Bloomberg Eyes Bank of America’s Derivatives Move
Columbia Journalism Review
Bloomberg News reports that Bank of America (with Federal Reserve approval) put Merrill Lynch credit-default swaps into BofA’s deposit-holding arm after a credit downgrade caused counterparties to demand it put up billions more in collateral.
Got that? Probably not, so let’s put it another way: Bank of America moved risky insurance contracts to a taxpayer-insured company, ostensibly to save money. The FDIC, which would now be on the hook for losses if the derivatives collapse, is not happy, and the move raises more questions about the health of Bank of America, which has already seen its market value sliced in half this year.
Bill Black puts it this way in a Bloomberg quote:
“The concern is that there is always an enormous temptation to dump the losers on the insured institution.”
And Yves Smith says this:
So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral.
Bob Ivry, Hugh Son, and Christine Harper report that the downgrade would have required BofA to put up more than $3.3 billion in collateral to back up the credit-default swaps it bought when it purchased Merrill Lynch in 2008. They report that JPMorgan Chase already holds virtually all of its massive derivatives portfolio in its deposit-taking arm. Has it always done that?
Meantime, The New York Times’s Binyamin Appelbaum reports this on Twitter:
Simon Johnson, throwing bombs at Boston Fed conference, says @bobivry story “looks terrible” for Fed, asks audience if it’s true. Silence.
At base, the question here is why is Bank of America only now moving these derivatives to its depositary institution and why the Fed is willing to help it do so, despite the fact that its own rules are designed to prevent it.
Smith and Black say that this move smacks of “desperation” on the part of Bank of America. If so, it does for the Fed too, which Bloomberg says wants “to give relief to the bank holding company.”
Good work by Bloomberg here keeping an eye out for taxpayers.
Anyone who thinks that we don't live in a corporate cesspool should...
Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010
Washington, DC – A comprehensive new study that profiles 280 of America’s most profitable companies finds that 78 of them paid no federal income tax in at least one of the last three years. Thirty companies enjoyed a negative income tax rate over the three year period, despite combined pre-tax profits of $160 billion. These are among the findings in “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010,” released today by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.
“These 280 corporations received a total of nearly $223 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author. “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”
“Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010” is the tenth comprehensive publication on corporate taxes from Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy (ITEP). The two groups released their first major study on the federal income taxes that large, profitable American corporations pay on their U.S. pretax profits in 1984.
The newest study, released today, is online at www.ctj.org/corporatetaxdodgers.
The study examines 280 corporations, all from the Fortune 500 list. All of the companies were profitable in each of the last three years and provided sufficient and reliable information in their financial reports about their pretax U.S. profits and their U.S. federal income taxes.
Corporations are lobbying for lower corporate rates and an exemption for profits they shift offshore. McIntyre, however, says “Our study provides proof that too many corporations are already being coddled by our tax system.”
Business as usual from our corporate overlords.
Europe Bans X-Ray Body Scanners Used at US Airports
Michael Grabell, ProPublica: "The European Union on Monday prohibited the use of X-ray body scanners in European airports, parting ways with the U.S. Transportation Security Administration, which has deployed hundreds of the scanners as a way to screen millions of airline passengers for explosives hidden under clothing. The European Commission, which enforces common policies of the EU's 27 member countries, adopted the rule 'in order not to risk jeopardizing citizens' health and safety.' As a ProPublica/PBS NewsHour investigation detailed earlier this month, X-ray body scanners use ionizing radiation, a form of energy that has been shown to damage DNA and cause cancer."
We would never do what the Europeans have done. Why? Because this is a corporatocracy and we have to be servile to our corporate overlords. Profit before safety concerns. (the company that makes this equipment and the marketers have known conservative connections. I've posted details before.)
There are hundreds of examples of corporate indifference; like contaminated food, dangerous pharmaceuticals, use of chemicals, etc.
It's just business, folks. Move along.
What Drugs Was Your Thanksgiving Turkey On?
Antibiotics and other drugs are common in the turkey that thousands of Americans eat every day.
So far, 2011 has not been a great year for turkey producers. In May, an article in Clinical Infectious Diseases reported that half of U.S. meat from major grocery chains--turkey, beef, chicken and pork--harbors antibiotic resistant staph germs commonly called MRSA. Turkey had twice and even three times the MRSA of all other meats, in another study.
In June, Pfizer announced it was ending arsenic-containing chicken feed which no one realized they were eating anyway, but its arsenic-containing Histostat, fed to turkeys, continues. Poultry growers use inorganic arsenic, a recognized carcinogen, for "growth promotion, feed efficiency and improved pigmentation," says the FDA. Yum.
And in August, Cargill Value Added Meats, the nation's third-largest turkey processor, recalled 36 million pounds of ground turkey because of a salmonella outbreak, linked to one death and 107 illnesses in 31 states. Even as it closed its Springdale, Arkansas plant, steam cleaned its machinery and added "two additional anti-bacterial washes" to its processing operations, 185,000 more pounds were recalled the next month from the same plant.
Since the mad cow and Chinese melamine scandals of the mid 2000's, a lot more people think about the food their food ate than before. But fewer people think about the drugs their food ingested. Food animal drugs seldom rate Capitol Hill hearings which is just fine with Big Pharma animals divisions since if people knew the antibiotics, heavy metals, growth promotants, vaccines, anti-parasite drugs and feed additives used on the farm, they would lose their appetite. Besides, people aren't Animal Pharma's primary customers anyway and the long term safety of animals drugs isn't an issue, since patients (are) supposed to die.
Many more important details...
I have occasionally posted articles on what is done to our food and what is done to the animals that we eat. It is ugly - and dangerous. Dangerous to our health and viciously indifferent to the animal's suffering. Sadism and greed combine to make this one disgusting industry.
I would have underlined the especially unpleasant parts but can't post all of it.
Please read the entire article. And remember it for the upcoming holiday and forever.
And if you care, do something about it. Complain and only buy from good sources and those that are humane to animals. Be concerned with additives. Your health depends on it.
Corporations Are Patenting Human Genes and Tissues -- Here's Why That's Terrifying
A medical ethicist explains the dark implications of corporate medical patents and the nightmarish scenario of our medical-industrial complex.
Do you think that granting corporations the rights of people in the Citizens United case is disturbing? Then contemplate the fact that corporations have been patenting human genes and tissues at alarming rates -- in the last 30 years, more than 40,000 patents have been granted on genes alone.
As the Occupy movement fights against the unmitigated influence of corporations on our lives, author and medical ethicist Harriet Washington's new book, Deadly Monopolies: The Shocking Corporate Takeover of Life Itself--And the Consequences for Your Health and Our Medical Future, is a timely wakeup call to protect the very essence of human life from the medical-industrial complex.
In a recent phone interview with AlterNet, Washington discussed the dark implications of corporate medical patents, how we find ourselves in this nightmarish scenario and what needs to be done to stop medical research profits from trumping human health. Washington is also the author of Medical Apartheid, which received the National Book Critics Circle Award. She has been a fellow in medical ethics at Harvard Medical School, a senior research scholar at the National Center for Bioethics at Tuskegee University and a fellow at the Harvard School of Public Health.
This is truly scary. Corporations are controlling medical practices by patenting processes/genes/tissues and then restricting the use of them unless they approve. To get the MONEY.
Reading the article you will learn again why this is a corporatocracy and what that means. We are all at risk from these vultures.
Don't get sick.