HEADLINE Economic, Financial & Global News...
every weekday, to keep you better informed.
Faber: "Middle East Will Go Up In Flames" ...
"Have To Be In Precious Metals and Equities"
by Mark O'byrne - nasdaq.com
....Swiss money manager and long term bear Marc Faber, aka "Dr Doom", says political risk in the Middle East has increased significantly with war between Iran and Israel "almost inevitable", and precious metals and equities investments offer some safety.
"Political risk was high six months ago and is higher now. I think sooner or later, the U.S. or Israel will strike Iran - it's almost inevitable," Faber, who publishes the widely read Gloom Boom and Doom Report, told Reuters on the sidelines of an investment conference.
Stay Long Gold
Submitted by Tyler Durden - ZeroHedge.com
As gold pulls back under $1700, back to 6 week lows (and Silver collapses in its high beta way, reverting back in line with Gold), Morgan Stanley says 'Stay Long Gold'. The recent sell-off notwithstanding, they remain bullish through 2012 and while the current USD strength is a headwind, they expect aggressive Fed action (and other global central banks), including the likely adoption of QE3 in 1H12, to be gold positive. Deciphering the demand and supply dynamics, they forecast prices to rise on a quarterly average basis through 4Q13 as the four pillars of their bull market thesis persist.
Is the Fed a Failure?
By: Steve Saville - GoldSeek.com
....It is not the least bit surprising to us that the historical record doesn't justify the Fed's existence, but no definitive conclusions can be drawn unless the data are viewed through the lens of good economic theory. For example, in the absence of good theory Fed apologists could argue that although the historical record doesn't seem to validate the Fed, things would have been much worse without the Fed. The pro-Fed crowd could also argue that the concept of a central bank is good, it's just that the right people haven't always been in charge. It could even be argued that the Fed has been less effective than originally envisaged because it hasn't had enough power. In the absence of good theory, how could these arguments be refuted?
Ben Bernanke’s gas pump bump
QE2 has weakened dollar, and boosted crude prices
By Joseph R. Mason
BATON ROUGE, La. (MarketWatch) — Any motorist on the road can see our domestic energy policy isn’t working. It’s posted on the prices at the pump, and it continues to rise.
Consumers are rightfully worrying while politicians scramble to point the finger. Certainly there is no shortage of factors to blame — precarious international markets, political gridlock, poor consumer confidence — and the list goes on. But a not-so-obvious culprit is causing some of the biggest and longest-lasting impact: misdirected U.S. monetary policy.
How Iran and Russia Could Cause an Oil Shock
By DAVID FRANCIS, The Fiscal Times
The good news behind the price increase that sent gas to $3.76 a gallon this past weekend is that it is being driven in part by the improvement in the economy and major stock indices. The bad news behind the spike – and the primary reason gas prices are expected to continue to rise through the summer –Iran.
With help from Moscow, and with continuing demand from markets like China and India to the east, Iran could still use its vast energy resources to counter sanctions by the West, complicating efforts to strangle the Iranian economy and end Tehran’s pursuit of nuclear weapons.
Bob Chapman - Radio Liberty 05 March 2012
Tim Geithner Covers for Corruption On Pennsylvania Avenue
By Charles Kadlec OP/ED - Forbes.com
Last Friday, Treasury Secretary Timothy Geithner charged in a Wall Street Journal op-ed that those who oppose the Obama Administration’s regulatory regime for the financial services industry "seem to be suffering from amnesia about how close America came to complete financial collapse under the outdated regulatory system we had before Wall Street reform." Au contraire, Secretary Geithner, it is you who choose to ignore and misrepresent the lessons of the financial crisis by perpetuating the myth that the source of the crisis was a lack of regulation.
First, your essay glosses over the central role the federal government played in creating the crisis. In particular, the government through Fannie Mae and Freddie Mac directed $5.2 trillion (that is trillion with a "t") of capital to increase the supply of mortgages. In addition, it passed a law that required banks to make billions of dollars in loans to individuals that were unlikely to pay off the loans, in the end with 0% down.
Jitters grow over Greece debt swap
Warning of painful consequences
if Greece succumbs to hard default
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — Greece continues to rattle investor nerves ahead of a Thursday deadline for private investors to voluntarily offer up Greek government bonds in a debt swap that will cut the value of their holdings by more than half.
Strategists blamed jitters over the process combined with concerns over global growth prospects as spoiling investor appetite for risk on Tuesday, sending European and U.S. equities lower and undercutting the euro and other risk-oriented currencies.
ECB Surpasses €3 Trillion,
Still Most Undercapitalized Hedge Fund In The World
Submitted by Tyler Durden - ZeroHedge.com
A few days ago when discussing the "stability" of Europe's biggest and most undercapitalized hedge fund, we said that "The adjusted balance sheet is pro forma for today's LTRO 2, which we noted earlier will add at least €311 billion in net assets to the ECB's balance sheet, and potentially much more. Assuming the minimum, it means the ECB's balance sheet will now hit €3 trillion." Sure enough - as of minutes ago, the total ECB balance sheet just passed €3 trillion, or €3.023 trillion to be precise (which is just why of $4 trillion based on today's exchange rate), as our estimate of net LTRO contribution was on the low side, with total assets increasing by €331 billion in the past week. Needless to say, capital and reserves has been unchanged, which means that our analysis from a week ago factoring in the ECB balance sheet expansion of the "well-capitalized" ECB was correct. Incidentally, the spike in the chart below was factored in long ago (about 20% lower in the market ago). And as we have been saying all along, the next bank on the docket to ease is the Fed, as everyone else has already done so. However before that happens stocks and more importantly crude, have to plunge by at least 15-20%, much to Dick Fisher's shock. It seems that the market is finally getting the hint today.
Why big money is turning to China
Today's investing game is about figuring out which central bank will be the next to open the stimulus floodgates. Europe is done, and the Fed is quiet, so . . . .
By Jim Jubak - Money.MSN.com
The global casino is moving on.
Now that the European Central Bank has flooded the European banking system with 1 trillion euros, and now that Federal Reserve Chairman Ben Bernanke has said that the U.S. central bank isn't thinking of a new program of quantitative easing, the best candidate for a big injection of central bank cash into global asset markets is the People's Bank of China.
With $700 Billion In QE3 Already Priced In,
Who Will Blink First?
Submitted by Tyler Durden - ZeroHedge.com
Something interesting happened when the ECB announced last week that its balance sheet was about to rise by €1 trillion gross, and hit a record €3 trillion net earlier today: the EURUSD barely budged. Why? Because as a reminder, the key driving relationship for relative risk performance of 2012 as we forecast back in December is the correlation of the Fed and the ECB's balance sheets, and the EURUSD, respectively, because while we may pretend that there is still alpha in this joke of a market, the truth is that in this new normal only beta matters (the more lever the better), and the only beta that matters is that generated by relative USD strength/weakness.
How Goldman Sachs Fleeced Greece...
Goldman’s Secret Greece Loan Reveals Sinners
By Nicholas Dunbar and Elisa Martinuzzi - Bloomberg.com
Greece’s secret loan from Goldman Sachs Group Inc. (GS) was a costly mistake from the start.
On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said.
Spain's sovereign thunderclap
and the end of Merkel's Europe
By Ambrose Evans-Pritchard - Telegraph.co.uk
The Spanish rebellion has begun, sooner and more dramatically than I expected.
As many readers will already have seen, Premier Mariano Rajoy has refused point blank to comply with the austerity demands of the European Commission and the European Council (hijacked by Merkozy).
Taking what he called a "sovereign decision", he simply announced that he intends to ignore the EU deficit target of 4.4pc of GDP for this year, setting his own target of 5.8pc instead (down from 8.5pc in 2011).
Keiser Report: Cosa Wallstra (E258)
In this episode, Max Keiser and co-host, Stacy Herbert, discuss financial hermaphrodites opening their kimonos and JP Morgan swaps occupying Cassino, Italy. In the second half of the show, Max talks to Das, author of Extreme Money, about potemkin villages of credit derivatives and five-year plans for the world economy.
15 Potentially Massive Threats
To The U.S. Economy Over The Next 12 Months
We live in a world that is becoming increasingly unstable, and the potential for an event that could cause "sudden change" to the U.S. economy is greater than ever. There are dozens of potentially massive threats that could easily push the U.S. economy over the edge during the next 12 months. A war in the Middle East, a financial collapse in Europe, a major derivatives crisis or a horrific natural disaster could all change our economic situation very rapidly. Most of the time I write about the long-term economic trends that are slowly but surely ripping the U.S. economy to pieces, but the truth is that just a single really bad "black swan event" over the next 12 months could accelerate our economic problems dramatically. If oil was cut off from the Middle East or a really bad natural disaster suddenly destroyed a major U.S. city, the U.S. economy would be thrown into a state of chaos. Considering how bad the U.S. economy is currently performing, it would be easy to see how a major "shock to the system" could push us into the "next Great Depression" very easily. Let us hope that none of these things actually happen over the next 12 months, but let us also understand that we live in a world that has become extremely chaotic and extremely unstable.
Insiders as bearish now as last April
Insider selling has become even more lopsided
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — Corporate insiders continue to sell shares of their companies at a well-above-average pace.
In fact, they are behaving even more bearishly than one month ago. And that’s really saying something, since — as I reported then — their pace of selling in early February was the highest since last July, right before the bottom dropped out of the market.
CAUSE, EFFECT & THE FALLACY OF A RETURN TO NORMALCY
By James Quinn - TheBurningPlatform.com
"Thousands upon thousands are yearly brought into a state of real poverty by their great anxiety not to be thought of as poor." – Robert Mallett
I hear the term de-leveraging relentlessly from the mainstream media. The storyline that the American consumer has been denying themselves and paying down debt is completely 100% false. The proliferation of this Big Lie has been spread by Wall Street and their mouthpieces in the corporate media. The purpose is to convince the ignorant masses they have deprived themselves long enough and deserve to start spending again. The propaganda being spouted by those who depend on Americans to go further into debt is relentless. The “fantastic” automaker recovery is being driven by 0% financing for seven years peddled to subprime (aka deadbeats) borrowers for mammoth SUVs and pickup trucks that get 15 mpg as gas prices surge past $4.00 a gallon. What could possibly go wrong in that scenario? Furniture merchants are offering no interest, no payment deals for four years on their product lines. Of course, the interest rate from your friends at GE Capital reverts retroactively to 29.99% at the end of four years after the average dolt forgot to save enough to pay off the balance. I’m again receiving two to three credit card offers per day in the mail. According to the Wall Street vampire squids that continue to suck the life blood from what’s left of the American economy, this is a return to normalcy.
The crisis of solvency – peak debt, peak food stamp usage,
and massive financial deception by media. The faux economy
of solving a solvency issue with more debt.
Job postings up but hiring flat.
The economy is largely running on a solidamount of debt, Orwellian news, and selective perception. Take for example the absolute lack of coverage on our peak debt situation. The media simply assumes that going over the $15 trillion mark on national debt was somehow a story not worth reporting. The total amount we have taken on in borrowing is larger than our annual GDP yet countries around the world are being chastised for this exact problem. Or what about the peak number of Americans now on food stamps? One out of every seven men, women, and children is now onfood assistance at well over 46,000,000. You get food assistance when you are economically scraping by. Yet the media is largely absent on this story. We are living in a crisis of solvency and much of the recent recovery is simply a choice of ignoring glaring issues of solvency.
35 Shocking Statistics
That Things Used To Be Much Better In America
By Michael Snyder - EndOfTheAmericanDream.com
Most Americans know that things used to be much better in the United States, but they don't have the facts and the figures to back that belief up. Well, after reading the shocking statistics in this article nobody should be left with any doubt that things have gotten worse in America. There are less jobs, incomes are down, home values have plummeted, poverty is up, consumer debt is way up, dependence of the government has skyrocketed and government debt is totally out of control. Sadly, it hasn't really mattered which political party has had control over the White House. Things have gotten worse under Obama, they got worse under Bush, and they got worse under Clinton. We are in the midst of a horrific long-term economic decline and the American people desperately need to wake up.
In Ohio, dashed dreams and a housing hangover
One Ohio family's tragic story of emotional and financial loss is a stark reminder of the hard times that hit the battleground state during the financial crisis.
By David Whitford, with Doris Burke - CNN.com
FORTUNE -- "Bad times right now are good times for us," says Craig Shanower. "You know what I'm saying?" It's a gray February afternoon on the east side of Cleveland. Shanower is standing outside a three-story house, white with red shutters: 3399 East 105th Street. Four bedrooms, two baths, according to Zillow. Built in 1910. Last changed hands, for $94,911, in March 2006. It's empty now, has been for years, and this afternoon it's coming down.
"We did 185 houses last year and this year we're hoping to double that," says Shanower, who operates a shovel-truck for Cherokee Demolition, which has a lucrative contract with the city.
Judge allows plan
for Jefferson County bankruptcy to move forward
By Jay Reeves - AP - MontgomeryAdvertiser.com
BIRMINGHAM -- A judge has cleared the way for an Alabama county to move forward with the largest municipal bankruptcy in U.S. history, overruling Wall Street claims that state law didn't allow the county to file the case.
U.S. Bankruptcy Judge Thomas Bennett issued his order late Sunday, allowing Jefferson County, the state's largest county, to remain in bankruptcy as it attempts to sort out more than $4 billion debt linked to borrowing for the county's sewer system.
Scott Walker Caught In Pre-Election Lie
On Collective Bargaining Plans-Will Wisconsin Voters Care?
By Rick Ungar - Forbes.com
Wisconsin Governor Scott Walker is fond of pointing out that he was voted into office based on his promise to take on state employee union collective bargaining rights so that he could get on with balancing the state’s budget.
Indeed, shortly after introducing his controversial ‘beat down’ of collective bargaining in the Badger State, Walker claimed that nobody should have been surprised by his actions because he had campaigned on the issue.
Obama Unveils New J.P. Morgan,
Wells Fargo Bailout Plan, Disguised as Mortgage Relief
By Mike Shedlock - GlobalEconomicAnalysis.Blogspot.com
Under guise of helping homeowners, president Obama has finalized his plan to further aid banks. Please consider Obama's alleged Mortgage Relief Plan.
The White House on Tuesday announced it was cutting the mortgage fees charged by the Federal Housing Administration’s refinancing program in another effort to help the languishing housing market recover.
President Barack Obama will announce the move at an afternoon press conference, his first since November.
An estimated 2 million to 3 million FHA borrowers will be eligible to benefit from the revamped program, the White House said in a statement.
Subprime to the Rescue
By Greg Hunter - USAWatchdog.com
Subprime lending is back, and it is creating headlines like: “February auto sales rise to highest level in 4 years.” That comes from a story last week from Reuters. Reuters goes on to say,“U.S. auto sales rose nearly 16 percent in February and the annual sales rate leapt to its best level in four years . . . For a second month in a row, sales surpassed even the most optimistic expectations. Analysts ascribed the gains partly to rising consumer confidence and upbeat U.S. economic data.” (Click here for the complete Reuters story.)
Subprime lending was one of the major causes of the 2008 economic meltdown. You would think the banks and the government would have learned a lesson, but they did not.
Couple Lives In $1.3 Million,
4,900 Square Foot Home
For Five Years Without Making A Single Mortgage Payment
Submitted by Tyler Durden - ZeroHedge.com
Wonder how Americans can afford to buy millions of iGadgets, a second LCD TV for the shoe closet, and eat at restaurants more than almost any time in the past despite sliding personal income? Simple - increasingly fewer pay the biggest staple bill in a US household: their mortgage. The following story of Keith And Janet Ritter, who have lived in their Fort Washington, MD $1.29MM, 4,900 square foot McMansion for 5 years (which they purchase with no money down) without ever making a single mortgage payment, and who are not even close to being evicted, may explain much about the way US society currently operates, and why other perfectly responsible and hard-working taxpayers (who do have to pay for their mortgage) continue to fund tens of billions in Fannie and Freddie losses who are first on the hook to absorb the implicit losses by allowing families such as the Ritters to live in perpetuity without paying, and the banks to keep said mortgage on the books at par without any impairments.
A million-dollar mortgage goes unpaid for years
while couple fights foreclosure
"When a bank does all it can to save itself, that’s good business," Keith said. "When a homeowner does the same thing, he’s called a deadbeat."
Reprieve after reprieve
For a guy who has lost much of his wealth and is on the verge of getting booted from his home, Keith Ritter is oddly calm. He says things such as, "No matter what happens, we are at peace" and likes to quote Scripture.
He and Janet pray daily, read the Bible, attend Pentecostal services and are reliable tithers. Their faith fuels their hope that they can somehow stave off eviction. But they also keep the sheriff’s office on speed dial. Keith calls the number every few days, always with the same question: "Do you have a date for us yet?"
Zillow and Trulia Face Backlash from Realtors
By STEVE YODER, The Fiscal Times
It used to be a given for anyone selling their house – a realtor would put their listing on national real estate aggregator websites like Zillow, Trulia, and Realtor.com to maximize exposure and sell homes quickly. But that could be changing fast as the two entities face off.
Since 2005 or so, realtors have shared data about homes they have for sale with those national sites, which have millions of visitors (Zillow, for example, had 32 million last month). But even though the sites have grown, sales haven't in the distressed housing market, and some agents believe the sites may not be helping. They accuse them of engaging in practices that give buyers inaccurate information that may hurt sales.
Postal Service can pay taxpayers - if Congress acts
By Jennifer Liberto - CNN.com
WASHINGTON (CNNMoney) -- The Postal Service is facing such a cash crunch that it has a $12.1 billion loan outstanding from Treasury.
But taxpayers will be paid back, especially after Congress acts to help save the Postal Service, according to most experts.
While progress on a measure has been slow-going in Congress, both House and Senate legislation would dramatically reduce or eliminate debt by tapping overpayments made in retirement accounts.
Report on college loan delinquency rate raises alarms
As many as 1 in 4 borrowers was carrying a past-due student loan balance in the third quarter, a much higher delinquency rate than previously thought, according to the Federal Reserve Bank of New York.
By Don Lee, Los Angeles Times
Reporting from Washington — Some experts have called the nation's soaring college debt load a "ticking time bomb" — a looming crisis threatening young adults, their families and the broader economy.
A new report raises even more alarms: It's likely that as many as 1 in 4 borrowers was carrying a past-due student loan balance in the third quarter, the Federal Reserve Bank of New York said Monday.
10 Insanely Overpaid Public Employees
By BLAIRE BRIODY, The Fiscal Times
When it comes to government employees, there’s plenty of news about laid off social workers in Florida, furloughed forest rangers in Minnesota, and underpaid teachers everywhere else. Yet even during these hard times, there are thousands of government employees who still earn great, big salaries – many of them hundreds of thousands more than the $400,000 Obama pulls down each year. In 2009, 347 Texas state employees earned more than the president; 53 of them made more than $600,000. In New York, 35 employees were paid over $400k last year. Since 2005, the number of Federal employees earning $150,000plus has jumped tenfold: going from 12,399 to 171,689. Much of the increase has been in medicine. Doctors at veterans hospitals and prisons averaged $179,500 in 2010, up from $111,000 in 2005.
Potential employers, colleges asking for Facebook passwords
Puget Sound Business Journal
Some employers and colleges are asking to have access to the Facebook pages of job applicants and student athletes, according to a report on Tuesday.
MSNBC's Red Tape Chronicles blog said job applicants at the Maryland Department of Corrections have been asked to log into their accounts so that interviewers could see their wall posts, friends, photos and anything else they may have behind the social network's privacy wall.
The American Civil Liberties Union complained when the department asked applicants to surrender their user name and password, so now the request is that they log in "voluntarily" during the job interview.
U.S. Swoops Down on Alleged Computer Hackers
By CHAD BRAY - WSJ.com
U.S. authorities unveiled criminal charges on Tuesday against six people in the U.S. and overseas that they described as important members of a computer hacking group that carried out a series of high-profile online attacks in recent years and stole confidential information from major companies.
The charges are the latest development in a global crackdown on hackers who have undertaken denial-of-service attacks and computer breaches at corporations, banks and government affiliates. Computer hacking groups Anonymous and Lulz Security, a splinter group, have taken credit for many of the incidents.
The Illuminati are Panicking: David Icke Reports 1/4
On the Tuesday, March 6 edition of the Alex Jones Show, Alex talks with former BBC television sports presenter, spokesman for the Green Party, author and speaker David Icke. He is the author of Infinite Love Is the Only Truth: Everything Else Is Illusion and is featured in a number of videos, including Speaking Out: Who Really Controls the World and What We Can Do About It and Freedom or Fascism: The Time to Choose.
The Illuminati are Panicking: David Icke Reports 2/4
The Illuminati are Panicking: David Icke Reports 3/4
The Illuminati are Panicking: David Icke Reports 4/4
Libertarians: Only now, at the end, do you understand...
By Noah Smith - NoahpinionBlog.Blogspot.com
Given my history of critiquing libertarianism, it would hardly be surprising if I felt a flash of gleeful schadenfreude to see the dismay with which so many movement libertarians are reacting to the Koch takeover of the Cato Institute. But I don't. I just feel sad. Here are a bunch of smart people who truly, honestly believe in their worldview - a worldview that shares some key elements with my own - discovering for the first time that they are in fact merely a proxy army for people who don't take them or their worldview seriously at all.
To those of us outside the movement, the fact that libertarians are a proxy army has always been painfully obvious. The key piece of evidence was always the set of issues that libertarians chose to emphasize. Most Americans share the belief that civil liberties are good, war is to be avoided, and high taxes are bad. But the fact that our country's libertarian movement spent so much time fighting high taxes and so little time fighting the encroaching authoritarianism of conservative presidential administrations was a clear sign that some priorities were seriously out of place. Should we really be more afraid of turning into Sweden than turning into Singapore? The contrast between libertarians' continual jeremiads against taxes and their muted, intermittent criticism of things like warrantless wiretaps, executive detention, and torture was a huge tip-off that the movement was really just some kind of intellectual front for America's right wing.
Cato Institute Is Caught in a Rift Over Its Direction
By ERIC LICHTBLAU - NYTimes.com
WASHINGTON — From its perch in a spacious brand-new headquarters blocks from the White House, the Cato Institute has built on its reputation as a venerable libertarian research center unafraid to cross party lines.
Now, however, a rift with one of its founding members — the billionaire conservative Charles Koch — is threatening the institute’s identity and independence, its leaders say, and is exposing fault lines over Mr. Koch’s aggressive and well-financed brand of Republican politics.
Cato Koch Fight
By JAMES JOYNER - OutsideTheBeltway.com
Reading the comments to Doug Mataconis' posting "Battle For Control Of Cato Institute Reveals Conservative-Libertarian Divide" I see a lot of comments along the lines of Brad DeLong's snark that, "The Kochs' point of view is simple: since William Niskanen's death the shareholders’ agreement says that they own a majority of the shares of Cato, and it is their property with which they can do as they wish. It is hard to see how any true libertarian could possibly disagree, and seek to do anything other than to vindicate the Kochs’ liberty interest in what is their property."
But I’m not seeing anyone argue to the contrary. Not Julian Sanchez. Not any of the dozen-plus commentators that DeLong rounds up and consumes with "delicious irony" on the grounds that they "are not libertarian but rather Burkean, communitarian, and social democratic ones, and thus arguments that no true libertarian could ever possibly make." Libertarianism, at least in its Cato-style American form, is about the relationship between man and the state. Most libertarians would bitterly oppose government action to prevent the brothers Koch from turning Cato into a Republican hack shop.* None who are bemoaning the possibility of that becoming Cato’s fate would dispute that, if the Kochs indeed have a controlling interest, they have every right to fire every independent thinking employee who fails to hew to the party line. Sanchez, for one, cheerily concedes that point.
Cato Goes to War
The Koch brothers have launched an extraordinary campaign to take control of America’s most respected libertarian think tank. Will they destroy it?
By David Weigel - Slate.com
On Friday afternoon, as the Washington offices of the Cato Institute were emptying out for the weekend, the libertarian think tank’s president sent an e-mail to all staff. The subject was the Koch brothers crisis.
"Catoites," wrote Ed Crane, "You are all probably aware by now of the unfortunate development with Charles and David Koch. They are in the process of trying to take over the Cato Institute and, in my opinion, reduce it to a partisan adjunct to Americans for Prosperity, the activist GOP group they control."
Koch v. Cato — A View from Cato
By Jonathan H. Adler - Volokh.com
My friend Jerry Taylor, a senior fellow at the Cato Institute, offered me his perspective on the Koch-Cato dispute. Jerry’s obviously sympathetic to Cato President Ed Crane, but he also offers a fair amount of detail about recent events, including recent changes to the Cato Institute’s Board of Directors - changes that occurred last Thursday and I have yet to see reported in the press.
I understand that the Kochs have a different perspective on some of the relevant events but have not (as yet) gotten anything on-the-record beyond that which has appeared in various news accounts. If I do, I will post that as well.
Koch versus Cato: unravelling the riddle
By Charles Rowley
....Readers should not expect many free market think tanks to speak out against the Koch assault. Too many of them benefit financially from the pocket money doled out by Charles and David Koch through their various well-funded foundations. That pocket money comes at a significant cost. I can assure you that there is no such thing as a free Koch luncheon.
Save the Cato Institute
By Timothy B. Lee - Forbes.com
You may have heard the news last Thursday that Charles and David Koch had filed a lawsuit seeking to take control of the Cato Institute. My friend Dave Weigel has an in-depth look at the background of the dispute. I want to endorse the comments of my colleague Gene Healy:
I can understand why so many people in the small-government movement feel conflicted and disappointed about this dispute. But while I'm disappointed, I'm not conflicted.
When it comes to this lawsuit, like Jonathan Adler, "I cannot understand how [the Kochs'] actions can, in any way, advance the cause of individual liberty to which they’ve devoted substantial sums and personal efforts over the years."
On Thursday, Charles G. Koch told the press, "We are not acting in a partisan manner, we seek no 'takeover' and this is not a hostile action."
With all due respect, Mr. Koch, that is not true.
More on Cato—Koch Bros want to
"transform our Institute into an intellectual
ammo-shop for American for Prosperity"
By Gaius Publius - AmericaBlog.com
The story of the Koch Bros "hostile takeover" of the Cato Institute has attracted some telling leaks.
In our first post on this story, we noted (new emphasis supplied):
But why a lawsuit at all, you ask? Why does it matter? No one knows for sure, but here's one possibility, from yet a third Post story, quoting Cato board chair Bob Levy (who may or may not be right):
Cato’s board chairman, Bob Levy, said in an interview that the Koch brothers, who have the power to appoint half of the board, have been choosing "Koch operatives" for [board] members, with an eye to push Cato towardsupport of the Republican Party.
Koch Email to Alumni Regarding Cato Lawsuit
UnderPenaltyofCatapult.com [Editor's note: This email was sent from the Charles G. Koch Foundation to a mailing list of CGK program alumni on March 6, 2012.]
Thank you for bringing your inquiries forward regarding the shareholders’ agreement with Cato. We’d like to take this opportunity to respond and provide some additional context. Please continue to let us know what questions you have from here.
Think Tank in Koch Brothers Dispute
Could Find Its Tax Status at Risk
By Debra E. Blum - Philanthropy.com
Charles and David Koch, the billionaire brothers active in Tea Party politics, last week sued the libertarian Cato Institute, which Charles Koch helped found more than 30 years ago, in a move that would ensure their control over the institution.
But in filing the lawsuit, the brothers may well have tipped off the Internal Revenue Service to concerns that the organization has never deserved to be a charitable institution eligible to receive tax-deductible contributions or other benefits of tax exemption, says a former head of the tax agency’s charity division.
Koch Brothers Sue Cato in Ownership Dispute
by R Butler - TXWCLP.org
In a move that could have significant impact on institutional libertarianism, Cato Institute founder Charles Koch and his brother David (the latter of whom sits on the boards of both Cato and the Reason Foundation, which publishes this website), are suing Cato, Cato President Ed Crane, and the widow of recently deceased former Cato chairman William Niskanen in a dispute over Niskanen's ownership shares in the $39 million libertarian think tank. Here’s how the Washington Post, which broke the story, characterized events:
- - - - - - - - - - - - - - - -
Archived Page Link
- - - - - - - - - - - - - - - -