Archive for April 19th, 2012
This is important: we get to elect our Representatives and Senators (even if the latter can’t get anything done because of the stupid filibuster rule), but we don’t get to elect regulators—they’re supposed to carry out (‘execute’) the will of Congress as expressed in legislation. It’s not working, as Jesse Eisinger reports at ProPublica:
The path to gaming the Volcker Rule has always been clear: Banks will shut down anything with the word “proprietary” on the door and simply move the activities down the hall.
To look like they were ready to comply with the Volcker Rule, the part of the Dodd-Frank Act that aims to prevent banks from gambling on their own account with money that taxpayers insure, financial firms quickly spun off or shut down their hedge funds, private equity firms and proprietary trading desks.
But the suspicious-minded among us wonder whether it was all that simple. This is the specter raised by the news that a JPMorgan Chase trader in London, made instantaneously notorious thanks to his colorful nicknames (“Voldemort” or “the London Whale,” take your pick), was amassing such huge positions in indexes related to corporate defaults that he was distorting the market. (Apparently, it wasn’t just one trader but more than a dozen, according to a person at JPMorgan, but the nicknames are too good to let go.)
Bloomberg followed up with a powerful article about how Jamie Dimon, the chief executive of JPMorgan, has transformed the sleepy chief investment office, which takes care of the bank’s treasury operation, into a unit that hires former hedge fund portfolio managers and slings around giant sums of money in what walks and quacks like prop trading. The chief investment office seems not to just be risk-mitigating, but profit-maximizing.
The Congressional authors of the Volcker Rule worried about this very thing, and you can trace their concerns through their drafts. The original language of the rule had a broad exception: banks couldn’t trade for their own account, but they could hedge to mitigate their risks.
The authors quickly realized that the exemption was absurdly broad. After moving these businesses to other divisions, banks would then argue that their bets were either market-making activities or simply hedges that offset risks.
Such “hedges” could encompass a lot of trades that looked awfully proprietary. A trade could seem to hedge a large business risk, like suffering loan losses if companies they lent to went broke in an economic downturn. But that might just be a bet on companies going belly up.
So Congress tightened the language. It wrote that the hedges had to be specific. When the Dodd-Frank financial reform law came out, the Volcker Rule provision defined “risk mitigating activities” as trades that were “designed to reduce the specific risks to the banking entity in connection with and related to such positions, contracts, or other holdings.” No macro-hedging, only micro-hedging. That is the will of Congress.
But then . . .
The Wife will want one of these—and her sister-in-law is who pointed it out:
Juan Cole, an expert on the Mideast, offers some cogent thoughts on the situation with Iran; his article is prefaced by a statement from Tom of TomsDispatch, where the article appears:
[Tom writes:] Negotiators for Iran, the U.S., Britain, China, France, Russia, and Germany are to meet in Turkey this Friday, face to face, for the first time in more than a year. There are small signs of possible future compromise on both sides when it comes to Iran’s nuclear program (and a semi-public demand from Washington that could be an instant deal-breaker). Looking at the big picture, though, there’s a remarkable amount we simply don’t know about Washington’s highly militarized policy toward Iran.
Every now and then, like a flash of lightning in a dark sky, some corner of it — and its enormity and longevity — is illuminated. For example, in 2008, the New Yorker’s indefatigable Seymour Hersh reported that the previous year Congress had granted a Bush administration request for up to $400 million “to fund a major escalation of covert operations against Iran,” including “cross-border” operations from Iraq. Just recently, Hersh offered a window into another little part of the U.S. program: the way, starting in 2005, the U.S. military’s Joint Special Operations Command spent years secretly training members of M.E.K., an Iranian opposition-group-cum-cult that’s on the State Department’s terror list, at a Department of Energy site in the Nevada desert.
Similarly, from time to time, we get glimpses of the U.S. basing and naval build-up in the Persian Gulf, which is massive and ongoing. As for the skies over Iran, last year the Iranians suddenly announced that they had acquired — downed, they claimed (though this was later denied by the Americans) — an advanced U.S. spy drone, the RQ-170 Sentinel. Indeed, they had the photos to prove it. Until then, there had been no publicity about American drones flying over Iranian territory and initially the U.S. military claimed that the plane had simplystrayed off course while patrolling the Afghan border.
Last week, however, a range of typically anonymous officials leaked to Washington Postreporters Joby Warrick and Greg Miller the news that the CIA’s drone surveillance program over Iran was more than three years old, large-scale, and itself just part of an “intelligence surge” focused on that country. According to their sources, “The effort has included ramped-up eavesdropping by the National Security Agency, formation of an Iran task force among satellite-imagery analysts, and an expanded network of spies.” In addition, under former CIA Director Leon Panetta, “partnerships” were built “with allied intelligence services in the region capable of recruiting operatives for missions inside Iran.”
Such reports and leaks give us at least the bare and patchy outlines of a concerted military, covert action, spying, surveillance, and propaganda program of staggering proportions (and that’s without even adding in the Israeli version of the same, which evidently includes theassassination of Iranian nuclear scientists). All of this, we have to believe, is but part of an even larger set of intertwined, militarized operations against a modest-sized regional power with relatively limited military capabilities. It’s a program that we’re sure to know less about than we think we do, filled with what former Secretary of Defense Donald Rumsfeld would havecalled “known unknowns” as well as “unknown unknowns.”
TomDispatch regular Juan Cole, who runs the always invaluable Informed Comment website, does a remarkable job of offering us a full-scale picture of the complex economic underpinnings of the present Iran-U.S.-Israeli crisis and the unnerving dangers involved. But for the full, grim story of Washington’s campaign against Tehran, we are reliant either on the next Bradley Manning, a future WikiLeaks, or declassification of the necessary documents in time for our grandchildren to grasp something of the folly of our moment. (To catch Timothy MacBain’s latest Tomcast audio interview in which Cole discusses the consequences of sanctions on Iran, click here, or download it to your iPod here.) Tom
I assume we’ve pretty much thrown in the towel on winning the hearts and minds and building alliances, now that we’re embarking a course of killing all those we don’t like the look of. This is a unbelievably grim overreach of power, and it is going to harm the US a lot. Greg Miller reports in the Washinton Post:
The CIA is seeking authority to expand its covert drone campaign in Yemen by launching strikes against terrorism suspects even when it does not know the identities of those who could be killed, U.S. officials said.
Securing permission to use these “signature strikes” would allow the agency to hit targets based solely on intelligence indicating patterns of suspicious behavior, such as imagery showing militants gathering at known al-Qaeda compounds or unloading explosives.
The practice has been a core element of the CIA’s drone program in Pakistan for several years. CIA Director David H. Petraeus has requested permission to use the tactic against the al-Qaeda affiliate in Yemen, which has emerged as the most pressing terrorism threat to the United States, officials said.If approved, the change would probably accelerate a campaign of U.S. airstrikes in Yemen that is already on a record pace, with at least eight attacks in the past four months. . .
Continue reading. The problem with these strikes in Pakistan is that scores of civilians, including women and children, are slaughtered as well, and the US doesn’t seem to really care: a brief apology, a few hundred dollars, and the US continues to kill civilians. And now we’re adding another country to the shooting gallery? There will be big blowback from this. And note that the US is not at war with Pakistan or Yemen—we just want to be able to kill some of their people.
In the Judeo-Christian tradition, rules play a big role, so that people in this tradition tend to believe that the ethical sense is necessarily tied into religion, an idea that would have astonished, say, the Greeks and Romans, who did not look to their religious beliefs for ethical guidance and yet managed to be about as ethical (or not) as modern Christians or Jews. Kant worked on developing ethical standards from pure reason—and, at the other extreme, many of our ethical attitudes seem to me to stem directly from our being social animals: group loyalty, for example, seems to make the ethical point that covering up misdeeds and crimes for the sake of the group is ethical, but informing authorities outside the group of the misdeeds and crimes is unethical. For example, a police officer who reports crimes committed by other policemen is generally shunned and despised as a “traitor”, even though from any reasonable ethical point of view the covering up of misdeeds and crimes and protecting offenders simply because they are members of the same group as oneself is unethical—but we’re social animals, and our evolutionary development pushes us to protect the group.
At any rate, Philip Kitcher has an interesting article on the topic:
Many people believe, with Dostoyevsky’s Ivan Karamazov, that if ethical precepts were not grounded in God’s commands, then anything would be permitted. From Plato on, however, the philosophical tradition has frequently questioned the idea of a religious foundation for ethics.
Despite this, philosophers have yearned for a different source of absolute ethical authority, substituting the dictates of reason for any divine imperative, seeking, with Kant, the “moral law within.”
Over a century ago, Darwin outlined a different way of thinking about ethics, and we are now able to articulate more fully the hints he offered. Ethics emerges as a human phenomenon, permanently unfinished. To adopt this perspective provides a different perspective on many questions that now confront us.
Fifty thousand years ago, our ancestors lived, as chimpanzees still do, in groups of about thirty members, mixed by age and sex. To live in this way was itself a social achievement, one that required psychological capacities that are rare in the natural world.
As primatologists have discovered, chimpanzees are able to recognize the wants and needs of other members of their species, and to react in helpful ways. At cost to themselves, chimpanzees sometimes give aid to an impaired relative, or carry out a task that another has tried without success. These altruistic tendencies make their social lives possible.
Nevertheless, these capacities for sympathy are easily strained. Chimpanzee social life is often tense, because loyalties are discarded and selfish impulses override their limited altruism. There is much breaking-up – and consequently making-up, long periods of huddling together for mutual reassurance. This, too, would have been the lot of our ancestors, restricting their opportunities for cooperation and the size of the societies in which they could live.
We became fully human when . . .
Continue reading. It’s quite interesting. I do have on quibble. Kitcher writes:
We became fully human when we were able to find ways of inhibiting tendencies to socially disruptive action, ways of reinforcing our altruistic capacities. Practices of punishment may well have played a role at early stages of the process. The crucial step, however, consisted in internalizing the check on our behaviour. We became able to formulate rules for ourselves, or to remind ourselves of exemplary cases of conduct. We invented a crude system of ethics.
This completely overlooks the domestication of the species through artificial selection. Not to put too fine a point on it, aggressive and non-social individuals—bullies who would not cooperate with others—were undoubtedly simply killed by the group. The selecting out of over-aggressive individuals—just as early domesticaters of goats, sheep, cattle, dogs, and horses undoubtedly killed (and did not allow to reproduce) those animals that were most unruly and troublesome, resulting within a relatively small number of generations of a much more placid population.
This morning I tried the Rooney with Mike’s Natural Barber Shop shaving soap—which does indeed have a pleasant and muted traditional barberhop fragrance. I loaded the brush heavily and followed Mike’s advice about working in more water. This time I worked it on my beard, and I did have sufficient lather for three passes, though the lather (for me) thins considerably in the third pass. But the Rooney Victorian I have is a generous brush and hoards no lather, so the shave went well.
The Progress with its Swedish Gillette blade did its usual very nice job: three passes, no problems—none of the “cuts and bleeding” the some who have not tried DE shaving think is the inevitable result. Just a very nice and comfortable shave.
A splash of Speick and I’m ready for the day. In the meantime, the HBR discussion of P&G’s shaving products and plans continues unabated. The most recent contribution, which I like because he directly contradicts the “cuts and bleeding” narrative, is from Collin Walker:
I feel I must weigh in on this discussion. I am the average mid 30s male. In seventh grade I got a Sensor, and a can of Edge gel, and a lesson from my father. I shaved with it till the Excel came out, promising that it would be a better shave. I still suffered from ingrown hairs on my neck, and hated shaving. When I went to college I got an electric, which was better, but it still gave me an ingrown or two per week. I then went eighteen years with an electric buying the newest $100 plus model when they came out.
Now as my hair is thinning I have decided to shave my head. The electric could not do it to a level I was happy with in a reasonable amount of time. I tried the Fusion ProGlide on my face, and the ingrowns appeared again, plus it was priced at a level that irritated me. I was at my wits end, I wanted my head cleanly shaven, but the two ways I was aware of were unacceptable. I then stumbled on a post on a head shaving forum that mentioned using a DE.
I look forward to every morning’s shave now. This coming from someone who hated shaving for the past twenty three years. I did not nick or cut myself on my first shaves, and have once and for all ended the ingrown hairs. In addition I can shave my head…
The whole discussion has intrigued me greatly (as you can see).