Deborah Pasmantier (AFP)
Anger at US builds at Port-au-Prince airport
PORT-AU-PRINCE — Anger built Saturday at Haiti's US-controlled main airport, where aid flights were still being turned away and poor coordination continued to hamper the relief effort four days on.
"Let's take over the runway," shouted one voice. "We need to send a message to (US President Barack) Obama," cried another.
Control remained in the hands of US forces, who face criticism for the continued disarray at the overwhelmed airfield.
Dozens of French citizens and dual Haitian-French nationals crowded the airport Saturday seeking to be evacuated after Tuesday's massive 7.0 earthquake, which leveled much of the capital Port-au-Prince.
But at the last minute, a plane due to take them to the French island of Guadeloupe was prevented from landing, leaving them to sleep on the tarmac, waiting for a way out.
"They're repatriating the Americans and not anyone else," said Charles Misteder, 50. "The American monopoly has to end. They are dominating us and not allowing us to return home."
The crowd accused American forces, who were handed control of the airport by Haitian authorities, of monopolizing the airfield's single runway to evacuate their own citizens.
The US embassy denied it was putting the evacuation of the approximately 40,000 to 45,000 American citizens in the country first.
Others waiting for a way out were taken aback by the chaotic scenes confronted them when they arrived at the Toussaint L'Ouverture airport.
"I haven't been able to tell my family that I'm alive. The coordination is a joke," said Wilfried Brevil, a 33-year-old housekeeper.
"I was at the Christopher Hotel," said Daniele Saada, referring to the headquarters of the UN peacekeeping force in Haiti, MINUSTAH.
"I was extremely shaken up. I was pulled out, the others weren't," added Saada, 65, a MINUSTAH employee.
"I decided to return to France. I have nothing and now I am stuck," she said, caught between fury at the chaos and sheer exhaustion.
The disorder even appeared to cause diplomatic ripples, with French Secretary of State for Cooperation Alain Joyandet telling reporters he had lodged a complaint with the United States over its handling of the Port-au-Prince airport.
"I have made an official protest to the Americans through the US embassy," he said at the Haitian airport after a French plane carrying a field hospital was turned away.
A spokesman for the French foreign ministry later denied France had registered protest, saying "Franco-US coordination in emergency aid for Haiti is being handled in the best way possible given the serious difficulties."
The US ambassador to Haiti defended American efforts at the small airport, which was up-and-running 24 hours after the massive quake, even though the air traffic control tower was damaged.
"We're working in coordination with the United Nations and the Haitians," said Ambassador Kenneth Merten, though he acknowledged some difficulties.
"Clearly it's necessary to prioritize the planes. It's clear that there's a problem."
Despite the chaos, a group of French citizens was eventually able to take off on Saturday, and the French plane carrying a field hospital landed safely around noon.
Still, with aid continuing to flood into the quake-stricken country, concern remains about the lack of coordination at the airport, and across devastated Port-au-Prince.
"The Haitians haven't been notified about the arrival of planes. And when they do land, there's no one to take charge and a large amount of goods are arriving without coordination," said Haitian government official Michel Chancy.
On Port-au-Prince's streets, the consequences of the coordination breakdown are clear, as traumatized and starving quake survivors approached passing foreigner and begged them for food.
Saturday, January 16, 2010
Friday, January 15, 2010
The history that “binds” the US and Haiti
Bill Van Auken
In his statement on the Haitian earthquake Wednesday, President Barack Obama referred to the “long history that binds us together.” Neither he nor the US media, however, have shown any inclination to probe the history of US-Haiti relations and its bearing on present catastrophe confronting the Haitian people.
Rather, the backwardness and poverty that have played a substantial role in driving the death toll into the tens, if not hundreds, of thousands are presented as a natural state of affairs, if not the fault of the Haitians themselves. The United States is portrayed as a selfless benefactor, ready to come to the aid of Haiti with donations, rescue teams, warships and Marines.
In a cynical and dishonest editorial, the New York Times Thursday began, “Once again the world weeps with Haiti,” a country which it goes on to describe as characterized by “poverty, despair and dysfunction that would be a disaster anywhere else but in Haiti are the norm.”
The editorial continues: “Look at Haiti and you will see what generations of misrule, poverty and political strife will do to a country.”
In a background article on the Haitian disaster, the Times adds that the country “is known for its many man-made woes—its dire poverty, political infighting and proclivity for insurrection.”
In a shorter and even more dismissive editorial, the Wall Street Journal celebrates the fact that the US military will play the leading role in Washington’s response to the earthquake as “a fresh reminder that the reach of America’s power coincides with the reach of its goodness.”
It goes on to draw an obscene comparison between the Haitian earthquake and the one that struck southern California in 1994, in which 72 people died. “The difference,” the Journal declares, “is a function of a wealth-generating and law-abiding society that can afford, among other things, the expense of proper building codes.”
The message is clear. The Haitians have only themselves to blame for the hundreds of thousands of dead and injured, because they failed to create sufficient wealth and lacked respect for law and order.
What is deliberately obscured by this comparison is the real relationship, which has evolved over more than a century, between “wealth generation” in the United States and poverty in Haiti. It is a relationship built on the use of force to pursue US imperialism’s predatory interests in a historically oppressed country.
If the Obama administration and the Pentagon carry through with reported plans to deploy a Marine expeditionary force in Haiti, it will mark the fourth time in the past 95 years that the US armed forces have occupied the impoverished Caribbean nation. This time, as in the past, rather than aiding the Haitian people, the essential purpose of such a military action will be to defend US interests and guard against what the Times refers to as the “proclivity for insurrection.”
The roots of this relationship go back to the birth of Haiti as the first independent black republic in 1804, the product of a successful slave revolution led by Toussaint Louverture, and the subsequent defeat of a French army sent by Napoleon.
The ruling classes of the world never forgave Haiti for its revolutionary victory. It was subjected to a worldwide embargo that was led by the United States, which feared the Haitian example could inspire a similar revolt in the southern slave states. It was only with southern secession and the outbreak of the Civil War that the North recognized Haiti—nearly 60 years after its independence.
From the dawn of the 20th century, Haiti fell under the domination of Washington and the US banks, whose interests were defended by sending Marines to carry out an occupation that continued for nearly 20 years, maintained through the bloody suppression of Haitian resistance.
The Marines left only after carrying out the “Haitianization”—as the New York Times referred to it at the time—of the war against the Haitian people by building an army dedicated to internal repression.
Subsequently, Washington backed the 30-year dictatorship of the Duvaliers, which began with the coming to power of Papa Doc in 1957. While tens of thousands of Haitians died at the hands of the military and the dreaded Tontons Macoute, US imperialism saw the murderous dictatorship as a bulwark against communism and revolution in the Caribbean.
Since the mass upheavals that brought down the Duvaliers in 1986, successive US governments, Democratic and Republican alike, have sought to reconstruct a reliable client state capable of defending the markets and investments of US firms attracted by starvation wages, as well as the property and wealth of the Haitian ruling elite. This entails preventing any challenge to a socio-economic order that keeps 80 percent of the population in dire poverty.
This effort continues today under the tutelage of Bill and Hillary Clinton—respectively the UN’s special representative to Haiti and the US Secretary of State—who together have Haitian blood on their hands.
Washington has backed two coups and sent US troops back into Haiti twice in the past 20 years. Both coups were organized to overthrow Jean-Bertrand Aristide, the first Haitian president to be elected by popular vote and without Washington’s approval. Together, the coups of 1991 and 2004 claimed the lives of at least 13,000 more Haitians. In the 2004 overthrow, Aristide was forcibly transported out of the country by US operatives.
Needing them in Iraq, the US withdrew its troops in 2004, contracting the job of repression out to a United Nations peacekeeping force of 9,000 under the leadership of the Brazilian army.
Despite Aristide’s capitulation to the demands of the International Monetary Fund and his willingness to compromise with Washington, the mass support he attracted with his anti-imperialist rhetoric made him anathema to the ruling elites in both Washington and Port-au-Prince. On the orders of the Obama administration, he is barred from returning to Haiti and his political party, Fanmi Lavalas, remains effectively outlawed.
This is the real and continuing history that, as Obama put it, binds Haiti to US imperialism, which bears overwhelming responsibility for the desperate conditions that have compounded the carnage inflicted by the earthquake.
There are, however, other ties that bind and are deeply felt, as the immensity of the tragedy in Haiti unfolds. There are over half a million Haitian Americans officially counted in the US and undoubtedly hundreds of thousands more who are undocumented. Their presence concretizes the class interests and solidarity that unite Haitian and American workers. Together, it is their task to sweep away the conditions of poverty and devastation in both countries, along with the capitalist profit system that has created them.
In his statement on the Haitian earthquake Wednesday, President Barack Obama referred to the “long history that binds us together.” Neither he nor the US media, however, have shown any inclination to probe the history of US-Haiti relations and its bearing on present catastrophe confronting the Haitian people.
Rather, the backwardness and poverty that have played a substantial role in driving the death toll into the tens, if not hundreds, of thousands are presented as a natural state of affairs, if not the fault of the Haitians themselves. The United States is portrayed as a selfless benefactor, ready to come to the aid of Haiti with donations, rescue teams, warships and Marines.
In a cynical and dishonest editorial, the New York Times Thursday began, “Once again the world weeps with Haiti,” a country which it goes on to describe as characterized by “poverty, despair and dysfunction that would be a disaster anywhere else but in Haiti are the norm.”
The editorial continues: “Look at Haiti and you will see what generations of misrule, poverty and political strife will do to a country.”
In a background article on the Haitian disaster, the Times adds that the country “is known for its many man-made woes—its dire poverty, political infighting and proclivity for insurrection.”
In a shorter and even more dismissive editorial, the Wall Street Journal celebrates the fact that the US military will play the leading role in Washington’s response to the earthquake as “a fresh reminder that the reach of America’s power coincides with the reach of its goodness.”
It goes on to draw an obscene comparison between the Haitian earthquake and the one that struck southern California in 1994, in which 72 people died. “The difference,” the Journal declares, “is a function of a wealth-generating and law-abiding society that can afford, among other things, the expense of proper building codes.”
The message is clear. The Haitians have only themselves to blame for the hundreds of thousands of dead and injured, because they failed to create sufficient wealth and lacked respect for law and order.
What is deliberately obscured by this comparison is the real relationship, which has evolved over more than a century, between “wealth generation” in the United States and poverty in Haiti. It is a relationship built on the use of force to pursue US imperialism’s predatory interests in a historically oppressed country.
If the Obama administration and the Pentagon carry through with reported plans to deploy a Marine expeditionary force in Haiti, it will mark the fourth time in the past 95 years that the US armed forces have occupied the impoverished Caribbean nation. This time, as in the past, rather than aiding the Haitian people, the essential purpose of such a military action will be to defend US interests and guard against what the Times refers to as the “proclivity for insurrection.”
The roots of this relationship go back to the birth of Haiti as the first independent black republic in 1804, the product of a successful slave revolution led by Toussaint Louverture, and the subsequent defeat of a French army sent by Napoleon.
The ruling classes of the world never forgave Haiti for its revolutionary victory. It was subjected to a worldwide embargo that was led by the United States, which feared the Haitian example could inspire a similar revolt in the southern slave states. It was only with southern secession and the outbreak of the Civil War that the North recognized Haiti—nearly 60 years after its independence.
From the dawn of the 20th century, Haiti fell under the domination of Washington and the US banks, whose interests were defended by sending Marines to carry out an occupation that continued for nearly 20 years, maintained through the bloody suppression of Haitian resistance.
The Marines left only after carrying out the “Haitianization”—as the New York Times referred to it at the time—of the war against the Haitian people by building an army dedicated to internal repression.
Subsequently, Washington backed the 30-year dictatorship of the Duvaliers, which began with the coming to power of Papa Doc in 1957. While tens of thousands of Haitians died at the hands of the military and the dreaded Tontons Macoute, US imperialism saw the murderous dictatorship as a bulwark against communism and revolution in the Caribbean.
Since the mass upheavals that brought down the Duvaliers in 1986, successive US governments, Democratic and Republican alike, have sought to reconstruct a reliable client state capable of defending the markets and investments of US firms attracted by starvation wages, as well as the property and wealth of the Haitian ruling elite. This entails preventing any challenge to a socio-economic order that keeps 80 percent of the population in dire poverty.
This effort continues today under the tutelage of Bill and Hillary Clinton—respectively the UN’s special representative to Haiti and the US Secretary of State—who together have Haitian blood on their hands.
Washington has backed two coups and sent US troops back into Haiti twice in the past 20 years. Both coups were organized to overthrow Jean-Bertrand Aristide, the first Haitian president to be elected by popular vote and without Washington’s approval. Together, the coups of 1991 and 2004 claimed the lives of at least 13,000 more Haitians. In the 2004 overthrow, Aristide was forcibly transported out of the country by US operatives.
Needing them in Iraq, the US withdrew its troops in 2004, contracting the job of repression out to a United Nations peacekeeping force of 9,000 under the leadership of the Brazilian army.
Despite Aristide’s capitulation to the demands of the International Monetary Fund and his willingness to compromise with Washington, the mass support he attracted with his anti-imperialist rhetoric made him anathema to the ruling elites in both Washington and Port-au-Prince. On the orders of the Obama administration, he is barred from returning to Haiti and his political party, Fanmi Lavalas, remains effectively outlawed.
This is the real and continuing history that, as Obama put it, binds Haiti to US imperialism, which bears overwhelming responsibility for the desperate conditions that have compounded the carnage inflicted by the earthquake.
There are, however, other ties that bind and are deeply felt, as the immensity of the tragedy in Haiti unfolds. There are over half a million Haitian Americans officially counted in the US and undoubtedly hundreds of thousands more who are undocumented. Their presence concretizes the class interests and solidarity that unite Haitian and American workers. Together, it is their task to sweep away the conditions of poverty and devastation in both countries, along with the capitalist profit system that has created them.
Thursday, January 14, 2010
Ron Paul Powerful Speech - A Call for Revolution
Watch and listen this powerful speech: Slavery sold as liberty. Socialism to save capitalism. A psychotic nation. Exuberant taxation. Epidemic of cronyism. 700 military basis all over the world. Tortures of 21st century. We have forgotten what made America great. Revolutionary changes are needed and foreseen.
Obama Wants Your Retirement Account
Obama to meddle with your retirement account?
Administration considers forcing investors into Treasury debt
Jerome R. Corsi
The Obama administration appears to have come up with a novel way of financing trillion-dollar budget deficits – demanding IRA and 401(k) holders buy trillions of dollars in Treasury bonds.
With the Treasury needing this year to see another $1 trillion in debt to finance the anticipated federal budget deficit, and the Federal Reserve about to discontinue its 2009 program of buying Treasury bonds for the Fed's asset portfolio, the Obama administration is scrambling to find ways to sell government debt without having to raise interest rates.
Bloomberg reported Friday that Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Mark Iwry are planning to stage a public comment period before implementing regulations that would require private investors to structure IRA and 401(k) accounts into what could amount to a U.S. Treasury debt-backed government annuity.
CNBC's Rick Santelli broadcast the rumor the same day from the trading floor during CNBC's "Power Lunch" show.
Spokesmen from both the U.S. Treasury and Department of Labor confirmed to WND that the federal agencies about to enter a pre-regulation public comment phase on the proposed rule change.
But the agencies are getting serious pushback from the mutual fund industry, objecting to what some financial planners see as a government attempt to divert hundreds of billions of dollars of private retirement accounts
into federal government debt, regardless whether the investment in Treasury bonds is in the best interest of the retirement-oriented investor.
On the Department of Labor website, the transcript of a Dec. 9 webchat with Borzi confirms the Employee Benefits Security Administration is about to issue a Request for Information on how annuity lifetime options should be structured into a wide range of defined contribution retirement plans, including 401(k)s.
Under ERISA, the Department of Labor regulates approximately 700,000 private pension plans, with approximately $4.7 trillion in assets.
Furthermore, annuities as life insurance contracts have a unique investment advantage of being able to pay a specified lifetime income, regardless how long the annuitant lives.
The Investment Company Institute, a national trade organization representing the mutual fund industry, argues that the distinction of the Obama administration proposal would be to require annuities funded with Treasuries to be embedded within IRAs and 401(k) programs, using the fear of loss as a reason to demand retirement investors own Treasuries.
Right now, IRA holders and investors in 401(k) plans are free to invest in Treasury bonds, if they choose.
Also, annuities are a popular settlement option for IRAs and 401(k) plans that transition from the accumulation phase to the payout phase.
Annuities are an attractive payout instrument, because annuities offer the part of lifetime income and only a portion of each payout installment is considered taxable as return of investment principle.
Interest or investment earnings in annuities accumulate income tax-deferred until the annuitant takes out money, either in an unscheduled withdrawal, or in a payout option extending over a specified number of years in retirement, or for the lifetime of the annuitant.
The unusual nature of the Obama administration's proposal would be to place as an investment a tax-deferred instrument like an annuity within a tax-deferred retirement program. Investment advisers typically use annuities as an investment option for after-tax dollars, not as a required investment option within a retirement program like an IRA or 401(k) that is already income-tax deferred.
A survey conducted by the Investment Company Institute showed more than 70 percent of all households disagreed with the idea of requiring retirees to buy annuities with a portion of their assets, whether the annuity is offered by an insurance company or by the government.
Administration considers forcing investors into Treasury debt
Jerome R. Corsi
The Obama administration appears to have come up with a novel way of financing trillion-dollar budget deficits – demanding IRA and 401(k) holders buy trillions of dollars in Treasury bonds.
With the Treasury needing this year to see another $1 trillion in debt to finance the anticipated federal budget deficit, and the Federal Reserve about to discontinue its 2009 program of buying Treasury bonds for the Fed's asset portfolio, the Obama administration is scrambling to find ways to sell government debt without having to raise interest rates.
Bloomberg reported Friday that Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Mark Iwry are planning to stage a public comment period before implementing regulations that would require private investors to structure IRA and 401(k) accounts into what could amount to a U.S. Treasury debt-backed government annuity.
CNBC's Rick Santelli broadcast the rumor the same day from the trading floor during CNBC's "Power Lunch" show.
Spokesmen from both the U.S. Treasury and Department of Labor confirmed to WND that the federal agencies about to enter a pre-regulation public comment phase on the proposed rule change.
But the agencies are getting serious pushback from the mutual fund industry, objecting to what some financial planners see as a government attempt to divert hundreds of billions of dollars of private retirement accounts
into federal government debt, regardless whether the investment in Treasury bonds is in the best interest of the retirement-oriented investor.
On the Department of Labor website, the transcript of a Dec. 9 webchat with Borzi confirms the Employee Benefits Security Administration is about to issue a Request for Information on how annuity lifetime options should be structured into a wide range of defined contribution retirement plans, including 401(k)s.
Under ERISA, the Department of Labor regulates approximately 700,000 private pension plans, with approximately $4.7 trillion in assets.
"Lifetime Income Options," code words for annuities, are also listed in the Department of Labor's regulatory agenda for the Employee Benefits Security Administration, issued Dec. 7 and filed in the Federal Register.
The government's argument is that IRA and 401(k) investors lost principle in the stock market when the Dow Jones Industrial Average plummeted from a closing of 14,164.53 on Oct. 9, 2007, to 6,547.05 on March 9, 2009.
For instance, Fidelity Investments reported the average fund balance on the approximately 11 million accounts Fidelity manages dropped 31 percent to $47,500 at the end of March, from $69,200 at the end of 2007.
With the stock market rally since March, Fidelity further reports 401(k) account balances increased 128 percent by the end of the third quarter 2009, to an average of $60,700, from the low at the end of the first quarter 2009 of $47,500.
Furthermore, annuities as life insurance contracts have a unique investment advantage of being able to pay a specified lifetime income, regardless how long the annuitant lives.
The Investment Company Institute, a national trade organization representing the mutual fund industry, argues that the distinction of the Obama administration proposal would be to require annuities funded with Treasuries to be embedded within IRAs and 401(k) programs, using the fear of loss as a reason to demand retirement investors own Treasuries.
Right now, IRA holders and investors in 401(k) plans are free to invest in Treasury bonds, if they choose.
Also, annuities are a popular settlement option for IRAs and 401(k) plans that transition from the accumulation phase to the payout phase.
Annuities are an attractive payout instrument, because annuities offer the part of lifetime income and only a portion of each payout installment is considered taxable as return of investment principle.
Interest or investment earnings in annuities accumulate income tax-deferred until the annuitant takes out money, either in an unscheduled withdrawal, or in a payout option extending over a specified number of years in retirement, or for the lifetime of the annuitant.
The unusual nature of the Obama administration's proposal would be to place as an investment a tax-deferred instrument like an annuity within a tax-deferred retirement program. Investment advisers typically use annuities as an investment option for after-tax dollars, not as a required investment option within a retirement program like an IRA or 401(k) that is already income-tax deferred.
A survey conducted by the Investment Company Institute showed more than 70 percent of all households disagreed with the idea of requiring retirees to buy annuities with a portion of their assets, whether the annuity is offered by an insurance company or by the government.
Moreover, 96 percent of households in the survey responded that retirees rejected the idea that the government should mandate turning IRA or 401(k) assets into annuities, asserting instead that retirees should make their own decisions about managing retirement assets and income.
The Investment Company Institute member companies manage some $11.62 trillion in mutual fund assets for some 90 million mutual fund shareholders, including retirement-oriented investors participating in defined contribution plans such as employer-sponsored 401(k) accounts.
Wednesday, January 13, 2010
Corporations are pitching a bizarre product -- a radical vision of the 1st Amendment.
Monica Youn
Giving corporations an outsized voice in elections
Corporations are pitching a bizarre product -- a radical vision of the 1st Amendment. It would give corporations rather than voters a central role in our electoral process by treating corporate political spending as protected speech. If this vision becomes reality, businesses and other big-money players will spend billions either hyping their preferred candidates or running attack ads against elected officials who don't support their preferred agenda. Voters will be forced into a couch-potato role, mere viewers of the electoral spectacle bought and paid for by wealthy companies.
The Supreme Court's decision in the hotly anticipated campaign finance reform case Citizens United vs. Federal Election Commission -- which may be announced as early as Tuesday -- will show whether a majority of the Roberts court is buying their argument.
The case may be the turning point in a concerted, decades-long ideological campaign -- the "corporate free speech movement," as Robert L. Kerr and other scholars have chronicled. As far back as 1971, Lewis F. Powell Jr. (whom President Nixon would shortly nominate to the Supreme Court) sent a confidential memorandum to his friend Eugene Sydnor Jr. at the U.S. Chamber of Commerce arguing that corporate interests needed to take advantage of a "neglected opportunity in the courts." Because "the judiciary may be the most important instrument for social, economic and political change," the memo said, the chamber and other corporate interests should develop a cadre of constitutional lawyers to file lawsuits and amicus briefs to push a corporate-friendly legal agenda in the Supreme Court.
Corporations heeded this call to arms, generously funding the chamber's litigation arm and founding other think tanks. In hundreds of lawsuits and briefs, the chamber and corporations such as Exxon-Mobil and Nike have drilled in the pro-business party line that 1st Amendment protection should extend to corporate political spending -- such as the corporate-funded movie about Hillary Rodham Clinton that is at issue in Citizens United. The case, which began on narrow grounds (did restrictions on corporate campaign ads apply to this film?) has become a test of whether restrictions on political speech by corporations should be ended altogether.
Only five years after Powell sent his memo, the Supreme Court in Buckley vs. Valeo struck down campaign spending limits on 1st Amendment grounds, with the rationale that such limits "impose direct and substantial restraints on the quantity of political speech." Two years later, in First National Bank of Boston vs. Bellotti, the court held -- for the first time -- that the 1st Amendment extends to corporate political spending, striking down a law that had prevented business corporations from spending shareholder funds to influence the outcome of state ballot measures. By then Powell was on the court, and he wrote the controlling opinion in Bellotti and was in the majority in both cases.
As 1st Amendment expert Linda Berger has pointed out, the Buckley and Bellotti cases planted the seeds of three new metaphors in election law: that money is speech; that corporations are people; and that elections are marketplaces. To equate corporate campaign spending with 1st Amendment-protected speech, you must accept all three. Each, however, is problematic.
First, although spending money may, in some circumstances, have some expressive value (such as clicking a web link to give $10 to a candidate), it does not follow that money is speech or that the 1st Amendment should shield such spending from regulation. After all, I can drive my car in a way that conveys a message -- disapproval of a tailgating fellow driver, for example -- but that doesn't mean that driving is speech, nor that the 1st Amendment renders traffic laws unconstitutional. When corporations and other monied interests spend vast sums to influence the outcome of an election, they're not trying to communicate an idea but simply to wield economic power and to bid for influence.
Second, as Justice Ruth Bader Ginsburg pointed out at the Citizens United oral argument, a corporation "is not endowed by its creator with inalienable rights." After all, corporations are legal entities created for doing business and given special advantages that aren't available to individuals or even other business entities, including limited liability and favorable tax treatment.
Thus, although corporations have certain economic rights -- to enable them to conduct business -- a corporation has no claim to the fundamental constitutional rights held by "We the People." Corporations already have ample means to express their "viewpoints" -- by lobbying, testifying in Congress and conducting public education on issues -- and those corporate employees who wish to advance the corporation's political agenda can contribute to the corporation's political action committee.
Third, and finally, one should not simply import economic free-market principles wholesale into the "free market of ideas." The operating assumption of free-market theory is that, in the long term, buyers' preferences will steer money to the best outcomes, so that those firms that offer the best goods and services will be rewarded with the greatest market success. However, this "invisible hand" assumption -- that money follows or represents merit -- has no application to elections, especially when corporations are involved. The amount of money a corporation can spend lacks even a theoretical connection to the intrinsic worth -- or popular support -- of its political agenda.
For decades, the Supreme Court stopped short of fully endorsing any of the three metaphors, heeding former Chief Justice William H. Rehnquist's warning that to treat corporate spending as the 1st Amendment equivalent of individual free speech is "to confuse metaphor with reality." Instead, as campaign finance law developed, the court struck a balance between the rights of campaigners -- candidates, parties, PACs and corporations -- on the one hand and the rights of the electorate to a representative, participatory and accountable government on the other.
But since Chief Justice John G. Roberts Jr. and Justice Samuel Alito have replaced Rehnquist and Justice Sandra Day O'Connor on the court, concern for the 1st Amendment interests of the electorate seems to have been jettisoned. Since they joined the court, it has struck down campaign finance regulations in each of the three relevant cases it has heard, championing a 1st Amendment right to spend money freely in political campaigns without regard to the voter's right to a meaningful role in the electoral process.
With Citizens United due to be decided as campaigns for this year's elections get off the ground, political players are keenly aware that the court could open the floodgates to corporate cash. "We the People" can only hope the court steps back from the brink and instead recognizes that in a democracy, voters, not corporations, should be at the center of the political process.
Monica Youn directs the Money in Politics Project of the Brennan Center for Justice at the NYU School of Law.
Giving corporations an outsized voice in elections
Corporations are pitching a bizarre product -- a radical vision of the 1st Amendment. It would give corporations rather than voters a central role in our electoral process by treating corporate political spending as protected speech. If this vision becomes reality, businesses and other big-money players will spend billions either hyping their preferred candidates or running attack ads against elected officials who don't support their preferred agenda. Voters will be forced into a couch-potato role, mere viewers of the electoral spectacle bought and paid for by wealthy companies.
The Supreme Court's decision in the hotly anticipated campaign finance reform case Citizens United vs. Federal Election Commission -- which may be announced as early as Tuesday -- will show whether a majority of the Roberts court is buying their argument.
The case may be the turning point in a concerted, decades-long ideological campaign -- the "corporate free speech movement," as Robert L. Kerr and other scholars have chronicled. As far back as 1971, Lewis F. Powell Jr. (whom President Nixon would shortly nominate to the Supreme Court) sent a confidential memorandum to his friend Eugene Sydnor Jr. at the U.S. Chamber of Commerce arguing that corporate interests needed to take advantage of a "neglected opportunity in the courts." Because "the judiciary may be the most important instrument for social, economic and political change," the memo said, the chamber and other corporate interests should develop a cadre of constitutional lawyers to file lawsuits and amicus briefs to push a corporate-friendly legal agenda in the Supreme Court.
Corporations heeded this call to arms, generously funding the chamber's litigation arm and founding other think tanks. In hundreds of lawsuits and briefs, the chamber and corporations such as Exxon-Mobil and Nike have drilled in the pro-business party line that 1st Amendment protection should extend to corporate political spending -- such as the corporate-funded movie about Hillary Rodham Clinton that is at issue in Citizens United. The case, which began on narrow grounds (did restrictions on corporate campaign ads apply to this film?) has become a test of whether restrictions on political speech by corporations should be ended altogether.
Only five years after Powell sent his memo, the Supreme Court in Buckley vs. Valeo struck down campaign spending limits on 1st Amendment grounds, with the rationale that such limits "impose direct and substantial restraints on the quantity of political speech." Two years later, in First National Bank of Boston vs. Bellotti, the court held -- for the first time -- that the 1st Amendment extends to corporate political spending, striking down a law that had prevented business corporations from spending shareholder funds to influence the outcome of state ballot measures. By then Powell was on the court, and he wrote the controlling opinion in Bellotti and was in the majority in both cases.
As 1st Amendment expert Linda Berger has pointed out, the Buckley and Bellotti cases planted the seeds of three new metaphors in election law: that money is speech; that corporations are people; and that elections are marketplaces. To equate corporate campaign spending with 1st Amendment-protected speech, you must accept all three. Each, however, is problematic.
First, although spending money may, in some circumstances, have some expressive value (such as clicking a web link to give $10 to a candidate), it does not follow that money is speech or that the 1st Amendment should shield such spending from regulation. After all, I can drive my car in a way that conveys a message -- disapproval of a tailgating fellow driver, for example -- but that doesn't mean that driving is speech, nor that the 1st Amendment renders traffic laws unconstitutional. When corporations and other monied interests spend vast sums to influence the outcome of an election, they're not trying to communicate an idea but simply to wield economic power and to bid for influence.
Second, as Justice Ruth Bader Ginsburg pointed out at the Citizens United oral argument, a corporation "is not endowed by its creator with inalienable rights." After all, corporations are legal entities created for doing business and given special advantages that aren't available to individuals or even other business entities, including limited liability and favorable tax treatment.
Thus, although corporations have certain economic rights -- to enable them to conduct business -- a corporation has no claim to the fundamental constitutional rights held by "We the People." Corporations already have ample means to express their "viewpoints" -- by lobbying, testifying in Congress and conducting public education on issues -- and those corporate employees who wish to advance the corporation's political agenda can contribute to the corporation's political action committee.
Third, and finally, one should not simply import economic free-market principles wholesale into the "free market of ideas." The operating assumption of free-market theory is that, in the long term, buyers' preferences will steer money to the best outcomes, so that those firms that offer the best goods and services will be rewarded with the greatest market success. However, this "invisible hand" assumption -- that money follows or represents merit -- has no application to elections, especially when corporations are involved. The amount of money a corporation can spend lacks even a theoretical connection to the intrinsic worth -- or popular support -- of its political agenda.
For decades, the Supreme Court stopped short of fully endorsing any of the three metaphors, heeding former Chief Justice William H. Rehnquist's warning that to treat corporate spending as the 1st Amendment equivalent of individual free speech is "to confuse metaphor with reality." Instead, as campaign finance law developed, the court struck a balance between the rights of campaigners -- candidates, parties, PACs and corporations -- on the one hand and the rights of the electorate to a representative, participatory and accountable government on the other.
But since Chief Justice John G. Roberts Jr. and Justice Samuel Alito have replaced Rehnquist and Justice Sandra Day O'Connor on the court, concern for the 1st Amendment interests of the electorate seems to have been jettisoned. Since they joined the court, it has struck down campaign finance regulations in each of the three relevant cases it has heard, championing a 1st Amendment right to spend money freely in political campaigns without regard to the voter's right to a meaningful role in the electoral process.
With Citizens United due to be decided as campaigns for this year's elections get off the ground, political players are keenly aware that the court could open the floodgates to corporate cash. "We the People" can only hope the court steps back from the brink and instead recognizes that in a democracy, voters, not corporations, should be at the center of the political process.
Monica Youn directs the Money in Politics Project of the Brennan Center for Justice at the NYU School of Law.
The Recession Is Over, the Depression Just Beginning
...In his upcoming State of the Union address, Obama is expected to repeat his post-China trip message that fiscal austerity (meaning sharp social spending cuts) is necessary to cut the public debt. In other words, bankrolling Wall Street, health insurers, the drug cartel, other corporate favorites, and war profiteers will continue while working Americans won't be helped during the greatest economic crisis in their lifetimes, a protracted one that will last years.
Looking ahead in 2010, the state of the nation for most people is dire and worsening, and 2011 looks no better. City mayors are on the front lines dealing with it. So are governors at their state levels, but increasingly they're getting less help from Washington from an administration with priorities leaving them out and the millions they serve, on their own and out of luck.
Stephen Lendman
In late 2009, former Merrill Lynch economist, now with the Canadian firm, Gluskin Sheff, said the following:
"The credit collapse and the accompanying deflation and overcapacity are going to drive the economy and financial markets in 2010. We have said this repeatedly that this recession is really a depression because the (post-WW II) recessions were merely small backward steps in an inventory cycle but in the context of expanding credit. Whereas now, we are in a prolonged period of credit contraction, especially as it relates to households and small businesses."
Summarizing his 2010 outlook, Rosenberg highlighted asset deflation and credit contraction imploding "the largest balance sheet in the world - the US household sector" in the amount of "an epic $12 trillion of lost net worth, a degree of trauma we have never seen before," even after the equity bear market rally and "tenuous" housing recovery likely to be short-lived and illusory with a true bottom many months away.
As a result, consumer spending will be severely impacted. "Frugality is the new fashion and likely to stay that way for years," highlighting a secular shift toward prudence and conservatism because households are traumatized, tapped out, and mindful of a bleak outlook. It shows in new consumer credit data, contracting $17.5 billion in November, the largest monthly amount since 1943 record keeping began.
Surprisingly, only people over age 55 have experienced job growth. All others have lost jobs, can't get them, and for youths the "unemployment crisis (is) of epic proportions." In addition, there's a record number of Americans out of work for longer than six months, in part because the "aging but not aged" aren't retiring, and those who did are coming back, of necessity, to make up for wealth lost.
Rosenberg stresses that for a sustainable recovery to begin, the ratio of household credit to personal disposable income must revert to the mean and reach an excess in the opposite direction. In the 1950s, it was 30%. Today its 125%, down from the late 2007 139% peak, with a long way to go taking years, and when it's over, another $7 trillion in household credit will have to be extinguished.
Until he retired in 1992, Robert Farrell was a highly respected Merrill Lynch market strategist and theorist, best remembered for his "10 Market Rules to Remember." Number one was that "markets tend to return to the mean over time." Number two was that "excesses in one direction will lead to an opposite excess in the other direction," and number nine was that "when all the experts and forecasts agree -- something else is going to happen."
According to a November National Association of Business Economics (NABE) survey, 48 top economists expect the US economy to grow 3.2% in 2010 even though the job outlook is bleak. Overall, they're so optimistic that only 15% want more stimulus, 40% said leave the present package in place, and the other 45% want the amount approved but not spent cut because it's not needed. At the same time, according to Investors Intelligence, market sentiment is at the highest level since December 2007, shortly after equities peaked, headed down, and world economies began to crator.
In his January 5 commentary, David Rosenberg notes that "Sentiment is wildly bullish....almost every survey is overwhelmingly constructive," yet reviewing 2009's market performance in the face of economic fundamentals "almost wants to make you believe in the tooth fairy." He explained that "small business (still faces) a credit quagmire," there's no housing recovery, and household spending is retrenching and hunkering down for the long haul.
The latest US nonfarm payroll report provides more confirmation. Although the headline number was a modestly anemic -85,000, Rosenberg called it "horrible" because its details showed consistent weakness. As a result, he estimates a more accurate "465,000" December decline, based on what's occurring at the small company level "where the trend in orders, output, sales and employment" has been dismal.
Importantly, economic sectors sensitive to the business cycle actually "cratered" in December, "which flies in the face of the overwhelming view that this recession has fully run its course." Also disturbing was that while "temp help" gained 47,000 jobs, its fifth straight increase, full-time employment "plunged" 647,000 last month, a clear sign that no one is hiring, especially small businesses that do most of it.
The reason headline U-3 unemployment held steady at 10% was because the labor force plunged by 661,000, the sharpest (discouraged worker) decline in nearly 15 years. The broader U-6 unemployment is 17.3%, and economist John Williams (shadowstats.com) calculates it more accurately at 21.9% by excluding manipulated changes for more valid figures. He estimates about 500,000 December job losses, not the sanitized U-3 number. He also says that a "major double-dip downturn should be obvious by mid-year."
Economist Jack Rasmus' Outlook
Z Magazine's January issue features a bleak outlook from economist Jack Rasmus in his article titled, "Economic Crisis in 2010 and Beyond." In reviewing 2009, he argued that no recovery is possible as long as job losses and home foreclosures continue.
Looking ahead in 2010, he says "The fundamental problems of financial and consumption fragility have not been resolved." Both are deteriorating, and banks are in trouble, large and small, with 500 or more of the latter ones to fail this year. In addition, credit contraction will continue. Banks aren't lending to business or consumers. "Commercial property markets' deflation will deepen," so more Fed rescues will be needed in the face of defaults.
Business bankruptcies will increase, and so will the numbers of unemployed and those losing their homes. And if interest rates rise, the junk and Treasury bond markets will crater.
As for consumers, consumption will continue weak. Disposable income will decline, so recovery in 2010 isn't likely. In addition, without more stimulus (he believes won't come), unemployment will rise to 27 million from the current 24 million level, U-6 unemployment will reach 19% by year end, (the true number will be close to 25%), and hiring that does occur will be mostly low-wage temporary and part time.
Home foreclosures will also exceed seven million, "on their way to a possible 10 million." After stabilizing, home prices will again fall, and by year end "Between 33 percent to 50 percent of homes will be under water," a grave situation with many owners walking away from them and glutting the market more with unsold properties.
Rasmus also sees no interest rate hike until after the November mid-term elections, no meaningful financial reform, a lower dollar, more defaults like Dubai-World, perhaps in troubled economies in Latvia, Ukraine, Greece and Italy, and US states in greater trouble than today because of falling revenues, rising deficits, little in the way of relief, and forced budget cuts and layoffs exacerbating a dire situation. In other words, Rasmus, like Rosenberg, sees hard times ahead, in contrast to the consensus rosy outlook. More...
Looking ahead in 2010, the state of the nation for most people is dire and worsening, and 2011 looks no better. City mayors are on the front lines dealing with it. So are governors at their state levels, but increasingly they're getting less help from Washington from an administration with priorities leaving them out and the millions they serve, on their own and out of luck.
Stephen Lendman
In late 2009, former Merrill Lynch economist, now with the Canadian firm, Gluskin Sheff, said the following:
"The credit collapse and the accompanying deflation and overcapacity are going to drive the economy and financial markets in 2010. We have said this repeatedly that this recession is really a depression because the (post-WW II) recessions were merely small backward steps in an inventory cycle but in the context of expanding credit. Whereas now, we are in a prolonged period of credit contraction, especially as it relates to households and small businesses."
Summarizing his 2010 outlook, Rosenberg highlighted asset deflation and credit contraction imploding "the largest balance sheet in the world - the US household sector" in the amount of "an epic $12 trillion of lost net worth, a degree of trauma we have never seen before," even after the equity bear market rally and "tenuous" housing recovery likely to be short-lived and illusory with a true bottom many months away.
As a result, consumer spending will be severely impacted. "Frugality is the new fashion and likely to stay that way for years," highlighting a secular shift toward prudence and conservatism because households are traumatized, tapped out, and mindful of a bleak outlook. It shows in new consumer credit data, contracting $17.5 billion in November, the largest monthly amount since 1943 record keeping began.
Surprisingly, only people over age 55 have experienced job growth. All others have lost jobs, can't get them, and for youths the "unemployment crisis (is) of epic proportions." In addition, there's a record number of Americans out of work for longer than six months, in part because the "aging but not aged" aren't retiring, and those who did are coming back, of necessity, to make up for wealth lost.
Rosenberg stresses that for a sustainable recovery to begin, the ratio of household credit to personal disposable income must revert to the mean and reach an excess in the opposite direction. In the 1950s, it was 30%. Today its 125%, down from the late 2007 139% peak, with a long way to go taking years, and when it's over, another $7 trillion in household credit will have to be extinguished.
Until he retired in 1992, Robert Farrell was a highly respected Merrill Lynch market strategist and theorist, best remembered for his "10 Market Rules to Remember." Number one was that "markets tend to return to the mean over time." Number two was that "excesses in one direction will lead to an opposite excess in the other direction," and number nine was that "when all the experts and forecasts agree -- something else is going to happen."
According to a November National Association of Business Economics (NABE) survey, 48 top economists expect the US economy to grow 3.2% in 2010 even though the job outlook is bleak. Overall, they're so optimistic that only 15% want more stimulus, 40% said leave the present package in place, and the other 45% want the amount approved but not spent cut because it's not needed. At the same time, according to Investors Intelligence, market sentiment is at the highest level since December 2007, shortly after equities peaked, headed down, and world economies began to crator.
In his January 5 commentary, David Rosenberg notes that "Sentiment is wildly bullish....almost every survey is overwhelmingly constructive," yet reviewing 2009's market performance in the face of economic fundamentals "almost wants to make you believe in the tooth fairy." He explained that "small business (still faces) a credit quagmire," there's no housing recovery, and household spending is retrenching and hunkering down for the long haul.
The latest US nonfarm payroll report provides more confirmation. Although the headline number was a modestly anemic -85,000, Rosenberg called it "horrible" because its details showed consistent weakness. As a result, he estimates a more accurate "465,000" December decline, based on what's occurring at the small company level "where the trend in orders, output, sales and employment" has been dismal.
Importantly, economic sectors sensitive to the business cycle actually "cratered" in December, "which flies in the face of the overwhelming view that this recession has fully run its course." Also disturbing was that while "temp help" gained 47,000 jobs, its fifth straight increase, full-time employment "plunged" 647,000 last month, a clear sign that no one is hiring, especially small businesses that do most of it.
The reason headline U-3 unemployment held steady at 10% was because the labor force plunged by 661,000, the sharpest (discouraged worker) decline in nearly 15 years. The broader U-6 unemployment is 17.3%, and economist John Williams (shadowstats.com) calculates it more accurately at 21.9% by excluding manipulated changes for more valid figures. He estimates about 500,000 December job losses, not the sanitized U-3 number. He also says that a "major double-dip downturn should be obvious by mid-year."
Economist Jack Rasmus' Outlook
Z Magazine's January issue features a bleak outlook from economist Jack Rasmus in his article titled, "Economic Crisis in 2010 and Beyond." In reviewing 2009, he argued that no recovery is possible as long as job losses and home foreclosures continue.
Looking ahead in 2010, he says "The fundamental problems of financial and consumption fragility have not been resolved." Both are deteriorating, and banks are in trouble, large and small, with 500 or more of the latter ones to fail this year. In addition, credit contraction will continue. Banks aren't lending to business or consumers. "Commercial property markets' deflation will deepen," so more Fed rescues will be needed in the face of defaults.
Business bankruptcies will increase, and so will the numbers of unemployed and those losing their homes. And if interest rates rise, the junk and Treasury bond markets will crater.
As for consumers, consumption will continue weak. Disposable income will decline, so recovery in 2010 isn't likely. In addition, without more stimulus (he believes won't come), unemployment will rise to 27 million from the current 24 million level, U-6 unemployment will reach 19% by year end, (the true number will be close to 25%), and hiring that does occur will be mostly low-wage temporary and part time.
Home foreclosures will also exceed seven million, "on their way to a possible 10 million." After stabilizing, home prices will again fall, and by year end "Between 33 percent to 50 percent of homes will be under water," a grave situation with many owners walking away from them and glutting the market more with unsold properties.
Rasmus also sees no interest rate hike until after the November mid-term elections, no meaningful financial reform, a lower dollar, more defaults like Dubai-World, perhaps in troubled economies in Latvia, Ukraine, Greece and Italy, and US states in greater trouble than today because of falling revenues, rising deficits, little in the way of relief, and forced budget cuts and layoffs exacerbating a dire situation. In other words, Rasmus, like Rosenberg, sees hard times ahead, in contrast to the consensus rosy outlook. More...
Credit Bureaus to Include Your Income on Credit Report
KAREN BLUMENTHAL
Look Who's Peeking at Your Paycheck
You may think your income is private information. But the credit bureaus may have your number.
And starting in February, your income—as estimated by the bureaus—may be used to help determine whether you get a new credit card.
Tuesday, the Federal Reserve issued its final rules related to last year's Credit Card Act, which, among other things, will require credit-card companies to consider an applicant's income or assets and current debts before approving credit. To provide flexibility, however, the Fed said that issuers can use "a reasonable estimate" of income or assets based on "statistically sound models."
In hopes of such a decision, the three big credit bureaus have been updating or rolling out products that seek to estimate consumers' incomes, based on information in their credit reports, such as the size and age of their mortgages or the size of their credit limits.
The products also are responding to banks' efforts to tighten credit standards in order to reduce losses and risk. "We look to fill in the blanks where they need the blanks filled in," says John Cullerton, vice president, product management, for Equifax Inc., an Atlanta-based credit bureau.
Credit-card companies can then double-check what we have long reported ourselves against these estimates—which often don't require consumer consent and aren't available to consumers for review.
Indeed, lenders of all kinds are starting to collect ever more financial information from us and about us. Last summer, Fannie Mae began requiring mortgage lenders to verify borrowers' incomes by checking income-tax filings. Instead of simply providing pay stubs and bank and brokerage account statements, home buyers now are being asked to provide copies of their tax returns and are also required to fill out an Internal Revenue Service form known as 4506-T that allows the IRS to release their tax filings to lenders.
Credit scores, which have been long a key factor in whether you get a loan or a credit card, may not be sufficient for many future credit decisions. With the new credit-card law requiring credit-card issuers to consider a customer's ability to pay before opening new accounts, the Fed had proposed requiring people to report their own income or assets when applying for credit.
But retailers feared the proposed rules would squelch their ability to instantly open credit accounts at the cash register because shoppers wouldn't want to disclose such personal information in the middle of a store. Both retailers and the credit bureaus asked the Fed to allow them use alternatives such as the credit bureaus' income estimations instead.
Card companies already are asking for more detailed information in their online applications. Capital One is asking applicants to disclose how much they pay in mortgage or rent payments, how much they have in bank accounts and how much is in their investment accounts. Bank of America and Chase are requiring household income estimates.
In the past, the companies relied on self-reported income information. But lenders already are starting to use Experian PLC's Income Insight product to verify what individuals report, says Brannan Johnston, vice president, income and deposits for the Costa Mesa, Calif., credit bureau.
Experian came up with its estimates by matching credit reports against a deep database of wages and interest and investment income and determining what information about the number of accounts, total credit, payments and other factors best predicted income.
Mr. Johnston says the income estimates also may be used to decide whether to increase a credit limit, since information on credit-card accounts may not be available or up-to-date. In addition, collection agencies have been interested in using the data to determine the most profitable accounts to pursue.
TransUnion LLC, a Chicago-based credit bureau, says most uses of its updated income estimates so far have been used for marketing pre-approved credit cards or other consumer offers, though lenders are also interested in the opportunity to calculate a debt-to-income ratio to see how extended a potential borrower might be.
Experian estimates income to the nearest thousand, while TransUnion offers a range. But both acknowledge the estimates are just that. Experian says that more than 85% of the incomes it estimates at about $35,000 will indeed be below $50,000—but that's hardly precise. Chet Wiermanski, global chief scientist at TransUnion, said it isn't uncommon for estimates to be off by $15,000 or $20,000.
Because the bureaus' numbers aren't exact, the companies say their contracts prohibit lenders and credit-card issuers from turning down customers based solely on the information. The estimates may, however, prompt a request for more details from borrowers, like pay stubs or tax returns.
Equifax, through its Work Number business, also provides employment verification and payroll data collected electronically from about 2,000 employers. Lenders, potential lenders, insurers and debt collectors can access the information without getting an individual's specific consent if they're using it for permissible purposes under credit laws. More...
Look Who's Peeking at Your Paycheck
You may think your income is private information. But the credit bureaus may have your number.
And starting in February, your income—as estimated by the bureaus—may be used to help determine whether you get a new credit card.
Tuesday, the Federal Reserve issued its final rules related to last year's Credit Card Act, which, among other things, will require credit-card companies to consider an applicant's income or assets and current debts before approving credit. To provide flexibility, however, the Fed said that issuers can use "a reasonable estimate" of income or assets based on "statistically sound models."
In hopes of such a decision, the three big credit bureaus have been updating or rolling out products that seek to estimate consumers' incomes, based on information in their credit reports, such as the size and age of their mortgages or the size of their credit limits.
The products also are responding to banks' efforts to tighten credit standards in order to reduce losses and risk. "We look to fill in the blanks where they need the blanks filled in," says John Cullerton, vice president, product management, for Equifax Inc., an Atlanta-based credit bureau.
Credit-card companies can then double-check what we have long reported ourselves against these estimates—which often don't require consumer consent and aren't available to consumers for review.
Indeed, lenders of all kinds are starting to collect ever more financial information from us and about us. Last summer, Fannie Mae began requiring mortgage lenders to verify borrowers' incomes by checking income-tax filings. Instead of simply providing pay stubs and bank and brokerage account statements, home buyers now are being asked to provide copies of their tax returns and are also required to fill out an Internal Revenue Service form known as 4506-T that allows the IRS to release their tax filings to lenders.
Credit scores, which have been long a key factor in whether you get a loan or a credit card, may not be sufficient for many future credit decisions. With the new credit-card law requiring credit-card issuers to consider a customer's ability to pay before opening new accounts, the Fed had proposed requiring people to report their own income or assets when applying for credit.
But retailers feared the proposed rules would squelch their ability to instantly open credit accounts at the cash register because shoppers wouldn't want to disclose such personal information in the middle of a store. Both retailers and the credit bureaus asked the Fed to allow them use alternatives such as the credit bureaus' income estimations instead.
Card companies already are asking for more detailed information in their online applications. Capital One is asking applicants to disclose how much they pay in mortgage or rent payments, how much they have in bank accounts and how much is in their investment accounts. Bank of America and Chase are requiring household income estimates.
In the past, the companies relied on self-reported income information. But lenders already are starting to use Experian PLC's Income Insight product to verify what individuals report, says Brannan Johnston, vice president, income and deposits for the Costa Mesa, Calif., credit bureau.
Experian came up with its estimates by matching credit reports against a deep database of wages and interest and investment income and determining what information about the number of accounts, total credit, payments and other factors best predicted income.
Mr. Johnston says the income estimates also may be used to decide whether to increase a credit limit, since information on credit-card accounts may not be available or up-to-date. In addition, collection agencies have been interested in using the data to determine the most profitable accounts to pursue.
TransUnion LLC, a Chicago-based credit bureau, says most uses of its updated income estimates so far have been used for marketing pre-approved credit cards or other consumer offers, though lenders are also interested in the opportunity to calculate a debt-to-income ratio to see how extended a potential borrower might be.
Experian estimates income to the nearest thousand, while TransUnion offers a range. But both acknowledge the estimates are just that. Experian says that more than 85% of the incomes it estimates at about $35,000 will indeed be below $50,000—but that's hardly precise. Chet Wiermanski, global chief scientist at TransUnion, said it isn't uncommon for estimates to be off by $15,000 or $20,000.
Because the bureaus' numbers aren't exact, the companies say their contracts prohibit lenders and credit-card issuers from turning down customers based solely on the information. The estimates may, however, prompt a request for more details from borrowers, like pay stubs or tax returns.
Equifax, through its Work Number business, also provides employment verification and payroll data collected electronically from about 2,000 employers. Lenders, potential lenders, insurers and debt collectors can access the information without getting an individual's specific consent if they're using it for permissible purposes under credit laws. More...
Tuesday, January 12, 2010
The Clouds Are Gathering, Time To Be Fearful
Doug Kass
Yesterday, the following clouds gathered:
1. renewed fears of populism as the administration considers launching a tax on financial institutions.
2. a disappointing Alcoa (AA Quote) earnings release;
3. China guided the one-year bill higher to curb lending and this morning raised bank reserve requirements; and
4. we experienced a different sort of market close.
My responses?
1. I remain fearful of the ramifications of populism in 2010-2011 on economic growth and on the market's prospects.
2. The industrials trade is far too crowded.
3. China is setting the stage for a rise in benchmark interest rates in the first half of 2010 (something included in my surprises for 2010 list).
4. And I know that when things look too good to be true (read: the markets persistently rise), they usually are!
I am not a Cassandra, and I have suggested on RealMoney Silver that, while there are numerous market positives in place as we enter 2010 that could produce favorable economic and corporate profit growth outcomes, there are also many probable outcomes that are less benign.
Often, the irrational is rationalized in such strong market settings, and arguably, this has been the case over the past six months, as headwinds (e.g., still sluggish labor markets, rising populism and marginal tax rates, commodities pressure, higher interest rates, etc.) are too easily ignored and perception becomes readily detached from reality.
In markets and in life, we are consistently bamboozled by appearance and consensus. Too often, we are played as suckers as we just accept the trend, momentum and/or the superficial as certain truth without a shred of criticism. Just look at those who bought into the success of Enron, the financial supermarket concept at Citigroup (C Quote), the uninterrupted profit growth at Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote), housing's new paradigm of noncyclical growth and ever-rising home prices in the early to mid 2000s, Saddam Hussein's weapons of mass destruction, the uncompromising principles of former New York Governor Elliott Spitzer, the morality of our politicians (e.g., John Edwards, John Ensign and Larry Craig), the consistency of Bernie Madoff's investment returns (and those of other hucksters) and the clean-cut image of Tiger Woods.
"Do you want to know the truth or see me hit a few dingers?"
-- Mark McGwire
And, even the heroic home-run production of steroid-laced Major League Baseball players such as Mark McGwire is ignored until the facts are made public in black and white.
Yesterday, the following clouds gathered:
1. renewed fears of populism as the administration considers launching a tax on financial institutions.
2. a disappointing Alcoa (AA Quote) earnings release;
3. China guided the one-year bill higher to curb lending and this morning raised bank reserve requirements; and
4. we experienced a different sort of market close.
My responses?
1. I remain fearful of the ramifications of populism in 2010-2011 on economic growth and on the market's prospects.
2. The industrials trade is far too crowded.
3. China is setting the stage for a rise in benchmark interest rates in the first half of 2010 (something included in my surprises for 2010 list).
4. And I know that when things look too good to be true (read: the markets persistently rise), they usually are!
I am not a Cassandra, and I have suggested on RealMoney Silver that, while there are numerous market positives in place as we enter 2010 that could produce favorable economic and corporate profit growth outcomes, there are also many probable outcomes that are less benign.
Often, the irrational is rationalized in such strong market settings, and arguably, this has been the case over the past six months, as headwinds (e.g., still sluggish labor markets, rising populism and marginal tax rates, commodities pressure, higher interest rates, etc.) are too easily ignored and perception becomes readily detached from reality.
In markets and in life, we are consistently bamboozled by appearance and consensus. Too often, we are played as suckers as we just accept the trend, momentum and/or the superficial as certain truth without a shred of criticism. Just look at those who bought into the success of Enron, the financial supermarket concept at Citigroup (C Quote), the uninterrupted profit growth at Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote), housing's new paradigm of noncyclical growth and ever-rising home prices in the early to mid 2000s, Saddam Hussein's weapons of mass destruction, the uncompromising principles of former New York Governor Elliott Spitzer, the morality of our politicians (e.g., John Edwards, John Ensign and Larry Craig), the consistency of Bernie Madoff's investment returns (and those of other hucksters) and the clean-cut image of Tiger Woods.
"Do you want to know the truth or see me hit a few dingers?"
-- Mark McGwire
And, even the heroic home-run production of steroid-laced Major League Baseball players such as Mark McGwire is ignored until the facts are made public in black and white.
Job Openings in U.S. Fell by 156,000 in November
Bob Willis
Job openings in the U.S. fell in November, a sign employers are reluctant to expand staff even as payroll reductions waned from earlier last year.
Openings declined by 156,000 to 2.42 million, the Labor Department said today in Washington. The number of unfilled positions was down 50 percent since peaking in June 2007.
Payrolls dropped more than anticipated in December after revisions showed a gain in the prior month that was the first since the recession began. Unemployment that’s forecast to stay above 10 percent for the first half of the year may make it harder for consumer spending to accelerate.
“There is little in the way of job creation going on in the economy,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “Coming out of a recession, companies stop firing before they start hiring, but this time it looks like stage two is going to take a while longer to develop.”
The rate of job openings in November dropped to 1.8 percent from 1.9 percent, while the pace of hiring accelerated to 3.2 percent from 3.1 percent.
The separations rate, which includes dismissals and those who quit their jobs, rose to 3.3 percent from 3.2 percent the prior month.
Payrolls fell by 85,000 last month after a 4,000 increase in November that was the first gain since December 2007, according to Labor Department figures released on Jan. 8. The unemployment rate held at 10 percent, near the 26-year high of 10.1 percent that was reached in October.
‘Reluctant to Hire’
Companies “are still reluctant to invest and hire,” partly because they’re awaiting government changes to health care, tax and climate-change policies, Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday.
“There’s a limit to what monetary policy can do” to improve the labor market, Lockhart told reporters after a speech in Atlanta. The prospects for employment “will come back with credit growing.”
The government may need to continue “targeted” programs to stimulate the economy even as growth in the first half of this year will likely be enough to create jobs, President Barack Obama’s chief economist said.
“We are getting closer to stability in employment,” Christina Romer, the head of the White House Council of Economic Advisers, said Jan. 10 on ABC News’s “This Week” program. “The next step is to finally start adding jobs. I think we are on the path of steady progress.”
Cuts at UPS
United Parcel Service Inc., the world’s largest package- delivery company, said Jan. 8 that it plans to cut 1,800 jobs as it shrinks management at a U.S. unit. Atlanta-based UPS said it will reduce the number of U.S. operating districts to 20 from 46 to streamline management of its small-package unit.
AOL Inc., the Internet company spun off from Time Warner Inc. in December, this week said it started involuntary job cuts after 1,100 employees accepted buyout packages as part of a restructuring.
Among companies considering adding workers, Caterpillar Inc., the world’s largest maker of bulldozers, aims to bring back some laid-off workers this year, Chief Executive Officer Jim Owens said last month.
“We’ll gradually begin to call people back and to rebuild our overall sales and ability to ship product,” Owens said in a Dec. 11 interview with Bloomberg Television. “It will gradually begin to pick up as 2010 unfolds.”
Job openings in the U.S. fell in November, a sign employers are reluctant to expand staff even as payroll reductions waned from earlier last year.
Openings declined by 156,000 to 2.42 million, the Labor Department said today in Washington. The number of unfilled positions was down 50 percent since peaking in June 2007.
Payrolls dropped more than anticipated in December after revisions showed a gain in the prior month that was the first since the recession began. Unemployment that’s forecast to stay above 10 percent for the first half of the year may make it harder for consumer spending to accelerate.
“There is little in the way of job creation going on in the economy,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “Coming out of a recession, companies stop firing before they start hiring, but this time it looks like stage two is going to take a while longer to develop.”
The rate of job openings in November dropped to 1.8 percent from 1.9 percent, while the pace of hiring accelerated to 3.2 percent from 3.1 percent.
The separations rate, which includes dismissals and those who quit their jobs, rose to 3.3 percent from 3.2 percent the prior month.
Payrolls fell by 85,000 last month after a 4,000 increase in November that was the first gain since December 2007, according to Labor Department figures released on Jan. 8. The unemployment rate held at 10 percent, near the 26-year high of 10.1 percent that was reached in October.
‘Reluctant to Hire’
Companies “are still reluctant to invest and hire,” partly because they’re awaiting government changes to health care, tax and climate-change policies, Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday.
“There’s a limit to what monetary policy can do” to improve the labor market, Lockhart told reporters after a speech in Atlanta. The prospects for employment “will come back with credit growing.”
The government may need to continue “targeted” programs to stimulate the economy even as growth in the first half of this year will likely be enough to create jobs, President Barack Obama’s chief economist said.
“We are getting closer to stability in employment,” Christina Romer, the head of the White House Council of Economic Advisers, said Jan. 10 on ABC News’s “This Week” program. “The next step is to finally start adding jobs. I think we are on the path of steady progress.”
Cuts at UPS
United Parcel Service Inc., the world’s largest package- delivery company, said Jan. 8 that it plans to cut 1,800 jobs as it shrinks management at a U.S. unit. Atlanta-based UPS said it will reduce the number of U.S. operating districts to 20 from 46 to streamline management of its small-package unit.
AOL Inc., the Internet company spun off from Time Warner Inc. in December, this week said it started involuntary job cuts after 1,100 employees accepted buyout packages as part of a restructuring.
Among companies considering adding workers, Caterpillar Inc., the world’s largest maker of bulldozers, aims to bring back some laid-off workers this year, Chief Executive Officer Jim Owens said last month.
“We’ll gradually begin to call people back and to rebuild our overall sales and ability to ship product,” Owens said in a Dec. 11 interview with Bloomberg Television. “It will gradually begin to pick up as 2010 unfolds.”
Monday, January 11, 2010
Govt wants to protect you by making annuities mandatory for 401(k)s
Sara Hansard
Should annuities be mandatory for 401(k)s? Fund companies go on the offensive
Participants in 401(k) plans do not want the government to require them to convert a portion of their 401(k) assets to annuities, according to the results of a survey of about 3,000 households released today by the Investment Company Institute.
The results of the survey aren't surprising, given that the IC I represents mutual fund companies. Some $7.5 trillion is invested in 401(k) plans and individual retirement accounts, about half of which is invested in mutual funds.
The release of the research indicates that the mutual fund industry intends to resist proposals discussed in Washington to reduce tax breaks for 401(k)s and to impose more government controls on the plans, such as mandating investment options.
“Government should not be making those decisions for them,” ICI president and chief executive Paul Schott Stevens said in summarizing the ICI survey of 401(k) participants, which was conducted in November and December. “They really value the independent control that they have over the way they invest and manage those accounts. They don't like mandates. They don't like government micromanagement.”
Mr. Stevens, speaking at a press conference in Washington on Friday, also opposed a plan being considered by the Treasury and Labor departments to require that a portion of 401(k) balances be converted to annuities to guarantee lifetime income for retiring workers. About 96% of the respondents in the ICI survey said retirees should make their own decisions about managing retirement assets and income, while more than 70% disagreed that the government should require retirees to trade a portion of their retirement plan accounts for a contract that promises to pay them income for life.
“They want the maximum amount of choice, so if you want to take an annuity, great,” said Jack Brennan, chairman emeritus of The Vanguard Group Inc., who also spoke at the press conference. “But don't force it, because it's not for everyone.”
J. Mark Iwry, senior adviser to Treasury Secretary Timothy Geithner and deputy assistant secretary for retirement and health policy, co-authored a paper before joining the Obama administration that recommended having a portion of a retiring worker's 401(k) assets automatically invested in an annuity — unless the employee opts out of the program.
The Treasury and Labor departments are likely to issue regulations this year to make it easier for companies to offer “automatic annuities” in 401(k) plans, Mr. Iwry said last September. More...
Should annuities be mandatory for 401(k)s? Fund companies go on the offensive
Participants in 401(k) plans do not want the government to require them to convert a portion of their 401(k) assets to annuities, according to the results of a survey of about 3,000 households released today by the Investment Company Institute.
The results of the survey aren't surprising, given that the IC I represents mutual fund companies. Some $7.5 trillion is invested in 401(k) plans and individual retirement accounts, about half of which is invested in mutual funds.
The release of the research indicates that the mutual fund industry intends to resist proposals discussed in Washington to reduce tax breaks for 401(k)s and to impose more government controls on the plans, such as mandating investment options.
“Government should not be making those decisions for them,” ICI president and chief executive Paul Schott Stevens said in summarizing the ICI survey of 401(k) participants, which was conducted in November and December. “They really value the independent control that they have over the way they invest and manage those accounts. They don't like mandates. They don't like government micromanagement.”
Mr. Stevens, speaking at a press conference in Washington on Friday, also opposed a plan being considered by the Treasury and Labor departments to require that a portion of 401(k) balances be converted to annuities to guarantee lifetime income for retiring workers. About 96% of the respondents in the ICI survey said retirees should make their own decisions about managing retirement assets and income, while more than 70% disagreed that the government should require retirees to trade a portion of their retirement plan accounts for a contract that promises to pay them income for life.
“They want the maximum amount of choice, so if you want to take an annuity, great,” said Jack Brennan, chairman emeritus of The Vanguard Group Inc., who also spoke at the press conference. “But don't force it, because it's not for everyone.”
J. Mark Iwry, senior adviser to Treasury Secretary Timothy Geithner and deputy assistant secretary for retirement and health policy, co-authored a paper before joining the Obama administration that recommended having a portion of a retiring worker's 401(k) assets automatically invested in an annuity — unless the employee opts out of the program.
The Treasury and Labor departments are likely to issue regulations this year to make it easier for companies to offer “automatic annuities” in 401(k) plans, Mr. Iwry said last September. More...
America slides deeper into depression as Wall Street revels
Image by Getty Images via Daylife
The labour force contracted by 661,000. This did not show up in the headline jobless rate because so many Americans dropped out of the system. The broad U6 category of unemployment rose to 17.3pc. That is the one that matters.
Wall Street rallied. Bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism.
The home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. The local sheriff will escort them out of the door, often with some sympathy –– just like the police in 1932, mostly Irish Catholics who tithed 1pc of their pay for soup kitchens.
Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath.
Judges are finding ways to block evictions. One magistrate in Minnesota halted a case calling the creditor "harsh, repugnant, shocking and repulsive". We are not far from a de facto moratorium in some areas.
This is how it ended between 1932 and 1934, when half the US states declared moratoria or "Farm Holidays". Such flexibility innoculated America's democracy against the appeal of Red Unions and Coughlin Fascists. The home siezures are occurring despite frantic efforts by the Obama administration to delay the process.
This policy is entirely justified given the scale of the social crisis. But it also masks the continued rot in the housing market, allows lenders to hide losses, and stores up an ever larger overhang of unsold properties. It takes heroic naivety to think the US housing market has turned the corner (apologies to Goldman Sachs, as always). The fuse has yet to detonate on the next mortgage bomb, $134bn (£83bn) of "option ARM" contracts due to reset violently upwards this year and next.
US house prices have eked out five months of gains on the Case-Shiller index, but momentum stalled in October in half the cities even before the latest surge of 40 basis points in mortgage rates. Karl Case (of the index) says prices may sink another 15pc. "If the 2008 and 2009 loans go bad, then we're back where we were before – in a nightmare."
David Rosenberg from Gluskin Sheff said it is remarkable how little traction has been achieved by zero rates and the greatest fiscal blitz of all time. The US economy grew at a 2.2pc rate in the third quarter (entirely due to Obama stimulus). This compares to an average of 7.3pc in the first quarter of every recovery since the Second World War.
Fed hawks are playing with fire by talking up about exit strategies, not for the first time. This is what they did in June 2008. We know what happened three months later. For the record, manufacturing capacity use at 67.2pc, and "auto-buying intentions" are the lowest ever.
The Fed's own Monetary Multiplier crashed to an all-time low of 0.809 in mid-December. Commercial paper has shrunk by $280bn ($175bn) in since October. Bank credit has been racing down a hair-raising black run since June. It has dropped from $10.844 trillion to $9.013 trillion since November 25. The MZM money supply is contracting at a 3pc annual rate. Broad M3 money is contracting at over 5pc.
Professor Tim Congdon from International Monetary Research said the Fed is baking deflation into the pie later this year, and perhaps a double-dip recession. Europe is even worse.
This has not stopped an army of commentators is trying to bounce the Fed into early rate rises. They accuse Ben Bernanke of repeating the error of 2004 when the Fed waited too long. Sometimes you just want to scream. In 2004 there was no housing collapse, unemployment was 5.5pc, banks were in rude good health, and the Fed Multiplier was 1.73.
How anybody can see imminent inflation in the dying embers of core PCE, just 0.1pc in November, is beyond me.
Mr Rosenberg is asked by clients why Wall Street does not seem to agree with his grim analysis.
His answer is that this is the same Mr Market that bought stocks in October 1987 when they were 25pc overvalued on Shiller "10-year normalized earnings basis" – exactly as they are today – and bought them at even more overvalued prices in 2007, long after the property crash had begun, Bear Stearns funds had imploded, and credit had its August heart attack. The stock market has become a lagging indicator. Tear up the textbooks.
The Coming Confiscation of 401(k)'s
expectedreturns.blogspot.com
Our government is in the middle of a funding crisis that will be resolved as it always has: through the confiscation of citizens' hard-earned wealth. Judging by the way Americans are being conditioned to accept criminal behavior at the highest levels of government, this confiscation will probably be pretty explicit. I'm guessing we'll eventually see a FDR-style confiscation of gold and retirement accounts (401(k)'s). From the following article in Businessweek, Americans Oppose Initiatives Limiting 401(k) Choices, ICI Says, it seems that day is quickly approaching.
Our government is in the middle of a funding crisis that will be resolved as it always has: through the confiscation of citizens' hard-earned wealth. Judging by the way Americans are being conditioned to accept criminal behavior at the highest levels of government, this confiscation will probably be pretty explicit. I'm guessing we'll eventually see a FDR-style confiscation of gold and retirement accounts (401(k)'s). From the following article in Businessweek, Americans Oppose Initiatives Limiting 401(k) Choices, ICI Says, it seems that day is quickly approaching.
U.S. investors oppose federal initiatives that would force them to give up control over their 401(k) accounts, the Investment Company Institute said.
Seven in 10 U.S. households object to the idea of the government requiring retirees to convert part of their savings into annuities guaranteeing a steady payment for life, according to an institute-funded report today.
7 out of 10 Americans against government control of 401(k)'s? This probably means legislation is going to be shoved down our throats anyway. I mean, isn't this the new trend in our new "government-knows-best" style of government?
Annuity Conversion, aka Theft
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.
The coming theft of retirement accounts is one of the most obvious trends for the next 20 years. I mean seriously, the American public stood shell-shocked like 5 year olds while getting looted to the tune of trillions of dollars- what makes you think the government isn't going to steal your retirement accounts?
The government is going to try to sell the move into annuities as a "safe" way to protect the public from the vagaries of the stock market. The truth is, the government is damn broke, which means they will have their hand in every person's pocket. The confiscation will function like this. American citizens will be forced to buy a worthless asset (in this case U.S. Treasuries) and receive a paltry return on capital. Factoring in inflation, returns are likely to be negative.
That the government has to resort to such measures indicates the severity of the current funding crisis. First, the insane monetization of debt. Now, Americans will be compelled to prop up the Treasury market. 5 years ago you couldn't make this stuff up; today, it is a reality.
Stock Market Collapse + Retirement Hopes Destroyed
Ok. So the government is basically telling us they are going to confiscate 401(k)'s. Now think for a second what happens when massive forced inflows of capital into stocks turn into massive forced outflows. It doesn't take a genius to figure out stocks are going to crater, and with it, the retirement hopes of millions of Americans.
When a critical mass of the population realizes this, then you will really know what a panic is. 401(k)’s were always structurally deficient products. The standard line is that with tax benefits and company matches, nothing can possibly go wrong! 401(k)'s are for the "wise" investor who is in it for the mythical "long-term". Whenever I hear this ridiculous line from someone, I know the person hasn't looked at a single "long-term" chart in his life. Sorry to ruin the party, but in the "long-term" (at least for Baby Boomers) stocks are going to go down in real terms and taxes are going to rise. And oh yea, you're getting taxed on income, which means if your 401(k) is actually worth something, the only person who will be celebrating is Uncle Sam. This is a disaster in the making for the disappearing middle class in America.
2010-2020: Major Paradigm Shifts Coming
These are interesting times. I can tell you this much: a lot of paradigms are about to change in the next 10 years. Most people are already skeptical of our government, which is clearly evidenced by the plunging approval ratings of both Congress and President Obama. However, most people are ignorant about the lengths governments always go to in order to prevent insolvency.
The current forced bond purchase scheme by our government reminds me a lot of what happened in France during the French Revolution, when church property was confiscated in return for assignats- which functioned as bonds. It didn't take long for those assignats to be worthless in value. I expect the same thing to happen eventually with U.S. Treasuries.
There will be a crisis of sorts in the near future. This is just one of the many reasons I am extremely bullish on gold.
Federal Reserve Seeks to Block Release of U.S. Bailout Secrets
David Glovin
The Federal Reserve will ask a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities of financial firms that might have collapsed without the largest government bailout in U.S. history.
The U.S. Court of Appeals in Manhattan, after hearing arguments in the case today, will decide whether the Fed must release records of the unprecedented $2 trillion U.S. loan program launched after the 2008 collapse of Lehman Brothers Holdings Inc. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News.
Bloomberg argues that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money. Banks and the Fed warn that bailed-out lenders may be hurt if the documents are made public, causing a run or a sell-off by investors. Disclosure may hamstring the Fed’s ability to deal with another crisis, they also argued. The lower court agreed with Bloomberg.
“The question is at what point does the government get so involved in the life of the institution that the public has a right to know?” said Charles Davis, executive director of the National Freedom of Information Coalition at the University of Missouri in Columbia. Davis isn’t involved in the lawsuit.
The ruling by the three-judge appeals panel may not come for months and is unlikely to be the final word. The loser may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court, said Anne Weismann, chief lawyer for Citizens for Responsibility and Ethics, a Washington advocacy group that supports Bloomberg’s lawsuit.
Seeking Disclosure
New York-based Bloomberg, majority-owned by Mayor Michael Bloomberg, sued in November 2008 after the Fed refused to name the firms it lent to or disclose the amounts or assets used as collateral under its lending programs. Most were put in place in response to the deepest financial crisis since the Great Depression.
“Bloomberg has been trying for almost two years to break down a brick wall of secrecy in order to vindicate the public’s right to learn basic information,” Thomas Golden, an attorney for the company with Willkie Farr & Gallagher LLP, wrote in court filings. He said the Fed may be trying “to draw out the proceedings long enough so that the information Bloomberg seeks is no longer of interest.”
The Fed’s balance sheet debt doubled after lending standards were relaxed following Lehman’s failure on Sept. 15, 2008. That year, the Fed began extending credit directly to companies that weren’t banks for the first time since the 1930s. Total central bank lending exceeded $2 trillion for the first time on Nov. 6, 2008, reaching $2.14 trillion on Sept. 23, 2009.
Freedom of Information
The lawsuit, brought under the U.S. Freedom of Information Act, or FOIA, came as President Barack Obama criticized the previous administration’s handling of the $700 billion Troubled Asset Relief Program passed by Congress in October 2008. Obama has said funds were spent by the administration of former President George W. Bush with little accountability or transparency.
FOIA requires federal agencies to make government documents available to the press and public.
In her Aug. 24 ruling, U.S. District Judge Loretta Preska in New York said loan records are covered by FOIA and rejected the Fed’s claim that their disclosure might harm banks and shareholders. An exception to the statute that protects trade secrets and privileged or confidential financial data didn’t apply because there’s no proof banks would suffer, she said.
Burden Not Met
The central bank “speculates on how a borrower might enter a downward spiral of financial instability if its participation in the Federal Reserve lending programs were to be disclosed,” Preska, the chief judge of the Manhattan federal court, said in her 47-page ruling. “Conjecture, without evidence of imminent harm, simply fails to meet the board’s burden” of proof.
In its appeal, the Board of Governors of the Federal Reserve System argued that disclosure of “highly sensitive” documents, including 231 pages of daily lending reports, threatens to stigmatize lenders and cause them “severe and irreparable competitive injury.”
“Confidentiality is essential to the success of the board’s statutory mission to maintain the health of the nation’s financial system and conduct monetary policy,” Assistant U.S. Attorney General Tony West and Fed lawyer Richard Ashton wrote in a legal brief to the appeals court.
“The board’s ability to administer lending programs crucial to maintaining national financial and economic stability will be severely undermined” if lenders won’t come to the regional Federal Reserve Banks “for their funding needs, particularly in time of economic crisis,” they said.
Protected From Disclosure
Historically, the type of government documents sought in the case has been protected from public disclosure because they might reveal competitive trade secrets, Davis said. Laws governing such disclosures may be due for a change, he said, following the far-reaching U.S. bailout.
“If you are in need of a bailout and turn to the federal government and say, ‘help,’ with that comes some requirements in terms of transparency,” Davis said.
The Fed is joined in its bid to overturn Preska’s order by the Clearing House Association LLC, an industry-owned group in New York that processes payments between banks. The group assailed the judge’s decision for what it said were legal errors, such as applying the wrong standard in weighing the exception to FOIA.
The group includes ABN Amro Bank NV, a unit of Royal Bank of Scotland Plc, Bank of America Corp., The Bank of New York Mellon Corp., Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co., US Bancorp and Wells Fargo & Co.
Directly Participate
Preska allowed the association to join the case so that it could directly participate in the appeal. More than a dozen other groups or companies filed amicus, or friend-of-the-court, briefs, including the American Society of News Editors and individual news organizations.
The judge postponed the application of her ruling to allow the appeals court to consider the case.
Also today, the same appeals court will hear arguments in a lawsuit brought by News Corp. unit Fox News Network seeking similar documents. U.S. District Judge Alvin Hellerstein in New York sided with the Fed in that case and refused to order the agency to release the documents.
The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York).
The Federal Reserve will ask a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities of financial firms that might have collapsed without the largest government bailout in U.S. history.
The U.S. Court of Appeals in Manhattan, after hearing arguments in the case today, will decide whether the Fed must release records of the unprecedented $2 trillion U.S. loan program launched after the 2008 collapse of Lehman Brothers Holdings Inc. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News.
Bloomberg argues that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money. Banks and the Fed warn that bailed-out lenders may be hurt if the documents are made public, causing a run or a sell-off by investors. Disclosure may hamstring the Fed’s ability to deal with another crisis, they also argued. The lower court agreed with Bloomberg.
“The question is at what point does the government get so involved in the life of the institution that the public has a right to know?” said Charles Davis, executive director of the National Freedom of Information Coalition at the University of Missouri in Columbia. Davis isn’t involved in the lawsuit.
The ruling by the three-judge appeals panel may not come for months and is unlikely to be the final word. The loser may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court, said Anne Weismann, chief lawyer for Citizens for Responsibility and Ethics, a Washington advocacy group that supports Bloomberg’s lawsuit.
Seeking Disclosure
New York-based Bloomberg, majority-owned by Mayor Michael Bloomberg, sued in November 2008 after the Fed refused to name the firms it lent to or disclose the amounts or assets used as collateral under its lending programs. Most were put in place in response to the deepest financial crisis since the Great Depression.
“Bloomberg has been trying for almost two years to break down a brick wall of secrecy in order to vindicate the public’s right to learn basic information,” Thomas Golden, an attorney for the company with Willkie Farr & Gallagher LLP, wrote in court filings. He said the Fed may be trying “to draw out the proceedings long enough so that the information Bloomberg seeks is no longer of interest.”
The Fed’s balance sheet debt doubled after lending standards were relaxed following Lehman’s failure on Sept. 15, 2008. That year, the Fed began extending credit directly to companies that weren’t banks for the first time since the 1930s. Total central bank lending exceeded $2 trillion for the first time on Nov. 6, 2008, reaching $2.14 trillion on Sept. 23, 2009.
Freedom of Information
The lawsuit, brought under the U.S. Freedom of Information Act, or FOIA, came as President Barack Obama criticized the previous administration’s handling of the $700 billion Troubled Asset Relief Program passed by Congress in October 2008. Obama has said funds were spent by the administration of former President George W. Bush with little accountability or transparency.
FOIA requires federal agencies to make government documents available to the press and public.
In her Aug. 24 ruling, U.S. District Judge Loretta Preska in New York said loan records are covered by FOIA and rejected the Fed’s claim that their disclosure might harm banks and shareholders. An exception to the statute that protects trade secrets and privileged or confidential financial data didn’t apply because there’s no proof banks would suffer, she said.
Burden Not Met
The central bank “speculates on how a borrower might enter a downward spiral of financial instability if its participation in the Federal Reserve lending programs were to be disclosed,” Preska, the chief judge of the Manhattan federal court, said in her 47-page ruling. “Conjecture, without evidence of imminent harm, simply fails to meet the board’s burden” of proof.
In its appeal, the Board of Governors of the Federal Reserve System argued that disclosure of “highly sensitive” documents, including 231 pages of daily lending reports, threatens to stigmatize lenders and cause them “severe and irreparable competitive injury.”
“Confidentiality is essential to the success of the board’s statutory mission to maintain the health of the nation’s financial system and conduct monetary policy,” Assistant U.S. Attorney General Tony West and Fed lawyer Richard Ashton wrote in a legal brief to the appeals court.
“The board’s ability to administer lending programs crucial to maintaining national financial and economic stability will be severely undermined” if lenders won’t come to the regional Federal Reserve Banks “for their funding needs, particularly in time of economic crisis,” they said.
Protected From Disclosure
Historically, the type of government documents sought in the case has been protected from public disclosure because they might reveal competitive trade secrets, Davis said. Laws governing such disclosures may be due for a change, he said, following the far-reaching U.S. bailout.
“If you are in need of a bailout and turn to the federal government and say, ‘help,’ with that comes some requirements in terms of transparency,” Davis said.
The Fed is joined in its bid to overturn Preska’s order by the Clearing House Association LLC, an industry-owned group in New York that processes payments between banks. The group assailed the judge’s decision for what it said were legal errors, such as applying the wrong standard in weighing the exception to FOIA.
The group includes ABN Amro Bank NV, a unit of Royal Bank of Scotland Plc, Bank of America Corp., The Bank of New York Mellon Corp., Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co., US Bancorp and Wells Fargo & Co.
Directly Participate
Preska allowed the association to join the case so that it could directly participate in the appeal. More than a dozen other groups or companies filed amicus, or friend-of-the-court, briefs, including the American Society of News Editors and individual news organizations.
The judge postponed the application of her ruling to allow the appeals court to consider the case.
Also today, the same appeals court will hear arguments in a lawsuit brought by News Corp. unit Fox News Network seeking similar documents. U.S. District Judge Alvin Hellerstein in New York sided with the Fed in that case and refused to order the agency to release the documents.
The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York).
Sunday, January 10, 2010
Russia, China will not stand idle if US or Israel attacks Iran
Russia, China, Iran redraw energy map
M K Bhadrakumar
The inauguration of the Dauletabad-Sarakhs-Khangiran pipeline on Wednesday connecting Iran's northern Caspian region with Turkmenistan's vast gas field may go unnoticed amid the Western media cacophony that it is "apocalypse now" for the Islamic regime in Tehran.
The event sends strong messages for regional security. Within the space of three weeks, Turkmenistan has committed its entire gas exports to China, Russia and Iran. It has no urgent need of the pipelines that the United States and the European Union have been advancing. Are we hearing the faint notes of a Russia-China-Iran symphony?
The 182-kilometer Turkmen-Iranian pipeline starts modestly with the pumping of 8 billion cubic meters (bcm) of Turkmen gas. But its annual capacity is 20bcm, and that would meet the energy requirements of Iran's Caspian region and enable Tehran to free its own gas production in the southern fields for export. The mutual interest is perfect: Ashgabat gets an assured market next door; northern Iran can consume without fear of winter shortages; Tehran can generate more surplus for exports; Turkmenistan can seek transportation routes to the world market via Iran; and Iran can aspire to take advantage of its excellent geographical location as a hub for the Turkmen exports.
We are witnessing a new pattern of energy cooperation at the regional level that dispenses with Big Oil. Russia traditionally takes the lead. China and Iran follow the example. Russia, Iran and Turkmenistan hold respectively the world's largest, second-largest and fourth-largest gas reserves. And China will be consumer par excellence in this century. The matter is of profound consequence to the US global strategy.
strategy.
The Turkmen-Iranian pipeline mocks the US's Iran policy. The US is threatening Iran with new sanctions and claims Tehran is "increasingly isolated". But Mahmud Ahmadinejad's presidential jet winds its way through a Central Asian tour and lands in Ashgabat for a red-carpet welcome by his Turkmen counterpart, Gurbanguly Berdymukhammedov, and a new economic axis emerges. Washington's coercive diplomacy hasn't worked. Turkmenistan, with a gross domestic product of US$18.3 billion, defied the sole superpower (GDP of $14.2 trillion) - and, worse still, made it look routine.
There are subplots, too. Tehran claims to have a deal with Ankara to transport Turkmen gas to Turkey via the existing 2,577km pipeline connecting Tabriz in northwestern Iran with Ankara. Indeed, Turkish diplomacy has an independent foreign-policy orientation. Turkey also aspires to be a hub for Europe's energy supplies. Europe may be losing the battle for establishing direct access to the Caspian.
Second, Russia does not seem perturbed by China tapping into Central Asian energy. Europe's need for Russian energy imports has dropped and Central Asian energy-producing countries are tapping China's market. From the Russian point of view, China's imports should not deprive it of energy (for its domestic consumption or exports). Russia has established deep enough presence in the Central Asian and Caspian energy sector to ensure it faces no energy shortage.
What matters most to Russia is that its dominant role as Europe's No 1 energy provider is not eroded. So long as the Central Asian countries have no pressing need for new US-backed trans-Caspian pipelines, Russia is satisfied.
During his recent visit to Ashgabat, Russian President Dmitry Medvedev normalized Russian-Turkmen energy ties. The restoration of ties with Turkmenistan is a major breakthrough for both countries. One, a frozen relationship is being resumed substantially, whereby Turkmenistan will maintain an annual supply of 30bcm to Russia. Two, to quote Medvedev, "For the first time in the history of Russian-Turkmen relations, gas supplies will be carried out based on a price formula that is absolutely in line with European gas market conditions." Russian commentators say Gazprom will find it unprofitable to buy Turkmen gas and if Moscow has chosen to pay a high price, that is primarily because of its resolve not to leave gas that could be used in alternative pipelines, above all in the US-backed Nabucco project.
Third, contrary to Western propaganda, Ashgabat does not see the Chinese pipeline as a substitute for Gazprom. Russia's pricing policy ensures that Ashgabat views Gazprom as an irreplaceable customer. The export price of the Turkmen gas to be sold to China is still under negotiation and the agreed price simply cannot match the Russian offer.
Fourth, Russia and Turkmenistan reiterated their commitment to the Caspian Coastal Pipeline (which will run along the Caspian's east coast toward Russia) with a capacity of 30bcm. Evidently, Russia hopes to cluster additional Central Asian gas from Turkmenistan (and Kazakhstan).
Fifth, Moscow and Ashgabat agreed to build jointly an east-west pipeline connecting all Turkmen gas fields to a single network so that the pipelines leading toward Russia, Iran and China can draw from any of the fields.
Indeed, against the backdrop of the intensification of the US push toward Central Asia, Medvedev's visit to Ashgabat impacted on regional security. At the joint press conference with Medvedev, Berdymukhammedov said the views of Turkmenistan and Russia on the regional processes, particularly in Central Asia and the Caspian region, were generally the same. He underlined that the two countries were of the view that the security of one cannot be achieved at the expense of the other. Medvedev agreed that there was similarity or unanimity between the two countries on issues related to security and confirmed their readiness to work together.
The United States' pipeline diplomacy in the Caspian, which strove to bypass Russia, elbow out China and isolate Iran, has foundered. Russia is now planning to double its intake of Azerbaijani gas, which further cuts into the Western efforts to engage Baku as a supplier for Nabucco. In tandem with Russia, Iran is also emerging as a consumer of Azerbaijani gas. In December, Azerbaijan inked an agreement to deliver gas to Iran through the 1,400km Kazi-Magomed-Astara pipeline.
The "big picture" is that Russia's South Stream and North Stream, which will supply gas to northern and southern Europe, have gained irreversible momentum. The stumbling blocks for North Stream have been cleared as Denmark (in October), Finland and Sweden (in November) and Germany (in December) approved the project from the environmental angle. The pipeline's construction will commence in the spring.
The $12-billion pipeline built jointly by Gazprom, Germany's E.ON Ruhrgas and BASF-Wintershall, and the Dutch gas transportation firm Gasunie bypasses the Soviet-era transit routes via Ukraine, Poland and Belarus and runs from the northwestern Russian port of Vyborg to the German port of Greifswald along a 1,220km route under the Baltic Sea. The first leg of the project with a carrying capacity of 27.5bcm annually will be completed next year and the capacity will double by 2012. North Stream will profoundly affect the geopolitics of Eurasia, trans-Atlantic equations and Russia's ties with Europe.
To be sure, 2009 proved to be a momentous year for the "energy war". The Chinese pipeline inaugurated by President Hu Jintao on December 14; the oil terminal near the port city of Nakhodka in Russia's far east inaugurated by Prime Minister Vladimir Putin on December 27 (which will be served by the mammoth $22-billion oil pipeline from the new fields in eastern Siberia leading to China and the Asia-Pacific markets); and the Iranian pipeline inaugurated by Ahmadinejad on January 6 - the energy map of Eurasia and the Caspian has been virtually redrawn.
The year 2010 begins on a fascinating new note: will Russia, China and Iran coordinate future moves or at least harmonize their competing interests?
Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.
M K Bhadrakumar
The inauguration of the Dauletabad-Sarakhs-Khangiran pipeline on Wednesday connecting Iran's northern Caspian region with Turkmenistan's vast gas field may go unnoticed amid the Western media cacophony that it is "apocalypse now" for the Islamic regime in Tehran.
The event sends strong messages for regional security. Within the space of three weeks, Turkmenistan has committed its entire gas exports to China, Russia and Iran. It has no urgent need of the pipelines that the United States and the European Union have been advancing. Are we hearing the faint notes of a Russia-China-Iran symphony?
The 182-kilometer Turkmen-Iranian pipeline starts modestly with the pumping of 8 billion cubic meters (bcm) of Turkmen gas. But its annual capacity is 20bcm, and that would meet the energy requirements of Iran's Caspian region and enable Tehran to free its own gas production in the southern fields for export. The mutual interest is perfect: Ashgabat gets an assured market next door; northern Iran can consume without fear of winter shortages; Tehran can generate more surplus for exports; Turkmenistan can seek transportation routes to the world market via Iran; and Iran can aspire to take advantage of its excellent geographical location as a hub for the Turkmen exports.
We are witnessing a new pattern of energy cooperation at the regional level that dispenses with Big Oil. Russia traditionally takes the lead. China and Iran follow the example. Russia, Iran and Turkmenistan hold respectively the world's largest, second-largest and fourth-largest gas reserves. And China will be consumer par excellence in this century. The matter is of profound consequence to the US global strategy.
strategy.
The Turkmen-Iranian pipeline mocks the US's Iran policy. The US is threatening Iran with new sanctions and claims Tehran is "increasingly isolated". But Mahmud Ahmadinejad's presidential jet winds its way through a Central Asian tour and lands in Ashgabat for a red-carpet welcome by his Turkmen counterpart, Gurbanguly Berdymukhammedov, and a new economic axis emerges. Washington's coercive diplomacy hasn't worked. Turkmenistan, with a gross domestic product of US$18.3 billion, defied the sole superpower (GDP of $14.2 trillion) - and, worse still, made it look routine.
There are subplots, too. Tehran claims to have a deal with Ankara to transport Turkmen gas to Turkey via the existing 2,577km pipeline connecting Tabriz in northwestern Iran with Ankara. Indeed, Turkish diplomacy has an independent foreign-policy orientation. Turkey also aspires to be a hub for Europe's energy supplies. Europe may be losing the battle for establishing direct access to the Caspian.
Second, Russia does not seem perturbed by China tapping into Central Asian energy. Europe's need for Russian energy imports has dropped and Central Asian energy-producing countries are tapping China's market. From the Russian point of view, China's imports should not deprive it of energy (for its domestic consumption or exports). Russia has established deep enough presence in the Central Asian and Caspian energy sector to ensure it faces no energy shortage.
What matters most to Russia is that its dominant role as Europe's No 1 energy provider is not eroded. So long as the Central Asian countries have no pressing need for new US-backed trans-Caspian pipelines, Russia is satisfied.
During his recent visit to Ashgabat, Russian President Dmitry Medvedev normalized Russian-Turkmen energy ties. The restoration of ties with Turkmenistan is a major breakthrough for both countries. One, a frozen relationship is being resumed substantially, whereby Turkmenistan will maintain an annual supply of 30bcm to Russia. Two, to quote Medvedev, "For the first time in the history of Russian-Turkmen relations, gas supplies will be carried out based on a price formula that is absolutely in line with European gas market conditions." Russian commentators say Gazprom will find it unprofitable to buy Turkmen gas and if Moscow has chosen to pay a high price, that is primarily because of its resolve not to leave gas that could be used in alternative pipelines, above all in the US-backed Nabucco project.
Third, contrary to Western propaganda, Ashgabat does not see the Chinese pipeline as a substitute for Gazprom. Russia's pricing policy ensures that Ashgabat views Gazprom as an irreplaceable customer. The export price of the Turkmen gas to be sold to China is still under negotiation and the agreed price simply cannot match the Russian offer.
Fourth, Russia and Turkmenistan reiterated their commitment to the Caspian Coastal Pipeline (which will run along the Caspian's east coast toward Russia) with a capacity of 30bcm. Evidently, Russia hopes to cluster additional Central Asian gas from Turkmenistan (and Kazakhstan).
Fifth, Moscow and Ashgabat agreed to build jointly an east-west pipeline connecting all Turkmen gas fields to a single network so that the pipelines leading toward Russia, Iran and China can draw from any of the fields.
Indeed, against the backdrop of the intensification of the US push toward Central Asia, Medvedev's visit to Ashgabat impacted on regional security. At the joint press conference with Medvedev, Berdymukhammedov said the views of Turkmenistan and Russia on the regional processes, particularly in Central Asia and the Caspian region, were generally the same. He underlined that the two countries were of the view that the security of one cannot be achieved at the expense of the other. Medvedev agreed that there was similarity or unanimity between the two countries on issues related to security and confirmed their readiness to work together.
The United States' pipeline diplomacy in the Caspian, which strove to bypass Russia, elbow out China and isolate Iran, has foundered. Russia is now planning to double its intake of Azerbaijani gas, which further cuts into the Western efforts to engage Baku as a supplier for Nabucco. In tandem with Russia, Iran is also emerging as a consumer of Azerbaijani gas. In December, Azerbaijan inked an agreement to deliver gas to Iran through the 1,400km Kazi-Magomed-Astara pipeline.
The "big picture" is that Russia's South Stream and North Stream, which will supply gas to northern and southern Europe, have gained irreversible momentum. The stumbling blocks for North Stream have been cleared as Denmark (in October), Finland and Sweden (in November) and Germany (in December) approved the project from the environmental angle. The pipeline's construction will commence in the spring.
The $12-billion pipeline built jointly by Gazprom, Germany's E.ON Ruhrgas and BASF-Wintershall, and the Dutch gas transportation firm Gasunie bypasses the Soviet-era transit routes via Ukraine, Poland and Belarus and runs from the northwestern Russian port of Vyborg to the German port of Greifswald along a 1,220km route under the Baltic Sea. The first leg of the project with a carrying capacity of 27.5bcm annually will be completed next year and the capacity will double by 2012. North Stream will profoundly affect the geopolitics of Eurasia, trans-Atlantic equations and Russia's ties with Europe.
To be sure, 2009 proved to be a momentous year for the "energy war". The Chinese pipeline inaugurated by President Hu Jintao on December 14; the oil terminal near the port city of Nakhodka in Russia's far east inaugurated by Prime Minister Vladimir Putin on December 27 (which will be served by the mammoth $22-billion oil pipeline from the new fields in eastern Siberia leading to China and the Asia-Pacific markets); and the Iranian pipeline inaugurated by Ahmadinejad on January 6 - the energy map of Eurasia and the Caspian has been virtually redrawn.
The year 2010 begins on a fascinating new note: will Russia, China and Iran coordinate future moves or at least harmonize their competing interests?
Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.
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