Tag: ek Politics

Blackstone Unit Wins in No-Lose Codere Trade: Corporate Finance

By Stephanie Ruhle, Mary Childs, and Julie Miecamp, Bloomberg News

2013-10-22 15:02:47

GSO, the New York-based credit investing unit of Blackstone, the world’s largest private-equity firm, bought Codere’s bonds and credit-default swaps in the first half of this year, hoping to profit from differences in pricing of the instruments in what’s known as a basis trade, according to a person familiar with the transactions.

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The company’s willingness to pay the coupon late helped ease restructuring negotiations as many bondholders also held credit-default swaps and would benefit from a missed payment, the person said. Codere made the August payment two days after a 30-day grace period, and the International Swaps & Derivatives Association ruled that there was a failure-to-pay credit event, resulting in a $197 million payment to holders of the swaps.

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“As a lender, the idea is to help somebody make payments on their debt,” said Bonnie Baha, the head of global developed credit at Los Angeles-based DoubleLine Capital LP, which manages about $53 billion. “It’s generally not to pay them not to make payments on their debt so that you can benefit via a derivative instrument.”

Blackstone Made Money on Credit-Default Swaps With This One Weird Trick

By Matt Levine, Bloomberg News

2013-12-05 22:47:32Z

The Blackstone Codere trade — in which Blackstone Group LP bought credit-default swaps on troubled Spanish gaming company Codere SA, then agreed to roll a $100 million revolver for Codere on favorable terms in exchange for Codere agreeing to make an interest payment on some bonds two days late, thus creating a technical default and triggering the CDS, pocketing some gains for Blackstone at the expense of the CDS writers, without costing Codere anything — is such a glorious pinnacle of financial achievement that of course someone had to make a television show about it. I would have preferred a prime-time miniseries, but what we got is a “Daily Show” segment, and that will have to do.

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Really, the only reason to cover this story is its majestic beauty. Which is a great reason to cover it, don’t get me wrong; it’s just that aesthetic appreciation of clever derivatives trades is sort of a specialized niche. Certainly “The Daily Show” didn’t muster much admiration and instead spent seven minutes criticizing everyone else for not covering the story. This is wrong. This trade is so lovely that the proper reaction is to love it and cherish it and hold it close to your heart, not to complain that nobody else does.

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The credit-default swaps market is a way to express in terms of money the market’s estimate of a company’s chance of default — real default, not missing a payment by two days — in the future. Blackstone found a way to turn that expression in terms of money into money. One day it had a CDS contract with a mark-to-market value of 11 million euros or whatever; the next day it had 11 million euros. One day the banks were taking risk on Codere’s credit that had gone against them to the tune of 11 million euros; the next day they had no risk and 11 million fewer euros. The risk that they got rid of was still worth about 11 million euros.

In protest, Festivus pole put up at Fla. Capitol

By Associated Press

Wednesday, December 11, 3:33 PM

“What’s the point? There is no point. It’s ridiculous. This is the most ridiculous thing I could come up with,” said Stevens, an atheist. “This is about the separation of church and state.”

Because Florida considers the Statehouse rotunda to be a public forum, people can use the space to express themselves or protest, as long as they first apply with a state agency.

Along with the Nativity scene and six-foot Festivus pole, the Wisconsin-based Freedom From Religion Foundation has put up a banner advocating for the separation of government and religion. A Festivus pole is also on display at the Wisconsin Capitol, along with other displays.

The Arctic Is the First Line of Defense Against a Climate Transition to an Uninhabitable Earth

By DH Garrett, Truthout

Tuesday, 10 December 2013 09:46

Humanity – and the Earth system it is a part of – is moving toward an Anthropocene Thermal Max (ATM), which will be cataclysmic for the ecosystem and the human societies it sustains. Despite the fact that climate scientists are uniform in stating that remaining hydrocarbon energy resources must be kept in the ground if we are to have a chance of stopping at a peak temperature that affords a chance of adaptation, the world’s major transnational energy companies and the world’s arctic nations are moving at breakneck speed to develop arctic resources. This is the story of three ATMs. First: the earth system can no longer be treated as an ATM; capitalistic economics as currently configured is dangerously out of kilter with real costs. Second: the great focus of both global and local efforts must be on making the ATM (Anthropocene Thermal Max) as low as possible. Third: an ATM (Arctic Transnational Moratorium) must be put in place now if the great majority of humanity is to have a reasonable prospect of adapting to climate-change-induced, nonlinear changes already programmed into the Earth-climate system.

TransCanada Begins Injecting Oil Into Keystone XL Southern Half

By: Steve Horn, Firedog Lake

Tuesday December 10, 2013 1:48 pm

Keystone XL’s southern half is one step closer to opening for business. TransCanada announced that “on Saturday, December 7, 2013, the company began to inject oil into the Gulf Coast Project pipeline as it moves closer to the start of commercial service.”

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According to a statement provided to DeSmog by TransCanada, “Over the coming weeks, TransCanada will inject about three million of [sic] barrels of oil into the system, beginning in Cushing, Oklahoma and moving down to the company’s facilities in the Houston refining area.”

In mid-January, up to 700,000 barrels per day of Alberta’s tar sands diluted bitumen (dilbit) could begin flowing through the 485-mile southern half of TransCanada’s pipeline, known as the Gulf Coast Project. Running from Cushing, Oklahoma to Port Arthur, Texas, the southern half of the pipeline was approved by both a U.S. Army Corps of Engineers Nationwide Permit 12 and an Executive Order from President Barack Obama in March 2012.

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Residents living along the length of the southern half will have no clue about the rest of the start-up process, as TransCanada says it won’t provide any more information until the line is already running. “For commercial and contractual reasons, the next update we will provide will be after the line has gone into commercial service,” the company announced.

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The Keystone XL line fill comes just weeks after Public Citizen released an investigation revealing potentially dangerous anomalies such as dents, faulty welding and exterior damage that the group suggests could lead to pipeline ruptures, tears and spills.

“Public Citizen] and its citizen sources uncovered over 125 anomalies in that half of the line alone,” DeSmogBlog [reported on November 12. “These findings moved Public Citizen to conclude the southern half of the pipeline shouldn’t begin service until the anomalies are taken care of, and ponders if the issues can ever be resolved sufficiently.”

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Chief Seattle is said to have said, “The Earth does not belong to man; man belongs to the Earth. All things are connected like the blood that unites us all. Man did not weave the web of life; he is merely a strand in it. Whatever he does to the web, he does to himself.” It is ironic that an American such as myself should quote a Native American, a people we perpetrated genocide upon. It is tragic that an American would quote a fellow human being who had a different relation with nature than the one my culture imposed upon his continent. I do not mean to romanticize traditional lifestyles, but the indigenous view of the world, in terms of the human intimate, important, connection with nature is correct. The understanding of the interconnection of all living things is perfectly scientifically accurate. It is we “moderns” in our boxes, in our cars, in our shopping malls, who have become very sick.

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Some good news from lambert @ Corrente–

Ministers miss 2013 deadline for US-led trade pact

By Martin Abbugao, AFP

5 hours ago

Barack Obama has hailed the TPP as a centrepiece of renewed US engagement in Asia, saying it contains market-opening commitments that go well beyond those in other free-trade accords.

The TPP talks also cover areas not included in other pacts, such as the environment and labour standards.

But the complexity of the issues already caused negotiators to miss the original 2012 deadline set by Obama to reach a deal.

They have been divided on a number of issues, including opening up Japan’s auto and farm markets, government procurement and limiting the role of state-owned enterprises — said by some countries to distort competition.

Patent issues — in particular on medicines — have also been a sticking point.

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(G)roups like humanitarian organisation Medecins Sans Frontieres (Doctors Without Borders) say such patent protection would restrict access to cheaper generic drugs for millions of poor people.

US Fails To Close TPP Deal As Wikileaks Exposes Discord

Emma Woollacott, Forbes

12/10/2013 @ 9:28AM

The announcement comes as Wikileaks releases an internal memo and spreadsheet, revealing that the US is putting heavy pressure on other nations to conform with its demands.

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The statement coincides with the release of two more documents from Wikileaks which reveal just how far apart the US is from the other nations involved in the treaty, with 19 points of disagreement in the area of intellectual property alone. One of the documents speaks of “great pressure” being applied by the US.

Australia in particular is standing firm, objecting to the US’ proposals for copyright protection, parallel importation proposals and criminalization of copyright infringement. It’s also opposed to a measure supported by all the other nations involved to limit the liability of ISPs for copyright infringement by their users. Japan, too – which only joined the talks in March – has vowed to protect its agricultural markets, which the US wishes to see opened up.

But the TPP is causing increasing disquiet in the US, as well as around the world. Over the weekend, campaign group Knowledge Ecology International (KEI) revealed that Nobel prize-winning economist Joseph Stiglitz of the Columbia University School of Business has written to the negotiators, calling on them to resist a tranche of measures that he says would weaken the 2001 Doha Declaration on TRIPS and Public Health.

These include extending patent terms and lowering the threshold for patentability of medicines, making surgical procedures patentable and mandating monopolies of 12 years on test data for biologic drugs. He also objects to the granting of compulsory licenses on patents, increasing damages for patent and copyright infringement, placing lower limits on injunctions, narrowing copyright exceptions and extending copyright protection to life plus 70 years.

“The TPP proposes to freeze into a binding trade agreement many of the worst features of the worst laws in the TPP countries, making needed reforms extremely difficult if not impossible,” he writes.

(Note: link to the Stiglitz letter added.)

Countries Remain Opposed to Some of More Extreme US Proposals in TPP Negotiations, According to WikiLeaks

By: Kevin Gosztola, Firedog Lake

Monday December 9, 2013 6:50 pm

“It should be mentioned that the US is exerting great pressure to close as many issues as possible this week,” the document reads. “[U.S. Chief] met with all twelve countries and said that they were not progressing according to plan.”

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Large differences on how to handle “intellectual property” persisted and introduced “serious doubts” as to what would happen in Singapore.

Discussions on the environment went nowhere because the countries could not agree on the definition of “environmental law.”

On financial services, “positions” were “still paralyzed.” The US showed “zero flexibility.” And, as for the issue of agricultural export subsidies, “all TPP countries except the US are committed to eliminating them.

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The US has been and remains the only country to support its own proposal to establish criminal offenses for “unintentional infringements of copyright, related rights and trademarks.”

All countries, after Salt Lake City, oppose the United States’ current proposals or positions on pharmaceuticals.

Democrat-Friendly! New and Improved Caricature of Barack Obama

Ruben Bolling–

I believe that any site or publication has the right to refuse to publish any cartoonist or writer that they don’t want in thier pages.  And Daily Kos is a great site that has done a world of good not only in American politics, but also for my small world of alternative cartooning, and for me.  But to refuse publication specifically on these unwarranted grounds at the very least requires my vocal objection.  I’m standing up to say that I believe that Ted’s depiction of Barack Obama is no way racist.

(h/t Stephanie Kelton @ New Economic Perspectives)

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NSA Surveillance Fallout Costs IT Industry Billions

Mathew J. Schwartz, InformationWeek

11/27/2013 01:10 PM

Analysts predict US tech companies may lose $180 billion by 2016 due to international concerns about intelligence agencies’ spying.

For US technology firms that sell hardware, software, and services, that would be a collective loss of $22 billion to $35 billion through 2016 due to foreign businesses and governments worrying if the National Security Agency (NSA) can spy on those products or services. That figure comes via the Information Technology & Innovation Foundation (ITIF), a Washington-based policy research group backed by many leading technology firms, including Cisco, Google, IBM, and Intel.

“The potential fallout is pretty huge given how much our economy depends on the information economy for its growth,” Rebecca MacKinnon, a senior fellow at Washington-based policy group New America Foundation, told Bloomberg. “It’s increasingly where the U.S. advantage lies.”

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“If a foreign enemy was doing this much damage to the economy, people would be in the streets with pitchforks,” Sen. Ron Wyden (D-Ore.) said last month at a Cato Institute conference, The Washington Times reported. Likewise, Rep. James Sensenbrenner (R-Wis.), who authored the Patriot Act, which the White House said authorizes the NSA’s digital dragnet, has accused the intelligence agency of overreaching. Some critics, however, have asked why Congressional oversight mechanisms failed to rein in the NSA’s surveillance programs.

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Richard Salgado, Google’s director of law enforcement and information security, warned the Senate Judiciary Subcommittee on Privacy, Technology, and the Law that the NSA’s spying activities had caused governments in some countries — including Brazil and Norway — to rethink how they’ll procure cloud services or work with US firms. Brazil, for example, has introduced a bill that would require service providers such as Google to store all Brazilian data in the country or risk massive fines.

Salgado, in his testimony, said those types of efforts could undermine today’s Internet. “If data localization and other efforts are successful, then what we will face is the effective Balkanization of the Internet and the creation of a ‘splinternet’ broken up into smaller national and regional pieces with barriers around each of the splintered Internets to replace the global Internet we know today,” he said.

NSA: We Steal Industry Secrets, But Not for Competitive Advantage

by emptywheel

Posted on December 2, 2013

The NSA has uttered various versions of this claim since the Snowden leaks started. But I find this formulation particularly telling. NSA is not denying they steal industry secrets (nor could they, since we know they’ve stolen data from corporations like Petrobras and have stolen secrets from a range of hacking targets).

They’re just denying they steal secrets in order to give US companies a competitive advantage.

Of course, they’re not calculating the advantage that having the world’s most voracious COMINT spy might have for owners of IP. They’re not talking about how intelligence on opposition to US products (like GMO or untested chemicals) translates into industrial advantage. They’re not talking about how spying influences the work of Defense Contractors (who do, of course, also sell on the international market). They’re not talking about how larger financial spying ultimately gives American companies an advantage.

But so long as NSA’s workers can tell their mother-in-law they’re not facilitating US cheating (which they are), it’s all good, I guess.

Guardian will not be intimidated over NSA leaks, Alan Rusbridger tells MPs

Nick Hopkins and Matthew Taylor, The Guardian

Tuesday 3 December 2013 12.34 EST

The Guardian has come under concerted pressure and intimidation designed to stop it from publishing stories of huge public interest that have revealed the “staggering” scale of Britain’s and America’s secret surveillance programmes, the editor-in-chief of the newspaper has said.

Giving evidence to a parliamentary committee about stories based on the National Security Agency leaks from the whistleblower Edward Snowden, Alan Rusbridger said the Guardian “would not be put off by intimidation, but nor are we going to behave recklessly”.

He told MPs that disclosures from the files had generated a global debate about the powers of state agencies, and the weaknesses of the laws and oversight regimes they worked within.

“In terms of the broader debate, I can’t think of a story in recent times that has ricocheted around the world like this has and which has been more broadly debated in parliaments, in courts and amongst NGOs,” he said.

“The roll call of people who have said there needs to be a debate about this includes three presidents of the United States, two vice-presidents, generals, the security chiefs in the US [who] are all saying this is a debate that in retrospect we had to have.”

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Nick Pickles, director of Big Brother Watch, said: “Newspapers around the world, from the Guardian to the Washington Post and Der Spiegel, have done what our own parliamentary oversight committee and other oversight bodies failed to do: they exposed unprecedented surveillance being undertaken without the knowledge or approval of our elected representatives.

“Spies spy, but they should not be able to write their own rules, exploiting woefully out-of-date legislation to collect information on millions of innocent people.

“If the three intelligence chiefs had previously faced anywhere near as rigorous cross-examination then perhaps we would not have been so dependent on the Guardian and other newspapers to learn just how out of control surveillance had become.”

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Yesterday the UN special raporteur on counter-terrorism and human rights, Ben Emmerson, announced he was launching an investigation into the surveillance programmes operated by GCHQ and the NSA.

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“The astonishing suggestion that this sort of journalism can be equated with aiding and abetting terrorism needs to be scotched decisively,” Emmerson said. “Attacking the Guardian is an attempt to do the bidding of the services themselves, by distracting attention from the real issues.”

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As you know our boys were off this week for the holiday, but Jon left us some web exclusive, on topic lessons in institutional dysfunction.

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