Suspected Russian spies want to plead guilty in U.S.

NEW YORK (Reuters) – All 10 people accused of being undercover Russian agents while living in the United States told a U.S. judge they want to plead guilty on Thursday.

Wall St edges up but tech stocks weigh

NEW YORK (Reuters) – The Dow and the S&P 500 rose modestly on Thursday on strong June sales at several retailers and stronger-than-expected jobs sector data, but losses in the technology sector eased the market off its highs.

Mark Weisbrot: Washington Still Has Problems With Democracy in Latin America

Imagine that Barack Obama, upon taking office in January 2009, had decided to deliver on his campaign promise to “to end business-as-usual in Washington so we can bring about real change.” Imagine that he rejected the architects of the pro-Wall Street policies that had led to economic collapse, such as Larry Summers, Tim Geithner, and the stable of former Goldman Sachs employees that runs the U.S Treasury Department, and instead appointed Nobel laureate economists Paul Krugman and Joe Stiglitz to key positions including the chair of the Federal Reserve.

Instead of Hillary Clinton, who lost the Democratic presidential primary because of her unrelenting support for the Iraq war, imagine that he chose Senator Russ Feingold for Secretary of State, or someone interested in delivering on the popular desire to get out of Afghanistan. Imagine a real health care reform bill, instead of health insurance reform, that didn’t give the powerful pharmaceutical and insurance lobbies a veto.

It goes without saying that President Obama would be vilified in the major media outlets. The seething hostility from right-wing blowhards such as Glenn Beck and Rush Limbaugh would be matched by more mainstream media outlets, who would accuse the president of polarizing the nation and “dangerous demagoguery.” With almost all of the establishment media and institutions against him, Obama would likely face a constant battle for political survival – although he might well triumph with direct, populist appeals to the majority.

This is what has happened to a number of the left-of-center governments in Latin America. In Ecuador, President Rafael Correa was re-elected by a large margin in 2009, despite strong opposition from the country’s media. In Bolivia, Evo Morales has brought stability and record growth to a country that had a tradition of governments that didn’t last more than a year – despite the most hostile media in the hemisphere and unrelenting, sometimes violent opposition from Bolivia’s traditional elite. And President Hugo Chavez survived a U.S. backed military coup-attempt and other efforts to topple his government, winning three presidential elections, each time by a larger margin.

All of these presidents took on entrenched oligarchies and fought hard to deliver on their promises. Morales, Bolivia’s first indigenous president in a country with an indigenous majority, re-nationalized the hydrocarbons (mostly natural gas) industry and created jobs through public investment, as well as getting a new, more democratic constitution approved. Correa doubled spending on health care and cancelled $3.2 billion of foreign debt found to be illegitimate. Chavez cut poverty in half and extreme poverty by more than 70 percent after getting control over the country’s oil industry.

These presidents faced another obstacle that Obama wouldn’t have – they had to fight with the most powerful country in the world in order to deliver on their promises. This was also true of President Nestor Kirchner in Argentina (2003-2007), who had to battle the Washington-dominated International Monetary Fund in order to implement the economic policies that made Argentina the fastest growing economy in the hemisphere for six years.

Of course, Hugo Chavez has been the most demonized in the U.S. media – but that is not because of what he has said or done but because he is sitting on 500 billion barrels of oil. Washington has a particular problem with oil-producing states that don’t follow orders – whether they are a dictatorship like Iraq, a theocracy like Iran, or a democracy like Venezuela.

All of these leaders – including President Lula da Silva of Brazil – had hoped that President Obama would pursue a more enlightened policy toward Latin America, but it hasn’t happened. It seems that Washington, which was comfortable with dictators and oligarchs who ran the show for decades, still has problems with democracy in its former “back yard.”

This op-ed was distributed by McClatchy Tribune Information Services on July 7, 2010.

Read more: Democracy, Hugo Chavez, Latin America, Economy, Barack Obama, Politics News

Mary Bottari: Wall St. Reform Bill Yields Big Win for Little Countries

You know that Wall Street reform bill pending in the Senate? Some last minute insertions add up to a surprisingly big win for the developing world.

Oil Companies Required to Detail the Dough Paid to Foreign Governments

First, kudos to Senators Dick Lugar (R-Indiana) and Ben Cardin (D-Maryland) for inserting strong provisions that require extractive companies (oil, natural gas, etc.) to detail in their annual Securities and Exchange Commission (SEC) filings the payments they make to foreign governments.

One would think that oil-rich and mineral-rich countries would be, well, rich. Big international firms move in to extract these resources and pay royalties, fees, taxes, bonuses and other monies to national governments. Unfortunately, too frequently this money is put to work lining the pockets of dictators and warlords, rather than building schools or health clinics.

Lugar’s bill, which was supported by The ONE Campaign, forces U.S. companies to issue an annual report on the type and total amount of these payments as well as governments in receipt of payments. A coordinated international effort is afoot to get the governments to do the same, so that discrepancies can be spotted. For instance, an initial reporting effort in Nigeria indicates over $800 million of unresolved differences between what companies said that they paid and what the government said it received. Exxon Mobile and Shell are only two of the big U.S. firms operating in Nigeria, where catastrophic oil spills are endemic.

Once U.S. firms are required to detail their payments to foreign officials, the citizens of these countries will know how much their governments are receiving and from whom, giving them a fighting chance to hold their government accountable for investing those funds in critical needs such as food, health and education.

High-Tech Firms Required to Report on Conflict Minerals

Three cheers for Senators Sam Brownback (R-Kansas) and Russ Feingold (D-Wisconsin) for making progress regarding the war in the Congo and the problem of conflict minerals.

Eastern Congo is the site of an on-going and horrific war that has claimed 5 million lives. Many U.S. consumers will be surprised to learn that their pretty, shiny toys including iPhone, iPad, iPod and Mac, laptops and digital cameras are linked to this conflict by the tin, tantalum, tungsten found inside these products. The Congolese militia owns and controls many of the mines that source these materials, and too many U.S. firms are not being rigorous in ensuring that their supply chain does not include the mines that fuel the conflict. As New York Times columnist Nicholas Kristof wrote in a column entitled Death by Gadget: “They want you to look at a gadget and think sleek, not blood.”

For over a year, the Enough project, the rocking anti-genocide organization, has tried to raise awareness of the issue and has hounded the firms — including Apple, Dell, HP, Nintendo and Research In Motion (Makers of Blackberry) — with some effective netroots campaigning. Campaigners are thrilled the measure was included in the financial reform bill and are anxious to see the bill passed.

The Brownback-Feingold measure would force firms to report on where they get their mineral inputs, and submit to an independent audit. Campaigners expect that public pressure will force them to clean up their supply chain and make sure they are getting their tantalum from Australia rather than from the Congo. The measure also requires the U.S. State Department to develop a map of mines owned by the militia and develop a detailed plan to address the problem.

Wall Street Forced to Spin Off Food Commodity Speculation

Harper’s Magazine has an incredible story in its July edition exposing how Wall Street speculators bumped up food commodity prices 80% between 2005-2008. Once the housing market began to go south, they needed to engage in other speculative investments to keep those big bonuses rolling in. According to Harper’s: “The global speculative frenzy sparked riots in more that thirty countries and drove the number of the world’s food insecure to more than a billion. The ranks of the hungry had increased by 250 million in a single year, the most abysmal increase in all of human history.”

Thanks to Senators Blanche Lincoln (D-Arkansas), Senator Chuck Grassley (R-Iowa), the Wall Street reform bill brings these speculative bubbles out of the shadows and into the light of day. Large Wall Street firms engaged in speculative food and energy derivatives trading will be forced to spin off their derivatives desks into a separately capitalized affiliate, making speculation in these markets much more costly. In addition, all trades will be cleared by regulators and exchange traded where pricing and positions will be transparent. Capital requirements and margin requirements will apply, putting real money behind the bets. Position limits will apply, making it more difficult for a few players to dominate the market.

“If used seriously, these are extremely effective policy tools for inhibiting and bursting speculative bubbles,” says economist Robert Pollin, who has written about the harms caused by commodity speculation for developed and developing nations.

These small provisions aid in global efforts to bring transparency and accountability to international firms that travel around the world and quietly engage in destructive business practices that they don’t want their customers or shareholder to know about. By cracking down on these shameful business practices, the Wall Street reform bill take a big step in the right direction. The bill is one vote short in the Senate, let Congress know you support the reform effort.

Read more: Apple, Apple Iphone, Finanical Crisis, Wall Street, Big Banks, Finanical Reform, Africa, Blackberry, Dell, Business News

Steven Cohen: The Federal Government Attacks Creative Local Green Energy Finance

The financial geniuses at Fannie Mae and Freddie Mac who managed to lose billions of dollars in the housing market have decided in their new-found fiscal conservatism to do their best to derail a promising and innovative mechanism for financing local green energy retrofits. The federal housing agencies’ attack on an energy and money-saving program, Property Assessed Clean Energy (PACE), demonstrates an obtuse hostility toward green energy initiatives.

Property Assessed Clean Energy programs allow local governments to sell municipal bonds and lend the capital to local homeowners for energy efficiency and renewable energy projects. This solves two problems that usually stop homeowners from retrofitting older homes for green energy: 1. The availability of capital, and; 2. The possibility that the time it takes to recoup the energy cost savings from your investment could be longer than the amount of time that you own your home. PACE programs add the green energy loan repayment to a homeowner’s property tax bill, so the costs of energy-saving investments are assumed by new homeowners if the house is sold. After 10-20 years, the additional assessment ends once the loan is repaid. The PACE program provides a great incentive for homeowners to switch to renewable energy or reduce their energy consumption.

Unfortunately, federal financial institutions object to the PACE program. In an article written this past March, the Wall Street Journal’s Nick Timiraos outlined the financial dilemma posed by this new mechanism when he noted that PACE:

“…debt would be senior to existing mortgage debt, so if the homeowner defaults or goes into foreclosure, it would be repaid before the mortgage lender gets any money. While property-tax assessments are usually senior to existing property debt, cities have traditionally used their assessment authority for community-wide improvements like sewers and roads–not for upgrades that homeowners elect to make on their own homes. Proponents of the program, called Property Assessed Clean Energy, or PACE, say it is necessary for the loans to be paid before mortgages if local governments are to raise funds for the program from municipal-bond investors.”

At the heart of these financial institutions’ objections to PACE is a shortsighted and narrow view of the world that willfully ignores the value of reducing the cost of energy in the home. Rather than working with state and local governments to ensure that PACE investments add value to the home in ways that address potential financial objections, these financial wizards simply say they will not buy or sell mortgages that include PACE-related liens. In a New York Times article on June 30, Todd Woody reported that:

“In letters sent to mortgage lenders on May 5, Fannie Mae and Freddie Mac stated that energy-efficiency liens could not take priority over a mortgage. ‘The purpose of this industry letter is to remind seller/servicers that an energy-related lien may not be senior to any mortgage delivered to Freddie Mac,’ wrote Patricia J. McClung, a Freddie Mac executive. However, the agencies did not offer guidance to mortgage lenders on how to handle properties that carry the energy liens. Backers of the programs fear that mortgage lenders, who depend on Fannie and Freddie to buy their home loans, will now start demanding that the entire lien be paid off before issuing a new loan.”

It is true that many mortgages are in trouble because homeowners have taken out too much debt on their homes and have borrowed and spent their housing equity on frivolous purchases like big screen TVs and hot tubs. However, a more efficient furnace, insulation and solar panels are investments that increase in value as the price of energy rises. PACE programs can be designed to require certified energy audits, higher levels of financial capability and other restrictions. These lumbering financial giants should not be allowed to destroy this promising local initiative.

But nobody is stopping them. In a statement issued on July 6, the Federal Housing Finance Agency exempted homes with existing PACE loans from proposed restrictions but directed Fannie and Freddie to:

“Undertake actions that protect their safe and sound operations. These include, but are not limited to:

  • Adjusting loan-to-value ratios to reflect the maximum permissible PACE loan amount available to borrowers in PACE jurisdictions;
  • Ensuring that loan covenants require approval/consent for any PACE loan;
  • Tightening borrower debt-to-income ratios to account for additional obligations associated with possible future PACE loans…”

The Federal Housing Finance Agency also encourages Fannie and Freddie to develop additional guidelines for these green energy finance programs. While this new approach is far better than automatic rejection, it may be a way of replacing the initial sledgehammer elimination of PACE with death by a thousand small cuts.

What is most disturbing about the approach taken by these federal housing agencies is their obvious hostility to the goals of green energy. While they provide lip service in support of green energy goals, their actions speak louder than their words. As of today, 22 states have authorized PACE programs, but these are fledgling efforts at best. At this crucial early stage and in the very complex world of home finance, housing agencies have done what I am afraid may be permanent damage to a promising initiative. If PACE is to be saved, the Obama Administration needs to send a clear message to all federal agencies, including those bailed-out, quasi-private bodies like Fannie and Freddie, to get on the green energy train. Today.

Read more: Steven Cohen, Freddie Mac, Pace, Solar Panels, Renewable Energy, Federal Housing Finance Agency, Financial Crisis, Fannie Mae, Property Assessed Clean Energy, Green Living, Green Energy, Energy Policy, Housing Crisis, Green News

Laura Flanders: The F Word: Who Fights and Why?

It’s too hot for outdoor activities in New York, so off I went to the cinema. Winter Bone — if you haven’t seen this extraordinary, woman-directed film about a family in trouble in the Ozarks of Missouri, I recommend it. Grim it is. Irrelevant it is not.

Winter Bone features a 17 year-old-girl, the sole supporter of her catatonic mom, and two younger siblings. Put up as collateral on their disappeared father’s bail, the family’s about to lose their house. 17 year-old-girl Ree looks longingly at the ROTC drills in the high school she had to leave. The best possible scenario for her is military recruitment. Actually, it’s the only out on offer, and the $40,000 signing bonus could save her family’s house.

Winter Bone made me think of Michael Massing’s essay in the New York Review of Books. Who fights and why? "With its guarantees of housing, employment, health insurance, and educational assistance," he wrote, "the US military today seems the last outpost of the welfare state in America." Massing’s piece appeared in April 2008, before the economic crisis really hit, before unemployment reached 10% officially (and around 16% by more precise calculations — or 44 percent if you’re in Detroit).

The US is currently shedding hundreds of thousands of jobs each month. It’s not just in the Ozarks that the recruiters are the only ones with jobs around. The economy shed 125,000 jobs in June. That’s about the number of troops we have left in Iraq.

Winter Bone just amped up the volume on a creepy question in my head. As Massing noted, "In today’s America, the hunger for a college degree is so great that many young men and women are willing to kill—and risk being killed—to get one." And what happens to the vets when they have their degree, or when they don’t want one or already have one?

We’ve long heard about fighting people over there so we don’t have to do it here. Is the colder truth becoming that we’re sending people over there because we sure can’t employ ’em over here? And we’re scared to death of what unrest might come with a massive return of men and women who’ve served and endured — and who expect something better for their families than starvation wages, and no social services when they get back?

Read more: New York Review of Books, New York, Military, Army, Economic Crisis, Afghanistan, Laura Flanders, Economy, Michael Massing, Rotc, Grittv, Jobs, Iraq, Recruitment, Grit Tv, Winter Bone, Detroit, Politics News

Irene Aldridge: What is High-Frequency Trading, Afterall?

High-frequency trading (HFT) uses quantitative investment computer programs to hold short-term positions in equities, options, futures, ETFs, currencies, and all other financial instruments that possess electronic trading capability. (Some securities, like Credit Default Swaps, for example, cannot be traded electronically, and are incompatible with investment algorithms.)

Aiming to capture just a fraction of a penny per share or currency unit on every trade, high-frequency traders move in and out of such short-term positions several times each day. Fractions of a penny accumulate fast to produce significantly positive results at the end of every day.

“High-frequency trading” became a buzzword in 2009, when Goldman Sachs accused one of their ex-employees of stealing their “cash cow,” a sophisticated computer program capable of generating millions of dollars in trading profits over short periods of time. Yet, HFT has been around since the early 1980s, when several stock exchanges first decided to experiment with electronic trading. Since the 1980s, HFT has been growing in scope, speed and complexity.

At the heart of HFT is a simple idea that properly programmed computers are better traders than humans. Computers can easily read and process amounts of data so large it is inconceivable to humans. For example, frequently traded financial securities such as EUR/USD exchange rate can produce well over 100 distinct quotes each second. Each quote, or “tick,” carries unique information about concurrent market conditions. And while a dedicated team of human traders may be able to detect some tradeable irregularities in such fast-paced data over time, human brains are no match for computers that can accurately resolve and act upon all minute information infusions in the markets. Add to that the fact that computers seldom get ill, are easily replaceable, and have no emotions. Oh, and they’ve become really cheap.

The complexity of computer technology currently required by many HFT systems pales in comparison with that required to play modern video games. As video game purveyors drive the prices of advanced computer technology down, high-frequency trading becomes increasingly affordable to anyone with an inclination for quantitative analysis and programming. Call this a .com 4.0 revolution: the latest technology long deployed in many other industries has finally arrived on Wall Street.

Some high-frequency trading strategies are quantitative investing strategies deployed at high speeds. Other strategies, specific to high-frequency trading, work with market minutia, known as “microstructure.” In both cases, high-frequency traders feed off small intraday variations in prices and do not impact long-term investors.

Read more: High-Frequency Trading, Investing, Quant, Goldman Sachs, Wall Street, Business News

EU parliament ratifies data sharing deal with U.S.

STRASBOURG, France (Reuters) – The European Parliament gave its final agreement on Thursday to a deal with the United States granting terrorism investigators access to information about Europeans’ bank transfers.