Global Corporations Sue Governments in Secret Courts -- Guess Who Usually Wins

In a world turned upside down, when governments forbid companies from dumping toxic waste or warn their citizens of the dangers of tobacco, large multinational corporations sue them in secret courts, where unelected judges, acting without juries, usually force the governments to cease their efforts and pay large fines to the corporations. It sounds like the voiceover for the trailer of a dystopian science fiction movie. But this is not fiction, science or otherwise; this is the reality of International Law in the early 21st century.

According to a recent report released by the United Nations Conference on Trade and Development (UNCTAD), at the end of 2011 there were at least 450 active lawsuits brought against governments by companies invoking clauses in bilateral investment treaties (BITs). These are only the known cases; most are kept secret. BITs are treaties that establish the conditions for investment by companies of one country in another nation, and were often forced upon small countries by large countries at the behest of corporations seeking to avoid regulations wherever they do business.

Although BITs have been around for years, it was only after the turn of the century that corporations started ramping up their use of them to frustrate regulations they don’t like. In 1999, the total number of known BIT suits exceeded 100 for the first time, and has steadily increased since, usually to the detriment of the nations being sued. Last year, for example, Ecuador was forced to pay fines of $78 million to U.S. oil company Chevron, which claimed the country’s efforts to protect the Amazon from pollution have negatively affected business. More...

Private Prison Corporations Are Slave Traders

Prison cell, Fort Leavenworth. Deutsch: Gefängniszelle, Fort Leavenworth. (Photo credit: Wikipedia)

Concertina razor wire at a prison (Photo credit: Wikipedia)

The nation’s largest private prison company, the Corrections Corporation of America, is on a buying spree. With a war chest of $250 million, the corporation, which is listed on the New York Stock Exchange, this month sent letters to 48 states, offering to buy their prisons outright. To ensure their profitability, the corporation insists that it be guaranteed that the prisons be kept at least 90 percent full. Plus, the corporate jailers demand a 20-year management contract, on top of the profits they expect to extract by spending less money per prisoner.

For the last two years, the number of inmates held in state prisons has declined slightly, largely because the states are short on money. Crime, of course, has declined dramatically in the last 20 years, but that has never dampened the states’ appetites for warehousing ever more Black and brown bodies, and the federal prison system is still growing. However, the Corrections Corporation of America believes the economic crisis has created an historic opportunity to become the landlord, as well as the manager, of a big chunk of the American prison gulag. More...

Despite a 24/7 campaign of carefully managed "good news," 76% do not believe the U.S. "recovery

oftwominds.com
Suppressing the Cognitive Dissonance of a Bogus Recovery
A massive outbreak of economic cognitive dissonance is being suppressed with wave after wave of manufactured "good news." Every visibly negative bit of data is run through a media and Central State assembly line to refashion it as "good news" and "evidence" that the "nascent recovery is taking hold." Whatever cannot be rejiggered is simply buried or suppressed.

The fact that five corporations control the the vast majority of the U.S. mainstream media certainly aids that manufacturing process.

Let's run through a few of the most blatant examples of suppressed dissonance:

1. If the economy is recovering so strongly ( +3% GDP growth in the first quarter!) then why are tax revenues down? Federal budget deficit hits April record: The April deficit soared to $82.7 billion. Total revenues for April were down 7.9 percent from a year ago. In the seven months of this year, corporate tax receipts are up 8.9% to $77.1 billion. The same cannot be said of individual income tax revenue, which is down 11.6% in the first seven months to $500.8 billion.

Through the first seven months of the current budget year, which began on Oct. 1, the deficit totals nearly $800 billion. That is down only slightly from last year's deficit during the same period of $802 billion. Revenues total $1.2 trillion in those seven months, down 4.5 percent from the same period last year.

How can tax revenues be falling when the economy is "growing strongly"? As for those corporate profits: corporate profits register biggest year-over-year gain in 25 years.

As this chart from the Federal Reserve shows, non-financial corporate profits were almost 14% of GDP before the global meltdown. In a $13 trillion economy, that's $1.8 trillion.

But much of the "good news" in Corporate America is not quite as rosy as presented.

2. Rising corporate profits mask falling sales. Consider Walmart's last report, which caused the financial media to quiver in ecstasy because the retailer logged a 10% increase in profits. But behind the hype, (profits rose $0.3 billion on $99 billion in sales, whoopie), Walmart same-store sales drop; gross margins decline.

You have to read to the very last line to get to the sobering reality: same-store sales dropped in the U.S. and gross margins declined. Both are bad news, yet you'd never know it from the lead paragraphs and talking heads.

3. Corporate profits are boosted with special charges and other accounting trickery. It takes a forensic accounting analysis of corporate filings to discern what's real and what's been juiced to boost quarterly "earnings."

Meanwhile, corporations are loading up on debt again: Junk bonds-- essentially risky bets on future corporate earnings--made up the biggest share of corporate debt sales on record last year. That hardly suggests prudence on the part of the companies loading up on tens of billions of dollars of high-interest debt. Load the company with debt, goose profits, cash out the big bonuses and then let the balance sheet implode. More...

Damage Control Over $15Million in Missing Gold Royal Canadian Mint

Image via Wikipedia

Jack Branswell and Phil Couvrette
Canwest News Service
Mint went into damage control over missing gold

OTTAWA - Faced with what may prove to be a huge gold heist right out from underneath its nose, the Royal Canadian Mint ordered polls and consulted with a high-powered Ottawa public relations firm as it worked on damage control, access to information documents show.

What is clear in 66 pages of notes released to Canwest News Service under access-to-information law is that as news of the missing 17,514 troy ounces of gold and other precious metals -- with an estimated value of $15.3-million -- leaked out, the mint was keen to protect its reputation.

What is less clear is just what the mint's consultations with Angus Reid, which conducted at least two omnibus polls for the Crown corporation, and Hill & Knowlton Inc., the public relations firm, told the mint.

The documents are heavily edited, with the polls being blacked out entirely.

Their media notes -- they messages they tell reporters -- say the mint "is one of the most highly regarded mints in the world and has a very strong reputation." But that reputation has been under siege as the mint has been unable to account for the missing gold since last fall.

On June 9, the government announced it had told the mint to have the RCMP investigate the missing gold.

By the end of that month and in early July, the mint may not have found the gold, but it had acquired Corporate Reputation and Sponsorship Index reports from Angus Reid. The reports were called Royal Canadian Mint: Reputation to June 30 (and the second one July 14). Hill & Knowlton also weighed in with an "Issue Analysis" on at least four occasions in June and July.

It is clear through e-mails, released with the documents, that the polls are about "our reputation in the context of the metal reconciliations file."

But the polls themselves, 48 pages of data, are marked not for public release and are completely blacked out.

To explain the heavy editing, the mint cites sections of the Freedom of Information Act that allow exemptions for commercially sensitive information, information that could harm third-party dealings and negotiations and advice or recommendations the mint hasn't put into operation.

The mint also held a July 17 conference call and part of that dealt with "Reputation Management" but again, all the details were censored.

Christine Aquino, a spokeswoman for the mint, said it is normal that the documents would be so highly censored.

"The minting industry is highly competitive, therefore this type of information is deemed confidential," she said.

"It is commonplace for the mint to conduct such research on a very regular basis for a variety of reasons, including to develop new products and programs that fulfil our mandate."

The mint also would not say how much it spent on the polls or the Hill & Knowlton work.

Charles Weinberg, a professor of marketing at Sauder School of Business at the University of British Columbia, said this is a serious crisis for the mint and that getting advice on its reputation is part of managing the situation.

"Part of the critical issues are how they deal with this crisis," Weinberg said.

"Losing $15-million worth of gold is a serious amount of money, no matter how profitable the Crown corporation is or what a small percentage of the amount of gold it has.

"Generally when something goes wrong, a tainted product or something like that, the first thing that the organization has to do is sort of acknowledge the mistake that was made and show that they're trying to understand what the cause was and providing appropriate corrective action."

The mint doesn't just make coins for Canada, it has international clients, and Mr. Weinberg said it would also be acutely aware that it has to maintain its reputation with them, too.

But he said the issue isn't resonating with Canadians at this point.

"One of the unusual things about this is that unlike health scares where people get ill right away and there's product recalls where there's a real danger to people . . . this is a financial embarrassment but is not an immediate danger to anyone, so I think there's less heightened public attention on this than there otherwise would be."

"One of the questions, and they may be doing this, is to see whether or not this issue is actually on people's minds. The problem is going to be when the RCMP is finishing their investigation and either conclude whether they can find there was theft taking place or can't explain it either, and if it's theft they have to see if the theft is something the mint could have done something about."

He questioned why so much of the access-to-information request would have to be blacked out.

"The question is why is this such sensitive information that it can't be publicly released?"

Among other censored information in the documents is a three-page letter, dated July 7, to John Baird, the transport minister, whose department is responsible for the mint and his minister of state, Rob Merrifield.

As government department and agencies do, the mint was very closely monitoring the volume of news reports on their missing gold and tracking whether coverage was dying off or not.

"Coverage spiked once the minister announced the RCMP had been contacted. This is now truly a cross-Canada story, including in Quebec [both print and broadcast]," the documents note. But a section right after that, presumably talking about that coverage, is blocked out under the law's exemption to not release information that is advice that hasn't been acted on yet.

The mint's final report on the missing gold and other precious metals is expected to be released soon. The RCMP investigation into the case is ongoing.

List of company names and their recent layoff announcements [more green shoots]

Wall St. Cheat Sheet
Lately, I continue to see layoffs popping up in the news on a very consistent basis (again). So, I put together a list of company names and their recent layoff announcements right here as a one-stop-shop to showcase the fact that these people, who are consumers in the global economy, will be very worried about their future come Holiday time.

Ben Bernanke said recovery? I still smell recession …

Since November 1st, 2009, here are the major layoff announcements which hit the wires:

-Applied Materials (Nasdaq: AMAT) to cut 1,300 to 1,500 jobs;

-AOL (TWX) lays off 100 employees ahead of spinoff ;

-Adobe (Nasdaq: ADBE) to cut about 680 full-time jobs;

-Electronic Arts Inc. (Nasdaq: ERTS) said it is cutting 1,500 jobs, representing about 17 percent of its work force;

-Toyota Motor Corp. (NYSE: TM) is shutting 300 dealerships in Japan over the next three years;

-Lloyds Bank (NYSE: LYG) is cutting or moving 5,000 more jobs;

-Sprint (NYSE: S) plans to cut up to 2,500 jobs;

-Daimler (NYSE: DAI) to cut 1,000 jobs in Germany;

-HSBC cutting 1,700 jobs in the UK;

-Paper maker UPM to lay off 870 workers in Finland;

-Nokia Siemens Networks (NYSE: SI) to lay off up to 5,700;

-RBS (NYSE: RBS) to cut 3,700 jobs in their UK branch network;

Cost-cutting is good for a company’s bottom line, but it does not support the all-important consumer who contributes to shopping at retail, paying their mortgage, and sustaining their monthly expenses. These numbers indicate people all over the world will be requiring more help from the government, therefore increasing deficits.

If I’ve missed some job cut announcements you have seen, feel free to leave a comment and let me know!

Disclosure: No positions in the companies mentioned.

Why is GMAC Paying Dividends While It Begs the Taxpayer

Cody Willard

Let me get this straight:

GMAC, which was owned by private equity gambling firm Cerberus (which is run by former Goldman dudes and even Dan Quayle), used to be the lending and banking and gambling arm of GM. The company was founded in 1919 to help finance cars for buyers of the GM brand.

Over the years, the guys at GMAC got ever greedier and by the time the idiots at Cerberus gambled some $7 billion of their investors’ money on buying GMAC, the company was headlong into wasting its investors’ money on horrible businesses like “wholesale financing” and jumbo mortgages. They also gambled their depositors’ and investors’ and lenders’ money in those toxic mortgage assets like CDOs and so on.

Well, Cerberus and GMAC and GM went to their cronies in the Republican/Democrat Regime in power a couple years ago and begged for billions of dollars in loans and cash infusions because they’d made so many stupid investments and loans over the years that the company couldn’t even pay its utility bills without access to taxpayer largesse.

The company was insolvent. So Bush and his cronies gave the guys at Cerberus/GMAC billions of dollars of welfare. Then when that wasn’t enough, Obama and his cronies gave the guys at Cerberus/GMAC billions of dollars of welfare.

Turns out that wasn’t enough either. So after getting a million dollars for free from the government some 12,000 times already (that’s another way of saying $12 billion), Cerberus and GMAC and its other investors are back with hat in hand begging the Republican/Democrat regime to give them another 5,000 million dollars or so ($5 billion…$5,000,000,000).

It’s outrageous that this company hasn’t been forced into bankruptcy and that we’re ignoring 200 years of rule of law in order to prop up a company that obviously has no idea how to allocate capital and maintain a self-sustaining business.

And you really wanna be outraged? How about the fact that just last week, seven days before they came begging for billions of dollars of more welfare money, the company declared its dividend payouts. Yes, GMAC is asking your representatives to give them your money against your will in a time when we can’t even get health care millions of needy children, so that GMAC can send its owners $44 million next month. (GMAC is also going to pay the Treasury a couple hundred million dollars of taxpayer money…Peter pays Paul, see? Running in circles… but that’s not even the real issue this time!)

GMAC Owners Get Free Money…AGAIN!

Think about that. The government is literally taxing you so that they can give your money to people who were rich enough and powerful enough to risk their own money on GMAC.

How can any liberal be okay with that? And how can any conservative be okay with that?

I’m at war with all Republicans and Democrats in power who have created this horrid system of redistributing wealth upwards to corporations and their owners, lenders and other investors.

I’ve got a call and an email into GMAC asking them to clarify who exactly got this $44 million dividend windfall totally paid for with your taxpayer money. Holding my breath for their reply. Any bets on whether they actually will tell us?

Companies With the Greatest Risk of Bankruptcy Over the Next 12 Months

Image via Wikipedia

Audit Integrity, a research firm, has come out with a list [pdf] of American companies which are most likely to go bankrupt in the next year.

Rite Aid Corporation
Sirius XM Radio Inc.
AMR Corporation
Federal-Mogul Corporation
Textron Inc.
The Goodyear Tire & Rubber Company
Continental Airlines, Inc.
CBS Corporation
Las Vegas Sands Corp.
Liberty Media Corporation
Advanced Micro Devices, Inc.
Macy's, Inc.
Mylan Inc.
Apartment Investment and Management Co.
Hertz Global Holdings, Inc.
Redwood Trust, Inc.
Oshkosh Corporation
Amkor Technology, Inc.
Interpublic Group of Companies, Inc.
Sprint Nextel Corporation