Category Archives: Industry Jobs Oil Economics

$6Billion in Fines for Rigging Currency

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Just pay the fine and no one goes to jail. Those that pay the billions in fines are the stockholders, there is never a personal or individual consequence. Jamie Dimon should have been in prison years ago, next to Bernie Madoff. Even more troubling is Jon Corzine with his criminal activity.

Attorney General, Loretta Lynch knows the depths of the fraudulent activity and seems to be complicit in giving individuals a blind-eye.

Big banks to pay $6B for market manipulation

Six of the biggest names in finance have agreed to pay nearly $6 billion dollars in penalties, with five pleading guilty to criminal charges over long-running manipulation of key financial markets.

The Justice Department announced the massive settlement Wednesday, its latest in a series of deals to bring to a close probes of financial manipulation of everything from benchmark interest rates to top currency exchanges.

Attorney General Loretta Lynch said the latest settlement brings to an end a manipulation scheme of “breathtaking flagrancy,” in which traders conspired to artificially alter currency exchange markets to obtain illicit profits.

U.S. authorities said that traders from competing banks frequently used chat rooms to conspire with each other to maximize profits for their institutions by manipulating currency trades, forming a group they dubbed “the cartel.” Dating back to 2007, Lynch said traders “acted as partners rather than competitors” in a “brazen display of collusion.”

The banks will pay the Justice Department and the Federal Reserve a total of $5.7 billion in criminal penalties, with most of the institutions also agreeing to plead guilty to some criminal charges.

Barclays, Citigroup, JPMorgan and the Royal Bank of Scotland all agreed to plead guilty to charges of conspiring to fix prices. UBS agreed to plead guilty to charges stemming from a previous investigation after the bank’s role in this new probe led the Justice Department to toss out a prior agreement not to seek criminal charges. Bank of America agreed to pay a fine as well.

The announcement is just the most recent in a string of settlements the government has struck with huge banks over industrywide bad behavior.

In April, Deutsche Bank agreed to pay a record $2.5 billion in fines, and fire several employees, for its role in rate-rigging. And in November, five large banks agreed to pay a combined $4.25 billion in penalties to U.S. and British authorities.

But those eye-popping numbers are unlikely to tamp down complaints from some lawmakers, like Sen. Elizabeth Warren (D-Mass.), and from outside groups that complain the government has failed to bring charges against top executives for illegal activity at their banks. Rather, they contend banks are happy to continue paying large fines as the cost of doing business.

On Tuesday, UBS announced it will pay $545 million to settle claims that it was manipulating the foreign exchange market. The bank also noted that the Justice Department terminated a 2012 non-prosecution agreement it struck with the bank, which was part of a previous settlement over interest-rate-rigging where the bank paid $1.5 billion.

But the government argued that the new charges violated the terms of that deal.

While the bank faces no criminal charges from the recent currency probe, the bank agreed to plead guilty to wire fraud stemming from the previous rate-rigging investigation, and attributed the misbehavior to “a small number of employees.”

Bank CEOs Blame Currency Rigging on the Work of a Few Bad Apples

Wall Street’s biggest banks admitted Wednesday to rigging currency markets around the world. Within minutes of the Justice Department’s announcement, they were blaming it on a few rotten apples.

“I share the frustration of shareholders and colleagues that some individuals have once more brought our company and industry into disrepute,” Barclays Plc Chief Executive Officer Antony Jenkins said in a statement announcing his bank’s guilty plea.

JPMorgan Chase & Co. CEO Jamie Dimon also pointed a finger at a few currency traders.

“The lesson here is that the conduct of a small group of employees, or of even a single employee, can reflect badly on all of us,” Dimon said in a statement.

Dimon ran his bank during the length of the currency conspiracy, which the Justice Department said lasted from 2007 through 2013. Jenkins has been CEO of Barclays since 2012.

Barclays and JPMorgan were among banks that didn’t detect and address traders’ illegal cooperation to manipulate benchmark currency prices, the Federal Reserve said Wednesday. Among the clues they missed: an instant-message group called “The Cartel,” where dealers exchanged information on client orders and decided how to trade.

Under a $5.8 billion settlement, JPMorgan, Barclays and units of Citigroup Inc. and Royal Bank of Scotland Group Plc agreed to plead guilty to conspiring to manipulate the price of U.S. dollars and euros.

‘Ethical Behavior’

Attorney General Loretta Lynch said at a news conference in Washington that the investigation is continuing. The Justice Department may bring charges against individuals, according to people familiar with the matter.

“Fostering a culture of ethical behavior has been, and continues to be, a top priority” for Citigroup, CEO Michael Corbat said in a statement. He added that the bank’s “internal investigation has so far resulted in nine terminations and additional disciplinary actions.”

RBS pinned the blame for violating U.S. antitrust law on one currency trader. Still, Chairman Philip Hampton said that more people may have been involved.

“We have dismissed three people and suspended two more pending further investigation,” Hampton said in a statement.

Wall Street and 5th Avenue Planned for Benghazi

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Imagine a hotel room at the Plaza Hotel, shopping at Bloomingdales and dining at the Rainbow Room in Benghazi. Yes Benghazi, after all the most feared leader, Muammar Gaddafi is dead and all is calm after the attack on American interests in 2012. So, never let a  good crisis go to waste. Libya had and has a deadly history where some elites had high aspirations for a new Libya.

Trey Gowdy, the Chairman of the Benghazi Commission likely has some documented trails on Hillary’s future dreams for Libya, but you don’t and should know even more of the story. Libya, is hardly the place for booking a vacation on a Club Med holiday but Hillary and her mobilized force sure thought it was a perfect future opportunity.

The crisis in Libya had a long and bloody history with daily urban warfare, leading up to 2011 and 2012. The Institute for the Study of War gathered the calendar of Libyan hostilities from countless sources demonstrating that a perfect storm was gathering. Several foreign governments and countries had interests in Libya to protect, so when the United States announced Gaddafi had to go, he was actually buckling to the pressure and was willing to turn over power to his Minister of Justice. Some surmised that Gaddafi would not actual go quietly such that he would fire more Scud missiles as the rebels advance, and fears remain that the regime may also deploy chemical weapons.

Remembering the urgent call as revealed in audio tapes released that Hillary made with her stewards, Susan Rice and Samantha Power following close behind that the U.S. had to act quickly to prevent an anticipated massacre. Yet no one at the Pentagon or AFRICOM had any fresh intelligence that a chemical weapons attack or a planned massacre was in the immediate forecast.

Meanwhile, the National Transition Council was born with collaboration of outside NGO’s and the United Nations seeking a diplomatic solution post Gaddafi where many meetings took place. The mission was to gain and manage control of Libya where a future country would have thriving towns, economic opportunities and well, great shopping and even a stock exchange that emulated Wall Street.

The National Transitional Council (NTC) was formed on the 27th of February, 2011 to act as the political face of the revolution. Officially established on the 5th of March 2011 in Benghazi, the unicameral legislative body is composed of 33 members, representing the different Libyan cities and towns, in addition Political Affairs, Economics, Legal Affairs, Youth, Women, Political Prisoners and Military Affairs. Identities of some members, mainly from the western side of Libya are kept confidential for safety reasons. The Chairman of the NTC is Mustafa Mohammed Abdul Jalil. Hillary’s interlocutor to the NTC was Mohamed Mansour el Kikhia and he has meetings with David L. Grange in Jordan on the future and control of Libya.

The legislative body is in place for an interim period, until free democratic elections are held establishing the new Parliament.

Hillary knew about the planned Benghazi attack, heck Sidney Blumenthal predicted it.

Back in the Clinton State Department, Hillary was working her intelligence channels and her operatives were crafting relationships to gain traction in 2012 and beyond. Mrs. Clinton mobilized an inner circle, they included Sidney Blumenthal, Tyler Drumheller, Cody Shearer, Andrew Shapiro, MG David L. Grange (ret), Najib Obeida and Mohamed Mansour el Kikhia.

When a hacker worked some keyboard magic, he uncovered emails to that pesky New York Clinton server publishing emails between Blumenthal and a Hillary email firewall person, likely either Huma Abedin, Jake Sullivan or Cheryl Mills, who would then forward the most significant transmissions to Hillary herself. Hillary had a spy network which was originally revealed during the published of the Wikileaks cables.

Sidney Blumenthal had his own operatives that he worked around the globe yet those with Libya assignments included many of those listed above. Two of particular interest are David L. Grange and Najib Obeida, a Libyan official. General Grange performed some Pentagon secret operations before he retired where he went on to be involved in Osprey Global Solutions and later in Constellations Group which was formed by Bill White, a philanthropist whose objective was generating networks and business opportunities in Libya. “Gaddafi is dead, or about to be, and there’s opportunities, let’s try to see who we know there.”

There is still hope for a Libyan version of Park Avenue, Wall Street and Club Med. The Obama administration has earmarked and of the funds requested for FY2015, $9.5 million in Economic Support Fund (ESF) monies would support U.S. Agency for International Development (USAID) programs “to help consolidate- democratic reforms” through technical assistance, training, capacity building, and electoral process support, including $3 million requested in part to fund the development of a “public financial management framework.” The Administration also requested an additional $20 million in global FY2015 Transition Initiatives funding over FY2014 levels and hopes to use $10 million of its Complex Crises Fund request “to address emerging needs and opportunities in the Middle East and North Africa (MENA) region.” Funds appropriated in these accounts may be programmed for operations in Libya.

Outlook
The 2012 attacks in Benghazi, the deaths of U.S. personnel, the emergence of terrorist threats on Libyan soil, and the internecine conflict between Libyan militias have reshaped debates in Washington about U.S. policy toward Libya. Following intense congressional debate over the merits of U.S. and NATO military intervention in Libya in 2011, many Members of Congress welcomed the announcement of Libya’s liberation, the formation of the interim Transitional National Council government, and the July 2012 national General National Congress election, while expressing concern about security in the country, the proliferation of weapons, and the prospects for a smooth political transition.
To date, the Obama Administration and Congress have agreed to support a range of security and transition support assistance programs in Libya, some of which respond to specific U.S. security concerns about unsecured weapons, terrorist safe-havens, and border security. Identifying and bringing those involved in the September 2012 Benghazi attacks to justice has become a priority issue in the bilateral relationship, as has confronting any Al Qaeda affiliated groups present in Libya. Securing stockpiles of Libyan weapons also remains an issue of broad congressional concern, as does ensuring that transitional authorities act in accordance with international human rights standards in pursuing justice and handling detainees.
U.S. officials must weigh demands for a response to immediate security threats emanating from Libya with longer-term concerns for Libya’s stability, the survival of its nascent democratic institutions, and the future of U.S.-Libyan relations. Decisions about responding to threats to U.S. security are complicated by the relative weakness of the Libyan state security apparatus and the risk of inflaming public opinion or undermining the image of elected Libyan leaders through direct or overt U.S. security responses. If conflict persists, congressional debate over transition and security assistance programs in Libya may intensify, with advocates possibly arguing for further investment to prevent a broader collapse and critics possibly arguing that a lack of political consensus among Libyans makes U.S. assistance unlikely to achieve intended objectives.

You have plenty of time to book your next vacation, keep some small arms handy though.

 

 

Foreign Media Readout of Obama Failed Summit

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When foreign media, one from Qatar and the other from the United Kingdom provide readouts of Obama’s Gulf State summit at Camp David explaining nicely that it failed, one must worry even more.

Obama’s White House protocol office made a huge gaffe at the front end of the summit by getting a name and history wrong. Then he returned each night to the White House, leaving his invited guests to their own devices. Not only did topics like Iran and Iran get some verbal gymnastics but the matter of Syria and Russia did too. The whole charade boiled down to let us just keep channels open.

For Barack Obama, a sitting president to be so concerned, that it keeps him up at night about those dying and suffering, when he touts his special energies to human rights, his real indifference is on both sleeves for all to see that are watching.

The White House, his national security council, this connections to the United Nations and his jet-setter, John Kerry have no mission statement, no objective, no strategy and no final goal except to pass the burning of the globe on to the next administration. The death toll rises, he is cool with that, and that will frame his 8 year White House legacy.

The Guardian view on the UN talks on Syria: a waiting game while the country burns

In part:

What is going on is the classic diplomatic exercise of keeping channels of communication open in a confused situation in the hope that, as and when it changes, there will be some expertise and engagement available if new opportunities arise. De Mistura’s tactics also represent a recognition that, if there were ever a time when the Syrian war could be tackled on its own, that time has passed. It was always part of the larger regional contest between Iran and the Sunni states led by Saudi Arabia, a contest which in turn was deeply influenced by the difficult relationship between the United States and Iran, by the rise of jihadism, and by the standoff between the west and Russia.

Now all these dimensions are changing. Secretary of state John Kerry’s consultations with Vladimir Putin last week suggest a softening of US and Russian differences over Syria. Meanwhile, at Camp David, President Obama tried to allay the fears of Gulf states that Iran will exploit a nuclear agreement to become the region’s strongest power. It is indeed an open question whether Iran will become a satisfied power, interested in extricating itself from Syria and resting content with its enhanced influence in Iraq, or not. The US will both cooperate with Iran and oppose it, Obama has implied – cooperate in Iraq and parts of Syria, but oppose in other parts and in Yemen. It is a formula that must be very perplexing even to its authors. The new Saudi king, Salman bin Abdulaziz Al Saud, meanwhile, has thrown down a gauntlet in Yemen, and is propping up the Sisi regime in Egypt financially while Egypt is choosing sides in Libya. The verdict on this new Saudi forward policy has yet to be reached.

And a word or two from al Jazeera:

Another forgettable summit

The just-concluded Camp David summit promises little more than running in place.

In part:

In contrast, the just-concluded summit promises little more than running in place. For its part, Washington explained its intention to move forward with Iran on a nuclear deal while insisting that it did not portend a US pivot away from its traditional Arab friends. Arabs were and remain sceptical, and justifiably so.

Obama himself explained: “I want to be very clear. The purpose of security cooperation [with the GCC] is not to perpetuate any long-term confrontation with Iran or even to marginalise Iran.”

US initiatives

Saudi misgivings about the choices made by US presidents have a long pedigree. The kingdom has been on the losing end of US initiatives in the region for decades. Washington has proven more than willing to take advantage of Arab weakness – US Palestine policy holds pride of place in this regard.

Of equal if not greater strategic import, however, is the toxic legacy of the US’ destruction of Baghdad’s Sunni military and political leadership, offering Iran a strategic entree into Iraq it has not enjoyed for centuries.

”I do not believe it is in the United States’ interests, or the interest of the region, or the world’s interest, to [attack Iraq],” Crown Prince Abdullah told ABC News shortly before Vice President Dick Cheney’s arrival in March 2002. ”And I don’t believe it will achieve the desired result.”

Cheney dismissed Saudi concerns that war would destabilise the region. That is indeed what Bush wanted – a revolutionary break with the past out of which a new Middle East would be forged.

Shocking Financial Facts on AMTRAK

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AMTRAK is highly subsidized. In fact the subsidies are in the billions. Some dollars were eliminated amounting to $71 million that was due to sequestration, an effective ploy designed and implemented by the White House. There are routes that are not financially prudent to run at all.

Lawmakers appropriated more than $1.5 billion in 2013 to subsidize intercity passenger rail services provided by the National Railroad Passenger Corporation—or Amtrak—including $1.0 billion in grants for capital expenses and debt service, $0.5 billion in grants for operating subsidies, and $0.1 billion for disaster mitigation and repair work after Hurricane Sandy. Those amounts were subsequently reduced by a total of $71 million by sequestration. All told, the government covers almost all of Amtrak’s capital costs as well as more than 10 percent of its operating costs. In 1970, when the Congress established Amtrak, it anticipated subsidizing the railroad for only a short time, until it became self-supporting. Since then, however, the federal subsidies to Amtrak have totaled about $45 billion. This option would eliminate those subsidies, yielding savings of $15 billion from 2015 through 2023, the Congressional Budget Office estimates.

An argument in favor of this option is that federal funding is subsidizing the operation of uneconomic services and routes (including sleeper-class service and many long-distance routes) that are not used extensively and provide little public benefit in terms of reducing congestion or emissions of greenhouse gases. Eliminating Amtrak’s federal subsidy would encourage its managers to improve operating efficiency, in part by cutting unprofitable services and routes. It is also argued that if states or localities value those routes highly, they should be prepared to subsidize their operation (as is already done in some cases).

So first out to the microphone was Nancy Pelosi blaming the Republicans for cutting funding on AMTRAK. Next up was Chuck Schumer telegraphing the same blame on lack of funding.

Another hidden fact with regard to managing rail systems is a piece of software that performs much like a governor known as PTC, positive train control. This PTC was installed in the AMTRAK train 188 but it was turned off due in part to more testing. Failed funding on rail infrastructure was no to blame for the deadly disaster, it was speed. The 2 black boxes have been recovered and prove the train and rails had not failed.

To further rebut Pelosi and Schumer, more facts need to be shared with regard to their claims of lack of funding.

Amtrak Collected $1.3 Billion From Stimulus

$850 million directly to infrastructure on top of $1.4 billion budget
In part:According to Recovery.gov, Amtrak received $1,295,804,688 from President Barack Obama’s stimulus law through a grant from the Department of Transportation (DOT) filed under “Other Heavy and Civil Engineering Construction.”

The grant noted that roughly 50 percent of the money went to “infrastructure improvements” in the Northeast Corridor.

The funding, all of which has been allocated, paid for 154 individual projects in 46 states, and the District of Columbia. The grant mandated that at least $850 million go directly to infrastructure.

“The American Recovery and Reinvestment Act (ARRA) appropriated $1.3 billion to Amtrak for capital investment,” the grant states. “The ARRA requires that Amtrak allocate $850 million for funding to rebuild and modernize infrastructure and equipment.”

Amtrak can’t be bothered to finish up a safety system on time. But did Amtrak CEO Joseph Boardman ever miss a nickel of his $350,000-a-year salary? No. Did Amtrak fail to pay employee bonuses? No—in fact, it paid bonuses to people who weren’t even eligible for them, and then refused to rescind them once it was pointed out that they were unauthorized. So Amtrak took care of Amtrak’s priorities, just like every other government agency. But Amtrak’s priorities are not its customers’ priorities. And that new safety system that was supposed to be operating by the end of the year at the latest? Maybe by 2020. Maybe not.

General Mattis Declares Strategic Atrophy

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How can anyone argue with General Mattis, former Commander of CENTCOM when he tells the audience there is no strategy and the cost of blind leadership causes a full tilt of the balance across the globe.

On Russia:

Mattis: U.S. Suffering ‘Strategic Atrophy’

Because the United States lacks a global strategy, “volatility is going to get to the point that chaos threatens,” a former Central Command (CENTCOM) commander told a Heritage Foundation audience Wednesday.

Speaking in Washington, D.C., retired Marine Corps Gen. James Mattis said, “the perception is we’re pulling back” on America’s commitment to its allies and partners, leaving them adrift in a changing world. “We have strategic atrophy.”

He said Russia’s military moves against its neighbors—taking Crimea and backing separatists in Ukraine is “much more severe, more serious” than Washington and the European Union are treating it.

The nationalist emotions that Russian President Vladimir Putin has stirred up will make it “very, very hard [for him or his successors] to pull back from some of the statements he has made” about the West. At the same time, Putin faces problems of his own with jihadists inside Russia’s borders that threaten domestic stability.

But Putin also demonstrated Russia’s nuclear capability with long-range bomber flights near NATO countries. His intent is “to break NATO apart.”

Mattis said China “is doing a pretty good job of finding friction points between our allies,” such as Korea and Japan.

While Putin creates instability along Russia’s border, China’s approach is a “tribute model,” Mattis said, executing a “veto authority in each of the countries around their periphery.”

In the Middle East, he described a Sunni and Shi’ia civil war where “terrorism is only part of the problem.” He said there is a more important question: “Is political Islam [in both sects] in our best interest?”

Mattis said it is important “to find the people who want to stand with you.” He cited the United Arab Emirates and Jordan, stepping forward to help fill the gaps in Afghanistan when the United Kingdom and France began removing forces there.

He said since World War II the United States helped create a world order—diplomatically [United Nations] , economically [World Bank and International Monetary Fund], culturally and militarily.

By renewing that combination of inspiration and intimidation, “I have no doubt we can turn this around.”

Outside the scope of Russia and militant Islam sweeping the globe, there is China. Many months ago, the White House announced an Asia Pivot. The pivot to Asia was obscured under the real guise of trade and not a security strategy even while China has continued to threaten U.S. allies over control of the South China Sea. China is not impressed and the disputed waters and islands in the South China Sea are still being challenged.

Meanwhile it is important to telegraph what China is doing while the National Security Council, the White House and the State Department look the other way.

Report: China Hacked Two Dozen U.S. Weapon Designs

Chinese hackers have obtained designs for more than two dozen U.S. weapon systems — including the Aegis Ballistic Missile Defense System, the F-35 Lighting II Joint Strike Fighter, the Littoral Combat Ship and electromagnetic railguns. A partial list of stolen U.S. military technologies by China is found here.

Making matters worse, at the Pentagon is under sequestration which stifles innovation, repair, weapons systems, defensive systems and acquiring advanced technology keep a competitive edge of adversaries, the U.S. is lagging while China has advanced beyond the scope and imagination of the Department of Defense and contractors.

Pentagon: China Developing New Anti-Satellite Weapons, Jammers

 

China is designing weapons to counter advanced Western satellite technology using directed energy weapons and jammers and may have already tested some, according to a Friday Chinese military assessment to Congress.

The West — particularly the U.S. — relies on ever expanding constellations of communications and surveillance satellites to maintain its information edge over potential rivals and China is seeking ways to erode that advantage in the event of a conflict, according to the Military and Security Developments
Involving the People’s Republic of China 2015 report to Congress.

“China continues to develop a variety of capabilities designed to limit or prevent the use of space- based assets by adversaries during a crisis or conflict, including the development of directed-energy weapons and satellite jammers,” read the report.

Dubbed counterspace, the efforts follow several demonstrations of China’s capabilities to interdict satellites with ground-based missiles in the last several years.

Perhaps the most well known is Jan. 11, 2007 test in which a modified Chinese ballistic missile successfully destroyed a defunct weather satellite in polar orbit — littering Earth’s orbit with debris and surprising the West.

Since then, the Pentagon report has cited several instances in which it appears the People’s Liberation Army (PLA) has conducted similar — albeit non-destructive — tests.

A July 2014 missile test “did not result in the destruction of a satellite or space debris, read the report.
”However, due to the evidence suggesting that this was a follow-up to the 2007 destructive test, the United States expressed concern that China’s continued development of destructive space technologies represented a threat to all peaceful space-faring nations, and was inconsistent with China’s public statements about the use of space for peaceful purposes.”
Additionally, in 2013 a suspicious Chinese launch sent an object into an orbital neighborhood crowded with geosynchronous communications satellites.

“Analysis of the launch determined that the booster was not on the appropriate trajectory to place objects in orbit and that no new satellites were released,” read the report.

After a little more than nine hours, the mystery object landed, leaving the rest of the space faring world puzzled to what the object was.

“The United States and several public organizations expressed concern to Chinese representatives and asked for more information about the purpose and nature of the launch. China thus far has refrained from providing additional information,” read the report.

The report feared the test could “have been a test of technologies with a counterspace mission in geosynchronous orbit.”

The U.S. relies heavily on satellites for communications and some targeting of its weapons a fact that has not been lost on the PLA.

“PLA writings emphasize the necessity of ‘destroying, damaging, and interfering with the enemy’s reconnaissance … and communications satellites,’ suggesting that such systems, as well as navigation and early warning satellites, could be among the targets of attacks designed to ‘blind and deafen the enemy’,” read the report.
“PLA analysis of U.S. and coalition military operations also states that ‘destroying or capturing satellites and other sensors … will deprive an opponent of initiative on the battlefield and [make it difficult] for them to bring their precision guided weapons into full play’.”

The report to Congress comes as some in the Air Force have called for a more robust defense of U.S. space assets, according to a Monday analysis from Jane’s Defence Weekly.

“The USAF’s outgoing military acquisition chief recently acknowledged that the Pentagon is devising new concepts for protecting its space assets, hinting at the need for new types of deterrence. ‘We have to put some resources and some focus on protection capability,’ Lt. Gen. Ellen Pawlikowski said in April,” read the Monday report.