28 posts tagged “corruption”
Recently, I posted some information about how companies use High Frequency Trading techniques as a way to reap profits by acting as a middleman of sorts. They are able to get between orders being placed in nanoseconds, affecting the price that you and I and mutual funds pay. Through the wonders of croneyism in our society amongst those in power, there are no laws against this practice. Here is a review:
HFT computers can detect large buy orders for a stock, the kind of buy orders mutual funds make, even when the funds try to disguise them. The HTF system can then purchase that stock before the mutual fund’s order is executed. The fund ends up paying more per share, and the HTF traders pocket the difference.
This isn’t illegal; it’s akin to cutting into a long line at the supermarket. And it’s just as infuriating. "It just ticks off mutual fund managers who feel their stock moves against them every time they show up," says Al Berkeley, chairman of Pipeline Trading Systems, a trading service designed to help institutions and brokers outsmart HFT systems that try to detect their orders.
How much does all of this cost mutual funds in higher stock prices, or lower prices when they sell? It’s not clear, but one study by the Tabb Group estimates that high-frequency traders made about $21 billion in profits last year — much of that at the expense of mutual funds.
Wall Street’s High-Tech War on Investors
As unfair as that sounds, there is an even more blatant abuse of the financial system called flash orders. Flash orders are essentially the very quick display of trading orders to a select few group of insiders. In an effort for small, upstart exchanges to compete with established ones like the New York Stock Exchange (NYSE) and Nasdaq, they offer these flash orders to large customers in the hope that they big customers will split the fees with the small exchange. A primer:
Smaller exchanges have to pass along big orders to the big exchanges if it looks like they can’t fill them. To avoid this loss, they "flash" these orders to big customers for less than half a second. The hope is that big players will help fill the order, splitting the fees with the small exchange.
But this also gives the insider an advance look at a trading price you and I never see. Mind you, it’s a half-second advantage; you and I couldn’t do anything with it anyway. But those with HFT systems can.
Wall Street’s High-Tech War on Investors
What’s more, is that the HFT systems are so fast and powerful that they can
search the market every few milliseconds and have the ability to sense the
supply and demand for a given stock. They can then use this information to
purchase the stock with a limited supply and sell it for a quick profit. Here
is how it works in graphical form:
When it came out, and the SEC offered lip service to the issue, all of the
exchanges said that they would stop providing them soon. I would advise people
not to hold their breath. There is a lot of money and lobbying in this sector,
and money trumps reason in our country in almost all instances.
As with many of my fellow disillusioned Americans, I had lost all faith in our government some time ago. Obama's true success during his run for the presidency was that he convinced the majority of Americans that change was possible and that he was the person to do it. I was skeptical, but I must admit that he said a lot of the right things during his campaign that led me to believe that he was serious. The most important and compelling case that he made in my eyes was a call for transparency. My thinking is that it is much harder for corrupt politicians to engage in such behavior when the people can see what is going on. I am not naive enough to think that the majority of people would care, but I do believe that enough people would for change to really manifest itself.
To say that Obama has let me down and mislead his fellow Americans to this point is an understatement. Do you want an example of the transparency that he supports? How about we look at the $18 MILLION dollar website Recovery.gov. This is the government's website that is supposed to show us where the money is going. Aside from being a huge failure at its core purpose, the fact that it cost $18 MILLION should raise everyone's eyebrows! For people unfamiliar with what it costs to develop a website, I ask you to consider that it cost roughly $1500-$2000 to create Digg which is one of the largest and most sophisticated sites on the internet. The cost appalls me, but the part that should REALLY concern everyone? How about the supposed transparency.
Back in July, a software company named Smartronix landed an $18 million contract to build a Web site where taxpayers could easily track billions in federal stimulus money. It was just another part of the Obama administration’s ongoing effort to bring transparency to stimulus spending, we were told.
But it seems the drive for transparency doesn’t cover the contract itself.
After weeks of prodding by ProPublica and other organizations, the General Services Administration released copies of the contract and related documents that are so heavily blacked out they are virtually worthless.
Don’t believe us? Take a look.
ProPublica sought the contract under the Freedom of Information Act to find out what kind of site Smartronix planned to build and to assess whether it justified the cost, which Republican critics of the stimulus plan called “unreal.”
Want proof that nothing has changed in Washington? How about this little ditty from the man responsible saying that everything is fine:
Ed Pound, the director of communications for the Recovery Accountability and Transparency Board, defended the redactions as “legitimate.” The Web site Smartronix is to build will replace Recovery.gov, the existing stimulus Web portal run by the transparency board.
“I’m not concerned about whether journalists are concerned about this,” Pound said. “We have been very transparent.”
Obama Administration Redacts Contract Details for Recovery.gov
The contract is so heavily redacted that it is worthless. In all, 25 pages of a 59-page technical proposal — the main document in the package — were redacted completely. Of the remaining pages, 14 had half or more of their content blacked out.
The entire scenario disgusts me, not only because I feel lied to, but because I honestly believe that in this day and age, Obama was our best chance at any sort of change in the way our government works. In the end, he is one of them, and not one of us.
Here is the contract for those interested:
Recovery.gov Contract Documents
I have hated insurance since as far back as I can remember. To me, it seemed like a legitimized mafia practice. Pay me in case something bad happens. Oh, and if something bad does happen, good luck getting us to do anything about it! I hate insurance because it has changed the medical industry as well. Medicine is now practiced based upon the bottom line rather than the care of patients. Costs have skyrocketed because hospitals know that they can get the money from insurance companies rather than patients. If you are a patient and you have a severe illness, you can't expect to be treated unless you demonstrate the ability to pay. Do you know what really hammers this idea home? Should you get really sick, insurance companies will ACTIVELY seek to remove you so that they don't have to pay out! This practice is acknowledged by our government:
The Department of Health and Human Services put a spotlight on that practice Tuesday in its continuing campaign to build support for an overhaul of health insurance.
“When a person is diagnosed with an expensive condition such as cancer, some insurance companies review his/her initial health status questionnaire,” the HHS said in a posting at HealthReform.Gov. In most states, insurance companies can retroactively cancel individuals' policies if any condition was not disclosed when the policy was obtained, "even if the medical condition is unrelated, and even if the person was not aware of the condition at the time.”
“Coverage can also be revoked for all members of a family, even if only one family member failed to disclose a medical condition,” HHS said.
The department cited recent research by the staff of the House Committee on Energy and Commerce, which found that three large insurers rescinded almost 20,000 policies over five years, saving $300 million in medical claims.
“Simply put, these insurance company employees are encouraged to revoke sick people’s health coverage," HHS said.
Do you want to know the lengths to which they will go? I will offer you two examples, one which would seem obvious given what these corrupt assholes are doing, and the other that should terrify any clear-thinking person.
WellPoint and Assurant told the committee that they automatically investigate the medical records of every policyholder with certain conditions, including leukemia, ovarian cancer, brain cancer, and becoming pregnant with twins, the committee staff wrote.
In November 2006, after a Texas resident was found to have a lump in her breast, Wellpoint investigated her medical history and concluded that she had been diagnosed previously with osteoporosis. The insurer rescinded her policy and refused to pay for treatment of the lump, the committee staff wrote.
Under the current system, something as relatively simple as seasonal sneezing can jeopardize your financial security, HHS argues, citing a 2001 study for the Kaiser Family Foundation.
“Even when offering coverage, insurers can exclude whole categories of illnesses related to a preexisting condition. For example, someone with a preexisting condition of hay fever could have any respiratory system disease – such as bronchitis or pneumonia – excluded from coverage,” HHS said.
In a truly disgusting practice, it was revealed that Blue Cross REWARDS their employees for dropping policy holders who become ill with anything serious:
But documents obtained by the House Committee on Energy and Commerce and released today show that the company's employee performance evaluation program did include a review of rescission activity.
The documents show, for instance, that one Blue Cross employee earned a perfect score of "5" for "exceptional performance" on an evaluation that noted the employee's role in dropping thousands of policyholders and avoiding nearly $10 million worth of medical care.
WellPoint's Blue Cross of California subsidiary and two other insurers saved more than $300 million in medical claims by canceling more than 20,000 sick policyholders over a five-year period, the House committee said.
What is the bottom line on all this? The bottom line is that it is all about the bottom line for insurance companies. They will gladly take your premiums, but when it comes time to honor their obligations, they will find a way out of them. It is a truly disgusting practice, but I believe it to be systematic of how things in our country operate in our modern age. It becomes increasingly difficult to believe that the rich and powerful don't run this country in a manner that only fosters their own interests. I firmly believe that the average citizen has no say in our government anymore.
As someone who values education above all else and a former educator, I cannot begin to describe how much I hate the Teachers Union. It is an abomination and does nothing but drag down an already ailing education system in very bad need of reform. Consider this example:
Hundreds of New York City public school teachers accused of offenses ranging from insubordination to sexual misconduct are being paid their full salaries to sit around all day playing Scrabble, surfing the Internet or just staring at the wall, if that's what they want to do.
Because their union contract makes it extremely difficult to fire them, the teachers have been banished by the school system to its "rubber rooms" — off-campus office space where they wait months, even years, for their disciplinary hearings.
The 700 or so teachers can practice yoga, work on their novels, paint portraits of their colleagues — pretty much anything but school work. They have summer vacation just like their classroom colleagues and enjoy weekends and holidays through the school year.
Because the teachers collect their full salaries of $70,000 or more, the city Department of Education estimates the practice costs the taxpayers $65 million a year. The department blames union rules.
"It is extremely difficult to fire a tenured teacher because of the protections afforded to them in their contract," spokeswoman Ann Forte said.
City officials said that they make teachers report to a rubber room instead of sending them home because the union contract requires that they be allowed to continue in their jobs in some fashion while their cases are being heard. The contract does not permit them to be given other work.
700 NYC Teachers Paid to do Nothing
In this example from New York, several teachers say that they are being unfairly targeted. That very well may be the case, and if it is, then there are other problems with the system (SHOCKING) than this. My main concern with this however, is that the Teachers Union affords an obscene amount of protection towards its members. I am aware of the incredilble beauracracy that exists in education (from elementary through college), but the system clearly needs to be reformed. It cannot be changed if the Teachers Union doesn't back down and set foot back in reality. Don't mistake me for someone who is inherently against unions either, I was a union member for years. I think that a union provides a valuable service to many employees, but it must be willing to work with its industry for the good of both parties.
I apologize for losing focus on this post. I have a 102+ temp and its 80 degrees in my apartment!
There is no doubt that Africa is a place in need of a lot of help, in a lot of different areas. In this post, there are two issues that I want to focus on however, and to a large degree, they are mutually exclusive.
The first of which is that the G-8 countries (G-8) that had pledged to supply $21.5 billion in aid to Africa by 2010 to help the continent get out of poverty and help with healthcare and education. With less than a year to go, there is a bit of a problem however. So far, only $7 billion has come through, with the remainder nowhere to be found. The two largest culprits are Italy and France, but there is more to this than the mere shirking of financial obligations.
The leaders of the world's countries didn't anticipate the economic maelstrom that swept the globe when they made their pledges. They were forced to spend billions of dollars bailing out their own economies (which was a contentious move in and of itself-and if you read this, then you know how I feel about it). The horizon doesn't look much better for anyone's economy either.
"As governments look to cut deficits, they will look to cut all parts of their budgets, and these parts that are to help the poorest may or may not be cut as part of that process," Bill Gates told reporters in London on Thursday after the release of the DATA report. The Bill & Melinda Gates Foundation operates in numerous African countries, and its $27.5 billion endowment makes it a far more significant donor than foreign governments are in some countries.
Why Wealthy Nations Are Stiffing Africa
There is, and has been for some time, a severe problem with aid in Africa. There is a fierce debate amongst aid and government officials about whether or not money for Africa is even worth it. There was a best-selling book (a very good one, and I highly recommend it) called Dead Aid written by Zambian economist Dambisa Moyo in which she argues that $1 TRILLION of Western aid during the last 50 years has actually left Africa more poor and dependant. Her sentiments were echoed by Rwandan President Paul Kagame, who wrote in the Financial Times last month that "as long as poor nations are focused on receiving aid, they will not work to improve their economies." But others have pointed out that carefully directed aid can play a critical role in removing obstacles to economic development. Gates told reporters that projects that focus on agriculture and health are "measurable and very impactful. The money had made a difference."
Source
I think that it is important to note two things not mentioned in this discussion however. There is overwhelming evidence that many of the African leaders have funneled vast sums of this money into their own personal Swiss bank accounts. Just as in any country, power corrupts. I also find it interesting that China isn't mentioned at all. China has-and does-donate more money to African aid than all of the G-8 countries COMBINED. Granted, it has one of the better economies currently, but it is a country that certainly has its own issues to deal with as well. I just find it rather curious that they are left out. To me, it is an acknowledgement that the G-8 countries are a relic of a bygone era. Formed with countries that had power and influence during the World War II era, I think that it is antiquated when looked at from a modern viewpoint that recognizes that China is one of the most powerful countries in the world.
Even if they (the leadership) are dicks.
The congressional panel investigating what happened to all that bank bailout money has issued a subpoena to the Federal Reserve, asking them to hand over all documents relating to the takeover of Merrill Lynch by the Bank of America.
On January 1, BofA finalized its purchase of Merrill Lynch for just over $29.1 billion. That made the bank eligible for an additional $20 billion in federal rescue money, bringing BofA's total to some $45 billion. Now, Reps. Dennis Kucinich (D-OH) and Edolphus Towns (D-NY) want to know exactly what the banks and the Federal Reserve agreed to when they arranged the deal last year.
Full text of the press release from Kucinich's office:
Washington D.C. (June 8, 2009) -- House Oversight and Government Reform Committee Chairman Edolphus Towns (D-NY) and Ranking Member Darrell Issa (R-CA) today served a subpoena on the Federal Reserve (the Fed) to compel it to turn over documents related to Bank of America’s acquisition of Merrill Lynch.
The full committee and Domestic Policy Subcommittee, under the leadership of Chairman Dennis Kucinich (D-OH), have been investigating the circumstances surrounding the federal government’s bailout of the Bank of America-Merrill Lynch transaction. Specific documents subpoenaed include emails, notes of conversations and other documents.
New York Attorney-General Andrew Cuomo has claimed that, in 2008, then-Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke strong-armed BofA into buying Merrill -- a move that, if true, could expose Paulson and Bernanke to prosecution.
Last week, news services reported that the House had asked Bank of America CEO Kenneth Lewis to testify before the House Committee on Oversight and Government Reform. That hearing takes place on Thursday (June 11).
The Raw Story
California is screwed. Why? Aside from the myriad issues surrounding crime, employment, and immigration, they have their economy. How broke is it? How about to the tune of $24+ BILLION dollars!
And who broke it? The voters will blame the governor. And the Democrats will blame the Republicans and vice versa. But the real culprits, of course, are the people of California themselves. By defeating the five propositions designed to close the $21.3 billion budget deficit, the citizens of California have richly earned their state’s abysmal credit rating, the worst of any state in the union.
This isn't the issue that I wanted to discuss however. I read the headline today that California is considering doing away with its CalWORKs program. For those who don't know, this is basically California's welfare system. [Source]
H.D. Palmer, a spokesman for the state Department of Finance, said California is in an unprecedented fiscal situation that has made all programs, from education to human services, vulnerable to deep and painful reductions.
“I don’t wish for a moment to minimize the profound impact” that eliminating CalWORKs would have, Palmer said. “But the easy decisions are way past being in the rearview mirror for us. We face the specter of California not having cash on hand to pay its bills in July.”
While I am certain that they won't eliminate the program, it is also certain that there will be cutbacks. I predict that there will be massive cutbacks to the program, and given the current economic climate, especially in California, this is terribly unfortunate. I don't know what the state will do, but it appears that its only viable option is to begin a massive cutback on many programs. There are people to blame however. Consider this:
Gov. Schwarzenegger said Wednesday that “…I respect the will of the people who are frustrated with the dysfunction in our budget system” he was right in noting that the system is messed up.
But he was wrong to just the fault the system. It really is the fault of the people of California, who live beyond their means–and the laws of economics.
You cannot pay police officers $190,000 a year in salary and benefits or pay your school employees 35% more than the national average and keep your state solvent.
You cannot provide three million illegal immigrants with social services–spending 70% more per capita on social services than the national average–and keep your state solvent.
And you cannot tax your state into solvency with the highest personal income tax rates in the country.
That is why the state’s deficit ballooned 42% to $21 billion from
$15 billion in just a few months–and why it will continue to get
bigger.
I don't necessarily blame the citizens of California, but I do blame those in power. Certainly the average person working at Walmart doesn't have much impact or say in the overpayment of police officers, but I can fault them for a lack of outrage at this. I know that this is the typical case of the "uninformed" American citizen, but people need to wake up. This is real, and its going on right now.
Elizabeth Coleman, Inspector General of the Federal Reserve. What the hell does she even do then? You have to love how someone holds a position like that without a clue as to what the hell it is they do.
In case your a partisan screaming idiot, I am here to tell you that all politicians are the same. Rather than differentiate them based upon some ideology that many only follow in order to get votes, we should simply categorize them as what they are: people in power. If you don’t believe me, then take a look around the world. You don’t see Democrats and Republicans (as we define them anyways). What you see are people in power doing the same things that the people in power here are doing.
Consider all of ass-covering that the Republicans (specifically Cheney) did during our last administration. Now consider that the Democrats are doing the same thing under Nancy Pelosi. I must admit that I consider her a mental nitwit and an incompetent, I am still shocked that she would consider attempting to do such a thing in the Obama administration with his attempts to bring clarity to the haze in Washington. It could certainly be a smokescreen, but I don’t think so. While I don’t believe that he will be able to fully realize this, I applaud the effort. Washington has been dirty for too long for one man to change it. The same dinosaurs that helped corrupt our system in order to benefit themselves are still there. They don’t have any incentive to change the system. I think that the administration will be able to push forward small changes, but that is all. I hope otherwise however.
Let’s get back to the Nancy Pelosi situation. I came across this in the Washington Post this evening:
House Speaker Nancy Pelosi is working to buffer lawmakers from federal investigators. This is a bad idea. Special legal protections for politicians encourage unethical conduct.
Democrats facing scrutiny include the chairman of the House Appropriations Subcommittee on Defense, John P. Murtha of Pennsylvania, for his close ties to the defense lobby firm PMA Group, which is under federal investigation; House Ways and Means Chairman Charles B. Rangel of New York about a number of tax issues; Rep. Jesse L. Jackson Jr. of Illinois over his reported effort to persuade ousted Illinois Gov. Rod R. Blagojevich to appoint him to fill President Obama's former Senate seat; and Rep. Jane Harman of California, who reportedly was taped in 2005 by the National Security Agency purportedly agreeing to help seek leniency for two accused Israeli spies in exchange for help in lobbying her appointment to chair the House Intelligence Committee.
Nancy Pelosi is trying to justify it by invoking the separation of powers as justification. The issue gets bogged down in the courts (naturally) from that point on. When a corrupt entity such as Congress can push forward laws, it is only natural that they will have a few that cover their own ass. Its a sick flaw, and one that I imagine our forefathers never would have considered. While there were certainly men of questionable motives and behavior during that time, I can’t imagine that they would have been able to envision such a state as we have now in our legislative branch.
Make sure to remember which politicians these are at the next election! Railing against bailouts while taking money from them is disgusting!
