What the public is furious about is how Wall Street continues to play the financial shell game with us, along with lying, and no one stops them. The politicians are in the back pockets of Wall Street because of enormous campaign funds drug dripped to them ever so carefully over decades to decide who gets in and who stays out of office.
One smart thing to come out of the Obama White House today - and a long time coming - is the decision to divide in two the Minerals Management Service under the Department of the Interior. After the BP oil spill flashed a glaring light on how cozy parts of our government are with the oil industry it was the smart political move.
Minerals Management Service will now have two agencies: one for inspecting oil rigs, actually enforcing safety regulations like they are supposed to do and shining the light of investigation on oil companies when they need it (which will probably be a continuing effort).
The second agency will oversee the leases for oil drilling as well as collecting those billions of dollars in oil royalties. (Which Louisiana never saw for decades - until recently when the government promised them to the state. Of course, we have yet to see those royalties or we would not be having a state budget shortfall to the tune of $1 billion.)
CBS did a long series of interviews with Secretary of State Hillary Clinton about her global mission. Included are links to all the video clips.
What I find to be an alarming development that could cascade and cause our fragile economy to collapse or develop a severe limp is this new trend of homeowners walking away from devalued homes while they can still afford to pay. It's called "strategic default" and already over one million homeowners have done this. Currently, there are over 11 million homeowners across the nation who are struggling to pay their mortgages.
There is no way the banks can absorb this many toxic assets. Of course, the big banks dug themselves into this hole and refuse to work with homeowners. They haven't even dipped into the huge billions Obama gave them to help restructure mortgage debt.
And you think the BP oil spill is a mess - wait until this real estate walk away spreads past Arizona and California. I simply do not understand why banks are so incredibly stupid. It just goes to the old Louisiana saying, "Greed will bring you to your knees." There is no way the American taxpayers will ever again OK a bailout for any big banks or Wall Street. These banks will fail.
And, late this afternoon in my Central Time Zone, we heard that Britain finally hammered out a deal to make David Cameron Prime Minister. It sure looks like he has some fine ideas for real change to pull his odious party away from the Thatcher model into the new century and actually care about people. Hopefully, he will succeed, if he is true to his agenda and promises.
WSJ: Hedge Fund's Bet May Have Triggered Market Dive (CBS)
Last Thursday's incredible market plunge may not have been set off by a typographical error, as originally speculated, but rather by a hedge fund's big bet that stocks would decline, according to a Wall Street Journal report ($) Tuesday.
The furious sell-off, which sent the Dow Jones industrials down nearly 1,000 points on the day in a matter of minutes, took place shortly after hedge fund Universa Investments LP executed a $7.5 million trade for 50,000 options contracts, according to the report. Traders on the other side of the transaction, including Barclays Capital, engaged in their own selling in order to offset the risk, creating a tidal wave of selling that clogged up exchanges.
Ordinarily, Universa's trade, which would have paid off around $4 billion if the S&P 500 falls to 800 by June (it was 1145 at the time of the transaction), might have had a temporary impact on stock prices, but not cause a dramatic ripple effect. But among markets already jittery because of Europe's debt woes, the transaction may have triggered more widespread selling, according to the report.
The episode points out a "structural flaw" in the markets, Gus Sauter, chief investment officer at Vanguard Group, told the Journal.
As the report notes, physical exchanges like the New York Stock Exchange are becoming less important as computer-driven trading operations at firms around the country drive much of the market. That leads to greater potential for disorder and makes controlling markets more difficult.
Official Seeks Changes to Oil Drilling Oversight (CBS)
Interior Secretary Ken Salazar Wants to Split Agency that Oversees Offshore Drilling
The Obama administration is proposing to split up a U.S. Interior Department agency that oversees offshore drilling, as part of its response to the Gulf Coast oil spill, The Associated Press has learned.
An administration official who asked not to be identified because the plan is not yet public said Interior Secretary Ken Salazar will call for splitting the Minerals Management Service in two. One agency would be charged with inspecting oil rigs, investigating oil companies and enforcing safety regulations, while the other would oversee leases for drilling and collection of billions of dollars in royalties.
Currently, the Minerals Management Service, an arm of the Interior Department, is responsible for collecting more than $10 billion a year from oil and gas drilling and with enforcing laws and regulations that apply to drilling operations.
Some critics have said the two roles are in conflict and are one reason the agency has long been accused of being too cozy with the oil and natural gas industry.
An administration official said Salazar has the authority to split up the agency but is likely to propose other changes Tuesday that would require congressional approval.
An internal investigation in 2008 described a "culture of substance abuse and promiscuity" by workers at the minerals agency. The investigation by Interior's inspector general found workers at the MMS royalty collection office in Denver partied, had sex with and used drugs with energy company representatives. Workers also accepted gifts, ski trips and golf outings, the report by Inspector General Earl E. Devaney said.
Devaney decried "a culture of ethical failure" and an agency rife with conflicts of interest.
More than half a dozen workers out of around 50 at the Denver office were disciplined - and several were fired - because of the scandal.
Salazar, who promised aggressive reform when he took over the Interior Department early last year, believes the tragedy aboard the Deepwater Horizon oil rig - and the resulting massive oil spill has made reform even more urgent, the administration official said.
The Interior Department will move to establish an independent energy inspection agency within the Minerals Management Service "so that the American people know that they have a strong and independent organization holding energy companies accountable and in compliance with the law of the land," the official said...
Secretary of State Clinton's Global Mission (CBS)
She Talks to "60 Minutes" About America's Foreign Policy Challenges, the War on Terror, and Being the Country's Top Diplomat
After the car bomb was found in Times Square, we wanted to ask the secretary of state about the administration's efforts against terrorism in Pakistan and Afghanistan. "60 Minutes" correspondent Scott Pelley spoke with Secretary Clinton at the State Department on Friday.
It was the last in a series of interviews that we've done with her over the last six months. During that time, we've been traveling with Mrs. Clinton to see how this surprising choice for secretary of state is engaging the world. We didn't expect such a far flung story would begin with questions about events in the heart of Manhattan.
Watch CBS News Videos Online
Full segment of interview with Sec. Hillary Clinton - Scott Pelley follows Hillary Rodham Clinton as she performs her duties as secretary of state and questions her on the latest developments in foreign policy and the recent terror scare in New York's Times Square.
Web Extra: Pakistan & Terror In The U.S. - In the aftermath of the attempted Times Square bombing, Secretary of State Hillary Clinton discusses the United States' relationship with Pakistan.
Web Extra: Terror & Citizenship - Secretary of State Hillary Clinton on the bill in Congress that would strip U.S. citizenship from terrorists.
Web Extra: Hillary's Future - How long does Secretary of State Hillary Clinton plan on staying in her job as the nation's top diplomat? And, is there another run for the White House in her future?
Web Extra: Inside Secretary Clinton's Office - Secretary of State Hillary Clinton gives Scott Pelley a behind the scenes look at her private office.
Watch CBS News Videos Online
Strategic Default: Walking Away from Mortgages (CBS)
60 Minutes: A Million Have Walked Away; Trend Could Undermine the Fragile Economic Recovery
Despite some indications that the economy is recovering, the housing market remains a disaster area. Currently, about seven million homeowners are behind on their mortgages and that number is only getting worse.
Banks, with the help of the government, are offering some relief to homeowners who've lost jobs and just can't meet their payments.
But there's a growing number who can pay but are simply walking away from houses that are now worth as little as half of what they paid for them.
It's called "strategic default." People have done the math and decided making those monthly payments is just throwing money away, leaving the mortgage holders - the banks - as zookeepers of an ever-growing parade of white elephants.
In the past year it is estimated that at least a million Americans who can afford to stay in their homes simply walked away...
The Southwest has become an inland ocean of bad mortgage debt. In Arizona, a full 50 percent of houses are underwater, and in Nevada it's even worse: 65 percent of houses there are drowning and the rivers are rising.
And it's not just the Southwest: according to CoreLogic, more than 11 million homeowners across the country are underwater. It's estimated that number could double in the next year, which means nearly half of all American mortgage holders will owe more on their homes than those homes are currently worth....
To try and stem the tide of foreclosures, Stevens says the Obama administration has set aside billions to give banks incentive to help struggling and underwater borrowers with their mortgages. But banks have been slow to modify the terms of those loans....
Watch CBS News Videos Online
U.S. Missiles Slam Pakistan Taliban Sanctuary 9CBS)
Officials Say 14 Alleged Insurgents Killed in Massive Strike Near Afghan Border
Up to 18 American missiles slammed into a Taliban sanctuary in Pakistan close to the Afghan border Tuesday, killing 14 alleged insurgents in the third such strike since a failed car bombing in New York drew fresh attention to the region, officials said.
The number of missiles fired into North Waziristan was unusually high, reflecting multiple targets.
They struck cars, homes and tents across a wide area in the Doga area, where insurgents have hideouts and training facilities, two intelligence officials said on condition of anonymity because they were not authorized to speak to the media. The identities of the people killed in the attack were not immediately known.
North Waziristan has been the target of nearly all of about 30 other American attacks this year. In recent months, it has become a new haven for militants who fled a Pakistani army offensive in their previous stronghold, neighboring South Waziristan...
Oh, how politics change on the wind! :)
late this afternoon in America:
David Cameron, UK's "Tory Blair," Rises to Power (CBS)
Britain's New Conservative Prime Minister Known as Privileged yet with Common Touch
Upper-class David or down-to-earth Dave? Perceptions of David Cameron, the man who led the Conservatives back to power after a generation, all depend on the eye of the beholder.
One newspaper last week cast Cameron in a homage to the famous blue-and-red image of President Obama, over the words "Our Only Hope." In contrast, another ran a photo of him as a rich young Oxford University student, haughty in stiff collar and tails.
On one hand, Cameron is a modern urbanite who has tried to remake his party in his own image as an eco-friendly, down-to-earth man of the people who rides his bike to work. Yet he's also the privileged product of Eton, Britain's most elite private school, and Oxford University - and is married to an aristocrat's daughter.
At 43, Cameron is the youngest prime minister in almost two centuries, a few months younger than Tony Blair was when he became leader in 1997.
Sometimes called the "Tory Blair," Cameron has dragged the Conservatives back from the wilderness to which they were consigned by Blair's Labour landslide, moving his right-of-center party toward the center of British politics, promoting inclusive politics, environmental concerns, and a certain modern sensibility.
He's recruited more women and minorities, declared his loyalty to public services and - gingerly - tried to draw the Tories from under the shadow of Margaret Thatcher, the polarizing leader who dominated British politics in the 1980s...
early this morning in America:
British Election Result: Still Under Negotiation (CBS)
Election Yielded No Outright Winner, Leaving Reform-Minded Liberal Democrats in Potential King-Maker Role
Britain's pivotal third party kept its larger suitors - and the electorate - hanging Tuesday, opening formal negotiations with Prime Minister Gordon Brown's Labour Party to form a new government after talks with the rival Conservatives.
Five days after an election that produced no outright winner, the third-placed Liberal Democrats were playing hardball in hopes of extracting maximum concessions in return for propping up a Conservative or Labour administration.
Brown's dramatic decision Monday to announce his impending resignation opened the way for a possible deal with the Liberal Democrats - who had demanded his removal as a condition.
Both of the two main political parties have now offered to meet the Liberal Democrats' key demand - electoral reform - muddying the differences between the two offers.
Conservative leader David Cameron appeared miffed at the sudden turn of events, which came after both the Conservatives and the Liberal Democrats claimed to be making progress Monday in their coalition talks...
Cameron's Conservatives - who won the most seats in Parliament in Thursday's national election but fell short of capturing a majority - have struggled in their attempts to win over the Liberal Democrats.
Though the Liberal Democrats appeared genuinely open to a deal with the Conservatives, they are more ideologically compatible with Labour. Brown's offer to resign could give Liberal Democrat leader Nick Clegg a viable chance at passing electoral reform and a role in the British government after years on the political fringe...
Pope: Church Facing Its "Greatest Persecution" (CBS)
In Strongest Comments Yet on Sex Abuse Scandal, Pontiff Also Says Sins Inside Church, Not Outside, to Blame
Pope Benedict XVI says the clerical abuse scandal represents "the greatest persecution of the church," but said it was born from sins inside the church, not outside.
He called for profound purification and penance within the church as well as pardon and justice.
In some of his strongest comments to date, Benedict said the Roman Catholic Church had always suffered from internal problems but that "today we see it in a truly terrifying way..."
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