Michael J. de la Merced & Andrew Ross Sorkin | November 1

NYT - General Electric and the cable giant Comcast have moved closer to a deal giving control of NBC Universal to Comcast, and a formal announcement could be made sometime next week, people briefed on the talks said Sunday.

After a series of meetings last week, the two companies reached a tentative agreement on Friday over the main points of a deal, these people said. Comcast would own about 51 percent of NBC Universal, contributing several billions of dollars in cash and its own stable of cable networks to the new venture.

Linda Shen | Nov 2

Bloomberg - CIT Group Inc.’s decision to seek court protection probably will keep money flowing to bondholders and 1 million customers of the 101-year-old commercial lender. Shareholders and taxpayers won’t be as fortunate.

CIT’s Chapter 11 bankruptcy may give bondholders new notes at 70 cents on the dollar plus new common stock, and Chief Executive Officer Jeffrey Peek said clients will be able to get funds. Common stock owners could be mostly wiped out, and the U.S. Treasury Department said it won’t recoup much, if any, of the $2.33 billion of taxpayer money that went into CIT, the largest firm to go bankrupt after getting a federal bailout.

“It doesn’t look too good for the government preferred or any preferred holders,” Brian Charles, a debt analyst at New York-based brokerage RW Pressprich & Co., said yesterday. “It’s unlikely common shareholders realize any value.”

Nov 1

BBC - UK: Government to create bank chains

The government is to create three new High Street banking chains by 2015 as part of a major overhaul of the sector.

They will be set up by selling off parts of Royal Bank of Scotland, Lloyds and Northern Rock - the banks which had to be bailed out by the taxpayer.

Ministers and the European Competition Commissioner are in talks over the move, which would go some way to recoup the public money invested in the banks.

There is speculation that buyers might include Tesco and Virgin.

The new chains will be standard retail banks concentrating on deposits and mortgages.

In order to boost competition, they will only be sold to new entrants to the UK banking market and not to existing financial institutions.

Ministers say that creating more competitors on the High Street in this way will invigorate the mortgage market and ultimately lead to a better deal for customers.

Greg Gordon | Nov 1

McClatchy - In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers that it also was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Now, a five-month McClatchy investigation has found that Goldman's failure to disclose those secret bets may have violated securities laws.

Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.

Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.

Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy investigation has found that Goldman's failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws.

"The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion," said Laurence Kotlikoff, a Boston University economics professor who's proposed a massive overhaul of the nation's banks. "This is fraud and should be prosecuted."

Washington | Oct 28

AFP - Financial companies with more than 10 billion dollars in assets will have to pay for rivals' failures or rescues, under draft legislation which has been released by the US Treasury and lawmakers.

The plan to address systemic risk in the financial sector will wind down failing institutions and end "too big to fail" bailouts that have been borne by taxpayers, the Treasury and the House Financial Services Committee said Tuesday.

The proposed Financial Stability Improvement Act "provides for the orderly wind-down of failing firms and ends 'too big to fail' to ensure that industry and shareholders absorb the risks and costs of failure, not taxpayers," they said in a statement.

The measure would be a cornerstone of President Barack Obama's commitment to reform financial regulation and avert costly taxpayer bailouts of banks and other financial firms.

"The Financial Services Committee and the Obama administration are committed to ensuring that the taxpayers are never again called upon to take responsibility for Wall Street's business decisions," the bill's sponsors said.

Government is outsourcing a variety of important tasks to private contractors, who operate with little oversight

"In her new book, One Nation Under Contract, Allison Stanger documents in stunning detail the extent to which the United States has turned much of its most important work over to private contractors whose motivation is profit and level of public accountability near zero.

“Lockheed Martin . . . gets more federal money each year than the Departments of Justice or Energy. Lockheed Martin sorts your mail, tallies up your taxes, cuts social security checks, counts people for the US census, runs space flights, and monitors air traffic.’’ In fact, “in this new world,’’ she writes, “the private sector increasingly handles the everyday business of governing.’’

Martin Hickman | Oct 24

The Observer - Commitment aimed at halting ecological damage done in South-east Asia

Marks & Spencer will commit to paying more for sustainable palm oil across its entire range of products today in an attempt to limit environmental damage in south-east Asia.

In a rolling programme over the next six years, M&S will buy GreenPalm certificates for sustainably produced palm oil equivalent to the amount it uses in almost 1,000 food, beauty and home products. Like other food manufacturers, M&S pours palm oil, the world's cheapest vegetable fat, into a wide variety of food and household products such as biscuits and convenience foods.

By early next year, the retailer said nine products, including 200g packs of oatcakes, a 500g cookie selection and seven types of cooked potatoes, would be covered by the GreenPalm scheme. By 2015, it promised to buy certificates for all relevant products. M&S, which would not disclose the cost of the commitment, is also funding a 120-acre wildlife corridor between plantations in Borneo.

Ashley Seager, Julia Kollewe & Kathryn Hopkins | London | October 23

The Guardian - The British economy is mired in its longest recession on record, as government figures out this morning showed a shock 0.4% drop in gross domestic product (GDP) in the third quarter of the year.

The figures confounded widespread hopes that the economy had returned to growth after five consecutive quarters of recession.

City economists had almost unanimously expected a small increase in GDP. Quarterly records go back to 1955 and show there has never until now been six quarters of contraction in a row.

What this article describes is not capitalism. It's parasitism, plain and simple:

But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.

Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years.

In the grand scheme of things a mattress company isn't a top line productive industry, and yet, they still actually make things, as opposed to the bloodsuckers on Wall Street who literally raped the company.

Martin Mittelstaedt | Oct 18

Globe and Mail - Embassy in Washington asks agency to alter plan that would force lake freighters to stop burning dirty bunker fuel

The U.S. Environmental Protection Agency has proposed tough new measures to reduce the health toll from air pollution around the Great Lakes by forcing lake freighters to stop burning dirty bunker fuel.

But the plan has an unusual opponent: The Canadian embassy in Washington has quietly asked the EPA to weaken the measures, arguing that they could harm trade. It wants ships to be allowed to continue using the high-polluting fuel and to instead install smokestack scrubbers that would clean up their emissions. The Canadian recommendation, if accepted, could delay the clean-air measure for years, because the technology for the scrubbers does not yet exist.

The embassy asked the EPA to make the changes in a letter last month, marking a rare instance in which Canada has lobbied the United States to weaken air-pollution controls designed to reduce health problems linked to breathing dirty air. Because winds carry contaminants back and forth across both sides of the Canada-U.S. border, the EPA proposal would also lead to air-quality improvements in Canada.

The Canadian position is supported by the Great Lakes shipping industry, which is warning that the costs of complying with the proposed environmental regulations are so high that they will force companies to scrap some of the iconic steamers that now ply the lakes carrying everything from salt to iron ore.

Kevin G. Hall | Washington | Oct 18

McClatchy - As the housing market collapsed in late 2007, Moody's Investors Service, whose investment ratings were widely trusted, responded by purging analysts and executives who warned of trouble and promoting those who helped Wall Street plunge the country into its worst financial crisis since the Great Depression.

A McClatchy investigation has found that Moody's punished executives who questioned why the company was risking its reputation by putting its profits ahead of providing trustworthy ratings for investment offerings.

Instead, Moody's promoted executives who headed its "structured finance" division, which assisted Wall Street in packaging loans into securities for sale to investors. It also stacked its compliance department with the people who awarded the highest ratings to pools of mortgages that soon were downgraded to junk. Such products have another name now: "toxic assets."

As Congress tackles the broadest proposed overhaul of financial regulation since the 1930s, however, lawmakers still aren't fully aware of what went wrong at the bond rating agencies, and so they may fail to address misaligned incentives such as granting stock options to mid-level employees, which can be an incentive to issue positive ratings rather than honest ones.

New York Times, By David W. Dunlap & James Estrin, October 14

Any effort to describe the photography of Lu Guang by reference to the work of other artists would almost certainly invoke the name of W. Eugene Smith. (It is, for instance, just about impossible to look at Slide 4 without thinking of “Tomoko Uemura in Her Bath.”)

So it seems especially fitting that Mr. Lu, a Chinese freelancer, is the recipient of this year’s $30,000 W. Eugene Smith Grant in Humanistic Photography for his project, “Pollution in China.” The announcement was made Wednesday evening in New York by the W. Eugene Smith Memorial Fund on the occasion of its 30th anniversary.

Graham Bowley | Oct. 16

NYT - A celebrated Goldman Sachs partner, Gus Levy, coined the maxim that long defined the bank, the savviest and most influential firm on Wall Street: “Greedy, but long-term greedy.”

But these days that old dictum is being truncated to just “greedy” by some Goldman critics. While many ordinary Americans are still waiting for an economic recovery, Goldman and its employees are enjoying one of the richest periods in the bank’s 140-year history.

[snip]But despite Goldman’s success or, perhaps, because of it, the bank has come to symbolize for many a return to wanton Wall Street excess. Even in 2008, the most tumultuous year in modern Wall Street history, Goldman employees reaped rewards that most people can only dream about. Goldman paid out $4.82 billion in bonuses last year, awarding 953 employees at least $1 million each and 78 executives $5 million or more. The rewards for 2009 will be far greater.

A comment from Numerian worth a full post on its own:

At first glance, the top line number for Goldman Sachs’ third quarter performance looks spectacular: Net Revenue of $12.37 billion, and $3.19 billion of Net Income. These numbers were multiples larger than the results for the third quarter last year, at the peak of the credit crisis, when Goldman converted itself into a commercial bank. It’s when you look into the details you realize that Goldman didn’t make its numbers this quarter as a commercial bank, nor even as an investment bank (which is what it used to be), but as a hedge fund.

Is there any question that Goldman is a leech on the body-politik of the United States? While the rest of the country struggles to get by Goldman is earning billions every quarter and giving your tax dollars away to the 'best and brightest':

Goldman also disclosed how much it had set aside for its annual bonus pool. It said that it had earmarked $5.35 billion in compensation and benefits, an increase of 84 percent from the year earlier period, putting it on course for a record payout to its executives by the end of 2009.

It's just obscene.

As someone asked a while back about Goldman:

Would someone from the NY Fed kindly explain the precise nature of the waiver that has been granted to Goldman so that it can operate in this fashion? If this is temporary, is it envisaged that Goldman will cease being a bank holding company, or that it will divest itself shortly of activities not usually allowed (and with good reason) by banks? Or will all bank holding companies be allowed to expand on the same basis.

Can we get some answers?

David Cho | October 11

WaPo - The financial crisis has blown a hole in the rosy forecasts of pension funds that cover teachers, police officers and other government employees, casting into doubt as never before whether these public systems will be able to keep their promises to future generations of retirees.

The upheaval on Wall Street has deluged public pension systems with losses that government officials and consultants increasingly say are insurmountable unless pension managers fundamentally rethink how they pay out benefits or make money or both.

Washington | Oct 6

UPI - Boeing and international academic and business partners are looking into ways of producing commercially viable aviation fuel from saltwater plants in a push toward reducing carbon emissions from air travel.

The Boeing Co. said scientific studies were focused on salicornia bigelovii and saltwater mangroves -- plants known as halophytes.

Research conducted in the United States, Abu Dhabi, the United Arab Emirates and other locations showed the plants thrive when irrigated with seawater and can be produced in large quantities to extract biofuel suitable for aircraft.

Aviation industry analysts said a biofuel substitute for hydrocarbons used in air travel could help ease environmentalist concerns over aviation's carbon footprint.

A switch from expensive, high-octane aviation fuel to biofuels could also help counter a rising global aversion to air travel because of the perceived damage to the Earth's ecology, said the analysts.

Brian Cloughley | Daily Times

Exxon Mobil is a classic case of rampant corporate greed. Its executives and shareholders prosper mightily, while citizens of the many countries which the company exploits are kept in direst poverty

On September 4, the US Congressional Research Service published details of US arms’ sales worldwide. It reported that the United States was responsible for 68.4 percent of global sales of arms in 2008, making $37.8 billion, up from the previous year’s former record of $25.4 billion. Weapons deals for the first half of 2009 totalled $27 billion.

That’s an awful lot of weaponry being sold around the world — and enormous profits for America’s arms manufacturers.

On September 14, President Chavez of Venezuela, who distrusts Washington almost to the point of paranoia, but with certain justification, announced the purchase from Russia of weapons worth about $2.2 billion.

And the following day, US Secretary of State Hillary Clinton, in mega-scolding mode, declared that in acquisition of weapons the Venezuelans “outpace all other countries in South America and certainly raise the question as to whether there is going to be an arms race in the region.”

This would be side-splittingly funny were it not indicative of the arrogant mindset of establishment Washington, in spite of the supposedly liberal inclinations of the Obama administration. In 2006-2007 the US sold weapons to 174 of the world’s 195 countries, yet unblushingly castigates a South American nation that buys weapons from Russia.

Cecilia Kang | Washington | October 6

WaPo - Bloggers who offer endorsements must disclose any payments they have received from the subjects of their reviews or face penalties of up to $11,000 per violation, the Federal Trade Commission said Monday.

The agency, charged with protecting consumer interests, had not updated its policy on endorsements in nearly three decades, well before the Internet became a force in shaping consumer tastes. The new rules attempt to make more transparent corporate payments to bloggers, research firms and celebrities that help promote a product.

Cahal Milmo | Sept 26

The Independent -

Tankers full of oil its owners don't want to sell. Shady deals with brutal regimes. Vast profits. Pollution scandals. Cahal Milmo investigates a very murky business

With a combined capacity for 313,000 tonnes of oil, the Delta Ios and the NS Burgas supertankers were launched two months ago to criss-cross the globe in search of trade. Instead, the vast vessels were to be found yesterday lying idle off the coast of Singapore after their owners were paid by two of the world's richest and most secretive oil companies to turn them into floating petrochemical warehouses.

At first glance, the decision by Trafigura Group and Vitol Holding BV to charter the newly built ships at an estimated cost of £47,000 a day to do nothing for up to four months in South-east Asia while laden with cargos of diesel worth at least £77m per vessel makes little economic sense.

When this is combined with the fact that the Delta Ios and the NS Burgas are just two ships in an enormous fleet of tankers which are currently being paid about £80m a month by independent oil traders like Trafigura and Vitol, as well as giants such as Shell, to stay anchored around the globe with anything between 50 and 150 million barrels of redundant crude on board, it seem that the ruthless barons of black gold must be losing money as fast as they can make it.

Far from it. The phenomenon of "floating storage", which has been brought about by a huge over-supply of global tanker capacity and unusual market conditions, is just one example of the multitude of ways in which a small group of private, mostly Swiss-based companies have become adept at turning vast profits from the closed and often murky world of independent oil trading.

Kevin G. Hall | Washington | Sept 24

McClatchy Newspapers - If you doubt that U.S. banks long to return to the days of impotent regulation, you need only look at one of the financial sector's top legislative priorities: killing a proposed new agency that would be dedicated solely to protecting consumers' financial interests.

The Obama administration is asking Congress to create a new Consumer Financial Protection Agency to regulate consumer financial products ranging from credit cards to mortgages, and to simplify disclosure about them all.

Though virtually every cause of the nation's recent financial crisis was rooted in weak consumer protection, the U.S. Chamber of Commerce is leading the fight against the proposed agency on grounds that it would make credit less available and more costly. The American Bankers Association, the Independent Community Bankers of America, and the Financial Services Roundtable also oppose the measure.

globeSt.com - NEW YORK CITY-The major ratings agencies say they’re going to carefully scrutinize new oversight rules announced by the Securities and Exchange Commission on Thursday. In a release, the SEC says it has adopted or proposed measures intended to “improve the quality of credit ratings by requiring greater disclosure, fostering competition, helping to address conflicts of interest, shedding light on rating shopping and promoting accountability.”

The release says the commission has adopted rules to provide greater information concerning ratings histories “and to enable competing credit rating agencies to offer unsolicited ratings for structured finance products, by granting them access to the necessary underlying data for structured products.” It has also amended its rules and forms to omit “certain references to credit ratings” by nationally recognized statistical rating organizations, including locally based Moody’s Investors Services, Fitch Ratings and Standard & Poor’s, among others.

Rudy Ruitenberg | Paris | September 18

Bloomberg - More than 60,000 European dairy farmers halted or reduced milk deliveries today to protest falling prices and plans to scrap production quotas, an industry group said.

Farmers across the European Union will dump more than 350,000 liters (92,350 gallons) of milk in fields and streets today in protest, the European Milk Board said in a statement on its Web site. Belgian farmers discharged 4 million liters of milk worth 600,000 euros ($882,250) earlier this week, it said.

New York | Sept 14

DPA - A New York judge on Monday threw out a government settlement with Bank of America for misleading its investors about billions of dollars in bonuses paid to Merrill Lynch executives when it acquired the investment bank.

In throwing out the 33-million-dollar settlement with the Securities and Exchange Commission, Judge Jed Rakoff ensured that the case would appear in court before February 1.

While seeking stockholder approval of the deal to acquire Merrill Lynch, the Bank of America said that Merrill would not pay year-end bonuses to its executives. But the bank had actually already reached a deal with Merrill Lynch that allowed it to pay 5.8 billion dollars in bonuses.

The SEC alleges that stockholders were misled when they were told no bonuses would be paid, while the companies had actually already agreed on a payment plan. This information must be disclosed under financial regulations. Under the SEC settlement announced last month, the bank agreed to pay a fine without admitting fault.

The judge called the settlement neither fair or adequate, noting that the bank's managers could come out of the agreement unfazed. His decision to toss out the agreement is unusual, as most such settlements are approved.

The man who saw the meltdown coming had another troubling insight: it will happen again

The Boston Globe, By Stephen Mihm, September 13

Since the global financial system started unraveling in dramatic fashion two years ago, distinguished economists have suffered a crisis of their own. Ivy League professors who had trumpeted the dawn of a new era of stability have scrambled to explain how, exactly, the worst financial crisis since the Great Depression had ambushed their entire profession.

Amid the hand-wringing and the self-flagellation, a few more cerebral commentators started to speak about the arrival of a “Minsky moment,” and a growing number of insiders began to warn of a coming “Minsky meltdown.”