Category - Economics: USA

JPMorgan Chase & Co. To Start Charging Large Customers Deposit Fees

Reports suggest JP Morgan will initiate charges on certain deposits

Bidness, Etc., By Larry Darrell, February 24

The largest bank in the US in terms of assets, JP Morgan Chase & Co., is likely to start charging large customers on deposits and is making holding money costly for clients, reports the Wall Street Journal.

The move is an attempt to reduce the effect on deposits that are affected by billions of dollars and is said to bring the number down in 2015. It is the recent in a series of discussions by big banks to discourage certain deposits by corporate clients that are attracted by the low interest rates and new regulations.

Sources privy to the matter said that the memo in place cites new rules that will not affect retail clients. However, some financial firms and corporate clients might be charged higher fees. It is reported that JP Morgan will unveil the bank’s strategy with investors on Tuesday.

“We are adapting to a changing regulatory environment across our company,” Wall Street Journal quotes the JP Morgan memo sent on Monday.

Wall Street Journal [paywalled]: J.P. Morgan to Start Charging Big Clients Fees on Some Deposits

U.S. Oil Workers’ Union Expands Biggest Plant Strike Since 1980

Bloomberg, by Lynn Doan & Barbara Powell, February 21

The United Steelworkers, which represents 30,000 U.S. oil workers, called on four more plants to join the biggest strike since 1980 as talks dragged on with Royal Dutch Shell Plc, negotiating a labor contract for oil companies.

The USW, with members at more than 200 refineries, fuel terminals, pipelines and chemical plants across the U.S., asked workers late Friday at Motiva Enterprises LLC’s Port Arthur refinery in Texas, the nation’s largest, to join a nationwide walkout on Saturday, and issued notices for three other plants to go on strike in 24 hours.

This brings the work stoppage — which began on Feb. 1 at nine sites from California to Texas and expanded to two BP Plc refineries in the Midwest a week later — to 12 refineries and 3 other facilities. The union has rejected seven contract offers from Shell, which is representing companies including Exxon Mobil Corp. and Chevron Corp.

An agreement would end a strike at U.S. plants that account for almost 20 percent of the country’s refining capacity. It’s the first national walkout of U.S. oil workers since 1980, when a work stoppage lasted three months. The USW represents workers at plants that together account for 64 percent of U.S. fuel output.

Previously: US oil workers on largest national strike since 1980

US oil workers on largest national strike since 1980

US union leaders have launched a large-scale strike at nine refineries after failing to agree on a new national contract with major oil companies.

BBC, February 1

It marks the first nationwide walkout since 1980 and impacts plants that together account for more than 10% of US refining capacity.

The United Steelworkers Union (USW) began the strike on Sunday, after their current contract expired and no deal was reached despite five proposals.

The USW said it “had no choice”.

“This industry is the richest in the world and can afford to make the changes we offered in bargaining,” USW International Vice President of Administration Tom Conway said in a statement.


Reuters: Workers strike for second day at nine U.S. oil, chemical plants

China’s Louisiana Purchase: Who’s building a methanol plant on the bayou?

Al Jazeera investigates ties between Louisiana and the Chinese government in a proposed $1.85 billion methanol plant.

Al Jazeera, By Massoud Hayoun, January 26

This article is part one of a three-part series on China’s role in redeveloping southern Louisiana called China’s Louisiana Purchase.

St. James Parish, LA — A prominent Chinese tycoon and politician — whose natural gas company has a dubious environmental and labor rights record that recently started coming under fire in the Chinese press — is parking assets in a multibillion dollar methanol plant in a Louisiana town. And he appears to be doing it with help from the administration of likely GOP 2016 presidential ticket contender Louisiana Gov. Bobby Jindal.

Not many locals in a predominantly black neighborhood of St. James Parish — halfway between New Orleans and Baton Rouge — know that Wang Jinshu, the Communist Party Secretary for the northeastern Chinese village of Yuhuang and a former delegate to the National People’s Congress, is the man at the helm of a $1.85 billion methanol plant to be built in their town over the next two years with a $9.5 million incentive package from the state. The details of the project are unclear, residents say, largely because they were not told about the project until local officials, amid discussions with state officials and Chinese diplomats, decided to move forward with the project in July 2014.

“We never had a town hall meeting pretending to get our opinion prior to them doing it,” said Lawrence “Palo” Ambrose, a 74-year-old black Vietnam War veteran who works at a nearby church. “They didn’t make us part of the discussion.”

The Cartel: How BP Got Insider Tips Through a Secret Chat Room

Bloomberg, By Liam Vaughan, December 29

Halfway down a muddy, secluded road on marshland in suburban Essex sits Wharf Pool, a lake stocked with some of the biggest freshwater fish you will ever see.

A white sign with red lettering reads: “Private Syndicate: Strictly Members Only.” A metal gate, a barbed-wire fence and two CCTV cameras bar the way. Anglers hoping to spend time on the lake’s carefully tended banks must join a waiting list. Those who make it to the top pay a membership fee that buys them the chance to catch a carp that weighs more than a Jack Russell. There are hundreds of them swimming beneath the surface. It’s close to shooting fish in a barrel.

An hour away by train, in London’s financial district, the lake’s owners ply their trade. Wharf Pool was purchased for about 250,000 pounds ($388,000) in 2012 by Richard Usher, the former JPMorgan Chase & Co. (JPM) trader at the center of a global investigation into corruption in the foreign-exchange market, and Andrew White, a currency trader at oil company BP Plc. (BP/)

With revenue of almost $400 billion last year and operations in about 80 countries, BP trades large quantities of currency each day. Traders at the company regularly received valuable information from counterparts at some of the world’s biggest banks — including tips about forthcoming trades, details of confidential client business and discussions of stop-losses, the trigger points for a flurry of buying or selling — according to four traders with direct knowledge of the practice.

Zero Hedge picks up the story: The Rigging Triangle Exposed: The JPMorgan-British Petroleum-Bank Of England Cartel Full Frontal

A New Jersey bid to privatize water without public votes

If approved by Gov. Christie, bill would give municipalities with aging pipes right to sell systems to private companies.

Al Jazeera, by Peter Moskowitz, December 29

A bill that would allow New Jersey municipalities to sell their public water utilities to private, for-profit corporations without putting the measure to voters is awaiting Gov. Chris Christie’s signature.

Until now, any municipality in New Jersey that sought to sell off its water system to a private bidder had to hold a public vote. But a bill passed with bipartisan support by the state’s Senate last week would allow municipalities with aging and deteriorating water systems to put their systems up for sale without holding a referendum.

While supporters of the bill say privatizing water systems could save municipalities money, it allows companies to factor the purchase price of the systems into the rates they charge customers, meaning taxpayers could ultimately be on the hook for the sale of their water systems.

Many New Jersey municipalities have turned to privatization as a way to get quick cash infusions for their deteriorating water systems. According to the Environmental Protection Agency, the state would need $41 billion over the next 20 years to repair its water, stormwater and wastewater systems.

[…]

If the bill is enacted, New Jersey would join several other states, including Illinois, Pennsylvania and California, where ballot measures are not required to sell water systems to private developers.

[…]

But even as more and more New Jersey cities, towns and boroughs turn to privatization, some have resoundingly rejected it. In 2010, Trenton voters rebuffed the sale of their water system 4 to 1. In November hundreds of voters in Sussex Borough also overwhelmingly rejected privatization. Still, Food and Water Watch, a nonprofit group based in Washington, D.C., has said, “New Jersey is one of the most receptive states to water privatization.”

LEAKED: Secret Negotiations to Let Big Brother Go Global

The ugly ramifications of the Trade in Services Act (TiSA)

Wolf Street, By Don Quijones, December 25

Much has been written, at least in the alternative media, about the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), two multilateral trade treaties being negotiated between the representatives of dozens of national governments and armies of corporate lawyers and lobbyists (on which you can read more here, here and here). However, much less is known about the decidedly more secretive Trade in Services Act (TiSA), which involves more countries than either of the other two.

At least until now, that is. Thanks to a leaked document jointly published by the Associated Whistleblowing Press and Filtrala, the potential ramifications of the treaty being hashed out behind hermetically sealed doors in Geneva are finally seeping out into the public arena.
Read More

Obama hopes to enlist GOP in push for trade pact, despite Democratic resistance

Washington Post, By David Nakamura, December 26

President Obama is preparing a major push on a vast free trade zone that seeks to enlist Republicans as partners and test his premise that Washington can still find common ground on major initiatives.

It also will test his willingness to buck his own party in pursuit of a legacy-burnishing achievement. Already, fellow Democrats are accusing him of abandoning past promises on trade and potentially undermining his domestic priority of reducing income inequality.

The dynamic, as the White House plots strategy for the new year when the GOP has full control of Congress, has scrambled traditional political alliances. In recent weeks, Obama has rallied the business community behind his trade agenda, while leading Capitol Hill progressives, including Sen. Elizabeth Warren (D-Mass.), have raised objections and labor and environmental groups have mounted a public relations campaign against it.

The administration is moving aggressively in hopes of wrapping up negotiations by the middle of next year on a 12-nation free-trade pact in the Asia Pacific before the politics become even more daunting ahead of the 2016 presidential campaign.

“This is an all-hands-on-deck moment for the administration,” said Rep. Ron Kind (D-Wis.), a pro-trade Democrat viewed by the administration as a key ally. “They need to get out and educate members and address the concerns they might have. I’ve been advising colleagues who are skeptical and not supportive of trade to at least engage in conversations and feedback.”

Natural gas flaring in Eagle Ford Shale already surpasses 2012 levels of waste and pollution

AP, December 21

San Antonio — Gas flaring in the most profitable shale field in the U.S. is on pace to surpass to 2013 levels of waste and pollution in South Texas, according to a newspaper analysis of state records published Sunday.

The Eagle Ford Shale burned off more than 20 billion cubic feet of natural gas in the first seven months of this year, according to the Railroad Commission of Texas, which oversees the oil and gas industry. The tons of pollutants released into the air already exceed levels for 2012.

Experts say plummeting oil prices likely won’t stifle Eagle Ford production anytime soon.

The San Antonio Express-News (http://bit.ly/1ATJFNW ) also found some of the top sources of flaring in 2014 lacked state-mandated permits to flare natural gas. The goal of flaring is to incinerate impurities, but it generates air pollution and carbon dioxide, a greenhouse gas that scientists say contributes to climate change.

Railroad Commission spokeswoman Ramona Nye said Friday that the agency sent violation notices to three energy companies after the newspaper asked about their permitting status.

Bankers Brought Rating Agencies ‘To Their Knees’ On Tobacco Bonds

Wall Street pressed S&P, Moody’s and Fitch to assign more favorable credit ratings to their deals and bragged that the raters complied. Now many of the bonds are headed for default.

ProPublica, By Cezary Podkul, December 23

When the economy nosedived in 2008, it didn’t take long to find the crucial trigger. Wall Street banks had peddled billions of dollars in toxic securities after packing them with subprime mortgages that were sure to default.

Behind the bankers’ actions, however, stood a less-visible part of the finance industry that also came under fire. The big credit-rating firms – S&P, Moody’s and Fitch – routinely blessed the securities as safe investments. Two U.S. investigations found that raters compromised their independence under pressure from banks and the lure of profits, becoming, as the government’s official inquiry panel put it, “essential cogs in the wheel of financial destruction.”

Now there is evidence the raters also may have succumbed to pressure from the bankers in another area: The sale of billions of dollars in bonds by states and municipalities looking to quickly cash in on the massive 1998 legal settlement with Big Tobacco.

A review by ProPublica of documents from 22 tobacco bond offerings sold by 15 state and local governments shows that bankers routinely bragged about having their way with the agencies that rated their products. The claims were brazen, the documents show, with bankers saying they routinely played one firm against its competitors to win changes to rating methods, jack up a rating or agree to rate longer-term, riskier bonds.

The Vanishing Male Worker: How America Fell Behind

New York Times, By Binyamin Appelbaum, December 11

Annapolis, MD — Frank Walsh still pays dues to the International Brotherhood of Electrical Workers, but more than four years have passed since his name was called at the union hall where the few available jobs are distributed. Mr. Walsh, his wife and two children live on her part-time income and a small inheritance from his mother, which is running out.

Sitting in the food court at a mall near his Maryland home, he sees that some of the restaurants are hiring. He says he can’t wait much longer to find a job. But he’s not ready yet.
Read More

Congress gives Native American lands to foreign mining company with new NDAA

RT, December 04

Congress is poised to give a foreign mining company 2,400 acres of national forest in Arizona that is cherished ancestral homeland to Apache natives. Controversially, the measure is attached to annual legislation that funds the US Defense Department.

This week, the House and Senate Armed Services Committees quietly attached a provision to the National Defense Authorization Act (NDAA) that would mandate the handover of a large tract of Tonto National Forest to Resolution Copper, a subsidiary of the Australian-English mining company Rio Tinto, which co-owns with Iran a uranium mine in Africa and which is 10-percent-owned by China.

The “Carl Levin and Howard P. ‘Buck’ McKeon National Defense Authorization Act for Fiscal Year 2015” – named after the retiring chairmen of the Senate and House Armed Services panels – includes the giveaway of Apache burial, medicinal, and ceremonial grounds currently within the bounds of Tonto. News of the land provision was kept under wraps until late Tuesday, when the bill was finally posted online.

The land proposed to be given to Resolution Copper, in exchange for other lands, includes prime territory Apaches have used for centuries to gather medicinal plants and acorns, and it is near a spot known as Apache Leap, a summit that Apaches jumped from to avoid being killed by settlers in the late 19th century.

The Downside of the Boom

North Dakota took on the oversight of a multibillion-dollar oil industry with a regulatory system built on trust, warnings and second chances. The cooperative approach doesn’t seem to generate results.


NYT -In early August 2013, Arlene Skurupey of Blacksburg, Va., got an animated call from the normally taciturn farmer who rents her family land in Billings County, N.D. There had been an accident at the Skurupey 1-9H oil well. “Oh, my gosh, the gold is blowing,” she said he told her. “Bakken gold.”

It was the 11th blowout since 2006 at a North Dakota well operated by Continental Resources, the most prolific producer in the booming Bakken oil patch. Spewing some 173,250 gallons of potential pollutants, the eruption, undisclosed at the time, was serious enough to bring the Oklahoma-based company’s chairman and chief executive, Harold G. Hamm, to the remote scene.

More of this lengthy, detailed article at the link.   (image: Brent McDonald/NYT)

US Federal Reserve Initiates Investigation of New York Federal Reserve

Value Walk, By Mark Melin, November 21

After press reports reveal more than a cozy relationship, but sharing of confidential documents, investigation called for on eve of Senate testimony on the issue

After a withering expose in The New York Times that showed bank regulators at the New York Federal Reserve sharing confidential information with Goldman Sachs and earlier disclosure from secret tapes inside the New York Fed showed regulators providing the large Wall Street bank kid glove treatment, comes a two-pronged investigation and a call for structural changes.

In a letter to the Inspector General for the Federal Reserve System and the Consumer Financial Protection Bureau Thursday, Scott Alvarez, general counsel at the Federal Reserve Board of Governors, and Michael Gibson, director of banking supervision, both with primary offices in Washington DC, are requesting an investigation into the operations at the New York Federal Reserve and other locations.

“After consultation with the Chair and other Board members, we respectfully request that the Office of the Inspector General conduct a review of… the manner in which the Federal Reserve System conducts examinations of large banking organizations (with over $50 billion in total assets),” the letter requested. The vast majority of such banks are located in New York City.

The Washington DC-based inspector-general is being asked to examine if there are “adequate methods for decision makers to obtain all the necessary information to make supervisory assessments” and if there are channels, both within and outside the immediate chain of command, for decision-makers to be aware of divergent views about material issues regarding large banking organizations addressed by the members of the dedicated examination team?

New York Times: New Scrutiny of Goldman’s Ties to the New York Fed After a Leak
ProPublica: Federal Reserve Announces Sweeping Review of Its Big Bank Oversight