KBR to Get No-Bid Army Contract Worth $568 Million as Justice Department Pursues Lawsuit Over Kickbacks
May 9th, 2010Via: Bloomberg:
KBR Inc. was selected for a no-bid contract worth as much as $568 million through 2011 for military support services in Iraq, the Army said.
The Army announced its decision yesterday only hours after the Justice Department said it will pursue a lawsuit accusing the Houston-based company of taking kickbacks from two subcontractors on Iraq-related work. The Army also awarded the work to KBR over objections from members of Congress, who have pushed the Pentagon to seek bids for further logistics contracts.
The Justice Department said the government will join a suit filed by whistleblowers alleging that two freight-forwarding firms gave KBR transportation department employees kickbacks in the form of meals, drinks, sports tickets and golf outings.
“Defense contractors cannot take advantage of the ongoing war effort by accepting unlawful kickbacks,” Assistant Attorney General Tony West said in a statement.
KBR, the Army’s largest contractor in Iraq, will review the litigation when it is received and “will continue to cooperate with the government,” company spokeswoman Heather Browne said in an e-mail. “Gifts of dinners, baseball tickets and similar items would violate KBR policies and KBR was not aware of these violations.”
KBR will continue to provide services in Iraq such as housing, meals, laundry, showers, water purification and bathroom cleaning under the new order, which was placed under a military contract KBR won in late 2001, shortly after the U.S. invaded Afghanistan.
U.S. Debt Shock May Hit As Soon As 2013
May 9th, 2010Via: Investor’s Business Daily:
Spiraling debt is Uncle Sam’s shock collar, and its jolt may await like an invisible pet fence.
“Nobody knows when you bump up against the limit, but you know when it happens it will really hurt,” said fiscal watchdog Maya MacGuineas of the Committee for a Responsible Federal Budget.
The great uncertainty about how much debt is too much has tended to make fiscal discipline seem less urgent, rather than more. There is no obvious threshold beyond which investors will demand higher real yields for holding U.S. debt. Vague warnings from ratings agencies about the loss of America’s ‘AAA’ status haven’t added much clarity — until recently.
In the wake of the financial crisis and recession, Moody’s Investors Service has brought new transparency to its sovereign ratings analysis — so much so that 2018 lights up as the year the U.S. could be in line for a downgrade if Congressional Budget Office projections hold.
The key data point in Moody’s view is the size of federal interest payments on the public debt as a percentage of tax revenue. For the U.S., debt service of 18%-20% of federal revenue is the outer limit of AAA-territory, Moody’s managing director Pierre Cailleteau confirmed in an e-mail.
Under the Obama budget, interest would top 18% of revenue in 2018 and 20% in 2020, CBO projects.
But under more adverse scenarios than the CBO considered, including higher interest rates, Moody’s projects that debt service could hit 22.4% of revenue by 2013.
“While we see limited risk of a U.S. sovereign debt downgrade in the next 2-3 years, beyond that we cannot be so certain,” wrote Societe Generale’s economics team in a recent report.
Connecticut Growing Gardens at Prisons to Cut Food Costs
May 9th, 2010While Connecticut’s decision to have prisoners grow some portion of their own food is a positive development for several reasons (the health of the prisoners being the main one), let’s make sure that we’re seeing the big picture and understand that the prison industrial complex is just about the most diabolical aspect of the American Corporate State.
The United States has the highest documented incarceration rate in the world at 754 persons in prison or jail per 100,000 (as of 2008). A report released Feb. 28, 2008 indicates that more than 1 in 100 adults in the United States are in prison. The United States has less than 5% of the world’s population and 23.4% of the world’s prison population.
The fact that people are incarcerated for victimless crimes (Ain’t Nobody’s Business if You Do by Peter McWilliams) is absurd and odious.
Diet plays a role in why some people are in prison in the first place:
At a maximum-security prison in England, Gesch and a team of British scientists enrolled 231 prisoners in a study designed to test the effects of over the counter supplements containing vitamins, minerals, and essential fatty acids. They tracked the prisoners’ behavior for nine months before administering vitamins, tallying the incidents of “antisocial behavior,” which can run the gamut from mouthing off to a guard to starting fights with other inmates. They also observed the prisoner’s diets. Overall, he says, the prison offered healthy choices and most inmates were getting close to the recommended doses of vitamins. But, Gesh says, “a lot of the prisoners were not getting the nutrients they needed because of poor choices…You could have salad and artichokes in béchamel sauce but what they chose to eat was the pile of chips.”
To supplement prison diets, the study randomly selected half of the prisoners to receive vitamin supplements for the following nine months, while the other half received a placebo. Over those nine months, researchers saw instances of antisocial behavior plummet in the group receiving vitamins, while the placebo group’s behavior remained virtually the same. Minor offenses fell by 33% among the vitamin group, and serious offenses, including violence, fell 37%.
These results may be surprising to some, but not to Stephen Schoenthaler. A professor of criminology and sociology at Cal State Stanislaus, Shoenthaler has been studying the effects of vitamins on inmates in California for the last 20 years. In a study among young offenders in California, Shoenthaler found that young adult men receiving vitamin supplements showed a 38% drop in serious behavior problems. In a large study of prison diets in California, New York, Oklahoma, Virginia, and Florida, he found that prisoner’s eating habits could be used to predict future violent behavior. “Normally, you’d say the best predictor of violence is how people behaved in the past,” Shoenthaler says. “We found that’s not as good a predictor as looking at people’s diets.”
Conclusions: Poor nutritional habits in children that lead to low concentrations of water-soluble vitamins in blood, impair brain function and subsequently cause violence and other serious antisocial behavior. Correction of nutrient intake, either through a well-balanced diet or low-dose vitamin-mineral supplementation, corrects the low concentrations of vitamins in blood, improves brain function and subsequently lowers institutional violence and antisocial behavior by almost half. This paper adds to the literature by enabling previous research to be generalized from older incarcerated subjects with a history of antisocial behavior to a normal population of younger children in an educational setting.
Via: AP:
The greenhouse at the Corrigan-Radgowski prison is filled with about 8,000 seedlings — tomatoes, peppers, squash, cucumbers– ready to be planted in prison gardens across Connecticut.
Inmates will plant and tend the gardens, which the state is hoping will save it thousands of dollars each year in food costs.
Corrections Commissioner Brian Murphy wants each of the state’s 18 state prisons to find space for a garden this summer. Those that already have gardens are being asked to expand them.
“Any facility that has some green space for this, we want to utilize it,” said Andrius Banevicius, a department spokesman. “Some will be bigger than others.”
With state’s across the nation facing budget problems, prison systems are finding creative ways to do more with less, said Bob May, associate director of the Association of State Correctional Administrators.
A county sheriff in northern Ohio decided last year to make inmates grow their own food to cut costs. But May said he’s not aware of another state doing it for that reason.
…
“They like growing something. And some of these guys haven’t seen a fresh vegetable in 15, 20 years.”
Research Credit: dilinger
Kent State: New Audio Analysis Reveals That Someone Ordered National Guards Troops to Prepare to Fire on Students
May 9th, 2010Via: AP:
A new analysis of a 40-year-old audio recording reveals that someone ordered National Guard troops to prepare to fire on students during a deadly Vietnam War protest at Kent State University in 1970, two forensics experts said.
The recording was enhanced and evaluated by New Jersey-based audio experts Stuart Allen and Tom Owen at the request of The Plain Dealer newspaper. Both concluded that they hear someone shout, “Guard!” Seconds later, a voice yells, “All right, prepare to fire!”
“Get down!” someone shouts, presumably in the crowd. A voice then says, “Guard!…” followed two seconds later by a booming volley of gunshots.
Four Kent State students were killed and nine were wounded.
“I think this is a major development,” said Alan Canfora, who was shot and wounded in the right wrist during the protest on May 4, 1970. Canfora, who has long believed that the troops were ordered to fire, located a copy of the tape in a library archive in 2007 and has urged that it be professionally reviewed.
The original reel-to-reel audio recording was made by Terry Strubbe, a student who placed a microphone in a window sill of his dormitory that overlooked the anti-war rally.
Allen, president and chief engineer of the Legal Services Group in Plainfield, N.J., removed extraneous noises — wind blowing across the microphone, for example — that obscured voices on the recording.
Without a voice sample for comparison, the new analysis can’t determine who might have issued such a command or why.
Most of the senior Ohio National Guard officers directly in charge of the troops have died.
Research Credit: dilinger
Tainted Nuclear Power Plant Water Reaches Major NJ Aquifer
May 8th, 2010Via: AP:
Radioactive water that leaked from the nation’s oldest nuclear power plant has now reached a major underground aquifer that supplies drinking water to much of southern New Jersey, the state’s environmental chief said Friday.
The state Department of Environmental Protection has ordered the Oyster Creek Nuclear Generating Station to halt the spread of contaminated water underground, even as it said there was no imminent threat to drinking water supplies.
The department launched a new investigation Friday into the April 2009 spill and said the actions of plant owner Exelon Corp. have not been sufficient to contain water contaminated with tritium.
Tritium is found naturally in tiny amounts and is a product of nuclear fission. It has been linked to cancer if ingested, inhaled or absorbed through the skin in large amounts.
“There is a problem here,” said environmental Commissioner Bob Martin. “I am worried about the continuing spread of the tritium into the groundwater and its gradual moving toward wells in the area. This is not something that can wait. That would be unacceptable.”
The tritium leaked from underground pipes at the plant on April 9, 2009, and has been slowly spreading underground at 1 to 3 feet a day. At the current rate, it would be 14 or 15 years before the tainted water reaches the nearest private or commercial drinking water wells about two miles away.
But the mere fact that the radioactive water — at concentrations 50 times higher than those allowed by law — has reached southern New Jersey’s main source of drinking water calls for urgent action, Martin said.
Bank Risk Soars to Record, Default Swaps Overtake Lehman Crisis
May 7th, 2010Via: Bloomberg:
The cost of insuring against losses on European bank bonds soared to a record, surpassing levels triggered by the collapse of Lehman Brothers Holdings Inc., as the sovereign debt crisis deepened.
The Markit iTraxx Financial Index of credit-default swaps on 25 banks and insurers soared as much as 40 basis points to 223, according to JPMorgan Chase & Co. The index closed at 212 basis points March 9, 2009. Swaps on Greece, Portugal, Spain and Italy rose to or near all-time high levels.
Credit risk rose for a sixth day on concern the Greek debt crisis is spiraling out of control and triggering concern banks may face losses on their sovereign bond holdings. The Group of Seven plans to hold a conference call today to discuss the turmoil, after a global stock rout that briefly erased more than $1 trillion in U.S. market value.
“Financials are caught in a really bad place right now,” said Aziz Sunderji, a London-based credit strategist at Barclays Capital. “Investors are selling bonds, not just hedging with CDS. It shows investors are repositioning portfolios and there’s a more long-term repricing of peripheral risk.”
Pacific Investment Management Co.’s Mohamed El-Erian and Loomis Sayles & Co.’s Dan Fuss said Europe’s crisis may spread across the globe because of investor concern that governments have borrowed too much to revive their economies.
MUST HEAR: Panic And Loathing From The S&P 500 Pits
May 7th, 2010A “car” is one futures contract.
A “handle” is a full point.
Via: ZeroHedge:
“Guys this is probably the craziest I have seen it down here ever.” Here it is, memorialized for the generations and away from the now openly ridiculous disinformation propaganda of the mainstream media, just what a full market meltdown panic sounds like: straight from the epicenter, the S&P 500 pits. Luckily open ouctry still exists, if at least for shock value. Click here for a first hand account of the most shocking 15 minutes in recent market history. Fat finger my ass.
Research Credit: dagobaz
SEC Said to Probe Causes, Exploitation of Stock-Market Turmoil
May 7th, 2010Maybe Captain Obvious dropped in at the SEC this morning.
Via: Bloomberg:
U.S. regulators plan to examine whether securities professionals triggered yesterday’s stock- market plunge or exploited the turmoil to profit illegally, two people with direct knowledge of the matter said.
The Securities and Exchange Commission aims to determine if market participants accidentally or maliciously entered orders that derailed normal trading, the people said, declining to be identified because the inquiry isn’t public. The agency will also examine if controls to prevent the rout from snowballing weren’t in place at exchanges and firms.
SEC officials, who haven’t drawn conclusions, began preparing for inquiries in the hours after a U.S. selloff triggered by Europe’s debt crisis briefly erased more than $1 trillion in market value, beginning around 2:40 p.m. in New York. U.S. stocks tumbled the most in a year as waves of computerized trading exacerbated the rout, sparking a slide in Asian shares.
The SEC and Commodity Futures Trading Commission said in a joint statement after U.S. markets closed that they will examine “unusual trading” that contributed to the plunge.
“We will make public the findings of our review along with recommendations for appropriate action,” they said.
SEC spokesman John Nester declined to comment on the investigations. The regulator will also look at whether traders tried to take advantage of the chaos, such as by entering orders that drove some stocks to pennies, according to the two people.
Plan for Congressional Audits of Fed Dies in Senate
May 7th, 2010Looks like that one thousand point pants shitter from yesterday sent a pretty clear message.
Via: Wall Street Journal:
Last-minute maneuvering in the Senate allowed the Federal Reserve to sidestep legislation that would have exposed its interest-rate decision-making to congressional auditors.
Pressure from the Obama administration led Senate lawmakers to alter a provision pushed by Sen. Bernie Sanders (I., Vt.) that was gaining momentum despite opposition from the Treasury and the Fed. It would have largely repealed a 32-year-old law that shields Fed monetary policy from congressional auditors.
The compromise, endorsed by Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and the Treasury, would require the Fed to disclose more details about its lending during the financial crisis. It would also require a one-time audit of those loans and a one-time review of Fed governance. A formal vote was pushed back until next week.
Thursday’s Senate showdown came after senators on the left and right joined forces to support Mr. Sanders’ provision.
“At a time when our entire financial system almost collapsed, we cannot let the Fed operate in secrecy any longer,” Mr. Sanders said. “The American people have a right to know.”
But Fed Chairman Ben Bernanke, while insisting on a commitment to “openness” at the Fed, said in a letter to Congress the Sanders measure would “seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation.”
Deputy Treasury Secretary Neal Wolin, in a statement, endorsed the revisions to the Sanders provision, saying they would provide a comprehensive audit of the Federal Reserve Board’s operations in response to the financial crisis, “while preserving the existing protections of the Federal Reserve’s independence with respect to monetary policy.”
A House bill sponsored by Rep. Ron Paul (R., Texas) that passed in December contains a proposal similar to the original Sanders measure. If the Senate bill passes, it will need to be reconciled in a conference committee. That keeps the pressure on the Fed alive for the coming months.
Research Credit: dagobaz
U.S. Government Now 96.5% of the Mortgage Market Q1, 2010
May 7th, 2010Via: Smirking Chimp:
“Let nobody try and fool nobody else anymore. Fannie and Freddie have nothing to do with the less privileged: they are the ultimate tools for Washington to keep Wall Street alive.”
“Not only would significantly lower home values put severe strains on the major banks’ balance sheets, they would also implode and destruct what Mortgage Backed Securities and various other housing related derivatives can be put on the books for.”
