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There Was a Solution to the Corruption of Bond Rating Agencies: Timothy Geithner Killed It

Dean Baker

October 2

http://cepr.net/blogs/beat-the-press/there-was-a-solution-to-the-corruption-of-bond-rating-agencies-timothy-geithner-killed-it

The Wall Street Journal ran a lengthy piece on how bond rating agencies are again giving inflated ratings, in this case to collateralized loan obligations that include tranches of a variety of bonds and loans. Inflated ratings were a major problem in the housing bubble years, with the major rating agencies giving investment-grade ratings to mortgage-backed securities that were filled with subprime mortgages.

The piece notes the basic incentive problem that the issuer pays the rating agency. This gives rating agencies an incentive to give higher ratings as a way to attract business.

There actually is a simple solution to this incentive problem: have a third party pick the rating agency. Senator Al Franken proposed an amendment to the Dodd-Frank bill that would have had the Securities and Exchange Commission (SEC) pick rating agencies rather than issuers. The amendment passed the Senate with 65 votes, getting strong bi-partisan support.

Under this provision, if JP Morgan wanted to have a new issue rated, instead of calling Moody's or Standard and Poor, it would call the SEC, which would then decide which agency should do the rating. This means that rating agencies would have no incentive to inflate ratings to gain customers.

In spite of the strong bipartisan support in the Senate, then-Treasury Secretary Timothy Geithner did not want the provision to be included in the bill. As he boasts in his autobiography, he arranged to have it killed in the House-Senate conference.

So, when we see the problem of inflated bond ratings re-emerging, we should all be saying "Thank you, Secretary Geithner."

The Noclue Prize

OCTOBER 7, 2019
Steve Sack / The Minneapolis Star-Tribune, MN

https://www.truthdig.com/cartoons/the-noclue-prize/

Bernie Sanders Is America's Beating Heart

Norman Solomon

https://www.truthdig.com/articles/bernies-heart-is-his-secret-weapon/

Along with being where all blood goes, the heart is an enduring metaphor. As Bernie Sanders recovers from a heart attack, now might be a good time to consider some literal and symbolic meanings.

Bernie immediately used his heart trouble to advance a central mission. From the hospital, he tweeted: “I’m fortunate to have good health care and great doctors and nurses helping me to recover. None of us know when a medical emergency might affect us. And no one should fear going bankrupt if it occurs. Medicare for All!”

That’s the kind of being “on message” we so badly need. It’s fully consistent with Bernie’s campaign and his public life. (“Not me. Us.”) He has never been a glad-hander or much of a showman. He’s always been much more interested in ending people’s pain than proclaiming that he feels it.

About 10 years ago, I was lucky enough to dialogue with Bernie during an “in conversation with” event in San Francisco, where several hundred people filled the room. Before we went on stage, there was a gathering in a makeshift green room that raised a small amount of money for his senatorial campaign coffers. “I’ve never been good at raising money,” he told me.

I thought about that comment when the news broke a few days ago that the Bernie 2020 campaign raised a whopping $25.3 million during the last quarter, with donations averaging just $18. Bernie never went after money. It went after him; from the grassroots.

From the middle of this decade onward, as the popularity of Bernie and his political agenda has grown, so has the hostility from corporate media. The actual Bernie campaign is in sharp contrast with cable TV coverage as well as press narratives.

The campaign looks set to fully resume soon. When Bernie left the hospital on Friday, NBC News quoted the chief of cardiology at the UC San Diego School of Medicine, Ehtisham Mahmud, who said that the three-day length of hospitalization indicates the senator “probably had a small heart attack” — and “they require really a very short recovery time.”

So, from all indications, Bernie will soon be back on the campaign trail — once again hammering on grim realities that are evaded or excused by the political and media establishment, like the fact that just three individuals (Jeff Bezos, Warren Buffett and Bill Gates) have as much wealth as the bottom half of the entire U.S. population.

Last month, in an interview about his proposal to greatly increase taxes on the extremely rich, Bernie said: “What we are trying to do is demand and implement a policy which significantly reduces income and wealth inequality in America by telling the wealthiest families in this country they cannot have so much wealth.” Such concentrations of wealth — and the political power that goes with it — are antithetical to genuine democracy.

For his entire adult life, Bernie Sanders has been part of social movements intent on challenging such profit-mad industries as corporate health care, financial services, mass incarceration and the military-industrial complex that cause so much opulence for the few and so much suffering for the many. The enormous inequalities of wealth and power are systemic and ruthless — with devastating effects on vast numbers of people.

That’s where the heart as metaphor is apt. Bernie has a huge and eternally healthy heart, filled with the lifeblood of empathy and dedication. In essence, that’s what the Bernie 2020 campaign is all about. As he has been the first to say, it’s not about him, it’s about us. How much compassion and commitment can we find in our hearts?

September 2019 Was Earth's Hottest September on Record

Olivia Rosane

Oct. 07, 2019 06:45AM EST

https://www.ecowatch.com/earth-hottest-months-recorded-2640870848.html

September 2019 was the hottest September on record, the EU's Copernicus Climate Change Service reported Friday. This makes it the fourth month in a row this year to be the hottest or near hottest of its kind.

June 2019 was the hottest June on record, July 2019 was the hottest month ever recorded and August was the second-hottest August, according to Copernicus data reported by The Washington Post's Capital Weather Gang.

"The recent series of record-breaking temperatures is an alarming reminder of the long-term warming trend that can be observed on a global level. With continued greenhouse gas emissions and the resulting impact on global temperatures, records will continue to be broken in the future," Jean-Noël Thépaut, director of Copernicus at the European Center for Medium-Range Weather Forecasts, said in a statement reported by The Washington Post.

Copernicus ECMWF@CopernicusECMWF

September #temperature highlights from #Copernicus #C3S:

Globally, this year had the warmest September in our records, although it wasn't much warmer than September 2016

European temperatures above 1981-2010 average in most areas

More detail

http://bit.ly/2ImMMKN

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5:38 AM - Oct 5, 2019
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September 2019 was 0.57 degrees Celsius warmer than the average for the month from 1981-2010, Coepernicus found. It was also about about 1.2 degrees Fahrenheit above the preindustrial average, according to The Washington Post. It was only around 0.04 degrees Fahrenheit warmer than September 2016, meaning the two months were "virtually on a par," Copernicus said. However, The Washington Post pointed out that in 2015 and 2016, there was a powerful El Niño event driving up temperatures. No such event occurred this year.

Places that saw higher than average temperatures this September included much of Europe, much of the Arctic, most of the U.S., Iran, Afghanistan, Mongolia, northern China, central South America, South Africa, southwestern Australia and West Antarctica, Copernicus announced. Marine temperatures were also higher than average, especially over the northeastern Pacific and many seas in the Arctic and Western Antarctic.

Only southwestern Russia, the Central Asian Republics and parts of Antarctica saw temperatures markedly below average. Norway, Sweden and far-eastern Europe also saw below average temperatures.

Copernicus EU@CopernicusEU

September 2019 was 0.57°C warmer than the average September from 1981-2010! Regions most markedly above average temperatures include parts of the USA

and the #Arctic.

September

highlights from Copernicus #ClimateChange Service (#C3S) are out! https://bit.ly/30RLwpy

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10:20 AM - Oct 4, 2019
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CBS News climate and weather contributor Jeff Berardelli said that heat waves are more closely linked to the climate crisis than any other extreme weather event. That is because masses of hot air "pool" extra warming, he told CBS News.

"There is no doubt in the scientific community that heatwaves will continue to get worse in the future due to human-caused climate change," Berardelli said.

And heat waves are also the type of extreme weather event most deadly to humans, according to CBS News.

The U.S. National Aeronautics and Space Administration and National Oceanic and Atmospheric Administration (NOAA) will both release their September temperature data later this month, USA Today reported.

However, a preliminary NOAA tally found that the U.S. recorded 2,491 daily record highs in September, but only 82 daily record lows, as The Weather Channel reported.

More than 100 U.S. cities experienced one of their three warmest Septembers and more than 50 recorded their warmest September ever. Among them was Utqiagvik, Alaska, which recorded a monthly average of 40.8 degrees Fahrenheit, the first time a month other than July or August has averaged more than 40 in the northern city.