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	Credit rating companies should be denied their quasi-official status by HuffPost & agencies USA   Nov 2011   EU Commissioner Michel Barnier laments incorrect credit rating of France by Standard & Poors.   The incorrect rating of France by Standard & Poors "is serious and it shows that in the current tense and volatile market situation, market players must exercise discipline and demonstrate a special sense of responsibility", said European Commissioner, Michel Barnier, who is responsible for the EU"s Internal Market and Services.   "This is all the more important since we are not talking about just any market player but one of the biggest rating agencies, which, as such, has a particular responsibility".   "I do not want to comment on the error itself - which was acknowledged by Standard & Poors. It will be up to ESMA (which is the European Supervisory Authority of rating agencies), in coordination with the AMF (the national) to establish the facts, assess them and draw conclusions.   All this strengthens my conviction that Europe must adopt strict and rigorous rules, including but not limited to the rating agencies".   "The draft legislation that I will bring forward will strengthen the legislation on rating agencies on several levels: "Reduced reliance on ratings, and we can see again today just how important that is; Increased competition and elimination of conflicts of interest; Increased transparency and rigor in the rating of sovereign debt and finally creating a European framework for civil liability in the case of serious misconduct or gross negligence. "All these points, especially the latter, are relevant in the context of this case", said the Commissioner.   Aug 2011   Triple-A Idiots, by Robert Kuttner. (Huffington Post)   You have to hand it to Standard and Poor"s. Forget their two-trillion dollar math error. The whole idea that these clowns are evaluating the creditworthiness of the United States is just loony.   For starters, these are the same people who brought us the crisis, by blessing junk sub-prime loans as AAA securities. And they did so because they were paid as consultants by the same financial scoundrels who created the securities.   The executives of the credit rating companies -- not "agencies," for these are private, profit-making, essentially unregulated companies, not public entities -- belong in prison.   They managed to slither out of serious regulation under the Dodd-Frank Act. Their sketchy business models go merrily on, pretty much as before, as if the sub-prime scandal never happened. Rules for the minimal regulation provided by Dodd-Frank have yet to be written.   The last job these thieves deserve is arbiter of the security of Treasury bonds, and markets are even more irrational than they seem if they lend any credence to this downgrade.   The second thing that"s suspicious is the timing. If S&P were going to downgrade the government"s credit rating, the time to do it was while the Republicans were playing chicken with default. But S&P waited until after Obama was blackmailed into taking an austerity deal to assure that the debt would be honored.   So why do the downgrade now, when payment of the debt has been assured. Maybe to get Republicans off the hook? The action left Democrats sputtering and Republicans chortling.   Third, S&P has ventured way outside its franchise when it contends that the downgrade reflects political uncertainty. Credit rating agencies were set up to help investors evaluate relatively obscure bonds that are opaque to individual investors. Is Acme Cement a soundly-run company? Does Madison County Iowa collect enough taxes to pay back its municipal bonds? How about Azerbaijan?   But the debt ratio of the U.S. is a matter of public record, and the great game of default- chicken was hidden in plain view. Even so, financial markets are snapping up U.S. Treasury ten-year bonds at the near record low of about 2.4 percent. Do you think investors would lend Uncle Sam their hard-earned money locked in for ten years for a skimpy 2.4 percent return if they thought there was a snowball"s chance of default?   So exactly what esoteric insight does Standard and Poors add that the markets don"t already know? It beats me.   Their enterprise is so scientific that the three major credit rating companies can"t even agree on a rating for the U.S. They should take up astrology.   This sorry tale is part of the larger corruption of private regulation of the world"s financial markets. Greece, Italy, Spain, Ireland and Portugal are under assault today in part because large hedge funds are gambling, using essentially unregulated credit default swaps, often "naked" swaps backed by no reserves, betting that these nations will default.   These markets need to be re-regulated, and the European Union and its Central Bank need to refinance these debts at affordable costs.   As for the credit rating companies, they should be denied their quasi-official status, and be put out of business in favor of non-profit or public entities. They would have to be totally transparent in their models, and without conflicts of interest in how they get paid.   August 2011   Forget democracy. It is corporations that rule the west, by Chris Zappone.   For me, there is no clearer sign that capitalism has trumped democracy in our time than the credit ratings agency Standard & Poor"s decision to cut the rating on US debt to "AA+" from "AAA".   So what if, in order to maintain a company"s "market" credibility, it has cast doubt on the US government"s ability to repay its debts, potentially driving up the cost to fund US debt and pushing more of a burden onto the taxpayer?   It"s lost on few that the credit rating agencies, S&P, Moody"s and Fitch rubber stamped the sub-prime residential mortgage debt securities AAA before the financial crisis, only to leave the US government with the multibillion-dollar tab to bail out banks and stabilise the system.   Now, as George Washington University law professor Jeffrey Manns points out, those same agencies are waging a behind-the-scenes war with the US government to keep their oligopoly in rating structured finance.   One week into the stomach-turning gyrations on financial markets following S&P"s decision, the blame game between S&P and the US government is really only a microcosm of the shift that"s been under way for a generation in the US, and by extension, wherever market capitalism has been allowed to flourish.   That is, corporations feel entitled, if not duty bound, to put their interests above all else.   Capitalism can do many good things, but unchecked, it begins to undermine democracy and the will of a nation"s citizens.   In the US, the groundwork was laid in President Richard Nixon"s time, which was also when consumer advocate Ralph Nader sought legal remedies to corporate abuses. Once the courtroom became the venue for addressing corporate power, post-Watergate Republicans increasingly focused on deregulation – law changes — as a way to advance their agenda.   The right-wing built a machine of influence through innumerable think tanks and research groups that year after year just happened to think the same thing: deregulation is always the answer. Thirty-five years later, a generation of deregulation set the stage for the market meltdown that began in 2008 and continues today.   Now, the US has come to the logical end point of decades of handing power to companies, executives and the rich. The corporate sector? It"s doing fine. The companies pay few taxes and have productive workers – that"s because in the US, companies have reshaped the law in their own image. Outside of the halls of the companies, the jobless numbers are high, the household and consumer sector — also known as citizens – face years in the wilderness of lost wages and underemployment.   After being told for decades that deregulation would allow the wealth to "trickle down", those same citizens are being told they have to pay billions to clean up the mess of the financial crisis.   Aug 2011   S&P slammed by econnomists. (Boston Herald)   Standard & Poor’s — the same rating agency that touted insurance giant AIG, Fannie Mae and subprime mortgage-backed securities before their collapses nearly sank the economy — is now taking heavy fire after downgrading U.S. credit, a move that drove markets down sharply yesterday.   “It doesn’t make sense to me,” said Alan Clayton-Matthews, economics professor at Northeastern University. “The debt ceiling was raised and both sides, even as they were playing chicken, said the country would not default.”   S&P is one of the “Big Three” companies — along with Moody’s and Fitch — engaged in the dark art of credit rating, but it’s the only one to have downgraded U.S. credit.   Dean Baker, co-director of the Center for Economic and Policy Research, slammed S&P for lowering the country’s credit rating after the United States actually raised the borrowing limit, pointing out that its decision was based partly on calculations that were later revealed to contain a $2 trillion error.   The Credit Rating Hoax, by William Greider.   Standard & Poor’s, the self-righteous credit-rating agency, has a damn lot of nerve. It provoked scary headlines by solemnly threatening to “short” America. That is, downgrade the credit-worthiness of US Treasury bonds unless Congress and the president oblige creditors by punishing the citizenry with severe budget cuts. What a load of crap.   News coverage on S&P’s credit warning typically failed to mention that Standard & Poor’s itself is in utter disrepute. It was an unindicted co-conspirator in the Wall Street deceitfulness that brought the nation to financial ruin.   During the bubble of inflated housing prices, S&P and other rating agencies blessed the fraud-based mortgage securities issued by Wall Street banks with AAA ratings—deceiving gullible investors around the world and assuring bloated profits (and executive bonuses) for the greedy bankers. S&P provided cover for the massive scam that led to the crisis that sank the national economy.   That story line is the essential reason federal deficits soared in the age of Obama. National wealth was massively destroyed, government tax revenues collapsed, the feds spent trillions bailing out the imperiled financial system. In short, the bankers did it, abetted by see-no-evil accomplices like Standard & Poor’s.   The real explanation for the deficits has been air-brushed out of public discussion. Instead, we are witnessing another brazen scam engineered by the financial establishment—a phony political analysis that blames the victims, Americans at large who lost jobs, homes, savings and security thanks to Wall Street titans.   The fiscal problem, we are told by right-handed commentary, should be blamed on big government, not big bankers. Because Washington has overreached, people must now learn to curb their appetites. Brave politicians in both parties claim they must cut healthcare and Social Security and other important guarantees in order to save the country from wrathful judgment by Standard & Poor’s. What a hoot.   The dereliction of Standard & Poor was spelled out in detail by the blistering report recently issued by the Senate Permanent Subcommittee on Investigations, chaired by Senator Carl Levin.   Levin’s hearings last year established why the supposedly disinterested analysts at S&P took a dive for the bankers and handed out inflated ratings for toxic assets. They did it for the money, as witnesses acknowledged.   The rating agencies are paid by the banks to do their ratings. If they refuse to stamp newly issued securities with AAA labels, the bank will take its business elsewhere. The firm loses income; executives get smaller bonuses.   This is an outrageous conflict of interest at the very heart of the financial system.   Congress should have had the nerve to outlaw the practice in unambivalent terms. Instead, Congress turned the question over to federal regulatory agencies and asked them to devise a remedy. But the regulators were also among the see-no-evil accomplices that led to the crash.   Senator Levin’s final report includes six recommendations urging the regulatory agencies to get tough with the inflated credit ratings, but don’t hold your breath. What’s required is a serious law that either changes the status of the rating agencies or shuts them down. Otherwise, the temptations for more deception and false assurances will be too strong to resist.   The deficit panic is itself bogus—poor-mouthing America to avoid raising taxes on the folks who got the money. Naturally, this reactionary approach was first promoted by Republicans, but has been tacitly embraced by the Democrats. Barack Obama promises to do the blood-letting more delicately than barbaric Republicans, protecting Social Security and Medicare and other much-loved programs. But can people believe him? They have been burned before by vague good talk.   If you listen closely, Obama is setting himself up to fashion another “grand compromise” with the right.   As the polls keep reporting, the populace is overwhelmingly opposed to any political deal-making that punishes them again for a catastrophe they did not cause. People seem to know it is wrong to dump more pain on them while the real malefactors are not held accountable for their sins.   In Washington, these contrary public attitudes are dismissed as uninformed or self-indulgent. But the one thing that can save the country from the respectable wrath of Standard & Poor’s is the wrath of angry, mobilized citizens. Visit the related web page
	We need to give people affected by the drought the chance to rebuild their lives by Food & Agriculture Organization & agencies Horn of Africa   Aug 9, 2011   UN fears dramatic rise in Somalia famine refugees. (AP)   The United Nations estimates that tens of thousands of people have died from malnutrition in Somalia in recent months, and over 13 million people across East Africa need food aid because of a long-running devastating drought.   Already hundreds of thousands have fled toward the Somali capital of Mogadishu and across the borders to Kenya and Ethiopia, where refugee camps are straining under the pressure of new arrivals.   The Food & Agriculture Organization has been working to prevent Somalis from abandoning their drought-hit farms by paying them cash for small jobs, thus allowing people to remain.   The World Health Organization, meanwhile, warned that diseases such as measles and cholera are circulating among Somali refugees, many of whom are too weak to survive the diseases.   Aug 2011   United Nations agencies are moving to counter the worsening food crisis in the Horn of Africa, with an immediate infusion of food in an area where 640,000 children alone are threatened with acute malnutrition, and longer-term steps to spark an agricultural recovery.   “It is vital that we not only save lives today but also save the livelihoods on which people"s lives depend tomorrow,” says the UN Food and Agriculture Organization (FAO). The World Food Programme (WFP) has provided aid to nearly 8 million people in the region in the past five weeks and is targeting 11.5 million out of more than 13 million people affected by the drought and famine.   WFP is airlifting into Mombasa, Kenya, tons of high-energy biscuits (HEBs), enough to feed 1.6 million people for a day. The biscuits are being pre-positioned for onward delivery to vulnerable people throughout the region, where Somalis are seeking relief in overcrowded refugee camps in neighbouring Kenya and Ethiopia, both of which have also been affected by the crisis.   WFP is aiming to deliver fortified food to fight acute childhood malnutrition to Somalia, with enough to feed more than 30,000 malnourished children under age five for a month.   Looking beyond the immediate crisis of saving the lives of the acutely malnourished, many of them children under five, the FAO is seeking funds to spark a short-term agricultural recovery, such as cash for work for agricultural and water harvesting, seed distribution, vaccination and animal feeding, irrigation and food storage.   These actions will transition into support to governments’ medium- to long-term plans, building resilience over the long haul. The agency has asked for funding to save the lives and livelihoods of millions of farmers and pastoralists across the drought-struck region.   “When you see the sheer numbers of animal dead bodies along the road you know that this means that people have less capacity to buy their food today and tomorrow,” Cristina Amaral, Chief of Operations in FAO’s Emergency Operations and Rehabilitation Division said. “FAO is concerned that support to incomes and safeguarding people’s assets has so far been largely overlooked and this will make recovery slower.”   Meanwhile the UN High Commissioner for Refugees (UNHCR) has flown into beleaguered Mogadishu, with emergency aid for scores of thousands of displaced people, including 31 tons of shelter material such as plastic sheeting for shelter, sleeping mats and blankets, jerry cans and kitchen utensils.   UNHCR has been shipping its relief items to Mogadishu by sea and by land but, due to the dramatic rise in the number of those uprooted by famine and conflict in recent weeks. An estimated 100,000 Somalis have fled to Mogadishu over the past two months, joining more than 370,000 displaced people already there.   Like FAO, the agency is also facing a serious funding shortfall for of identified needs for Somalia, Kenya, Ethiopia and Djibouti.   “We need the funding support to continue to enable us to replenish our emergency stocks inside Somalia as they are being rapidly depleted as we deliver much-needed aid across southern Somalia,” said UNHCR Representative to Somalia Bruno Geddo.   UNHCR, UNICEF and other agencies are also providing emergency assistance in the far larger Dadaab camp complex in Kenya, whose mainly Somali population has swelled to nearly 400,000 in recent months, including 40,000 arrivals in the past month alone.   In Geneva, UN World Health Organization (WHO) spokesperson Tarek Jasarevic warned of the high risk of disease due to the lack of potable water, the living conditions in overcrowded camps and malnutrition.   "We must avert a human tragedy of vast proportions. And much as food assistance is needed now, we also have to scale up investments in sustainable immediate and medium-term interventions that help farmers and their families to protect their assets and continue to produce food", said FAO Director-General Jacques Diouf.   A rare combination of conflict and insecurity, limited access for humanitarian organizations, successive harvest failures and a lack of food assistance has jeopardized an entire population in southern Somalia. The country has suffered war on and off since 1991.   FAO has been helping Somali farmers and herders with farm inputs and livestock health services. But drought due to successive poor rain seasons has curtailed food production and wiped out livestock assets.   "We need to immediately support farmers with seeds, tools and access to water and herders with fodder and emergency treatment to avoid further displacement and starvation".   The current crisis affects the whole Horn of Africa region including the northern part of Kenya and southern parts of Ethiopia, Djibouti and the Karamoja Region of Uganda where large areas are classified as in a state of humanitarian emergency.   "We need to not lose sight that there is a tiny window of opportunity to prevent massive deaths and destitution," said Rod Charters, FAO Regional Emergency Coordinator for Eastern Africa.   "Currently in the neighboring countries of Kenya, Ethiopia and Djibouti, 7.9 million people are in need of urgent emergency assistance. Support through agriculture and livestock not only provides essential food but an income for families and we need to give people affected by the drought the chance to rebuild their lives," he added. Visit the related web page
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