Ban All the Banks: Here’s the Wild Idea People are Seriously Starting to Talk About

Still from It’s A Wonderful Life

Thanks to Kat.

By Joe Weisenthal, Bsuiness Insider - April 28, 2014 - http://tinyurl.com/lad3v4g

Economists have begun seriously discussing the idea of banning banks. That seems ridiculous and far-fetched, but the idea might not be as crazy as it sounds.

But before we get to the idea, there’s something important that needs to be addressed, which is that people tend to have a gross misconception about what a bank does.

The typical person probably thinks about a bank the way it’s depicted in the movie It’s A Wonderful Life.

In the scene below, George Bailey’s savings and loan is being caught up in a run on the banks. Bailey is forced to explain to the depositors that their money isn’t in the vaults because it’s been loaned out. He then points to some people in the crowd who have taken out mortgages from the bank, explaining how that’s where people’s deposits have gone.

But actually that’s not how banks work.

Saying President Barack Obama hasn’t been tough enough on Russia, a high-powered group of Republican senators introduced legislation on Wednesday aimed at imposing new sanctions on Moscow over its actions in Ukraine.

“Rather than react to events as they unfold, which has been the policy of this administration, we need to inflict more direct consequences on Russia prior to Vladimir Putin taking additional steps that will be very difficult to undo,” said Bob Corker of Tennessee, the top GOP member of the Senate Foreign Relations Committee, who drafted the measure.

The congressional push for a harder line on Russia comes with Obama set to welcome German Chancellor Angela Merkel, one of his key partners on Ukraine, to the White House on Friday.

Republican Sen. Dan Coats, a former ambassador to Germany and current Senate Intelligence Committee member, will have dinner with Merkel on Thursday and is expected to press her to get Europe to agree on a tougher response to the crisis.

“The lack of a forceful, effective response by the administration and Western leaders has given Putin little reason to expect that further aggression will be punished,” said Coats, who pressed Obama to back Corker’s bill.

“If he is willing to lead by taking action that demonstrates American disapproval of Russia’s actions, I am confident that a bipartisan majority in Congress will stand with him,” the Indiana lawmaker said.

Republican Senate Minority Leader Mitch McConnell backed the bill, as did Republican Sens. John McCain of Arizona, Kelly Ayotte of New Hampshire, John Cornyn of Texas, John Barrasso of Wyoming, Marco Rubio of Florida, John Hoeven of North Dakota and David Vitter of Louisiana.

View gallery

Sen. Bob Corker, R-Tenn., right, walks with Sen. John McCain, R-Ariz., on Capitol Hill in Washington …

The legislation is unlikely to attract support from the Obama administration, which has sent symbolic military support to skittish NATO allies and imposed sanctions on Russian officials and companies but held back on measures expected to damage the economy of Europe, one of Russia’s biggest trading partners.

“We are reserving the most severe sanctions for the potentially most severe action by Russia should Russia chose to engage in it, and the most severe sanctions economically would be sanctioning sectors of the economy,” said Obama spokesman Jay Carney.

U.S. officials have said that Washington and Europe are in talks about how to impose sanctions targeting entire sectors of Russia’s economy if Putin follows up his country's annexation of the strategic Crimean Peninsula by ordering troops into eastern Ukraine.

“There is a conversation about possible counterbalancing and compensatory measures for those states who might have to take it on the chin more if and when sectoral sanctions come on,” one senior official told reporters on a recent conference call.

The bill provides for sharply expanded U.S. and NATO support for the militaries of Poland, Estonia, Lithuania and Latvia, according to a summary provided to Yahoo News.

It also calls for Obama to accelerate and expand American missile defense systems in Eastern Europe — something Russia fiercely opposes.

Notably, the legislation would expand existing economic sanctions by taking aim at four major Russian banks — Sberbank, VTB Bank, VEB Bank and Gazprombank.

And it would for the first time impose sweeping sanctions on Russia’s energy sector, including the giant Gazprom firm, which provides about 30 percent of Europe’s natural gas. Other energy firms in the bill’s cross hairs include Novatek and Rosneft. The large Russian arms export firm Rosoboronexport would also face new sanctions.

If Russian armed forces push into eastern Ukraine, the legislation would “essentially cut all senior Russian officials, their companies, and their supporters off from the world’s financial system,” according to the summary.

“In addition, tough sanctions would target any Russian entities in the arms, defense, energy, financial services, metals, or mining sectors that has ownership by the Russian Government or any other sanctioned individual or entity. Additional sanctions would also cut Russian banks off from the U.S. banking system,” the document said.

The measure calls for $100 million in direct military aid to Ukraine, including anti-tank and anti-aircraft weapons and small arms, and urges greater intelligence sharing.

And it would give Ukraine, Moldova and Georgia the status of “major non-NATO ally,” which can facilitate U.S. arms sales.

Related video

GOP senators introduce new Russia sanctions bill

Republicans draft a measure that calls for penalties that take aim at four major Russian banks. $100 million in military aid to Ukraine

Okla. Gov. calls for review of execution protocol

By Selam Gebrekidan

NEW YORK (Reuters) - A CSX Corp train carrying crude oil derailed and burst into flames in downtown Lynchburg, Virginia on Wednesday, spilling oil into the James River and forcing hundreds to evacuate.

CSX said 15 cars on a train traveling from Chicago to Virginia derailed at 2:30 p.m. EDT. Fire erupted on three cars, the company said. Photos and video from the scene showed high flames and a plume of black smoke. It was the second oil-train accident this year for CSX.

About two hours after the derailment, CSX said the fire had been extinguished. City officials said there were no injuries, but 300-350 people were evacuated from the area. Around 6:00 p.m., residents were allowed to return to their homes.

The fiery derailment a short distance from office buildings in the city of 77,000 was sure to bring more calls from environmentalists and activists for stricter regulations of the burgeoning business of shipping crude oil by rail.

JoAnn Martin, the city's director of communications, said three or four tank cars were leaking, and burning oil was spilling into the river, which runs to Chesapeake Bay. She said firefighters were trying to contain the spill.

Kathy Bedsworth, owner of the Carriage House Inn bed and breakfast in Lynchburg, the commercial hub of central Virginia, told Reuters flames streaked as high as 60 feet.

"There was black, black, black smoke and huge billows of flames. The flames were taller than the buildings," she told Reuters over the phone after heading to the scene of the incident five blocks from her guest house.

View gallery

Train derailment and fire in Lynchburg, VA. (Photo from @ABC13News via Twitter)

The U.S. Department of Transportation said it was sending Federal Railroad Administration inspectors to the scene. The National Transportation Safety Board was sending investigators. The Environmental Protection Agency said an official was heading there to help the state monitor air quality.

There was no immediate information about the origin of the cargo or the train's final destination. One of the only oil facilities to the east of Lynchburg is a converted refinery in Yorktown, now a storage depot run by Plains All American. The company did not immediately reply to queries.

It was not clear what caused the accident. CSX said it was "responding fully" with emergency personnel, safety and environmental experts.

NEW RULES

Several trains carrying crude have derailed over the past year. Last July, a runaway train in Lac-Megantic, Quebec, derailed and exploded, killing 47 people. In January, a CSX train carrying crude oil derailed in Philadelphia, nearly toppling over a bridge.

With more trains hauling crude and flammable liquids across North America, U.S. regulators are expected soon to propose new rules for more robust tank cars to replace older models; Canadian authorities did so last week.

"With this event, regulators could try to expedite the process, and they'll likely err on the side of the more costly safety requirements in order to reduce the risk of these accidents in the future," said Michael Cohen, vice president for research at Barclays in New York.

Tougher rules could drive up costs for firms that lease tank cars and ship oil from the remote Bakken shale of North Dakota, which relies heavily on trains. It could also boost business for companies that manufacture new cars, such as Greenbrier Companies and Trinity Industries.

Residents across the country have voiced concern about oil trains, often a mile long, passing near their communities, particularly in New York and the Pacific Northwest. Derailments have occurred in places as far removed as Alberta and Quebec in Canada, and North Dakota and Alabama in the United States.

In Virginia, environmental groups including the Sierra Club and the Chesapeake Bay Foundation have opposed expansion of crude-by-rail shipments through the region to the Yorktown terminal, which can handle 140,000 barrels per day. CSX's route through populated areas like Lynchburg and the proximity to the James River have been mentioned as special concerns.

"These trains started bringing Bakken crude oil through Virginia to the Yorktown facility last December," Virginia Chapter Director Glen Besa told Reuters.

"This raises major questions, after numerous instances of derailments and explosions of Bakken crude on railroads in the last year. Now one of the questions is what the impact will be on the James River. Will this stuff sink or float?"

In January, CSX Chief Executive Officer Michael Ward told analysts the company planned to boost crude-by-rail shipments by 50 percent this year. He said the Jacksonville, Florida-based railroad was working with U.S. regulators to address safety concerns in light of recent derailments and fires.

(Reporting by Selam Gebrekidan, Joshua Schneyer, Anna Driver, Patrick Rucker, Josephine Mason, Ian Simpson; Editing by David Gregorio)

After a fiery accident in downtown Lynchburg, several train cars are leaking oil into a river, official says.
Evacuations

A heartbreaking new video taken inside a capsized South Korean ferry shows that students were told to stay in their cabins even as the ship’s crew and captain fled to safety.

The video was shot on the phone of Park Su-hyeon, 17, whose body was recovered from the vessel by South Korean coast guard rescuers. The video was released to South Korean television by the boy’s father, Park Jong-dae, as part of an effort to show the public how things went wrong about the ferry.

In the video, a number of the student passengers can be overheard expressing their fears about the ship’s fate. But at the same time, other passengers appear unaware of the gravity of the situation aboard the Sewol.

“This looks like the end,” one teenage passenger says in a translation provided by the New York Times . Another asks, “Are we becoming a Titanic?” In a separate translation provided by CNN, another passenger asks, “"You think I'm really going to die?"”

Ninety-two passengers are still reported as missing amongst the original 476 aboard the vessel. Of those, 325 were second year high school students.

The full 15-minute video was broadcast on South Korean television and has been viewed nearly 200,000 times on YouTube since being posted Monday evening. The faces of the passengers have been blurred to protect the identities of the victims, many of whom have still not been recovered.

“This is by far the most heartbreaking scene I have seen in my 27-year broadcasting career,” television producer Choi Seung-ho said while airing the footage in a translation provided by the Times.

In the video, a voice can be heard on the ship’s intercom telling students and teachers to stay in their cabins. At the same time, the ship’s crew and captain fled the ship through a crew only exit. Rescuers later said they had no idea the man they were pulling from the ship was the captain.

“During the rescue operation, people were just dropping in the sea," South Korean coast guard Capt. Kim Kyung Il said in a press conference translated by CNN. "Everyone was wearing a life vest, so we couldn't tell who was passenger, and who was crew."

Some of the student passengers appeared to question the instructions to stay in their cabins, with one voice saying, “Nonsense. I want to get off. I mean it.” Another student also questioned the instructions, asking, “What’s going on? If they are telling us to wear life jackets, doesn’t that mean that the ship is sinking?”

The ship’s captain Lee Joon-seok and 14 crewmembers have been arrested and charged with abandoning their passengers in an emergency.

"My son, it must have been cold and dark where you were," Jong-dae, said while reading a statement on JTBC, the South Korean network that carried the footage. "How much you must have been cold and afraid?

"I hoped and prayed for your survival, but it didn't turn out that way,” Jong-dae continued. “My son, now it's time for us to say goodbye. It's time for you and me to say goodbye and for me to let go of the hope that I could not let go so far. Please forgive me.”

Follow Eric Pfeiffer on Twitter (@ericpfeiffer)

A new video taken inside a capsized South Korean ferry shows that students were told to stay in their cabins.
Some questioned the order