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The Trade Agreement You Never Heard About - TPP

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Did you know, beyond closed doors, there is a massive trade agreement being crafted? It's called TPP or Trans Pacific Partnership and this one makes NAFTA look like the stepping stone that it is. This is one bad mother.

This is a trade agreement between Chile, Australia, Brunei, Chile, New Zealand, Peru, Singapore, Malaysia and Vietnam and the United States. Japan as well as China may also join. The countries involved isn't the problem. What's being negotiated is.

Jamie Dimon Eats $2 Billion Worth of Crow

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If you are the CEO of a major global bank and you have to announce a $2.0 billion trading loss, you will no doubt feel that the shareholders, regulators, and reporters are all against you. But if you announce that the loss occurred in a portfolio that just six weeks earlier was the subject of criticism in the press, and which you described as nothing more than “a tempest in a teapot”, you are entitled to feel that the gods are against you.

The gods definitely have it in for Jaime Dimon, CEO of JP Morgan Chase, the legendary “fortress balance sheet” bank that prides itself on having avoided problems during the housing bust and credit crisis of 2007-2008. Someone inside the bank blew a large cannonball through the bank’s fortress walls, and it seems likely to have been “the Whale” of the credit derivatives market, JP Morgan’s Bruno Michel Iksil.

JPMorgan Say What?

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wallstreetWhat a surprise, that biggest fighter against financial regulation of them all, JPMorgan Chase accrued a $2 billion dollar loss:

The $2 billion loss came from a complicated trading strategy that involved derivatives, financial instruments that derive their value from the prices of securities and other assets. JPMorgan said the derivatives trades were part of a hedge, meaning they were set up to offset potential losses on the bank’s large holdings of bonds and loans.

black swanThat loss was caused by derivatives and credit default swaps and in part due to a Value at Risk model. This is the same type of model which was part of the financial crisis and has been warned about repeatedly for not being mathematically complex enough to base one's gambling debts on. No surprise a VaR model was behind the loss.

It produced large losses even without extreme movements in the derivatives markets or underlying bond markets.

Austerity vs. Growth: A False Choice

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The headlines coming out of Europe all tell us the same thing: the voters are fed up with austerity; they want growth. Is that really what these elections were all about? Nicolas Sarkozy was defeated by Francois Hollande, a Socialist party candidate, in a near-rout. In Greece, the two centrist parties which form the current government polled less than half the votes they received in the last election. It is unclear if they can even form a coalition government. If so, they will have to draw on either the far left party or the neo-fascists on the right to get a majority vote in parliament.

These two elections were as much about Germany as they were about domestic issues, as serious as those were (unemployment in France is 10%, and 20% in Greece). Germany is the instigator for austerity imposed on the periphery countries, and now imposed as well on its core partners such as France. Germany wants more cutbacks in social spending, it wants higher taxes on the average citizen, and it wants friendlier policies for corporations, but only in places like Greece, Italy, Spain, and Portugal, which are considered chronic over-spenders. It also wants you to ignore the fact that Germany was one of the first countries to violate the 3% debt/GDP rule that it insisted upon when the euro was founded. Germany wants everyone to see the world the way Germans see the world: Germans are thrifty, efficient, makers of excellent export products, and prudent about the use of debt. Most everyone else, especially in southern Europe and on the periphery, are spendthrifts, indolent, unproductive, and living off government welfare.

More Dire Reports Show the American Labor Force is in Huge Trouble

U.S. Corporations made record profits in 2011 while regular people went without jobs. A new study from the International Labor Organization shows Corporate Profits are doing fine and back to pre-recession levels. Yet this is at the expense of American workers and investment in America.

The ILO covers labor internationally. From their report, the world of work, there are some dire predictions. Austerity is one thing killing economies. The authors also found no recovery in sight for labor markets. They also realize as do many, except for those who could actually do something, if policies were enacted that were geared towards labor, we would not be in this mess and finally, the high unemployment and never ending income inequality is brewing up a nasty mix of social unrest.

More than half of 106 countries surveyed by the ILO face a growing risk of social unrest and discontent.

Add to that a new report from the Census, in part sponsored by the ,Kauffman Foundation, shows start-up companies are at record lows, 8%, in the United States.

Corporate Welfare By Job Blackmail

pickpocketYou know how States are hurting? How budgets are in the red to the point some towns cannot even hold elections? Adding insult to injury comes the news States are allowing corporations to pocket taxes they take out of your paycheck and pocket the money for themselves. I kid you not.

Nearly $700 million a year in state income taxes withheld from worker paychecks in 16 states is being used to provide lavish subsidies to corporations rather than paying for vital public services. These diversions have gone to more than 2,700 companies, including major firms such as Sears, Goldman Sachs and General Electric. Few if any of the affected workers are aware, because no state requires they be informed on their pay stubs.

David Cay Johnston put together this nifty video overviewing how corporations manage to take state taxes out of your paycheck yet pocket the money.

 

Do You Know Who Owns Your Congressional Representative?

Bloomberg has yet another stunning revelation that Tea Party Congressional members are being funded heavily by the Banksters.

Tea Party favorites such as Stephen Fincher of Tennessee were swept into Congress on a wave of anger over government-funded bailouts of banks.

Now those incumbents are collecting thousands of dollars for re-election campaigns from the same Wall Street firms whose excesses they criticized. They have taken no significant steps to curb them or prevent future taxpayer-financed rescues.

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