it is time for the US banks who manage billions in capital for the LIA, to step up.” Now that they have been exposed by a third party, the CEOs should really take the hint before this escalates into a full blown PR disaster.
The secretive Libyan Investment Authority has reportedly invested hundreds of millions of dollars in Goldman Sachs Asset Management funds, including a loan fund designed to invest in new hedge funds set up by the Kuwait Investment Authority. Goldman Sachs already has a relationship with Libya — in 2008, Goldman was the first U.S. bank to get a contract with the country following the removal of sanctions, when it was hired by Libya’s central bank to provide information on its behalf to credit rating agencies. A spokesperson for Goldman Sachs did not return calls seeking comment.
The Libyan government, including LIA, has also banked with Citigroup, according to several sources familiar with the matter. A spokesperson for Citigroup declined to comment on the bank’s interactions with the Treasury Department’s Office of Foreign Assets Control, which is in charge of carrying out Obama’s order regarding Libyan assets.
JPMorgan Chase reportedly handles much of the LIA’s cash and some of the Libyan central bank’s reserves. The summer after then-Secretary of State Condoleezza Rice visited Gaddafi in 2008, LIA gave “mandates to some of the international banks, including JPMorgan to manage their funds in the interbank money markets, according to Vanity Fair.
Banks are not the only entities: Washington DC darling private equity firm, and alleged CIA front organization, Carlyle is also among the collaborators:
Two years ago, the Carlyle Group’s co-founder and managing director, David Rubenstein, and Blackstone chief executive Steven Schwarzman traveled to the Libyan capital of Tripoli to help celebrate the wedding of Mustafa Zarti, the deputy director of the LIA, in a massive tent set up on the outskirts of the city, reported the Financial Times. And when Gaddafi’s son and longtime likely successor, Saif al-Islam, visited New York in November 2008, Schwarzman hosted a lunch for him at the Blackstone CEO’s Park Avenue apartment. The younger Gaddafi was also honored on that trip by Carlyle’s retired chairman, former defense secretary Frank Carlucci, who hosted a dinner for him in a private room at the City Club.
Yet while nobody really cares about Carlyle which for decades now has managed to remain behind the scenes, even though in many regards it is the Goldman Sachs of the Private Equity world, many do care about Goldman, especially following today’s latest disclosure of supposed gross and criminal abdication of fiduciary duty by a person at the very top. The last thing Goldman needs is to be disarming a PR minefield in which various bloggers and the less than mainstream media (certainly excluding those that have Goldman Sachs Asset Management ad banners on their pages) try to pin the tail on the Blankfein donkey of PR blunder following PR blunder.
Read the entire article HERE.
By David L. Ganz, Numismatic News
June 29, 2010
A blizzard of paperwork could be about to hit numismatics.
Passage by Congress of the national health care legislation has had an unintended consequence to the nation’s coin collectors, vest-pocket dealers who buy and sell coins, and larger dealers who are frequent buyers of coins that collectors periodically liquidate as they trade up their collections for better coins, or simply sell to take a small profit or loss.
What has happened is that effective Jan. 1, 2012, the whole system of giving and receiving Internal Revenue Service 1099 forms will be turned on its head and all persons (including corporations) who are in business will now have to give 1099 tax reporting forms for coins and other goods that they sell as well as buy.
The responsibility for issuing forms kicks in at $600 for coins or bullion – not a very high level and one that has already started sounding alarm bells. It doesn’t matter in what form payment is made, whether cash, check, credit card, or Yap stone money, the $600 threshold applies.
There’s a bill introduced by Rep. Dan Lungren (H.R. 5141), which has gathered over 80 members of Congress as co-sponsors to repeal this section. Evidently, however, the drafters of the provision think there is a $17 billion loophole that this plugs.
The Industry Council for Tangible Assets is alerting member dealers and the public at large in the hope that some sense of outrage will lead to a ready modification before the law becomes operational in 2012.
Form 1099 is used to report independent contractor income, income from dividends, income from other things – and is one of the reasons why children receive tax bills for work or labor or services performed.
Section 9006 of the Patient Protection and Affordable Care Act (Public Law 111-148, signed into law by President Obama this spring) turns 1099 forms into reporting forms not only for independent contractor’s income – what they have long been used for – but also to show sales, gains and losses on purchases and sales of goods as part of a trade or business.
The section reads (in relevant part) “SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS. (a) IN GENERAL. – Section 6041 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsections:
‘‘(h) APPLICATION TO CORPORATIONS. – Notwithstanding any regulation prescribed by the secretary before the date of the enactment of this subsection, for purposes of this section the term ‘person’ includes any corporation that is not an organization exempt from tax under section 501(a).
‘‘(i) REGULATIONS. – The secretary may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.’’
(b) PAYMENTS FOR PROPERTY AND OTHER GROSS PROCEEDS. –
Subsection (a) of section 6041 of the Internal Revenue Code of 1986 is amended –
(1) by inserting ‘‘amounts in consideration for property,’’ after ‘‘wages,’’
(2) by inserting ‘‘gross proceeds,’’ after ‘‘emoluments, or other’’, and
(3) by inserting ‘‘gross proceeds,’’ after ‘‘setting forth the amount of such.’’
Read the entire article HERE.
Friday, Jun 25, 2010 08:26 ET
By Glenn Greenwald
When The Washington Post’s Dana Priest first revealed (in passing) back in January that the Obama administration had compiled a hit list of American citizens targeted for assassination, she wrote that “as of several months ago, the CIA list included three U.S. citizens.” In April, both the Post and the NYT confirmed that the administration had specifically authorized the assassination of Anwar al-Awlaki. Today, The Washington Times’ Eli Lake has an interview with Obama’s top Terrorism adviser John Brennan in which Brennan strongly suggests that the number of U.S. citizens targeted for assassination could actually be “dozens”:
Dozens of Americans have joined terrorist groups and are posing a threat to the United States and its interests abroad, the president’s most senior adviser on counterterrorism and homeland security said Thursday. . . . “There are, in my mind, dozens of U.S. persons who are in different parts of the world, and they are very concerning to us,” said John O. Brennan, deputy White House national security adviser for homeland security and counterterrorism. . . .
“If a person is a U.S. citizen, and he is on the battlefield in Afghanistan or Iraq trying to attack our troops, he will face the full brunt of the U.S. military response,” Mr. Brennan said. “If an American person or citizen is in a Yemen or in a Pakistan or in Somalia or another place, and they are trying to carry out attacks against U.S. interests, they also will face the full brunt of a U.S. response. And it can take many forms.”
Nobody — or at least not me — disputes the right of the U.S. or any other country to kill someone on an actual battlefield during war without due process. That’s just obvious, but that’s not remotely what Brennan is talking about, and it’s not remotely what this assassination program is about. Indeed, Brennan explicitly identified two indistinguishable groups of American citizens who “will face the full brunt of a U.S. response”: (1) those “on the battlefield in Afghanistan or Iraq”; and (2) those “in a Yemen or in a Pakistan or in Somalia or another place.” In other words, the entire world is a “battlefield” — countries where there is a war and countries where there isn’t — and the President’s “battlefield” powers, which are unlimited, extend everywhere. That theory — the whole world is a battlefield, even the U.S. — was the core premise that spawned 8 years of Bush/Cheney radicalism, and it has been adopted in full by the Obama administration (indeed, it was that “whole-world-is-a-battlefield” theory which Elena Kagan explicitly endorsed during her confirmation hearing for Solicitor General).
Anyone who doubts that the Obama administration has adopted the core Terrorism policies of Bush/Cheney should listen to the concession — or boast — which Brennan himself made in his interview with Lake:
Mr. Brennan toward the end of the interview acknowledged that, despite some differences, there is considerable continuity between the counterterrorism policies of President Bush and President Obama.
“There has been a lot of continuity of effort here from the previous administration to this one,” he said. “There are some important distinctions, but sometimes there is too much made of those distinctions. We are building upon some of the good foundational work that has been done.”
I would really like never to hear again the complaint that comparing Bush and Obama’s Terrorism and civil liberties policies is unfair, invalid or hyperbolic given that Obama’s top Terrorism adviser himself touts that comparison. And that’s anything but a surprise, given that Brennan was a Bush-era CIA official who defended many of the most controversial Bush/Cheney Terrorism policies.
I’ve written at length about the reasons why targeting American citizens for assassination who are far away from a “battlefield” is so odious and tyrannical, and I won’t repeat those arguments here. Suffice to say — and I’m asking this literally — if you’re someone who believes, or are at least willing to acquiesce to the claim, that the U.S. President has the power to target your fellow citizens for assassination without a whiff of due process, what unchecked presidential powers wouldn’t you support or acquiesce to? I’d really like to hear an answer to that. That’s the question Al Gore asked about George Bush in a 2006 speech condemning Bush’s claimed powers merely to eavesdrop on and imprison American citizens without charges, let alone assassinate them: “If the answer is yes, then under the theory by which these acts are committed, are there any acts that can on their face be prohibited? . . . If the president has th[is] inherent authority. . . . then what can’t he do?” Can anyone defending this Obama policy answer that question?
One other thing that is truly amazing: the U.S. tried to import this same due-process-free policy to Afghanistan. There, the U.S. last year compiled a “hit list” of 50 Afghan citizens whose assassination it authorized on the alleged ground (never charged or convicted) that they were drug “kingpins” or funding the Talbian. You know what happened? This:
A U.S. military hit list of about 50 suspected drug kingpins is drawing fierce opposition from Afghan officials, who say it could undermine their fragile justice system and trigger a backlash against foreign troops. . . .
Gen. Mohammad Daud Daud, Afghanistan’s deputy interior minister for counternarcotics efforts . . . said he worried that foreign troops would now act on their own to kill suspected drug lords, based on secret evidence, instead of handing them over for trial . . . “They should respect our law, our constitution and our legal codes,” Daud . “We have a commitment to arrest these people on our own” . . . .
The U.S. military and NATO officials have authorized their forces to kill or capture individuals on the list, which was drafted within the past year as part of NATO’s new strategy to combat drug operations that finance the Taliban.. . . . “There is a constitutional problem here. A person is innocent unless proven guilty,” [Ali Ahmad Jalali, a former Afghan interior minister] said. “If you go off to kill or capture them, how do you prove that they are really guilty in terms of legal process?”
Read the entire article HERE.