Fallout from Huge Solar Flare Sideswipes Earth

Fallout from Huge Solar Flare Sideswipes Earth Today

May 17, 2013

SPACE.com - A huge explosion on the sun will deal Earth a glancing blow today (May 17) but should not pose a threat to the planet, scientists say.

The sun storm erupted late Tuesday (May 14) during a powerful solar flare — the fourth unleashed by a single sunspot in just 48 hours — and hurled a massive cloud of charged particles out into space at millions of miles an hour.

Such eruptions — known as coronal mass ejections, or CMEs — can wreak havoc if they hit Earth squarely, temporarily disrupting GPS navigation, satellite communications and power grids. But this one isn't aimed directly at us, so there's no cause for alarm, experts say.

Space weather forecasters with the U.S. National Oceanic and Atmosperic Administration "estimate a 40 percent chance of polar geomagnetic storms when the cloud arrives," astronomer Tony Phillips wrote today on Spaceweather.com, a website that tracks skywatching and space weather events.

"High-latitude skywatchers should be alert for auroras tonight," Phillips added.

The solar flare associated with Tuesday night's CME registered as an X-class flare, the most powerful type. It was the fourth X flare unleashed by a sunspot known as AR1748 since Sunday night (May 12).

While incredibly powerful, Tuesday's flare actually was the weakest of the four rapid-fire X flares, clocking in at X1.2. The previous three registered as X1.7, X2.8 and X3.2 flares, respectively. Those three all occurred while AR1748 was facing away from Earth, however, so they did not affect our planet.

AR1748 is currently rotating toward Earth and should be lined up with us more or less directly by Saturday (May 18), researchers say. And the sunspot is still busy, firing off two medium-strength M flares over the past two days.

Scientists classifly strong solar flares into three categories, with C being the weakest, M intermediate and X the most powerful.

X-class flares can cause long-lasting radiation storms in Earth's upper atmosphere and trigger radio blackouts. M flares can cause brief radio blackouts in the polar regions and occasional minor radiation storms, while C flares have few noticeable consequences. Strong solar flares can also supercharge Earth's auroras, creating dazzling northern lights displays.

The sun is currently in an active period of its 11-year solar weather cycle and is expected to reach peak activity later this year. The current cycle, known as Solar Cycle 24, began in 2008.

Scientists have been tracking sunspots, solar flares and other space weather events since they were first discovered in 1843. Today, an international fleet of spacecraft keeps constant watch on the sun's activity.

Obama Family's Large JP Morgan Account

Obama Financial Forms Show Big JP Morgan Account

May 15, 2012

The Ticket - Maybe it's a case of putting your mouth where your money is.

President Barack Obama praised JP Morgan Chase in an interview recorded Monday as "one of the best managed banks there is" and its CEO, Jamie Dimon, as "one of the smartest bankers we got."

On Tuesday, the White House made public financial disclosure forms showing the president and First Lady Michelle Obama had between $500,001 and $1,000,000 in a "JP Morgan Chase Private Client Asset Management Checking Account."

The annual peek into the Obamas' finances showed that the president held between $1,000,001 and $5,000,000 in U.S. Treasury Notes, generating between $5,001 and $15,000 in interest. They also held between $500,001-$1,000,000 in Treasury Bills.

Obama, who recently said he had only paid off his student loans eight years ago, has been doing pretty well by daughters Sasha and Malia: The disclosures show four college savings accounts each with between $50,001 and $100,000 in them.

Obama's "Dreams From My Father" book pulled in royalties between $100,001 and $1,000,000. "The Audacity of Hope" had more modest earnings, making the Obamas between $50,001 and $100,000. Obama's "Of Thee I Sing: A Letter To My Daughters" children's book generated between $100,001 and $1,000,000 (though the forms noted that those funds will go to the Fisher House Foundation for a scholarship fund honoring children of fallen or disabled soldiers).

The Obamas reported a regular JP Morgan Chase checking account, this one worth between $1,001-$15,000, and listed interest of less than $201.

(In his wide-ranging conversation on ABC's "The View," Obama also said that JP Morgan Chase's $2 billion trading loss is "going to be be investigated.")

The only liability listed in the Obamas' disclosure form was the mortgage on their home in Chicago. The first couple is paying 5.625% interest on a 30-year loan of between $500,001 and $1,000,000.

For readers who want more on the President's finances, here's a link.

Vice President Joe Biden also released his financial disclosure forms, which are far more modest than the Obamas' (repeat national bestsellers have a way of pumping up one's bottom line). But they include one intriguing item: A gift. According to the disclosure, Biden accepted a Vulcain Cricket Watch, with an estimated value of $800.

"The Vice President received a Vulcain Cricket watch from the proprietor of a small jewelry store while on an official trip to Finland," a Biden aide said on condition of anonymity.

"The Vice President accepted it in keeping with a tradition established by the proprietor's family of presenting this watch to U.S. Presidents visiting Finland, including Presidents Ford, Reagan, Herbert Walker Bush, and Clinton," the aide said.

The aide pointed Yahoo! News to a blog post describing that tradition.

Read More...

IRS Scandal Suddenly Became About Obamacare

Why the IRS Scandal Suddenly Became About Obamacare

May 15, 2013

The Atlantic Wire - It seems as if the battle over the IRS' improper focus on Tea Party groups has splintered into an attack on the Affordable Care Act, better known as Obamacare. But it's more accurate to say that the new scandal is simply the latest reason being used to attack the president's health-care legislation.

Here's how the two are linked. When the Supreme Court upheld the ACA last June, it did so on what could be described as a four-to-four-to-one vote. The Court's four liberal justices supported the policy; four of the five conservatives opposed it. Chief Justice John Roberts's majority opinion upheld the policy for an unexpected reason: Congress has the ability to regulate health care as part of its power to tax. Since the policy was administered through the IRS, the law was Constitutional.

According to CNBC, there are 47 different provisions of the ACA that the IRS is supposed to administer. (An overview of some of the Act's provisions is provided at the IRS website.) That's 47 new things for the IRS to track — meaning a substantial increase in the amount of work the IRS needs to do. According to reporting from the Fiscal Times, the IRS will add over 2,000 new employees to do that work, an addition that also requires a substantial increase in the amount of money the IRS needs.

Attacks on the ACA are not new. Today, the House is expected to vote for the 37th time to repeal the policy entirely. Nor are attempts to inhibit the IRS' ability to administer the policy by curtailing funding new; in March, the House passed a funding resolution that aimed at scrapping that money.

What's new is the leverage provided by the still-brewing IRS scandal. It didn't take ACA opponents long to imply that the IRS' errors and failures in the administration of non-profit status implied that it couldn't be trusted to properly administer Obamacare. Michele Bachmann presented the most extreme argument to that end, but she wasn't alone in suggesting that there was a problem. On Monday's Morning Joe, Newt Gingrich argued that the agency was fundamentally untrustworthy, asking, "Why would you trust the bureaucracy with your health if you can’t trust the bureaucracy with your politics?"

Senator Dean Heller of Nevada was more direct. Yesterday, Heller wrote a letter to Health and Human Services Secretary Kathleen Sibelius indicating that both Congress and her agency must "look closely at the money given to the IRS through the health care law" in light of "recent events" involving the IRS. Heller announced that he planned to introduce a bill that would block the $440 million the agency needs for implementation, though, as the Las Vegas Sun points out, that legislation would be unlikely to get past Senate Majority Leader Harry Reid. 

Given the narrow scope of malfeasance outlined in the Inspector General's report about the IRS, it's not yet clear if critiques of the agency as a whole will stick. The president yesterday called for harsh consequences for those involved, albeit not as harsh as demanded by the Speaker of the House.

Boehner on IRS: My question isn't who's going to resign, it's who's going to jail.
— Michael McAuliff (@mmcauliff) May 15, 2013

Should accountability for the mistakes happen quickly, the damage the agency faces would likely be contained. (One thing that probably isn't worrying the IRS is the prospect of a sharp decline in its popularity. A 2009 Gallup poll identified the agency as the third-least popular in the government.)

The calls for Obamacare to be separated from the IRS will continue no matter what happens, as evidenced today in a harsh editorial in the Wall Street Journal. The most striking aspect of that editorial, though, is what isn't prominently featured: the argument that the IRS non-profit mistakes make the case for taking ACA administration away from the IRS. It's mentioned, but it's not needed for the argument. It's almost as if the Journal would have made the case against the ACA regardless of the scandal.

U.S. House Votes to Repeal Obamacare in 37th Symbolic Act; Attempts to Dismantle the Law will Likely Go Nowhere in the Democratic-run Senate

The Republican-controlled U.S. House of Representatives voted to repeal President Barack Obama's healthcare reform law on Thursday in a symbolic move aimed as much at healing internal Republican rifts as demonstrating dogged party opposition to "Obamacare." The 229-195 vote occurred largely along party lines and marked the 37th time the House has voted to repeal or defund the 2010 Patient Protection and Affordable Care Act, which is now in the final months before full implementation on January 1. Like previous attempts to dismantle the law, the measure will likely go nowhere in the Democratic-run Senate.- Reuters, May 17, 2013

When the Supreme Court upheld the ACA last June, it did so on what could be described as a four-to-four-to-one vote. The Court's four liberal justices supported the policy; four of the five conservatives opposed it. Chief Justice John Roberts's majority opinion upheld the policy for an unexpected reason: Congress has the ability to regulate health care as part of its power to tax. Since the policy was administered through the IRS, the law was Constitutional.- The Atlantic Wire, May 17, 2013

House Republicans repeal Obamacare again. Why do they keep doing it?

House Republicans repealed Obamacare for the fourth time Thursday, and like their other efforts, it will go nowhere in the Senate. Yet for the party's base, it's hardly a pointless vote.

May 17, 2013

Christian Science Monitor - House Republicans booked yet another chapter of their drive to repeal President Obama’s signature health-care law on Thursday night, ramming their fourth complete repeal and 37th elimination of some portion of the law through the chamber on a 229-to-195 vote.

Two Democrats joined Republicans in voting for a measure that represents a cornerstone of the Republican attack on Mr. Obama and congressional Democrats in the election cycle to come.

While the scandals currently roiling Washington – from the IRS’s overreach to the Department of Justice’s seizing of Associated Press phone records to a lack of clarity over the Obama administration’s response to the terror attacks in Benghazi, Libya – don’t seem to have a common theme, Republicans see a unifying thread: government overreach.

Republicans argue, in effect, this is what happens when you put your faith in big government. And at the bedrock of that critique, the purest form of this governmental overreach in the minds of many conservatives, is Obama’s signature health-care law.

Sen. Marco Rubio (R) of Florida put it just so on the Senate floor on Wednesday.

“This same IRS [who targeted conservative groups for more scrutiny] will now have unfettered power to come after every American and ensure that either you’re buying insurance or you’re paying them a tax. Every American business. The front lines of enforcing Obamacare falls to the IRS. That is what happens when you expand the scope and power of government,” Senator Rubio said.

“It’s always sold as a noble concept. It’s always offered up by government as, ‘We’re going to give the government more power so they can do good things for us.’ But the history of mankind proves that every time a government gets too much power, it almost always ends up using it in destructive ways against the personal liberties of individuals,” he continued.

The health-care law is such a fundamental piece of the Republican political playbook because it has enormous implications for the lives of ordinary Americans – and thus weighty political implications.

Republicans have argued for a long, long time that excluding a handful of popular provisions in the health-care law, the implementation of the bulk of the law regarding insurance exchanges in late 2013 and 2014 will be a disaster. That’s because, they argue, the law is too complex and dysfunctional to be well-implemented, Republicans argue, and will drive up insurance costs with little accompanying benefit.

“Ultimately, that’s the meaning of the vote being taken by the House of Representatives on Thursday,” said Joe Trauger, a vice president at the National Association of Manufacturers, in an e-mailed statement. “It is a vote of no-confidence.”

Americans tend to agree that the law will drive up premiums, according to a recent survey by TIPP/The Christian Science Monitor. Some 61 percent say that premiums will increase significantly versus 7 percent who think they will stay the same and 25 percent who think premiums will drop significantly.

Republicans have had some policy impact on the law already. On seven occasions, bills specifically targeting the health-care law or changes to the law folded into other bills have passed the House and been signed by the president.

Republicans think it’s such a bad deal, in fact, that they’re willing to overlook something that usually stops bill dead in its tracks – the fact that repealing the law adds to the deficit. When the Congressional Budget Office looked at the impact of repealing the law in July 2012, it concluded that such legislation would add just over $100 billion to the deficit over the next decade.

They also see a political benefit. Senate Republicans’ campaign committee targeted Democratic Reps. Bruce Braley of Iowa and Gary Peters of Michigan, two 2014 Senate contenders, with statements challenging them to vote to repeal the health-care law, for example.

Conservatives remember the 2010 midterms, when rage about the health-care law helped them give congressional Democrats a “shellacking,” in the president’s words, and put Republicans into the majority in the House. It’s that 2010 election – and to a lesser extent the 2012 polls – that force the GOP to hold votes on the issue.

The Monitor/TIPP poll shows the public is split on the law, with 46 percent saying the law should be repealed in full but roughly the same share of Americans saying the bill should either be expanded or left as-is (21 and 24 percent, respectively).

However, momentum may be in the GOP's favor. Forty percent of Americans view the health-care law more negatively than they did one year ago, according to the poll, compared with 10 percent who view the law more favorably. A slim majority, 51 percent, oppose the law either somewhat or strongly, while 39 percent support the law in some fashion.

But the law is a lightning rod with the conservative base, and conservative lawmakers are concerned about appearing to go soft on the issue.

Several members on the GOP conference’s most rightward flank objected to voting for a GOP proposal that aimed to shift funds from one part of the law to another last month, arguing that because the conference had not yet voted to repeal the entire law yet. Republicans didn't want to appear to be validating the law by tweaking it before voting to rip it out by the roots once again.

Those conservative concerns didn’t appear to be misplaced on Thursday: The base is certainly paying close attention.

Obamacare was not far from the lips of tea party activists protesting the IRS’s targeting of conservative groups on Capitol Hill.

“When you think about Obamacare being implemented and 16,000 more people added to the IRS, are they going to be next determining who can get health care based on your political views?” asked Dianne Belsom, a leader of a South Carolina tea party group.

As such, the 37th vote almost certainly won’t be the last.

“Many people have said this issue was dead. Many people have said that Obamacare is here to stay. We are here as the people's representatives, as real people from across the United States, to say this issue is now revived,” said Rep. Michelle Bachmann (R) of Minnesota, the sponsor of the health-care repeal law. “It is back on the table.”

Obamacare Supporters Attacking Job Creators has Mark of a Professional Operation

Why are Obamacare supporters attacking job creators?

When seemingly organized Obamacare supporters attack small business leaders who express concern about the health-care law, job creators are no longer just uncertain about how their business will be impacted by the law. They are afraid – for their businesses and to speak out.

May 16, 2013

Christian Science Monitor - On a Monday morning in March, small business owner Mike Ruffer told a group at the Heritage Foundation in Washington, D.C, how his eight Five Guys Burgers and Fries franchise restaurants in North Carolina were faring under the Affordable Care Act, known as Obamacare. Five hours later, the backlash was so intense he had to wonder if that 15-minute speech might kill his company.

In fact, Mr. Ruffer is the most recent victim in a troubling pattern of seemingly orchestrated campaigns to silence small business owners who speak out about President Obama’s agenda. CEOs have told me they see disturbing parallels in the Internal Revenue Service and Department of Justice scandals, where the administration pursued political opponents and the press. And, quite frankly, these business owners are afraid.

Ruffer is in the same tough spot most job creators are today: stuck in the limbo of uncertainty about the future of Obamacare. He told the audience in Washington on that Monday morning that Mr. Obama’s health-care reform was so expensive he had to cancel expansion plans and may raise burger prices.

ONE MINUTE DEBATE: 3 views on whether the next Congress should repeal Obamacare

Like many in his business, Ruffer set up his restaurants as separate corporations a decade ago. As Obamacare emerged, he was not concerned because none of his companies had enough employees to suffer the mandate that all employers of a certain size provide health insurance to their employees.

When more details were revealed, he found out his multiple corporations did not protect him at all. Today Ruffer believes the costs of health-care reform will eat the entire profits of one of his restaurants. Just like his peers, he is uncertain about imminent costs and requirements under Obamacare and cannot plan accordingly.

All businesses are affected by the health-care law’s mandates, but small businesses – especially restaurants – have less maneuverability to pay for them. As Ruffer told his audience, passing the cost to customers risks pricing his products beyond perceived value. As a result, he would have to cut his expenses: employees, investments in new locations, and more.

When Ruffer’s comments hit the Internet, calls and emails from Obamacare supporters rained into executives at Five Guys headquarters – Ruffer’s bosses. Social media started to turn against the popular brand, and progressive bloggers filed the first wave of negative stories.

Within hours, corporate headquarters was distancing themselves from their North Carolina business partner, stating that his views did not reflect the corporate position. Ruffer stopped answering his telephone; emails went unanswered. The business he had built after retiring was suddenly in danger. He probably wondered why he opened his big mouth – and he’s not alone.

In late 2012, executives from Darden Restaurants – owner of The Olive Garden, LongHorn Steakhouse, and Red Lobster restaurants – were planning for future compliance with the new health-care law and tested the impact of putting more workers on part-time schedules. No permanent changes ever took place, but after media reports about the testing and commentary about the cost of Obamacare by Darden’s CEO, the company was rapidly rebuked via telephone, email, and social media.

At the same time, John Metz’s Palm Beach-based RREMC Restaurants, owner of 30 Denny’s franchises, announced he might put an Obamacare cost line on diners’ checks. Then came the deluge of emails and telephone calls and the social media backlash. Again, the franchise headquarters and Denny’s brand were targeted, not just the franchisee. Within a day, Denny’s corporate offices expressed “disappointment” with Mr. Metz’s comments and Metz issued a public apology.

The list goes on: Applebees, Papa John’s, even golfer Phil Mickelson. When a business owner speaks up about the costs of Obamcare, he is quickly singled out for a public thrashing.

Each attack has similar fingerprints and the marks of a professional operation: telephone banks and email campaigns that erupt moments after a business leader speaks out, all focused on pressuring the exact people who can effectively slap the offender down.

And the president's supporters certainly are organized. While Ruffer was buried in backlash, Organizing for Action was holding a two-day summit two blocks from the White House. The nonprofit group formed from Obama’s reelection campaign was charting its future. According to press reports, attendees were talking about applying campaign tactics to support the president’s domestic agenda.

Of course, those on the left aren’t the only ones to organize campaigns to target those who go against their platform. But when Obamacare supporters target small business owners – the backbone of US job creation – I have to wonder if they’ve crossed a line.

Is this new era of the permanent campaigning why Mike Ruffer believes his business is at risk? “Of course this is orchestrated, and clearly by the president’s supporters,” Democrat pollster Pat Caddell told me. “This passes the duck test: It looks, swims, and quacks like a duck. Every political operative in the country knows this is a duck.”

Mike Leven, president of Sands Casino, summed it up recently: “For the first time in my long career, I feel like a target.” He is not alone. A recent Job Creators Alliance poll showed 70 percent of small business owners feel Washington has become more hostile to them in recent years. Their peers at Five Guys, Denny’s, Applebee’s, Red Lobster, and more would certainly agree.

Today, job creators across the country are staring into the depths of Obamacare uncertainty. New problems keep coming, with little or no warning. Facing the same questions as Ruffer, they cannot plan. But when seemingly organized forces of Obama supporters attack small business leaders, disrupt commerce, and risk jobs to make a political point, job creators are no longer just uncertain. They are afraid – afraid for their businesses and afraid to speak out.

Bernie Marcus is co-founder and former CEO of Home Depot and co-founder of the national Job Creators Alliance.

College-Industrial Complex Drove Tuition High

Dear Class of ‘13: You’ve been scammed

May 17, 2013

MarketWatch - No one else is going to tell you this, so I might as well.

You sit here today, $30,000 or $40,000 in debt, as the latest victims of what may well be the biggest conspiracy in U.S. history. It is a conspiracy so big and powerful that Dan Brown won’t even touch it. It’s a conspiracy so insidious that you will rarely hear its name.

Move over, Illuminati. Stand down, Wall Street. Area 51? Pah. It’s nothing.

The biggest conspiracy of all? The College-Industrial Complex.

Consider this: You have just paid about three times as much for your degree as did someone graduating 30 years ago. That’s in constant dollars - in other words, after accounting for inflation. There is no evidence that you have received a degree three times as good. Some would wonder if you have received a degree even one times as good.

According to the College Board, in 1983 a typical private American university managed to provide a bachelor’s degree education to young people just like you for $11,000 a year in tuition and fees. That’s in 2012 dollars.

Instead, those of you at private colleges paid this year an average of $29,000.

And back then a public college charged just $2,200 a year in tuition and fees - in today’s dollars. You could get a full four-year degree for $8,800. Today that will get you one year’s tuition, or $8,700.

Notice, please, we are not even counting the cost of all the “extras,” like room and board. This is just the cost of the teaching.

It is, as a result, no surprise that total student loans are now approaching $1 trillion. They have easily overtaken credit card debts and car loans. According to the Federal Reserve Bank of New York, total student loans have basically tripled since 2004. Fed researcher Lee Donghoon says in the last eight years the number of borrowers has gone up by about 70%, and the average amount owed has also gone up about 70%.

Donghoon calculates that about 17% of those with student loans are more than 90 days’ delinquent on their interest payments. Yet he also calculates that 44% haven’t even entered the repayment period at all.

If you turn to the pages of any newspaper you will read a lot of handwringing about this. You will hear attacks on “predatory” student loan companies, and “predatory... for-profit colleges.” You will hear about cutbacks on Pell Grants and federal aid and proposals to lower the interest rate on subsidized federal loans. But all of these comments ignore one basic problem.

U.S. colleges are a rip-off. Two decades ago I spent six years at Cambridge and Oxford universities and it didn’t cost me a nickel. Admittedly one reason was social policy: The taxpayers paid the bill (and a very good return they earned too, given the British taxes I paid once I graduated and started work). But the second reason was that these universities did not charge an arm, leg and other appendage for the act of teaching.

My undergraduate course at Cambridge largely consisted of one hour a week with a tutor, a weekly essay question and research list, and a library card. This teaching model hadn’t changed much, really, since the days of Aristotle. Student, teacher, discussion. See you same time next week.

How on earth do colleges today ramp up costs to $40,000 a year? 

Yes, I know that in the sciences the costs of teaching may have risen to some extent legitimately. But that’s probably wildly exaggerated, especially at the undergraduate level. And in the humanities and liberal arts any claim that the real cost should be rising faster than inflation is complete nonsense. 

I know of a young singer who had to drop out of conservatory because he couldn’t afford the tuition. Think about that. How much should singing lessons cost? We’re talking about a sound-proof room and a voice coach. The student brings the vocal cords. How is this worth tens of thousands a year? 

Part of the answer lies in the arms race of fancy facilities being built by colleges. Part of the answer lies in escalating salaries, especially for academic “divas” - the marquee names recruited at great expense to bring in the customers... er, students. Part of the answer lies in institutional metastasis - the expansion of bureaucracy, like any bureaucracy. 

The student drama facilities at Cambridge consisted of a few rooms here and there and a damp basement below an old church. Out of this the university produced the comedy trouple Monty Python, and a legion of successors. Hollywood director and actor Chris Weisz, who was at university when I was there, began his dramatic career in a bizarre play called Mango Tea in a room above a pub. But apparently today colleges need the dramatic facilities suitable for staging Les Mis. 

Some members of the College-Industrial Complex are now talking about a new solution to bring down costs. They want to reduce, or eliminate, the amount spent on the actual teaching. Instead, students will watch online videos. Perhaps these will be on YouTube, or TED. It sounds like a column by the late, great Art Buchwald: “For $30,000 a year we can provide you with a top-of-the-range BA degree, just without any actual teaching.” You couldn’t make this up. But we’re already half way there anyway. Even today most undergraduates don’t get within a million miles of the big-name professors that they are paying for. 

Today’s graduates, so badly served by comparison with their parents and grandparents, may look actually look lucky to those who come later. Costs are probably going to keep rising. The super-rich can bid up prices, just as they do for real estate in New York or London. (The difference is that you don’t have to live in New York or London, but you do have to get a degree. Unemployment rates for those without a bachelor’s degree are twice as high as for those who have one). The conspiracy will keep pushing for more federal support. 

How high will it go? Try this. The College-Industrial Complex says that degrees are still worth it because those with BAs will earn a lot more over the course of their lifetimes, and should pay for that. They point to U.S. Census data showing those with BAs earning on average $26,000 a year more than those with just a high school diploma. 

Using that logic, they could justify charges approaching $500,000 for a college degree. With the interest rate on subsidized student loans down to 3.4%, the net present value of those future earnings is, theoretically, very high. 

No one is going to slap that price tag on a degree in public. Not yet. But these numbers are based on some basic financial calculations. If I’ve done them, you can bet those in the Complex have, too. 

Some members of the Complex are pushing for the interest rate on student loans to be slashed to 1%, subsidized with taxpayers’ dollars. The lower that interest rate, the more the colleges can charge. 

This isn’t just a rip-off. It is also a conspiracy. You’ll notice how college fees, miraculously, move in tandem. You’ll notice how few colleges are willing to break ranks. Above all, you’ll notice amazingly little frank and open discussion of this from the usual sources. 

Call me crazy if you like. Tell me I should have mimeographed this column in purple ink. Send me sarcastic emails asking if the CIA is sending me signals through the metal fillings in my teeth. Fact is, a horrifying number of people are in on the conspiracy - directly and indirectly. And, as in many of the most insidious and effective conspiracies, most of them don’t even realize they’re involved. 

The rich and connected benefit from the escalation of college costs because it prices middle-class kids out of the market. For the 1%, a bill of $20,000 or $60,000 isn’t much different: But suddenly junior’s chances of getting in to Prestige U. are a lot better, since many will decide they can’t afford to apply. College is a luxury good again, like $3,000 Italian shoes. Great news for those who can afford it. 

Fancier sports arenas and drama facilities just add to the exclusivity. Indeed, astonishingly, I have seen one or two “conservative” writers actually complain that good public colleges are underpriced. Berkeley, they say, should raise its prices to equal those of Stanford. 

After all, you don’t want to let in the riff-raff! 

Meanwhile there’s a second group who are in on the conspiracy: The media. 

The reason? Self-interest. 

Some members of the media already work in the Complex. They teach in college, or they hold down some cushy sinecure in a university’s “media institute” or think-tank. Many more journalists have friends, or family, who are employed by a college. And still more journalists are hoping to land college jobs themselves. 

Consider the deafening media silence over the phenomenon of graduate degrees in journalism, where young people are scammed out of $30,000 or more for the privilege of earning a certificate to practice a dying craft. Working journalists, in private, all agree how utterly crazy and ridiculous it is that young people are still going to journalism school. I hear this all the time. 

But good luck finding much commentary about it in public. The reason? J-school no longer exists to teach the journalists of tomorrow (if it ever did), but to employ the journalists of yesterday. Every reporter awaiting the dreaded Next Round of Layoffs has J-School lined up as Plan B. Good luck getting that job, though, if the hiring professor’s Google search of your recent articles turns up a scathing expose of journalism school. You’ll end up in Starbucks instead. 

Like I said, call me crazy. Tell me I’m paranoid. But, whatever you do, don’t forget to tip me ten years from now, when I serve you that decaf soy latte.

Resistance is Under Way for Google Glass

Google Glass Picks Up Early Signal: Keep Out

Reuters - Google founder Sergey Brin poses for a portrait wearing Google Glass glasses before the Diane von Furstenberg Spring/Summer 2013 collection show during New York Fashion Week September 9, 2012.

May 7, 2013

New York Times - Google’s wearable computer, the most anticipated piece of electronic wizardry since the iPad and iPhone, will not go on sale for many months.

But the resistance is already under way.

The glasseslike device, which allows users to access the Internet, take photos and film short snippets, has been pre-emptively banned by a Seattle bar. Large parts of Las Vegas will not welcome wearers. West Virginia legislators tried to make it illegal to use the gadget, known as Google Glass, while driving.

“This is just the beginning,” said Timothy Toohey, a Los Angeles lawyer specializing in privacy issues. “Google Glass is going to cause quite a brawl.”

As personal technology becomes increasingly nimble and invisible, Glass is prompting questions of whether it will distract drivers, upend relationships and strip people of what little privacy they still have in public.

A pair of lens-less frames with a tiny computer attached to the right earpiece, Glass is promoted by Google as “seamless and empowering.” It will have the ability to capture any chance encounter, from a celebrity sighting to a grumpy salesclerk, and broadcast it to millions in seconds.

“We are all now going to be both the paparazzi and the paparazzi’s target,” said Karen L. Stevenson, a lawyer with Buchalter Nemer in Los Angeles.

Google stresses that Glass is a work in progress, with test versions now being released to 2,000 developers. Another 8,000 “explorers,” people handpicked by Google, will soon get a pair.

Among the safeguards to make it less intrusive: you have to speak or touch it to activate it, and you have to look directly at someone to take a photograph or video of them.

“We are thinking very carefully about how we design Glass because new technology always raises new issues,” said Courtney Hohne, a Google spokeswoman.

Developers, however, are already cracking the limits of Glass. One created a small sensation in tech circles last week with a program that eliminated the need for gestures or voice commands. To snap a picture, all the user needs to do is wink.

The 5 Point Cafe, a Seattle dive bar, was apparently the first to explicitly ban Glass. In part it was a publicity stunt — extremely successful, too, as it garnered worldwide attention — but the bar’s owner, Dave Meinert, said there was a serious side. The bar, he said, was “kind of a private place.”

The legislators in West Virginia were not joking at all. The state banned texting while driving last year but hands-free devices are permitted. That left a loophole for Google Glass. The legislation was introduced too late to gain traction before the most recent session ended, but its sponsor says he is likely to try again.

In Las Vegas, a Caesars Entertainment spokesman noted that computers and recording devices were prohibited in casinos.

“We will not allow people to wear Glass while gambling or attending our shows,” he said.

Louis Brandeis and Samuel Warren famously noted in 1890 that “numerous mechanical devices threaten to make good the prediction that ‘what is whispered in the closet shall be proclaimed from the house-tops’.”

Glass is arriving just as the courts, politicians, privacy advocates, regulators, law enforcement and tech companies are once again arguing over the boundaries of technology in every walk of life.

The Senate Judiciary Committee voted last month to require law enforcement to have a warrant to access e-mail, not just a subpoena. The Federal Bureau of Investigation’s use of devices that mimic cellphone towers to track down criminals is being challenged in an Arizona case. A California district court recently ruled that private messages on social media were protected without a warrant. 

“Google Glass will test the right to privacy versus the First Amendment,” said Bradley Shear, a social media expert at George Washington University.

Google has often been at the forefront of privacy issues. In 2004, it began a free e-mail service, making money by generating ads against the content. Two dozen privacy groups protested. Regulators were urged to investigate whether eavesdropping laws were being violated.

For better or worse, people got used to the idea, and the protests quickly dissipated. Gmail now has over 425 million users. In a more recent episode, the company’s unauthorized data collection during its Street View mapping project prompted government investigations in a dozen countries.

Like many Silicon Valley companies, Google takes the attitude that people should have nothing to hide from intrusive technology.

“If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place,” said Eric Schmidt, then Google’s chief executive, in 2009.

Glass is a major step in Google’s efforts to diversify beyond search, and potentially an extremely lucrative move. Piper Jaffray, an analyst firm, estimates that wearable technology and another major initiative, self-driving cars, could ultimately be a $500 billion opportunity for the company. In the shorter term, IHS, a forecasting firm, estimates that shipments of smart glasses, led by Google Glass, could be as high as 6.6 million in three years.

Thad Starner, a pioneer of wearable computing who is a technical adviser to the Glass team, says he thinks concerns about disruption are overblown.

“Asocial people will be able to find a way to do asocial things with this technology, but on average people like to maintain the social contract,” Mr. Starner said. He added that he and colleagues had experimented with Glass-type devices for years, “and I can’t think of a single instance where something bad has happened.”

An incident at a Silicon Valley event shows, however, the way the increasing ease in capturing a moment can lead to problems — even if unintentionally.

Adria Richards, who worked for the Colorado e-mail company SendGrid, was offended by the jokes two men were cracking behind her at the PyCon developers conference. She posted a picture of them on Twitter with the mildly reproving comment,

“Not cool.”

One of the men, who has not been identified, was immediately fired by his employer, PlayHaven.

 “There is another side to this story,” he wrote on a hacking site, saying it was barely one lame sexual joke. “She gave me no warning, she smiled while she snapped the pic and sealed my fate,” he complained.

Critics lashed out at Ms. Richards, using language much more offensive than the two men used. SendGrid was hacked. The company dismissed Ms. Richards, saying there was such an uproar over her conduct, it “put our business in danger.”

“I don’t think anyone who was part of what happened at PyCon that day could possibly have imagined how this issue would have exploded into the public consciousness,” Ms. Richards reflected later.

She has not posted on Twitter since.

New App Lets You Boycott Koch Brothers and Monsanto

New App Lets You Boycott Koch Brothers, Monsanto and More by Scanning Your Shopping Cart

 

May 14, 2013

Forbes - Buycott shows you a product's corporate family tree while you shop.

In her keynote speech at last year's annual Netroots Nation gathering, Darcy Burner pitched a seemingly simple idea to the thousands of bloggers and web developers in the audience. The former Microsoft programmer and congressional candidate proposed a smartphone app allowing shoppers to swipe barcodes to check whether conservative billionaire industrialists Charles and David Koch were behind a product on the shelves.

Burner figured the average supermarket shopper had no idea that buying Brawny paper towels, Angel Soft toilet paper or Dixie cups meant contributing cash to Koch Industries through its subsidiary Georgia-Pacific. Similarly, purchasing a pair of yoga pants containing Lycra or a Stainmaster carpet meant indirectly handing the Kochs your money (Koch Industries bought Invista, the world’s largest fiber and textiles company, in 2004 from DuPont).

At the time, Burner created a mock interface for her app, but that's as far as she got. She was waiting to find the right team to build out the back end, which could be complicated given often murky corporate ownership structures.

She wasn't aware that as she delivered her Netroots speech, a group of developers was hard at work on Buycott, an even more sophisticated version of the app she proposed.

"I remember reading Forbes' story on the proposed app to help boycott Koch Industries and wishing that we were ready to launch our product," said Buycott's marketing director Maceo Martinez.

The app itself is the work of one Los Angeles-based 26-year-old freelance programmer, Ivan Pardo, who has devoted the last 16 months to Buycott. "It's been completely bootstrapped up to this point," he said. Martinez and another friend have pitched in to promote the app.

Pardo's handiwork is available for download on iPhone or Android, making its debut in iTunes and Google Play in early May. You can scan the barcode on any product and the free app will trace its ownership all the way to its top corporate parent company, including conglomerates like Koch Industries.

Once you've scanned an item, Buycott will show you its corporate family tree on your phone screen. Scan a box of Splenda sweetener, for instance, and you'll see its parent, McNeil Nutritionals, is a subsidiary of Johnson & Johnson.

Even more impressively, you can join user-created campaigns to boycott business practices that violate your principles rather than single companies. One of these campaigns, Demand GMO Labeling, will scan your box of cereal and tell you if it was made by one of the 36 corporations that donated more than $150,000 to oppose the mandatory labeling of genetically modified food.

Deciding to add that campaign to your Buycott app might make buying your breakfast nearly impossible, as that list includes not just headline grabbers like agricultural giant Monsanto but just about every big consumer company with a presence in the supermarket aisle: Coca-Cola, Nestle, Kraft, Heinz, Kellogg's, Unilever and more.

Buycott is still working on adding new data to its back end and fine-tuning its information on corporate ownership structures. Most companies in the current database actually own more brands than Buycott has on record. The developers are asking shoppers to help improve their technology by inputting names of products they scan that the app doesn't already recognize.

And if this all sounds worthy but depressing, be assured that your next trip to the supermarket needn't be all doom and gloom. There are Buycott campaigns encouraging shoppers to support brands that have, say, openly backed LGBT rights. You can scan a bottle of Absolut vodka or a bag of Starbucks coffee beans and learn that both companies have come out for equal marriage.

"I don't want to push any single point of view with the app," said Pardo. "For me, it was critical to allow users to create campaigns because I don't think its Buycott's role to tell people what to buy. We simply want to provide a platform that empowers consumers to make well-informed purchasing decisions."

Forbes reached out to Koch Industries and Monsanto for comment and will update this story with any responses.

Update: Tuesday's traffic surge is causing some problems for Buycott. Pardo says he's working to fix issues with the Android app in particular. "The workload is a bit overwhelming now," he said. "For example, our Android app was just recently released and the surge of new users today has highlighted a serious bug on certain devices that needs to be fixed immediately. So all other development tasks I was working on get put on hold until I can get this bug fixed."

How to Stop the FBI from Reading Your Email

Officials can read messages older than 6 months without a warrant

May 14, 2013

MarketWatch - Emails are not private. A message may have one sender and one recipient but it can, with little effort, be read by a third party. In fact, despite the Fourth Amendment’s protections against unlawful searches, federal agencies do not necessarily need a warrant to read emails older than six months.

Concerns over such government snooping were raised by the American Civil Liberties Union, which last week noted a “troubling picture” of email surveillance practices by the Federal Bureau of Investigation and the Department of Justice. The agencies may be taking advantage of a component of the Electronic Communications Privacy Act, which requires warrants only for emails that have been stored on a third-party server for less than 180 days.

Documents reviewed by the ACLU showed that the FBI may be reading emails and other electronic messages without a warrant, and that different U.S. attorney’s offices may be applying “conflicting standards,” the group says.

“It is time for Congress to step in and standardize the requirements and require warrants across the board,” says Nathan Wessler, a staff attorney with the ACLU. The report follows a similar review of IRS documents.

Facing pressure from the ACLU and lawmakers, the IRS said it would require warrants before reading all emails in both criminal and civil investigations, but did not offer any clarity on its policy for social media sites. The FBI issued a separate statement saying it “obtains emails in accordance with the laws and Constitution of the United States.” The Department of Justice did not respond to requests for comment.

But such statements aren’t enough, some lawmakers say. A bipartisan bill introduced by Senators Patrick Leahy (D, Vt.) and Mike Lee (R, Utah) would require the government to obtain a search warrant before going through all Americans’ emails and electronic communications, with some exceptions for emergencies and national security threats.

But even if the bill is passed, privacy experts say, it won’t take long for such a measure to become outdated, or for authorities to find a loophole.

 “The problem is the law is always, in my opinion, five years to 10 years behind the technology,” says Eduard Goodman, chief privacy officer for ID Theft 911, an identity-management solutions firm.

In the meantime, what can Americans do to protect themselves from warrantless email searches? Authorities will probably always be able to access messages if they have reason to believe someone is breaking the law, says Chester Wisniewski, senior security adviser for Sophos, an information technology security and data protection company. But those hoping to avoid unnecessary snooping through emails sent to a spouse (or regrettable messages sent during one’s college years) can take a few steps to protect themselves.

One option is to encrypt messages before sending them, which can make them indecipherable as they are transmitted across servers. Such messages can only be read after the recipient unlocks the message with an encryption key. The process may be too cumbersome for most emails, says Wisniewski, since it requires people to exchange keys. And the option isn’t offered by all email providers, he says.

Given that authorities can only access emails that have been stored on a server for more than six months, privacy experts say another option is to delete older emails or store them directly on a hard drive (which is protected by the Fourth Amendment). Common email platforms like Microsoft Outlook will typically offer an option for archiving emails on a hard drive, says Wisniewski but such messages could no longer be accessed remotely. And if the hard drive fails, the data could be lost entirely.

One final option is an “offshore email account.” Servers operated in other countries would not be subjected to the same rules as those based in the U.S., says Wisniewski. The tradeoff: Connections might be slower than with American email providers, he adds. And people who decide to store their emails abroad also need to be conscious of the privacy rules of the country hosting their server.

Hospitals in 15 State Opting Out of Obamacare Will Lose $64 Billion in Medicaid/Medicare Funding and are in Danger of Closing in the Next Six to 12 Months

Hospitals Prepare to Cut Care in Medicaid Opt-Out States

May 14, 2013

Bloomberg - With 15 U.S. states opting out of President Barack Obama’s Medicaid expansion, hospitals that treat poor and uninsured patients are asking the government to delay $64 billion in planned funding cuts.

Medicaid funds to hospitals with a disproportionate share of low-income patients will be cut 50 percent, or $14.1 billion, from fiscal 2014 through 2019, according to draft regulations to be published in the Federal Register tomorrow. The American Hospital Association wants to delay by two years the start of the cuts for Medicaid and for $49.9 billion in reductions by Medicare, the health program for the elderly and disabled.

“They decided not to look at the effect of health care reform,” Tom Nickels, senior vice president for federal relations in Washington for the hospital association, said in a telephone interview today. “They don’t penalize states that have chosen not to expand.”

The reductions are mandated by President Barack Obama’s Affordable Care Act, and were supposed to be offset by an increase in the number of patients who would gain insurance through an expansion of state Medicaid programs. With some Republican-led states deciding not to cooperate, a loss of funding without a gain in more insured patients would hamper hospitals ability to keep caring for underserved populations.

“It’s a kick in the gut,” said John Bluford, chief executive officer of Truman Medical Centers in Kansas City, Missouri, which estimates it may lose as much as $150 million in Medicaid payments over seven years. “These are real dollars. It would wipe out our margins.”

Tenet Profit 

The rules being circulated this week show Medicaid would reduce the so-called DSH payments by $500 million in the fiscal 2014 year starting in October. For 2015, $600 million more would be cut with the annual reductions reaching $5.6 billion in 2019.

For the first two years, the funding cuts won’t be based on whether states have opted to expand Medicaid. Tenet Healthcare Corp. (THC), the third-largest for-profit hospital chain in the U.S., estimated in February the Medicaid and Medicare cuts would cost it $35 million in government payments in the fourth quarter. Dallas-based Tenet has 26 percent of its beds in Florida and 20 percent in Texas, both states where the Republican governors have opted not to expand Medicaid.

HCA Holdings Inc. (HCA), the largest for-profit U.S. hospital chain, has 25 percent of its beds in Texas and 25 percent in Florida, according to said Brian Tanquilut, an analyst at Jefferies LLC in Los Angeles.

Saving Grace 

For-profit hospitals like Tenet are unlikely to pass along the costs of the cuts to consumers in the way of raising rates to non-government payers, Tanquilut said.

“They’ll eat it.”

Cuts in the Medicare DSH payments also will be offset by a separate April 26 regulatory proposal that would lead to a 0.8 percent net raise in overall Medicare payments for services that elderly and disabled patients get after being admitted to hospitals, Tanquilut said by telephone.

The overall Medicare rate -- which includes the Medicare cuts to hospitals that treat a large number of low-income patients -- should keep HCA’s earnings before interest, taxes and amortization expenses within its February 2013 guidance, R. Milton Johnson, president and chief financial officer, said on an April conference call with investors.

The saving grace for for-profit hospitals, Tanquilut said, is that the Affordable Care Act will bring financial benefits that nonprofit and public hospitals like Truman Medical won’t see. Large, urban hospitals that provide the biggest share of charity care and treat more Medicaid patients are most at risk, Moody’s Investors Service Inc. said in a March 14 report.

Tight Bind 

With only about one-fifth of their patients having commercial insurance, these safety-net hospitals typically have profit margins of about 2.3 percent, a third of the industrywide average for all hospitals, according to 2010 data from the National Association of Public Hospitals and Health Systems. Losing Medicaid funding and not gaining more insured patients would swing that margin from a profit to a loss of 6.1 percent.

Hospitals may try to recoup losses by limiting the amount of care they provide to the uninsured or reducing staff, John Graves, an assistant professor at the Vanderbilt University School of Medicine in Nashville, Tennessee, said by telephone.

“They’re in a tight bind,” Graves said. “They have to recoup those losses through fewer services, shutting down.”

Lobbying Lawmakers 

Grady Health System in Atlanta, which had estimated it may lose $45 million annually in Medicaid payments, has been meeting with U.S. lawmakers to try to repeal or change the cuts, John Haupert, chief executive officer at Grady, said by telephone.

“We’re having discussions with Congress and the administration to give states that don’t expand Medicaid an option to not extend the DSH cuts,” Haupert said in an interview. For some hospitals, “it’s a matter of their doors being opened or closed.”

Grady gets about 30 percent of its business from Medicaid, while Truman Medical gets about 60 percent. 

In addition to the American Hospital Association, the National Association of Urban Hospitals also said it’s lobbying Congress to delay or revisit the Medicaid DSH cuts.

Emma Sandoe, a spokeswoman at the Centers for Medicare and Medicaid Services, said the agency wouldn’t comment on the pending cuts.

Medicaid Opt-Outs 

President Barack Obama’s 2010 health-care system overhaul promised to deliver an increased number of insured patients who could pay their bills, thus reducing the need for government assistance to hospitals burdened by uncompensated care. That promise would be accomplished by making 11 million more people become eligible for Medicaid, a program largely financed by the federal government yet controlled by each individual state.

As of May, at least 15 states, all with Republican governors, aren’t planning to participate, according to a tally by the Washington-based Advisory Board Co. States with high levels of uninsured patients leaning toward opting out of the expansion include Texas, Louisiana, Idaho, Georgia and South Carolina, according to Moody’s.

The looming DSH reductions may pressure states that are still weighing Medicaid expansion because they know they’ll face a financial quandary, Larry Gage, a senior adviser with Alvarez & Marsal, a New York-based professional services firm who was once president of the public hospitals association.

“There are hospitals already in danger of closing in the next six to 12 months,” Gage said by telephone.

Immigration Bill Has Always Been a Ruse for a National Biometric ID

Rubio to push biometric system in U.S. Senate immigration bill

May 15, 2013

Reuters - Republican U.S. Senator Marco Rubio, who is considered crucial for the success of an immigration law overhaul, on Tuesday vowed to fight for a biometric system to track foreigners leaving the country after a Senate panel rejected the provision, in part because it was too costly.

Rubio and seven other Republican and Democratic senators, known as the "gang of eight," have crafted a sweeping bill that would revamp the immigration system, increase work visas and put millions of illegal immigrants on a path to citizenship.

In its second day of examining the legislation, the Senate Judiciary Committee voted against the Republican amendment that would have made it easier for the government to track illegal immigrants and other foreigners who have overstayed their visas.

The amendment would have required a biometric system, which uses technology such as iris scans and fingerprinting, at every point of entry in the United States before illegal immigrants would be eligible for permanent residency or a green card.

Citing a $25 billion price tag and saying it would delay citizenship for the unauthorized foreigners, two of the Republicans who helped craft the bill sided with Democrats to defeat the amendment 12-6.

In an effort to keep the legislation intact, the bipartisan gang of eight senators agreed to work together to block amendments that could kill the bill.

But Rubio's office said he was disappointed by the vote and would fight to add biometrics to the exit system when the bill is considered by the full Senate later this year.

"Having an exit system that utilizes biometric information will help make sure that future visitors to the United States leave when they are supposed to," his spokesman said.

Immigration reform advocates hope Rubio's popularity with conservatives will help sell the bill to his party.

The committee has already succeeded in rejecting other Republican attempts to beef up border security in ways that go beyond the bill and could jeopardize the path to citizenship.

On Thursday, lawmakers were due to consider changes to work visa programs and were under pressure from businesses to make it easier to recruit highly skilled workers from other countries and bring in more foreigners to do manual labor.

High-tech companies and other businesses are pushing for changes to provisions that would require firms to seek American applicants first for any job and that would prohibit the displacement of U.S. workers. The companies are backing a series of amendments by Republican Utah Senator Orrin Hatch concerning the skilled worker visa program known as H1-B.

The AFL-CIO labor organization opposes the amendments, saying they would be unfair to American workers.

The committee delayed some of Hatch's most controversial amendments to give lawmakers time to hash out a compromise.

Hatch, whose support is important because it would increase pressure on the Republican-led House to work on legislation, said he has had conversations with the Senate gang of eight and has made clear the H1-B visa issue may be pivotal to his vote.

"I think they're taking me seriously. Let's put it that way," Hatch said of the Senate gang. "And I hope they do because if they don't, I'm not going to support this bill."

As the committee debated changes to the nearly 900-page bill, a group of conservative Republicans in the House of Representatives vowed to "tear up" and defeat that bill if it reaches their chamber.

They derided the Senate legislation as little more than "amnesty" for those who have come to the United States illegally or overstayed their visas. If enacted, they said it would cost U.S. taxpayers trillions of dollars.

Representative Steve King of Iowa told reporters that House conservatives were launching a public relations campaign consisting of floor speeches, opinion articles and other actions to "get the message out that there's another viewpoint here. It's not the one that's being stampeded in the Senate and may be stampeded in the House."

Representative Steve Stockman of Texas, referring to the eight Republican and Democratic senators who wrote the Senate's immigration bill, said, 

"They have a gang of eight. We're going to have a gang of millions" who, Stockman said, "will rise up against" the bill.

Instead of comprehensive immigration reform, these House conservatives want new steps to secure the southwestern U.S. border against illegal crossings before considering other changes to immigration law.

Related: 

• Obamacare Will Lead to a National ID Card, Which Will Be the 'Mark of the Beast' That is One-World Government 
• Legal Workforce Act: E-Verify is the De Facto National ID 
• Biometric National ID Cards and a Cashless Society 
• 72 State Fusion Centers Feed Information to the FBI's 'Nationwide Suspicious Activity Reporting Initiative' 
• Facts on the National ID Card 
• Obama and the Biometric National ID 
• The National ID Card and Biometric ID

Mexico Raises Alert Level for Popocatepetl Volcano

Mexico raises alert level for Popocatepetl volcano

May 12, 2013 

Reuters - Mexican authorities raised the alert level for the Popocatepetl volcano near Mexico City on Sunday morning after observing an increased level of explosive activity.

The lava dome of Popocatepetl, some 50 miles (80 km) to the southeast of the capital, may expand and unleash increasingly powerful explosions of ash and lava, Mexico's National Center for Disaster Prevention said in a statement.

The alert level for the towering volcano was raised to yellow phase three from yellow phase two, on orders from the country's Interior Ministry.

It is the third-highest warning on the center's seven-step scale.

This change in activity in the 5,450-meter (17,900-foot) volcano could provoke big explosions capable of sending incandescent fragments out over considerable distances, the center added.

Argentina May Force Technical Default on Restructured Bonds

Argentina faces very different debt default if loses legal fight

May 13, 2013

Reuters - When Argentina defaulted on its debt in 2002, the economy was collapsing and a bloody popular revolt had helped topple two presidents in a week. Now, the country could default again, but it would be over a matter of principle rather than necessity.

After a decade of sleepy litigation, investors got a jolt late last year when U.S. courts ruled in favor of "holdout" creditors who had rejected Argentine debt exchanges in 2005 and 2010 and sued to be repaid in full on their defaulted bonds.

A U.S. judge ordered Argentina to pay the holdouts the full $1.33 billion owed them the next time it serviced restructured debt. Argentina appealed, and a ruling by the 2nd U.S. Circuit Court of Appeals is expected in the coming weeks.

Investors are following the case closely because Argentina appears willing to enter into technical default in order to avoid paying the holdouts any more than other creditors received.

The nearly 93 percent of bondholders who accepted the debt exchanges got returns of as low as 25 cents on the dollar.

Tough-talking Argentine President Cristina Fernandez has pledged to keep paying the restructured debt but vows never to pay the "vultures" that bought the bonds at a steep discount and sued for full repayment.

When Argentina defaulted on some $100 billion in bonds 11 years ago, its debt represented 166 percent of gross domestic product. Bank deposits were frozen and devalued, the economy shrank 11 percent in one year, and millions lost their jobs.

Argentina's economy rebounded after that crisis and boomed during most of the last decade. Although growth slowed sharply in the last year and inflation is high, the debt burden is down to about 42 percent of GDP.

In other words, Argentina could pay the holdouts if it wanted, but it refuses to do so.

"Argentina will not blink and neither will the holdouts, so this will lead to a technical default," said Shahriar Shahida, co-founder of Constellation Capital Management LLC in New York, which is currently invested in Argentina and believes it would be unfair to favor the holdouts over exchange bondholders.

"This is an unparalleled case of somebody defaulting not because they don't have capacity, not because they don't have willingness, but because somebody is forcing them to do something egregious," he said.

MARKETS ON EDGE

Argentina says it will fight the holdouts - led in this case by Elliott Management affiliate NML Capital and Aurelius Capital Management - all the way to the U.S. Supreme Court.

Sources familiar with the position of Elliott and Aurelius say Argentina has never shown a willingness to negotiate.

Investors anticipate the country will eventually defy U.S. courts if they insist the holdouts be paid in full.

In that scenario, Argentina is widely expected to force a technical default on the restructured bonds issued under New York law - which would be most directly affected by the rulings - while trying to create a new payment scheme for those bonds.

One option would be a swap in which the exchange bondholders turned in their New York paper for new Argentine-law bonds. Some analysts warn that might not be doable, however.

The default would be technical because Argentina might try to pay the exchange bondholders without paying the holdouts, and the courts could then disrupt the payments. Or the country could suspend payments on the restructured bonds citing its own laws, which bar it from paying the holdouts on better terms.

Argentine economic officials have refused to discuss whether they are evaluating a "Plan B" for payments. The next interest payments on restructured bonds come due June 2 and June 30.

When the court rulings first came down last year, many investors scrambled to sell off their Argentine bonds and some firms specializing in distressed debt moved in to buy.

The market has since stabilized and the restructured bonds regained some ground in April. Argentina's Global 2017, issued during the 2010 debt swap, is now yielding around 16.3 percent, down from 19.6 percent in early March.

In terms of credit default swap contracts - which act as insurance against a default - the maximum payout possible dropped sharply in late 2012 and now stands at about $1.53 billion, data from the Depository Trust & Clearing Corp shows.

CDS payouts would likely be less, however, after an auction process to determine the recovery value of the defaulted bonds.

Ultimately, Argentina is no longer as relevant to global credit markets as it used to be. It has not issued international debt since the 2002 default and its weighting on the JPMorgan Chase EMBI+ emerging market sovereign bond index has shrunk to 1.8 percent from over 23 percent in early 2001.

Capital controls and more-recent foreign currency restrictions have further isolated the country, which is seen as an anomaly in largely market-friendly Latin America.

Credit Suisse analysts said last week that most of their contacts in Buenos Aires believe the spillover effects of a technical default "would be relatively small due to Argentina's relative isolation from international capital markets and the ongoing deterioration in Argentina's business climate."

LEGAL OUTLOOK

In November, U.S. District Judge Thomas Griesa ordered Argentina to deposit the $1.33 billion owed to holdouts in an escrow account by December 15, when restructured debt came due.

He also required that third parties involved in payments on Argentina's restructured bonds be held accountable if the court order were evaded. This included Bank of New York Mellon Corp, which acts as trustee for the exchange bondholders.

The 2nd Circuit suspended these orders under an emergency judicial stay while reviewing Argentina's appeal.

It is not clear, however, that the stay would remain in place if Argentina had to appeal to the Supreme Court. Most analysts seem to think it would, but there is no guarantee.

It is also anyone's bet how the 2nd Circuit will rule. The court upheld Griesa's original decision, finding Argentina had discriminated against the holdouts and violated the "pari passu" or equal treatment clause in their defaulted bond contracts.

But with the U.S. government arguing Griesa's rulings could complicate future sovereign debt restructurings, the 2nd Circuit may seek to limit the scope of the payment orders.

The appeals court asked Argentina to submit its own payment proposal, which essentially echoed the terms of the 2010 swap. NML and Aurelius rejected this outright.

If Argentina appealed to the Supreme Court and its case were accepted for review, a ruling could be made as late as June 2015, according to Bank of America Merrill Lynch analysts.

A new Argentine default, no matter how short-lived, would tend to push bond prices lower and hurt the balance sheets of local banks, which hold lots of debt. But most economists do not think there would be massive fallout, in part because Argentine exporters are much less reliant on trade finance than in 2002.

Guillermo Nielsen, who as finance secretary helped push through Argentina's tough debt restructuring in 2005, said nonetheless a default should be avoided at all costs.

"The New York financial market is important not only for less developed countries but also for developed countries. Even Sweden issues debt in the New York market," Nielsen said. "And here we have everything to be made, to be built, to be created. We need that financing."