Douglas Caddy

The Rise of Innovative State Capitalism By Joshua Kurlantzick on June 28, 2012 Business Week Magazine http://www.businessweek.com/articles/2012-06-28/the-rise-of-innovative-state-capitalism#r=nav Over the past five years, as much of the developed world has staggered through crisis, a new type of capitalism has emerged as a challenger to laissez-faire economics. Across much of the developing world, state capitalism—in which the state either owns companies or plays a major role in supporting or directing them—is replacing the free market. By 2015 state-owned wealth funds will control some $12 trillion in assets, far outpacing private investors. From 2004 through 2009, 120 state-owned companies made their debut on the Forbes list of the world’s largest corporations, while 250 private companies fell off it. State companies now control about 90 percent of the world’s oil and large percentages of other resources—a far cry from the past, when BP (BP) and ExxonMobil (XOM) could dictate terms to the world. Even as state capitalism has risen, some writers, business leaders, and politicians contend that such systems fail to encourage innovation, the key to long-term growth and economic wealth. Ian Bremmer, the president of Eurasia Group and author of The End of the Free Market: Who Wins the War Between Corporations and States, argues that state capitalists “fear creative destruction—for the same reason they fear all other forms of destruction that they cannot control.” In China 2030, a recent analysis of China’s economy, the World Bank concurred, noting that the country needs “a better innovation policy, [which] will begin with a redefinition of government’s role in the national innovation system … [and] a competitive market system.” It is a mistake, however, to underestimate the innovative potential of state capitalism. Rising powers such as Brazil and India have used the levers of state power to promote innovation in critical, targeted sectors of their economies, producing world-class companies in the process. Despite its overspending on some state sectors, the Chinese government has nevertheless intervened effectively to promote skilled research and development in advanced industries. In so doing, the state capitalists have shattered the idea that they can’t foster innovation to match developed economies. State capitalists’ combination of government resources and innovation could put U.S. and European multinationals at a serious disadvantage competing around the globe. State intervention in economic affairs runs against the established wisdom that the market is best for promoting ideas. At the same time, throughout history, the governments of many developed nations have actively fostered groundbreaking companies, from Bell Labs in the U.S. to Airbus in Europe. Brazil is perhaps the best current example of how a state-capitalist system can build innovative industries. Successive Brazilian governments have intervened—with incentives, loans, and subsidies—to promote industries that otherwise would have needed long-term private investment to make them competitive with U.S. and European rivals. At the same time, Brazil preserved strong, independent management of state-backed firms, ensuring they did not become political boondoggles. Three decades ago, for example, the Brazilian government gave aircraft manufacturer Embraer lucrative contracts and various subsidies, recognizing that it could potentially find a niche in producing smaller, regional aircraft. Private investors were dubious of Embraer’s chances. Had it relied solely on private investment, the company probably would have failed; instead, it flourished, becoming the world’s biggest maker of regional jets. Similarly, by investing in deep-sea drilling technology, Petrobras, a state oil company with an independent management board, has made itself competitive with multinational giants such as Chevron (CVX), Shell (RDS/A), and BP. By picking industries it could dominate and supporting them even when private capital was scarce, Brazil has created internationally competitive companies in a range of industries, from aerospace to clean energy. Today the government often backs companies as a minority shareholder or through indirect vehicles, allowing for corporate independence while still helping companies make important investments in research and skills. Many of Brazil’s state-backed companies have survived the global slump far better than multinationals because they can rely on government assistance to see them through. Combining government support with a mandate for profitability and independent management has yielded successful businesses in other state-capitalist economies. Singapore has used government incentives to push companies to move into industries such as solar and other clean energies, which, although not necessarily profitable now, will be the emerging technologies of this century. A comprehensive 2009 paper by Harvard Business School looked at India’s more than 40 state-owned science and engineering research laboratories, which have used a similar type of public-private collaboration. It found that the Indian state labs had “more U.S. patents than all domestic [indian] private firms combined.” In China, greater political interference in state-supported companies has been worse for profitability and innovation than in places like Brazil. And yet in recent years, China’s score has steadily risen on the Global Competitiveness Index, a World Economic Forum ranking of nations, even as the score of the U.S. has dropped. The rise of innovative state capitalists presents a more than formidable challenge to U.S. and European businesses; it could push multinationals out of some markets entirely. In oil and gas, for example, state companies already control most of the world’s reserves, and as state companies like Petrobras become as innovative as multinationals, they will not require foreign companies for exploration, deepwater technology, or refining. In their own large domestic markets the innovative state capitalists will be able to match multinationals’ technology, giving them dominance over mobile communications, high-end retailing, and other businesses. Some developed countries may respond by either curbing state-capitalist companies’ access to their markets or by intervening heavily in their own economies. Neither of these solutions is really viable. As the state capitalists’ biggest companies expand their global operations, their technology, connections, and capital will be almost impossible to keep out. And aging, heavily indebted nations face huge challenges reforming their entitlement programs: They’re in no position to pour the amount of resources into companies that Brazil, India, or China can. Instead of trying to prevent—or worse, dismiss altogether—the rise of state-capitalist systems, U.S. and European companies and governments would do better to learn from them. Singapore offers one model of how the state can intervene in the economy without stifling entrepreneurship. The government there identifies industries that are critical to innovation and future technology, helps provide initial angel investments in small companies, tries to woo talented men and women from other countries who work in these industries, and uses state resources to ensure that universities focus on basic science research that will yield dividends in the future. All these strategies require only modest state investment, and nothing on the scope of China’s or Brazil’s large-scale lending to state companies. The U.S. itself has effectively employed such policies in the past—before restrictive immigration policies kept skilled foreigners out, state and federal governments robbed funds from universities for other programs, and even the idea of the government helping foster new industries such as clean energy became politically toxic. (See Solyndra.) Developed nations still possess a huge advantage over their emerging-market competitors: The U.S. and countries in Europe have mature, large venture capital firms, while places like India don’t. In emerging markets, when innovative companies become large enough to leave the state’s embrace, they may have nowhere to turn. Venture capital giants, on the other hand, can help small groundbreakers grow. This advantage can be enormous for countries like the U.S. And in a world where the emerging-market giants are learning to innovate, any advantage will be critical.

Bob Diamond: Labour ministers were warned about Libor fixing Senior Government ministers close to Gordon Brown were today dragged into the banking scandal after the outgoing chief executive of Barclays claimed they were privately warned about potentially illicit activities. By Robert Winnett, Political Editor The Telegraph 7:06PM BST 04 Jul 2012 http://www.telegraph.co.uk/news/politics/9376923/Bob-Diamond-Labour-ministers-were-warned-about-Libor-fixing.html During almost three hours of cross-examination by MPs, Bob Diamond claimed there had been a series of private conversations with senior Government figures, thought to include Baroness Vadera, during the autumn of 2008. Mr Diamond claimed that the Government and regulators were repeatedly warned by Barclays that banks were improperly fixing the Libor rate, which is used to set borrowing costs for millions of consumers, businesses and investors. The Barclays chief executive was forced to resign earlier this week after the bank admitted manipulating the Libor rate and paid a fine of almost £300 million. However, Mr Diamond indicated that he and Barclays have been unfairly vilified as they had co-operated fully with regulators and been the first to admit wrongdoing. He said he had personally been unaware until recently that Barclays traders were also manipulating interest rates – at the time, he was warning regulators about the behaviour of rival institutions. MPs repeatedly questioned why he had not sought to check his own traders’ conduct while raising concerns about other banks. But, Mr Diamond suggested that other banks were more culpable in the growing rate-fixing scandal – which also implicated the Treasury, Bank of England and Financial Services Authority (FSA), the City regulator. Senior Labour figures including Baroness Vadera strongly deny having any inappropriate conversations about the libor rate. They are all now also expected to be called before Parliament in the coming days to provide an account of their actions. In another day of dramatic developments in the banking scandal: * Mr Diamond indicated he will not agree to surrender his pay-and-bonus severance package which could mean he leaves Barclays with up to £20 million. * David Cameron warned that “spivvy and probably illegal activity in the City” meant that “homeowners may have paid higher mortgage rates”. * George Osborne, the Chancellor, said that those around Gordon Brown were “clearly involved” in the scandal. * The possibility of a detailed inquiry into banking culture hung in the balance with Labour and the Conservatives in disagreement over whether it should be run by a judge or politicians. * An MP questioned whether banks had been involved in fixing other financial markets other than global interest rates. Yesterday, Mr Diamond appeared before MPs on the Treasury Select Committee to answer questions about his resignation, the culture at Barclays and the bank’s role in the rate-fixing scandal. His appearance came less than 24 hours after Barclays had released a memorandum detailing a conversation between Mr Diamond and Paul Tucker, the deputy governor of the Bank of England. The document suggested that the Bank had encouraged Barclays to cut the key Libor rate during the credit crisis. It said that Mr Tucker had been contacted by a “number of senior figures within Whitehall” questioning why Barclays was declaring high Libor rates. Mr Diamond had been expected to blame the Bank of England for condoning the manipulation of Libor, but the Barclays executive instead claimed that it was senior political figures who had been behind the pressure. The Barclays executive said that he was concerned in autumn 2008 that the Government may seek to nationalise the bank if they thought Barclays was struggling to raise money. At the time, Barclays was declaring a Libor rate higher than other banks – which may have been interpreted that it was in financial difficulty. In fact, Mr Diamond believed this was because other banks were manipulating their rates to be lower. When asked about the conversation with Mr Tucker, Mr Diamond said that he interpreted it as a warning over the Government’s concerns. He was then asked about the identities of the “senior figures” referred to by Mr Tucker. “I would only be speculating and it’s not appropriate to do that,” he said. “Paul [Tucker] didn’t mention who he was referring to. I don’t know, senior people." Later, when asked about Baroness Vadera's role by Michael Fallon, deputy chairman of the Conservative party, he said: "Shriti [Vadera] was very involved in recapitalisation of banks in UK. John Varley [the then Barclays chief executive] was doing most communication with Shriti but she asked to see me also. I would see her and Paul Myners [the City minister] from time to time. There were conversations with them. It was being driven by John.” Asked again, Mr Diamond said that Mr Varley had a follow-up conversation with “Government” following the discussion with Mr Tucker. Mr Diamond also added that Barclays had repeatedly warned regulators in Britain and America about the problems with the Libor rate. “There was an issue out there and it should have been dealt with,” he said. “We were disappointed.” Mr Diamond’s remarks appeared to back-up earlier comments made by Mr Osborne in an interview with this week’s Spectator magazine. The Chancellor said: “They [those around Gordon Brown] were clearly involved and we just haven’t heard the full facts, I don’t think, of who knew what when.” Baroness Vadera was one of the key people close to Mr Brown who spearheaded the Government’s response to the credit crisis. Yesterday, she strongly denied being involved in conversations about Libor. “I didn’t speak to Paul Tucker or anyone at the Bank of England about the rate-setting of Libor,” Baroness Vadera said. “I’ve been through my files. I don’t remember anything that would suggest that anyone in government understood some of the allegations that are in this report by rogue bank traders on Libor.” She added: “it was a completely legitimate concern of government and regulators to worry about the access to credit and the cost of credit to the real economy –that was what the financial crisis was about. “That shouldn’t be confused in any way with the actions of people, who as I understand for many years from this report, were manipulating how they set Libor.”

Mystery Bermuda-based company and other undisclosed Romney assets hint at larger wealth By Associated Press, Updated: Wednesday, July 4, 9:52 AM WASHINGTON — For nearly 15 years, Republican presidential candidate Mitt Romney’s financial portfolio has included an offshore company that remained invisible to voters as his political star rose. Based in Bermuda, Sankaty High Yield Asset Investors Ltd. was not listed on any of Romney’s state or federal financial reports. The company is among several Romney holdings that have not been fully disclosed, including one that recently posted a $1.9 million earning — suggesting he could be wealthier than the nearly $250 million estimated by his campaign. The omissions were permitted by state and federal authorities overseeing Romney’s ethics filings, and he has never been cited for failing to disclose information about his money. But Romney’s limited disclosures deprive the public of an accurate depiction of his wealth and a clear understanding of how his assets are handled and taxed, according to experts in private equity, tax and campaign finance law. Sankaty was transferred to a trust owned by Romney’s wife, Ann, one day before he was sworn in as Massachusetts governor in 2003, according to Bermuda records obtained by The Associated Press. The Romneys’ ownership of the offshore firm did not appear on any state or federal financial reports during Romney’s two presidential campaigns. Only the Romneys’ 2010 tax records, released under political pressure earlier this year, confirmed their continuing control of the company. The mystery surrounding Sankaty reinforces Romney’s history of keeping a tight rein on his public dealings, already documented by his use of private email and computer purges as Massachusetts governor and his refusal to disclose his top fundraisers. The Bermuda company had almost no assets, according to Romney’s 2010 tax returns. But such partnership stakes could still provide significant income for years to come, said tax experts, who added that the lack of disclosure makes it impossible to know for certain. “We don’t know the big picture,” said Victor Fleischer, a University of Colorado law professor and private equity expert who urged corporate tax code reforms during congressional testimony last year. “Most of these disclosure rules are designed for people who have passive ownership of stocks and bonds. But in this case, he continues to own management interests that fluctuate greatly in value long after his time with the company and even the end of his separation agreement. And the public has no clear idea where the money is coming from or when it will end.” Named for a historic Massachusetts coastal lighthouse, Sankaty was part of a cluster of similarly named hedge funds run by Bain Capital, the private equity firm Romney founded and led until 1999. The offshore company was used in Bain’s $1 billion takeover of Domino’s Pizza and other multimillion-dollar investment deals more than a decade ago. Romney’s campaign declined to answer detailed questions from AP about Sankaty. Romney aides have said in the past that some disclosures were not required because those assets were valued by his financial advisers at less than $1,000 — below the minimum threshold under federal rules set by the U.S. Office of Government Ethics. A financial snapshot of Sankaty in Romney’s 2010 tax returns showed the holding with almost no value at the time— with $10,000 in both assets and liabilities. “Everything on the filings is reported as required,” campaign spokeswoman Andrea Saul said in a brief statement. “If OGE has an issue with any filings, they would let us know.” The agency declined to comment. While Sankaty no longer plays an active role in Bain’s current deals, private equity experts said such holdings could provide significant income to Romney under his 10-year separation agreement from Bain, which expired in 2009. Investment funds typically churn “carried interest,” profit shares due to the managers of the funds that often range as much as 20 percent of a fund’s annual profit — known as “the carry.” Even after investment funds are exhausted, profit shares and other late earnings from those stakes can continue to stream, arriving as lucrative “tails,” tax experts say. In some circumstances, the analysts added, offshore companies like Sankaty could also offer limited tax deferral advantages. The implications of Romney’s Bain profit-sharing became clear last month when his trust reported that one rarely disclosed asset had posted a $1.9 million payout. The income was described as a “true-up” payment, catch-up income that made up for unpaid earnings owed to Romney as part of his Bain separation agreement. Such sizable earnings are possible “depending on the terms of the agreement,” said tax law expert Michael Kosnitzky, an attorney at the New York firm of Boies, Schiller & Flexner. The Romney campaign acknowledged recently that it could not rule out more large future payments. The use of offshore companies such as Sankaty is allowed under U.S. tax laws. They are typically set up as shell corporations by private equity and hedge funds to route investments from large foreign and institutional investors, such as large pension plans, into corporate takeovers. The money is used to provide equity and buy up debt. In turn, the investors gain U.S. tax advantages by passing their funds through the offshore “blocker” corporations, avoiding a high 35 percent tax on earnings that the Internal Revenue Service describes as “unrelated business income.” Set up in Bermuda in 1997, Sankaty served as Romney’s partnership stake in Bain’s Sankaty group, which invests in bonds, bank loans and corporate debt instruments. That first wave of Sankaty funds managed more than $100 million in investments in the late 1990s and early 2000s, according to a corporate analyst familiar with the funds. The analyst insisted on anonymity because the analyst was not authorized to discuss the funds publicly. Since late 2003, Romney has left his financial decisions to what his campaign describes as a “blind trust” overseen by lawyer R. Bradford Malt, a longtime Boston legal associate. The trust was set up under Massachusetts law, but it’s not a federally qualified blind trust — which Romney plans to use if he wins the presidency. Romney does not oversee his investments under his current trust, but its general composition is made public and Malt invests according to Romney’s political positions. Romney’s 2010 tax returns show him and his wife as sole owners of Sankaty. A 2011 Bermuda legal document lists Malt as Sankaty’s president. Michael F. Goss, currently Bain Capital’s chief operating officer, is listed as vice president, and Quorum Corporate Ltd., a Bermuda law firm, as secretary. Malt deferred questions about Sankaty to the Romney campaign; Bain Capital and Quorum declined to comment. The candidate’s 2010 tax returns listed at least 20 investment holdings besides Sankaty that had not been previously disclosed on federal reports. At least seven were foreign investments. Bain Capital Inc., the holding that posted the $1.9 million earning, was listed on Romney’s state ethics reports in 2001 and 2002, when he ran for governor, but was missing from any annual ethics report until Romney’s trust included it last month on his 2012 financial statement. Sankaty is the only offshore holding in the Romneys’ portfolio under their full control. On his 2010 taxes, Romney’s blind trust filed an IRS form identifying Sankaty as a “controlled foreign corporation.” That filing is required for any U.S. taxpayer who owns more than 50 percent of a foreign company. Romney’s 2010 tax returns indicate that he and his wife control all 12,000 shares. Several U.S. Securities and Exchange documents from the late 1990s and 2000s depicted Romney as Sankaty’s owner at the time, but when he ran for Massachusetts governor in 2001 and 2002, Romney did not list the company on annual disclosure forms required by the Massachusetts State Ethics Commission. The ethics commission would not comment on the omissions. Boston College law professor R. Michael Cassidy, who was a member of the commission at the time, said that if Romney “owned this business before he signed his ethics disclosure, then he was obliged to report it.” The state’s disclosure rules also allow a $1,000 minimum threshold. A six-year statute of limitations covering Romney’s ethics reports has since expired. Bermuda legal documents show that on Jan. 1, 2003, the day before Romney was sworn in as governor, his wife’s trust acquired 12,000 shares of Sankaty. The transfer was not made public. The month before, Romney had placed his assets in the state-approved trust overseen by Malt. The move legally allowed the trust to describe Romney’s holdings in 2003 only as “various investments and securities” — without providing details. The trust filed similar disclosures between 2004 and 2007, the last year of Romney’s term. Romney’s use of Sankaty as his partnership stake in Bain deals is documented in several U.S. Securities and Exchange Commission reports between 1998 and 2000. The company controlled 50,000 shares of Global-Tech Appliances Inc., a Chinese appliance firm that Bain briefly invested in. Sankaty was also used to manage 385,000 shares in the 1999 takeover of Domino’s, as well as the $75 million investment into the Stericycle waste disposal firm and a $150 million investment in the US LEC telecommunication firm. Romney was named as sole owner and president of Sankaty in several of those documents. Though no longer active at Bain by then because he had left to head Salt Lake City’s Olympic Games bid, Romney remained a participant because of his partnership stake. Even though Sankaty is no longer used for Bain investments, several tax analysts said its legal offshore status still could be used by Romney to defer some taxes on some of the “carried interest” income related to the Bain deals. Romney has said he gets no tax break. He told an audience at a Maine town hall appearance in February that “I have not saved one dollar by having an investment somewhere outside this country.” But the lack of disclosure over the years, private equity experts said, makes it impossible to tell. “Without knowing more about an offshore’s history and how it was used,” Fleischer said, “you’re left in the dark.” ___ Associated Press writer Josh Ball in Hamilton, Bermuda, contributed to this report.

Ex-Daily Mirror journalist Greig Box Turnbull arrested in 'corrupt payments' probe A former Daily Mirror journalist was arrested today as Scotland Yard extended its inquiry into alleged corrupt payments to public officials beyond News International. The Daily Mirror By Sam Marsden and Martin Evans 3:13PM BST 04 Jul 2012 Greig Box Turnbull, 37, was held at his home in Morden, south London, on suspicion of corruption, conspiracy to commit bribery and conspiracy to cause misconduct in a public office. He was one of three people detained early this morning by detectives from Operation Elveden, the Metropolitan Police’s investigation into allegations that journalists made illegal payments to police and other public officials. Police also arrested a 46-year-old prison officer at his home in south-east London and a 50-year-old woman at a railway station in Kent as she travelled to work, both on suspicion of corruption, conspiracy to commit bribery and conspiracy to cause misconduct in a public office. A total of 37 people have now been arrested under Operation Elveden, which is running alongside Operation Weeting, Scotland Yard’s phone-hacking investigation. Until now all the journalists detained as part of Operation Elveden have been linked to either The Sun or the News of the World, titles published by Rupert Murdoch’s UK newspapers subsidiary News International. Mr Box Turnbull joined the Daily Mirror in 2004 and left the paper in March this year. He is currently working for Westminster City Council as a senior media officer on attachment to Richmond Borough Council. A Westminster City Council spokesman said: “We are aware of the arrest. We have yet to speak to the employee. “In the light of that and the possibility of further legal action, it would clearly be inappropriate for us to say anything further.” Trinity Mirror, which publishes the Daily Mirror, declined to comment. A Scotland Yard spokesman said: "Today's arrests relate to suspected payments to a public official and are not about seeking journalists to reveal confidential sources in relation to information that has been obtained legitimately."

Phone-hacking victims hail Glenn Mulcaire court ruling Private investigator forced to reveal who at the News of the World allegedly instructed him to intercept voicemails By Josh Halliday and Lisa O'Carroll guardian.co.uk, Wednesday 4 July 2012 10.33 EDT Glenn Mulcaire has fought to keep the information secret since November 2010. Photograph: Peter Macdiarmid/Getty Images Solicitors acting for phone-hacking victims have hailed a supreme court ruling that will force private investigator Glenn Mulcaire to reveal who at the News of the World allegedly instructed him to intercept voicemails. Britain's highest court ruled on Wednesday that Mulcaire must pass key phone-hacking details to Nicola Phillips, the former assistant to Max Clifford whose voicemails were intercepted. Mark Lewis, the solicitor for Phillips, said the ruling would finally force Mulcaire to reveal who at the now-closed Sunday tabloid allegedly instructed him and which journalist the voicemail messages were passed on to. Mulcaire has fought a 20-month legal battle not to reveal the details to protect his privilege against self-incrimination. However, the supreme court has now thrown out his appeal in a unanimous judgment by five senior law lords. Lewis told MediaGuardian: "It [the ruling] will take everything further on. It's a precedent that he's now got to pass this information on." John Kelly, the solicitor for comedian Steve Coogan, who initially took the action with Phillips to force Mulcaire to disclose the information, said the decision would have implications for other civil litigants suing the News of the World publisher News Group Newspapers over hacking. "They will be able to ask who asked him to hack phones and he won't be able to rely on PSI, if he does the judge will just refer to the supreme court decision," he said. Mulcaire's legal team is weighing up whether to appeal the ruling to Europe. He said in a statement: "I will consider with my lawyers what the wider implications of this judgment are if and when I am asked to answer such questions in other cases." Mulcaire has fought to keep the information secret since November 2010, when Mr Justice Mann at the high court ordered the private investigator to answer a series of questions asked of him. He challenged a further high court ruling in February 2011 and a court of appeal ruling in the same month.

The Libor Conspiracy: Were the Bank of England and Whitehall in on it? By Oliver Wright, James Moore, Nigel Morris The Independent Wednesday, 4 July 2012 The Bank of England was dragged into the interest-rate rigging scandal last night after an email was released suggesting it may have encouraged banks to doctor their borrowing costs during the financial crisis. The email – an account of a conversation between the chief executive of Barclays, Bob Diamond, and the Deputy Governor of the Bank of England, Paul Tucker – appears to show Barclays was under the impression that manipulating rates was being sanctioned at the highest level. The email was released by Barclays ahead of today's high-profile showdown between Mr Diamond and MPs on the Treasury Select Committee. Mr Diamond is certain to be asked what advice he received from the Bank of England on the reporting of Barclays' Libor rates. Any suggestion that the manipulation was authorised by Mr Tucker, the Permanent Secretary at the Treasury Sir Nicholas Macpherson or government ministers would be highly damaging and increase pressure for a full public inquiry. The email came at the end of a day of dramatic developments in which it emerged that: * Mr Diamond could be in line for a payment of up to £30m after announcing his immediate departure as head of the bank. Barclays was said to be attempting to get its former chief executive to waive up to £20m in bonus payments. * Mr Diamond's resignation was triggered by a call from the Governor of the Bank of England Sir Mervyn King to Barclays' chairman, Sir Marcus Agius. Some reports suggested Sir Mervyn told Barclays that unless Mr Diamond went, the BoE might not stand as the backer of last resort. But it was the release of an internal Barclays email which could prove the most significant development. The email, dated 30 October 2008, was from Mr Diamond, then head of Barclays Capital, to John Varley, Barclays' chief executive, and copied in to Jerry del Missier, then co-head of the investment bank. In it he details a phone conversation with Mr Tucker who was concerned at Barclays' high reported Libor borrowing costs. Mr Diamond said the Deputy Governor told him he had received calls "from a number of senior figures within Whitehall" to question "why Barclays was always toward the top end of the Libor pricing". Mr Diamond said he told him that the Treasury should be told it was because other banks were under-reporting their own borrowing costs. He said the response was, "Oh, that would be worse". In the most damaging section of the email Mr Diamond says he was told the calls from the Treasury were "senior", before appearing to give a strong hint that Barclays should also under-report its borrowing rates. He said Mr Tucker told him: "it did not always need to be the case that we appeared as high as we have recently." But in its submission to the select committee Barclays claimed that was not what Mr Diamond meant by the email. "Subsequent to the call, Bob Diamond relayed the contents of the conversation to Jerry del Missier," Barclays said. "Bob Diamond did not believe he received an instruction from Paul Tucker or that he gave an instruction to Jerry del Missier. However, Jerry del Missier concluded that an instruction had been passed down from the Bank of England not to keep Libors so high and he therefore passed down a direction to that effect to the submitters." In a hastily convened conference call yesterday afternoon Barclays' chairman Marcus Agius refused to provide any explanation for the apparent contradictions within the bank's submission. "There is a hearing of the Treasury Select Committee tomorrow when this will be addressed," he said. Despite repeated questions Mr Agius refused to explain further. The Tories are hoping to embroil the shadow Chancellor Ed Balls in the scandal. Although he was not a Treasury minister at the time he was close to Gordon Brown. Mr Balls said he knew nothing about senior figures in Whitehall applying pressure over Barclays' Libor pricing. Bob Diamond’s own note of a phone call with Paul Tucker, Bank of England Deputy Governor, 29 October 2008 Mr Tucker reiterated that he had received calls from a number of senior figures within Whitehall to question why Barclays was always toward the top end of the Libor pricing... I asked if he could relay the reality, that not all banks were providing quotes at the levels that represented real transactions, his response “oh, that would be worse”... I noted that we continued to see others in the market posting rates at levels that were not representative of where they would actually undertake business... Shock in the City: The day banks were called to account 7.40am Barclays announces the resignation of chief executive Bob Diamond with immediate effect. Chairman Marcus Agius, who announced his own resignation on Monday, returns to the role and will lead the bank until a replacement is found. 8.01am Barclays' shares fall in early morning trading, dropping around 3 per cent to 163p. 8.18am The Chancellor, George Osborne, who was appearing on Radio 4's Today programme, says he welcomes Diamond's resignation, calling it "the first step towards the new age of responsibility we need to see." 8.40am Labour leader Ed Miliband says that Diamond's resignation was "necessary and right". 8.48am Barclays' shares recover, up 1 per cent to 170p. 11.59am BBC business editor Robert Peston tweets that Governor of Bank of England Mervyn King and the chair of the FSA told Barclays they would be, in Peston's words, "happy for Diamond to go". 2.45pm Barclays' chief operating officer Jerry del Missier resigns. 3.22pm Barclays publishes its submission to the Treasury Select Committee, chaired by Andrew Tyrie, ahead of today's hearing with Bob Diamond. It contains an email from Diamond, detailing a phone call between himself and the deputy governor of the Bank of England, Paul Tucker, in October 2008, in which Tucker appears to tell Diamond that Barclays need not set the Libor rate "as high as we have recently". The email refers to "senior figures within Whitehall" questioning Barclays setting of the Libor rate. 3.25pm Agius says Diamond and del Missier have put "the future of the bank ahead of their careers". 3.40pm Diamond's daughter, Nell, defends her father on Twitter, writing: "No one in the world I admire more than my dad. 16yrs building Barclays. Shame to see the mistakes of few tarnish the hard work of so many." 4.56pm Barclays shares close down 1.35 per cent at 168.4p.

Nixon, Watergate, and the JFK assassination By Ruben Castaneda Baltimore Post Examiner July 2, 2012 http://baltimorepost...tion/2012/07/02 Was Richard Nixon afraid that the Watergate scandal would reveal the killers of John F. Kennedy? Dozens of stories have been written recently commemorating the 40th anniversary of the Watergate break-in. The journalistic heroes of the story, Bob Woodward and Carl Bernstein, published a lengthy piece in the Washington Post detailing Nixon’s war on the Constitution, on the press, on democracy. But the most tantalizing aspect of Watergate has been ignored: The possibility that Nixon worried that the investigation could reveal the truth behind the JFK assassination. To a large extent, Nixon did himself in by taping his White House conversations. The famous Watergate tapes revealed him to be duplicitious, paranoid and profane. One particular recording may also reveal that the president was fearful that the unfolding scandal could lead to a story far bigger than slush funds or political dirty tricks. The bungled break-in at the Democratic National Committee office, at the Watergate hotel complex, occurred on June 17, 1972. Less than a week later, on June 23, Nixon engaged in an intense conversation with one of his top aides, H.R. Haldeman. A transcript of the conversation shows the two talking about how to contain the investigation. Nixon refers to the Bay of Pigs At one point, Nixon says, “When you get these people, when you get these people in, say, ‘Look, the problem is that this will open the whole Bay of Pigs thing …” At another point in the same conversation, Nixon says, “this is a Hunt, you will – that will uncover a lot of things. You open that scab and there’s a hell of a lot of things that we just feel that it would be very detrimental to have this going further.” Hunt was E. Howard Hunt, a longtime CIA operative and one of the Watergate burglars. In his memoir, Haldeman wrote that he believed “Bay of Pigs” was Nixon’s coded way of referring to the JFK assassination. Bay of Pigs – the botched invasion by CIA-trained Cuban exiles – occurred on April 17, 1961, during JFK’s first few months in office. It was a plan JFK had inherited from the Eisenhower administration. An initial U.S. air strike was ineffectual, and failed to knock out Cuba’s Air Force. JFK refused to call in a second air attack. The invaders were crushed. About 100 were killed by Cuban forces, and more than 1,200 were captured. The aftermath was toxic. Military hawks were enraged at the president for not calling in more air support. JFK was livid at the CIA, which he vowed to “splinter into a thousand pieces.” Hatred is too polite a word for what anti-Castro Cubans felt toward JFK. Nixon was not in office when the Bay of Pigs played out. Why would he refer to it when talking about the Watergate break-in? In the decades since JFK’s assassination, a mythic golden hue has been cast over him and his administration. He is a Democratic Party icon. His image is mounted in the living rooms of admirers from Boston to East Los Angeles. Some dangerous people hated JFK But at the time he was killed, JFK was reviled by a number of forces: Cuban exiles who felt betrayed, arch-conservatives who hated his stance on civil rights, mobsters who were livid that the administration’s Justice Department, led by the president’s brother Robert, was going after organized crime. There were probably hundreds of people at the time who would have stood in line to take a shot at JFK. The initial official story, dispensed via the Warren Commission, contended that Lee Harvey Oswald, acting alone, used a World War II-era Italian-made Mannlicher-Carcano rifle to fatally shoot JFK from the sixth floor of the Texas Bookstore Repository on Nov. 22, 1963. The idea that Oswald killed JFK is not only preposterous, it is an insult to anyone who takes a few minutes to study the evidence. At its core, the assassination was a homicide, a crime. As with any crime, one needs to follow the evidence. The Warren Commission released a 888-page report that claimed to prove Oswald killed JFK. An untenable official theory As one Warren Commission critic put it, the commission’s findings are a series of small and medium lies, based on one big lie: The magic bullet theory. Boiled down, the magic bullet theory – authored by former Pennsylvania senator Arlen Specter, who was a commission staffer – holds that Oswald fired three shots at a moving target in six seconds. FBI sharpshooters were unable to duplicate this feat with that weapon. The most preposterous aspect of the theory holds that one bullet strafed through the back of the president’s neck, stopped in mid-air, turned, went through Texas Sen. John Connally’s wrist and chest, and finally through the senator’s thigh. The alleged bullet was “discovered,” hours later, in pristine condition on a stretcher at the Dallas hospital JFK and Connally were taken to. Fired bullets do not change direction in mid-air. Bullets which pass through muscle and bone do not remain in pristine condition. For the magic bullet theory to work, the laws of physics, for starters, would have had to have not been in effect. And then there’s the Zapruder film, which show’s JFK’s head snapping backward when the fatal bullet strikes his cranium. The footage clearly indicates the fatal shot was fired from in front, probably from the infamous grassy knoll. The public has never bought the Warren Commission findings The American public had serious doubts about the official account from the beginning. Those doubts have not dissipated with time. In 2004, a Fox News poll found that 66 percent of the American public believed JFK was killed as part of a conspiracy, and 75 percent believed there was a cover-up. Most likely, JFK was killed by a collaboration of anti-Castro Cubans, the Mob, and CIA operatives. There is no doubt security people were involved. Moments after the shooting, a Dallas police officer ran toward the grassy knoll. He was met by a man in a suit who flashed what appeared to be official credentials. The man said he was with the Secret Service and told the cop the area was covered. The Secret Service did not have anyone assigned to that area. That’s not a Mob move. The cover-up included the killing of accused assassin Lee Harvey Oswald by Jack Ruby, a Mob-connected strip club owner. Initially, Ruby explained he killed Oswald – in front of a passel of cops – to spare JFK’s widow, Jackie, from having to go through a trial. Please. A couple of years later, Ruby told the Warren Commission he would tell what he knew, but he begged to be moved out of Texas. The commission didn’t take him up on his offer. As researchers and authors dug into the assassination, much suspicion fell on CIA man Hunt. There is a famous photograph of three so-called tramps who were near the assassination scene and were briefly detained by Dallas police. Some researchers have argued that Hunt was one of the three. Some people are skeptical that such a huge crime could be kept under wraps for so long. The fact is, it really hasn’t been kept secret. For whatever reason, the mainstream press has, almost universally, simply not pursued the story. Over time, significant aspects of what really happened have been revealed: In 1978, an article by the Spotlight, a weekly publication of the hard-right organization (now defunct) the Liberty Lobby, implicated Hunt in the JFK hit. Hunt sued for defamation. In a civil trial a few years later, the Liberty Lobby was defended by JFK assassination researcher Mark Lane, a Washington, D.C., attorney. Lane won. In 1979, the House Select Committee on Assassinations, after a lengthy probe which included public hearings, determined that JFK was “likely” killed as the result of a conspiracy. In 2007, Rolling Stone reported on the deathbed confession of Hunt, who died in January of that year. In a series of tape recorded talks with his son, St. John Hunt (known as “Saint”), the dying spy named about a half-dozen CIA operatives. He minimized his own involvement, and suggested Lyndon B. Johnson spearheaded the cover-up. In 2009, a book revealed that Carlos Marcello, the Mafia kingpin of Texas and Louisiana, declared following the assassination, “Yeah, I had the son of a bitch killed. I’m glad I did. I’m sorry I couldn’t have done it myself!” The admission was contained in FBI files and was contained in a book, “Legacy of Secrecy,” by Lamar Waldron. Based on the evidence, it is likely that JFK was killed by a coalition of anti-Castro Cubans, the Mob, and elements of the CIA. There are some excellent books which detail the events surrounding the killing, including “Conspiracy” by former BBC correspondent Anthony Summers and “Plausible Denial” by Lane, the attorney who defended the Liberty Lobby. Out of context, Nixon’s reference in the Watergate tapes to the Bay of Pigs may sound like a non-sequiter. As the evidence shows, there is plenty of context. Nixon may well have feared that the Watergate scandal could have led to the truth about the JFK assassination. ---------------------------------------------- Another article from the same publication: http://baltimorepostexaminer.com/deathbed-confession-who-really-killed-jfk/2012/07/02

Rigged Rates, Rigged Markets Editorial The New York Times July 3, 2012 Marcus Agius, the chairman of Barclays, resigned on Monday, saying “the buck stops with me.” His was the first departure since the British bank agreed last week to pay $450 million to settle findings that, from 2005 to 2009, it had tried to rig benchmark interest rates to benefit its own bottom line. Mr. Agius was right to go and the bank’s chief executive, Robert Diamond Jr., should follow him out the door. But the investigations cannot stop there. The rates in question — the London interbank offered rate, or Libor, and the Euro interbank offered rate, or Euribor — are used to determine the borrowing rates for consumers and companies, including some $10 trillion in mortgages, student loans and credit cards. The rates are also linked to an estimated $700 trillion market in derivatives, which banks buy and sell on a daily basis. If these rates are rigged, markets are rigged — against bank customers, like everyday borrowers, and against parties on the other side of a bank’s derivatives deals, like pension funds. Barclays is only one of more than a dozen big banks that provide information used to set the daily rate for Libor and Euribor. The settlement, struck with regulators in Washington and London and with the Department of Justice, indicates that the bank did not act alone. It shows that unnamed managers and traders of Barclays in London, New York and Tokyo colluded with or prevailed upon bank employees who provide the benchmark data to make false reports. The aim was to bolster Barclays’s trading positions and to aid or counteract other banks’ attempts at manipulation. The evidence, cited by the Justice Department — which Barclays agreed is “true and accurate” — is damning. “Always happy to help,” one employee wrote in an e-mail after being asked to submit false information. “If you know how to keep a secret, I’ll bring you in on it,” wrote a Barclays trader to a trader at another bank, referring to an attempt to align their strategies for mutual gain. If that’s not conspiracy and price-fixing, what is? The Justice Department has left open the possibility of prosecuting officers or employees of Barclays. But it has agreed not to prosecute the bank itself, in part because Barclays was the first to cooperate in the investigation and has agreed to keep cooperating. Such an agreement makes sense only if that cooperation will allow prosecutors to nail other banks that have been involved in setting the rates, including potential cases against Citigroup, JPMorgan Chase and HSBC, and people who work there. To date, the Justice Department has not distinguished itself in prosecuting major banks or their executives for conduct leading up to and during the financial crisis. But with Barclays now cooperating, the “Libor scandal” is another chance for government prosecutors to unmask and punish financial wrongdoing.

Barclays chief executive Bob Diamond resigns Chancellor George Osborne says Diamond's exit after interest rate scandal was 'right decision for Barclays and for country' By Jill Treanor, City editor guardian.co.uk, Tuesday 3 July 2012 03.45 EDT Barclays chief executive Bob Diamond has resigned following the interest rate manipulation scandal. Bob Diamond has resigned from Barclays in the face of relentless political pressure for him to go following the interest rate manipulation scandal. An attempt by the board to save his position by accepting the resignation of the chairman, Marcus Agius, on Monday has failed. Instead Agius will now become full-time chairman and lead the search for a new chief executive. In a stunning turnaround – only on Monday the 60-year old chief executive was vowing to stay – Diamond is to go immediately after a 15-year career with the bank and only 18 months as chief executive. Diamond's resignation was welcomed by the government, which has come under increasing pressure to launch a public inquiry into the scandal. George Osborne, speaking on BBC Radio 4's Today programme, said it was "the right decision for Barclays – and for the country". "I think Bob Diamond's resignation is the first step towards the new age of responsibility we need to see." Asked whether he had played a part in Diamond's exit, the chancellor denied it, saying he was not in his job to decide who ran Britain's banks. Osborne also condemned the City's "corrupt practices", suggesting that criminal cases over the bank's manipulation of the inter-bank lending rate would follow, even though no one responsible has yet been charged with any offence. Ed Miliband said Diamond's departure was "necessary and right", but repeated his call for a public inquiry. "This is about more than one man," the Labour leader said. "This is about the culture and practices of the entire banking system which is why we need an independent, open, judge-led, public inquiry." But Diamond's decision to quit – and the return of Agius – dismayed some in the City. One investor said: "We are clearly now left with the worst of all possible situations. We don't have a ready-made candidate and a chairman who has no credibility." After an initial fall this morning, Barclays shares edged 1% higher to 170.5p, reflecting a view that the the worst of the political storm may have been passed. They fell 15% last week, wiping £4bn from Barclays' stock market value. Diamond, 60, is understood to have decided to go on Monday evening, and informed the board of his decision. But one source said it was a matter of semantics as to whether Diamond went or was pushed. There is no mention in Barclays' statement of any compensation for Diamond, but shareholders are determined that it should be kept to a minimum. Since Diamond's pay was first disclosed by Barclays in 2006 he has amassed £100m in pay and perks. The former investment banker Bill Winters, who sat on the independent commission on banking, will be regarded as a candidate to succeed Diamond, whose attempts to focus on the bank's commitment to "citizenship" have speculatorly backfired. Diamond said: "My motivation has always been to do what I believed to be in the best interests of Barclays. No decision over that period was as hard as the one that I make now to stand down as chief executive. The external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen. "I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth. I know that each and every one of the people at Barclays works hard every day to serve our customers and clients." Diamond will still appear before MPs on the Treasury select committee on Wednesday where he is expected to face tough questioning about when he knew about the bank's manipulation of the London inter-bank offered rate (Libor). Last week Barclays was ordered to pay £290m to settle claims that it used underhand tactics to try to rig financial markets. The penalties from UK and US regulators, including a record £59.5m fine from the Financial Services Authority, follow allegations it manipulated Libor and Euribor interbank lending, which govern the rates at which banks are prepared to lend to each other in the wholesale money markets. Agius said: "As chief executive he [Diamond] has led the bank superbly. I look forward to working closely with the chief executives of our businesses and the other members of the executive committee in leading Barclays' world class businesses in serving our customers and clients and delivering value for our shareholders." The Lib Dem peer Lord Oakeshott said: "This is a great day. Bob Diamond was the greedy gambler, personified. What really matters now is that the criminals inside Barclays, that they are charged and they are convicted and the full force of the law is brought to bear. Stealing money as a banker is the same thing as stealing from a house."

http://www.vanityfair.com/politics/2012/08/investigating-mitt-romney-offshore-accounts http://www.vanityfair.com/online/daily/2012/07/virgin-islands-box-438-taxes

Libor scandal may have cost families their homes Families may have lost their homes as a result of the bank rate-fixing scandal, the housing minister warned last night. Yesterday, Marcus Agius, the chairman of Barclays, resigned amid furore over the “culture” at the bank. He said: “The buck stops with me.” By Robert Winnett, Political Editor The Telegraph 6:50PM BST 02 Jul 2012 http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9371150/Libor-scandal-may-have-cost-families-their-homes.html Grant Shapps said that the scandal may have been a “contributory factor” in some home repossessions following the credit crisis. The Housing Minister issued the warning as David Cameron and George Osborne announced a fast-track Parliamentary inquiry into the behaviour and culture of Britain’s banks. The inquiry, which is not the independent judge-led inquiry demanded by Labour, will report back before the end of the year. Last week, Barclays paid a record £290 million fine after it admitted manipulating a key international interest rate which is used to set borrowing costs for millions of businesses, consumers and investors. RBS and Lloyds Banking Group are among other banks also facing investigation over their role in fixing the rate, known as Libor. The issue has sparked renewed calls for an overhaul of the banks amid concern over their culture and ethical standards. Asked yesterday whether the scandal may have contributed to people having their homes repossessed, Mr Shapps said: “All the research into homelessness proves that there are a lot of different causes, of which the Libor rate may have [been] a contributory factor, if indeed it transpires that mortgage rates have been adjusted as a result.” A Barclays source said they did not believe the bank’s actions had caused anyone to lose their home. Yesterday, Marcus Agius, the chairman of Barclays, resigned amid furore over the “culture” at the bank. He said: “The buck stops with me.” However, Bob Diamond, the bank’s chief executive who will face questions from MPs tomorrow, defied calls to step down. In a letter to staff, he apologised directly for the first time for the behaviour of Barclays’ traders and executives. “I understand why the reaction has been severe,” he said. “No one is more sorry, disappointed and angry about these events than I am. “I am sorry because we let down the people whose trust we rely on - our customers and clients; our shareholders; our regulators; and the communities in which we live and work. “I am disappointed because many of these behaviours happened on my watch. It is my responsibility to make sure that it cannot happen again.” Nick Clegg, the Deputy Prime Minister, indicated last night that he thought Mr Diamond should resign. “People at the top of these big banks who earned lots of money, they had these big fat bonuses when things went well,” he said. “They have also got to take the rough with the smooth, they have also got to be responsible when things go wrong on their watch.” The Prime Minister described the scandal as “extremely serious” and said that the Serious Fraud Office (SFO) would consider whether criminal prosecutions should be brought. However, Mr Cameron ruled out an independent judicial inquiry into the banks, modelled on the Leveson inquiry into media ethics. The Prime Minister said: “On the unfolding banking scandal here in the UK, we need to take action right across the board. “I want us to establish a full parliamentary committee of inquiry involving both houses, chaired by the chairman of the Commons Treasury select committee. This committee will be able to take evidence under oath, it will have full access to papers and officials and ministers including ministers and special advisers from the last government.” The Chancellor said that an independent inquiry would be too costly and time consuming. “I don’t think a long, costly public inquiry is the right answer; it would take months to set up and years to report,” Mr Osborne said. “We know what went wrong and we can’t wait until 2015 or 2016 to fix it.” But, Ed Miliband, the Labour leader, said he was “not convinced” by the approach. “However able or distinguished, politicians investigating bankers will not command the consent of the British people,” he said. “People are understandably angry about the way banks let them down and I don’t believe the proposed way forward is a way we can build the consensus that is required for real change.” A senior regulator said last night that the public shaming of Barclays may prove a “watershed moment.” “Perhaps the reaction to the penalty imposed last week on Barclays will be a watershed moment, the point when the industry realises that it also has to rise to the challenge and to recognise that things have to change,” said Tracey McDermott, acting head of enforcement at the Financial Services Authority

Banks and banksters claim they are too big to fail. Now they are also claiming they are too big to jail. In reality they are not "too big" but "too connected" to suffer the consequences of their crimes.

Joseph Stiglitz: Man who ran World Bank calls for bankers to face the music Joseph Stiglitz tells Ben Chu that rogue financiers have proven that regulation must get tougher By Ben Chu The Independent Monday, 2 July 2012 The Barclays Libor scandal may have shocked the British public, but Joseph Stiglitz saw it coming decades ago. And he's convinced that jailing bankers is the best way to curb market abuses. A towering genius of economics, Stiglitz wrote a series of papers in the 1970s and 1980s explaining how when some individuals have access to privileged knowledge that others don't, free markets yield bad outcomes for wider society. That insight (known as the theory of "asymmetric information") won Stiglitz the Nobel Prize for economics in 2001. And he has leveraged those credentials relentlessly ever since to batter at the walls of "free market fundamentalism". It is a crusade that has taken Stiglitz from Massachusetts Institute of Technology, to the Clinton White House, to the World Bank, to the Occupy Wall Street camp and now, to London, to promote his new book The Price of Inequality. And kind fortune has engineered it so that Stiglitz's UK trip has coincided with a perfect example of the repellent consequences of asymmetric information. When traders working for Barclays rigged the Libor interest rate and flogged toxic financial derivatives – using their privileged position in the financial system to make profits at the expense of their customers – they were unwittingly proving Stiglitz right. "It's a textbook illustration," Stiglitz said. "Where there are these asymmetries a lot of these activities are directed at rent seeking [appropriating resources from someone else rather than creating new wealth]. That was one of my original points. It wasn't about productivity, it was taking advantage." Yet Stiglitz's interest in the abuses of banks extends beyond the academic. He argues that breaking the economic and political power that has been amassed by the financial sector in recent decades, especially in the US and the UK, is essential if we are to build a more just and prosperous society. The first step, he says, is sending some bankers to jail. " That ought to change. That means legislation. Banks and others have engaged in rent seeking, creating inequality, ripping off other people, and none of them have gone to jail." Next, politicians need to stop spending so much time listening to the financial lobby, which, according to Stiglitz, demonstrates its spectacular economic ignorance whenever it claims that curbs on banks' activities will damage the broader economy. This talk of economic ignorance brings us to the eurozone crisis and the extreme austerity policies being pursued. Stiglitz is depressed. In 2000 he resigned from the World Bank and launched an excoriating attack on the way it and its sister institution, the International Monetary Fund, handled the Asian financial crisis of the late 1990s. He condemned the IMF for imposing brutal and inappropriate adjustment policies on bailed out nations – medicine which, he argued, merely pushed nations further into crisis. "For me there's some nostalgia here," he says. Does he see any hope for the eurozone, I ask, or is it now heading, inevitably, for a breakup? "It is a train that can still be stopped" he says. "But the relevant question is the politics in Germany. Have they created in their rhetoric a dynamic that makes it difficult to stop? In particular [German Chancellor] Angela Merkel's rhetoric that the crisis was caused by profligacy. She's framed the issue as profligacy, rather than framing it as 'the European system is fundamentally flawed' ". The central argument of his latest oeuvre is that the huge inequalities of income and wealth that have developed in the US and elsewhere in the West over recent decades are not only unjust in themselves but are retarding growth. "Every economy needs lots of public investments – roads, technology, education," he says. "In a democracy you're going to get more of those investments if you have more equity. Because as societies get divided, the rich worry that you will use the power of the state to redistribute. They therefore want to restrict the power of the state so you wind up with weaker states, weaker public investments and weaker growth." It's an elegantly simple proposition. And one that logically points to a radical manifesto of redistribution and higher taxation in the name of the general public good. Time will tell whether this comes to be regarded as another manifestation of towering economic genius. But, for now, crusading Stiglitz has one more weapon in his hands with which to batter down those walls of folly. Joseph Stiglitz: A life in brief Born: Gary, Indiana in 1943 Educated: Amherst college, in New England. Later, Massachusetts Institute of Technology Career: Nobel Prize-winning economist and former member of President Clinton's administration during his time in the White House and, latterly, an adviser to President Obama. He is currently a professor at Columbia University Family: Married to Anya Schiffrin, a professor at Columbia FYI: Stiglitz' home town also produced Paul Samuelson, the first American winner of the Nobel Prize for economics Stiglitz wrote of Samuelson: "Paul allegedly once wrote a letter of recommendation for me which summarised my accomplishments by saying that I was the best economist from Gary, Indiana." "The Price of Inequality" by Joseph Stiglitz is published by Allen LaneBy

Libor scandal: How I manipulated the bank borrowing rate An anonymous insider from one of Britain's biggest lenders – aside from Barclays – explains how he and his colleagues helped manipulate the UK's bank borrowing rate. Neither the insider nor the bank can be identified for legal reasons. 11:02PM BST 01 Jul 2012 The Telegraph It was during a weekly economic briefing at the bank in early 2008 that I first heard the phrase. A sterling swaps trader told the assembled economists and managers that "Libor was dislocated with itself". It sounded so nonsensical that, at first, it just confused everyone, and provoked a little laughter. Before long, though, I was drawing up presentations to explain the "dislocation of Libor from itself" for corporate relationship managers. I was deciphering the subject in emails, internally and externally. And I was using the phrase myself openly with customers of the bank. What I was explaining was that the bank was manipulating Libor. Only I didn't see it like that at the time. What the trader told us was that the bank could not be seen to be borrowing at high rates, so we were putting in low Libor submissions, the same as everyone. How could we do that? Easy. The British Bankers' Association, which compiled Libor, asked for a rate submission but there were no checks. The trader said there was a general acceptance that you lowered the price a few basis points each day. According to the trader, "everyone knew" and "everyone was doing it". There was no implication of illegality. After all, there were 20 to 30 people in the room – from management to economists, structuring teams to salespeople – and more on the teleconference dial-in from across the country. The discussion was so open the behaviour seemed above board. In no sense was this a clandestine gathering. The main business of the day was to deal with the deepening crisis. And questions were raised about what we, in one of the bank's sales teams, could be doing to earn our wages. The answer was fire-fighting. Helping the corporate bank with clients – predominantly explaining why the customer's loan was being moved from base rate to Libor and why their interest margin was increasing sharply. It wasn't easy for the corporate bankers. They were under orders from the credit committee, and powers at the top, to change a client's borrowing rate to Libor and increase the margin if any covenant was breached, no matter how small. We accompanied the relationship managers to meetings to explain what was happening in the economy – why base rate lending could not be sustained, why margins had to increase, and of course to explain the general economic backdrop. As part of that, we had to explain the "dislocation of Libor from itself". As the trader put it, everyone knew that we couldn't borrow at Libor, you only needed to look at the price of our credit default swaps – effectively survival insurance for the bank – to see that. What that meant was that even though Libor may have been, for example 2pc, the real Libor rate the bank was paying was more like 5pc or 6pc. So in fact, we needed to be lending money at Libor plus 3pc or 4pc just to break even. That is what we were telling clients. Looking back, I now feel ashamed by my naivety. Had I realised what was going on, I would have blown the whistle. But the openness alone suggested no collusion or secrecy. Management had been in the meeting, and so many areas of the Treasury division of the bank represented, that this was clearly no surprise or secret. Libor had dislocated with itself for a very good reason – to hide the true issues within the bank.

Top Tories dragged into banking scandal Cameron allies linked to City firms under scrutiny over interest rate fixing By Jane Merrick, Brian Brady, Matt Chorley, Jonathan Owen The Independent Sunday, 1 July 2012 Senior Tories were dragged into the interest rate-fixing scandal last night as fresh evidence emerged that the banking industry denied there were any problems with "the integrity" of Libor five years ago. The Independent on Sunday has learnt that the Conservative deputy chairman, Michael Fallon, is a board member of a leading brokerage firm that dominates the rates market and which has been asked to co-operate with the Financial Services Authority's investigation into malpractice across the City. Mr Fallon is a close ally of David Cameron and a senior member of the Treasury select committee that will question the Barclays chief executive, Bob Diamond, this week, prompting demands from Labour that he should declare an interest. The Prime Minister continues to resist calls from Ed Miliband for a Leveson-style inquiry into rate-fixing. The Government is to set up an "urgent independent review" into Libor (the London inter-bank lending rate), but Labour continued to press for a judge-led inquiry. The review will consider the future operation of the Libor rate and the possibility of introducing criminal sanctions, a Treasury source said. Class-action lawsuits are being filed in the US by plaintiffs that held financial products that depended on Libor. Any lawsuits that arise are likely to dwarf the fines that Barclays has already paid, perhaps running into the tens of billions across the industry. The IoS can also reveal that the Bank of England was aware of concerns over Libor five years ago, and discussed it in at least two meetings with representatives of some of the City's biggest financial institutions. Mr Fallon, the MP for Sevenoaks, has been a director of interdealer broker Tullett Prebon since 2006, standing down in 2010 when he ran unsuccessfully for chairman of the select committee, before being reappointed that year. Tullett Prebon is not under full investigation by the FSA into manipulation of Libor but has responded to "requests for information". A City source close to the investigation said it was "extremely unlikely Tullett Prebon would not be investigated" at some point, and sources at the firm, asked if employees could have engaged in wrongdoing, said they could "never say never". There is no suggestion of wrongdoing on the part of Mr Fallon or the company. In a statement the firm said: "Tullett Prebon, like probably all firms in the City, has been responding to requests for information from the regulators. To date, we have had no cause to suspend or otherwise discipline any employee in connection with this inquiry." Labour said the Tory deputy chairman had "serious questions" to answer over his role at the firm, given his key role in Parliament's inquiry into the rate-fixing scandal, which is thought to extend far beyond the wrongdoing at Barclays. Labour MP Simon Danczuk said: "Across the banks there are serious questions about who knew what and when and that must include the deputy chair of the Conservative Party. We have to get to the bottom of the Libor fixing scandal, and the Government must also agree to calls by Ed Miliband and Ed Balls for a proper independent inquiry into the culture of banking." The questions over the role of Mr Fallon followed the revelation that one of the Prime Minister's closest advisers, the former Tory party treasurer Michael Spencer, is under scrutiny by the FSA. Mr Spencer's brokerage firm ICAP is one of a number of institutions alleged to have helped to manipulate bank interest rates while he was treasurer of the Conservatives. Mr Cameron said yesterday that he needed to "think this through carefully" whether there should be a judge-led inquiry into the Libor scandal. Mr Fallon and Mr Spencer are not the only Tories with close links to the City, prompting concerns that the party is not enforcing tough action against the banking industry. Francis Maude, the Cabinet Office minister, was paid by Barclays to sit on its Asia-Pacific advisory committee between 2005 and 2009. A spokesman for Mr Maude said last night the minister was "absolutely not" aware of any wrongdoing at Barclays and that the committee met "three times over a couple of years", was purely advisory and had no executive function. Mr Fallon declined to comment. Court documents filed in the US accuse Bank of England officials of failing to act on questions about "the integrity of Libor" raised during meetings of the Money Markets Liaison Group as early as 2007. The meeting was chaired by the BoE deputy governor, Paul Tucker, and attended by officials from institutions including at least seven that have since been named in Libor investigations. The British Bankers Association assured group members of its "quality control measures", and said that "they speak to contributing banks regularly". The decision not to investigate further effectively enabled British bankers to go unchecked for more than a year. The FSA finally joined the investigation into Libor manipulation in October 2009, after other countries had already launched their own inquiries. A Bank spokesman said last night it was "nonsense" to suggest it had been aware of any Libor-fixing in 2007 or 2008. The Conservative connection Michael Fallon Mr Fallon is deputy chairman of the Conservative Party. A close ally of David Cameron and a reliable defender of the Government on the airwaves, the 60-year-old is a board member of Tullett Prebon Plc, a leading brokerage firm that dominates the rates market and which is being asked to co-operate with FSA inquiries. He resigned his directorship in the days after the coalition was formed, but was reappointed in September 2010. He receives a quarterly fee of almost £7,000 for 20 hours' work. George Osborne In a statement to the Commons on Thursday, the Chancellor of the Exchequer described the Libor scandal as a "shocking indictment of the culture at banks like Barclays in the run-up to the financial crisis". But at the time that brokers were swilling Bollinger and fixing rates, Mr Osborne was trying to convince the City that he was not some callow newcomer but a chancellor in-waiting. In 2007, bruised by hostile briefings that he wasn't up to the job, he made strenuous efforts to court the City, through the Conservative City Circle. This week he condemned his opposite number, Ed Balls, for failing to regulate the banks, but in 2007 he backed a Tory policy report written by John Redwood which called for deregulation of the mortgage market. Michael Spencer Mr Spencer is a former treasurer of the Conservative Party. The 57-year-old, a close friend of David Cameron, is head of ICAP, a brokerage firm alleged to have helped manipulate bank interest rates while he was also Tory party treasurer from 2006 until October 2010. ICAP is being investigated by regulators over claims the Libor lending rates were rigged. He remains chairman of the Conservative Foundation, a body launched in 2009 for the party to receive legacies free of inheritance tax. He was among a list of party donors to have enjoyed "kitchen suppers" in the PM's Downing Street flat. Francis Maude The Cabinet Office minister is a key Tory moderniser. He was a member of Barclays' Asia-Pacific Advisory Committee for much of the boom from 2005. In an entry in the Register of Members' Interests, he said: "My duties were to attend committee and other meetings by phone or in person; other advice and consultation by e-mail." He received payment of £9,230.23 after tax for 15 hours' work in 2009, and resigned at the end of that year. He joined the coalition government in May 2010.

When Carl Shoffler arrested the five Watergate burglars on June 17, 1972, at 2: 30 AM, he claimed that he found one key on the person of the burglar known as Eugenio Martinez. He asserted the key was taped on the front of a notebook found in a shirt pocket on Martinez and that he subsequently inscribed his own notes in his detective’s pad about what he found relating to the arrests. Martinez’ notebook, bearing Shoffler’s initials with the key taped on it, was later placed in the U.S. Archives, where it sat for almost two decades before being noticed. The key was the subject of an A&E Investigative Report broadcast in 1992 with the title of “Key to Watergate.” Officer Shoffler was interviewed on the program. Here is a link to it: http://www.nixonera.com/library/watergate.asp Of particular interest to me and others is that Shoffler did not turn the notebook in with the other items found on the burglars at the time of the arrests. He turned it in the next day at the police station. In my opinion why he kept the notebook in his possession raises interesting questions as to his motivation and what he feared the notebook might contain and what page(s) he might have torn out before he turned it in. Even the original prosecutors were ignorant of the notebook’s existence at the time of the original Watergate trial in January 1973. Shoffler had successfully finessed it being “lost” in the maelstrom of the scandal. -------- It should also be noted, according to Jim Hougan's book "Secret Agenda" that 12 hours after the arrests, the police using a search warrant, found in the burglars' hotel room "an address book belonging to Bernard Barker that contained the initials 'H.H.-W.H.' and Hunt's telephone number at the White House."

Nixon was serious. On Nov. 8, 1972, right after his re-election, he asked for the resignations of key governmental officials, including the heads of agencies. http://millercenter....keyevents/nixon This was after the election and well after the break-in Sure it was after the election and the break-in. Do you think he would announce it before then and provoke an adverse reaction? Obviously it was not a spur-of-the-moment decision. It was a policy decision that had been crafted well in advance of the time it would be publicly announced. I remember reading about it in the Washington Post when he proclaimed it and I said to myself, "This is a major strategic mistake." Why? Because the Watergate scandal was festering and he would need the support of key persons if he were to survive it. When the key people in government read the announcement that he wanted their resignations, a chill went down their backs and their interest in his survival was greatly diminished. In fact, they probably thought his departure and replacement as president would be the best way for their careers not to be terminated by a whim of Nixon.

Rupert Murdoch denies News Corp split is linked to phone-hacking scandal Division into entertainment and publishing is a result of three-year review and will make businesses easier to manage By Lisa O'Carroll guardian.co.uk, Thursday 28 June 2012 10.23 EDT Rupert Murdoch has dismissed suggestions that splitting News Corporation into separately listed publishing and entertainment companies has anything to do with the phone-hacking scandal that led to the closure of News of the World. In a conference call with Wall Street analysts in New York on Thursday, after News Corp confirmed the split, the 81-year-old media mogul denied there was a connection between the two. "We're not doing this in any sense as a reaction to anything in the UK … This is not a reaction to anything in Britain," he said. Murdoch added that the plan to split News Corp into two publicly listed companies – one for TV and film interests and the other newspapers, books and education – was the result of a "three- year" review of the business. He said the asset structure had got too complicated and the changes would make the business "easier and better managed". But he confessed that it was a tough decision for him personally. Murdoch has spent nearly 60 years building his global media empire, beginning with an Australian newspaper inherited from his father, the Adelaide News. "I don't want to hide the fact that I've spent most of my life on this. It is a very big move and a very big decision for me," he said. As part of the restructuring, Murdoch will be taking a step back from newspaper publishing, the business that is closest to his heart. He will remain as chairman of both new companies but will act as chief executive of just one – the media and entertainment business. This immediately creates a vacancy for chief executive of what Murdoch called a "world-class" publishing operation with an "unparalleled portfolio of assets". He told analysts this job was likely to be taken by an internal candidate, fuelling speculation that it could open the way for his eldest son Lachlan Murdoch to make a return to the News Corp executive fold after a seven-year absence. Murdoch said: "I just want to say we have a wonderful group of managers in the whole company. This is going to take many months to complete, we are in no hurry to make a decision on that." Others being mooted for the job include Tom Mockridge, the chief executive of News International who was parachuted in from Sky Italia in July last year to replace Rebekah Brooks when she was forced to resign at the height of the phone-hacking scandal. Murdoch said he was convinced the publishing company had a bright future. "I am convinced that both of these new business will be able to reach new heights." He added that he had not doubt the "naysayers" would see the announcement as a reflection of concern for the future of newspapers. "Nothing could be further from the truth," he said. "People will pay for news. It is the most valuable commodity in the world." The mechanics of the demerger have yet to be worked out. There was some confusion between Murdoch and his chief financial officer, David Davoe, during the conference call as to whether shareholders would get one new share in the each new companies for one old News Corp share, or whether the share structure would reflect the fact that the film and TV businesses are seen as having more growth potential than the publishing operation. Davoe eventually stepped in and said it would initially be a one-for-one share offer, but added the structure had yet to be evaluated. Murdoch also revealed that News Corp's stake in Australian pay-TV operation Foxtel would come under the publishing business. News Corp's Australian subsidiary, News Ltd,

Rupert Murdoch snubs Britain and says he will invest his billions in the US News Corp chairman tells Fox he has 'moved on' after abandoning BSkyB bid amid phone-hacking scandal By Dominic Rushe guardian.co.uk, Thursday 28 June 2012 13.14 EDT Lachlan Murdoch is 'highly unlikely' to run the new publishing arm of News Corp, his father Rupert told Fox Rupert Murdoch appears to have turned his back on Britain following his humiliation over the phone-hacking scandal. In an interview with the Fox Business channel on Thursday following New Corporation's confirmation that it was splitting into two companies, entertainment and publishing, Murdoch said he would be "a lot more reluctant" to invest in Britain now, compared to the US. The News Corp chairman and chief executive also told Fox Business host Neil Cavuto it was "highly unlikely" that his eldest son, Lachlan Murdoch, would run the new newspaper, book publishing and education company. Once Britain's most powerful media figure, Murdoch has seen his bid for broadcaster BSkyB blocked and his reputation dragged through the mud following the phone-hacking revelations. Last month a parliamentary committee said he was not a fit and proper person to run a major corporation. Now he looks set to retaliate by taking his money elsewhere. Asked about his future plans following his decision to split his News Corp empire in two, Murdoch made clear the UK was not his first priority and said the company's thinking had "moved on" since it abandoned its Sky bid last summer at the height of the phone-hacking scandal. "There are billions and billions of dollars, and if Britain didn't want 'em, there are plenty of good places to put them here [in the US]. I'm much more bullish about America than I am about England," he added. "I would be a lot more reluctant to invest in new things in Britain today, rather than here." Asked by Cavuto whether this was because of what he went through, Murdoch replied: "No, not at all, just the English." The News Corp boss also scotched rumours that Lachlan might return to the family firm and run the newly separated publishing business, saying: "I think that's highly unlikely." He added: "Lachlan is very happy running his own business in Australia – and he loves living there." In response to a question about the prospects for the new publishing company, Murdoch said: "In the present climate of thinking in the markets, it'll carry a lower p/e ratio, certainly. But the other one [film and TV company] I think will get a lot higher. Net, net, net the shareholders who are here today will be a lot better off." Murdoch said that Europe was in for a "very long, tough haul" and that business prospects in the US were far more rosy. That said the media mogul was worried about Thursday's decision by the US Supreme Court to uphold president Barack Obama's landmark healthcare legislation. "I worry about this entitlement culture," said Murdoch. "We've seen where it's taken Greece. We've seen where it's taken France and Spain today. So, on a political level, I worry about it." Ken Doctor, media analyst at Outsell, said the split presaged Murdoch's exit from the UK. "It's a recognition of his waning influence in the UK and the consolidation of his business in the US. If he was 60, I would bet on him making a UK comeback but he's not and I can't see him achieving that in his lifetime." He said that he expected the UK papers would eventually be sold or put into a trust. "Those newspapers and his influence in the UK have grown hand in hand. That's over now," added Doctor. Julie Tanner, a director at Christian Brothers Investment Services, which led a shareholder revolt against Murdoch and his board last year, said investors were keen to hear who would be appointed to head the new companies. Tanner added that she would continue with plans to press for a new independent chairman at News Corp. "News Corp must consult with a broad and varied range of shareholders to ensure there are strong corporate governance guidelines established and oversight and monitoring mechanisms in place to assure the highest levels of integrity," she said. Rich Greenfield, analyst at BTIG, dismissed concerns about Murdoch's control. "If you don't like Rupert, there are plenty of other media companies you can buy," he said.

Poster's note: This is an unusual article. I am posting it because it The New York Times seldom mentions the JFK assassination and the CIA in the same sentence as it does here near the end. Perhaps more interesting information is contained in Guy Lawson's book that is about to be released. --------------------------------------------------- June 25, 2012, 9:17 pm The New York Times A Con Man Who Lives Between Truth and Fiction By ANDREW ROSS SORKIN BUTNER, N.C. -- "I'm a proven xxxx. Don't believe anything I say." That was what Samuel Israel III told me last week. He is the hedge fund manager convicted of running a $450 million Ponzi scheme who faked his own suicide in the summer of 2008 to avoid his prison sentence before turning himself in after a worldwide manhunt. He was sitting across from me in the visiting center of the Butner prison complex, about 45 minutes north of Raleigh in eastern North Carolina. (Bernard L. Madoff is in the same complex.) Mr. Israel, 52, who is serving a 22-year sentence, was wearing a tan prison uniform with his hair grown out, a mass of silver and brown curls sprouting from the sides of his bald head. ("I'm never going to cut it until I get out," he exclaimed.) I was there to talk to him because his story is a cautionary tale of the highly sophisticated, often endemic, fraud that still lurks on Wall Street. People I spoke with who dealt with him are still mystified about the breach of trust and how no one had a clue about his deception until it was too late. "Everyone cheats," he said as a matter of fact. "I'm not a xxxx," he insisted, affably. "I became a xxxx." I flew down to visit Mr. Israel after reading an advance copy of a book about him that is coming out in two weeks, "Octopus: Sam Israel, the Secret Market, and Wall Street's Wildest Con" by Guy Lawson (Crown). I was riveted by Mr. Lawson's telling of Mr. Israel's bizarre conduct - sometimes genius and often sickening. Here's a quick recap of his sordid story: A native of New Orleans who is the grandson of a well-known commodities trader on Wall Street, he started Bayou Hedge Fund Group in 1996 and quickly became a rising star, amassing money from some of the most-respected investors on Wall Street based on the firm's trading track record. Bayou traded through, among other firms, a unit of Goldman Sachs. There was only one problem: the firm's profits were fictitious. Completely made up. In truth, Bayou consistently lost money. The firm's accounting firm, which blessed Mr. Israel's numbers in letters to investors, was also fictitious. Mr. Israel and his partners created the accounting shop out of thin air, including its stationery and logo. After the fraud unraveled in 2005 as his losses mounted and investors demanded their money, Mr. Israel pleaded guilty. But after he was sentenced to 20 years in prison (the sentence was extended after his efforts to avoid prison), he faked his suicide on Bear Mountain just north of Manhattan, leaving his GMC Envoy on a bridge after writing "Suicide is Painless" in dust on the hood. He was on the run for two months during which, he now says, he tried to commit suicide for real, but failed. He told me he turned himself in after he saw himself on TV and was struck by how many people he had truly hurt. "I was watching America's Most Wanted and I see me!" he said. "I said, 'Oh my god!' " His girlfriend, Debra Ryan, had been arrested on charges of helping him with his escape plan. "I have so many regrets but my biggest is ruining this poor girl's life. The only reason they screwed her was to get to me - and it worked. I knew they were coming for my mother next." (Ms. Ryan plead guilty and was sentenced to house arrest.) So how did Mr. Israel's fraud begin? He said building a fraud was never the plan. (It never is.) Early on, he said the firm had made a series of losing trades. He was willing to lie to his investors - which he claimed was his partners' idea - because he thought that by the next quarter he would be able to make back a profit. "I thought, 'I can make this back.' I wasn't worried in the least," he said. "I was a good trader. I was a workaholic." He added: "Was it hard to lie in the beginning? No. Did it get harder? Yes. I lived with this beast every day. I lived with 'the hole.' It was awful. It was the worst feeling in the world." Yet he continued to lose - and lie, compounding lies upon more elaborate lies. At one of his lowest moments, he said, he chased what he believed was a "secret market" supposedly run by the Federal Reserve in order to make back the lost money for investors. Along the way, he fell in with a con man, and of course, never was able to return any money to investors. The story is mind-boggling. But it raises the question of why no one saw the red flags. The Securities and Exchange Commission, Mr. Israel said, "could not bother to go through everything with a fine-tooth comb because they did not have the manpower to do so." He said that only six months before the firm's collapse the S.E.C. had looked at its trading and "they did not see anything wrong." In an arbitration case, Goldman Sachs's execution and clearing unit, formerly known as Spear Leeds & Kellogg, which cleared trades for Bayou, was ordered to pay $20.6 million to creditors of the failed hedge fund. The firm is appealing the decision. "Are there similar frauds going on today?" Mr. Israel asked. "I am most sure there are." What, I asked him, can an investor do to avoid being conned by the next Samuel Israel? "Seek as much transparency as possible," he said. "If they do not understand exactly how a manager is making money, do not invest. If there is a secret process that cannot be explained, run. Go see the organization yourself, talk to the employees. The manager cannot see everyone or he could not be making money; if he has all the time in the world for you, that is a flag." Mr. Israel is a good salesman, even in prison. It is clear why he was able to get away with his fraud for as long as he did. He is likable; he likes to tell you about his mistakes and acts as if he has known you forever. When I first sat down to talk with him, he offered me an orange Life Saver. When he mentioned Mr. Madoff, he leaned in to confide - as if we were best friends - that the Butner grapevine had it Mr. Madoff was "a terrible guy. Not a nice dude." About halfway through, the interview turned bizarre when Mr. Israel, on the verge of crying, announced: "I took a man's life. I shot him twice." I asked for more details. The story is recounted in "Octopus," but the author, Mr. Lawson, doesn't appear to believe it. In the supposed slaying, Mr. Israel describes himself defending a known con man, Robert Booth Nichols, who claimed to have once worked for the Central Intelligence Agency and has since died. Mr. Nichols was undertaking a secret trade at a German bank and was ambushed outside by a cockeyed "Middle Eastern guy." Mr. Israel says he shot the ambusher in the hip and then in the head. He looked at me, shaking, and said, "I've seen someone with their head blown off maybe two feet back - as close as I am to you." Mr. Israel recognized my skepticism. When I asked him what happened to the body, he said, "Bob made a couple of calls." Again, I looked at him quizzically. "These people can do anything. They can get rid of a body," he said. "Come on," he added, looking at me as if I didn't understand. "They can kill presidents." I wasn't sure what he was talking about. "The J.F.K. thing," he said. He went on to tell me that he had videotapes of Kennedy's assassination and that one was stolen by the F.B.I. "I know it makes me look like a crackpot," he said. "But I know it's real. Look into my eyes - I don't care if people think I'm crazy." When I asked Mr. Lawson what to make of Mr. Israel's more adventurous stories, he told me: "I don't think he's lying. But that doesn't mean he's telling the truth." Mr. Lawson holds out the possibility that a murder was staged in Hamburg. But, he said, Mr. Israel "believes J.F.K. was assassinated by the C.I.A. I don't." The author added: "That's the nature of confidence games - it becomes impossible to tell where the truth ends and deception begins." My conversation with Mr. Israel left me with a sense that at some level Wall Street, too, is a confidence game. Investors are sometimes too busy looking for profits to notice where the truth ends and the deception begins. This post has been revised to reflect the following correction: Correction: June 26, 2012 An earlier version of the article incorrectly stated that Goldman's execution unit was fined $20.6 million by the Financial Industry Regulatory Authority. Goldman was ordered to pay $20.6 million to the creditors of the collapsed hedge fund in a Finra arbitration case.

News Corp's split makes Rupert Murdoch a paper tiger News Corp's division into entertainment giant and struggling newsprint empire is a humbling By Michael Wolff guardian.co.uk, Tuesday 26 June 2012 13.40 EDT This may be the most humble day of Rupert Murdoch's life. His company seems to be spurning his newspapers, and also his leadership – or at least, his Sun God standing. Early Tuesday morning, News Corporation said, through its newspaper, the Wall Street Journal, that it was considering a spin-off of its print properties. Since using the Journal made this something of an in-house announcement, for "considering" one might better read "actively planning". Perhaps not coincidentally, Chase Carey, News Corp's chief operating officer, was spied yesterday having lunch with Stan Shuman of Allen & Company, one of the company's long time investment bankers. Lunch was at Michael's, the media business canteen in New York, where they were sure to be seen – possibly something, in other words, of a victory walk for Carey, who is the primary operator of the entertainment assets which would become the whole of News Corp. Even before the phone-hacking scandal in Britain killed the News of the World, the company's newspapers were an issue of internal complaint. From a rational business view, the papers consumed far more resources than any returns they can ever hope to offer. Still, because News Corp was singularly Rupert's company (pay no attention to its public shareholders), and Rupert was atavistically committed to his newspapers, there could be no real debate about their future. The $5.6bn acquisition of the Wall Street Journal in 2007, at a steep premium to its market value, happened despite the recognition by News Corp's executives that the deal would have a profound negative impact on News Corp's shares – and despite the fact that the Journal would shortly be worth only a fraction of what the company paid for it. If Rupert wanted a paper, he got a paper. But then there was the phone-hacking scandal. And perhaps even worse for the newspapers: investors everywhere suddenly seemed to wake up and agree that the newsprint titles were not just shrinking, but dissolving assets. By getting rid of the papers in the US, UK and Australia (together with Harper Collins, News Corp's book publishing company), the shares of News Corp itself could even be expected to rise. The phone-hacking saga, and the diverted attention, if not the much-reduced status, of the Murdoch family, was the opportunity. But what of the papers, then? And of Murdoch himself? The print division made a small profit last year. With the closing of the News of the World, one of its big earners, and with the continued fall in newspaper circulation and advertising, those earnings may be expected to disappear almost immediately. That will leave the three big money losers particularly exposed: the New York Post, the London Times, and the Wall Street Journal. The losses among them might be as great as $250m. It is almost impossible to imagine that a stand-alone public print company would not have to quickly cut costs and dispose of those assets that do not have a credible path to profitability. Indeed, for each of News Corp's newspapers, protected so long by the company's vast diversification, being spun off, instead of sold to enthusiastic bidders, might be their worse fate. And curiously, the papers, while they lose the upside of being part of News Corp, maintain what is arguably the downside: Rupert Murdoch. Rupert and the Murdoch family trust will still control the papers. Indeed, this odd move, to create a company of ever-weakening businesses, may have been, for Murdoch, a bad choice – but a better choice than selling and losing them. Meanwhile, it's awfully good news for Chase Carey and the new entertainment-focused company. Rupert and the other Murdochs will have an ever-deepening quagmire to attend to with the newspapers, keeping the Murdochs at an even greater distance from the entertainment business. Indeed, that is the de facto division that exists now, but the separation becomes cleaner and more widely understood with an actual split. Surely, Rupert Murdoch can be counted on to follow his heart. By early morning, rumours were circulating among Rupert-watchers that Lachlan Murdoch, Rupert's oldest son and once the heir-apparent, who had been forced out of News Corp by the ever-more-powerful entertainment executives and into exile in Australia, might be tapped by his father to head the new newspaper company. In fact, Lachlan would not even have to relocate because the Australian operation will become the centerpiece of this new company – thus bringing the long story back to where it all began.

I posted it because of the frivolous manner in which the subject of the arrests of the burglars is being treated by one of the most influential publications in Washington, The Washingtonian Magazine, on the occasion of the 40th anniversary of the case breaking open. At least the article could have noted that the police vehicle that Det. Carl Shoffler was in when he received the call from dispatch just happened to be parked a block from Watergate and that he was not supposed to be working but had specifically asked to be allowed to work overtime that particular night even though his parents and family were waiting for him in Pennsylvania to celebrate his birthday. Jim Hougan's classic book, Secret Agenda, best covers the mysterious actions of Shoffler leading up to the arrests.

Nixon was serious. On Nov. 8, 1972, right after his re-election, he asked for the resignations of key governmental officials, including the heads of agencies. http://millercenter.org/president/keyevents/nixon

It is well known that many of the Kennedys died at the hands of others. It is possible that the death of JFK’s and Jackie’s baby boy, Patrick Bouvier Kennedy, born after JFK was elected president was not a natural death? Has anyone ever explored this? He died on August 9, 1963, having been born prematurely by five and a half weeks. Did someone clandestinely arrange for Jackie to eat or drink something that induced the premature birth? The reason I bring it up is that in entry #104 on p. 7 in this topic the following appears: The following evening Rivera gave Adele Edisen a tour of Washington. When they passed the White House he asked Edisen, "I wonder what Jackie will do when her husband dies?" After Adele replied "What!", Rivera said, "Oh, oh, I meant the baby. She might lose the baby." In the past year I posted a topic on the forum that showed all of the Kennedy deaths, beginning with Joe, Jr. in World War II, fell within the same hour of sidereal time, which is a measurement system based upon the repetitive motion of the stars. I wonder of the baby’s death in 1963 also occurred in the same sidereal hour.

Poster's note: This is the most pitiful, stupid and irresponsible example of what passes for journalism today that I have even seen. --------------------------------------------------- The Bartender’s Tale: How the Watergate Burglars Got Caught | Published June 20, 2012 Washingtonian Magazine http://www.washingtonian.com/articles/people/the-bartenders-tale-how-the-watergate-burglars-got-caught/indexp2.php Squad car 80 operated out of the Second District station at 2301 L Street, Northwest, covering a relatively small portion of the city, and was only minutes away from any location in its patrol area. The station recently had installed its own gas tanks so police cruisers could fill up on site. The uniformed officer driving car 80—a “black-and-white”—had pulled up earlier that evening in front of PW’s, a new bar in downtown DC. PW stood for the Prince and the Walrus, nicknames for Rick Stewart and Rich Lacey, who owned the bar with Rich’s brother, Bill. Try as we might, my research assistant, Borko Komnenovic, and I were unable to find the police officer who drove car 80 that evening. A retired officer told us that in that era cars came and went without a lot of paperwork. Despite extensive interviews, we never found our man. A place where young professionals gathered after work, PW’s was politely known as a “swinging singles” establishment, more bluntly as a “meat market.” The bar was a favorite of Washington’s Finest. Officers would stop by for free meals, Cokes, and alcoholic beverages—even while in uniform and on duty. “We were friendly with the local police that had that beat,” Bill Lacey recalls. Captain William Lacey had been a career Army officer, but after he and his brother slogged through the jungles of Vietnam, the two were reassigned to Fort Belvoir, a sleepy Army base some 20 miles south of DC. “We’ve always wanted to be Irishmen and own a saloon,” Bill, then 33, told his younger brother. Rich was eager, resourceful, and more than a tad mischievous. One evening in Vietnam, Bill had been startled to find that his brother had somehow procured a dining table, linens, crystal, fine wine, and steaks for a formal sit-down dinner in the middle of a firebase. In DC, the Laceys and Stewart searched for an appropriate location and finally leased a place at 1136 19th Street, Northwest, where the bar Science Club is today. They worked for months getting it ready for a spring 1971 opening. Lacey used his Northern Virginia home as collateral for a loan. The three men worked with legitimate contractors, organized-crime shakedown artists, and representatives of the DC government. “Can you put a little something in my hand?” was a query the brothers say they often heard. Finally, Bill recalls, they told both the inspectors and the man who represented a Mob protection racket to go to hell, flashing a Walther PPK pistol for emphasis. It worked—both the legal and illegal crooks vamoosed, and the La-ceys went about gutting and rebuilding PW’s for a town that was a mixture of white-collar workers and white-collar criminals, street hoods, protesters, and other people from all walks of life. PW’s quickly became a hot spot. The walls were barnwood, the standard fare was steak and burgers, and the place reeked of bourgeois charm. Rich served as bartender and liked to mix especially strong drinks. One day, Bill was at the bar drinking a Bloody Mary that, unknown to him, was mostly vodka with just enough tomato juice to give it color. When he finished a glass, his brother had a fresh one ready. Hours later, Bill was driving home with one eye closed. After midnight on June 17, a policeman came in, Bill recalls, “and my brother poured him a glass of bourbon with a little Coke on top. Then he poured him another one, and another one. The policeman is sitting there, and his walkie-talkie, which was on the bar, squawked—they wanted him to investigate a burglary. He got up from the stool and could barely walk. He said, ‘How the hell am I going to investigate a burglary? I can’t even stand.’ “ ‘Piece of cake,’ my brother said. ‘Go out and get on your car radio and tell them that you’re out of fuel and you got to go back and refuel before you can respond, and somebody else will take the call.’ ” The policeman went out, got on the radio, and said, “I’m out of fuel and I can’t respond.” The dispatcher then contacted Sergeant Leeper’s undercover car. • • • Leeper and his men began their search in the basement and made their way up to the sixth floor—where the Democratic National Committee office was located. There they literally stumbled onto the Watergate Five. Having checked each office, they were down to the final one. “Our adrenaline was starting to pump now,” Leeper recalls. Officer Barrett puts it more bluntly. When he saw a hand move toward him, Barrett says, “it scared the xxxx out of me.” The cops yelled, “Hold it! You’re under arrest!” and five pairs of hands went up. One arrestee simply said, “You got us.” The presence of five men—McCord, Frank A. Sturgis, Virgilio R. Gonzalez, Eugenio R. Martinez, and Bernard L. Barker—wearing business suits and surgical gloves and carrying electronic surveillance equipment as well as rolls of crisp, new $100 bills struck Leeper and Barrett as, well, weird. Also odd was that the burglars were all older men—in their late forties and early fifties. The officers had only two pairs of handcuffs, so four of the burglars were cuffed together and the other, Martinez, was simply escorted out. In the process, Officer Shoffler discovered a small spiral notebook in Martinez’s jacket that had “White House” written in it. It was 2:10 am by the time the arrest eventually heard ’round the world was made. For quite a while, police reports noted it as “the burglary at Democratic National Committee, Sixth Floor, 2600 Virginia Ave., NW.” It was some time before it was shortened to its infamous moniker, “Watergate.” Borko Komnenovic assisted with research for this article. This article appears in the July 2012 issue of The Washingtonian.