“Beppe Grillo, the leader of Italy’s nascent Five-Star Movement catapulted into power by last week’s Italian elections, is causing a bit of a stir this weekend.
Yesterday, Grillo told German weekly news magazine Focus that given the dire straits Italy’s economy is in, if things didn’t change, Italians would want to leave the euro.
Today, in an interview with Bild – Germany’s biggest newspaper – Grillo said he supports a referendum on euro membership….”
Comments »“WASHINGTON (AP) — The White House is threatening a presidential veto of a Senate Republican measure that would give President Barack Obama more authority and flexibility to find $85 billion in spending cuts this year. The measure is intended to replace the automatic across-the-board cuts scheduled to kick in Friday.
The White House says it instead backs a Democratic measure to replace the cuts with tax hikes on millionaires and spending reductions over 10 years.
Neither bill is likely to survive Senate procedural obstacles Thursday….”
Comments »“Italy is headed for a broad coalition government as bondholders pressure Pier Luigi Bersani andSilvio Berlusconi to set aside their rivalries and form a partnership, said Finance Undersecretary Gianfranco Polillo.
A joint government between Bersani’s Democratic Party and the forces led by Berlusconi, a three-time former premier, is “the only possible way,” Polillo said late yesterday in a telephone interview.
Italian yields surged after elections Feb. 24-25 delivered a four-way parliamentary split and cast doubt on the stability of the next government. Bersani, the top vote getter, has resisted engaging Berlusconi and said he would seek to hammer out a compromise with lawmakers elected under the upstart political movement of ex-comic Beppe Grillo. Polillo, a former adviser to a Berlusconi ally, said this strategy wouldn’t work.
“I don’t think it’s possible to expose a government to the caprice of parliamentary calculations in a situation of great difficulty like this one, in which the first thing markets look at is the governability of a country,” said Polillo “Markets won’t sit by and watch our little games.”
Polillo has served the apolitical government of unelected Prime Minister Mario Monti since November 2011. He previously was adviser to the head of Berlusconi’s People of Liberty party in lower house of parliament. Monti finished fourth in the election.
Italian 10-year yields dropped 5 basis points to 4.7 percent at 11:20 a.m. in Rome, after rising about 30 basis point since before the election….”
Comments »“Japanese Prime Minister Shinzo Abe nominated Asian Development Bank President Haruhiko Kuroda to lead the nation’s central bank, raising the likelihood of further monetary stimulus this year.
Kikuo Iwata, a professor at Tokyo’s Gakushuin University who advocates greater government oversight of the Bank of Japan (8301), and BOJ Executive Director Hiroshi Nakaso were nominated for the two deputy governor positions, the nation’s parliament said in a statement today. Current Governor Masaaki Shirakawa and his deputies will step down on March 19….”
Comments »“President Barack Obama brushed off a Republican plan Tuesday to give him flexibility to allocate $85 billion in looming spending cuts, wanting no part of a deal that would force him to choose between the bad and the terrible.
Three days out and no closer to any agreement, both parties sought to saddle the other with the blame for the painful ramification of the across-the-board cuts set to kick in Friday. Obama accused Republicans of steadfastly refusing to compromise, while the top Senate Republican, Mitch McConnell, chided Obama’s effort to “fan the flames of catastrophe.”
McConnell and other top Republicans were lining up behind a plan that wouldn’t replace the cuts but would give Obama’s agency heads, such as incoming Defense Secretary Chuck Hagel, greater discretion in distributing the cuts. The idea is that money could be transferred from lower-priority accounts to others that fund air traffic control or meat inspection.
But Obama, appearing at a Virginia shipbuilding site that he said would sit idle should the cuts go through, rejected the idea, saying there’s no smart way to cut such a large chunk from the budget over just seven months — the amount of time left in the fiscal year.
“You don’t want to have to choose between, ‘let’s see, do I close funding for the disabled kid, or the poor kid? Do I close this Navy shipyard or some other one?'” Obama said. “You can’t gloss over the pain and the impact it’s going to have on the economy.”
Giving the Obama administration more authority could take pressure off of Congress to address the sequester. But the White House is also keenly aware that it would give Republicans an opening to blame Obama, instead of themselves, for every unpopular cut he makes.
Not all Republicans were on board, either….”
Comments »“European Union leaders piled pressure on Italy’s rival factions to form a unity government committed to budget rigor after a deadlocked election stirred fears of an quagmire that would re-ignite the euro debt crisis.
In a message that resonated in Rome, EU President Herman Van Rompuy warned in Tallinn,Estonia, that backsliding on budget discipline and economic reforms would shatter market confidence in the 17-nation currency union’s crisis management.
“Every time we turn a corner, we must keep in mind that just around that corner lies the danger of complacency,” Van Rompuy told Estonia’s parliament yesterday. “There is no way back. And this we simply cannot afford.”
Italy’s stalemate shook European bond markets, with investors moving money from crisis-hit Spain, Portugal, Greece and Italy itself to the perceived haven of Germany. Ten-year Italian yields rose by the most in 14 months, rising 41 basis points to 4.9 percent; the risk premium against German debt jumped 51 basis points to 343 basis points.
As leaders of Italy’s two rival blocs, Democratic Party chief Pier Luigi Bersani and former Prime Minister Silvio Berlusconi, weighed their options, European officials alternated between pleading with them to craft a stable government and fretting that they won’t manage to….”
Comments »“Mario Monti’s caretaker government is considering postponing a 3.9 billion-euro ($5.1 billion) bailout for Banca Monte dei Paschi di Siena SpA, leaving the final decision on the payout to the next government, two people familiar with the discussions said.
According to the decree approved by Monti’s cabinet in December, the payment is set to be completed by March 1. Under the government’s rescue plan, Monte Paschi will sell securities, dubbed “Monti” bonds, to the government with a 9 percent coupon that may rise to as much as 15 percent.
A decision whether to go ahead with the capital injection may be made as soon as today, said one of the people, who asked not to be identified because the talks are private. Government and Monte Paschi officials didn’t answer several phone calls seeking comment. The stock fell as much as 4 percent in Milan trading.
Italian elections this week produced a hung parliament, with comedian Beppe Grillo’s anti-austerity movement winning more than 25 percent of the popular vote, compared with the 10.5 percent of the votes received by Monti’s coalition in the lower house. Grillo opposed the current bailout plan, arguing that a parliamentary commission should investigate the bank’s dealings. A delay may prompt a review of the terms, said Fabrizio Bernardi, a Milan-based analyst at Fidentiis Equities…”
Comments »“The European Union must press ahead with global bank capital standards to avoid fresh delays and to give certainty to lenders that must abide by the overhaul, the bloc’s financial services chief said today.
“We need agreed rules as soon as possible so that banks know which way they are going,”Michel Barnier said in an interview on the sidelines of a conference in Paris.
Lawmakers and EU negotiators will meet tomorrow to try to break logjams over banker bonuses, financial reporting requirements and the amount of power retained by national regulators. An EU planning document warned the EU should finish its laws on the new rules by March 22.
If the measures aren’t finalized next month, the EU may run out of time to hit its January 2014 target date to implement the so-called Basel III accord, according to the Feb. 22 document drawn up by Ireland’s EU presidency and obtained byBloomberg News. Missing the March deadline may force the EU either to shorten its transition period, putting undue strain on lenders to adjust by the start of next year, or delay starting the new bank rules until July 2014 or January 2015.
Barnier said he’s working “on the hypothesis there won’t be a delay” so the EU can stick to its schedule. He reiterated the Brussels-based commission’s goal of regulating when countries can set their own safeguards for lenders.
“The commission is very attached to having a working single regime,” Barnier said. He said EU lawmakers are focused on issues relating to banker pay….”
Comments »“….The markets were hoping for the liberal leader Pier Luigi Bersani to win easily, allowing him to form a coalition government with technocrat leader Mario Monti.
This would ahve paved the way for unpopular austerity and reforms, that the rest of Europe has been very happy to see.
But the voters had a different idea tonight. As Emmanueal Letta — the second in command of the left party — just explained, the voters have entered a “rebellion” and the country appears to be ungovernable.
The Senate is too divided for any party to claim a victory, and in fact Berlusconi, who was thought to be in second place, appears to have won the majority of seats in the Senate….”
Comments »Funding for numerous federal agencies and programs will be slashed, half from defense and half from nondefense spending.
Generally speaking, both parties say they don’t want the cuts to kick in as planned.
Just how the cuts would be replaced — if they are — remains unclear, however.
Scenario 1 – Shutdown threat pushes Congress to act: The current measure funding the government expires on March 27. Known as a continuing resolution, that law is separate from the one that mandates the automatic cuts. It sets spending levels and authorizes the government to continue operating.
If lawmakers don’t agree to new funding levels soon, the government will shut down on March 28 and remain closed until Congress reaches a deal.
A shutdown wouldn’t bode well for either party. Most government offices and services would be shuttered. The only exception: services deemed “essential” — those related to the safety of human life and protection of property. Taxpayer money would be wasted in the process because it costs money to close the government and to ramp it back up when Congress reaches a deal.
The urgency to avert a shutdown might spur lawmakers to agree on a replacement of the automatic spending cuts as part of a final deal…”
Comments »“New York Mayor Michael Bloomberg and a handful of Silicon Valley’s top technology investors are planning a nation-wide social media campaign to pressure congress to pass immigration reform. The so-called “virtual march” will attempt to galvanize thousands of netizens to email, tweet, and facebook their leaders to come up with a solution that solves the industry’s looming skills shortage.
“Usually in Washington when you try to push an issue, people knock on senators and congressmens doors, they hire paid lobbyists,” says Jonathan Feinblatt, policy advisor to Bloomberg, “but what we’re doing is actually using the tools of the technology trade–email, and facebook, and social networking–too actually raise the voice of the innovators in this country.”
To be sure, both Republicans and Democrats are bound together in a rare bi-partisan lovefest over the need for more high-skilled immigrants. They differ in how low-skilled and undocumented workers should be let into the country, and have been unable to separate low-skilled and high-skilled reform into different bills.
There’s no guarantee that congress will find a compromise…..”
Comments »“Morgan Stanley bills this weekend’s Italian elections as a “crucial risk event.”
The euro crisis front has been relatively quiet since ECB President Mario Draghi gave his famous “whatever it takes to save the euro” speech in July, and many analysts have been waiting for this weekend for months.
Mario Monti, an unelected technocrat, has been relatively successful in pushing through economic reforms since assuming office in late 2011, but those reforms have driven the country deeper into recession, and record high unemployment shows how Italians are suffering.
As a result, former comedian Beppe Grillo and his newly-formed political party, the anti-establishment Five Star Movement, have seen a surge in interest.
As the elections draw nearer, the position of establishment political parties heading into the polls appears to be weakening.
The fear is that reforms could be hampered, causing Italian bond yields to rise again, causing the European chaos to reignite. Furthermore, the election shows what happens when the goals of the elites goes up against the economic situation of the voters.
Comments »“Japanese Prime Minister Shinzo Abe is likely to nominate Asian Development Bank President Haruhiko Kuroda as Bank of Japan governor, according to two officials with knowledge of the discussions.
Abe is also likely to tap Kikuo Iwata, an academic who has urged a ramping up in Japan’s monetary base to end deflation, and Hiroshi Nakaso, a senior BOJ official, as deputy governors, according to one government official and a ruling coalition executive, who asked not to be named as the talks are private. Finance Minister Taro Aso lauded Kuroda in remarks to reporters today. The yen fell and Japanese stocks rose on the plans.
The picks would raise the odds of further BOJ stimulus after Kuroda, 68, who advocated an inflation target more than a decade before the bank adopted one in January, said this month additional easing can be justified for 2013. Iwata briefed Abe on monetary policy and the economy during his stint in opposition, when he decided to make reflation the main plank of his campaign for the Liberal Democratic Party to retake power.
“Kuroda has a degree of credibility, having been there relatively early” with arguing for an inflation target, said Richard Jerram, chief economist at Bank of Singapore Ltd., who has analyzed the Japanese economy since the 1980s bubble years. “The end of a toleration of deflation” means the nation is at an inflection point, where growth could return to 1 percent to 2 percent a year as real interest rates are brought down, he said….”
Comments »“President Barack Obama is tired of waiting for Congress to move on legislation to reduce carbon emissions, and his administration is poised to move forward on actions to do just that—including a move that will effectively eliminate the possibility of any new coal plant opening in the United States, experts say.
“We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence,” Obama said during his State of the Union address. “Or we can choose to believe in the overwhelming judgment of science—and act before it’s too late.”
Climate change has been a controversial public policy issue in recent years, as many conservative Republicans have denied a relationship between carbon emissions and incremental increases in temperatures, which many scientists link to increasingly severe weather events.
Democrats, on the other hand, have used the evidence to push for regulations limiting carbon emissions. In 2009, the Democratically controlled House of Representatives passed landmark climate-change legislation but the Senate, also controlled by Democrats, declined to take up the measure heading into the 2010 elections.
Now, with Republicans in control of the House, it’s even more unlikely Congress will act on any bill that would accomplish the president’s goals, so the president indicated he’s moving forward on his own….”
Comments »“United States President Barack Obama has no plans to show Congress the legal rulings that justify his use of drones to kill US citizens, despite urging from members of his own political party.
Both members of the House and Senate have demanded as of late that the Obama administration explain more about the president’s ability to execute Americans suspected of terrorist activity without ever taking them to trial. Members of his own party have continuously pressed President Obama to disclose more information on his targeted kill program to no avail, but even as questions intensify and answers continue to be unknown, the president is reportedly dismissing pleas largely coming from the left and is preparing to side with Republicans — political foes who are much less concerned about his drone program than last year’s terrorist attack in Benghazi, Libya.
In lieu of opening up about the justification for killing his own citizens, Pres. Obama will reportedly instead offer up instead intelligence about last September’s incident in Libya that left four Americans dead, including US Ambassador Chris Stevens. The event has become a point of contention on both sides of the aisle, and ongoing disputes over the mishandling of the assault and an alleged cover-up in the days and weeks after have driven a rift in Washington. Now with some lawmakers threatening to halt cabinet nominations recently made by the president in protest, Mr. Obama will reportedly offer Congress information about the Benghazi attack and not his drone program.
According to the New York Times, Obama administration officials are in talks with members of the Republican Party that are expected to end with the White House opening up about Benghazi. In making that decision, though, the paper reports that the commander-in-chief will ignore pleas from his own political party to discuss his overseas drone program, his ability to wage extrajudicial killings on US citizens and his secretive kill list.
By siding with right-wing opponents, Pres. Obama may finally succeed in having hand-picked choice John O. Brennan confirmed for a role as director of the CIA after having his nomination held up on Capitol Hill be lawmakers wanting to learn more about Benghazi. In the process, though, the president could be alienating Democrats and once more going back on a promise to bring drone discussion to the forefront of politics.
“I recognize that in our democracy, no one should just take my word that we’re doing things the right way,” the president said during his State of the Union address this month. “So, in the months ahead, I will continue to engage with Congress to ensure not only that our targeting, detention and prosecution of terrorists remains consistent with our laws and system of checks and balances, but that our efforts are even more transparent to the American people and to the world.” …”
Comments »“U.S. military leaders really don’t want the defense budget cut, and they’re willing to do some serious damage to vital programs to prove their point to Congress.
With automatic reductions set to kick in soon, the Department of Defense stands to lose about $48 billion, or 7.4% of the $645 billion it is set to receive this year.
But both civilian and military leaders at the Pentagon are adamant about not losing this money, and have resorted to what some have called “hysterics” to convince lawmakers to do something.
During testimony before the House and Senate armed services committees, the deputy secretary of defense and the entire Joint Chiefs of Staff reportedly depicted the coming cuts (referred to as sequestration) as unleashing “doomsday” on the nation’s military.
Comments »[youtube://http://www.youtube.com/watch?v=lbc2u_Bx-QQ 450 300]
Link for iPhone users: http://www.youtube.com/watch?v=lbc2u_Bx-QQ
“The really desperate come early. George Bishop, 61, a lanky, gray-haired cabinet builder in a tropical shirt, has a red, swollen nose from a boil caused by his third sinus infection in the past five months. Diana Rios, 54, cheerful despite the arthritis pain in her back and knees, holds on tight to her purse and to her seven-year-old granddaughter and translator, Sofia. Lindsay Oliver, 28, is here because of hypothyroidism, Sjögren’s syndrome (an autoimmune disorder), anemia, chronic hives—and no insurance.
By 4 p.m. on a rainy winter afternoon, they are part of a small crowd assembled on a grassy field behind a chain-link fence outside the Palmer Feed Store in Orlando, Florida. Across the street is the county medical building, where volunteer doctors affiliated with the nonprofit group Shepherd’s Hope see uninsured patients on weekday nights. The clinic doesn’t start until 6, but it’s a first-come, first-served operation, and demand is high.
At 4:30, a security guard opens the doors to let the patients in out of the drizzle. Dozens of them soon fill rows of metal chairs in the lobby. They are anxious and ailing, but also chatty as they munch on the cookies offered up by the volunteer clinic manager. Many have multiple medical issues going wholly or partly untreated. Rios is here for “private” problems as well as back pain, arthritis in her knees, and bursitis in her shoulder that forced her to quit working in September when she could no longer lift the trays she helped prepare for an airline food company. As Sofia translates, Rios explains that she has been in Florida for 16 years but has never had health insurance. She ended up in the emergency room recently after she fell on her arm and was so immobilized that she couldn’t brush her teeth.
The raven-haired Oliver lost her job as a bank teller supervisor in July, leaving her and her three-year-old son uninsured. After months of unsuccessful job hunting, she finally signed on as a housekeeper at a Disney hotel. She’s gone without some of her expensive medications since August and is hoping the clinic can help.
Oliver, Bishop, and Rios are among the nearly 4 million Floridians who lack health insurance—more than 1 in 5 in a state with the second-highest rate of uninsured in the country. Obamacare is supposed to help fix that through a combination of new federal subsidies for private insurance as well as a generous expansion of Medicaid, the government insurance program for the poor and disabled.
But the people at this clinic may not see many of these benefits, because Gov. Rick Scott and a tea-party-dominated state government have been at the forefront of the revolt against the law—and virtually every other form of government spending.
Even before he was elected in 2010, Scottspent $5 million of his own money—earned leading a health care company that derives much of its revenue from government payments—to fight Obamacare. Florida was the lead plaintiff in the Supreme Court case challenging Obamacare, and even after the court upheld the law, Scott refused to take steps to implement it. His fellow tea partiers are urging lawmakers to do the same: At a hearing in December, activist John Knapp told state legislators, “The American Constitution which you just swore an oath to uphold and defend has been contorted, hijacked, and reduced.” ….”
Comments »“The Pentagon notified Congress on Wednesday it will be furloughing its civilian workforce of 800,000 employees if sequestration goes into effect March 1.
Defense officials have warned lawmakers that sequestration will devastate the military and lead to a hollow force, but the civilian furloughs will be one of the first major impacts felt by the across-the-board cuts.
The Pentagon furloughs will affect civilians across the country. Pentagon officials have said that civilians could face up to 22 days of furloughs, one per week, through the end of the fiscal year in September. The employees would receive 30 days’ notice before being furloughed.
“We are doing everything possible to limit the worst effects on DOD personnel — but I regret that our flexibility within the law is extremely limited,” Defense Secretary Leon Panetta wrote in a message to the department. “The president has used his legal authority to exempt military personnel funding from sequestration, but we have no legal authority to exempt civilian personnel funding from reductions.”
The Joint Chiefs also testified before both the House and Senate last week to lay out the dangers of sequestration, as the Pentagon has taken a much more proactive approach to the cuts than when they were set to hit in January.
Pentagon Comptroller Robert Hale told reporters Wednesday that the furloughs would save between $4 bill and $5 billion in 2013. The Pentagon would have to cut $46 billion under sequestration.
Hale said that most of the Defense Department’s near-800,000 civilian workforce would face furloughs, but there would be exceptions, including foreign workers on overseas bases and those working in combat zones….”
Comments »“Evidence of an unrelenting campaign of cyberstealing linked to the Chinese government is prompting the Obama administration to develop more aggressive responses to the theft of U.S. government data and corporate trade secrets.
A report being released Wednesday considers fines and other trade actions against China or any other country guilty of cyber-espionage. Officials familiar with the administration’s plans spoke on condition of anonymity because they were not authorized to speak publicly about the threatened action.
The Chinese government denies being involved in the cyberattacks cited in a cybersecurity firm’s analysis of breaches that compromised more than 140 companies. On Wednesday, China’s Defense Ministry called the report deeply flawed….”
Meanwhile China says we have no proof
Comments »In 2009, a network of online media outlets began popping up in state capitals across the nation, each covering the news from a clearly conservative point of view. What wasn’t so clear was how they were funded.
“The source is 100 percent anonymous,” said Michael Moroney, a spokesman for the Franklin Center for Government and Public Integrity, the think tank that created the outlets.
In fact, 95 percent of Franklin’s revenue in 2011 came from a charity calledDonors Trust, according to Internal Revenue Service records.
Conservative foundations and individuals use Donors Trust to pass money to a vast network of think tanks and media outlets that push free-market ideology in the states — $86 million in 2011 alone. The arrangement obscures the identity of the donors wishing to keep their charitable giving private, especially “gifts funding sensitive or controversial issues,” according to the group’s website.
The $6.3 million donation to the Franklin Center was the second-largest gift made in 2011 by the group, a tax-exempt “public charity” that takes tax-deductible donations from donors “dedicated to the ideals of limited government, personal responsibility, and free enterprise,” according to its website.
Donors Trust includes 193 contributors, the majority of whom are individuals. “A lot of donors are flying totally under the radar,” says president and CEO Whitney Ball.
Donor-advised fund
Since its founding in 1999, Donors Trust and its affiliated organization, Donors Capital Fund, have distributed nearly $400 million, becoming major vehicles for tax-exempt giving from wealthy conservatives such as billionaire industrialist Charles Koch.
Koch is among an exclusive pool of donors who have used Donors Trust as a “pass-through,” says Marcus Owens, the former director of the IRS Exempt Organizations Division, now in private legal practice. “It obscures the source of the money. It becomes a grant from Donors Trust, not a grant from the Koch brothers.”
Ball helped found Donors Trust in 1999 as a “donor-advised” fund. Donors can open an account and protect their identity from the public and even the recipient of their grants.
In addition, donor-advised funds offer contributors an extra level of control over where their money ends up, which seeks to remedy what Ball sees as the tendency for foundation money to “drift left.”
This was a chief concern of Daniel Searle, the late philanthropist and pharmaceutical executive who was one of Donors Trust’s early board members.
In 1998, with help from Donors Trust co-founder and board chairman Kim Dennis, Searle established an endowment called the Searle Freedom Trust, now worth $114 million, which has in turn given generously to Donors Trust.
‘Great guys’
The Searle Freedom Trust is one of dozens of conservative foundations that have given tens of millions of dollars to Donors Trust from 2001 to 2011. Among the group’s donors is the Knowledge and Progress Fund, a Wichita, Kan.-based foundation run by Charles Koch.
The foundation gave almost $8 million to Donors Trust between 2005 and 2011.
Where those funds ended up is a mystery, though some Donors Trust recipients, including the Mercatus Center and the Institute for Humane Studies based at George Mason University in Virginia, have also received major funding from foundations set up by Charles Koch and brother David.
Nearly half of the revenue for David Koch’s Americans for Prosperity Foundation came from Donors Trust in 2010, in the form of $7.6 million in grants.
Representatives for the Koch foundations did not return calls for comment.
Before Donors Trust, Ball was the director of development for the libertarian Cato Institute, which Charles Koch was instrumental in founding.
“We think they’re great guys,” she says of the Kochs, “but if they weren’t around, we’d still be successful.”
At a private Koch fundraising meeting in the summer of 2010, Donors Trust hosted cocktails and dessert for what Ball called a “target-rich environment” of wealthy donors.
Several wealthy conservatives who have attended Koch fundraising parties have Donors Trust accounts, including Amway co-founder and longtime booster of conservative causes Richard DeVos; hedge fund billionaire Paul Singer; and Philip Anschutz, owner of the conservative Examiner newspapers.
Dozens of other major conservative philanthropies have Donors Trust accounts, including the Lynde and Harry Bradley Foundation, the John M. Olin Foundation and the Coors family’s Castle Rock Foundation, according to IRS records….”
