Today's Teamster News 02.15.13

U.S. Grant Funded Workers' Play at LG Chem Factory  Wall Street Journal   ...The Obama administration's electric car efforts took another hit on Wednesday after a federal inspection found a South Korean advanced battery maker never scaled up U.S. production despite receiving $142 million in federal grants...
Wall Street wins again  Salon   ...The secret truth: There never was a “task force” dedicated to ferreting out mortgage fraud...
Euro-Area Economy Shrinks Most Since Depths of Recession  Bloomberg   ...The euro-area recession deepened more than economists forecast with the worst performance in almost four years as the region’s three biggest economies suffered slumping output....
New law credited with 'eye-popping' drop in California foreclosures  Ventura County Star   ...Foreclosure activity in California and Ventura County took a dramatic tumble in January as the state’s new Homeowner Bill of Rights kicked in...
Gas, Diesel Fuel Prices Continue to Rise  USAgNet   ...The U.S. average retail price of regular gasoline increased seven cents to $3.61 per gallon, up nine cents from last year at this time...The national average diesel fuel price increased eight cents to $4.10 per gallon, 16 cents higher than last year at this time...
Brewers of Corona and Budweiser revise buyout to appease US regulators  Associated Press   ...Anheuser-Busch InBev changed the terms of its proposed $20.1 billion acquisition of Mexican brewer Grupo Modelo Thursday in an attempt to push through a deal...Regulators are leery of the tie-up because AB InBev and Modelo control about 46 percent of annual U.S. sales...
Fat-Cat Pay Makes Swiss So Mad Wages Face National Vote  Bloomberg   ...With more than 100,000 Swiss citizens having signed a petition to limit “fat-cat” pay, voters will decide at a March 3 referendum whether top executives should have their compensation set by shareholders...
Minimum Wage Would Be $21.72 If It Kept Pace With Productivity: Study  Huffington Post   ...While advancements in technology have increased the amount of goods and services that can be produced in a set amount of time, wages have remained relatively flat, the study points out...
How Labor Made US Airways, AMR Merger Happen  Forbes   ...the turning point in the merger effort may have come on April 20, 2012 when US Airways said it had gathered support from American’s three major unions for its effort to merge with American...
Ohio unions rally against outsiders doing pipeline construction  Akron Beacon Journal   ...Four building trades associated with pipeline construction will be holding a job action in Ohio's Carroll County early today where WillBros Inc., a company from over 1,300 miles away in Houston, TX is performing work...
Maine Lawmaker Proposes to Ban Union Campaign Contributions  Maine Public Broadcasting   ...a Republican lawmaker says it's a conflict of interest for public workers unions to contribute to candidates for state office, and has submitted legislation to prohibit the practice...
Kane rejects Pa. lottery contract, citing constitutional grounds  Philly.com   ...Pennsylvania Attorney General Kathleen Kane rejected the Corbett administration's contract with a British firm to manage the $3.5 billion Pennsylvania Lottery, saying it "contravenes the Pennsylvania constitution."...
Scott aims to cut port regulations to spur economic growth Herald-Tribune ...(Florida Gov. Rick) Scott wants to increase the maximum gross vehicle weight for cargo containers by 5,000 pounds...
Obama trade proposal threatens more Minnesota jobs  Workday Minnesota   ...“The Trans-Pacific Partnership would accelerate job loss in Minnesota by forcing local employers to compete with companies that take advantage of sweatshop working conditions in places like Vietnam and Malaysia, which are undercutting even Chinese manufacturers,” said Josh Wise, director of the Minnesota Fair Trade Coalition...
Justice Details ‘History Of Abusive Behavior’ At Wisconsin Supreme Court  Talking Points Memo   ...Wisconsin State Supreme Court Justice Ann Walsh Bradley ... offered details about what she called “a history of abusive behavior in our workplace that has escalated from tantrums and rages, to threats, and now to physical contact.” As early as February 2010, Bradley wrote in the document, she had emailed other justices on the court about Prosser’s “abusive temper tantrums...”
Bloomberg: NYC school bus strike is 'lost cause;' union urges him to negotiate  Staten Island Advance   ...Mayor Michael Bloomberg struck a raw nerve with his statement Thursday that the ongoing school bus strike is a "lost cause." The president of Amalgamated Transit Union Local 1181, representing the striking workers, blasted Bloomberg over the remark...

The big rig: Most shocking Wall Street heist yet

Some men rob with a six gun, some with a fountain pen.

You try to be cynical about Wall Street, but you just can't keep up.

The latest scandal in the world of high finance and risky trading involves the London-based bank Barclay’s. It just shows that the greed of the one percent knows no limits.

Barclay’s already paid more than $450 million to U.S. and British bank regulators to settle charges that it manipulated LIBOR. But the scandal is spreading to more big banks. It's a gigantic financial crime.

But first about LIBOR: It stands for the "London Interbank Offered Rate." It's the average interest rate that big London banks say they'd charge if they were borrowing from other banks. The LIBOR rate is a guide to rates charged for trillions -- yup, trillions -- of dollars in loans throughout the world financial system.

This is complicated stuff. But one thing isn't complicated: a bunch of rich guys stole money. Maybe even yours.

As former Labor Secretary Robert Reich explains, instead of setting the LIBOR rate according to future worth, the bankers rigged the interest rate so their derivative gambling paid off at the expense of anyone on the other side of the bets. Reich tells us who else is involved:

So far, the scandal has been limited to Barclay's …whose top executives have been forced to resign, and whose traders' emails give a chilling picture of how easily they got their colleagues to rig interest rates in order to make big bucks.

But Wall Street has almost surely been involved in the same practice, including the usual suspects -- JPMorgan Chase, Citigroup, and Bank of America -- because every major bank participates in setting the LIBOR rate, and Barclay's couldn't have rigged it without their witting involvement.

This is massive fraud, Reich adds:

This is insider trading on a gigantic scale. It makes the bankers winners and the rest of us -- whose money they've used for to make their bets -- losers and chumps.

According to the Wall Street Journal, the LIBOR rate affects a mind-blowing $800 trillion in various financial contracts – that’s 10 times the annual output of the entire planet!

Rolling Stone’s Matt Taibbi sums up the stakes like this:

This is unbelievable, shocking stuff. A sizable chunk of the world's adjustable-rate investment vehicles are pegged to Libor, and here we have evidence that banks were tweaking the rate downward to massage their own derivatives positions.

The impact of the crime isn't entirely clear yet and may not be for months. We do know this: Hundreds of local governments in America may have been fleeced by Wall Street if LIBOR rates were artificially lowered. According to the Economist:

[The city of] Baltimore entered into over $100m in interest-rate swaps…Lower LIBOR-linked payments to the city would have meant less money to cover the outgoing fixed-rate payments. If LIBOR was artificially suppressed, the city would have been losing millions annually.

Naked Capitalism puts the LIBOR swindle in perspective

When people go to conduct business, they expect (or at least once did) to be treated fairly by vendors. And it wasn’t that long ago that regulators would come down hard on firms that broke the rules, not based on any computation of damages, but on the idea that certain types of behavior were not tolerated.

Once again, the super-rich have demonstrated they will do anything for profit, including robbing all of us blind. This scandal proves how thoroughly rotten the banking system is and why stronger enforcement is still desperately needed.

-- Union Thug

Today's Teamster News 12.12.10

Leaders agree job creation is needed in state  Detroit Free Press   ...Teamsters President James P. Hoffa has a four-letter answer when asked what it will take to get our moribund state back on track...
When do you need to ship your Christmas gifts by?  WTOP-FM   ...You have more time if you plan on using UPS...
Who will take the giant vampire squid?  NEF   ...Bank reform campaign gets animated...
Talgo pulling out of Milwaukee in 2012  Milwaukee Journal-Sentinel   ...Train-maker cites end of high-speed rail project...
A Secretive Banking Elite Rules Trading in Derivatives  New York Times   ...Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small...
Bernie's Rant & the Tax Bill War  Economic Populist  ...Senator Bernie Sanders, filibustered the Senate for 8.5 hours on the tax bill....
GMAC Can Sell Foreclosed Homes in Maine After Judge Rejects Homeowner Bid  Bloomberg News   ...“GMAC has repeatedly abused this process by presenting fraudulent representations to courts around the state”...
Simple BofA refi turns into foreclosure nightmare Foreclosure Fraud ...Homeowner says Bank of America refinanced her mortgage, then stopped taking her payments. Next, it threatened to seize her condo...
Employment-Population Ratio, Young People: A Potential Lost Generation Of Young Americans.  Rortybomb ...look at these two statistics of the employment-population ratio rate of young people in the United States...

Here's the Teamster Take on Financial Reform

The Teamsters have supported regulation of private equity firms and derivatives, as well as stronger protection for investors and consumers and limits on executive compensation.

“This is a landmark bill that will help redirect bank capital toward creating jobs instead of destroying them,” Hoffa said. “It makes progress toward bringing back Glass-Steagall, which forbids traditional commercial banks from taking risks with other people’s money.

“While not perfect, this conference report protects consumers, imposes some restrictions on executive compensation and regulates derivatives and private equity. I urge lawmakers to pass this important legislation.”

The conference report forces derivatives to be traded on exchanges or cleared in clearinghouses. It also allows the Securities and Exchange Commission to require private-equity and hedge fund advisers to open their books to inspection.

“Regulating private equity and derivatives is essential to help curbing abuses by financial institutions,” Hoffa said. “Private equity firms have wrecked too many companies and killed too many jobs to continue to operate without any transparency. Derivatives can create the wrong incentives, so that a handful of investors are motivated to destroy healthy enterprises.”

Hoffa said he’s pleased that the agreement includes an independent Consumer Financial Protection Board, which will have an independent budget and be headed by a presidential appointee. The CFPB will write and enforce rules for most banks, mortgage lenders, credit-card and private student loan companies.

“The CFBP has the authority and the independence to protect working families who have had too much of their hard-earned money plundered by greedy financial institutions,” Hoffa said.
The legislation would give shareholders the right to cast advisory votes on executive pay, and the Federal Reserve will set standards on excessive compensation deemed a dangerous practice for a bank.

“We have said all along that allowing CEOs to loot their own banks creates systemic risk,” Hoffa said. “I’m pleased the conferees recognize that outrageous pay for CEOs is not only wrong, but hazardous to our economic health.”

Finally, the bill includes a provision for proxy access that gives the SEC authority to decide adequate holding periods and ownership levels.

“This is a big victory for pension funds,” Hoffa said. “It will force corporate boardrooms to be more accountable to investors.”

Founded in 1903, the International Brotherhood of Teamsters represents more than 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.

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