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Anti-regulatory Forces in US Launch Full Assault on Public Protections


The American Dream (to imitate China)
Corporate lobbyists and their allies in Congress have launched a systematic, coordinated effort to attack the federal government's efforts to boost innovation and protect public health, worker safety, and environmental quality. The attacks appear to have the Obama administration backpedalling on its agenda to provide meaningful health and safety standards to the American people.

During most of the time President Obama has been in office, corporate special interests have been complaining about the administration's attempt to govern more proactively. As Congress passed major reforms like health care and financial regulation packages and the 2010 midterm elections approached, anti-government opponents prepared strategies to attack the role of government. (See the Jan. 11 issue of The Watcher for a summary of strategies.) The sections below describe the actions taken or planned to implement these strategies.


How one man tracked down Anonymous - and paid a heavy price

© ArsTechnica
Aaron Barr believed he had penetrated Anonymous. The loose hacker collective had been responsible for everything from anti-Scientology protests to pro-Wikileaks attacks on MasterCard and Visa, and the FBI was now after them. But matching their online identities to real-world names and locations proved daunting. Barr found a way to crack the code.

In a private e-mail to a colleague at his security firm HBGary Federal, which sells digital tools to the US government, the CEO bragged about his research project.

"They think I have nothing but a hierarchy based on IRC [Internet Relay Chat] aliases!" he wrote. "As 1337 as these guys are supp0sed to be they don't get it. I have pwned them! :)"

But had he?

Arrow Down

Egyptians Line Up for Cash as Banks Open, Currency Plummets to 2005 Low

© Patrick Baz/AFP/Getty Images
Egyptians line up at an ATM in Cairo.
Hundreds of Egyptians queued outside banks to withdraw funds as lenders opened for the first time in more than a week amid protests demanding the ouster of President Hosni Mubarak. The pound dropped to the lowest level since 2005.

At a Cairo-based branch of Commercial International Bank Egypt SAE, the nation's biggest publicly-traded lender, one man stood at the main door taking names of customers. "Banks need to open more branches," Mahmoud Eliwa, a 68-year-old retiree who wanted to withdraw 5,000 pounds, said in an interview outside the bank. Eliwa left after learning he needed to wait for about 100 people before him.

The central bank moved 5 billion pounds ($854 million) of cash into the financial system as depositors gained access to their savings. The regulator, which has $36 billion in reserves and guarantees deposits, used military cargo planes to bring in the funds, Governor Farouk El-Okdah said yesterday on state-run television.

The demonstrations, which left at least 300 people dead according to the United Nations, roiled financial markets worldwide and sent yields on Egyptian bonds higher. The stock market remained closed for a sixth day after the benchmark EGX 30 Index tumbled 16 percent in the week to Jan. 27.

Heart - Black

Rich Take From Poor as U.S. Subsidy Law Funds Luxury Hotels

blackstone hotel
© Michael L. Abramson/Bloomberg Markets
Renovation at the Blackstone Hotel in Chicago qualified for a federal subsidy due to the neighborhood's 26 percent poverty rate.
The landmark Blackstone Hotel in downtown Chicago, which has hosted 12 U.S. presidents, opened in 2008 after a two-year, $116 million renovation. Inside the Beaux Arts structure, built in 1910, buffed marble staircases greet guests spending up to $699 a night for rooms with views of Lake Michigan.

What's surprising isn't the opulent makeover: It's how the project was financed. The work was subsidized by a federal development program intended to help poor communities.

The biggest beneficiary of taxpayer help for the Blackstone revamp was Prudential Financial Inc., the second-largest U.S. life insurer. The company got $15.6 million in tax credits from the U.S. Department of the Treasury for helping to fund the project, according to Chicago city records, Bloomberg Markets magazine reports in its March issue.

JPMorgan Chase & Co., the second-largest U.S. bank by assets, also took in money by serving as a lender and the monitor of Blackstone construction financing, city records show.


Speculation is the main driver behind higher world food prices - the evidence is there in the data

World food inflation is the crisis of the moment. Prices for basic commodities are rising across the world, causing enormous distress, particular for the poorest and most vulnerable.

food commodity index
© Unknown
There are several ideas running around the internet seeking to explain this appalling state of affairs. As I mentioned in previous posts, these explanations can be grouped into three broad categories;

* Rising demand due to rapid economic growth in emerging markets, expecially in Asia:

* Supply shocks reducing the quantity of available food:

* Speculation and the search for higher yield, which has been facilitated by negative real interest rates in the developed world.

There is a difficulty in adjudicating between these three explanations. All three are, to some extent, true. They are not mutually exclusive. Nevertheless, we need to arrive at a relative weighting. Which of these three factors is the real driver behind the devastating rise in food prices?


Accusations of Fraudulent Mortgage Documents Led Citigroup to Settle With Homeowners

In a handful of cases around the country, Citigroup has reached settlements with homeowners who accused the bank of filing fraudulent mortgage documents to prove its legal standing to collect the debt in bankruptcy proceedings, Bloomberg reported today.

The cases put a twist on recent efforts by banks to patch over problems created because lenders and securitizers were sloppy with documentation during the housing bubble. These homeowners alleged that Citigroup's mortgage assignments - a key document produced whenever the ownership of a mortgage changed hands - were flawed because they were dated after the bankruptcy was filed.

Mortgage assignments, as we've noted , are sometimes processed in-house by mortgage servicers, but they may also be contracted out to companies, in this case a Texas company called Orion Financial Group. (Orion has not been accused of wrongdoing but told Bloomberg it does not "create fraudulent documents.")

In the settlement agreements with homeowners, Citigroup did not admit wrongdoing but agreed to cover their legal costs and slash their interest rates. In a few cases, the bank also reduced the amount outstanding on mortgages. Here's Bloomberg:
Citigroup paid almost $82,000 in opponents' legal costs when settling challenges to four bankruptcy claims that used Orion letters in 2010, according to agreements filed with federal bankruptcy courts in New York and Arkansas. The bank reduced interest rates on the remaining debt by an average of 49 percent, while cutting the outstanding mortgage balance in three cases by a combined $55,000, the filings show.


Tide turns in favour of Egypt's Brotherhood in revolt

mubarak out writing
© Unknown
The first time Essam el-Erian, went to jail, he was 27. Last Sunday, he left prison for the eighth time at the age of 57.

The medical doctor's crime for each incarceration was belonging to the Muslim Brotherhood, Egypt's most influential and best-organised Islamist opposition movement and long feared by President Hosni Mubarak, Israel and the United States.

Egypt's courts have repeatedly rebuffed the Brotherhood's requests for recognition as a party on the grounds that the constitution bans parties based on religion.

Now the world could not look more different to the past three decades when Brotherhood members were repressed, arrested, tried in military courts and shunned by the Egyptian government.

After the last tumultuous days of popular revolt against Mubarak, it is now the government that is seeking out the Muslim Brotherhood to discuss Egypt' future.


Israel jittery about gas supply from Egypt

© Unknown
An explosion at an Egyptian gas terminal that disrupted the supply of fuel to Israel had Israeli officials pressing Sunday to speed development of a natural gas deposit that they say can make Israel energy independent.

Infrastructures Minister Uzi Landau wants the government to back loans so financing can be obtained to develop the Tamar field, off Israel's coast in the Mediterranean Sea, a spokesman said. Landau also favors exempting the field's developers from a proposed windfall tax.

"We have to do everything to improve Israel's energy security," Landau told Israel Radio on Sunday. "It is Israel's obligation to remove as soon as possible every obstacle" to developing Tamar, he said.


Fearful Russian lawmaker flees to US

Ashot Egiazaryan
© AP / Jacquelyn Martin
Billionaire Russian lawmaker Ashot Egiazaryan poses for a portrait in a Washington law office Wednesday, Jan. 26, 2011, after fleeing Russia over accusations that some of its richest and most influential people swindled him in a real estate deal. Egiazaryan tells The Associated Press he's considering seeking asylum in the U.S. But after suing another Russian billionaire and several ex-business partners, including Moscow's former mayor and two longtime friends of Russian leader Vladimir Putin, he said he doesn't feel completely safe even in this country

A wealthy Russian lawmaker has fled with his family to the United States, where he says he fears assassination over accusations that some of Russia's richest and most influential people swindled him in a real estate deal. Back home, he's been charged with financial crimes.

Ashot Egiazaryan (pronounced Ah-shawt Yeh-gee-ah-zar-ee-AHN) says he is considering seeking asylum in the U.S. But after suing a Russian billionaire and several former business partners -- including a close friend of Russian Prime Minister Vladimir Putin and Moscow's former mayor -- he said he doesn't feel safe even in this country.

"I do think it's possible than an assassination attempt can be mounted against me here," he said flanked by lawyers in a conference room a few blocks the White House. The interview with The Associated Press was his first with Western media and came a few weeks after one of his relatives was gunned down in the Russian city of Astrakhan on Dec. 7, an attack he claims is connected with his suit.


Iran test-fires new supersonic missile

Iran's Revolutionary Guard have test-fired a supersonic ballistic surface-to-sea missile capable of hitting warships and targets within a 300km range.

The missile, called Persian Gulf, is supersonic, immune to interception and features high precision systems, Chief Commander of Iran's Revolutionary Guards, Brigadier General Mohammad Ali Jafari was reported as saying on Iranian state TV on Monday.

Jafari said the Islamic Revolution Guards Corps is currently manufacturing 500km stealth radars and has plans to mass-produce long-range passive radars with a range of 1,100km.