Category Archives: Finance

TTIP leaks throw trade deal into state of chaos

Germans marck in Hanover in one of the scores of protests which have erupted across Europe in the wake of the Greenpeace leak of key secret documents in the proposed Transatlantic Trade and Investment Partnership [TTIP] trade agreement.

Germans march in Hanover in one of the scores of protests which have erupted across Europe in the wake of the Greenpeace leak of key secret documents in the proposed Transatlantic Trade and Investment Partnership [TTIP] trade agreement.

When Greenpeace leaked key sections of the Transatlantic Trade and Investment Partnership [TTIP] [previously] to European media, most notably reporters at the venerable Süddeutsche Zeitung, Barack Obama’s must’ve uttered a cruse, or at least grabbed for a Marlboro.

As senator from Illinois, Obama was a steadfast ally of Monsanto and its drive to gain control over the world’s agriculture through its genetically engineered crops and patented herbicides used to ensure their survival.

But the TTIP leaks have set off a mighty uproar in Europe, derailing any chance the deal will be done while Obama’s still in the White House.

Larry Elliott, the Guardian’s economics editor, explains why:

Was it really feasible that TTIP could be pushed through in little more than three years? Not a chance.

There are three reasons for that. First, the main barriers to trade between the US and the EU are not traditional tariff barriers, which have been steadily whittled away in the decades since the second world war, but the differing regulatory regimes that operate on either side of the Atlantic. America and Europe have different views on everything from GM food to safety standards on cars so harmonising standards was always going to take a lot of time.

Second, the talks have involved controversial issues and have been taking place when trust in politicians and business has rarely been lower. The main driving forces behind TTIP have been multinational corporations and business lobby groups, who stand to gain from harmonised regulations. With information about the secret negotiations having to be chiselled out by groups hostile to TTIP, voters have drawn the obvious conclusion: the aim of the talks is to enrich big business even if it means playing fast and loose with environmental and health standards.

Which leads to the final and most important factor: there are no votes in trade. It would have been no surprise had Angela Merkel voiced strong opposition to the state of the TTIP negotiations, given the level of public antipathy to the trade deal in Germany and her delicate position in the polls ahead of elections next year.

Instead, the German chancellor was beaten to it by François Hollande (also facing a showdown with the voters in 2017) who has made it clear he will not sign TTIP in its current form. Years not months of hard slog lie ahead, by which time the US is likely to have a president much less wedded to the idea of striking trade deals. TTIP has just been kicked into the long grass for a very long time, and perhaps for good.

Publication of the leaks has also roused public opinion in Germany, as revealed in a new poll reported by Deutsche Welle:

A new poll published on Wednesday assessing German attitudes toward the government found that a clear majority of people view the trade deal as harmful and worry it could undermine consumer protection.

According to the survey, conducted by German broadcaster ARD, 70 percent of the participants said they believe the Transatlantic Trade and Investment Partnership (TTIP) has more disadvantages than it does advantages. That’s a steep increase from the 2014 survey, which found that 55 percent of Germans viewed the agreement negatively.

Seventeen percent of participants said they saw the deal as being advantageous for Germany, while 13 percent said they didn’t know or had no position.

Additionally, 79 percent of the survey’s participants said they believed the agreement would hurt consumer protection, while 83 percent expressed dissatisfaction with the secretive way in which the government handled the negotiations.

There’s lots more, after the jump. . . Continue reading

Creditors drive Puerto Rico deep into the abyss

It’s an all-too-frequent occurrence, a hallmark of the 21st Century.

Reduced support from neoliberal governments drives regions into debt as they strive to keep their services and citizen support systems afloat, and themn, when deadlines pass, creditors and their accompanying flocks of vulture capitalists swoop in, ready to pick the bones clean.

Bu this time it’s not happening in Greece, Spain, or Italy.

This time its in the U.S., in Puerto Rico, a territory whose residents are full citizens of the U.S.

From teleSUR English:

The humanitarian crisis ravaging Puerto Rico is a result of the “behavior from some creditor groups just as we saw in Argentina and Greece,” Jubilee USA’s Eric LeCompte told teleSUR.

Puerto Rico’s Government skipped a US$422 million debt payment on Monday, with billions more still owed to hedge funds, credit unions and other bondholders.

LeCompte praised this decision in an interview Monday as important for the ordinary people of Puerto Rico as the government made the “significant choice” that “keeping schools and hospitals open” is more important than paying a debt. LeCompte argues this will help the government continue providing essential public services to its citizens, with around 45 percent of the U.S. territory’s population living in poverty.

However, LeCompte fears that “a greater crisis” could hit the island in coming months. On July 1 Puerto Rico faces repayments with the “most challenging creditor groups,” including Goldman Sachs, Oppenheimer and UBS Asset Management, who between them have “about US$10 billion stake in the debt” and believe that they say should be paid off first. “Paid before anyone else is paid, paid before other creditors, before pensions are paid and before teachers are paid,” said LeCompte, who noted that such groups “have the lobyists on Capitol Hill” that regular people do not.

More leaks suspected, these for private profit

In today’s world, most leaks are kept quiet, and are often highly profitable.

If state espionage, as Phillip Knightley famously wrote, is the second oldest profession. we suspect corporate espionage, the pursuit of secret information for private profit, may well be the third.

And judging by this story from Reuters, it’s as profitable as ever these day:

Investors earned millions of dollars in profits from correctly betting on market moves ahead of sensitive U.S. economic data, suggesting leaks of key indicators, a European Central Bank research paper said on Monday.

Studying moves in the case of 21 market-moving indicators between 2008 and 2014, 11 showed some pre-announcement price drift consistent with the announcement surprise, with seven of them indicating substantial moves, the authors said in the paper, which does not necessarily represent the ECB’s opinion.

“Based on a back-of-the-envelope calculation, we estimate that since 2008 in the S&P E-mini futures market alone the profits associated with trading prior to the official announcement release time have amounted to about $20 million per year,” the authors said.

“Prices start to move about 30 minutes before the official release time, and this pre-announcement price move accounts on average for about a half of the total price adjustment.”

Radio wingnuts face furious financial flameouts

Right wing talk radio is in a serious meltdown, with its two leading names being toward oblivion as their audiences age to the point advertisers are placing their media buys in other markets and stations are turning towards other formats.

From Clay Bennett of the Chattanooga Times Free Press.

From Clay Bennett of the Chattanooga Times Free Press.

The theocratic Glenn Beck, who left a fat Fox paycheck to launch his own media empire, is fing that the main fuel of The Blaze these days is investor and banker capital.

The Daily Beast reports:

The axe fell once again on Glenn Beck’s crumbling media empire Thursday as employees in the New York and Washington offices of The Blaze, Beck’s multi-media online operation, along with business staffers in Los Angeles and the documentary unit in Columbus, Ohio, were told their jobs are on the chopping block, according to multiple sources who spoke The Daily Beast on condition of anonymity.

Sources estimated that nearly 40 people are being laid off—including about 20 in New York, a dozen in Washington, five in Ohio and two or three working out of the LA office suite of former Blaze CEO Kraig Kitchin—in order to satisfy the requirements of a multimillion-dollar bank loan taken out recently to keep Beck’s revenue-challenged enterprise running.

Ironically, the mass layoffs are occurring shortly after the company hired CNN alumnus Matt Frucci, former executive producer of the cable network’s New Day morning show, to run The Blaze’s television operation in New York—which apparently will no longer exist.

 New York-based radio and television personality Buck Sexton will remain with Beck’s operation, according to an informed source, although at least some of Sexton’s production staff are losing their jobs.
From Steve Sack of the Minneapolis Star Tribune.

From Steve Sack of the Minneapolis Star Tribune.

And radio’s most famous wingnut, the man who gave us “feminazi,” “gorbasm,” and other bilious neologisms, is also facing tough times, reported Eric Boehlert of Media Matters earlier this month:

For talk radio, there’s probably only one contract that enters that realm of notoriety: Rush Limbaugh’s eight-year, $400-million deal, signed in the summer of 2008 with his longtime radio employer Premiere Radio Networks.

Owned by Clear Channel Communications, which has since changed its name to iHeartRadio, Premiere’s Limbaugh deal instantly dwarfed any payout in AM/FM history. (Only Howard Stern’s contract with Sirius was larger.) The contract, which included a staggering $100 million signing bonus, never panned out as the wheels began to come off Limbaugh’s radio empire.

This year, his contract is up and the timing couldn’t be worse. The talker is facing ratings hurdles, aging demographics, and an advertising community that increasingly views him as toxic, thanks in part to his days-long sexist meltdown over Sandra Fluke in 2012. (He’s also stumbling through the GOP primary season.)

Concurrently, iHeartRadio’s parent company, iHeartMedia, is heading to court, teetering on bankruptcy. The once-dominant radio behemoth is saddled with $20 billion in debt, thanks to a misguided leveraged takeover engineered by Bain Capital in 2008, the same year the radio giant inked its disastrous Limbaugh deal.

Limbaugh’s been plagued of late by those declining numbers, along with dropped stations, and decl9ining interest from other media in covering hsi scurrilous rants.

But there’s still no conspicuous mainstream radio presence from the other end of the political spectrum.

Austerians demand another Greek wage cut

The Troika of the European Commission, the European Central Bank, and the International Monetary Fund are demanding yet more drastic pay and pension cuts from Greek workers to enable the banksters of the North to reap their pounds of flesh from the civic body.

No all that remains is getting approval form the national legislature yet one more time.

From To Vima:

At the recent Eurogroup, the Minister of Finance Euclid Tsakalotos reached an agreement with Greece’s creditors regarding the contingency measures that have been requested, in order to conclude the bailout review.

This package of contingency measures worth 2% of the GDP, namely 3.6 billion euros, will come into effect the government fails to reach its target for a 3.5% GDP primary surplus by 2018.

Given that the annual state expense for pensions is 30 billion euros and 15 billion euros for public sector wages, an average 8% cut will be required in order to cover the cost of the contingency measures.

It remains to be seen whether the Greek government will manage to support such a deal in Parliament. Should Athens pass the measures, a Eurogroup on the reprofiling of the debt will be called, in turn putting an end to months of instability and uncertainty.

Iceland’s president nailed by the Panama Papers

Ólafur Ragnar Grímsson, the Icelandic president first elected to office in 1996 as a political science professor turned politician, has become the second national politician linked by the Panama Papers to offshore bank accounts, coming only three days after he denied an such connections.

The revelations come less than a month after the nation’s then-Prime Minister Sigmundur Davíð Gunnlaugsson was driven out of office over similar ties discovered in the massive leak of emails and files from a Panamanian law firm.

From the Reykjavík Grapevine:

President Ólafur Ragnar Grímsson does in fact have connections to at least one offshore account, despite contentions to the contrary with CNN.

While the President told viewers of CNN that neither he nor his wife, Dorrit Moussaieff, have any connection to offshore accounts, The Grapevine has received documents that show this contention to be false.

The matter concerns a British company called Moussaieff Jewelers Limited (MJL), which is Dorrit’s family’s business. According to the Directors’ Report and Financial Statements for MJL in 2006, Lasca Finance Limited (LFL) – a company registered in the British Virgin Islands of which Dorrit’s parents are shareholders – was paid interest payments by MJL from at least 2000 until 2005, which was the last time we saw reported interest. Lasca also appears in the widely-reported Panama Papers leak.

In 2006, LFL all but disappears, and a new company appears in Hong Kong: Moussaieff Limited, of which Dorrit’s mother is the sole director and shareholder, and has been active through at least March 31, 2015. While not defined as a tax shelter by Icelandic law, Hong Kong does rank in second place on the Financial Secrecy Index.

Grapevine art director Sveinbjorn Palsson has created the perfect video mashup to accompany the story:

H/T to Birgitta Jónsdóttir.

Quote of the day: Gentrification in the East Bay

The eastern shoreline of San Francisco Bay, including esnl’s Berkeley and Oakland, just four blocks away, has become untenable for growing numbers of people, including many of the people of color who used to live in our own neighborhood.

Our own rent was just jacked up by more than half, and we know many others in the same fix.

And so we turn with interest to our QOTD, written by April M. Short for AlterNet, who was driven from Oakland by the same forces that are driving us out as well.

The true culprit behind displacement and gentrification is a complex ricochet effect that arguably began with the tech boom, as large Silicon Valley companies like Google, Facebook and Apple were drawn to this desirable and nearby area. As their money has flooded the city, landlords and business owners have hiked up prices and ultimately life in San Francisco has become too expensive for many artists, laborers and others who don’t receive salaries comparable to those of tech workers. Many of those San Franciscans have moved to Oakland, which remains less expensive (if only slightly). That migration includes many tech startup workers who can’t afford to buy or rent in San Francisco and have heard Oakland is more affordable. As Oakland has been inundated with this mass influx of people from across the bay, landlords and businesses over here have in turn hiked up their prices, forcing longtime locals further into the outskirts.

Another important piece of the problem are the unethical practices of these tech giants. The most obvious example is the tech companies’ corporate shuttles that allow non-locals to be driven into the city from Silicon Valley aboard luxury buses, which have earned the nickname Google buses. Mass protests have gathered to stop the buses, and in response, the city of San Francisco recently forbade those private buses from using public bus stops. But the mass displacement of San Francisco’s people and the white-washing gentrification of its streets have not reversed (Truthout has an in-depth snapshot of the situation).

Another thing to note is the greed of some landlords. As rents have skyrocketed in the last three to five years, mortgages have remained relatively stable, and some landlords have been charging more just because they can. Because of this trend, and similar situations in New York, Los Angeles and many other metropolitan areas, it is officially the worst time in American history to be a renter. A report by the online real estate website Zillow showed in August how rents have never taken up this much of the American paycheck.