Oppose Voter ID Legislation - Fact Sheet

July 21, 2011

BACKGROUND
Voter ID laws are becoming increasingly common across the country. Today, 30 states require voters to present identification to vote in federal, state and local elections, although some laws passed during the 2011 legislative session have not yet gone into effect. In 15 of those states, voters must present a photo ID – that in many states must be government-issued – in order to cast a ballot.
Many Americans do not have the necessary identification that these laws require, and face barriers to voting as a result. Research shows, for example, that more than 21 million Americans do not have government-issued photo identification; a disproportionate number of these Americans are low-income, racial and ethnic minorities, and elderly.
Voter ID laws have the potential to deny the right to vote to thousands of registered voters who do not have, and, in many instances, cannot obtain the limited identification states accept for voting. Many of these Americans cannot afford to pay for the required documents needed to secure a government-issued photo ID. As such, these laws impede access to the polls and are at odds with the fundamental right to vote.
VOTING IS A FUNDAMENTAL RIGHT, NOT A PRIVILEGE

• Nothing is more fundamental to our democracy than the right to vote.
• The right to vote is protected by more constitutional amendments - the 1st, 14th, 15th, 19th, 24th and 26th - than any other right we enjoy as Americans.
• There are additional federal and state statutes which guarantee and protect voting rights, as well as declarations by the Supreme Court that the right to vote is fundamental because it is protective of all our other rights.

VOTER ID REQUIREMENTS ARE A SOLUTION IN SEARCH OF A PROBLEM

• There is no credible evidence that in-person impersonation voter fraud -- the only type of fraud that photo IDs could prevent – is even a minor problem.
• Proponents of voter ID laws have failed to demonstrate that individual, in -person voter fraud is even a minor problem anywhere in the country.
• Multiple studies have found that almost all cases of in-person impersonation voter “fraud” are the result of a voter making an honest mistake, and that even these mistakes are extremely infrequent.
• It is important, instead, to focus on both expanding the franchise and ending practices which actually threaten the integrity of the elections, such as improper purges of voters, voter harassment, and distribution of false information about when and where to vote. None of these issues, however, are addressed or can be resolved with a photo ID requirement.

NO ELIGIBLE CITIZEN SHOULD HAVE TO PAY TO VOTE

• Requiring voters to obtain an ID in order to vote is tantamount to a poll tax. Although some states issue IDs for free, the birth certificates, passports, or other documents required to obtain a government-issued ID cost money, and many Americans simply cannot afford to pay for them.
• In addition, states incur sizable costs when providing IDs to voters who do not have them. Given the financial strain many states already are experiencing, this is an unnecessary allocation of taxpayer dollars.

VOTER ID LAWS ARE DISCRIMINATORY

• Voter ID laws have a disproportionate and unfair impact on low-income individuals, racial and ethnic minority voters, students, senior citizens, voters with disabilities and others who do not have a government-issued ID or the money to acquire one.
• The Supreme Court has held that a state cannot value one person’s vote over another and that is exactly what these laws do.
• Research shows that 11% of US citizens – or more than 21 million Americans -- do not have government-issued photo identification.
• As many as 25% of African American citizens of voting age do not have a government-issued photo ID, compared to only 8% of their white counterparts.
• 18% of Americans over the age of 65 (or 6 million senior citizens) do not have a government-issued photo ID.
• In 2008, it was widely reported that Indiana’s voter ID law disfranchised 12 nuns who were trying to vote in the primary election. The nuns were all over 80 years old, all had a history of voting in past elections, and none of them drove. Their limited mobility made it difficult for them to get an ID.

VOTER ID LAWS LIMIT VOTERS’ ACCESS TO THE VOTING BOOTH AND HINDER THEIR RIGHT TO CAST A BALLOT

• Voter ID laws restrict access to the voting booth. Rather than erecting hurdles that prevent Americans from voting, lawmakers must ensure that every eligible voter is allowed to vote, and that every vote counts.
• Any requirement that citizens show government-issued photo ID at the polls reintroduces an enormous amount of discretion into the balloting process, thus creating opportunities for discrimination at the polls against racial, ethnic and language minority voters.
• Most polling places rely on volunteers or poll workers with minimal training to check in voters and answer questions. There is a risk that inadequately trained workers could turn away and disfranchise even properly documented voters.

OUR COUNTRY HAS COME A LONG WAY SINCE THE PASSAGE OF THE VOTING RIGHTS ACT; VOTER ID REQUIREMENTS ARE A STEP BACKWARDS

• Voter ID requirements are a dangerous and misguided step backwards in our ongoing quest for a more democratic society.
• Elected officials should be seeking ways to encourage more voters, not inventing excuses to deny voters the ability to cast their ballots. Photo ID requirements present substantial barriers to voting and negatively effect voter participation.
• Today, 30 states have enacted discriminatory voter ID laws that prevent citizens from voting, and more states are considering such restrictive and discriminatory laws.
• The history of our nation is characterized by a gradual expansion of voting rights. As our democracy continued to evolve with the right to vote has been expanded to include most Americans.

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Please Enforce the Voting Rights Act
Dear Attorney General Holder,
Nothing is more fundamental to our democracy than the right to vote. New laws that have passed around the country, which restrict the pool of eligible voters and make it harder for Americans to cast a ballot, represent a step backwards in a decades-long struggle to end voter discrimination in this country. We urge you to exercise your authority under the Voting Rights Act to examine these laws so that voting rights are not jeopardized.

 crossposted: Wall Street Journal

Depression in Command

In times of crisis, mentally ill leaders can see what others don't

By NASSIR GHAEMI

Getty Images

Winston Churchill

When times are good and the ship of state only needs to sail straight, mentally healthy people function well as political leaders. But in times of crisis and tumult, those who are mentally abnormal, even ill, become the greatest leaders. We might call this the Inverse Law of Sanity.
Consider Neville Chamberlain. Before the Second World War, he was a highly respected businessman from Birmingham, a popular mayor and an esteemed chancellor of the exchequer. He was charming, sober, smart—sane.
Winston Churchill, by contrast, rose to prominence during the Boer War and the first World War. Temperamental, cranky, talkative, bombastic—he bothered many people. During the "wilderness" years of the 1930s, while the suave Chamberlain got all the plaudits, Churchill's own party rejected him.
When not irritably manic in his temperament, Churchill experienced recurrent severe depressive episodes, during many of which he was suicidal. Even into his later years, he would complain about his "black dog" and avoided ledges and railway platforms, for fear of an impulsive jump. "All it takes is an instant," he said.

People who are chronically a little depressed -- gloomy, grumpy, low energy -- have "dysthymic disorder," a condition with its own risks of job and family problems, as well as episodes of major depression. Melinda Beck has details.

Abraham Lincoln famously had many depressive episodes, once even needing a suicide watch, and was treated for melancholy by physicians. Mental illness has touched even saintly icons like Mahatma Gandhi and Martin Luther King Jr., both of whom made suicide attempts in adolescence and had at least three severe depressive episodes in adulthood.
Aristotle was the first to point out the link between madness and genius, including not just poets and artists but also political leaders. I would argue that the Inverse Law of Sanity also applies to more ordinary endeavors. In business, for instance, the sanest of CEOs may be just right during prosperous times, allowing the past to predict the future. But during a period of change, a different kind of leader—quirky, odd, even mentally ill—is more likely to see business opportunities that others cannot imagine.

Getty Images

Abraham Lincoln

In looking back at historical figures, I do not speculate about their relationships with their mothers or their dark sexual secrets, the usual stuff of "psychohistory." Instead, I base my diagnoses on the most widely accepted sources of psychiatric evidence: symptoms, family history, course of illness, and treatment. How, then, might the leadership of these extraordinary men have been enhanced by mental illness?
An obvious place to start is with depression, which has been shown to encourage traits of both realism and empathy (though not necessarily in the same individual at the same time).
"Normal" nondepressed persons have what psychologists call "positive illusion"—that is, they possess a mildly high self-regard, a slightly inflated sense of how much they control the world around them.
Mildly depressed people, by contrast, tend to see the world more clearly, more as it is. In one classic study, subjects pressed a button and observed whether it turned on a green light, which was actually controlled by the researchers. Those who had no depressive symptoms consistently overestimated their control over the light; those who had some depressive symptoms realized they had little control.
For Lincoln, realism bordering on political ruthlessness was central to his success as a war leader. Few recall that Lincoln was not a consistent abolitionist. He always opposed slavery, but until 1863 he also opposed abolishing it, which is why he was the compromise Republican candidate in 1860. Lincoln preferred a containment strategy. He simply wanted to prevent slavery's expansion to the West, after which, he believed, it would die out gradually.

Getty Images

Rev. Martin Luther King

When the Civil War came, Lincoln showed himself to be flexible and pragmatic as a strategist, willing to admit error and to change generals as the situation demanded. He was not the stereotypical decisive executive, picking a course of action and sticking with it. He adapted to a changing reality and, in the end, prevailed.
As for Churchill, during his severely depressed years in the political wilderness, he saw the Nazi menace long before others did. His exhortations to increase military spending were rejected by Prime Minister Baldwin and his second-in-command, Chamberlain. When Chamberlain returned from signing the Munich agreement with Hitler in 1938, only Churchill and a small coterie refused to stand and cheer in parliament, eliciting boos and hisses from other honorable members.
At dinner that night, Churchill brooded: How could men of such honor do such a dishonorable thing? The depressive leader saw the events of his day with a clarity and realism lacking in saner, more stable men.
Depression also has been found to correlate with high degrees of empathy, a greater concern for how others think and feel. In one study, severely depressed patients had much higher scores on the standard measures of empathy than did a control group of college students; the more depressed they were, the higher their empathy scores. This was the case even when patients were not currently depressed but had experienced depression in the past. Depression seems to prepare the mind for a long-term habit of appreciating others' point of view.

Getty Images

Mohandas Gandhi

In this we can see part of the motivation behind the radical politics of Gandhi and Martin Luther King. Their goal was not to defeat their opponents but to heal them of their false beliefs. Nonviolent resistance, King believed, was psychiatry for the American soul; it was a psychological cure for racism, not just a political program. And the active ingredient was empathy.
Gandhi and King succeeded to a degree, of course, but they also failed: India was fatally divided because Hindus and Muslims could not accept each other; segregation ended in the U.S., but it happened slowly and at the cost of social traumas whose consequences still afflict us. The politics of radical empathy proved, in the end, to be beyond the capacity of the normal, mentally healthy public.
Great crisis leaders are not like the rest of us; nor are they like mentally healthy leaders. When society is happy, they toil in sadness, seeking help from friends and family and doctors as they cope with an illness that can be debilitating, even deadly. Sometimes they are up, sometimes they are down, but they are never quite well.
When traditional approaches begin to fail, however, great crisis leaders see new opportunities. When the past no longer guides the future, they invent a new future. When old questions are unanswerable and new questions unrecognized, they create new solutions. They are realistic enough to see painful truths, and when calamity occurs, they can lift up the rest of us.
Their weakness is the secret of their strength.
—Dr. Ghaemi is a professor of psychiatry at Tufts University School of Medicine and director of the Mood Disorders Program at Tufts Medical Center. This essay is adapted from his new book, "A First-Rate Madness: Uncovering the Links Between Leadership and Mental Illness."

GDP numbers make double dip threat real

Posted: 29 Jul 2011 06:12 AM PDT

Cross-posted from Credit Writedowns
I have stopped reporting the quarterly GDP numbers but this last reading bears mentioning. The US Bureau of Economic Analysis reported the following at 830AM ET:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.3 percent in the second quarter of 2011, (that is, from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP increased 0.4 percent.

The immediate reaction was a drop in the dollar to record lows against the Japanese yen and Swiss franc, a drop in Ten-year yields to 2.88%, a drop in the Dow Futures to –137 and a rise in the Gold price by $10 to $1626.
While the headline number was well below expectations of 1.8%, what must be noted are the major revisions. Q1 2011 is now reported as +0.4%. That’s a major downward revision which demonstrates that QE2 was in fact doing nothing for growth and that the US is already at stall speed even without the negative impact of the European sovereign debt crisis and the debt ceiling fiasco. The double dip scare is real.
Here is how the BEA explains the extensive revisions:

Current-dollar GDP was revised down for all 3 years: $77.6 billion, or 0.5 percent, for 2008; $180.0 billion, or 1.3 percent, for 2009; and $133.9 billion, or 0.9 percent, for 2010. The percent change from the preceding year was revised down from an increase of 2.2 percent to an increase of 1.9 percent for 2008; was revised down from a decrease of 1.7 percent to a decrease of 2.5 percent for 2009; and was revised up from an increase of 3.8 percent to an increase of 4.2 percent for 2010. Current-dollar gross national product (GNP) (GDP plus net receipts of income from the rest of the world) was revised down for all 3 years: $82.9 billion, or 0.6 percent, for 2008; $174.1 billion, or 1.2 percent, for 2009; and $132.8 billion, or 0.9 percent, for 2010… Current-dollar GDP was also revised down for all 4 years from 2004-2007: $14.5 billion for 2004, $15.4 billion for 2005, $21.7 billion for 2006, and $33.1 billion for 2007.

While I am reporting this, I should note that the President made news regarding his understanding of the origins of the deficit and our slow growth recently when he said:

“For the last decade, we have spent more money than we take in. In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation’s credit card. As a result, the deficit was on track to top $1 trillion the year I took office.”

This is patently false. In fact, this is scary. Dean Baker tells us:

This is seriously mistaken.
The Congressional Budget Office’s projections from January of 2008, the last ones made before it recognized the housing bubble and the implications of its collapse, showed a deficit of just $198 billion for 2009, the year President Obama took office. In other words, the deficit was absolutely not "on track to top $1 trillion."… Obama does not have the most basic understanding of the nature of the budget problems the country faces. He apparently believes that there was a huge deficit on an ongoing basis as a result of the policies in place prior to the downturn. In fact, the deficits were relatively modest. The huge deficits came about entirely as a result of the economic downturn…. This misunderstanding of the origins of the budget deficit could explain President Obama’s willingness to make large cuts to core social welfare programs, like Social Security, Medicare, and Medicaid…

Hat tip to Brad DeLong for the information
In sum: The President has no idea why the deficit exploded, we are in jeopardy of default, and we will cut spending in into the teeth of a serious growth slowdown. America is rudderless. God help us.

By Washington’s Blog


Moody’s announced today:

Moody’s Investors Service has placed under review for possible downgrade the Aaa ratings of 177 public finance credits, affecting a combined $69 billion of outstanding debt. The credits include 162 local governments in 31 states, 14 housing finance programs and one university. A complete list of affected securities and additional analysis is available at www.moodys.com/USRatingActions.
These actions relate to Moody’s July 13 decision to place the Aaa government bond rating of the United States under review for downgrade, and reflect the rating agency’s assessment that some Aaa public finance ratings would likely be indirectly affected by potential credit deterioration of the sovereign.
***
In a previous action on July 19, Moody’s placed the ratings of five Aaa U.S. state governments under review for possible downgrade, affecting approximately $24 billion of general obligation and related debt. Those states are Maryland, New Mexico, South Carolina and Tennessee and the Commonwealth of Virginia.

The entities on down grade watch include:

• The Colorado Housing and Finance Authority’s Single Family Mortgage Bonds and the Single Family Program Bonds, 2009 Class I

• Idaho Housing and Finance Association’s Single Family Mortgage Senior Bonds, Series 1996B, Series 1996C, Series 1998D, Series 1999F, Series 1999-I*, Series 2000A, Series 2000C, and Series 2000D

• Kentucky Housing Corporation’s Housing Revenue Bonds

• Utah Housing Corporation’s Single Family Mortgage Senior Bonds, Series 1998G, Series 2000A and NIBP

• The University of Washington

• The Smithsonian Institution

Given that Moody’s and Standard & Poor both say that they’ll likely downgrade U.S. credit even if a debt ceiling deal is reached, it’s looking dire for the above-described entities and bond issues.

Harald Hau: Eurozone Bailout – Tax Transfer to the Wealthy?

Posted: 29 Jul 2011 09:48 PM PDT

Yves here. In comments, a reader recently expressed skepticism that bank bailout represented a massive looting of the public purse. Since the bank PR efforts have been more successful than I realized, it’s important to keep shining a bright light on this issue.
This post by business school professor Harald Hau not only discusses how this transfer from the many to the few works in the Eurozone rescue context, but also illustrates that the banksters have improved their game. And his observation that this bailout favors bondholders, and those constitute the top 5% of the population, is a generous estimate. Remember that the prime objective of this exercise is to spare big Eurobanks any pain, which means the highly paid professionals and executives in their employ are the biggest beneficiaries.
By Harald Hau, Associate Professor of Finance, INSEAD. Cross posted from VoxEU
Last week, the European heads of government added €109 billion to the existing €110 billion rescue plan for Greece. As Europe’s financial sector would have otherwise taken a huge hit, this column address the question: How did the financial sector manage to negotiate such a gigantic wealth transfer from the Eurozone taxpayer and the IMF to the richest 5% of people in the world?
When the deal was announced, German Chancellor Merkel highlighted the private-sector involvement. She stressed that this was the result of German intransigence. According to the spin, private creditors have to accept a 21% write-down on their claims. This amounts to a €37 billion private-sector contribution. They also provide €12.8 billion in new loans for debt buyback. This buyback, however, should not count as a private-sector contribution as it amounts to an exchange of one debt for another.
The private creditors’ contribution is therefore extremely modest compared to the €109 billion in new public commitments. Especially given that private creditors had the most to lose. Given that the market discount was already 50% for Greek debt, giving up 21% could be viewed as a gain. This has to be qualified as a very bad negotiation outcome for the Eurozone taxpayer.
A closer look shows the deal is much worse for taxpayers
The new plan foresees so-called credit enhancement for the new debt, which means that the new Greek debt is mostly guaranteed by the European Financial Stability Facility (EFSF) – and thus by the taxpayers. Now, in the financial world, a guarantee is worth hard cash – it’s like getting automobile insurance for free.
This is no small concession given that a successful turnaround for Greece is highly uncertain. The economy still is burdened with an excessive debt of around 132% of GDP; large structural policy reforms have not yet begun and may well fail. Most creditors can foresee this and are happy to accept the public guarantees for their debt before the next and much bigger haircut comes.
We can therefore expect that they take up the debt exchange offer “voluntarily”, since it is effectively a gift to sovereign creditors and not a bailout contribution.
What about Egalité? Tax for wealth, or on wealth?
More surprising is Sarkozy’s spin on these events. He interpreted the new deal as an important step towards Europe’s economic governance. But before taking too much pride, Sarkozy should remember that a €200 billion subsidy to sovereign creditors is a gigantic wealth transfer from the taxpayer to essentially the richest 5% of the world. In the US, the 5% richest households control roughly 70% of all financial wealth, and this percentage is not much different in the rest of the world. Ultimate ownership of bank capital and sovereign debt is so concentrated among high-wealth individuals that we should characterise the bailout subsidy as an “impôt pour la fortune” (“a tax for wealth”) – a wealth tax supporting the rich.
This should be problematic in a country like France which has been fighting bitterly over the so-called “impôt sur la fortune” (a wealth tax on the rich). This latter wealth tax amounts to a mere €4 billion annually in state revenue.
Why are the French not at the barricades over the structure of the Greek bailout?
This is a difficult question. Self-censorship by the mainstream French media might play a role, which – mostly left-leaning – does not want to provide ammunition to Eurosceptics like Marine le Pen before next year’s presidential elections. But even in France it will not remain unnoticed that almost all of the public funds go to creditors and hardly benefit the ordinary Greek citizen.
Why did taxpayers get such a bad deal?
In principle, governments should have been in a very strong position. Private default can end in the liquidation of a company, but a country cannot be liquidated. This puts private creditors in a very weak position when it comes to negotiating with a government and empowers the latter. But why was this not the case in the current debt crisis?

Bankers and many journalists convey the impression that we face a choice between a full sovereign bailout and a catastrophic banking crisis.
ECB executive board member Lorenzo Bin Smaghi even suggested that any talk about private bail-ins would increase the costs for the taxpayer.

Such assertions confuse more than they clarify, because they (falsely) suggest that there was no alternative.
The banking sector is the weak spot of any restructuring plan involving sovereign default. Here, direct bank support through bank recapitalisation is a much more effective and cheaper solution than a full guarantee of sovereign debt.
The taxpayers could get bank equity in exchange for their money. If this crisis is like others, there is a chance that share values recover and taxpayers break even in the long run. The 2007-2009 crisis has shown that governments are indeed able to contain a banking crisis by resolute action like forced recapitalisation and temporary nationalisation of banks.
The better prepared we are for such an event the smaller will be the impact on the economy. Europe’s governments have had plenty of time to prepare over the last year, so why was such a solution not even considered?
The reasons are political. Such a solution would have upset powerful vested banker interests, even though it would have imposed the costs on those most responsible for the massive credit misallocation.
A strong negotiating position of politicians confronts two important obstacles:

First, the finance ministry and banking authority typically lack competence and information in order to prepare contingency plans for bank recapitalisation.

There is an acute skill shortage in the finance ministry and what talent there is meets a wall of secrecy put up by an uncooperative banking sector.

Secondly, the strong lobbying power of the banking sector deters politicians from preparing in advance and taking risks in favour of the taxpayer.

Conflicts of interest between the politicians and the bankers are rampant.
After the disastrous risk-management performance of many bankers revealed in the 2007-2009 banking crisis, it is surprising that the same people still enjoy great influence in the policy process. The consequences are predictable.

If you ask a frog to come up with a plan for draining a swamp, you are like to end up with a proposal for more flooding.
Bankers were asked to come up with a plan for private-sector involvement under the leadership of Ackermann and the Institute for International Finance; what they came up with was a plan for more support.

We would never ask the tobacco industry to work out a new public health policy.
A further problem is the fragmentation of political power in Europe. This prevents the political authority from taking a strong negotiating position against the sovereign-debt creditors. In 1982, when the US faced a sovereign-debt crisis brought about by US banks’ lending to Latin American nations, US finance minister Baker rejected private-sector demands that the US taxpayer bail out of creditors. While this seems similar to the position of German Chancellor Merkel, her position is much weaker.
Lastly, the ECB played a very obstructive role in preventing any effective bail-in of private creditors. This strengthened the “hostage taking” of the political authorities. At times, ECB board members gave the impression of being themselves captured by the financial elite of their home country. The ECB severely damaged its own reputation by siding so strongly with creditors and bankers rather than defending Europe’s taxpayers and citizens.
And the future?
If the recent Greek bailout foreshadows the future of Eurozone “economic governance”, the real question is “how much of this governance can the euro survive?”
The political economy of these European bailouts is unlikely to improve before the next sovereign-debt crisis hits. This would require that politicians take on the powerful banking lobby by forcing much higher capital standards on Europe’s undercapitalised banks. There is no sign of this happening. The real peril for the euro may come from a taxpayer revolt against a financial elite that has betrayed the interests of the majority of citizens.

via: Yves Smith /Nakedcapitalism

“Is Standard and Poor’s Manipulating US Debt Rating to Escape Liability for the Mortgage Crisis?”

Posted: 29 Jul 2011 11:15 PM PDT

By Scarecrow and Jane Hamsher. Cross posted from FireDogLake
The Politico headline says it all: U.S. credit downgrade worries Obama, Congress more than default

It’s not the default that strikes the most fear in the White House and Congress these days. It’s the downgrade

As Robert Reich notes, Standard and Poors is the “biggest driver in the deficit battle.” Why would anyone care what the corrupt and disgraced organizations who quite nearly brought down the world economy think about anything at this point? And yet, that is where elite opinion is focused right now:

[W]hat really haunts the administration is the very real prospect, stoked two weeks ago by Standard & Poor’s, that Barack Obama could go down in history as the president who presided over his country’s loss of its gold-plated, triple-A bond rating.
[]
Financial analysts say such a move would hit Americans with more than $100 billion a year in higher borrowing costs, but it’s not just that. It would be a psychic blow to a nation that already looks over its shoulder at rising economic powers like China and wonders, what’s gone wrong? And it would give the president’s Republican rivals a ready-made line of attack that he’s dragging the country in the wrong direction.

This rumbling has been coming from Capitol Hill for a while, which made us start asking questions about what was really going on with Standard and Poors. It felt like there’s a story-behind-the-story driving S&P’s actions in the debt ceiling debate, which appear inexplicable at face value and go way beyond what Moody’s or Fitch have done. And the more we looked at the timeline of events, the more we wondered how the intertwining dramas of a) S&P downgrade threats, b) the liability that the ratings agencies may have for their role in the 2008 financial meltdown, and c) the GOP’s attempts to insulate the ratings agencies from b) are all impacting each other.
Timeline of Events
On July 21, 2010 President Obama signs Dodd-Frank into law. Prior to Dodd-Frank, the courts found that credit ratings are expressions of opinion that were protected under the first amendment, subject to a demonstration of actual malice:

The Dodd-Frank Financial Reform Act stripped away those protections, so that CRA’s were now subject to the same expert liability as an auditor or securities analyst, and required only a “knowing” or “reckless” state of mind for liability, rather than proof of scienter. It also repealed Section 436 of the Securities Act of 1933, which granted “safe harbor” for ratings, which were part of a prospectus.

Which, for obvious reasons, made the ratings agencies extremely nervous.
In October 2010 S&P issued its first threat to downgrade US debt: “If the U.S. government maintains its current policies for the next 40 years in the face of rising health care and pension spending pressure, it is unlikely that Standard & Poor’s Ratings Services would maintain its ‘AAA’ rating on the U.S.” The report paints a target on the back of Social Security and Medicare, says nothing about the wars, the Bush tax cuts, private health care costs or the absurdity of 40 year projections.
Ratings agencies are supposed to be reactive and analyze only what they see. They are not supposed to explicitly or implicitly give ”assurance or guarantee of a particular rating prior to a rating assessment.” By prescribing not only an austerity package for the United States, but stating that “in the long term, the U.S. AAA rating relies on reforms” of Social Security and Medicare, they most assuredly broke that rule.
S&P put forth no legitimate basis for their downgrade threat. As every reputable economist keeps reminding us (James K. Galbraith, Joe Stiglitz, FT’s Martin Wolf, Peter Radford, Bruce Bartlett, Krugman), the US is not Greece and does not face its risk of default. Unlike Greece, the US has its own currency, and unlike Greece, its debt is denominated and would be paid in its own currency. It can create that currency at will. So the only way the US can be forced into default is if Congress and the President do something that would be insane, like refuse to raise the debt limit, and the President then refuse to use the Executive authority of the Constitution to prevent a default.
But S&P was clearly determined to set itself up as arbiter of the US debt ceiling debate. They said nothing in December when the Bush tax cuts were extended, which dramatically exacerbated the deficit problem they warned of in October. But on February 14 President Obama releases his budget, which cut the deficit by $1.1 trillion over 10 years. The Standard and Poors committee found Obama proposal “disappointing.”

Sign our petition to the SEC: Revoke S&P’s authority as a credit ratings agency for their use of ratings as a political weapon and their attempt to avoid responsibility for their role in the financial crisis of 2008.

The White House clearly began to worry about the political implications of what S&P might do. Emails from both Treasury and S&P were provided to the House Financial Services committee earlier this week, showing that in March S&P and Treasury officials began coordinating discussions of the administration’s budget strategy before the S&P committee met to discuss the US credit rating.
But White House officials weren’t the only ones trying to work the refs. On March 14 Congressional Republicans stage their first challenge to 2010′s Dodd-Frank financial regulation reforms — an attempt to repeal the provision exposing credit rating agencies to the legal liability they were chafing to escape from.
And on April 5 Paul Ryan announced his alternative budget plan. Ryan’s budget was claimed (it was mostly a fraud) to produce over $4 trillion in reductions, while reducing tax rates. It also did so by slashing Medicare and making hundreds of billions in unspecified cuts to unnamed domestic programs. S&P were conspicuously silent.
April 13 was a big day
President Obama gave a speech in which he vowed to cut $4 trillion in cumulative deficits within 12 years through a combination of spending cuts and tax increases. Why was he suddenly pursuing $4 trillion in cuts, up from $1.1 trillion in January? Clearly Ryan had upped the ante. But what was he competing for?
Also on April 13 , Timothy Geithner along with Deputy Secretary Wolin, OMB Director Lew and a representative of the vice president’s office met with S&P personnel, per Geithner’s June 13 letter to the House Financial Services subcommittee. ABC reported that Geithner asked S&P’s David Beers to hold off on issuing any report until after the President Obama and Congress had completed negotiating over the rest of the FY2011 budget.
But perhaps the biggest thing that happened on April 13: A bipartisan study on the financial crisis from the Coburn-Levin Senate Permanent Subcommittee on Investigations released a report saying the credit ratings agencies were a “key cause” of the financial crisis. They issued a 650 page report, which included the following recommendation (p. 16):

The SEC should use its regulatory authority to facilitate the ability of investors to hold credit ratings agencies accountable in civil lawsuits for inflated credit ratings, when a credit rating agency knowingly or recklessly fails to conduct a reasonable investigation of the rated security.

Two days later, David Beers reached out to Undersecretary Goldstein to let Treasury know that the Standard and Poors committee has changed its outlook to “negative.” On April 18: Standard and Poors issued press release downgrading the outlook for US sovereign debt from stable to negative and giving a 30% chance of a ratings downgrade from AAA to AA.
“U.S.’s fiscal profile has deteriorated steadily during the past decade and two years after the financial crisis” they say — with no mention of their own role in that crisis. And whereas the October threat had been based on concerns over Social Security and Medicare, the latest press release contained no mention of either. Now they were worried that “Republicans and Democrats are deeply divided on a plan to reduce debt” and that political squabbling will prevent the debt ceiling from being raised.
On April 19 Geithner was dispatched to do an exhaustive round of talk shows, saying he disagrees with Standard and Poors and that there is “no risk” of a credit ratings downgrade.
But Geithner isn’t the only one. On April 20 Mitt Romney begins using the S&P threat of a downgrade for political advantage. In a radio interview he says that S&P “just downgraded their view for the future of America” and called for the President to “sit down and personally meet with S&P” as he said he did as governor of Massachusetts.
SEC takes the gloves off
In the midst of all of this, the SEC was moving to implement Dodd-Frank in ways that would negatively impact all the ratings agencies, and looking into S&P’s role in the 2008 mortgage crisis:

May 18: the SEC commissioners “voted unanimously to propose new, tougher regulations for credit rating agencies,” which would “implement certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act and enhance the SEC’s existing rules governing credit ratings.”
June 9: Bloomberg reports the SEC may recommend recommend that ratings agencies be prohibited from advising investment banks on how to earn top rankings for asset- backed securities
June 14: Reports emerge that the SEC is considering civil fraud charges against S&P and Moody’s in the run up to the financial crisis.

But Standard and Poors was not cowed by the SEC’s sudden rash of action. On July 14 they raised the threat of a downgrade to 50% within the next 90 days.
And now they were very explicit about what they were looking for in exchange for a AAA rating. They wanted a number….which just happened to be the magic $4 trillion number:

If Congress and the Administration reach an agreement of about $4 trillion, and if we to conclude that such an agreement would be enacted and maintained throughout the decade, we could, other things unchanged, affirm the ‘AAA’ long-term rating and A-1+ short-term ratings on the U.S.

Incredibly, S&P’s Devan Sharma told Congress this week that that S&P had been “misquoted” regarding the $4 trillion figure and that it had been “inaccurately stated that the company was calling for that specific threshold.” I really don’t know any other way you could read it. He also accused the administration of “meddling in the ratings process,” a charge quickly trumpeted by Republicans on the committee.
Politico reported that administration officials were “shocked by the move,” suggesting that it did not seem to square with prior S&P reports (duh).
But S&P wasn’t done. On July 21: David Beers met with Congressional Republicans in a closed door meeting to brief them on a potential downgrade of US debt.
And on that same day, the House Financial Services Committee approved the bill to remove the Dodd-Frank provisions that subject credit ratings agencies to expert liability. It passed 31-19 “over the opposition of the senior Democrat on the panel,” devolving into a clear partisan effort.
Then on Tuesday of this week, the SEC unanimously approved a plan to erase references to credit ratings from certain rulebooks. They also adopted alternatives to the credit ratings — a blow to the CRA’s entire business model.
Conclusion
It’s becoming more and more obvious that Standard and Poor’s has a political agenda riding on the notion that the US is at risk of default on its debt based on some arbitrary limit to the debt-to-GDP ratio. There is no sound basis for that limit, or for S&P’s insistence on at least a $4 trillion down payment on debt reduction, any more than there is for the crackpot notion that a non-crazy US can be forced to default on its debt.
Whatever S&P’s agenda, it has nothing to do with avoiding default risks or putting the US on sound fiscal footing. It appears to be intertwined with their attempts to absolve themselves from responsibility for their role in the 2008 financial crisis, and they are willing to manipulate not only the 2012 election but the world economy to escape the SEC’s attempts to regulate them.
It’s time the media and Congress started asking Standard and Poors what their political agenda is and whom it serves.
Sign our petition to the SEC: Revoke S&P’s authority as a credit ratings agency for their use of ratings as a political weapon and their attempts to avoid responsibility for their role in the financial crisis of 2008.

The Conspiracy of Capitalism...
video is not the best quality but, the info is top-notch and I recommend a watch. If you'd like to see more government films and archival info check out http://www.archive.org

 

Quelle Surprise! Banks Don’t Want to be in IRA Business if They Can’t Treat Customers as Stuffees

Posted: 26 Jul 2011 09:50 PM PDT

If you doubt the public need to be protected from their local mob bosses banks, their latest hissy fit is an admission that they can’t make what they deem to be enough profits unless they take advantage of their customers.
This object lesson is IRAs. Bloomberg reports that if brokerage firms who manage IRAs were required to act as a fiduciary, as in put their customers’ interests first, many would exit the business.
The dirty secret of the retail asset management business at brokerage firms is that their profits depend on treating you badly. Unless you are a big enough customer that they would not like to lose you, you are going to be abused (well, take it back, even being a billionaire is not rich enough to be safe from bank predation). The one check on this, ironically, is that salesmen are de facto small businessmen in a bigger corporate umbrella, and their clients are their book of business. They thus have incentives to make sure the customer thinks he is being treated well (whether he is actually treated well is another matter).
The big firms have generally if not completely inferior in-house fund management products they push (inferior by virtue of higher fees and/or not so hot performance). Your “investment advisor” also has an incentive to encourage you to trade if you are in a commission-paying account. The alternative, a wrap fee account, has annual charges that make a serious dent in your principal over time.
Now there may indeed be some imprecision in where the Labor Department draws the line between a fiduciary and someone who is merely peddling products. But the examples the industry defenders cite as practices they want to continue are troubling:

If firms are considered fiduciaries by the Labor Department, selling investors bonds from a brokerage’s inventory or recommending a trade that would generate a commission may be considered a conflict of interest and a “prohibited transaction,” said [Jim] McCarthy [of Morgan Stanley].

The bond example I find particularly troubling. Yes, bonds are over the counter products, so they are always going to come from some firm’s inventory, either the firm that the client is already doing business with or a third party. But unless the account in question is pretty large, it has no business buying bonds The transaction sizes for most individuals are the equivalent of odd lots, and the buyer is almost assured to get a worse price than an institutional investor. The overwhelming majority of individuals are better off putting their money in bond funds.
The article made it clear the industry was trying to say that small fry (those with under $25,000 in an account) would be hurt, when those are the least economical for high cost players like full service brokerage firms, also raising doubts about the banks’ argument. Someone with a small balance needs to keep transaction costs down even more than investors with bigger balances. And while they’d presumably want to preserve their profits with the small fry, I’d bet their real aim is to preserve their freedom of action with larger accounts, which is where the real juice is.
Similarly (and maybe I am hopelessly old fashioned) I have never liked the retail brokerage model (it probably has a lot to do with having worked on Wall Street). If you need advice, pay for advice and get low cost execution. Or if you are too small to afford advice, do some homework on asset allocation and buy index funds (one big caveat: read Benoit Mandelbrot’s The Misbehavior of Markets. Everyone needs to recognize that the tenets of financial economics underestimate the risk of markets and as a result, encourage too much risk-taking. Any standard advice on what level of stock holdings are desirable needs to be dialed down. Rule number one of investing is preservation of capital, and that too often is ignored).
It was depressing but predictable that this Bloomberg story was one sided; this article replayed the arguments of SIFMA, the industry lobbying group. But it’s probably an accurate reflection of how the consumer has no advocate when financial rules are being nailed down.

Bath & Body Works is Targeting Young Women with Their Toxic Product Ask Bath & Body Works to discontinue the use of toxic chemicals in their products
Toxic chemicals don't belong in personal care products Tell Bath & Body Works to take triclosan out of their products! July 27, 2011 Dear Reader at Figrd.... , Sometimes I don't wash my hands with soap and water. I just can't bring myself to use a product that causes all sorts of health problems and will exist in our environment forever. What ingredient is so repulsive that I'm willing to walk to find dish soap in the kitchen to use or just forgo the soap all together? Triclosan. I wonder what it is about Bath & Body Works' "antibacterial" soap that people are so drawn to. It comes in gift baskets and as prizes at baby showers and bachelorette parties, and it's in my friends' bathrooms. While it may come in sweet or fruity scents like "sugar lemon fizz" or "tangelo orange twist" to get the attention of young girls and women, their antibacterial soap contains a toxic chemical called triclosan. I can't help but wonder if the audience that Bath & Body Works targets even knows what triclosan is, and whether the company even cares. Can you ask Bath & Body Works to discontinue the use of triclosan in their products? Triclosan poses serious environmental health hazards by disrupting hormones, even lowering sperm counts in animals. After it is washed down the drain, it pollutes our waterways and can transform into dioxins, a class of chemicals some consider to be the most toxic. Bath & Body Works heavily markets their products containing triclosan to girls and young women, leading them to believe that they need antibacterial soaps. But the truth is, antibacterial soaps are no more effective than regular soap and water. In fact, using antibacterial soaps may be worse, even leading to antibiotic resistant bacteria. We need to ask Bath & Body Works to stop using triclosan. Other major companies, like Colgate Palmolive, have agreed to eliminate triclosan from some of their products. Why can't Bath & Body Works stop using triclosan too? Send the Bath & Body Works' CEO a message today: http://action.foodandwaterwatch.org/p/dia/action/public/?action_KEY=7319 Thanks for taking action, Meredith Begin Education & Outreach Organizer Food & Water Watch mbegin(at)fwwatch(dot)org
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Clueless New Zealand Ministry of Economic Development Provides Regulatory Cover to Bogus Financial Companies

Posted: 27 Jul 2011 02:19 PM PDT

…which is not good news for honest New Zealand investors trying to do a due diligence exercise; nor for the New Zealand Ministry of Economic Development’s reputation, if it has one; nor for the NZ Government’s promotion of igovt.
First, though, a detour: the first stop on our trip to New Zealand is…Panama.
Panamanian lawyers, if they are not 100% scrupulous, can earn an easy living by promising fraudsters more confidentiality than Panama can actually deliver. From Panama-Guide.com, here’s an article by Don Winner about the resonantly named pseudoreligious fraudster Quintin Sponagle:

…since I first published the original story about Quintin Sponagle, the guy who victimized 178 members of his own church and family to steal about $4 million dollars in a Ponzi scheme, I have received a bunch of emails and calls with additional information on his activities here in Panama. For example, he moved to Panama in 2006 when things got too hot for him in Nova Scotia. He apparently used the stolen money to establish several offshore corporations here in Panama in an attempt to cover his tracks – for example WATERNISH TRADING, INC. which is advertised as “C/O Sovereign Management Services, Avenida Ricardo J Alfaro Edificio Century Tower, Panama City, Panama, Panama, 260-4524.” That leads to a company called e-pharma24.com, and from there you can branch out into a whole network of online pharmaceutical companies all apparently owned by the same group and interconnected, but under a lot of different websites and operating names. This all ties back to another Panamanian Corporation called Miriad Inc.. Both Waternish Trading Inc. and Miriad Inc. have same resident agents and subscribers – Aknia Chi Pardo and Marga Quintanar de Calderon. If you then do a Google search on those two names, you will see how they are involved in literally dozens of companies, and their names pop up again and again on Internet forums of people trying to recover their money. Therefore, they are likely just setting up front companies for guys like Quintin Sponagle who are trying to hide behind a complicated web of offshore Panamanian corporations. And why would Quintin Sponagle want to hide the money he stole in Nova Scotia? Because Price Waterhouse is suing him for $1.8 million dollars.

I didn’t find that much about Marga Quintanar de Calderon, but when I looked into Aknia Chi Pardo, I hit the jackpot. Here is another of Don Winner’s stories, from 2006, a dodgy Panamanian company shut down by the Canadian regulator; the company treasurer is Aknia Chi Pardo. And here is an enormous list of all the Panamanian companies with which she’s associated in one capacity or another. She must be a very busy lady indeed, trousering all those service fees. If I were her I’d be concerned about who was paying me all that money and why.
If you relax your Google search criterion a bit, you get more hits. Here is plain Aknia Chi, a lawyer in Panama, here’s the same name cropping up in connection with a suspected scam, and here is Aknia Mayn Chi Pardo, who, with her very un-Swedish name has somehow got the role of director of a Swedish company, Transocean Savings and Trust ekonomisk förening,  that’s going into bankruptcy (that’s what “Konkurs inledd” means); the sort of thing a scam front company does once it’s done it’s work, or failed to hook anyone. I wonder which it is.
So that’s the MO, and it sounds great, from the fraudster’s point of view, doesn’t it? You commit your fraud, then stash the proceeds in a web of Panamanian companies, or a company tolerated by a dopey offshore company register, like the Swedish one. The trouble is, fraudsters can’t necessarily rely on the lawyers to stay onside once someone’s called the cops. Don Winner again:

In Panama it’s relatively easy to penetrate the supposed cloak of secrecy surrounding these companies and corporations. As long as you’re not doing anything illegal, then you have a right to privacy and protection. However as soon as you’re doing something like trying to hide the $4 million dollars you stole in Nova Scotia from the members of your church, then any prosecutor will order full an investigation, together with full and complete disclosure. The lawyers who set these things up promise the moon when they are taking your money, but when the investigators from the Public Ministry come knocking they simply say “we didn’t know” and roll over like ducks on a pond. It’s actually a pretty good gig for the lawyers. And, there’s steady flow of new suckers like Quintin Sponagle who are willing to drop down some of their hard-stolen money to try to buy anonymity. And once you start penetrating one company, then you find bank accounts, and the bank accounts lead to other information, and before too long it’s all coming down like a house of cards, and Quintin Sponagle is on a plane for Ecuador.

So that’s my tip to the fraudsters: you can’t trust the Panamanian lawyers that you are dealing with. They are scamming you. If they get into trouble, they will turn you in.
So much for Panama; what’s the New Zealand connection? Well, chasing Aknia Chi Pardo led me to New Zealand. And that got me started ferreting about in the NZ company register, looking for Panamanian connections. I found some. No-one expects a company register to be clean as a whistle – there will always be frauds and fronts in there. So this sort of garbage:

…is arguably not all that surprising. For some reason this New Zealand company has just one director, and he’s in Panama. I hope readers will recognize the smell of that by now. But still, you’d think someone in the NZ registry would be looking out for that sort of thing: it does stick out like a sore thumb; what on earth is the point of registering something like that? How will anyone be able to do the due diligence anyway? It looks remarkably like a front company, just like the bankrupt Swedish one we found before. Another funny thing: it says it’s a Savings and Loan. That’s an extremely strange name for a New Zealand company to give itself, with associations of American financial fraud. Of course if you know nothing about the history of financial fraud, that won’t ring any alarm bells for you. So the sort of person who would do business with a company with a name like that just might be a little naïve. A company name like that is just what a fraudster needs – a filter to keep savvier types away.
Next let’s do the obvious and let’s see what else we can find at the NZ address “9/22 Curran Street”. Garbage always comes in heaps, doesn’t it? Here’s the heap:

Oops, they all look like a bit like financial services companies, and they’ve all been registered in the last nine months or so. Someone’s brewing up a fraud in New Zealand! Rather than delve into all those front companies (there will be links to unverifiable overseas entities all over the place, no doubt) let’s keep our eyes on two big points:
1. It’s an offence under NZ’s 1993 Companies Act to make false statements in documents required under the act (such as registration documents).
2. Financial Service Providers (FSPs) have to be registered in New Zealand, at the New Zealand Ministry of Economic Development. And it’s an offence under NZ’s Financial Service Providers (Registration and Dispute Resolution) Act 2008 to put rubbish on the FSP register.
So that’s OK then, isn’t it? The New Zealand Ministry of Economic Development can be as ineptly trusting as it likes when registering FSPs: the dual deterrents, the Companies Act and the Financial Service Providers act, will deter, won’t they? And besides, the FSP register is protected by New Zealand’s splendid igovt identity scheme, which actually makes you input an address when you get an ID. So, as far as the NZ Goverment is concerned, once you have pushed your way past igovt, you are trusted. There’s a spot of extra registration to do when you are registering a financial company, that’s all. You can be an American blogger or a Panamanian crook with a false name or any damn thing you like. Peachy.
And how is all this going, in practice? Not that well, as it happens, as readers who still remember the title of this post will probably have guessed. “Total trainwreck” might be nearer the mark, in fact.
Let’s stick with the first of our garbage companies above, NEW ZEALAND INTERNATIONAL SAVINGS & LOAN LIMITED. Right now it is under the leadership of the Panamanian director, Rodrigo Edgardo ALVARADO, and is owned by a Swedish company, Eurocapital New Zealand Limited Partners SA, Frejgatan 13-882, Stockholm, 11479 , Sweden.
Delving into its brief but already exciting history, we find (01 October 2010 12:14:58) that the guy doing the updates to the company records is Leon QUIJADA, who despite his possibly Panamanian name is apparently resident at 9/22 Curran Street, Herne Bay. That’s this place, as near as I can make out, or something nearby, and very similar. It doesn’t look much like a nerve centre of international banking. According to the New Company Incorporation, the company was then called NZ GENERAL ADMINISTRATION LIMITED, the director being WOOD, Warwick, also resident at the manifestly capacious 9/22 Curran Street. There is a company name change later.
Next (21 October 2010 09:18:55) it gets another director, our Panamanian Rodrigo Edgardo ALVARADO, but mysteriously translated from Panama to Sweden (Frejgatan 13-882, Stockholm, 11479, SE, again). So at least he gets out and about a bit.
Lastly (27 October 2010 08:49:18) it gets yet another director, Rod ALVAR, likewise resident at 9/22 Curran Street. Warwick WOOD, exhausted by all the comings and goings at 9/22 Curran Street, and the ceaseless registration changes, stands down.
And if you don’t already think the whole of this history is bullshit, something about the name Rod ALVAR ought to make you pause for thought. Just compare it with the name Rodrigo Edgardo ALVARADO. My bet is that at least one (most likely Rod Alvar) of these two characters doesn’t exist.
All of which means that quite possibly, actual bad people don’t care a bit about the legal penalties for putting dodgy entries on the NZ company registrar (1993 Companies Act). There may be a whole bunch of them doing it already! Or maybe just one guy out in cyberspace somewhere. You just can’t tell.
If I were the NZ police, with no travel budget, and searching for the chimerical Rod Alvar, I’d now be very curious about the denizens of  9/22 Curran Street, and all of the people who’ve left their digital fingerprints on NEW ZEALAND INTERNATIONAL SAVINGS & LOAN LIMITED.  And of course, any other company on the register with associations to any of these bods or that address, is tainted.
Happy searching. There will, I suspect, be plenty to find.
Obviously the authentication part of the NZ company registry is utterly hopeless, but that isn’t necessarily all the system designers’ fault. Perhaps, if the security internals of the NZ company registry are as good as its GUI, there will be some logs somewhere that say something useful about where web updates to NEW ZEALAND INTERNATIONAL SAVINGS & LOAN LIMITED actually originate from. Is it Herne Bay, Panama, Stockholm, or somewhere else altogether? Who knows, but it must be worth a quick look.
So we have a profoundly dodgy company, NEW ZEALAND INTERNATIONAL SAVINGS & LOAN LIMITED and a profoundly dodgy made-up individual, Rod Alvar, and what look like offences under the 1993 Companies Act. Surely a company that ragged couldn’t possibly make it onto the register of Financial Service Providers, could it? Its mere presence there would make one wonder whether there had been an offence under the Financial Service Providers (Registration and Dispute Resolution) Act 2008, too.
Oh dear; here is its FSP register entry.

Helping to apply a veneer of respectability to dodgy companies, by not monitoring who is registering as an FSP, can only facilitate fraud. Perhaps I am an old fart, but I don’t think the purpose of the New Zealand Ministry of Economic Development’s imprimatur is to facilitate fraud. Of course if the Ministry are actually aiming at Panama’s “dodgy company” franchise, they should carry on just as they are.
And whoever put that register entry in, brushed igovt aside, too. But then, igovt has been broken ever since the NZ Powers That Be stopped insisting that people wanting an igovt ID had to present themselves at a government office with paper documents. Now you can just lie your head off about who you are, and you still get a login.
Of course, NEW ZEALAND INTERNATIONAL SAVINGS & LOAN LIMITED has a website. And it’s quite umm…dubious. There are tells aplenty, but what a magnificent one on the main page! NZISL declare:

NZISL offers banking services as a registered Financial Service Provider in New Zealand and not as a registered bank under the supervision of the Reserve Bank in New Zealand.  New Zealand International Savings & Loan is regulated by the Ministry of Economy and Finance of New Zealand which is responsible for supervising Financial Service Providers (FSP).

Well, there is no such thing as the “Ministry of Economy and Finance of New Zealand”. FSPs are regulated by the NZ Ministry of Economic Development (via the Companies Office). They’re the folk who registered NZISL as an FSP.
In short, we appear to have the magnificent spectacle of a non-existent financial institution staffed by non-existent people announcing to the world that the Ministry of Economic Development has nothing to do with regulation, and that a fantasy Ministry of their own devising does it instead.
And do you know, I think they might have a point. If this is how closely the Ministry of Economic Development monitor the FSP register,  it might as well be like that.
Welcome to the new world of igovt, by the way.
Oh, that’s enough. Here’s a far from exhaustive summary, based on this and other digging. There will be lots more to pull at before the whole furball is extracted. Let’s wrap it into one nice parcel for the various NZ authorities who ought to be interested in all this.
1. The New Zealand company register is in the process of infiltration by Panamanian front companies.
2. The New Zealand Ministry of Economic Development Financial Service Providers register is in the process of infiltration by fraudulent companies. This will be very bad for its credibility.
3. Given the pace at which these companies are being registered one has to imagine that a rash of attempts to defraud NZ nationals is imminent. Or rather, looking at NZISL, underway.
4. igovt is broken. “igovt means that government service providers can offer you more personalised online services involving more valuable transactions because they have confidence in your identity”, the igovt site tells us.  Until you revert to a guy at a desk checking ID and faces, I’d take it easy with that sort of grand claim, boys, if I were you.
5. The following NZ companies look likely or very likely or dead certs to be frauds or fronts. This might be far from an exhaustive list. One has to stop somewhere.

• Bantec Financial Limited
• Bantec Savings and Trust Limited (FSP 60882, registered end 29 Jan 2011)
• Investment Suisse Depository Savings Loan and Trust Limited
• Investment Suisse Limited (registered mid July 2011, something interesting going on there)
• New Zealand International Savings and Loan Limited (FSP 11201, registered 05 Oct 2010)
• Overture Global Limited
• Pluthero Investment Trust
• Trillion Private Wealth Limited
• Worldwide Forstock Financial Group Limited

6. The following NZ addresses are strongly associated with dodgy NZ companies.

• 48b Bond Street, Auckland 1021
• 9/22 Curran Street Herne Bay Auckland

7. The following names are associated with dodgy NZ companies. It’s possible that none of them refers to a real flesh and blood person.

• KELLY, John, 4556 QLD, Australia (director of Pluthero Investment Trust, Auckland).
• STEWARDS FIDUCIARY SERVICES INC (also owns) of Torre Banistmo, Calle 53,, Marbella, Office 1002,, Panama City, Panama, owns Pluthero Investment Trust
• Timothy Wayne JAMIESON, New Zealand. Director of the NZ company Investment Suisse Limited. Why, of all names, did JAMIESON choose the mongrel English/French “Investment Suisse”, which the internet already associates with scams. JAMIESON comes up in association with 50+ other NZ companies by the way.
• Aknia Mayn CHI PARDO, aka Aknia CHI PARDO, aka Aknia CHI, Panamanian lawyer, director or officer of many front companies in Panama, see above. Director of the NZ company INVESTMENT SUISSE DEPOSITORY SAVINGS LOAN AND TRUST LIMITED.
• Rodrigo Edgardo Alvarado, a Panamanian who registers companies at the NZ registry, perhaps under the alias Rod Alvar, a truncated version of his Panamanian name. He has also changed details for Investment Suisse Limited.
• Mike Hanson, who updates some of the same companies as Rod Alvar.

8. The folk who run the Swedish company register might want to check out how many strange-looking companies they have, too. Perhaps Swedish Lex is in a position to give them a little nudge about dormant companies with overseas directors, especially Panamanian directors. Or they might start with the address Frejgatan 13-882, Stockholm, 11479.
9. This is farcical. If, against all the evidence I have accumulated, there really are any NZ authorities who do happen to be mildly interested in preventing their country becoming a one stop shop for financial fraudsters, and who don’t want to just sit and wait for a boatload of fraud cases to hit the headlines, I have more info, and can be contacted via yves@nakedcapitalism.com.