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dkf's JournalBernanke Saying He’s Dispensable Suggests Tenure Ending
Federal Reserve Chairman Ben S. Bernanke said he’s “spoken to the president a bit” about his future and that he feels no personal responsibility to stay at the helm until the Fed winds down its unprecedented policies to stimulate the economy.
“I don’t think that I’m the only person in the world who can manage the exit,” Bernanke said when asked at a news conference in Washington if he’s discussed his plans with President Barack Obama. His term expires at the end of January.
Bernanke’s comments yesterday meshed with the views of some of Obama’s economic and political advisers who said Bernanke, 59, after spending most of his seven years on the job battling a financial crisis and its aftermath, is exhausted and wants to return to private life. The current and former administration officials asked to not be identified to describe the private conversations.
http://www.bloomberg.com/news/2013-03-21/bernanke-saying-he-s-dispensable-suggests-tenure-ending.html
The City of London - most important player in the global offshore system of tax havens
It seems to be that every big trading disaster happens in London,” U.S. congresswoman Carolyn Maloney observed last June. “And I would like to know why.” The disasters she was referring to were the ones that bankrupted Lehman Brothers and nearly bankrupted some other American firms, such as A.I.G. and MF Global, as well as causing JPMorgan Chase’s $6 billion loss at the hands of the trader popularly known as “the London Whale”—all of these happened to a high degree in the London branches of those firms and have cost the American taxpayer billions of dollars.
To answer her question and to understand why so much of the world’s money goes to London in the first place, you need to go back hundreds of years, to the emergence of what must be the most peculiar, the oldest, the least understood, and perhaps one of the most important institutions in the menagerie of global finance: the City of London Corporation. It is the local authority for “the Square Mile,” the pocket of prime financial real estate centered on the Bank of England and located about three miles to the east of Knightsbridge, along the Thames River. But the corporation is also much more, its identity embedded in—and slightly apart from—the British nation-state. The corporation has its own constitution, “rooted in the ancient rights and privileges enjoyed by citizens before the Norman Conquest, in 1066,” and its own lord mayor of London—not to be confused with the mayor of London, who runs the Greater London metropolis, with its eight million inhabitants. One sign of the City of London’s distinct identity is the fact that the Queen, on official visits there, will stop at the boundary of the Square Mile, where she is met by the lord mayor, who engages her in a short, colorful ritual, before she may proceed. Most Brits see this merely as a relic from a bygone age, a show for the tourists. They are wrong.
The lord mayor’s principal official role, his Web site says, is to be “ambassador for all UK-based financial and professional services.” He lobbies far afield, with offices in Brussels, China, and India, among other places, the better to “expound the values of liberalization” far and wide. The City Corporation and closely linked think tanks issue streams of publications explaining why finance should be less tethered by taxes and regulation. The corporation also has its own official lobbyist, with the delightfully medieval-sounding name of The Remembrancer (currently one Paul Double), lodged permanently in Britain’s Parliament. Local elections in the City are unlike any other in Britain: multi-national corporations vote alongside and vastly outnumber the tiny borough’s 7,400 human residents.
Over the centuries the City has thrived, thanks to a simple advantage: it has had money to lend when governments or monarchs needed it. So the City has been granted special privileges, allowing it to remain a political fortress withstanding the tides of history that have transformed the rest of the British nation-state. It has nurtured a British tradition of welcoming foreign money, with few questions asked, and so has for centuries attracted the world’s wealthiest citizens. “There the Jew, the Mahometan, and the Christian transact together,” Voltaire wrote in 1733, “as though they all professed the same religion, and give the name of infidel to none but bankrupts.”
The term “tax haven” is something of a misnomer, because tax havens offer escape routes not just from taxes but potentially from any of the rules, laws, and responsibilities of other jurisdictions—whether those be taxes, criminal laws, disclosure rules, or financial regulation. Tax havens are usually about parking your money “elsewhere,” in jurisdictions such as the Cayman Islands, beyond the reach of your home country’s regulators and taxmen. Or you park it in London: which is why some investment bankers have called it the Guantánamo Bay of finance. “The British think they do finance well,” says Lee Sheppard, a tax and banking specialist at the U.S. trade publication TaxAnalysts. “No. They do the legal stuff well. Most of the big investment banks there are branches of foreign operations. . . . They go there because there is no regulation whatsoever.”
James Henry, a former McKinsey chief economist, watched at close quarters the recycling of petrodollar wealth into Third World loans via London’s unregulated Euro-markets, which among other things enabled Wall Street to avoid New Deal-era banking regulations. Henry saw a global private-banking network emerge, following the money, “helping Third World elites abscond with hundreds of billions in diverted loans, illicit commissions, and corrupt privatizations, and park it in London and other tax havens.”
It comes as a surprise to most people that the most important player in the global offshore system of tax havens is not Switzerland or the Cayman Islands, but Britain, sitting at the center of a web of British-linked tax havens, the last remnants of empire. An inner ring consists of the British Crown Dependencies—Jersey, Guernsey, and the Isle of Man. Farther afield are Britain’s 14 Overseas Territories, half of them tax havens, including such offshore giants as the Caymans, the British Virgin Islands (B.V.I.), and Bermuda. Still further out, numerous British Commonwealth countries and former colonies such as Hong Kong, with deep and old links to London, continue to feed vast financial flows—clean, questionable, and dirty—into the City. The half-in, half-out relationship provides the reassuring British legal bedrock while providing enough distance to let the U.K. say “There is nothing we can do” when scandal hits.
http://m.vanityfair.com/society/2013/04/mysterious-residents-one-hyde-park-london
Cyprus Bank Levy Unlikely to Pass Parliament
Cyprus's parliament is unlikely to pass legislation taxing deposits which has prompted turmoil in its banking system, falling short on a condition for an international bailout, government spokesman Christos Stylianides said on Tuesday.
Cypriot President Nicos Anastasiades briefed German Chancellor Angela Merkel and EU economics affairs commissioner Olli Rehn on Monday evening.
While Anastasiades said he was ready to stand by what was agreed at a euro zone finance ministers' meeting last week, he "insisted that EU partners offer some additional help," Stylianides told state radio.
Parliament was due to convene at 4.00 pm London time on Tuesday. No single party has a majority in the 56-member chamber.
Meanwhile, the Cyprus Stock Exchange suspended trading on Tuesday and Wednesday, while banks remain closed and Fitch Ratings put a number of Cyprus banks on negative ratings watch.
http://www.cnbc.com/id/100565902
http://www.reuters.com/article/2013/03/19/us-cyprus-parliament-idUSBRE92G03I20130319
Police believe Adam Lanza killed himself so no one could take his "points"
“It really was like he was lost in one of his own sick games. That’s what we heard. That he learned something from his game that you learn in (police) school, about how if you’re moving from room to room — the way he was in that school — you have to reload before you get to the next room. Maybe he has a 30-round magazine clip, and he’s only used half of it. But he’s willing to dump 15 rounds and have a new clip before he arrives in the next room.”
“They believe he learned the principles of this — the tactical reload — from his game. Reload before you’re completely out. Keep going. When the strap broke on his first weapon (the AR-15), he went to his handgun at the end. Classic police training. Or something you learn playing kill games.”
He said when the presentation was over that day, he walked out of the hotel and into the New Orleans morning, three months removed from Sandy Hook Elementary but unable now to shake what he called the “visual” of Adam Lanza’s spreadsheets, the seemingly endless list of names and numbers compiled for God knows how long; the list on which he wanted his name at the top, because of all the easy kills he thought he could get at an elementary school.
“They don’t believe this was just a spreadsheet. They believe it was a score sheet,” he continued. “This was the work of a video gamer, and that it was his intent to put his own name at the very top of that list. They believe that he picked an elementary school because he felt it was a point of least resistance, where he could rack up the greatest number of kills. That’s what (the Connecticut police) believe.”
The man paused and said, “They believe that (Lanza) believed that it was the way to pick up the easiest points. It’s why he didn’t want to be killed by law enforcement. In the code of a gamer, even a deranged gamer like this little bastard, if somebody else kills you, they get your points. They believe that’s why he killed himself.
http://m.nydailynews.com/1.1291408
Ipad1 won't work for MLB or Netflix.
iPads are very reliable and amazingly resilient, so they don't break, they just become obsolete.
This happened to the itouch 2nd gen also, no upgrade for the iOS.
So...it seems to me a person may want to get the latest version of ipad even if they can save a few bucks by buying an older one. It will keep their equipment viable for a longer period.
Lessons learned from Cyprus...
http://ftalphaville.ft.com/2013/03/18/1426252/teaching-a-lesson-lesson-learned/?The lessons the peripherals will learn:
1. Bail-in is real and will be done with a hacksaw rather than a scalpel
2. Watch out for holidays and weekends
3. Deposit insurance is not sacred
4. Policymakers do not hesitate to use surprise and force majeure to their advantage, so what they promise Monday may not be what they do Tuesday
5. Every crisis justifies a ‘one-off’ policy intervention, so when policymakers say a deposit levy or PSI is one-off, they mean assuming there is no crisis down the road
6. Assets are not safe in countries with weak sovereign or financial institutions
Twitter Just Crushed Wall Street After The Cyprus Bailout
This has been a process happening for a long time, but for those in finance, the value of Twitter is increasingly equaling or surpassing the value of traditional sell-side research from Wall Street analysts.
This weekend's surprise bailout of Cyprus (surprise, because of the fact that depositors in Cypriot banks are seeing a 'one-off' tax) is a major moment in the evolution of financial information.
Because the news was so surprising, and because there's so little time between when the bailout was announced early Saturday morning, and when trading begins Sunday evening, there's been an aggressive thirst for information and analysis on what it all means.
But the sell-side has been fairly slow, and the Twittersphere has come to the rescue.
The man everyone is reading is the pseudonymous twitterer @pawelmorski, who has written two must-read posts already on the Cypriot bailout. The first is here, and the second is here.
http://www.businessinsider.com/twitter-beats-the-sell-side-after-cyprus-bailout-2013-3
Observations On Cyprus
Because of Cyprus’s special characteristics–a huge and weak banking sector relative to the size of the economy with a small amount of debt, and a relatively small marketable government debt, mostly issued under English law—on this occasion the path of least resistance was to tax bank depositors.
One close observer told me a month ago: “The IMF wants a sustainable solution, the Finns an Icelandic solution and the Germans a cheap solution.” Translated: The International Monetary Fund didn’t want to make its Greek mistake and wanted a deal from the outset that would cut debt to levels that Cyprus could credibly repay; Finland wanted to burn deposit holders; and Germany wanted to minimize its contribution to the bailout. Hence, Saturday morning’s deal.
The decline of sovereign immunity and the major difference between creditors operating under domestic law and those under English or New York law: In Greece and now in Cyprus, investors holding bonds not governed by domestic law have escaped without restructuring. In both cases, the amount of such foreign-law bonds was not decisive, but the disinclination to restructure them—and thereby risk lawsuits and asset seizures—is significant and may be reinforced by the outcome of the court actions in New York between Argentina and its creditors..
Let banks grow at your peril: Three European countries where banks grew to multiples of GDP—Iceland, Ireland and Cyprus—have been brought low.
Property rights are conditional in a financial crisis: There seems to be widespread shock that bank deposits are not sacrosanct, and are being taxed by the government. But taxing is what governments do, and this is the kind of thing that happens in a financial crisis–though often property rights are diluted less dramatically, through inflation. Faisal Islam of Britain’s Channel Four points out that British depositors in Cyprus are still probably better off, even after a 6.75% tax, than they would be had they kept their deposits in the U.K., where savings accounts have been yielding less than inflation for some years and where the pound has devalued against the euro.
http://blogs.wsj.com/brussels/2013/03/17/observations-on-cyprus/?mod=google_news_blog
Europe Just Pissed Off Whole Bunch Of Russian Mobsters And Oligarchs With Its Bailout Of Cyprus
In the early hours of the morning in Europe, the Eurozone and the IMF announced a $10 billion bailout for Eurozone member Cyprus, whose economy is tied closely to Greece's, and who was in a similarly dire state. The details are here.
A key angle here is the Russian angle.
You may remember that along the way during the crisis, Cyprus has sought aid from Russia, which was unusual. Well the reason for that is that (Island of) Cyprus is a place where Russians are believed to do a lot of money laundering, which involves parking cash in Cypriot banks.
What's stunning about Saturday's bailout is that depositors with over 100K euros in a Cypriot bank will see a 10 percent tax instantly before banks reopen on Tuesday.
That will infuriate domestic savers, and it will mean that a lot of Russian oligarchs/mobsters/money launderers/etc. will take big hits.
http://www.businessinsider.com/cyprus-bailout-russian-angle-2013-3
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