Weekend Economists Silent Night Christmas Eve 2014

[Demeter]

The markets are closed (until Friday) and by all rights, this should be a silent thread (no posts) but the world is so crazy, we can't fall behind!

So, WEE are open for business! Funny business, too, if you can find any joy or humor. Carols, definitely! It's an eclectic celebration, to be sure! And, remember, it's not ALL about the Benjamins....

"Wassail" is an ancient toast meaning something like "Good health!" and also a mulled cider that was drunk as part of "wassailing" festivities, typically on the Twelfth Night of Christmas. The practice of wassailing is old and exists as a folk tradition in many parts of the United Kingdom, even today. We present here Ralph Vaughan Williams' 1913 joyful setting of the "Gloucestershire Wassail," perhaps the most famous of all the local wassail traditions. The performance was part of "Carols for Quire 5," at Trinity Cathedral, Cleveland, OH, December 20-22, 2013.

The next Wassail Song, unlike other Christmas carols, does not celebrate the nativity. The Wassail Song celebrates the New Year! "Wassail" is an old English word for a toast similar to "Good Health" and the wassail is the content of the glass or goblet ( spiced or mulled wine or ale) The author of the lyrics is unknown but it is known that the tradition of going wassailing dates back to 12th century England. The composer of the music to the wassail song is also unknown.

[Demeter]

1. Yet another Wassail Song, with mini-lecture

[Demeter]

2. Dow Squeaks Higher as 'Santa Rally' Continues

http://www.nbcnews.com/business/markets/dow-squeaks-higher-santa-rally-continues-n274281

The 'Santa Rally' lives on...barely. The Dow Jones Industrial Average closed slightly higher Wednesday, extending to a sixth day a rally that saw the index rise above 18,000 for the first time.

The Dow closed up 6.29 points, or 0.03 percent, at 18,030.46, giving up most of its earlier gains late in the session. The benchmark S&P 500 ended 0.1 percent lower. Rebounding from Tuesday's decline, the Nasdaq gained 0.17 percent.

Trading was thin. Stock markets closed early and are shut for Christmas Day Thursday. Investors had just one piece of major economic data to ponder: jobless claims fell for the fourth straight week, the Labor Department reported. It was another signal of the economy's enduring strength a day after the government posted a revised third-quarter economic growth rate of 5.0 percent, the fastest in over a decade.


I'M SURE THERE'S A LOT OF HAPPY BANKSTERS OUT THERE...I HOPE THEY GET COAL IN THEIR STOCKINGS.

[Demeter]

3. Mark Fiore Sends Greetings of the Season: Driving while brown, and furry

&feature=youtu.be

And he offers a replacement for "The Interview", which got entangled in...whatever it was

http://vimeo.com/115302904

[DemReadingDU]

13. Mark Fiore

Listen to where Santa is to deliver the toys...the places of recent murders and protests. One of the places mentioned is Beavercreek, near Dayton, Ohio. In early August, white police shot a young black male who was talking on his cell-phone, in a Wal-mart. In his other hand, he was holding a BB gun that he had gotten from a shelf in the store.

Definitely big news around here, but nationally the situation has been overshadowed by the Ferguson shooting.

[mahatmakanejeeves]

87. The first one was great. Thanks for that. NT

[Demeter]

4. Christmas Economics: Challenging Some Common Beliefs By Laura Birg

http://www.voxeu.org/article/christmas-economics-challenging-some-common-beliefs

By Laura Birg, Postdoc, Center for European, Governance and Economic Development Research, University of Goettingen and Anna Goeddeke, Professor of Microeconomics and Quantitative Methods, ESB Business School, Reutlingen. Originally published at VoxEU

Christmas may be not so merry as we hope. Economists have argued that gift giving is an inefficient way to allocate resources, and it is widely suggested that Christmas brings a peak in prices and the number of suicides, or even disrupts the business cycle. This column discusses some conventional wisdom about Christmas and shows that economic research in fact runs counter to some of these common beliefs.

The idea that Christmas might incur a welfare loss has been well known to economists since Joel Waldfogel published his research on the deadweight loss associated with the holiday season (Waldfogel 1993). In addition, several articles discuss topics like Christmas pricing, weight gain at Christmas, and the optimal height of Christmas trees. In a recent paper (Birg and Goeddeke 2014), we present findings that contradict some common beliefs about Christmas held by economists (and maybe non-economists too).

Do You Believe That Prices Peak During Christmas Time?

Basic economic theory suggests that before Christmas, demand for Christmas-specific goods such as certain foods or consumer goods increases, causing the demand curve to shift outwards. As long as this is not accompanied by an increase in supply, we should expect to see higher equilibrium prices at Christmas. But empirical research shows the opposite – Warner and Barsky (1995) find falling prices for consumer goods such as action figures, power tools, and food processors. This is in line with the research of Chevalier et al. (2003) and MacDonald (2000) who show reduced prices for groceries. Different reasons for this (maybe at first sight) surprising result have been discussed. Warner and Barsky (1995) argue that due to higher economies of scale in price search during periods of high demand it pays-off for consumers to search more for lower prices before Christmas. The demand elasticity for each retailer is thus higher and this reduces prices. Another reason for lower prices might be a higher incentive for firms to deviate from tacit collusion during periods of high demand (Rotemberg and Saloner 1986). Nevo and Hatzitaskos (2006) estimate brand level demand for groceries, finding more price sensitive demand and changed brand preferences during periods of high demand. Consumers switch to cheaper brands and this reduces average prices.

In some countries a popular belief (or rather fear) is that gas prices increase before long weekends or holidays such as Christmas as the increase in holiday travel increases demand for gasoline. Is this true for Christmas time? Again, in contrast to the belief, researchers could not to show a price increase before Christmas in the US, Canada, or Australia.

In one market where one would not have expected it, a price increase before Christmas has been clearly established. In countries celebrating Christmas, stock prices increase in the days before Christmas. This particular price increase might be a surprise, at least for economists believing in Fama’s (1970) ‘Efficient Market Hypothesis’, according to which abnormal returns on predetermined occasions such as Christmas cannot exist, as the knowledge of that this effect exists should be sufficient for all rational investors to exploit this effect, so that it eventually disappears. But Chong et al. (2005) show that the Christmas effect declined in the US stock market over the last three decades of the twentieth century. In the long run, this pre-Christmas stock market effect might disappear.

Do You Believe That the Number of Suicides Peaks Before Christmas?

Another common belief is that holiday joy and cheer amplify loneliness and hopelessness and therefore increase suicide rates. Another reason discussed is that high expectations during the holiday season could only be disappointed and thereby cause suicides. In a literature review, Carley (2004) shows that empirical research points again in the opposite direction – fewer people commit suicide at Christmas. However, the number of people committing suicide increases subsequently at New Year.

Nevertheless, there seem to be other reasons why Christmas can be life threatening to all of us. The homicide rate increases in the US. In addition, a hospital emergency department visit might be especially dangerous at Christmas time. As Phillips et al. (2010) show for the US, the number of people dying in hospital increases at Christmas and New Year. Similar findings have been established for the UK by Keatinge and Donaldson (2005), although Milne (2005) cannot find such an increase in death rates. The reasons for this increase in death, according to Phillips, do not seem to be the excitement for Christmas but rather overcrowded emergency departments.

Do you Think That the Monetary Value of Presents You are Giving to Your Beloved is of Importance?

In his seminal paper, Waldfogel (1993) discusses whether Christmas entails a welfare loss due to Christmas presents that the receivers do not value as high as givers thought. A lively debate arose amongst economists about the right ways to measure this possible welfare loss, resulting in some researchers showing a welfare gain and others confirming Waldfogel’s welfare loss.6 Even if the discussion on the welfare effect of Christmas is ongoing, some institutional settings should be discussed to solve (potential) welfare loss – Flynn and Adams (2009) show that givers systematically overestimate the importance of the present’s monetary value to the gift-recipient. One solution to this possible welfare problem might therefore be to opt for more humble Christmas presents.

Giving cash would be another economically efficient, but socially inappropriate solution. Therefore gift cards may represent an intermediate between in-kind presents and cash (Offenberg 2007, Principe and Eisenhauer 2009). Offenberg (2007) also finds a welfare loss of 10% for gift cards, as measured by the difference between the face-value of a gift card and the willingness-to-accept –that is the resell price on eBay. So, as long as gift cards also do not seem to be the right solution, humble presents or a wish-list might be an economically reasonable way to reduce a potential welfare loss.

Do You Believe That at Christmas Time the Economy Peaks?

If microeconomic research suggests that Christmas could incur a welfare loss, from a macroeconomic point of view, it might still be a good thing because it “leads to more people working, but faced with a surge of demand, managers somehow manage to get everyone to work smarter and more efficiently even as the total number of workers grows”.

Several macroeconomists have tested for a so called ‘Santa Claus Effect’ in business cycles, that is, a boom in the fourth quarter and a following trough in the first quarter. Overall the results are mixed, with some papers finding this effect, while others could not – or only in some countries – establish a ‘Santa Claus Effect’. More interesting than the question of whether Santa establishes a business cycle is whether such an increase in output and employment in the fourth quarter followed by a contraction the following first quarter is economically efficient. Reliable research results on the effects of Christmas on growth are very limited. Maybe the government should smooth the business cycle and decrease spending in the fourth quarter, while increasing spending in the remaining three quarters. In this way, there could be a bit of Christmas every day.

HONEST TO CHRISTMAS, I COULDN'T TELL IF THIS WAS TONGUE IN CHEEK, OR NOT!

[Demeter]

5. Merchant Banker - Monty Python's The Flying Circus

[Demeter]

6. It’s a Wonderful Life, Comrade Michael Winship

http://billmoyers.com/2014/12/23/wonderful-life-comrade/

A number of years ago, I was telling a longtime city dweller friend of mine yet another story about the small, upstate New York town in which I grew up.

Simultaneously baffled and captivated, he said, “I think you were born and raised in Bedford Falls,” the fictional burg at the center of Frank Capra’s classic Christmas movie, “It’s a Wonderful Life.”

Well, I wasn’t. Actually, I grew up about 27 miles west of there. Its real name is Seneca Falls, NY – yes, the same place that’s also the birthplace of the women’s suffrage movement. While not absolutely certain, there’s a compelling body of circumstantial evidence that Capra had the town in mind when he created his cinematic version of Bedford Falls. The steel bridge over the canal, for example, like the one from which the hero George Bailey contemplates jumping in a suicide attempt, only to dive in to save his guardian angel, Clarence. The old Victorian homes, the design of town streets, a large Italian population, mentions of nearby cities Rochester, Buffalo and Elmira are just a few of the other similarities. There’s even the perhaps apocryphal tale of Frank Capra finding inspiration after stopping in Seneca Falls for a haircut on his way to visit an aunt.

Enough coincidences abound that Seneca Falls now holds a yearly “It’s a Wonderful Life” festival, and although it may not draw as many visitors as the nearby Women’s Rights National Historical Park, there’s also an “It’s a Wonderful Life” museum. Whatever the ultimate truth, there’s no denying that the movie is a storybook evocation of bygone small town America, places like Seneca Falls and my own hometown, right down to the underside of greed and malice that often lurks just around the corner from the film’s compassion and wholesome neighborliness. As for Frank Capra, as he prepared to make the movie, he told the Los Angeles Times, “There are just two things that are important. One is to strengthen the individual’s belief in himself, and the other, even more important right now, is to combat a modern trend toward atheism.”

Which makes it all the crazier that when the movie first came out, it fell under suspicion from the FBI and the House Un-American Activities Committee (HUAC) as Communist propaganda, part of the Red Scare that soon would lead to the blacklist and witch hunt that destroyed the careers of many talented screen and television writers, directors and actors.

Screenplay credits on “It’s a Wonderful Life” went to Frances Goodrich and her husband Albert Hackett, Capra and Jo Swerling, although a number of others took turns at different times, including Clifford Odets, Dalton Trumbo and Marc Connelly – not an unusual situation in Hollywood. But a 1947 FBI memorandum, part of a 13,533-page document, “Communist Infiltration of the Motion Picture Industry,” first went after the writers Goodrich and Hackett:

“According to Informants REDACTED in this picture the screen credits again fail to reflect the Communist support given to the screen writer. According to REDACTED the writers Frances Goodrick (sic) and Albert Hackett were very close to known Communists and on one occasion in the recent past while these two writers were doing a picture for Metro-Goldwyn-Mayer, Goodrick (sic) and Hackett practically lived with known Communists and were observed eating luncheon daily with such Communists as Lester Cole, screen writer, and Earl Robinson, screen writer. Both of these individuals are identified in Section I of this memorandum as Communists.”

The memo goes on to cast doubt on the movie’s storyline, in which Jimmy Stewart’s George Bailey and his struggling savings and loan fight on behalf of the good people of Bedford Falls against the avarice and power of banker and slumlord Henry Potter, played by Lionel Barrymore:

“With regard to the picture ‘It’s A Wonderful Life’, REDACTED stated in substance that the film represented a rather obvious attempt to discredit bankers by casting Lionel Barrymore as a ‘scrooge-type’ so that he would be the most hated man in the picture. This, according to these sources, is a common trick used by Communists.

“In addition, REDACTED stated that, in his opinion, this picture deliberately maligned the upper class, attempting to show the people who had money were mean and despicable characters. REDACTED related that if he had made this picture portraying the banker, he would have shown this individual to have been following the rules as laid down by the State Bank Examiners in connection with making loans. Further, REDACTED stated that the scene wouldn’t have ‘suffered at all’ in portraying the banker as a man who was protecting funds put in his care by private individuals and adhering to the rules governing the loan of that money rather than portraying the part as it was shown. In summary, REDACTED stated that it was not necessary to make the banker such a mean character and ‘I would never have done it that way.’”

This was part of an FBI evaluation of several Hollywood movies – others included “The Best Years of Our Lives” (which beat “It’s a Wonderful Life” at the Oscars for Best Picture and Best Director), “Pride of the Marines,” and Abbott and Costello in “Buck Privates Come Home.”

Wait – it gets nuttier. According to the media archival website Aphelis, “Among the group who produced the analytical tools that were used by the FBI in its analysis of ‘It’s a Wonderful Life’ was Ayn Rand.”

“Abbott and Costello Meet Ayn Rand” – what a comedy horror picture that would have made, scarier and funnier than their encounters with Frankenstein or the Wolfman. Rand’s group told the FBI:

“The purpose of the Communists in Hollywood is not the production of political movies openly advocating Communism. Their purpose is to corrupt non-political movies — by introducing small, casual bits of propaganda into innocent stories and to make people absorb the basic principles of Collectivism by indirection and implication. Few people would take Communism straight, but a constant stream of hints, lines, touches and suggestions battering the public from the screen will act like drops of water that split a rock if continued long enough. The rock that they are trying to split is Americanism.”

But redemption of an odd sort came for “It’s a Wonderful Life” at the infamous October 1947 House Un-American Activities Committee hearings. Just days before the appearance there of the Hollywood 10 – writers (and one director) who refused to testify and subsequently went to prison — a parade of “friendly witnesses” (including Ayn Rand, Gary Cooper, Ronald Reagan and Walt Disney) came before the committee to insinuate and weave dark tales of Communist infiltration and subversion in the movie business. One of them was a former Communist and screenwriter named John Charles Moffitt. Aphelis reports:

“When asked by HUAC Chief Investigator Robert E. Stripling if Hollywood is in the habit of portraying bankers as villainous characters, Moffitt takes the opportunity to try to clear the reputation of Frank Capra’s movie ‘It’s A Wonderful Life:’ he tries to argue that the film isn’t, in fact a Communist movie.”

MR. STRIPLING. The term “heavy” has been used here as a designation of the part in which the person is a villain. Would you say that the banker has been often cast as a heavy, or consistently cast as a heavy, in pictures in Hollywood?

MR. MOFFITT. Yes, sir. I think that due to Communist pressure he is over frequently cast as a heavy. By that I do not mean that I think no picture should ever show a villainous banker. In fact, I would right now like to defend one picture that I think has been unjustly accused of communism. That picture is Frank Capra’s “It’s a Wonderful Life.” The banker in that picture, played by Lionel Barrymore, was most certainly what we call a “dog heavy” in the business. He was a snarling, unsympathetic character. But the hero and his father, played by James Stewart and Samuel S. Hines, were businessmen, in the building and loan business, and they were shown as using money as a benevolent influence.

At this point, there was a bit of commotion in the hearing room.

THE CHAIRMAN. Just a minute. Come away. Everybody sit down. Will all you people who are standing up please sit down? And the photographers.

MR.MOFFITT. All right.

THE CHAIRMAN. Go ahead.

MR. MOFFITT. Well, to summarize, I think Mr. Capra’s picture, though it had a banker as villain, could not be properly called a Communist picture. It showed that the power of money can be used oppressively and it can be used benevolently. I think that picture was unjustly accused of Communism.

Since then, the movie has been more than redeemed as it slowly became a sentimental and beloved holiday perennial. And if anything, its portrayal of a villainous banker has been vindicated a thousand fold as in the last seven years we’ve seen fraudulent mortgages and subsequent foreclosures, bankers unrepentant after an unprecedented taxpayer bailout and unpunished after a mindboggling spree of bad calls, profligacy and corkscrew investments that raked in billions while others suffered the consequences.

It’s a wonderful life, alright, but not if you’re homeless or unemployed tonight, not if your kids are hungry and you can’t pay for heat. There are still a lot of Mr. Potters in the world. We know who you are and we’ll keep calling you out. God rest ye merry, gentlemen.

[Demeter]

7. 21 Ayn Rand Christmas Cards

http://www.dailykos.com/story/2014/12/22/1353470/-21-Ayn-Rand-Christmas-Cards

A TRULY GHASTLY COLLECTION IN FULL COLOR

[Warpy]

12. Actually, I always thought "Potterville" looked a lot more interesting

than the real town with its one bar serving tame drinks to stonefaced, grey working men and telling them to go home after the second. It's the kind of town any sensible teenager fled as soon as s/he possibly could, look at Violet, the only sensible one in the movie. Even George wanted out, only he got trapped by duty and then marriage.

Still, that was Capra's bias, that people treated honestly would turn out to be homebodies and utter bores, paragons of middle class churchgoing morality who never strayed, never realizing that the whole reason for Las Vegas to exist and prosper was that it provided prepackaged sin for such people, conveniently out of town.

But yes, Mr. Potter exists, only the scale of theft has increased a billionfold. It's useful to point out that he never gets his comeuppance from Capra, never gets charged with the theft, because even Capra considered his type irredeemable.

[Demeter]

8. Is Moral Offsetting™ Right for You? by Thomas Rodham Wells

http://www.3quarksdaily.com/3quarksdaily/2014/12/is-moral-offsetting-right-for-you.html



Do you want to be a good person but find yourself always falling short?

It may not be your fault. These days it is difficult to feel like good person. In fact the more you try, the more you may feel like a failure. Thanks to egalitarianism, globalisation, activist NGOs, the internet and over-active moral philosophers the calls on our moral attention are multiplying at an absurd rate.

Everywhere we turn there are people demanding that we take moral responsibility for ever more features of our lives and the implications of our actions. Almost everything we do turns out to be involve a moral choice, or more than one, in which our deepest principles are at stake. If you're an egalitarian, how come you help your kids with their homework? If you're against child-slavery, how come you still eat chocolate? If you're against racism, how come you enjoy ‘white privileges' like not being afraid when the police pull you over? And so on. Want to put milk on your breakfast cereal? There's a moral philosopher out there who wants you to read about murdered baby cows first.

Enough! These demands would challenge the forbearance and commitment of a saint. Trying to satsify them all would leave no room for getting on with your own life.

But it gets worse. Although they are presented as moral challenges, as tests of your principles, many of these demands are actually moral puzzles with no right answer. Flying to England to visit your sick grandmother, perhaps for the last time, is absolutely the right thing to do, but it's also absolutely the wrong thing to do if you care about the environment and justice for future generations.

You just can't win no matter how hard you try!

The rising tide of moralisation has been rather more successful in making us feel constantly guilty about everything we do than in inspiring us to live morally better lives. And this is not surprising since it demands that we take on the burden of extended moral responsibility – for the well-being of children in Cote d'Ivoire, for future generations, for the survival of rare species, and so on - without giving us the tools we need to manage that responsibility. Unfortunately feeling guilty all the time is morally debilitating. It undermines our ability and motivation to make good moral decisions in the first place.

If everything we do is wrong, why bother to even try to do the right thing?

Fortunately the solution is at hand. Here at Moral Tranquillity plc we believe that good people should be able to live a life free from guilt. That's why we have developed a range of Moral Offsetting™ products that make meeting your moral responsibilities simple and affordable...

SEE PRODUCT LIST, AT LINK

[Demeter]

9. Why Scrooge is an anti-capitalist hero, bravely resisting the commercialisation of Christmas

http://www.newstatesman.com/culture/2014/12/why-scrooge-anti-capitalist-hero-bravely-resisting-commercialisation-christmas

Each December, our media adorns itself with festive clichés as rapidly as a young boy throws tinsel on a yuletide tree. One word that reappears with grinding regularity is “Scrooge”, a term used to silence anyone who objects to the tiniest aspect of our annual consumerist orgy.

It’s not difficult, for example, to find articles that say “you’d have to be a real Scrooge not to like” this year’s John Lewis advert. Since I didn’t like the advert, this claim got me thinking. Why aren’t I overjoyed at the sight of a young boy purchasing a mail-order bride for his sex-starved, imaginary penguin? Maybe I am a Scrooge. But then Scrooge, the miser from Charles Dickens’ A Christmas Carol (1843), isn’t the villain that we typically assume. He represents, in fact, a figure of resistance to the capitalist vision of Christmas.

To begin with, Scrooge sees through the season’s shallow festivities – viewing them as an ideological sham, or “humbug”. Discussing Bob Cratchit, he says “my clerk, with fifteen shillings a week, and a wife and family, talking about a merry Christmas. I’ll retire to Bedlam”. The madness implied through his reference to “Bedlam” is that of Cratchit blithely accepting poverty as his natural state. Scrooge knows that singing carols and making merry won’t provide Tiny Tim with much-needed food. As he says to his impoverished nephew, “What is Christmas to you but a time for paying bills without money?”

When do-gooders knock on his door asking for donations, he rejects their piecemeal charity and asks whether the “Union workhouses” would not be a better alternative. Here Scrooge shows himself to be an early advocate of state intervention. The workhouse has a deservedly awful reputation, but it was still a baby step along the road to a proper welfare state. Crucially, he understands that individualist philanthropy is not the answer to structural poverty, whatever our tax-dodging, millionaire musicians might say to the contrary.

Scrooge is a heroic character, at least as far as preserving life on this planet goes. He is famously frugal: limiting the amount of coal he burns at home, and sitting by the light of a fire rather than spending money on gas. Though motivated by saving money (“Darkness is cheap”), his actions result in a low-emission lifestyle that could preserve the earth for future generations. Scrooge would love the savings to be made by installing solar panels.

Unlike the CEOs, bankers and politicians of today, he does not impose austerity from a luxury yacht. He is not willing to spend frivolous money on himself any more than he would on others. This attitude, which seems mean-spirited, can also be highly radical. If everyone consumed like Scrooge today then capitalism would collapse within a few weeks, which makes him a strange choice of hero for those on the neo-liberal right...

AND THE BEATING GOES ON...

[Demeter]

10. Chinese Banks Hemorrhaging Deposits, 1st Quarterly Drop Since 1999; Banks Offer iPhones, Even Cars

http://globaleconomicanalysis.blogspot.com/2014/12/chinese-banks-hemorrhaging-deposits-1st.html

Chinese banks have experienced an outflow of deposits for the quarter for first time since 1999. Customers are attracted to trust funds and the stock market which has been on a tear, up 43% in the last six months. In the first week of December, Chinese investors opened almost 600,000 stock-trading accounts, a 62 percent increase over the previous week, according to China Securities Depository and Clearing Co. To compete for funds, Chinese banks offer anything from fresh vegetables for small deposits to a Mercedes A180 for deposits big enough and long enough. The effective yield on the Mercedes is approximately seven percent!

China Daily explains the setup in Lenders Look to Attract Deposits with Goodies.

Lenders in China, desperate to attract customers who are finding alternatives for their savings, are turning to giveaways. On offer at one branch in Beijing: An iPhone 6 Plus or a Mercedes-Benz.

Cash rebates, trips abroad, interest rates at the highest premium ever over the official benchmark rate, even free vegetables are among other goodies banks are dangling to get Chinese savers to deposit their yuan in savings accounts.

"Chinese banks are hemorrhaging their deposits," says Rainy Yuan, a Shanghai-based analyst at brokerage Masterlink Securities Corp. "There is no fix for this. All the efforts they made to win savers back will only push up the costs, so it's a losing battle to fight."

Higher returns from Internet funds and investment products such as trusts, combined with the promise of a soaring stock market, have China's banks feeling the drain. They lost 950 billion yuan ($153 billion) of deposits in the three months through September, the first quarterly drop since 1999. In the first 11 months, new deposits were 23 percent lower than in the same period last year, People's Bank of China data show.

The iPhone promotion, by Shenzhen-based Ping An Bank Co in October at a branch in Beijing, offered a 128-gigabyte iPhone 6 Plus in lieu of interest payments for depositing 38,000 yuan for five years. For parking 903,000 yuan for the same period, savers could pick one of four Mercedes-Benz models. A Mercedes A180, which costs 252,000 yuan, would give investors the equivalent of an annualized return of almost 7 percent, compared with the benchmark rate of 4 percent on five-year deposits.

The China Banking Regulatory Commission in September banned what it called "illicit" deposit-gathering practices, including gifts and rebates on deposits. Banks that flout the curbs could face punishment, the regulator said, without clarifying whether product giveaways in lieu of interest payments qualify as gifts.

Loan Financing Scheme Will Implode

Think Chinese banks can lend money at rates that exceed 7 percent safely? I don't, and if not, this scheme of attracting depositors will backfire big time.

How big this deposit-chasing scheme gets is anyone's guess, but the root cause is systemic speculation fueled by central banks' loose monetary policies that manifest in different forms in different places.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

[Warpy]

11. I have a feeling it won't be pretty on Friday

because there was a big drop across the board in the US just before market close.

I honestly don't care because anything above a Dow at 10K is gravy, although it would be nice to leave Doctors Without Borders a lot of gravy when I kick the bucket.

[bread_and_roses]

14. Holiday happiness to all of you and a musical offering

Wanted to wish all the wonderful SMW and WEE crew the very happiest of holidays. This atheist loves Christmas and especially Christmas music.

I offer Leontyne Price singing O Holy Night. Even if you don't like Opera (I mostly don't, though make exceptions for Mozart and a few others) - she is to my ear just - divine - you have to listen to the end to get the very best of the performance, but it's not long.

[antigop]

47. thanks for that, bread. I wasn't into opera until recently. A family member is training to be an

opera singer and I've gone to some of the productions.

I've actually enjoyed them, subtitles and all.

[Eugene]

15. MF Global Holdings to pay $100 million fine in CFTC settlement

Source: Reuters

MF Global Holdings to pay $100 million fine in CFTC settlement

BY DOUWE MIEDEMA AND KAREY VAN HALL
WASHINGTON Wed Dec 24, 2014 4:34pm EST

(Reuters) - The U.S. Commodity Futures Trading Commission said on Wednesday it had fined MF Global Holdings Ltd for wrongdoing during the collapse of the futures brokerage, but will continue its lawsuit against the firm's former chief, Jon Corzine.

A federal judge in Manhattan approved a settlement in which the company will pay a $100 million fine and be jointly responsible for returning $1.212 billion in client funds that another unit had been ordered to restitute last year.

The parties agreed on the settlement earlier this month, though terms were not disclosed at the time.

The CFTC said its litigation would continue against former MF Global Chief Executive Corzine and former Assistant Treasurer Edith O'Brien. If they do not settle, the former officials may have to defend themselves in court.

[font size=1]-snip-[/font]

Read more: http://www.reuters.com/article/2014/12/24/us-mf-global-hldg-settlement-idUSKBN0K213G20141224

[Demeter]

16. Joyeux Noel!

He/she/it just looks French, to me!

[Demeter]

17. Elizabeth Warren’s real beef with Antonio Weiss: What her fight against him is actually about

http://www.salon.com/2014/12/23/elizabeth_warrens_huge_battle_why_shes_really_fighting_so_hard_against_antonio_weiss/

IT'S LIKE HALLOWEEN 13...CONCLUSION:

...Because of the end of the congressional session, President Obama would have to affirmatively nominate Weiss again in order to restart his confirmation process. He should find somebody else. Weiss is not merely a symbol of the Wall Street revolving door, he’s a symbol of what has happened to the middle class over the past 40 years. The last thing we should do is reward that.

[Demeter]

18. Thomas Piketty’s “Capital”, summarised in four paragraphs

http://www.economist.com/blogs/economist-explains/2014/05/economist-explains?fsrc=scn/tw_ec/thomas_piketty_s_capital_summarised_in_four_paragraphs

IT IS the economics book taking the world by storm. "Capital in the Twenty-First Century", written by the French economist Thomas Piketty, was published in French last year and in English in March of this year. The English version quickly became an unlikely bestseller, and it has prompted a broad and energetic debate on the book’s subject: the outlook for global inequality. Some reckon it heralds or may itself cause a pronounced shift in the focus of economic policy, toward distributional questions. This newspaper has hailed Mr Piketty as "the modern Marx" (Karl, that is). But what’s it all about?

"Capital" is built on more than a decade of research by Mr Piketty and a handful of other economists, detailing historical changes in the concentration of income and wealth. This pile of data allows Mr Piketty to sketch out the evolution of inequality since the beginning of the industrial revolution. In the 18th and 19th centuries western European society was highly unequal. Private wealth dwarfed national income and was concentrated in the hands of the rich families who sat atop a relatively rigid class structure. This system persisted even as industrialisation slowly contributed to rising wages for workers. Only the chaos of the first and second world wars and the Depression disrupted this pattern. High taxes, inflation, bankruptcies, and the growth of sprawling welfare states caused wealth to shrink dramatically, and ushered in a period in which both income and wealth were distributed in relatively egalitarian fashion. But the shocks of the early 20th century have faded and wealth is now reasserting itself. On many measures, Mr Piketty reckons, the importance of wealth in modern economies is approaching levels last seen before the first world war.

From this history, Mr Piketty derives a grand theory of capital and inequality. As a general rule wealth grows faster than economic output, he explains, a concept he captures in the expression r > g (where r is the rate of return to wealth and g is the economic growth rate). Other things being equal, faster economic growth will diminish the importance of wealth in a society, whereas slower growth will increase it (and demographic change that slows global growth will make capital more dominant). But there are no natural forces pushing against the steady concentration of wealth. Only a burst of rapid growth (from technological progress or rising population) or government intervention can be counted on to keep economies from returning to the “patrimonial capitalism” that worried Karl Marx. Mr Piketty closes the book by recommending that governments step in now, by adopting a global tax on wealth, to prevent soaring inequality contributing to economic or political instability down the road.

The book has unsurprisingly attracted plenty of criticism. Some wonder whether Mr Piketty is right to think the future will look like the past. Theory argues that it should become ever harder to earn a good return on wealth the more there is of it. And today’s super-rich mostly come by their wealth through work, rather than via inheritance. Others argue that Mr Piketty’s policy recommendations are more ideologically than economically driven and could do more harm than good. But many of the sceptics nonetheless have kind words for the book’s contributions, in terms of data and analysis. Whether or not Mr Piketty succeeds in changing policy, he will have influenced the way thousands of readers and plenty of economists think about these issues.

[Demeter]

19. Oil Crash: Don’t Believe the Happy Clatter By Pam Martens and Russ Martens

http://wallstreetonparade.com/2014/12/oil-crash-dont-believe-the-happy-clatter/

There is a mushrooming false narrative taking over the business airwaves: lower oil prices lead to lower prices at the pump which put more cash in consumers’ pockets which will lead to a more robust economy in the United States in 2015.

Yes, there are certainly lower prices at the pump. Yes, that gives consumers more disposable income. But it will decidedly not lead to a more robust economy in the United States for very long.

This isn’t a little speed bump in oil prices. This is one of the most dramatic and rapid crashes in a key industrial commodity in history. Since June, the price of West Texas Intermediate (WTI), the domestic crude oil produced in the U.S., is down by 47 percent. The price of the internationally traded crude oil, Brent, is down by a similar figure.

If this price collapse were happening in just crude oil, it could be shrugged off as a supply glut problem attributable to growing shale production in the U.S. and over production among OPEC members. But other industrial commodities are in freefall as well. Iron ore prices are down 49 percent this year while copper has declined 15 percent. The price of natural gas is down 30 percent in just the past month, including a plunge of 9 percent just yesterday.

Data from the Bureau of Labor Statistics shows that a broad gauge of industrial commodity prices entered a gradual decline in June and then began to plunge in September. That chart looks suspiciously similar to the price action in industrial commodities in the same time period in 2008 – which signaled an early warning to the greatest economic collapse in the United States since the Great Depression...


GREATER DEPRESSION, PART 2, HERE WE COME!

[Demeter]

20. You Thought The Saudis Were Kidding? ILARGI AUTOMATIC EARTH

http://www.theautomaticearth.com/you-thought-the-saudis-were-kidding/

There are many things I don’t understand these days, and some are undoubtedly due to the limits of my brain power. But at the same time some are not. I’m the kind of person who can no longer believe that anyone would get excited over a 5% American GDP growth number. Not even with any other details thrown in, just simply a print like that. It’s so completely out of left field and out of proportion that you would think by now at least a few more people understand what’s really going on.

And Tyler Durden breaks it down well enough in Here Is The Reason For The “Surge” In Q3 GDP (delayed health-care spending stats make up for 2/3 of the 5%), but still. I would have hoped that more Americans had clued in to the nonsense that has been behind such numbers for many years now. The US has been buying whatever growth politicians can squeeze out of the data and their manipulation, for many years. The entire world has.

The 5% stat is portrayed as being due to increased consumer spending. But most of that is health-care related. And economies don’t grow because people increase spending on not being sick and/or miserable. That’s just an accounting trick. The economy doesn’t get better if we all drive our cars into a tree, even if GDP numbers would say otherwise.

All the MSM headlines about consumer confidence and comfort and all that, it doesn’t square with the 43 million US citizens condemned to living on food stamps. I remember Halloween spending (I know, that’s Q4) was down an atrocious -11%, but the Q3 GDP print was +5%? Why would anyone volunteer to believe that? Do they all feel so bad any sliver of ‘good news’ helps? Are we really that desperate?


THE GHOST OF CHRISTMAS, YET TO COME....MORE AT LINK

[Demeter]

21. A visit from Janet Yellen Posted by Macro Man

http://macro-man.blogspot.com/2014/12/a-visit-from-janet-yellen.html


‘Twas the night before Christmas; yup, that time again
For punters to go limit long dollar/yen;
French SMEs filled out their loan apps with care,
In hopes that the ECB soon would be there;
Rates traders were shorting ED’s in the reds;
While visions of tightening danced in their heads;

Mamma was long AAPL, and I was long Schatz,
We’d just settled our brains ‘round the Fed’s stupid dots,
When the texts on my phone, they gave off such a clatter
I logged onto my screens to see what was the matter.

Away to the news feed I flew like a flash,
Pulled up my price screens quick as Bolt in the dash.

The chart of prompt oil had just one way to go,
With a warning it screamed, “HEY! LOOK OUT BELOW!”

When what in my wondering eyes did I see,
But a small red headline from the FOMC,
With a little old lady who said, “Don’t be sellin’”,
I knew in a flash that it was from Yellen.

More slowly than snails, their changes they came,
She harangued the committee and called them by name:
“Now Mester, now Fischer, now Powell and Plosser!
On Dudley, on Brainard, and Lacker, you tosser!
To the top of the chart! Just you watch NAIRU fall!
Now sit tight, now sit tight, now sit tight you all!”

As energy high-yield, which no longer shone,
Took note of the oil price and dropped like a stone;
Way up to the heavens, the dollar it flew
Against euros and yen, and the Canada too-
And then, in a twinkling, I heard on the floor
The sound of some traders being shown to the door.

As I just shook my head, and was turning around,
Janet Yellen appeared without making a sound.
She was dressed all in gray, from her head to her toe
And she stamped her small feet to shake off the snow;
A bundle of charts she had flung on her back,
And she looked like a bank strat as she opened her pack.

Her hair, it was white like the helmet of Stig
And I thought to myself that it must be a wig,
Her movements were languid and slow like a panda’s
Her voice? It sounded just like Estelle Costanza’s.

She showed me inflation and the U-rate too
I knew for a while there’d be nothing to do;
She said she was patient, no lift-off in sight,
And that when it comes that they won’t get too tight.

I mentioned the secular decline in prices
She claimed it was just the result of the crisis;
“The Phillips curve works- it’s just flatter, you see
Hmmph. Globalized labor means nothing to me.”

And then she ignored me and went straight to work
I could tell that she found me a bit of a jerk.
And laying her finger aside of her nose,
And giving a nod, equity prices rose;
Then giving a wink, and a shake of her hair,
That’s the last that I saw of the tiny Fed chair.

But I heard her exclaim ere I opened a beer,
“Happy hols to you all and I’m hiking next year!”

[Demeter]

22. The Ghost of Christmas Past

[DemReadingDU]

43. Let It Blow! Let It Blow! Let It Blow!!!

Via Zero Hedge member "Bill of Rights"

Merry X-MAS!

Oh the economy outside is frightful
But my 80-inch Big Screen's delightful
And since our economy’s got no place to go
Let It Blow! Let It Blow! Let It Blow!!

Oh, the collapse doesn't show signs of stopping
And I've brought some credit card debt for popping
My Obamaphones are turned way down low
Let It Blow! Let It Blow! Let It Blow!

When we finally kiss our economy goodnight
How I'll hate going out in the storm!
But if Obama really tells me everything’s alright
All the way home I'll be warm

The economy is slowly dying
And my dear we're still denying
But as long as you love me so
Let It Blow! Let It Blow! Let It Blow!

Oh, it doesn't show signs of stopping
And I've brought some student loan debt for popping
Since my Obamaphones are turned way down low
Let It Blow! Let It Blow! Let It Blow!

When we finally kiss our economy goodnight
How I'll hate going out in the storm!
But if Obama really tells me everything’s alright
All the way home I'll be warm

Let It Blow! Let It Blow! Let It Blow!!!

http://www.zerohedge.com/news/2014-12-25/happy-if-unhedged-christmas

[Demeter]

44. And that is the Ghost of Christmas Present, at last

“Spirit,” said Scrooge, with an interest he had never felt before, “tell me if Tiny Tim will live.”

“I see a vacant seat,” replied the Ghost, “in the poor chimney-corner, and a crutch without an owner, carefully preserved. If these shadows remain unaltered by the Future, the child will die.”

http://www.gutenberg.org/files/46/46-h/46-h.htm

[Demeter]

23. Saudis Tell Shale Industry It Will Break Them, Plans to Keep Pumping Even at $20 a Barrel

http://www.nakedcapitalism.com/2014/12/saudis-tell-shale-industry-will-break-plans-keep-pumping-even-20-barrel.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29



When the Saudis announced their intention not to support oil prices when they were sliding towards $90 and plunged quickly through that level, we deemed the move to be a masterstroke. It served to damage both economic and political enemies. On the economic front, the casualties would include renewables, Canadian tar sands, and the US shale gas industry. On the geopolitical front, the casualties would include Iran, Syria, Russia…. and the US.

Even though Riyadh is nominally still an ally, relations with the US are fraught. The Saudis are mighty unhappy with America over its failure to get rid of Assad, its refusal to indulge Saudi demands of attacking Iran (our leaders may be drunk on power, but they haven’t quite gone over the deep end) and or indirectly working with Iran against ISIS (which started out as Prince Bandar’s private army and may still have the kingdom as a stealth patron). So the Saudis are not at all unhappy if the US suffers as a result of the whackage of its energy industry. First, that’s an inevitable outcome if the Saudis are to succeed in maximizing the value of their oil assets, which is a survival issue for the royal family. Second, since relations between the US and Riyadh are frayed right now, it is an opportune time to show that the kingdom is not to be treated casually.

Yesterday, the Saudis made it even more clear that they are not pulling out of their game of chicken with other energy producing nations. The Saudis will keep pumping and by implication, will force production cuts on others. But in its clever formulation, which has the advantage of being true but misleading, the Saudis insist that all they are doing is preserving market share. Key sections of the Financial Times report:

Opec will not cut production even if the price of oil falls to $20 a barrel, the cartel’s de facto leader said, spelling out a dramatic policy shift that will have far-reaching implications for the global energy industry.

In an unusually frank interview, Ali al-Naimi, the Saudi oil minister, tore up Opec’s traditional strategy of keeping prices high by limiting oil output and replaced it with a new policy of defending the cartel’s market share at all costs.

“It is not in the interest of Opec producers to cut their production, whatever the price is,” he told the Middle East Economic Survey. “Whether it goes down to $20, $40, $50, $60, it is irrelevant.”

He said the world may never see $100 a barrel oil again….

In the MEES interview, Mr Naimi said Saudi Arabia and other Gulf oil producers would be able to withstand a long period of low crude prices, largely because their production costs were so low — at only about $4-$5 a barrel.

But he said the pain will be much greater for other oil regions, such as offshore Brazil, west Africa and the Arctic, whose costs are much higher.

“So sooner or later, however much they hold out, in the end, their financial affairs will limit their production,” he said.

“We want to tell the world that high efficiency producing countries are the ones that deserve market share,” said Mr Naimi added. “If the price falls, it falls?.?.?.?Others will be harmed greatly before we feel any pain.”

We had argued that many US shale producers might still keep pumping at a loss, since they needed to keep generating cash flow to service debt. And if they still have open credit lines, they could also borrow to keep producing in the hope that they would ride out what would prove to be a short-lived downdraft. Many Wall Street analysts are predicting that oil prices will rebound in the second half of 2015 as energy producers cut back on output. But if too many suppliers all make the same bet, that they cna stay the course because someone else will make cuts, then output levels won’t drop as much as analysts anticipate and pries will stay low longer. The stern words from the Saudis are clearly meant to speed up that process. We’ll see how quickly US producers act as if they have gotten the memo. A separate Financial Times story shows how a major Bakken player is slashing capital expenditures (which has ramifications for his suppliers and his employment level) but plans to produce more from fewer wells:

Continental Resources, one of the largest oil producers in the Bakken field in North Dakota which has been at the centre of the US shale resurgence, has cut its 2015 capital spending plans for the second time and intends to reduce the number of rigs it has operating by nearly 40 per cent….

Continental said late on Monday that it planned to spend $2.7bn on wells and other investment next year — down significantly from its previous plan of $4.6bn, which in turn was a reduction from its original target of $5.2bn.

It added that it expected to cut the number of drilling rigs it was using from about 50 today to an average of 31 for next year.

The company also said it expected to be able to cut the cost of its wells by about 15 to 20 per cent.

In spite of the planned fall in its capital spending, however, Continental still expects its average production next year to be 16-20 per cent higher than its average for 2014.

Notice that Continental plans to stay at cash flow breakeven:

Mr Hamm told the Financial Times the cut was intended to bring Continental’s capital spending “pretty close” to its cash flow from operations, so that it would not have to increase its borrowings.

But since shale wells show sharp production declines after the first two years, Hamm’s “do more with less” strategy looks to be a clever short-term expedient. He can’t afford to cut development for too long, or else his production in a year or a bit more will start to taper off. And notice how his price forecast is consistent with current US conventional wisdom and at odds with what the Saudis have in mind:

Mr Hamm, who started out in the oil business driving a truck in 1963, said he had seen “about half a dozen” such cycles in his career. He added that he expected prices to settle again at about $85-$90 per barrel, and “eventually” return to the $100 per barrel level seen in June.

It seems reasonable to expect oil prices to their old levels in light of peak oil, but that belief may also reflect anchoring. Before the Saudi bombshell, Anatole Kalecki argued oil could fall to $20 a barrel if the OPEC regime didn’t hold. The Saudi “pump, baby, pump” strategy is tantamount to OPEC abandoning its cartel role. From Anatole Kaletsky in Reuters:

Low oil prices will last long enough for one of two events to happen. The first possibility, the one most traders and analysts seem to expect, is that Saudi Arabia will re-establish OPEC’s monopoly power once it achieves the true geopolitical or economic objectives that spurred it to trigger the slump. The second possibility, one I wrote about two weeks ago, is that the global oil market will move toward normal competitive conditions in which prices are set by the marginal production costs, rather than Saudi or OPEC monopoly power. This may seem like a far-fetched scenario, but it is more or less how the oil market worked for two decades from 1986 to 2004.

Whichever outcome finally puts a floor under prices, we can be confident that the process will take a long time to unfold…

There are several reasons to expect a new trading range as low as $20 to $50, as in the period from 1986 to 2004. Technological and environmental pressures are reducing long-term oil demand and threatening to turn much of the high-cost oil outside the Middle East into a “stranded asset” similar to the earth’s vast unwanted coal reserves. Additional pressures for low oil prices in the long term include the possible lifting of sanctions on Iran and Russia and the ending of civil wars in Iraq and Libya, which between them would release additional oil reserves bigger than Saudi Arabia’s on to the world markets.

The U.S. shale revolution is perhaps the strongest argument for a return to competitive pricing instead of the OPEC-dominated monopoly regimes of 1974-85 and 2005-14. Although shale oil is relatively costly, production can be turned on and off much more easily – and cheaply – than from conventional oilfields. This means that shale prospectors should now be the “swing producers” in global oil markets instead of the Saudis. In a truly competitive market, the Saudis and other low-cost producers would always be pumping at maximum output, while shale shuts off when demand is weak and ramps up when demand is strong. This competitive logic suggests that marginal costs of U.S. shale oil, generally estimated at $40 to $50, should in the future be a ceiling for global oil prices, not a floor.

The Saudi determination to hold its position and force adjustment onto higher-cost producers makes this Kaletsky scenario seem more likely than it did when he wrote it. And that means optimistic US producers will have to wait much longer for their $100 a barrel payday than they expected and have to do a lot more creative production juggling in the meantime. As as shale producers have to contend with maturing debt, some may not be able to manage all the moving parts. As the Saudis hold to their guns, we can expect to see debt restructurings and asset sales. It won’t happen overnight but the combination of high debt levels, lack of access to cheap junk bonds, and a big fall in revenues means the air supply of these producers has been cut in a big way. Some will still prosper in these new conditions, but right now, we are seeing a lot of denial as to how much downshifting and reorganizing is likely to take place over the next eighteen months.

[xchrom]

24. It Looks Like US Retailers Are Just Barely Going To Meet Holiday Expectations

http://www.businessinsider.com/r-us-retailers-likely-to-just-meet-holiday-sales-forecasts-experts-2014-12

US consumers have not turned out in force for the final shopping days before Christmas, suggesting that traditional retailers will just meet industry sales forecasts in a season marked by deep discounts and growing encroachment from online rivals led by Amazon.com Inc.

Super Saturday - the last pre-Christmas Saturday, which fell on Dec. 20 this year - failed to make up for spotty performance this season. That included a disappointing Black Friday, the day after the U.S. Thanksgiving holiday that is typically one of the busiest shopping days of the year.

"The past weekend will not save this holiday season," said Craig Johnson, president of the retail and consumer product-oriented private equity fund Customer Growth Partners. "But combined with online sales, it would certainly save the year from being a dismal one."



Read more: http://www.businessinsider.com/r-us-retailers-likely-to-just-meet-holiday-sales-forecasts-experts-2014-12#ixzz3MufNERff

[xchrom]

25. Russian Ruble Strengthens In Thin Trade

http://www.businessinsider.com/r-russian-ruble-strengthens-in-thin-trade-2014-12

Russia's rouble strengthened on Thursday as exporters sold foreign currency in response to government pressure and to meet tax payments, but trading volumes were thin as many Western markets were closed for the Christmas Day holidays.

At 3.25 a.m. EST, the rouble was 1.7 percent stronger against the dollar at 52.55 and gained 1.5 percent to trade at 64.53 versus the euro.

The rouble earlier hit its highest against the dollar and euro since Dec. 4 and has trimmed its losses against the greenback to around 37 percent this year.

The Russian currency is supported towards the end of each month by tax payments to the state budget that require Russian exporters to convert part of their foreign-currency earnings into rubles.



Read more: http://www.businessinsider.com/r-russian-ruble-strengthens-in-thin-trade-2014-12#ixzz3Mufw6CYS

[Demeter]

26. To all who wander into this discussion--

May you find your heart's desire in the coming year: peace, love, some happiness to pursue. Whatever the season, whatever the reason, thrive!

[Demeter]

27. Tomorrow is the Feast of St. Stephen

St. Stephen's Day, or the Feast of St. Stephen, is a Christian saint's day to commemorate Saint Stephen, celebrated on 26 December in the Western Church and 27 December in the Eastern Church. Many Eastern Orthodox churches adhere to the Julian calendar and mark St. Stephen's Day on 27 December according to that calendar, which places it on 9 January of the Gregorian calendar used in secular contexts. It commemorates St. Stephen, the first Christian martyr or protomartyr.

It is an official public holiday in Alsace, Austria, Balearic Islands, Bosnia and Herzegovina, Catalonia, Croatia, Czech Republic, Denmark, Estonia, Finland, Germany, Ireland, Italy, Luxembourg, Macedonia, Montenegro, Moselle, Norway, Philippines, Poland, Romania, Serbia, Slovakia, Slovenia and Sweden. The date is also a public holiday in those countries that celebrate Boxing Day on the day instead/as well, such as Canada and the United Kingdom.

In Ireland, the day is one of nine official public holidays.
In Irish, it is called Lá Fhéile Stiofán or Lá an Dreoilín, meaning the Day of the Wren or Wren's Day. When used in this context, "wren" is often pronounced "ran". This name alludes to several legends, including those found in Ireland, linking episodes in the life of Jesus to the wren. People dress up in old clothes, wear straw hats and travel from door to door with fake wrens (previously real wrens were killed) and they dance, sing and play music. This tradition is less common than it was a couple of generations ago. Depending on which region of the country, they are called wrenboys and mummers. A Mummer's Festival is held at this time every year in the village of New Inn, County Galway and Dingle in County Kerry. A popular rhyme, known to many Irish children and sung at each house visited by the mummers goes as follows (this version popularized by the Irish group The Clancy Brothers):

The wren, the wren, the king of all birds,
St. Stephen's Day was caught in the furze,
Although he was little his honour was great,
Jump up me lads and give us a treat.

As I was going to Killenaule,
I met a wren upon the wall.
Up with me wattle and knocked him down,
And brought him in to Carrick Town.

Drooolin, Droolin, where's your nest?
Tis in the bush that I love best
In the tree, the holly tree,
Where all the boys do follow me.

Up with the kettle and down with the pan,
And give us a penny to bury the wren.

I followed the wren three miles or more,
Three miles or more three miles or more.
I followed the wren three miles or more,
At six o'clock in the morning.

I have a little box under me arm,
Under me arm under me arm.
I have a little box under me arm,
A penny or tuppence would do it no harm.

Mrs. Clancy's a very good woman,
a very good woman, a very good woman,
Mrs. Clancy's a very good woman,
She give us a penny to bury the wren.

A variant sung in the County Cork had a different explanation why the wren was the King of birds:

The wren, the wren, the King of All Birds,
On Saint Stephen's Day he was caught in the furze.
Although he is small his family is great.
Come out, good lady, and give us a treat!

St. Stephen's Day is a popular day for visiting family members and going to the theatre to see a pantomime.

Wales

St. Stephen's Day in Wales is known as Gŵyl San Steffan. Ancient Welsh custom, discontinued in the 19th century, included bleeding of livestock and "holming" (beating or slashing with holly branches) of late risers and female servants.
Catalonia

St. Stephen's Day (Sant Esteve) on 26 December is a traditional Catalan holiday. It is celebrated right after Christmas, with a big meal including canelons. These are stuffed with the ground remaining meat from the escudella i carn d'olla, turkey, or capó of the previous day.
Alsace and Moselle

St. Stephen's Day (Saint Etienne) is a heritage due to the local German culture even after French annexation in 1918.
Serbia

St. Stephen is the patron saint of Serbia. St. Stephen's Day falls on 9 January because the Serbian Orthodox Church adheres to the Julian calendar. Serbian medieval rulers' title was Stefan (Stephen). The day is not a public holiday in Serbia.

Republika Srpska

St. Stephen is also the patron saint of Republika Srpska, one of two entities of Bosnia and Herzegovina. St. Stephen's Day, 9 January, is celebrated as the Day of the Republika Srpska or Dan Republike, though mainly as an anniversary of the 1992 events rather than as a religious feast.

Finland

The most well known tradition linked to the day is "the ride of Stephen's Day" which refers to a sleigh ride with horses. These merry rides along village streets were seen in contrast to silent and pious mood of the previous Christmas days.

Another old tradition were parades with singers and people dressed in Christmas suits. At some areas these parades were related to checking forthcoming brides and Stephen's Day used to be a popular day for wedding as well. These days a related tradition are dances of Stephen's Day which are held in several restaurants and dance halls.

THAT LAST IS NEWS TO ME...NEVER SAW ANY OF THAT WHEN I WAS THERE.

[bread_and_roses]

71. I've always liked that carol

thanks for that version

[mahatmakanejeeves]

88. I hate those "me too" posts, but me too. NT

[Demeter]

28. Sony Hack: Clooney Says Movie is about Snowden, Not Journalism

https://firstlook.org/theintercept/2014/12/22/sony-hack-snowden-movie-sausage-gets-made-thrown-away/

As curious journalists, tabloid writers, and Hollywood watchers pore over the massive trove of hacked Sony data, the public is being given a rare glimpse into the complicated world of Hollywood and politics. Tucked between bitchy emails about Angelina Jolie and snarky comments on Will Smith’s family are details of a chummy relationship between Sony executives and the CIA, as well as rare insight into how Hollywood views potential movies about NSA whistleblower Edward Snowden.

Sony’s plan to make a Snowden movie got rolling in January 2014, when Elizabeth Cantillon, then an executive producer at Sony, sent company Co-Chairman Amy Pascal an email saying she had successfully closed on the rights to the book, “No Place to Hide,” by The Intercept‘s founding editor, Glenn Greenwald. “You will be my Oscar date,” Cantillon promised Pascal. In March of 2014, Sony officially optioned the rights to Greenwald’s book, which chronicles how he broke the Snowden story, and moved forward with plans for a movie. A month later, Pascal sent an email to a fellow Sony executive with the “fabulous slate” of tentative movie releases. The “Snowden movie” would be scheduled for 2016, between Pineapple Express 2 and the comic book film Bloodshot. Greenwald’s agreement with Sony gave him “creative input” and “final approval” on the press release for the movie.

A draft of the release was sent to a senior executive in Sony’s Government Affairs office, Keith Weaver, who offered a few “concerns/edits” before they were sent to Greenwald. Weaver was concerned about how Sony described U.S. government spying. Weaver wrote:

1. In the first sentence of the second paragraph – delete the phrase “illegal spying” and either it sic simply as “operations” or replace it with “intelligence gathering” — so the clause would read “U.S. government’s intelligence gathering operations.”

2. In the second sentence of the second paragraph — delete the “phrase misuse of power” and replace it with “actions” or “activities” so that it would read “The NSA’s actions” or “the NSA’S activities.”

Weaver was also concerned about how the draft quoted Greenwald as saying, “Growing up, I was heavily influenced by political films, and am excited about the opportunity to be a part of a political film that will resonate with today’s moviegoers.” Weaver, who would go on to be a key figure in the damage control team on Sony’s The Interview, wondered in the same email whether Sony wanted Greenwald to describe it as a “political film.”

“That’s really more of PR point so up to you guys — and I suspect since it is his own quote Greeenwald will feel strongly,” the Sony executive wrote.

The final version of the press release took Weaver’s suggestions on toning down the language on NSA, but let Greenwald’s quote stand (Greenwald, when asked about the emails, says he was “unaware, but am not surprised, that an internal Sony lobbyist diluted the press release draft in order to avoid upsetting the government.”) By June, however, Sony’s plans hit a roadbump when a rival Snowden movie production was announced. Oliver Stone and his long-time producing partner Mortiz Borman acquired the rights to Luke Harding’s “The Snowden Files: The Inside Story of the World’s Most Wanted Man” and “Time of the Octopus,” a novel written by Snowden’s former lawyer, Anatoly Kucherena...

NO DETAIL TOO SMALL FOR OUR VALIANT SPIES AND TORTURERS...MORE AT LINK

[Demeter]

29. The CIA engineered oil glut to bring down Putin and Maduro, by Wayne Madsen

http://www.vineyardsaker.co.nz/2014/12/23/the-cia-engineered-oil-glut-to-bring-down-putin-and-maduro-by-wayne-madsen/

INTERESTING READ

[Hotler]

67. Wow! I'm not surprised. Good read. n/t

[Demeter]

69. I'm not saying it's true, but those crazy guys at CIA will do anything, repeatedly

as we have learned to our sorrow, decades after.

[Demeter]

30. How Putin Stopped the Ruble's Collapse

http://www.bloombergview.com/articles/2014-12-23/how-putin-stopped-the-rubles-collapse

The Russian ruble, which last week briefly became the world's worst-performing currency, is rebounding, as is the battered Russian stock market. That doesn't mean President Vladimir Putin's economic team has managed to fully stabilize the currency or resolve any of the underlying problems that led to its recent plunge.

At first glance, the ruble and Russian stocks are doing well: They have recouped their losses faster than the oil price, which has merely stopped falling in recent days:

The current rate of less than 55 per U.S. dollar seems miraculous after last week's "Black Tuesday," which saw the ruble almost reach 80 per U.S. dollar. That decline followed a surprise decision by the Russian Central Bank to increase its key lending rate 6.5 percentage points to 17 percent, and it appeared the monetary authorities could do nothing short of introducing currency controls to halt the rout.

Nigeria's oil currency, the naira, is only down 4 percent against the dollar in the last 30 days, unlike the ruble, which lost almost 37 percent at its lowest point. Yet the African country's central bank has not been shy to impose a mild version of currency controls. It has banned local lenders from holding open forex positions overnight and required them to use purchased foreign currency within 48 hours, or sell it to regulator.

Russia has so far avoided introducing the kinds of measures, such as a moratorium on foreign debt repayment and an order to trade in 100 percent of foreign revenues for rubles, that were applied after its domestic debt default in 1998. Instead, the government is demonstrating the broad formal and informal control over the Russian economy it has acquired during Putin's rule.

The government is working through the boards of directors of state-controlled companies to give them until March 2015 to reduce the balances in their hard currency accounts to the level of October 1, 2014. Private companies are being told to do the same or face the Kremlin's ire -- a suggestion that can be as effective as a direct order in a country that has no real private property guarantees. Swissquote, an online bank, estimates that the requirement means a gradual sell-off of $50 billion, sparing the central bank the need to deplete its international reserves to hold up the ruble. Besides, one more company selling hard currency is one less player betting on the ruble's further decline.

So far, the tactic is working, even though there's been no sudden change in dollar and euro trading volumes on the Moscow Exchange. Short-sellers have become hesitant to bet against the ruble, knowing that some big foreign currency sales are coming...

MORE

[Demeter]

31. Global Headwinds No Match for Dow at 18,000 Milestone

http://www.bloomberg.com/news/2014-12-23/2014-headwinds-no-match-for-blue-chips-as-dow-tops-18-000.html

The Dow’s march to the 18,000 level had to overcome a long lineup of obstacles this year. None of them was a match against the Federal Reserve and the U.S. economy.

The Dow Jones Industrial Average rose 5.6 percent over the past five days for the biggest rally since 2011, climbing to 18,024.17 yesterday, as the central bank pledged patience in raising interest rates while data showed the economy roared the most in the third quarter since 2003. A measure of expected volatility in the Dow has fallen the most in three years during the recent rally.

U.S. equities faced upheavals in 2014 that threatened to derail a bull market in its sixth year, ranging from violence in the Ukraine to an Ebola outbreak and a bear market in oil prices. Yet the Dow’s worst retreat was only 7 percent, and the gauge recovered from each decline in about two months.

“Things have been getting better for five years,” John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, said in a phone interview. “Corporate America is doing fantastic, earnings are at an all time high, interest rates are low, inflation is low, and now you have the added positive of low gasoline prices. All of that adds up to a pretty good environment for equities.”

It’s been 172 days since the Dow closed above 17,000 on July 3, data compiled by Bloomberg show. That’s the fifth-fastest trip between thousands, with the record being 35 days to 11,000 in May 1999. It took the index almost 5,200 days to go from 1,000 to 2,000 between 1972 and 1987, according to Howard Silverblatt, an index analyst at New York-based S&P Dow Jones Indices....

[Demeter]

32. Greece to the Eurozone’s Rescue: Why the Troika Should Forgive Greece’s Debt

The European Commissioner for Economic and Financial Affairs, Pierre Moscovici’s unnecessary—and unseemly—visit to Athens served to spotlight Europe’s corrosive politics. Mr. Moscovici chose to all but endorse Antonio Samaras, the beleaguered Greek Prime Minister, who promises to play by the European Union’s dysfunctional rules. And the Commissioner described as “suicidal” the positions held by the opposition party Syrzia, which may well lead the next government and correctly deems the EU’s rules to be intolerant.

His boss, European Commission President Jean-Claude Juncker, weighed in by expressing his preference for Greece to be led by “known” faces.

Greece should not have been a member of the eurozone. But after the German Chancellor Helmut Kohl ensured Italy’s inclusion in May 1998, Spain and Portugal were waived in. So, the inevitable Greek entry came in 2002. By then, any vestige of economic good sense in the euro’s construction had been abandoned in the name of peace and friendship, a cause that Moscovici and Juncker presumably seek to promote.

From October 2009, when Greek authorities acknowledged that they had lied about their fiscal accounts, to May 2010, the claim was that the problem would go away without external help. When eventually the troika—the European Commission, the European Central Bank, and the International Monetary Fund—put together a large bailout fund, the manifestly untenable claim was that Greece would repay its private creditors in full. In July 2011, the repayment terms on the troika’s debt were eased, but it was too little too late. Large losses were eventually imposed on private Greek creditors but not before harsh austerity caused an extraordinary slump in growth and lasting misery.

Pretty much every time there was a choice between the right and wrong decision, the wrong one was taken.

Today, the only right way forward is for the troika to allow Greece to repay its official creditors in, say, 100 years. This will effectively mean debt forgiveness but the cosmetics may help German leaders tell their citizens that they will be repaid...

http://www.nakedcapitalism.com/2014/12/greece-eurozones-rescue-troika-forgive-greeces-debt.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

[xchrom]

33. BofA Fired Hong Kong Banker to Avoid Paying Bonus, Judge Rules

http://www.bloomberg.com/news/2014-12-24/bofa-fired-hong-kong-banker-to-avoid-paying-bonus-judge-rules.html

Bank of America Corp. maliciously fired a distressed-debt banker to deprive her of a bonus, a Hong Kong judge ruled, awarding Sunny Tadjudin $500,000 after a seven-year legal battle.

Tadjudin’s manager, John Liptak, was determined to fire her despite her improvement in a performance plan, and his malice can be attributed to the bank, High Court Judge Anthony To said in a 141-page ruling issued yesterday. Still, Tadjudin will receive only a fraction of the amount she requested.

Tadjudin, 51, who worked for the bank’s Asian distressed-debt trading group, had sought bonuses totaling $3.7 million after being fired in 2007 following what she said were irrational and arbitrary performance ratings. To ruled against her claims for higher 2005 and 2006 bonuses than she received.

“It may be argued that a prestigious bank as Bank of America would not do anything so mean or so lacking in commercial sense as to dismiss a performing employee to avoid paying her bonus,” To said. While that wasn’t the intention of senior management, “that was what the bank did through the hands of John Liptak and with his intention,” the judge said.

[Demeter]

41. $500,000 won't even pay for 7 years of lawyering

After all, she is a woman...of course it was intentional and petty and sexist and malicious!

[xchrom]

34. Wells Fargo, HSBC Among Banks Sued Over Subprime Securities

http://www.bloomberg.com/news/2014-12-24/wells-fargo-hsbc-bny-sued-over-mortgage-backed-securities.html


Wells Fargo & Co. (WFC), HSBC Holdings Plc (HSBA), Bank of New York Mellon Corp. (BK) and Deutsche Bank AG (DBK) were sued by an Irish securities firm that claims the banks failed to protect investors in their role as trustees of securities backed by home loans that defaulted after the 2008 credit crisis.

Phoenix Light SF Ltd. accused the banks, in complaints filed yesterday in Manhattan federal court, of failing to safeguard the interests of investors as required by their contracts. The securities were sold from 2005 to 2007.

Phoenix Light and related investors sued Deutsche Bank over 21 securitization trusts on which they claimed $183 million in losses. BNY Mellon was sued over 27 offerings for claimed damages of $269 million. Wells Fargo was sued for $237 million in losses on 12 securitizations and HSBC for $170 million on 11 securitizations.

The suits are part of a move by investors to target trustees of mortgage securities over their role in the crisis. Trustees have been sued by the National Credit Union Administration and by other investors, including hedge funds.

[xchrom]

35. How the U.S. Government Botched Its Multibillion-Dollar Plan to Beat Childhood Disease

http://www.businessweek.com/articles/2014-12-23/how-the-national-childrens-study-fell-apart

In the late 1990s, scientists studying children's health pondered crucial questions they couldn’t answer: Conditions as diverse as asthma and autism were increasing in prevalence, with no clear reason why. Many suspected that a child’s early environment—even exposures in the womb—were connected to medical problems that manifested years later. For example, is risk of asthma influenced by the stress a mother experiences during pregnancy? What role does air pollution play? What about diet? Those links proved difficult to study because by the time a child shows signs of asthma, it's too late to take a blood sample during pregnancy, or analyze the air the newborn breathed.

To address those challenges, leading pediatric researchers in the U.S. envisioned an ambitious study. They wanted to track 100,000 American children from before birth until the age of 21 by collecting detailed data, biological specimens such as blood and urine, and environmental samples, including dust from childhood homes. In 2000, Congress authorized the National Institutes of Health (NIH) to go ahead with the project, which would be called the National Children's Study.

In the 14 subsequent years, the government has spent $1.3 billion, working with hundreds of scientists at dozens of sites around the country. There's little to show for the effort. While some 5,700 children have been enrolled in pilot studies since 2009, researchers stopped collecting data on Dec. 12, when the NIH concluded that the project could not be salvaged and moved to shut it down. Families that had signed up received letters saying their contributions would no longer be needed.

"The goals of the study were laudable and they remain laudable," Francis Collins, NIH director, says. "Most of us believe it should now be possible to accomplish those goals at a substantially lower cost and higher efficiency."

[Demeter]

42. BECAUSE they were asking the WRONG QUESTIONS!

Autism is genetic. Women's Lib allowed women with autistic potential to study in college with men similarly endowed; they produced double-whammy children. Pregnancy conditions aren't going to do diddly about causing or detecting autism, unless genetic counseling is employed.

Asthma is environmental. Children of poverty and children who fall into poverty due to familial misfortune are exposed to more allergens, and are going to suffer more asthma. Unless we fight poverty, which is on record as increasing in this nation, nothing will change for the better. Blood tests in pregnancy aren't going to do squat about poverty, either.

Nice waste of $1.3 B. Maybe the NSA has a use for the database...

[xchrom]

36. Bulls Return to Russia ETF as Ruble’s Decline Halted

http://www.bloomberg.com/news/2014-12-24/bulls-return-to-russia-etf-as-ruble-s-decline-halted.html

Investors are piling into the biggest exchange-traded fund tracking Russian equities at the fastest pace in more than a year as government measures to stabilize the ruble ease concern that there will be a prolonged stock rout.

Asset managers added $126.2 million to the Market Vectors Russia ETF (RSX) on Dec. 23, the most in one day since May 2013, data compiled by Bloomberg show. Shares in the $1.6 billion fund gained 3.3 percent to $15.95 on yesterday, trimming their decline in 2014 to 45 percent. posts a five-day rally,

The inflow came as Russia moved to support the currency, stemming the biggest decline in emerging markets this year. The ruble extended its rally for a fifth day today, strengthening 2.2 percent to 52.29 per dollar by 12:13 p.m. in Moscow.

Policy makers engineered a cash shortage to prop up demand, and the government ordered five state-controlled exporters to cut their foreign-currency holdings. Short interest as a percentage of shares outstanding in the ETF slid to 12 percent on Wednesday after touching a nine-month high of 16 percent on Dec. 17.

[xchrom]

37. Oil Slides as U.S. Supplies Jump Most in Two Months

http://www.bloomberg.com/news/2014-12-23/oil-trades-near-57-after-rebounding-on-u-s-economic-growth.html

Oil dropped as a government report showed U.S. crude inventories increased the most in two months.

West Texas Intermediate fell 2.2 percent in New York while Brent slipped 2.4 percent in London. Stockpiles climbed 7.27 million barrels in the week ended Dec. 19 as imports surged, the Energy Information Administration said. The report was projected to show a 2.5 million-barrel decline, according to the median estimate in a Bloomberg survey of nine analysts. Gasoline supplies advanced to a seasonal record.

“This report provides us with a very consistent picture that we’ve got supply outpacing demand and inventories are piling up,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone. “There’s too much crude coming in. Refineries are operating at a high rate but not high enough to make a dent in this.”

Futures surged yesterday after Commerce Department data showed that the U.S. gross domestic product rose at a 5 percent annual rate from July through September, the most since 2003. Oil is heading for the biggest annual drop since 2008 amid a global glut exacerbated by the highest U.S. output in more than three decades. Prices have dropped about 20 percent since the Organization of Petroleum Exporting Countries decided Nov. 27 to maintain its output ceiling at 30 million barrels a day.

[xchrom]

38. Kuroda Calls on Japan Inc to Embrace Shift to Inflation: Economy

http://www.bloomberg.com/news/2014-12-25/boj-s-kuroda-calls-on-japan-inc-to-embrace-shift-to-inflation.html

Bank of Japan chief Haruhiko Kuroda called on Japan Inc. to deploy its cash and invest more on facilities and workers, saying “the rule book for business will be rewritten” as the economy emerges from deflation.

“This is a great chance,” Kuroda said in a speech at the Tokyo headquarters of the Keidanren, Japan’s biggest business lobby. “Firms that are able to get ahead of a change in the environment promptly and to adapt to the economy in an expanding equilibrium will become the winners of the competition and enjoy prosperity in the new era.”

The remarks underscore Kuroda’s bid to get companies to buy into efforts by the central bank and Abe administration to shake Japan out of two decades of stagnation. While profits are soaring with a weaker yen, companies are hoarding record cash, cutting capital expenditure, and failing to boost wages quick enough to keep up with rising living costs.

“Kuroda is working very hard to convince companies to help revive the economy,” said Maiko Noguchi, an economist at Daiwa Securities Co. and a former BOJ official. “Kuroda offered an optimistic outlook on the economy - that was more like his determination to make that happen than an outlook.”

[Demeter]

39. Obama Imports and Immunizes Banksters Who Donate to the Democratic Party WILLIAM K BLACK

http://neweconomicperspectives.org/2014/12/obama-imports-immunizes-banksters-donate-democratic-party.html

President Obama and then Secretary of State Clinton decided that America has a critical shortage of banksters and decided to import some from Ecuador. The banksters showed their gratitude by showing the Democratic Party with “donations.” Sometimes a small story reveals the core truth of large public policy issues far better than the big overall story can. The New York Times has just published an article entitled “Ecuador Family Wins Favors After Donations to Democrats.” The short-version is that Obama has decided to give what amounts to asylum to a family from Ecuador after it made large campaign donations to Democrats.

“It was one of several favorable decisions the Obama administration made in recent years involving the Isaías family, which the government of Ecuador accuses of buying protection from Washington and living comfortably in Miami off the profits of a looted bank in Ecuador.

The family, which has been investigated by federal law enforcement agencies on suspicion of money laundering and immigration fraud, has made hundreds of thousands of dollars in contributions to American political campaigns in recent years. During that time, it has repeatedly received favorable treatment from the highest levels of the American government, including from New Jersey’s senior senator and the State Department.”

And it gets better:

“The Obama administration has allowed the family’s patriarchs, Roberto and William Isaías, to remain in the United States, refusing to extradite them to Ecuador. The two brothers were sentenced in absentia in 2012 to eight years in prison, accused of running their bank into the ground and then presenting false balance sheets to profit from bailout funds. In a highly politicized case, Ecuador says the fraud cost the country $400 million.

The family’s affairs have rankled Ecuador and strained relations with the United States at a time when the two nations are also at odds over another international fugitive: Julian Assange, the WikiLeaks founder, who has taken refuge in the Ecuadorean Embassy in London.”

It’s not bad enough that Obama refuses to prosecute our banksters who grew wealthy by leading the three financial fraud epidemics that cost the U.S. over $20 trillion in lost GDP and over 10 million jobs – he’s now importing Ecuador’s banksters – even their families who were banned from entering the U.S. because they committed immigration fraud.

“MIAMI — The Obama administration overturned a ban preventing a wealthy, politically connected Ecuadorean woman from entering the United States after her family gave tens of thousands of dollars to Democratic campaigns, according to finance records and government officials.

The woman, Estefanía Isaías, had been barred from coming to the United States after being caught fraudulently obtaining visas for her maids. But the ban was lifted at the request of the State Department under former Secretary of State Hillary Rodham Clinton so that Ms. Isaías could work for an Obama fund-raiser with close ties to the administration.”

Yes, it’s the Obama/Clinton concept of good government, respect for the rule of law, and the proper response to elite white-collar criminals who loot “their” banks and cause the crises that devastate an entire nation – as they did in Ecuador in the late 1990s and the U.S. a decade later – is to ignore the crimes of the banksters. The banksters and their kin are a potential source of political contributions. Under Obama/Clinton, the U.S. is a sanctuary not just for U.S. banksters, but those from other countries who appropriately express their gratitude to the politicians who grant that sanctuary. When our leaders have contempt for our laws and knowingly choose to get in bed with the banksters and immunize their crimes, you know that crony capitalism has arrived.

Obama and Clinton’s New-“New Colossus”

President Obama and Former Secretary Clinton designed a New-“New Colossus” for the Statue of Liberty. Emma Lazurus’ words once read.

“Keep ancient lands, your storied pomp!” cries she

With silent lips. “Give me your tired, your poor,

Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tost to me,

I lift my lamp beside the golden door!”

The Obama/Clinton New-New Colossus reads:

Send us your elite banksters yearning to keep their wealth and immunity

Have them make large political contributions to my Party’s teeming whores

I’ll let you violate U.S. and foreign laws with impunity

Douse the lamp; show us the green and we’ll secretly open the golden door

Blame it on Correa

But it was this passage from the NYT article that captures how far we have fallen under the leadership of Obama and the Clintons.

“The Isaías brothers consider themselves political exiles unfairly attacked by the Ecuadorean government and have garnered support on Capitol Hill, where sentiment against Ecuador’s leftist president runs strong.”

You see, key Democrats on Capitol Hill, Obama, and the Clintons share a common cause – they hate Ecuador’s President, Rafael Correa. Indeed, Correa is so bad that the New York Times would not even put his name in print in the article! Correa’s unforgivable sin from the perspective of Obama, and Clintons, and some Democratic Party representatives in Congress is that he successfully implements policies favored by the Democratic wing of the Democratic Party. Correa did crack down on the banksters, but that is a small part of his policy package. Correa has three paramount policies, substantially increasing spending on education, health, and infrastructure. He has done so in a manner that greatly reduced unemployment, poverty, and inequality because those three programs focused on the people most in need. One can understand why Correa and his successful implementation of traditional Democratic Party policies would make him anathema to the Rubin wing of the Democratic Party. But understanding why the Rubin wing of the Party hates Correa with such a passion that it feels proud about helping convicted banksters and immigration frauds get away with their crimes with impunity reveals the depth of the pathologies of Obama and the Clintons.

Concentrating increased government spending on education, health, and infrastructure is a policy recommended in that notoriously “leftist” screed – the Washington Consensus. Unlike Obama and the Clintons (all lawyers), Correa is a skilled economist who did his dissertation on the Washington Consensus. The Washington Consensus urges that each of these increases in spending should be oriented towards helping those most in need – the poor. Correa did so.

It is telling that the Rubin wing of the Democratic Party is, when it comes to applying the rule of law to the banksters and increasing spending on education, health, and infrastructure (with special emphasis on serving the needs of the poor), far to the right of the infamous Washington Consensus. Note that the Rubin wing of the Democratic Party does not simply disagree with Correa on the desirability of greatly increased spending on education, health, and infrastructure with a focus on providing those benefits where they are most needed. The Rubin wing is enraged at Correa for those (successful) “leftist” policies. The “leftist” budgetary priorities that Correa created and that enrage the Rubin wing were promulgated and became a “Consensus” in “Washington” under the notorious “leftists” Presidents Reagan and Bush (I). Similarly, it was under President Bush (I) that we had our greatest success in prosecuting the U.S. banksters. It was the Clinton administration that began the gutting of financial regulation and the large scale reassignment of FBI agents and AUSAs that substantially reduced prosecutions of banksters. It is a measure of how far to the right that Obama and the Clintons have led the Rubin wing of the Democratic Party in these contexts that Correa’s primary public policies – which were once so mainstream in both major U.S. political parties that they were presented as “consensus” views even among conservative economists – are now treated by the Rubinites as so “leftist” that their success enrages and terrifies Obama and the Clintons.

Conclusion

It is amusing that the New York Times’ article treated Correa as so far beyond the pale that it “dared not speak his name.” Correa’s policies of applying the rule of law and prosecuting elite bank frauds and increasing spending on education, health, and infrastructure needs with a focus on the poor are not considered remotely “leftist” positions among the Democratic Wing of the Democratic Party. They are core beliefs of the Democratic Party and they were the among the policies that made America great.

[Demeter]

40. Billion Dollar Surveillance Blimp to Launch over Maryland By Dan Froomkin

https://firstlook.org/theintercept/2014/12/17/billion-dollar-surveillance-blimp-launch-maryland/

In just a few days, the Army will launch the first of two massive blimps over Maryland, the last gasp of an 18-year-long $2.8-billion Army project intended to use giant airships to defend against cruise missiles. And while the blimps may never stave off a barrage of enemy missiles, their ability to spot and track cars, trucks and boats hundreds of miles away is raising serious privacy concerns. The project is called JLENS – or “Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System.” And you couldn’t come up with a better metaphor for wildly inflated defense contracts, a ponderous Pentagon bureaucracy, and the U.S. surveillance leviathan all in one.

Built by the Raytheon Company, the JLENS blimps operate as a pair. One provides omnipresent high-resolution 360-degree radar coverage up to 340 miles in any direction; the other can focus on specific threats and provide targeting information. Technically considered aerostats, since they are tethered to mooring stations, these lighter-than-air vehicles will hover at a height of 10,000 feet just off Interstate 95, about 45 miles northeast of Washington, D.C., and about 20 miles from Baltimore. That means they can watch what’s happening from North Carolina to Boston, or an area the size of Texas.

At one point, there were supposed to be nearly three dozen blimps. But after a series of operational failures and massive cost overruns, the program was dramatically scaled back to the two existing prototypes that the Army plans to keep flying continuously above the Aberdeen Proving Ground for three years, except for maintenance and foul weather.

As soon the blimps are up, if you’re driving on the interstate north of Baltimore, you won’t be able to miss them. They are 80 yards long and their total volume is somewhere around 600,000 cubic feet. That’s about the size of three Goodyear blimps. Or over 3,500 white elephants

“There’s something inherently suspect for the public to look up in the sky and see this surveillance device hanging there,” says Ginger McCall, associate director of the Electronic Privacy Information Center (EPIC), an advocacy group. “It’s the definition of persistent surveillance.”

MORE

SMILE, YOU'RE ON CANDID CAMERA!

[Demeter]

45. IMF, World Bank Halt Lending to Ukraine – Franklin Templeton $4 Billion Ukraine Bet Goes Bad

Posted on December 16, 2014 by Yves Smith

http://www.nakedcapitalism.com/2014/12/imf-world-bank-halt-lending-ukraine-franklin-templeton-4-billion-ukraine-bet-goes-bad.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29



Yves here. While the financial media is riveted with the spectacle of the ruble meltdown and the Russian government rate hike to 17%, and the investor rush out of all things emerging markets, another drama is playing out in Ukraine. If you’ve been following this drama, the Ukraine economy is substantially intertwined with Russia’s, and Russia was already subsidizing it by giving it a break on gas prices. When things got ugly, Russia revoked the subsidy, demanded repayment of outstanding gas debts, and cut off gas shipments. This made for an ugly situation, since 70% of gas to Europe goes through pipelines that transit Ukraine meaning Ukraine could simply steal European-bound gas if they got desperate, creating a conflict with one of their new patrons. Moreover, it raised the specter that any rescue of Ukraine would wind up routing funds to Gazrpom to pay off the gas bill, another outcome unappealing to a West determined to punish Russia every way it could (the dispute over the outstanding debt is being arbitrated, with a decision due next summer, which also allows Europe to wash its hands of money going to Gazprom).

This detailed account of the wrangling over what to do about supporting the basket case of Ukraine makes a couple of issues very clear: one, the amount of funding needed is much larger than the officials want to admit to, and two, the approaches under discussion are at best stopgaps. A default and restructuring look inevitable...

SEE LINK

[Demeter]

46. COMMENT BY Lune December 16, 2014 at 12:45 pm

I don’t think Franklin Templeton has anything to be worried about. As the last part of the article hints at, this has nothing to do with the IMF/World Bank and everything to do with Europe and America deciding how to split the bill for their Ukrainian mess. But either way that bill will get paid. This is now a prestige issue for American and European politicians: they need Ukraine to succeed to show Putin they can still throw their weight around in Russia’s backyard. And what’s a few billion dollars of taxpayers’ money to help a few overgrown schoolyard bullies win a pissing match?

Besides, Ukraine’s debt is held by American and European banks, not retail investors. Do you really think the Treasury is *not* going to socialize their losses? The only people who would be the losers are US/EU taxpayers, and Ukrainian citizens who will be saddled with increasing amounts of debt, the proceeds of which will be used to pay foreign banks while never even touching their soil. But hey, it worked so well in Greece so…

Again, economics is politics by another name. So let’s stop looking at the numbers and talk about the politics of bailing out Ukraine:
1) Give Putin another black eye
2) Bail out the banks
3) Impoverish the actual citizens

Sounds like a win-win-win to me. Easily worth billions of OPM…

[antigop]

48. OK, I just had to post this....Sheldon sings Christmas carol

[Demeter]

49. Thank you for broadening my knowledge base

on modern TV. Which I pulled the plug on back in 2000.

[antigop]

50. Oh, Demeter..."Big Bang Theory" is the ONLY thing I watch on TV. Nerds rock! nt

[Demeter]

52. antigop--I come from generations of engineers (nerds before the word existed)

they don't rock. They hardly move at all. It's a hard way to live.

[antigop]

53. as do I, Demeter. I think they rock. nt

[Fuddnik]

80. You guys drove trains?

[Demeter]

84. Lionel--O gage

It was my mother's. I think Sis has it, now, since she's got room for it. The engine blew smoke rings, the log carrier unloaded its cargo; the milk cans were whisked off by a magnetic arm....

[Demeter]

51. Tuna tie-up: Chicken of the Sea owner buys Bumble Bee for $1.5bn

http://www.theguardian.com/business/2014/dec/19/tuna-meger-chicken-of-sea-bumble-bee?CMP=ema_565

Thai Union, one of the world’s biggest seafood companies, owns Chicken of the Sea and announced it will buy Bumble Bee. Will antitrust authorities allow the tuna market to become so concentrated? Thai Union Frozen Products, owner of Chicken of the Sea, is acquiring Bumble Bee Seafoods, a major seller of canned tuna in the United States, for $1.5bn, sandwiching two of the biggest tuna packagers in the country. Thai Union Frozen Products is the world’s biggest producer of canned tuna and it’s looking to double revenue through overseas acquisitions.

The purchase, which is Thai Union’s largest ever, will give the company control of some of North America’s most well-known seafood lines – including two of the three biggest canned tuna brands in the United States – in its quest to reach revenue of $8bn by 2020. The deal marks the latest instance of consolidation in a global seafood industry that analysts say has been in flux over the past few years, as companies change the way they manage supplies and costs to better cater to shifting consumer demand.

The transaction is likely to be completed in the second half of next year, subject to approval from US antimonopoly authorities, said Thai Union, whose clients include Wal-Mart Stores and Costco Wholesale. Thai Union president and chief executive Thiraphong Chansiri, whose company has operated in the US for over 17 years, said he expected a “positive response” from the authorities. But Thai Union may have to sell US assets to win antitrust approval, said a person familiar with the transaction, who asked not to be identified because of sensitivity of the deal.

Thai Union’s Chicken of the Sea is the third-biggest tuna brand in the US behind Bumble Bee. The top brand, Starkist, is owned by South Korea’s Dongwon Industries.

Cash call

Bumble Bee is the largest canned tuna and sardine producer in North America, with brands including Brunswick and Sweet Sue. It is owned by pan-Atlantic private equity firm Lion Capital, which bought the seafood maker from another private equity firm for $980m in 2010. It has annual sales of about $1bn. Its purchase should boost Thai Union’s sales next year to $5bn from $4bn, Thiraphong said. The transaction is valued at 8.6 times Bumble Bee’s 2014 estimated earnings, Bumble Bee said in a separate statement. The acquisition would be Thai Union’s third this year after the purchase of Norwegian canned fish producer King Oscar and French smoked salmon supplier MerAlliance.

For further expansion, analysts said Thai Union’s rising debt means the company would need to sell shares to raise capital. But the acquisition should boost Thai Union’s 15% to 17% gross profit margin, Thirapong said, as Bumble Bee’s profit margin is more than 20%. Thiraphong, 49, is the eldest son of Thai Union co-founder and chairman Kraison Chansiri, and took over as president when he was 30. Kraisorn was born in the Guangdong province of China and started the business 37 years ago with a tuna cannery in the Thai province of Samut Sakhon, southeast of Bangkok. Tuna now makes up 47% of sales, with shrimp 24% and the rest from sardines, salmon, pet food and other products. As well as Thailand and the US, Thai Union has been active in Europe since the 2010 purchase of MW Brand.

For its latest acquisition, Thai Union has hired UBS as adviser while Bumble Bee is being advised by Morgan Stanley and Rothschild. Thai Union is financing the purchase with the help of a one-year bridge loan from Bangkok Bank and Siam Commercial Bank, executives from the two banks said.


IN WHAT WAY IS ANYONE SERVED BY SUCH A MONOPOLY? I AM SERIOUSLY CONSIDERING GIVING UP TUNA. WE HAVE 3 PONDS HERE...PERHAPS AQUACULTURE?

[antigop]

54. Credit-Default Swaps Get Activist New Look

http://www.wsj.com/articles/credit-default-swaps-get-activist-new-look-1419379954

Hedge-fund managers are putting a new twist on credit-default swaps, using the contracts to fortify bets on troubled companies.

The swaps, which work like insurance policies when companies default on bonds and loans, fell out of favor after Wall Street’s outsize bets on the swaps soured during the financial crisis. Now, investors are increasingly combining credit-default-swaps trades with elements of activist investing to push companies toward default in some cases and away in others.

Swaps buyers pay sellers an upfront fee and a steady flow of premiums in exchange for a guaranteed payout from the seller if default occurs. Historically, the corporate credit-default-swaps market was dominated by bets on giant borrowers with billions of dollars of debt outstanding. But that use has declined, while swaps contracts on the debt of smaller companies in financial distress has surged.
...
The debt of struggling department-store chain J.C. Penney Co. has credit-default-swaps contracts valued at $19.3 billion, more than double its $8.7 billion in total debt. Gambling company Caesars Entertainment Operating Co., which is negotiating a debt-restructuring plan with creditors, has $26.9 billion in CDS contracts on its debt, about $8.5 billion more than the company’s outstanding debt.

A big reason for the shift: Event-driven hedge funds manage $555 billion in assets, double what they controlled in 2008, according to HFR, but there are far fewer distressed companies to target as default rates hover near historic lows. Credit-default swaps allow hedge funds to substantially increase the sums they bet on troubled companies.

[Demeter]

55. Took the Kid to See Robin Williams' Last Film; Museum 3

Ben Stiller was dull, as usual. What anyone sees in that man I do not get.

Evidently, it was Andy Rooney's last film, as well. He died April 5 of last year....93.5 years old.

What can we do, when we lose such treasures, but weep?

[Demeter]

56. Poland counts the cost of losing millions of its workers

http://uk.reuters.com/article/2014/12/05/uk-europe-demographics-poland-idUKKCN0JJ0KT20141205

"I'm staying here!," reads a grime-covered slogan on the side of a train in Opole, south-west Poland. It's a legacy of a local campaign aimed at discouraging young people from moving abroad. The campaign didn't work. After 1.2 million of its citizens migrated in the ten years since Poland joined the European Union, the country is counting the economic and social cost. Though its workers may have eased demographic difficulties in ageing countries like Britain and Germany, Poland now has a population crisis of its own.

Those who left were predominantly the young and economically active. For a while the billions of euros they sent back helped the economy - remittances were worth 2 percent of the country's GDP in 2009 alone - and enabled it to avoid recession but that money is drying up as they choose to settle permanently abroad. As a result Poland's social security system is creaking badly. The country will spend almost a third of its budget in 2015 subsidising pensions - a ratio only likely to increase as the population ages and grandchildren are born abroad.

"To put it very simply, millions of workers emigrating and not paying anything in means no pensions for millions of retirees," said Janusz Kobeszko, analyst at the Sobieski Institute, a Warsaw-based think tank.

Demographic projections show Poland will lose nearly 3 million people in the next 25 years, partly through migration and partly because women who leave Poland are more likely to have children than those who stay, official data shows. While Poland's pensions crisis looms, a more immediate migration-related problem is presenting itself: shortages of labour at home. In the Opole region, which has lost an estimated 10 to 15 percent of its population due to migration - the highest rate in the country - local businesses cannot find construction workers, carers, security guards, salespeople and cleaners.

One solution would be to welcome immigrants from elsewhere, perhaps from neighbouring Ukraine - so far immigrants make up less than 1 percent of the population. But despite the difficulty companies have in finding workers, unemployment is still high, at 11.3 percent, because the jobs on offer are low-skilled and low-paid. And that makes encouraging more immigrants politically risky, says Marta Jaroszewicz, analyst at the Centre for Eastern Studies, a Warsaw-based think tank. "Politicians don't want to talk about this, as voters think we can't afford immigrants," she said.

Similar patterns and problems are occurring all across ex-Communist countries of eastern Europe which are now EU members. In particular, Bulgaria's population is projected to shrink by a quarter come 2060. There too, migration is a major factor.

EURO-ORPHANS

Poland's dwindling population has brought social problems as well, says Aleksandra Walas, head of a social research centre in Opole, whose office is wedged in between a tax company for emigrants and a counter issuing documents for claiming child benefits abroad. In 2013, there were over 10,000 of what she describes as "euro-orphans" in the region - children with one or more parent working abroad. That number has risen 8 percent since 2008. Walas's team has also identified around 1,000 elderly people in the region who have been abandoned by their emigrating families, something she warns will become more of an issue as the country's remaining population gets older. Pawel Landwojtowicz, a family counsellor from Opole who is also a Catholic priest, said working abroad is a factor in around 60 percent of the cases he encounters.

"I've seen traditional, multi generational families torn apart by emigration, never to quite recover."

Halina, a hairdresser from the Opole region, says her family is better off financially because her husband has been a construction worker in Berlin for nearly two decades. But she adds there is no doubt it has put a strain on them.

"I've had to be both mother and father to my two kids, and my son used to resent his dad for not being around."

Poland's government offers guidance to people thinking about coming back, but former Prime Minister Donald Tusk's plans to attract large number of emigrants back with tax breaks and soft loans did not materialise. Tusk is now working in Brussels. Those tracking Polish migration say that the outward flow will not be reversed as long as wages are significantly higher in other parts of Europe. A recent study showed that only a half of Polish emigrants were planning to return home. Since 2004, some 70,000 Poles have taken up British and German passports.

"Let's be realistic. They're not coming back," said Jacek Suski, head of the labour office in Opole. "Unless it's to lay their bones to rest."

[Demeter]

57. Revealed 30 years on: secret role of Henry Kissinger in Bhopal tragedy

http://www.heraldscotland.com/news/home-news/revealed-thirty-years-on-the-secret-role-that-americas-henry-kissinger-played-in-the-.26048852

Former US Secretary of State Henry Kissinger put pressure on the Indian Government to agree a legal settlement that let the American chemical company Union Carbide off the hook for the 25,000 people killed by the toxic gas disaster in Bhopal 30 years ago. A letter released under freedom of ­information legislation reveals that the late Indian steel magnate JRD Tata wrote secretly to the Indian prime minister, Rajiv Gandhi, in May 1988 conveying ­Kissinger's concern about the delays in reaching agreement on the compensation to be paid to victims. At the time, Kissinger - who became notorious around the world in the 1970s for being involved in some of most hawkish US foreign policy decisions - was an adviser to Union Carbide and other major US corporations.

Kissinger thought the company was prepared to make a "fair and generous settlement" that "would effectively counter any attack or criticism" because it was more than interim amounts suggested by Indian courts, Tata wrote. In February 1989, the Indian government agreed a settlement of $470 million (£300m). This has since been widely derided as completely inadequate given the horrendous scale and persisting legacy of the disaster on December 3, 1984. Crucially, as part of the deal, all charges against Union Carbide and its managers were dropped - though this was subsequently overturned by India's Supreme Court in 1991.

The letter, obtained by Bhopal activists, is important because it confirms what many have long suspected: that the US and Tata were complicit in allowing Union Carbide to evade responsibility for the world's worst industrial accident. Activists have also released two diplomatic cables from the online campaign group WikiLeaks, showing that Kissinger helped build the pesticide plant that showered Bhopal with poisonous gas. When he was US Secretary of State in 1976 he facilitated a bank loan of $1.3m to Union Carbide to cover 45% of the cost of building the plant.

Five groups representing Bhopal survivors have now written to President Barack Obama criticising the "central role played by the US Government in the creation of the disaster in Bhopal and in the denial of justice to the victims". They accuse the US administration of protecting corporate profits over the lives and health of ordinary people. In 2001, Union Carbide was taken over by the US chemical giant Dow, which is now worth $58 billion. Both companies have repeatedly refused to appear in courts in India to answer charges against them, most recently on November 12.

"Obama made British Petroleum pay $20bn for the Gulf of Mexico oil spill," said Balkrishna Namdeo of survivors' group the Bhopal Gas Peedit Nirashrit Pensionbhogee Sangharsh Morcha.

"We would like to ask him how his conscience allows him to support two US corporations that paid a tiny fraction of that amount for 2000 times more fatalities."

MORE

[xchrom]

59. Russia's Ruble Interference Is Working

http://www.businessinsider.com/r-ruble-rebounds-sharply-from-lows-as-exporters-sell-dollars-2014-12

MOSCOW (Reuters) - Russia's ruble rose on Friday to its strongest levels in more than three weeks, in a sharp rebound from its recent all-time lows, after the government ordered exporters to sell some of their hard currency revenues.

The ruble plunged to all-time lows last week on heavy falls in the price of oil, the backbone of the Russian economy, and Western sanctions over the Ukraine crisis that have made it near impossible for Russian firms to borrow on Western markets.

But it has rebounded after authorities took steps to halt its slide and bring down inflation, which after years of stability threatens President Vladimir Putin's reputation for ensuring the country's prosperity.

Those measures included a hike in interest rates, curbs on grain exports and informal capital controls such as orders to large oil and gas exporters Gazprom and Rosneft to sell some of their dollar revenues.



Read more: http://www.businessinsider.com/r-ruble-rebounds-sharply-from-lows-as-exporters-sell-dollars-2014-12#ixzz3N0LqzhuL

[Demeter]

61. Interference? That's a rather judgmental word for a sovereign nation with its own currency

Intervention would be much more accurate....defending the ruble from outside manipulation.

[xchrom]

60. Russia's Finance Minister Says The Economy Could Shrink By 4% Next Year

http://www.businessinsider.com/r-russias-finance-minister-sees-economy-shrinking-4-percent-in-2015-2014-12

MOSCOW (Reuters) - Finance Minister Anton Siluanov said on Friday that the Russian economy could contract by 4 percent next year and that the budget could have a deficit of more than 3 percent of gross domestic product if oil prices average $60 a barrel.

Siluanov also told journalists that his ministry had recalculated its budget forecasts to take into account oil prices at $60 a barrel and that he expected the ruble's average exchange rate to be around 51 rubles per dollar in 2015.

He added that state bank VTB <vtbr.mm> could get 100 billion rubles ($1.9 billion) from the National Wealth Fund by the end of the year and 150 billion rubles more in 2015, while Gazprombank <gzpri.rts> could get 70 billion rubles this or next year.



Read more: http://www.businessinsider.com/r-russias-finance-minister-sees-economy-shrinking-4-percent-in-2015-2014-12#ixzz3N0MJduC1

[Demeter]

62. And Russia would STILL be ahead of the EU and the USA-Canada

[Demeter]

63. Looks Like we are going into extra innings on this thread, folks

Merry Christmas, Tansy Gold, wherever you are!

[Demeter]

64. Today is Boxing Day (December 26th)

Boxing Day is a holiday traditionally celebrated the day following Christmas Day, when servants and tradespeople would receive gifts, known as a "Christmas box", from their bosses or employers, in the United Kingdom, Canada, Hong Kong, Australia, New Zealand, Kenya, South Africa, Guyana, Trinidad and Tobago, Jamaica and other Commonwealth nations.

Today, Boxing Day is the bank holiday that generally takes place on 26 December. It is also a great time for shopping bargains, as we all know...

It was started in the UK about 800 years ago, during the Middle Ages. It was the day when the alms box, collection boxes for the poor often kept in churches, were traditionally opened so that the contents could be distributed to poor people. Some churches still open these boxes on Boxing Day.

It might have been the Romans that first brought this type of collecting box to the UK, but they used them to collect money for the betting games which they played during their winter celebrations!

In Holland, some collection boxes were made out of a rough pottery called 'earthenware' and were shaped like pigs. Perhaps this is where we get the term 'Piggy Bank'!

The Christmas Carol, Good King Wenceslas, is set on Boxing Day and is about a King in the Middle Ages who brings food to a poor family.

It was also traditional that servants got the day off to celebrate Christmas with their families on Boxing Day. Before World War II, it was common for working people (such as milkmen and butchers) to travel round their delivery places and collect their Christmas box or tip. This tradition has now mostly stopped and any Christmas tips, given to people such as postal workers and newspaper delivery children, are not normally given or collected on Boxing Day.

Boxing Day has now become another public holiday in countries such as the UK, Canada, Australia and New Zealand. It is also the traditional day that Pantomimes started to play. There are also often sports played on Boxing Day in the UK, especially horse racing and football matches!

The 26th December is also St. Stephen's Day. Just to confuse things, there are two St. Stephens in history! The first St. Stephen was a very early follower of Jesus and was the first Christian Martyr (a person who dies for their religious beliefs). He was stoned to death by Jews who didn't believe in Jesus.

The second St. Stephen was a Missionary, in Sweden, in the 800s. He loved all animals but particularly horses (perhaps why there is traditionally horse racing on boxing day). He was also a martyr and was killed by pagans in Sweden. In Germany there was a tradition that horses would be ridden around the inside of the church during the St. Stephen's Day service!

http://www.whychristmas.com/customs/boxingday.shtml

[Demeter]

65. We are now into the 12 Days of Christmas

The 12 Days of Christmas are now most famous as a song about someone receiving lots of presents from their 'true love'. However, to get to the song there had to be the days to start with!

The 12 Days of Christmas start on Christmas Day and last until the evening of the 5th January - also known as Twelfth Night. The 12 Days have been celebrated in Europe since before the middle ages and were a time of celebration.

The 12 Days each traditionally celebrate a feast day for a saint and/or have different celebrations:

Day 1 (25th December): Christmas Day - celebrating the Birth of Jesus
Day 2 (26th December also known as Boxing Day): St Stephen’s Day. He was the first Christian martyr (someone who dies for their faith). It's also the day when the Christmas Carol 'Good King Wenceslas' takes place.
Day 3 (27th December): St John the Apostle (One of Jesus's Disciples and friends)
Day 4 (28th December): The Feast of the Holy Innocents - when people remember the baby boys which King Herod killed when he was trying to find and kill the Baby Jesus.
Day 5 (29th December): St Thomas Becket. He was Archbishop of Canterbury in the 12th century and was murdered on 29th December 1170 for challenging the King’s authority over Church.
Day 6 (30th December): St Egwin of Worcester.
Day 7 (31st December): New Years Eve (known as Hogmanay in Scotland). Pope Sylvester I is traditionally celebrated on this day. He was one of the earliest popes (in the 4th Century). In many central and eastern European countries (including Austria, Bosnia and Herzegovina, Croatia, the Czech Republic, Germany, Hungary, Israel, Italy, Luxembourg, Poland, Slovakia, Switzerland and Slovenia) New Years Eve is still sometimes called 'Silvester'. In the UK, New Years Eve was a traditional day for ‘games’ and sporting competitions. Archery was a very popular sport and during the middle ages it was the law that it had to be practised by all men between ages 17-60 on Sunday after Church! This was so the King had lots of very good archers ready in case he need to go to war!
Day 8 (1st January): 1st January - Mary, the Mother of Jesus
Day 9 (2nd January): St. Basil the Great and St. Gregory Nazianzen, two important 4th century Christians.
Day 10 (3rd January): Feast of the Holy Name of Jesus. This remembers when Jesus was officially 'named' in the Jewish Temple. It's celebrated by different churches on a wide number of different dates!
Day 11 (4th January): St. Elizabeth Ann Seton, the first American saint, who lived in the 18th and 19th centuries. In the past it also celebrated the feast of Saint Simon Stylites (who lives on a small platform on the top of a pillar for 37 years!).
Day 12 (5th January also known as Epiphany Eve): St. John Neumann who was the first Bishop in American. He lived in the 19th century.

Twelfth Night

Twelfth Night was a big time of celebration with people holding large parties. During these parties, often the roles in society were reversed with the servants being served by the rich people. This dated back to medieval and Tudor times when Twelfth Night marked the end of 'winter' which had started on 31st October with All Hallows Eve (Halloween).

At the start of Twelfth Night the Twelfth Night cake was eaten. This was a rich cake made with eggs and butter, fruit, nuts and spices. The modern Italian Panettone is the cake we currently have that's most like the old Twelfth Night cake.

A dried pea or bean was cooked in the cake. Whoever found it was the Lord (or Lady) of Misrule for night. The Lord of Misrule led the celebrations and was dressed like a King (or Queen). This tradition goes back to the Roman celebrations of Saturnalia. In later times, from about the Georgian period onwards, to make the Twelfth Night 'gentile', two tokens were put in the cake (one for a man and one for a women) and whoever found them became the the 'King' and 'Queen' of the Twelfth Night party.

In English Cathedrals during the middle ages there was the custom of the 'Boy Bishop' where a boy from the Cathedral or monastery school was elected as a Bishop on 6th December (St Nicholas Day) and had the authority of a Bishop (except to perform Mass) until 28th December. King Henry VIII banned the practise in 1542 although it came back briefly under Mary I in 1552 but Elizabeth I finally stopped it during her reign.

During Twelfth Night it was traditional for different types of pipes to be played, especially bagpipes. Lots of games were played including ones with eggs. These included tossing an egg between two people moving further apart during each throw - drop it and you lose and passing an egg around on spoons. Another popular game was 'snapdragon' where you picked raisins or other dried fruit out of a tray of flaming brandy!

The first monday after Christmas feast has finished was known as ‘Plough Monday’ as this was when farming work would all begin again!

In many parts of the UK, people also went Wassailing on Twelfth Night.

Twelfth Night is also known as Epiphany Eve. In many countries it's traditional to put the figures of the Wise Men/Three Kings into the Nativity Scene on Epiphany Eve ready to celebrate Epiphany on the 6th January.

It's also traditional to take your Christmas decorations down following Twelfth Night.

Twelfth Night is also the name of a famous play written by William Shakespeare. It's thought it was written in 1601/1602 and was first performed at Candlemas in 1602, although it wasn't published until 1623.

http://www.whychristmas.com/customs/12daysofchristmas.shtml

I had seen this somewhere...the drummer she kept was a ringer for Ringo

[Demeter]

66. Everybody riffs off this one!

[Demeter]

68. I'm going out to pump up the economy---be back later today here

And for the Weekend, we'll break in a new thread...Cheers!

[Demeter]

72. I like this group! For our friends in Ukraine

"Carol of the Bells" is a popular Christmas carol composed by Mykola Leontovych in 1904 with lyrics by Peter J. Wilhousky. The song is based on a folk chant known in Ukrainian as "Shchedryk". Wilhousky's lyrics are copyrighted, although the original musical composition is not.

The song is recognized by a four-note ostinato motif. It has been arranged many times for different genres, styles of singing and settings and has been covered by artists and groups of many genres: classical, metal, jazz, rock, and pop. The piece has also been featured in films, television shows, and parodies.

The song is based on a traditional folk chant. It was associated with the coming New Year, which, in pre-Christian Ukraine, was originally celebrated with the coming of spring in April. (This explains why the original Ukrainian text speaks about a swallow returning and lambs being born.)

With the introduction of Christianity to Ukraine, and the adoption of the Julian calendar, the celebration of the New Year was moved from April to January, and the holiday with which the chant was originally associated became Malanka (Ukrainian: Щедрий вечір Shchedry vechir), the eve of the Julian New Year (the night of 13–14 January in the Gregorian calendar). The songs sung for this celebration are known as Shchedrivky.

The original Ukrainian text tells the tale of a swallow flying into a household to proclaim the plentiful and bountiful year that the family will have. The title is derived from the Ukrainian word for "bountiful". The period for the birth of animals and the return of swallows to Ukraine, however, does not correspond to the current calendar season of winter.

Composition and translation

It was introduced to Western audiences by the Ukrainian National Chorus during its concert tour of Europe and the Americas, where it premiered in the United States on October 5, 1921 at Carnegie Hall. A copyrighted English text was created by Peter Wilhousky in the 1930s, and since then it has been performed and sung during the Christmas season. Its initial popularity stemmed largely from Wilhousky's ability to perform it to a wide audience in his role as arranger for the NBC Symphony Orchestra, trained especially for Arturo Toscanini. The song would later be assisted to further popularity by featuring in television advertisements for champagne. An alternate English version ("Ring, Christmas Bells&quot featuring more Nativity-based lyrics, written by Minna Louise Hohman in 1947, is also common.

The original work was intended to be sung a cappella by mixed four-voice choir. Two other settings of the composition were also created by Leontovych: one for women's choir (unaccompanied) and another for children's choir with piano accompaniment. These are rarely performed or recorded.

https://en.wikipedia.org/wiki/Carol_of_the_Bells

[MattSh]

75. Did you know there's a religious aspect to this whole mess in Ukraine?

And the plot thickens....

[Demeter]

76. Okay, you can't just post and run like that

Which religious aspect are you referring to? Catholic/Orthodox/Jew/Moslem/Other/All of the Above?

[MattSh]

82. Why not? OK... If you insist...

First some current background.

First thing to note is although many Ukrainians associate themselves with a religion, they are not a particularly religious lot. The Soviet anti-religion campaigns had a lot to do with that. This is particularly true in the cities; more rural areas are more religious.

Though there are numerous religions in Ukraine, the ones to watch are the Catholics, mainly the Greek Catholics, and the Orthodox religions. The Catholics are mostly in the west; the Orthodox are mostly in the East. So, Ukrainians lean more Catholic; Russians lean more Orthodox. A number of churches in the war zone have gone up in flames, and it's not an accident. And the Orthodox are split into further sub-groups.

From Wikipedia:

The 2006 Razumkov Centre survey indicates:[8]

14.9 percent of believers identify themselves with the Ukrainian Orthodox Church - Kiev Patriarchate;
10.9 percent are adherents of Ukrainian Orthodox Church (Moscow Patriarchate) (which has the largest number of churches in Ukraine and claims up to 75% of the Ukrainian population[9]);
5.3 percent belonged to the Ukrainian Greek Catholic Church (sometimes referred to as the Uniate, Byzantine, or Eastern Rite Church);
1.0 percent belonged to the Ukrainian Autocephalous Orthodox Church;
0.6 percent belonged to the Roman Catholic Church;
0.9 percent identified themselves as Protestants (Pentecostal, Baptist, Lutheran, Mennonites, Adventists);
0.1 percent follow Jewish religious practices;
3.2 percent said they belonged to "other denominations".
62.5 percent stated they are not religious or did not clearly identified their church allegiance (many Orthodox Ukrainians do not clearly self-identify with a particular denomination and, sometimes, are even unaware of the affiliation of the church they attend as well as of the controversy itself, which indicates the impossibility to use the survey numbers as an indicator of a relative strength of the church).

Notice the Kiev Patriarchate and the Moscow Patriarchate. The Moscow group are the most frequent target of ire of the west Ukrainians, but a recent proposal before the Rada (parliament) is claiming there is no difference. Orthodox is Orthodox and Orthodox is under the control of Moscow. See where we're going here?

Some more historical background, by he who should not be mentioned here at DU:


PART ONE: a preliminary excursion in ancient history

Innocent III
1204 - The Eastern Crusade of Pope Innocent III:

Most people mistakenly believe that the Crusades only happened in the Middle-East and that they were only directed at Islam. This is false. In fact, while the official excuse for western imperialism at that time was to free the city of Jerusalem from the "Muslim infidels" the crusades also were aimed at either exterminating or converting the "Greek schismatics" i.e. the Orthodox Christians. The most notorious episode of this anti-Orthodox crusade is the sack of Constantinople by the Crusaders in 1204, during the 4th Crusade, in which the city was subjected to three days of absolutely grotesque pillaging, looting and massacres by the western "Christians" who even looted and burned down Orthodox churches, monasteries and convents, raped nuns on church altars and even placed a prostitute on the Patriarchal throne. This outpouring of genocidal hatred was hardly a fluke, but it was one of the earliest manifestation of something which would become a central feature of the mindset and ideology of the Latin Church.

There is, however, another no less important episode in the history of the Latin hatred for the Orthodox Church which is far less known.

Gregory IX
1242 - The Northern Crusades of Pope Gregory IX:

Unlike his predecessor who directed his soldiers towards the Holy Land, Pope Gregory IX had a very different idea: he wanted to convert the "pagans" of the North and East of Europe to the "true faith". In his mind, Orthodox Russia was part of these "pagan lands" and Orthodox Christians were pagans too. His order to the Teutonic Knights (the spiritual successors of the Franks who had pillaged and destroyed Rome) was to either convert or kill all the pagans they would meet (this genocidal order was very similar to the one given by Ante Pavelic to his own forces against the Serbs during WWII: convert, kill or expel). In most history books Pope Gregory IX has earned himself a name by instituting the Papal Inquisition (which has never been abolished, by the way), so it is of no surprise that this gentleman was in no mood to show any mercy to the "Greek schismatics". This time, however, the Pope's hordes were met by a formidable defender: Prince Alexander Nevsky.

http://vineyardsaker.blogspot.co.uk/2014/02/ukrainian-nationalism-its-roots-and.html

[Demeter]

85. Okay, it's complicated and has roots going back centuries

and like the Irish, the Jews, the Muslims, and the Southern Confederacy, the Central Europeans never forget a slight, let alone a massacre.

I can see that.

I confess to being eclectic....as a UU family, we here at home celebrate everything and revere anyone who rises above the brutality of the past and develops anything in line with the Enlightenment. After all, Poland WAS at one time the ONLY Universalist nation on earth, for the reign of one King.... But mostly, I'm pagan. My Great Aunt, last time I visited her before her death, asked me if my children were still heathens, they having never been baptized...

The symbolism of the religions of the world is awesome and inspiring, but when the rubber hits the road...fascism by any name doesn't wear well on me...I could say the only religion I recognize is music. And it has to be real music, not noise.

[Demeter]

73. Early Efforts to Inflate the DJIA another 100 pts. have been thwarted

http://tools.investing.com/market_quotes.php?

Reposted for those who must be up to the minute....

[Demeter]

74. Michigan’s Population Creeping Up As Autos Recover

http://detroit.cbslocal.com/2014/12/26/michigans-population-creeping-up-as-autos-recover/

After years of declining population, industrial Michigan finally seems to be on track toward growth again, the state’s demographer says.

The U.S. Census reported this month that Michigan’s population rose a razor-thin 0.1 percent to 9.91 million in 2014, the third straight increase. Despite the rise, Michigan dropped to the 10th most-populous state this year as North Carolina jumped to No. 9.

And the number of people moving to Michigan continues to trail the number migrating elsewhere, with births accounting for the slight increase.

Even so, the small rise “is a welcome change from the mid- to late 2000s, when Michigan experienced several years of consecutive population losses,” state Demographer Eric Guthrie said in a report this week.

According to the U.S. Census report released Tuesday, Michigan’s population rose by 11,684 between July 2013 and July 2014. The population is up an estimated 34,141 from 2011 — about a third of a percent...

[Demeter]

77. “Summer” Rerun: So Where, Exactly, Did Lehman’s $130 Billion Go?

http://www.nakedcapitalism.com/2014/12/summer-rerun-exactly-lehmans-130-billion-go.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

YVES: THIS RERUN POST from 2009 serves as a reminder of issues that were hot in the aftermath of the crisis that were not addressed adequately, if at all. Here, we discuss the mystery of the magnitude of Lehman’s losses. We pointed out that they are so large and impossible to explain that there had to be accounting fraud, but the bankruptcy overseer had its own reasons not go to there.

Note that this post was published eights months before Anton Valukus released his report on the Lehman bankruptcy, which described the Repo 105 ruse that allowed Lehman to hide over $50 billion of dodgy assets at quarter end and thus not include them in its financial reports. As we wrote in March 2010:

Quite a few observers, including this blogger, have been stunned and frustrated at the refusal to investigate what was almost certain accounting fraud at Lehman. Despite the bankruptcy administrator’s effort to blame the gaping hole in Lehman’s balance sheet on its disorderly collapse, the idea that the firm, which was by its own accounts solvent, would suddenly spring a roughly $130+ billion hole in its $660B balance sheet, is simply implausible on its face. Indeed, it was such common knowledge in the Lehman flailing about period that Lehman’s accounts were sus that Hank Paulson’s recent book mentions repeatedly that Lehman’s valuations were phony as if it were no big deal.

Well, it is folks, as a newly-released examiner’s report by Anton Valukas in connection with the Lehman bankruptcy makes clear. The unraveling isn’t merely implicating Fuld and his recent succession of CFOs, or its accounting firm, Ernst & Young, as might be expected. It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and Sarbox violations.

As we now know, the fact that so many well-placed people might be implicated if financial fraud at Lehman had been investigated meant it would never go further than the Valkas report. That analysis was generally regarded as taking the view that “this stuff might look stinky but it wasn’t actually fraud” given that the Repo 105 chicanery in particular had the blessing of a UK law firm, Linklaters. We argued that there was enough smoke that a deeper investigation was warranted. Oh, and for reference, we kept tabs on the Lehman black hole and it got bigger than as of the date of the post below.



This post first ran on July 10, 2009


...What has caught my attention from the get-go is that blame was very quickly pinned on the disorderly bankruptcy. While I am sure that is a major factor, it is now being played up in the press as if it was the sole cause. I find it curious that Bryan Marsal, the president of Lehman and more important, co-chief executive officer of Alvarez & Marsal, the restructuring consultant for US bankruptcy, is taking the time to tell this story, per the CNBC clip below. There happens to be a piece in the Financial Times: tonight on Lehman (hat tip reader Don B) as well as this video from last week via reader Hubert, which says there might be a bit of a PR effort afoot. VIDEO AT LINK Marsal sticks with the “disorderly bankruptcy” message, and invokes Public Enemy Number Two: derivatives (Number One is credit default swaps). And he maintains that the bank was felled by a liquidity, not a solvency problem.

Why is this all a tad convenient? Raising the issue of dubious accounting now, which is fraud, opens up a whole new can of worms. That would seem to be enough of a reason. But it seems pretty likely that dubious asset valuations played a role. Remember, David Einhorn was very critical of the Lehman’s accounting; it was very highly levered. Not much would have to be wrong for the bank to be bust. An ex-Lehman employe also has doubts:

I’ve always thought the fixed income portfolio was a much more promising source to look for the shortfall…they took no writedowns whatsoever on the portfolio through the fall/winter, despite a larger (relative to size) mix of mortgage and other toxic waste (leveraged finance, bridge to nowhere loans) than MER, C, etc. The Level 3 bucket grew substantially, until investors began to catch on & focus on that metric…at which time they moved a bunch of the Level 3 stuff off balance sheet (through setting up JV’s like One William, R3, etc)…all to avoid marks that would have created a bigger capital hole than they felt they could fill.

Another indicator that things might not be what they seem: the UK administrator says that there were 100 companies in that operation, and was stunned by its complexity. In a separate development described in the FT, Alvaraz & Marsal is trying to come up with a global plan, which seems peculiar given the national nature of bankruptcy regimes. And the UK administrator, which is overseeing the biggest non-US piece (and may also have a bone of contention, given how $8 billion was drained by the parent from the UK at the 11th hour) is having none of it:

Now, however, the liquidator to the parent company, Lehman Brothers Holdings Incorporated, is trying to change this mentality among the affiliates. Alvarez & Marsal, US restructuring experts, want to recreate some ghost version of the deceased bank through the global protocol, which aims to encourage each affiliate to focus on maximising the size of the overall pie rather than focusing only on their slice.

To that end, they have drawn up an agreement with seven administrators representing 27 Lehman companies – with more expected to sign. This promises much closer co-operation, the development of a single system for adjudicating internal claims and more sharing of data….

Crucially, however, not all the administrators are on board. PwC, in charge of Lehman’s main London-based European operations, known as Lehman Brothers International (Europe) and the most pivotal operation outside the US, has flatly refused to sign up.

Tony Lomas, head of the PwC team, is a veteran of cross-border corporate collapses from Robert Maxwell’s media empire to failed carmaker MG Rover and the European arm of Enron, the energy company. “My experience tells me [the protocol] is aspirational and lacks practicality,” he says. “It is sometimes not even practical to reduce an agreement between just two insolvency practitioners in different estates to writing.”

Back to the main plot, the $130 billion that went poof.

Lehman had $6 trillion of derivatives. But if they included credit default swaps, they were presumably hedged with offsetting positions, so the notional amount would way overstate real exposures. And another portion was probably plain vanilla stuff like interest rate swaps, which would not have a lot of latitude for pricing disputes. If Lehman was done in by adverse market conditions and dirty tricks by the rest of the banking industry to the tune of $130 billion, wouldn’t the counterparties to Lehman’s losing positions be showing gains?

Where this might come back is via the repos used to fund derivative positions. I will confess to not having tracked down Lehman’s final 10-Q, but a normal I-Bank is funded roughly 50% by repos, so say $330 billion. Let us make generous assumptions, that Lehman was using 40% structured credits as collateral. And remember, thanks to the 2005 bankruptcy laws, the counterparties can grab collateral. They don’t have to go into the bankruptcy queue.

Collateral haircuts went through the roof when Lehman went down:

http://www.nakedcapitalism.com/wp-content/oldimages/nakedcapitalism/1/_rWY3qGfe6gc/SlbAANEUl2I/AAAAAAAACGU/Tkydl-t6VTY/s400/Picture+31.png

But even with a 20% spike in repo haircuts, we get only to $26 billionish. Even if the Lehman counterparties were jerks and upped the haircuts by 30%, it still only gets you to around $40 billion. The reason I am particularly suspicious of Alvarez & Marsal is their role is badly conflicted. If you listen to the recording, Marsal argues that Lehman was not handled properly, and stresses that the board was shocked by the result. They had assumed an “orderly transition” meaning a sale, or bailout like Fannie. The problem is that Alvarez & Marsal was advising the Lehman board before the bankruptcy. So Marsal’s statement is tantamount to an admission that his firm advised the board badly. And even more peculiarly, in January A&M issued a report for the board in December contending that the “chaotic” bankruptcy was the cause (by implication the sole cause) of the big losses. But then they pegged the damage resulting from the disorder at only $50 to $75 billion. No wonder they are out doing the PR circuit. They want everyone to forget that earlier $50 to $75 billion range.

Here is a section from a December Wall Street Journal article:

As much as $75 billion of Lehman Brothers Holdings Inc. value was destroyed by the unplanned and chaotic form of the firm’s bankruptcy filing in September, according to an internal analysis by the company’s restructuring advisers.

A less-hurried Chapter 11 bankruptcy filing likely would have preserved tens of billions of dollars of value…An orderly filing would have enabled Lehman to sell some assets outside of federal bankruptcy-court protection, and would have given it time to try to unwind its derivatives portfolio in a way that might have preserved value, the study says.

We now have the interesting question, :”If the board was told as much as $75 billion was due to the chaos, pray tell where did the other $55 billion go?” And the assertion that Chapter 11 would have produced a vastly better outcome is questionable. As we pointed out then:

Here is where readers are encouraged to correct me if I have something wrong or a bit askew. I was under the very strong impression that securities firms do not decay in an orderly fashion, but instead collapse rapidly once certain triggers are breached, making it well-nigh impossible to contain the unwind. In fact, you’d need pretty substantial changes in both bankruptcy law and the way that trading counterparties deal with each other to have the sort of managed process that the A&M reports argues should have taken place.

Specifically:

1. Once a firm is downgraded beyond a certain threshold, any counterparties that trade with it will be downgraded due to their exposures. And when other firms stop being willing to enter into repos (which do involve a credit exposure) a securities firm is toast. Liquidity is the life blood of a trading firm. And a bankruptcy filing has the same effect. From Jim Bianco:

If Lehman does file, Moody’s has to downgrade their counter-party rating to junk. This forces everyone to stop doing business with Lehman. If you do business with a junk counter-party, you risk your rating falling to junk as well (you are only as good as your shakiest counter-party). Most buy-side accounts have fiduciary rules that bar them from doing business with a junk rated counter-party. Recall that this was the trigger that buried Bear.

No way that Moody’s will agree to keep a bankrupt broker with an investment grade counter-party risk rating.

2. The A&M report appears to have ignored the 2005 bankruptcy law changes that rendered the claim made above, that Lehman could have blocked the unwind of its derivatives book via a Chapter 11 filing, incorrect. From the Financial Times:

Wall Street unwittingly created one of the catalysts for the collapse of Bear Stearns, Lehman Brothers and American International Group by backing new bankruptcy rules that were aimed at insulating banks from the failure of a big client, lawyers and bankers say.

The 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company’s assets until a court decides how to apportion them among creditors.

The new rules were intended to insulate financial companies from the collapse of a large counterparty, such as a hedge fund, by making it easier for them to unwind trades and retrieve collateral.

However, experts say the new rules might have accelerated the demise of Bear, Lehman and AIG by removing legal obstacles for banks and hedge funds that wanted to close positions and demand extra collateral from the three companies.

“The changes were introduced to promote the orderly unwinding of transactions but they ended up speeding up the bankruptcy process,” said William Goldman, a partner at DLA Piper, the law firm. “They wanted to protect the likes of Lehman and Bear Stearns from the domino effect that would have ensued had a counterparty gone under. They never thought the ones to go under would have been Lehman and Bear.”…

The changes in the code expanded the scope and definition of financial transactions not covered by bankruptcy rules to include credit default swaps and mortgage repurchase agreements – products used widely by Lehman, Bear and AIG….

Lawyers said the 2005 exemptions also could apply to non-financial companies, potentially complicating the bankruptcy process of any company that uses derivatives. Stephen Lubben, professor at Seton Hall University School of Law, said: “These provisions affect a non-financial firm, such as a car company or an airline, because they also engage in derivatives trading.”.

Now perhaps the Wall Street Journal summary does the A&M report a disservice, and they did correctly parse out any that might have been spared the 2005 bankruptcy law changes. But the FT article gives the impression these changes included most if not all derivatives.

And there is another issue. Chapter 11 filings require debtor-in-possession financing (you need to keep paying bills while holding the creditors at the time of filing at bay). Lehman would have been a very big DIP. The financial community is a really small pond. Word of Lehman attempting to line up a big enough DIP would have lead to an immediate run on the firm. No counterparty wants to risk having trading assets frozen for months, perhaps longer.

So if the logic above is correct, the A&M report looks like a costly ass-covering exercise to protect the board from lawsuits. And the Journal did the board a favor by giving it reasonably prominent placement.

We were not alone in our skepticism. From Independent Accountant:

How interesting. A&M was hired before LEH’s bankruptcy. What if anything did A&M tell LEH before filing? Is A&M’s report designed to protect A&M from a malpractice suit for failure to warn LEH’s board of this at least, reasonably possible result? If A&M did not anticipate this $50+ billion disaster, why listen to A&M now? What does “value was destroyed” mean? Did an “Act of God” cause it? Aren’t derivatives a “zero-sum” game? If so, counterparties gained at LEH’s expense! Should LEH’s bankruptcy estate sue them? Or is A&M protecting these counterparties by saying value “destruction”, not transfer? Has LEH preference payments or fraudulent transfers to pursue? Does A&M recognize LEH’s counterparties may give it future referrals with nothing more to gain from LEH, a “repeat player advantage”? A better title for the WSJ article, “Lehman’s Chaotic Bankruptcy filing Destroyed Billions in Value”, would have been “Lehman’s Consultant Claims … “. The WSJ accepted A&M’s claims at face value. “Preserved value” or cost counterparties more? “This also terminated contracts”. Did the “Three Musketeers”, Henry Paulson (HP), Zimbabwe Ben (ZB) and Chris Cox (CC) know this on the night of 14 September?…

No matter, LEH’s board should not have filed on 15 September if it was not in the interest of LEH’s shareholders and creditors. PERIOD! Did Marsal discuss these “fundamental rules” with LEH’s board on the night of 14 September? If not, why not? Where was Harvey Miller (HM), LEH’s bankruptcy counsel on the night of 14 September? Should LEH sue HM for malpractice? The WSJ headline is revealing. Creating chaos may conceal bankruptcy fraud so intentional acts appear to result from oversight or mistake. Did that happen here? Is the SDNY US Attorney’s Office looking into this? The WSJ might have used this title, “Lehman Counterparties Screw Unsecured Creditors Out Of $50 Billion”.

Zero Hedge and Independent Accountant have also criticized A&M for incurring charges in the BK that look hard to justify, yet also taking the easy way out and skipping steps that would have increased recoveries for creditors.

Another example: in the video, Marsal mentions that his firm hired some 400 ex Lehman staffers to help unwind the trades, and threw out a $500,000 salary and a $500,000 bonus if recovery targets were met as a representative figure...The world happens to be awash in unemployed structured credit types these days, I would bet at least 300 of those 400 jobs could have been filled at much lower cost. But Alvarez & Marsal has no incentive to do that. Paying more makes it easier to hire people, and also makes their fees look more reasonable. And say “derivatives” and a BK judge will buy in, even if the skills required may not be all that high level. In the LTCM bankruptcy, Myron Scholes worked for a mere $250,000 a year, which in today’s dollars is about $330,000. Am I to believe in that there is good reason to pay more than the equivalent of $500,000 all in for a successful job? Well, sadly yes, pay escalated with perilous little justification, since most of the money supposedly made turned out to be smoke and mirrors, but those high water marks are still holding.

If readers have any idea where the $130 billion went, we’d be very curious to know. Please comment or ping us at [e-mail].

[Demeter]

78. How a Top Obama Crony Moved From Idaho To a $2 Million Washington Estate

IT'S NOT A PRETTY CHRISTMAS STORY....

https://firstlook.org/theintercept/2014/12/23/how-jim-messina-moved-from-idaho-to-2-million-dollar-washington-estate/

THIS OPERATOR COULD GIVE THE RNC A RUN FOR ITS MONEY....

[Demeter]

79. AN UPDATE ON THE 111 YEARS OF FLORIDA CONCENTRATION CAMP FOR BOYS: Dozier

http://www.tampabay.com/news/humaninterest/ground-truth-in-doziers-neglected-cemetery-a-search-for-lost-boys-and-the/2210734

ANOTHER HORRIBLE NOT-FOR-CHRISTMAS-CHEER STORY

[Demeter]

81. U.S. retailers likely to just meet holiday sales forecasts

http://www.reuters.com/article/2014/12/24/us-usa-holidaysales-idUSKBN0K218A20141224

READ IT AND WEEP

[Eugene]

83. Petrobras hit with U.S. class action suit over $98 billion in securities

Source: Reuters

Petrobras hit with U.S. class action suit over $98 billion in securities

BY WALTER BRANDIMARTE
Fri Dec 26, 2014 2:41pm EST

(Reuters) - Brazil's state-run oil company Petroleo Brasileiro SA and some of its executives were hit with a U.S. class action lawsuit by investors in $98 billion of the company's securities over an alleged kickback and bribery scheme.

News of the case helped knock Petrobras shares more than 4 percent lower. In mid-December, the stock hit its lowest in nearly 10 years as a widening corruption probe caused the company to delay the release of its third-quarter earnings.

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The latest case was filed on Dec. 24 in Manhattan's federal court by the Labaton Sucharow law firm on behalf of the city of Providence, Rhode Island, which invested in Petrobras.

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Allegations include that the company made material misstatements about the value of its assets in bond offering documents.

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Read more: http://www.reuters.com/article/2014/12/26/us-brazil-petrobras-idUSKBN0K40MY20141226

[Demeter]

86. WEE are moving on to the Weekend Thread

I have no idea what the theme will be--I promised X a month of Xmas, so there must be some aspect of it I haven't sucked dry, yet....

Note: DJIA ended up another 23.5 points at 18053.71 on incredibly miniscule and probably completely HFT volume...the greed goes on. You can count on it, just like the return of the sun in a couple of weeks.

My cocktail-wiener rent-a-dog is sleeping in my arms as I type...forgive any typos I neglect to correct. Somebody is shooting off fireworks in the night...we have a lot of Asians in the community. They are probably practicing for New Year. It was a sunny, not so horrible day today, a welcome change over the previous weeks.

Sleep well, and find a new thread under your tree in the morning.