Why Elizabeth Warren is Suited for the Senate, WP Headline Explains Republican Tax Policy, Opacity Causes $2.3 billion Fraud at UBS

And Other News That Needs Comments

Financial writer William D. Cohan writes in the Washington Post about Harvard Professor Elizabeth Warren’s run for the Senate seat in Massachusetts.  He doesn’t think her chances are good and he has this to say about her shortcomings.

her occasionally abrasive style reportedly got on the nerves of Republican lawmakers, Wall Street lobbyists and officials in the Obama administration. 

No Mr. Cohan, her abrasive style is a plus, it is exactly what is needed to counteract the Republicans in the Congress who are abrasive but have no style. 

Another story in the Washington Post, this one on the tax system has this as a headline

Ever-increasing tax breaks for U.S. families eclipse benefits for special interests

which explains exactly why Speaker of the House John Boehner (R, Oh) wants to reform this system.  In Republicans minds, the benefits for the special interests should be much greater than the tax breaks for U. S. families, and Republicans intend to try and implement changes to get there.

Britain’s economic policy has been focused solely on reducing its deficit.  The British government has pursued a policy of tax increases and spending cuts in order to bring about a balanced budget, and no amount of failure of the policy can get the government to change.  Now a Financial Times story reports that the deficit will be even worse than was previously thought

Ministers are set to be told this autumn that a £12bn black hole has opened in the public finances, in a forecast that threatens to derail the coalition’s deficit reduction strategy and prolong austerity well into the next parliament.

An informal account shows that this is the 217^th consecutive time world-widethat policy to contract the economy results in a contraction of the economy and higher rather than lower deficits.  Britain’s Conservative government is said to be looking for more evidence that this is correct.

The New York Times/CBS poll, taken shortly after the last Republican debate showed that Texas Gov. Rick Perry is still leading former Massachusetts Governor Mitt Romney.  Mr. Perry has 23% to Mr. Romney’s 15%.  An interesting sidenote by way of Taegan Goddard is this.

"For comparison, at a similar stage in the campaign in 2007, former New York City Mayor Rudy Giuliani was the leading choice of Republican primary voters (at 34%), followed by former Tennessee Sen. Fred Thompson (23%)."

Gosh, how did those two fellow do anyway, anyone remember?

In case there is anyone, anyone who still believes that the banking system can effectively manage its own affairs, it turns out the that trading fraud that has come to life for UBS was not just a recent event. 

An alleged trading scheme at UBS AG went undetected for three years before it was finally discovered, triggering a $2 billion loss, U.K. authorities indicated Friday as they charged a 31-year-old trader at the Swiss bank with fraud.

Oh, and just recently UBS has said the amount was not $2.0 billion but $2.3 billion.  The extra $300 million was apparently lost in the accounting.  As to how this could happen, there is this explanation

In a report in June, the Bank of England said global banks are exposed to risk in the ETF market because they serve as trading partners in a market "characterized by increasing complexity, opacity and interconnectedness."

Translation:  The financial industry has made up a bunch of highly complex products, and they have absolutely no idea what they are doing.  Yep, that about sums it up, that opacity thing is a real killer.