Weekend Economists At Animal Farm January 14-16, 2011

[Demeter]

I'm going to start us off, and then go to Swan Lake--I was given free tickets.

So today we talk to the animals, or at least, about them.

There are the classic Bear and Bull that describe the Markets:



and other animals to describe investors:



Goldman Sachs and other banksters



Day Traders



The canny investor

and our theme song for the day:

http://www.youtube.com/watch?v=EtlODX1Ba0M&feature=related

For those who can't stand Laurence Welk, the Bobby Darin version:

http://www.youtube.com/watch?v=nvMcKbo0vYc

[Demeter]

1. One Bank Down Already--in Georgia

Georgia banks are like peanuts, or potato chips, can't eat just one!


Oglethorpe Bank, Brunswick, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of the Ozarks, Little Rock, Arkansas, to assume all of the deposits of Oglethorpe Bank.

The two branches of Oglethorpe Bank will reopen during their normal business hours beginning Saturday as branches of Bank of the Ozarks...As of September 30, 2010, Oglethorpe Bank had approximately $230.6 million in total assets and $212.7 million in total deposits. Bank of the Ozarks did not pay the FDIC a premium for the deposits of Oglethorpe Bank. In addition to assuming all of the deposits of the failed bank, Bank of the Ozarks agreed to purchase essentially all of the assets.

The FDIC and Bank of the Ozarks entered into a loss-share transaction on $173.9 million of Oglethorpe Bank's assets....The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $80.4 million. Compared to other alternatives, Bank of the Ozarks' acquisition was the least costly resolution for the FDIC's DIF. Oglethorpe Bank is the third FDIC-insured institution to fail in the nation this year, and the first in Georgia. The last FDIC-insured institution closed in the state was Chestatee State Bank, Dawsonville, on December 17, 2010.

[Demeter]

2. The Class War Launched by America's Wealthiest Is Getting More Savage

http://www.alternet.org/story/149531/the_class_war_launched_by_america%27s_wealthiest_is_getting_more_savage?page=entire

It’s the corporations and the very wealthiest against all the rest of us. We’re losing.

In 1962 the wealthiest 1 percent of American households had 125 times the wealth of the median household. Now it’s 190 times as much. Is that a case of a rising tide lifting all boats, just a few of them a little bit higher? No.

From 1950 to 1965, median family income rose from $24,000 a year to $38,000 a year. That’s close to 4 percent a year, close to 60 percent over 15 years. That’s a rising tide.

In 1964 there was a big tax cut. That’s when things started to slow down for average people. By the mid-'70s the rise of the middle class stalled. From 1975 to 2010 median family income rose $42,936 to $49,777. That’s not quite 16 percent over 25 years, less than six-tenths of 1 percent per year.

Briefly, when taxes went up under Clinton, median income rose, peaked at $52,587 in 1999, and then, after Bush cut taxes, declined. Keep in mind that this is median family income. In the '50s and '60s, family income was usually earned by a single person. Today, family income normally comes from at least two people...

[some guy]

3. Enjoy the Ballet

:hi:

[Demeter]

10. TY. It Was a Lovely Performance

The dancers of the Russian National Ballet were all beautifully trained. The only quibble is they were so very young--not mature enough to express the passion of the story. The prince looked about 12.

I was in Detroit's Music Hall, having a sense of deja vu. I think I must have been there as a child--the Art Deco interior, in remarkably good shape, looked so very familiar! I doubt that my father would be able to remember, and everyone else is gone...I am the oldest woman in the family, aside from some second cousins and the fundie Aunt. And as I'm not even old enough to retire, this is troubling...I knew several of my Great Grands, and I'll be lucky if I ever see any grandchildren myself.

[bread_and_roses]

4. We're all supposed to be Boxer the cart-horse and "work harder"

for less, and watch that less eaten up by taxes and fees while the Napoleons loll in untaxed luxury.

I have long thought that we progressives miss the point when we campaign on "tax the rich" without including "un-tax" the rest of us. Part of the "Tea-Party" anger arises out of no one acknowledging that workers and even the "poor" are over-taxed - I've referenced this before and can't find it online but a few years ago a comparison was done in NY showing that the rich in NY were paying about 6% of their income in total taxes and fees while the lower tier income are paying 12%.

stolen from Joanne98 above: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x582053

from her cite: http://jdeanicite.typepad.com/i_cite/2011/01/wonk-room-conservative-statehouses-hand-out-corporate-tax-breaks-while-raising-taxes-on-low-income-citizens.html

Conservative Statehouses Hand Out Corporate Tax Breaks While Raising Taxes On Low-Income Citizens

Just days after calling for unity and “shared sacrifice” in their inaugural speeches, conservative governors, joined by legislators across the county, have proposed new tax cuts for business and top-earners alongside cuts to critical expenditures for low-income working families and tax increases on the working poor. As the Institute on Taxation and Economic Policy writes, in the face of massive budget shortfalls and declining revenue, many states “are poised to enact harmful cuts in existing state taxes that could weaken states’ ability to provide core public services for years to come.” “The threats to state tax fairness and adequacy are mounting by the day,” ITEP noted.

(there are links embedded in the original)

[Tansy_Gold]

5. This is exactly the argument that was used a few weeks ago

during the tax cut "debate": That certain aspects of the package would result in very low income wage earners actually paying MORE in income tax than before the "cut." But very few seem to get it.


TG, TT

[bread_and_roses]

6. Squealer's been hard at work to make sure people don't get it

...of course you know this, I'm not saying anything everyone here doesn't know...

[Demeter]

7. BP to reveal Rosneft transaction

BP is poised to unveil a big transaction with Rosneft in a deal that could lead to an exchange of shares between the Russian state oil company and the UK group.

BP confirmed that it was in talks with Rosneft “relating to a possible arrangement” but declined to comment further. The deal will be announced later on Friday night.

Read more >>
http://link.ft.com/r/6NPSBB/PR4YTT/9MEOW/LQZUWO/IY8MQT/N9/t?a1=2011&a2=1&a3=14

[Demeter]

8. The Progressive Case Against Obama's New Oval Office Team by Dean Baker

http://www.alternet.org/story/149509/the_progressive_case_against_obama%27s_new_oval_office_team?page=entire

...Both Daley and Sperling were major actors in the Clinton administration. At the center of the Clinton administration's economic policy was the idea that reducing the budget deficit was the key to boosting the economy. He held the view that if the deficit fell, then the private sector could be counted on to provide the demand to fill the gap created by less demand from the public sector...While the private sector did fill the gap in the late '90s, it did so from growth that was driven by a stock bubble. The stock bubble primarily fueled consumption, which hit a record high as a share of the GDP. It also led to somewhat higher investment, although much of this was in hare-brained, Internet start-ups of little or no value...The stock bubble burst over the years 2000-2002. The resulting recession featured what was at the time the longest period without job growth in the post-World War II era.

Three other features of Clinton-era policy made the recovery from this recession more difficult. First, Robert Rubin's high dollar policy led to a massive trade deficit. An overvalued dollar provides a huge subsidy to imports, and effectively imposes a tariff on exports...Banks like Citigroup (where Rubin took a top post after leaving the Clinton administration) may like a high dollar because it makes them more powerful in an international context, however it is about the worst imaginable policy from the standpoint of manufacturing workers. The high dollar is the main factor behind the loss of six million manufacturing jobs over the last 13 years. The basic story is simple: it is very hard to compete when your currency gives your competitors a 30 percent cost advantage....A second part of the story were the NAFTA-type trade deals that further depressed the wages of manufacturing workers by deliberately placing them in direct competition with low-paid workers in the developing world. The predicted and actual result of placing manufacturing workers in competition, while leaving highly paid professionals like doctors and lawyers largely protected, is an upward redistribution of income...This is bad to those who want to see the gains from growth broadly shared and also from the standpoint of sustaining high levels of demand. These trade deals transfer money from those most likely to spend it to people higher up the income ladder who are likely to save a larger share of their income...The Clinton economic agenda was also about setting Wall Street loose, even as the huge banks maintained their "too big to fail" training wheels. This meant that they could take enormous risks with creditors, knowing that the government will come to the rescue if necessary.

It was this growth path that laid the seeds for the economic wreckage that engulfed the country when the housing bubble finally burst in 2007. To be sure, the Bush administration left these policies in place and ignored all the warning signs, even as the dangers grew ever larger. For this it deserves at least an equal share of the blame. But there is little reason to believe the Clintonites would have changed course before disaster hit had they been at the helm.

...This is not just a matter of demanding atonement for past errors of calamitous proportions. There is the concrete issue of how the Obama administration is going to address the problem of near double-digit unemployment...

[burf]

9. I have soooooo given up on Obama. n/t

[Demeter]

11. You aren't alone

the Sock Puppet President.

[Demeter]

12. Goldman reveals fresh crisis losses

Goldman Sachs has revealed details of about $5bn in investment losses suffered during the crisis for the first time this week, in a move that will deepen the debate over companies’ financial disclosures.

The figures, issued as part of internal reforms aimed at silencing Goldman’s critics, show that the bank suffered $13.5bn in losses from “investing and lending” with its own funds in 2008.

Read more >>
http://link.ft.com/r/5F39HH/V1IEGE/YGZ3O/HDCJAK/3O9NQV/HK/t?a1=2011&a2=1&a3=13

[Demeter]

13. GM chickens boost hopes on avian flu

Scientists have genetically modified chickens to prevent the transmission of avian influenza, an innovation that could cut the risk of a lethal strain crossing to the human population and boost the poultry industry.

The chickens created at Cambridge and Edinburgh universities in the UK produce a genetic “decoy” molecule that mimics part of the replication machinery of the flu virus. This diverts the enzyme required for the virus to pass between cells – and stops the infection.

Read more >>
http://link.ft.com/r/0QSDPP/UUYIDB/FDFZE/HDCJFY/KEOABD/50/t?a1=2011&a2=1&a3=13

[Demeter]

14. MY LIFE IN COMICS--THANKS, DILBERT!

[Demeter]

15. THE WIKI-NOTES VERSION OF "ANIMAL FARM"

Animal Farm is a dystopian allegorical novella by George Orwell. Published in England on 17 August 1945, the book reflects events leading up to and during the Stalin era before World War II. Orwell, a democratic socialist, was a critic of Joseph Stalin and hostile to Moscow-directed Stalinism, especially after his experiences with the NKVD, and what he saw of the results of the influence of Communist policy (" ceaseless arrests, censored newspapers, prowling hordes of armed police" - "Communism is now a counter-revolutionary force"), during the Spanish Civil War. In a letter to Yvonne Davet, Orwell described Animal Farm as his novel "contre Stalin".

The original title was Animal Farm: A Fairy Story, but the subtitle was dropped by the US publishers for its 1946 publication and subsequently all but one of the translations during Orwell's lifetime omitted the addition. Other variations in the title include: A Satire and A Contemporary Satire. Orwell suggested for the French translation the title Union des républiques socialistes animales, recalling the French name of the Soviet Union, Union des républiques socialistes soviétiques, and which abbreviates URSA, which is the Latin for "bear", a symbol of Russia.

Time magazine chose the book as one of the 100 best English-language novels (1923 to 2005); it also places at number 31 on the Modern Library List of Best 20th-Century Novels. It won a Retrospective Hugo Award in 1996 and is also included in the Great Books of the Western World.

The novel addresses not only the corruption of the revolution by its leaders but also how wickedness, indifference, ignorance, greed and myopia destroy any possibility of a Utopia. While this novel portrays corrupt leadership as the flaw in revolution (and not the act of revolution itself), it also shows how potential ignorance and indifference to problems within a revolution could allow horrors to happen if smooth transition to a people's government is not satisfied.

[Demeter]

16. Plot summary

Old Major, the old boar on the Manor Farm, calls the animals on the farm for a meeting, where he compares the humans to parasites and teaches the animals a revolutionary song, "Beasts of England".

When Major dies three days later, two young pigs, Snowball and Napoleon, assume command and turn his dream into a philosophy. The animals revolt and drive the drunken and irresponsible Mr. Jones from the farm, renaming it "Animal Farm".

The Seven Commandments of Animalism are written on the wall of a barn. The most important is the seventh, "All animals are equal." All the animals work, but the workhorse, Boxer, does more than others and adopts the maxim — "I will work harder."

Snowball attempts to teach the animals reading and writing; food is plentiful; and the farm runs smoothly. The pigs elevate themselves to positions of leadership and set aside special food items ostensibly for their personal health. Napoleon takes the pups from the farm dogs and trains them privately. When Mr. Jones tries retaking the farm, the animals defeat him at what they call the "Battle of the Cowshed." Napoleon and Snowball struggle for leadership. When Snowball announces his idea for a windmill, Napoleon opposes it. Snowball makes a speech in favour of the windmill, whereupon Napoleon has his dogs chase Snowball away. In Snowball's absence, Napoleon declares himself leader and makes changes. Meetings will no longer be held and instead a committee of pigs will run the farm.

Using a young pig named Squealer as a mouthpiece, Napoleon announces that Snowball stole the idea for the windmill from him. The animals work harder with the promise of easier lives with the windmill. After a violent storm, the animals find the windmill annihilated. Napoleon and Squealer convince the animals that Snowball destroyed the windmill, although the scorn of the neighbouring farmers suggests the windmill's walls were too thin. Once Snowball becomes a scapegoat, Napoleon begins purging the farm, killing animals he accuses of consorting with Snowball. Meanwhile, Boxer takes up a second maxim: "Napoleon is always right."

Napoleon abuses his powers, making life harder for the animals; the pigs impose more control while reserving privileges for themselves. The pigs rewrite history, villainizing Snowball and glorifying Napoleon. Squealer justifies every statement Napoleon makes, even the pigs' alteration of the Seven Commandments of Animalism. "No animal shall sleep in beds" is changed to "No animal shall sleep in beds with sheets" when the pigs are discovered to have been sleeping in the old farmhouse. "No animal shall drink alcohol" is changed to "No animal shall drink alcohol to excess" when the pigs discover the farmer's whisky. "Beasts of England" is banned as inappropriate, as according to Napoleon the dream of Animal Farm has been realized. It is replaced by an anthem glorifying Napoleon, who appears to be adopting the lifestyle of a man. The animals, though cold, starving, and overworked, remain convinced through psychological conditioning that they are better off than they were when ruled by Mr. Jones. Squealer abuses the animals' poor memories and invents numbers to show their improvement.

Mr. Frederick, one of the neighbouring farmers, swindles Napoleon by buying old wood with forged money, and then attacks the farm, using blasting powder to blow up the restored windmill. Though the animals win the battle, they do so at great cost, as many, including Boxer, are wounded. Boxer continues working harder and harder, until he collapses while working on the windmill. Napoleon sends for a van to take Boxer to the veterinarian, explaining that better care can be given there. Benjamin the donkey, who "could read as well as any pig",<5> notices that the van belongs to "Alfred Simmonds, Horse Slaughterer and Glue Boiler", and attempts to mount a rescue; but the animals' attempts are futile. Squealer reports that the van was purchased by the hospital and the writing from the previous owner had not been repainted. He recounts a tale of Boxer's death in the hands of the best medical care. Shortly after Boxer's death, it is revealed that the pigs have purchased more whisky.

Years pass, and the pigs learn to walk upright, carry whips, and wear clothes. The Seven Commandments are reduced to a single phrase: "All animals are equal, but some animals are more equal than others." Napoleon holds a dinner party for the pigs and the humans of the area, who congratulate Napoleon on having the hardest-working animals in the country on the least feed. Napoleon announces an alliance with the humans, against the labouring classes of both "worlds". He abolishes practices and traditions related to the Revolution, and reverts the name of the farm to "Manor Farm".

The animals, overhearing the conversation, notice that the faces of the pigs have begun changing. During a poker match, an argument breaks out between Napoleon and Mr. Pilkington when they both play the Ace of Spades, and the animals realize that the faces of the pigs look like the faces of humans and no one can tell the difference between them.

[Demeter]

17. The Seven Commandments OF elementary Animalism

are laws that were supposed to keep order and (SECURE REVOLUTION) within Animal Farm. The Seven Commandments were designed to unite the animals together against the humans and prevent animals from following the humans' evil habits. Since not all of the animals can remember them, they are boiled down into one basic statement: "Four legs good, two legs bad!" (with wings counting as legs for this purpose, Snowball arguing that wings count as legs as they are objects of propulsion rather than manipulation), which the sheep constantly repeat, distracting the crowd from the lies of the pigs. The original commandments were:

1. Whatever goes upon two legs is an enemy.
2. Whatever goes upon four legs, or has wings, is a friend.
3. No animal shall wear clothes.
4. No animal shall sleep in a bed.
5. No animal shall drink alcohol.
6. No animal shall kill any other animal.
7. All animals are equal.

Later, Napoleon and his pigs are corrupted by the absolute power they hold over the farm. To maintain their popularity with the other animals, Squealer secretly paints additions to some commandments to benefit the pigs while keeping them free of accusations of breaking the laws (such as "No animal shall drink alcohol" having "to excess" appended to it and "No animal shall sleep in a bed" with "with sheets" added to it). Eventually the laws are replaced with "All animals are equal, but some animals are more equal than others", and "Four legs good, two legs better!" as the pigs become more human.

http://en.wikipedia.org/wiki/Animal_Farm

[Demeter]

18. ANIMAL FARM, THE VIDEO

THE ENDING DIFFERS SLIGHTLY FORM THE NOVELLA:

http://www.youtube.com/watch?v=NZldlyeR8DU

[Demeter]

20. Wikipedia plans to improve global access

The online encyclopedia is celebrating its 10th anniversary by diversifying the languages and countries in which it is available

Read more >>
http://link.ft.com/r/QM42II/IYVZ0Y/NRHD3/D48EAO/8ANTXK/RF/t?a1=2011&a2=1&a3=14

ASIMOV, HEINLEIN, AND THE REST WOULD BE SO PLEASED--A UNIVERSAL DATA BASE, FREE T O ALL, IS THE LONG-CHERISHED GOAL OF SCIENCE FICTION.

[Demeter]

19. Geithner questions ‘systemic’ feasibility

Tim Geithner, the Treasury secretary, has questioned the feasibility of identifying financial institutions as “systemically important” in advance of a crisis, just as the regulatory council he chairs is supposed to start doing precisely that

Read more >>
http://link.ft.com/r/QM42II/IYVZ0Y/NRHD3/D48EAO/A7PBD4/RF/t?a1=2011&a2=1&a3=14

[Demeter]

21. Basel hardens bank hybrid bond rules

Tough requirements imposed, on the bonds banks can count towards their regulatory capital, to kill off a funding technique deemed crucial to the need for taxpayer bail-outs

Read more >>
http://link.ft.com/r/VKY5JJ/EW607V/IEP5S/IYVRAQ/9Z3TVP/82/t?a1=2011&a2=1&a3=14

[Demeter]

22. GE deal accelerates push into energy

General Electric has made its first move into the fast-growing business of cutting electricity consumption by the telecoms and computer industries, buying Lineage Power for $520m from The Gores Group, a private equity firm

Read more >>
http://link.ft.com/r/VKY5JJ/EW607V/IEP5S/IYVRAQ/TP5DFD/82/t?a1=2011&a2=1&a3=14

[Demeter]

23. SWF support for banks and buy-out groups scrutinised

US regulators are probing whether banks and private equity groups that received capital injections from sovereign wealth funds violated US rules on the payment of bribes

Read more >>
http://link.ft.com/r/VKY5JJ/EW607V/IEP5S/IYVRAQ/XTKQUI/82/t?a1=2011&a2=1&a3=14

[Demeter]

24. Why does health care in Cuba cost 96% less than in the US?

http://links.org.au/node/2082

When Americans spend $100 on health care, is it possible that only $4 goes to keeping them well and $96 goes somewhere else? Single payer health care advocates compare US health care to that in Western Europe or Canada and come up with figures of 20–30% waste in the US.

But there is one country with very low level of economic activity yet with a level of health care equal to the West: Cuba.

Life expectancy of about 78 years of age in Cuba is equivalent to the US. Yet, in 2005, Cuba was spending US$193 per person on health care, only 4% of the $4540 being spent in the US. Where could the other 96% of US health care dollars be going?

WHERE INDEED? READ ON! A MUST READ ARTICLE

[Demeter]

25. Foreclosure Filings in U.S. May Jump 20% From Record 2010 as Crisis Peaks

http://www.bloomberg.com/news/2011-01-13/u-s-foreclosure-filings-may-jump-20-this-year-as-crisis-peaks.html

...As many as 250,000 foreclosure filings that would have occurred at the end of 2010 were delayed by the ongoing probe into lender practices, according to RealtyTrac. Those proceedings will be pushed into this year, resulting in an “ugly” first quarter, Sharga said...

[Pale Blue Dot]

58. Yet another article that claims that this is the "peak"

without a shred of evidence to back that statement up. I'm going to start bookmarking them and trotting them out whenever someone or other is "surprised" about bad economic news.

[Demeter]

26. S&P, Moody's Warn On U.S. Credit Rating

http://online.wsj.com/article/SB10001424052748703583404576079311379009904.html?mod=WSJ_hp_LEFTWhatsNewsCollection

With attention focused on sovereign-debt worries in Europe, two major credit-rating firms reminded investors again that the U.S. has debt problems of its own.

Investors bought Treasury debt nonetheless, ignoring the comments, which echoed prior statements by the companies and may still be months or years away from having any practical meaning.

"The warning on the U.S. rating is well-founded," said Brian Yelvington, chief fixed-income strategist at Knight Capital. "However, it will probably fall on deaf ears until the peripheral Europe story plays out."

Moody's Investors Service said in a report on Thursday that the U.S. will need to reverse the expansion of its debt if it hopes to keep its "Aaa" rating...

PAWN TO K4!

[Demeter]

27. JPMorgan Chase profit soars 47%

http://www.bizjournals.com/phoenix/news/2011/01/14/jpmorgan-chase-profit-soars-47.html

JPMorgan Chase & Co., the second-largest bank in Arizona by deposits, beat Wall Street estimates Friday with a 47 percent increase in fourth quarter profit to $4.83 billion, or $1.12 a share.

Analysts had expected a profit of $1 a share.

Revenue was up 13 percent to $26.1 billion. Revenue from fixed-income and equity markets was $4 billion, compared with $3.7 billion last year.

JPMorgan (NYSE:JPM) is the first major U.S. bank to report earnings. Citigroup and Bank of America report next week. It was the only major U.S. bank to stay profitable throughout the recent economic crisis.

Read more: JPMorgan Chase profit soars 47% | Phoenix Business Journal

[Demeter]

30. What Chance a U.S. Default? By James Politi

http://www.informationclearinghouse.info/article27262.htm

It was the most startling of warnings. If the U.S. does not get its finances in order “we will have a European situation on our hands, and possibly worse”, claimed Paul Ryan, the new Republican chairman of the House of Representatives budget committee.

As it stands today, the U.S. borrows about 40 cents of every dollar it spends. Curbing the budget deficit has been the stated mission of Mr. Ryan, a rising Republican star, for several years. But such calls for action have multiplied in Washington in recent months, igniting what some say is the fiercest debate over fiscal and budgetary policy in decades.

The risks are big. If the government rushes into austerity, cutting too much and too quickly, it could stunt economic recovery. But if the political system cannot forge some kind of consensus on steps to restore U.S. deficits to sustainable levels, the danger is potentially even greater: a sovereign debt crisis in the world’s largest economy.

“It’s a weak period for the economy, so I don’t think you want to do serious deficit reduction anyway, but we are playing a dangerous game and we will start to pay a price for fiscal irresponsibility,” says Ethan Harris at Bank of America Merrill Lynch.

MORE AT LINK

[Demeter]

45. Sleeping Easy Despite Moody’s Downgrade Threat By Addison Wiggin

Hmmn… There must have been change in the Matrix. We experienced a major deja vu this morning.

It began when we read this headline from The Wall Street Journal: “S&P, Moody’s Warn on US Credit Rating.”

“We have become increasingly clear,” the Journal quotes a Moody’s statement “about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the US, the likelihood of a negative outlook over the next two years will increase.”

Translation: If the boneheads in Washington can’t figure out how to raise revenue or cut spending, or both, Moody’s is going to write a strongly worded letter.

Ooooh, scary. And yet…it sounds so…familiar.

Read more: Sleeping Easy Despite Moody's Downgrade Threat http://dailyreckoning.com/sleeping-easy-despite-moodys-downgrade-threat/#ixzz1BA0jtLQ0

[Demeter]

46. Illinois is No Peter Pan By Frederick Sheehan

http://dailyreckoning.com/illinois-is-no-peter-pan/

“Top Illinois Democrats have agreed to push a plan that would temporarily boost income taxes by 75 percent and double cigarette taxes,” harked CBS Chicago on January 6, 2011. The proposed plan would increase Illinois’ personal income tax rate from 3 percent to 5.75 percent for the next three years. After that, it would drop back to 3.25%. So they say.

Illinois is a state in which the legislators have so betrayed the taxpayers that a lifetime on Devil’s Island would be too good for them. For instance, the liability of the four state pension plans is calculated at $151 billion or $280 billion, depending on the assumptions used. The $280 billion figure is analytically controversial but deductively compelling given the efforts to deny and confuse bondholders and the public alike respecting the coming collapse of the municipal bond market.

Springfield, the capital of Illinois, is a nice town. As state capitals go, it is strikingly uninhabited with a population of 110,000 (and falling, but not as fast as its benefit obligations are rising). Farm country starts about three blocks from the state house. Illinois has more representation in its capital than any other state.

The politicians raised pension benefits faster than poker bids in Macau. Presumably, they have boosted their own benefits faster than the state’s public servants, who, once they retire, no longer pay one cent for health insurance.

Read more: Illinois is No Peter Pan http://dailyreckoning.com/illinois-is-no-peter-pan/#ixzz1BA1ThGhd

[Demeter]

50. Can a 'monster' tax hike save Illinois?

http://news.yahoo.com/s/theweek/20110114/cm_theweek/211114

Illinois governor Pat Quinn, a Democrat, has approved a record income tax increase of 66 percent for his constituents. Can it help the state recover from the recession, or will it make the economy worse?

While many states are attempting to cut spending to trim recession-fueled deficits, Illinois is taking the opposite tack. The state's Democratic governor, Pat Quinn, has approved a "monster" tax increase to close a $15 billion budget gap that pushed the state to the brink of insolvency. The personal income tax rate will jump from 3 percent to 5 percent. Corporate rates also will rise, giving the state an extra $6.8 billion a year, which lawmakers hope will quickly resolve their financial crisis. But is raising taxes really the best way to tackle a deficit in hard economic times? (Watch a Fox News discussion about Illinois' tax hike)

Why should taxpayers suffer for government stupidity? I'm sorry, says Brian Sullivan at Fox Business, but Illinois taxpayers should not be coughing up for the "foolish spending" of the past. This tax bombshell will undoubtedly do "more harm than good." Companies will flee to Indiana and Wisconsin, and those individuals "with the means to leave the state" will. Truly, Illinois lawmakers are "the worst in the country."


WONDER HOW HE FEELS ABOUT PEOPLE WALKING AWAY FROM THEIR MORTGAGES....

[Demeter]

28. Sarkozy demands Ireland raise corporation taxes

http://www.gfsnews.com/article/836/1/Sarkozy_demands_Ireland_raise_corp_taxes

French President Nicolas Sarkozy has toughened his stance on Ireland's low corporate tax rate, claiming it is a deterring investment in countries that have saved its economy.

"I deeply respect the independence of our Irish friends and we have done everything to help them," said Sarkozy, speaking on a visit to an Airbus factory in Toulouse on Thursday...

[Demeter]

29. Ireland May Have Lent Banks Up to 51.1 Billion Euros

http://www.bloomberg.com/news/2011-01-14/ireland-may-have-lent-banks-up-to-51-1-billion-euros-update1-.html

Ireland’s central bank may have loaned as much as 51.1 billion euros ($68.4 billion) to the country’s lenders by the end of last year as the country and its banks suffered further ratings downgrades even after an international bailout.

The central bank’s “other assets” rose from 44.7 billion euros on Nov. 26, according to figures published today on the bank’s website. The Dublin-based central bank has said that “other assets” includes “exceptional liquidity assistance lending” for Irish banks, without giving more details. This liquidity makes up the bulk of the category, according to a senior central bank official, who declined to be identified because the bank doesn’t comment on this facility.

Still, Irish-based lenders’ borrowings from the European Central Bank fell 4.4 percent in December to 132 billion euros, according to today’s statistics. The figures include international and domestic financial institutions based in Ireland. The country’s central bank only provides an update on ECB funding reliance of domestic institutions at the end of every month.

“The steady rise in the ‘other assets’ category over recent months isn’t surprising in light of the ongoing funding pressures evident in the Irish banking system and due to their limited stock of eligible collateral that they can use” to refinance with the ECB, Ciaran Callaghan, an analyst with Dublin-based NCB Stockbrokers, said by telephone. “It’s also difficult to read too much into the ECB funding figure. The decline could be down to foreign-owned banks lowering their dependence on the ECB.”

MORE--SUGGESTED READ

[Demeter]

31. What Does Wikileaks Have on Bank of America? By Mary Bottari

http://www.informationclearinghouse.info/article27259.htm

...Before the big banks start calling for Assange's internment at Guantanamo, the question worth considering is what does Wikileaks have on America's largest bank?

Legal Liability for Toxic Mortgages

BofA is already under the gun, defending itself from multiple lawsuits from private investors as well as Fannie and Freddie demanding that the bank buy back billions worth of toxic mortgages-backed securities. The firm stopped issuing subprime mortgages in 2001, but it kept underwriting subprime mortgage-backed securities for many years. In September 2009, for example, BofA underwrote $239 million worth of securities backed by subprime loans. BofA has reserved a mere $4.4 billion for these "put back" lawsuits. If Assange has emails showing that top executives at BofA knew they were peddling toxic dreck to investors, it would rock the firm and give tremendous ammunition to the army of lawyers already knocking on BofA's door.

Reckless and Illegal Foreclosures

BofA is at the heart of the robo-signing scandal and has wrongfully foreclosed on countless American families. One poor woman returned to a vacation home to find it locked, all her possessions gone -- including the ashes of her late husband. How could such a mistake be made? A BofA employee deposed in February 2010 said that she signed as many as 8,000 foreclosure documents a month without reviewing them, in violation of the law. Mounting questions about the fraudulent and illegal foreclosure practices at the big banks and mortgage service companies prompted BofA to temporarily halt foreclosures nationwide in October, 2010. If Wikileaks can document that top BofA officials have a callous disregard for legal processes and constitutionally protected property rights, BofA's mounting legal liability may not be sustainable.

Headaches Left Over from Countrywide

In 2008, BofA acquired Countrywide, one of the most aggressive and fraudulent lenders during the housing bubble. The result has been a train wreck of liability and lawsuits for the megabank that now has over 1.3 million customers in foreclosure. To settle the lawsuits with Illinois, California and eight other states over predatory lending, BofA came up with an $8.4 billion loan relief plan for those holding Countrywide mortgages. In June, 2010 BofA paid $108 million to settle a Federal Trade Commission case that charged Countrywide with having extracted excessive fees out of borrowers facing foreclosure. BofA paid $600 million in August 2010 to settle shareholder claims that Countrywide had concealed the riskiness of its lending standards. There is no end in sight for these types of claims, and more. In June, 2010 the State of Illinois sued Countrywide again, this time over racial discrimination in its lending practices. Wikileaks could have further documentation of Countrywide's illegal and reckless underwriting practices or ongoing fraud at BofA.

Illegal Bonuses Paid by Taxpayers

Bank of America acquired the brokerage firm Merrill Lynch for $50 billion in January 2009. The U.S. government blessed the merger with a $20 billion bailout loan to aid BofA. After the acquisition went through, it was revealed that Merrill Lynch had lost $15.8 billion in the last quarter of 2008 and that $3.6 billion in bonuses were paid ahead of schedule to top executives at Merrill. Among beneficiaries of the bonus bonanza was Merrill's CEO John Thain, who famously spent a million redecorating his office at the height of the crisis. About the deal New York Attorney General Andrew Cuomo said: "One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding." If Wikileaks has emails showing top executives knowingly used bailout bucks for bonuses, this ugly chapter in history could be reopened, prompting Congressional investigations and further bailout backlash.

Still Too Big to Fail

In addition to the $25 billion in TARP bailout money and the $20 billion for purchasing Merrill, America recently learned of the extraordinary actions taken by the Federal Reserve to prop up BofA at the height of the crisis, details that were kept secret from the public. When the Fed was forced to release data about its emergency loan programs in December 2010, we found that BofA tapped an estimated $931 billion from the Fed in short term loans and government subsidies. If Wikileaks has information showing that America's biggest bank is only being kept alive by accounting tricks and ongoing government subsidies, the result could be another government bailout or potentially the orderly dissolution of a firm that is "too big to fail" and still poses a threat to our nation's economy....MORE

[Demeter]

32. This Is The Wikileak That Sparked The Tunisian Crisis

http://www.informationclearinghouse.info/article27263.htm

Tunisia's government has collapsed, partially due to food price inflation and unemployment, but also because of WikiLeaks.

One of the U.S. government cables released by WikiLeaks (via @spbaines) exposed the corruption of Tunisia's President's family, its reach into business in the country, and ability to transcend the rule of law. President Ben Ali's family was called "The Family" throughout the leak. The government attempted to block access to WikiLeaks earlier this month.

Here are some highlights from the June 2008 leak (read the full leak here):

On the power of the president's family:

Whether it's cash, services, land, property, or yes, even your yacht, President Ben Ali's family is rumored to covet it and reportedly gets what it wants.

On the family's business dealings:

The economic impact is clear, with Tunisian investors -- fearing the long-arm of "the Family" -- forgoing new investments, keeping domestic investment rates low and unemployment high (Refs G, H).

Further:

Often referred to as a quasi-mafia, an oblique mention of "the Family" is enough to indicate which family you mean. Seemingly half of the Tunisian business community can claim a Ben Ali connection through marriage, and many of these relations are reported to have made the most of their lineage. Ben Ali's wife, Leila Ben Ali, and her extended family -- the Trabelsis -- provoke the greatest ire from Tunisians.

On that yacht:

In 2006, Imed and Moaz Trabelsi, Ben Ali's nephews, are reported to have stolen the yacht of a well-connected French businessman, Bruno Roger, Chairman of Lazard Paris. The theft, widely reported in the French press, came to light when the yacht, freshly painted to cover distinguishing
characteristics, appeared in the Sidi Bou Said harbor.

On the banking sector:

Tunisian business people joke that the most important relationship you can have is with your banker, reflecting the importance of personal connections rather than a solid business plan in securing financing.

According to a representative from Credit Agricole, Marouane Mabrouk, another of Ben Ali's sons-in-law, purchased a 17 percent share of the former Banque du Sud (now Attijari Bank)
shares immediately prior to the bank's privatization. This 17 percent share was critical to acquiring controlling interest in the bank since the privatization represented only a 35 percent share in the bank. The Credit Agricole rep stated that Mabrouk shopped his shares to foreign banks with a significant premium, with the tender winner, Spanish-Moroccan Santander-Attijariwafa ultimately paying an
off the books premium to Mabrouk.

Finally, a prescient warning:

Although the petty corruption rankles, it is the excesses of President Ben Ali's family that inspire outrage among Tunisians. With Tunisians facing rising inflation and high unemployment, the conspicuous displays of wealth and persistent rumors of corruption have added fuel to the fire.

So, while unemployment and inflation were the underlying causes of the revolution, this WikiLeak may have been the spark that turned the public, and the government, against itself.

[Demeter]

33. US Banks Reporting Phantom Income on $1.4 Trillion Delinquent Mortgages

http://blogs.forbes.com/robertlenzner/2011/01/12/us-banks-reporting-phantom-income-on-1-4-trillion-delinquent-mortgages/?boxes=Homepagechannels

The giant US banks have been bailed out again from huge potential writeoffs by loosey-goosey accounting accepted by the accounting profession and the regulators...They are allowed to accrue interest on non-performing mortgages until the actual foreclosure takes place, which on average takes about 16 months...All the phantom interest that is not actually collected is booked as income until the actual act of foreclosure. As a resullt, many bank financial statements actually look much better than they actually are. At foreclosure all the phantom income comes off the books of the banks.

This means that Bank of America, Citigroup, JP Morgan and Wells Fargo, among hundreds of other smaller institutions, can report interest due them, but not paid, on an estimated $1.4 trillion of face value mortgages on the 7 million homes that are in the process of being foreclosed.

Ultimately, these banks face a potential loss of $1 trillion on nonperforming loans, suggests Madeleine Schnapp, director of macro-economic research at Trim-Tabs, an economic consulting firm 24.5% owned by Goldman Sachs...The potential writeoffs could be even larger should home prices continue to weaken, placing more homes in the nonperforming category on bank balance sheets...

[Demeter]

34. City Bankruptcies Will Increase, Dimon Warns

http://www.informationclearinghouse.info/article27246.htm

...The JPMorgan CEO said he expects to see more U.S. municipalities declare bankruptcy, Bloomberg News reports. His concerns echo those of Meredith Whitney, the analyst who has said the next major financial crisis will come from a wave of local government defaults, and those of famed investor Warren Buffett, who has called the municipal debt situation a "terrible problem."

"If you are an investor in municipals you should be very, very careful," Dimon said, according to Bloomberg.

His warning comes as local governments contend with painfully depreciated tax revenue, which in some cases threatens to ruin budgets. In the wake of the worst financial crisis since the Depression, cities and states have had to severely cut back their spending, even as the need for their services has grown. While official bankruptcy remains rare (Vallejo, California, is the most recent example), experts say there's trouble brewing.

Different cities have different problems, but one thing remains constant: there's not enough money coming in. Often, revenue isn't enough to cover even the most basic of services...

[Pale Blue Dot]

60. Muni bond fears run wild

NEW YORK (CNNMoney) -- Municipal bonds continued to sell off this week, as worried investors fled the market, and the media continued to churn out stories about state and local governments struggling with severe budget shortfalls.

It's easy enough to understand the concern. A growing number of states, including some of the biggest -- like California and Illinois -- face budget shortfalls of billions of dollars.

And that's led to growing concern that those states, as well as smaller counties and cities, might default on their municipal bonds if politicians don't start making some hard choices about how to raise revenue.

Add in prominent bank analyst Meredith Whitney's doomsday prediction of up to 100 sizable defaults in the muni bond market -- broadcast to the nation during a recent 60 Minutes interview -- and you have the makings of a full scale sell-off in the muni bond market.

http://money.cnn.com/2011/01/14/markets/bondcenter/municipal_bonds/index.htm

[Demeter]

35. 60% Of New Jobs In 2010 Were In Low-Paying Industries

http://www.huffingtonpost.com/2011/01/13/new-jobs-in-2010-60-were-_n_808447.html


"Of the 1.1 million private jobs gained in the last year, 650,000 or 60% are jobs that have absolutely no real wealth creation capacity, nor do they provide any real benefits."

[Demeter]

36. THE FED HAS SPOKEN: NO BAILOUT FOR MAIN STREET--today's must read article!

http://www.zerohedge.com/article/fed-has-spoken-no-bailout-main-street

The Federal Reserve was set up by bankers for bankers, and it has served them well. Out of the blue, it came up with $12.3 trillion in nearly interest-free credit to bail the banks out of a credit crunch they created. That same credit crisis has plunged state and local governments into insolvency, but the Fed has now delivered its ultimatum: there will be no “quantitative easing” for municipal governments.

On January 7, according to the Wall Street Journal, Federal Reserve Chairman Ben Bernanke announced that the Fed had ruled out a central bank bailout of state and local governments. "We have no expectation or intention to get involved in state and local finance," he said in testimony before the Senate Budget Committee. The states "should not expect loans from the Fed."

So much for the proposal of President Barack Obama, reported in Reuters a year ago, to have the Fed buy municipal bonds to cut the heavy borrowing costs of cash-strapped cities and states.

The credit woes of state and municipal governments are a direct result of Wall Street’s malfeasance. Their borrowing costs first shot up in 2008, when the “monoline” bond insurers lost their own credit ratings after gambling in derivatives. The Fed’s low-interest facilities could have been used to restore local government credit, just as it was used to restore the credit of the banks. But Chairman Bernanke has now vetoed that plan.

Why? It can hardly be argued that the Fed doesn’t have the money. The collective budget deficit of the states for 2011 is projected at $140 billion, a mere drop in the bucket compared to the sums the Fed managed to come up with to bail out the banks....MORE WELL WORTH THE READING

[DemReadingDU]

37. The rich get richer

the rest of us become destitute
:(


Been busy with the grand babies today, no time to read up on the latest news. Hopefully I'll find something of interest to post later.

[Demeter]

39. Glad to See You!

I don't have any grandbabies. I have a grandpuppy, though...

[Demeter]

38. Mike Krieger Deconstructs Commodity Inflation: "You Ain't Seen Nothing Yet"

http://www.zerohedge.com/article/mike-krieger-deconstructs-commodity-inflation-you-aint-seen-nothing-yet?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyon

HE HAS SEEN THE FUTURE, AND IT ISN'T PRETTY....

[Demeter]

40. THE VIDEO STORE

New Accounting Rules = Fraud

http://vodpod.com/watch/5287118-new-international-accounting-rules-opens-door-to-fraud?u=ampedstatuscom&c=ampedstatus

Celente: Global Revolution & Internet Nuke Bomb Coming

http://vodpod.com/watch/5305268-gerald-celente-internet-nuke-bomb-waiting-to-go-off?u=ampedstatuscom&c=ampedstatus

Keiser Report: Curse on Taxes

http://vodpod.com/watch/5312651-keiser-report-curse-on-taxes?u=ampedstatuscom&c=ampedstatus

[Demeter]

41. FORGOT ONE: NAOMI WOLF

http://www.youtube.com/watch?v=RjALf12PAWc&feature=player_embedded

[Demeter]

82. Unemployment I: The Cost of Economic Crisis (Video)

http://www.truth-out.org/richard-wolff-unemployment-i-the-cost-economic-crisis-video66694

[Demeter]

88. STOP THE LIES!

http://www.youtube.com/watch?v=tyCHV3DSQZE&feature=player_embedded

[Demeter]

42. Lockheed Martin's Shadow Government BY William Hartung

http://www.tomdispatch.com/post/175339/tomgram%3A_william_hartung%2C_lockheed_martin%27s_shadow_government

William Hartung, director of the Arms and Security Initiative at the New America Foundation, has written Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex, the definitive account of how that company came to lord it over our national security world. It’s a staggering tale...

Is Lockheed Martin Shadowing You?
How a Giant Weapons Maker Became the New Big Brother
By William D. Hartung

Have you noticed that Lockheed Martin, the giant weapons corporation, is shadowing you? No? Then you haven’t been paying much attention. Let me put it this way: If you have a life, Lockheed Martin is likely a part of it.

True, Lockheed Martin doesn’t actually run the U.S. government, but sometimes it seems as if it might as well. After all, it received $36 billion in government contracts in 2008 alone, more than any company in history. It now does work for more than two dozen government agencies from the Department of Defense and the Department of Energy to the Department of Agriculture and the Environmental Protection Agency. It’s involved in surveillance and information processing for the CIA, the FBI, the Internal Revenue Service (IRS), the National Security Agency (NSA), the Pentagon, the Census Bureau, and the Postal Service.

Oh, and Lockheed Martin has even helped train those friendly Transportation Security Administration agents who pat you down at the airport. Naturally, the company produces cluster bombs, designs nuclear weapons, and makes the F-35 Lightning (an overpriced, behind-schedule, underperforming combat aircraft that is slated to be bought by customers in more than a dozen countries) -- and when it comes to weaponry, that’s just the start of a long list. In recent times, though, it’s moved beyond anything usually associated with a weapons corporation and has been virtually running its own foreign policy, doing everything from hiring interrogators for U.S. overseas prisons (including at Guantanamo Bay in Cuba and Abu Ghraib in Iraq) to managing a private intelligence network in Pakistan and helping write the Afghan constitution....

[Demeter]

43. Mark Steel: We owe it to bankers to feel their pain HUMOR

http://www.independent.co.uk/opinion/commentators/mark-steel/mark-steel-we-owe-it-to-bankers-to-feel-their-pain-2182016.html

At last someone has dared to defend the oppressed people of the banking community. Bob Diamond, chief executive of Barclays, who himself has to suffer the trauma of an £8m bonus, said yesterday that the bankers' "period of remorse and apology should be over". And you feel his pain, because the first words to cross your mind when you see a banker are "remorseful and apologetic". Then you're left worrying, "Oh, how I wish the poor souls were slightly less burdened with remorse about their bonus, and didn't apologise with such agonising sincerity about putting it into their wife's name in a series of untraceable accounts based in uninhabitable islands off Ecuador."

But at last they've learnt to stand up for themselves, and Bob Diamond has emerged as their Martin Luther King. Soon the whole banking community will declare: "Say it out loud, I'm 27 million quid in the black and I'm proud."

MORE GIGGLES AT LINK

[Demeter]

44. Tax the Rich to Repay Looted Social Security Money

http://dissidentvoice.org/2011/01/tax-the-rich-to-repay-looted-social-security-money/

Most Americans have come to expect politicians to bend the truth, exaggerate the truth, and withhold part of the truth. But what about a high profile political leader who tells a whopper, that he knows to be untrue, especially when this whopper is designed to fool all Americans, not just his own constituents? That is exactly what Senate Majority Leader, Harry Reid, did in an interview with NBC’s David Gregory on “Meet the Press,” on Sunday January 9.

In response to a question about Social Security, Senator Reid said, “it’s fully funded for the next forty years.” Now, I have been a long-time admirer and supporter of Harry Reid ever since he took a strong stand to end the looting of the Social Security trust fund 20 years ago, but I cannot condone such a big lie, which adds to the confusion about the true status of Social Security.

In 1990, Reid, along with a few other senators, was trying to protect the future of Social Security by telling the truth about it. In a speech on the Senate floor, on October 9, 1990, Senator Reid made the following statement:

The discussion is are we as a country violating a trust by spending Social Security trust fund money’s for some purpose other than for which they were intended. The obvious answer is yes…On that chart in emblazoned red letters is what has been taking place here, embezzlement. During the period of growth we have had during the past 10 years, the growth has been from two sources. One, a large credit card with no limits on it, and, two, we have been stealing money from the Social Security recipients of this country.

Senator Reid was right in denouncing the raiding of the trust fund in 1990, but he didn’t follow through with his battle. Once he got into a leadership position, he abandoned his fight to end the looting and just ignored the illegal practice after that. The practice, which Reid described as “embezzlement” in 1990, has continued, unchanged, to this very day. Every dollar of the $2.5 trillion in surplus Social Security revenue, generated by the 1983 payroll tax hike, has been looted and spent on such things as tax cuts for the rich, two wars and other government programs...

[Demeter]

47. More banks walking away from homes, adding to housing crisis

http://www.chicagotribune.com/classified/realestate/foreclosure/ct-biz-0113-walkaway--20110113,0,7716930.story

Research shows 1,896 red flag homes in Chicago appear to have been abandoned during foreclosure process...

A new type of property is adding to neighborhood blight: the bank walkaway.

Research to be released Thursday, the first of its kind locally, identifies 1,896 "red flag" homes in Chicago — most of them are in distressed African-American neighborhoods — that appear to have been abandoned by mortgage servicers during the foreclosure process, the Woodstock Institute found.

Abandoned foreclosures are increasing as mortgage investors determine that, at sale, they can't recoup the costs of foreclosing, securing, maintaining and marketing a home, and they sometimes aren't completing foreclosure actions. The property, by then usually vacant, becomes another eyesore in limbo along blocks where faded signs still announce block clubs.

"The steward relationship between the servicer and the property is broken, particularly in these hard-hit communities," said Geoff Smith, senior vice president of Woodstock, a Chicago-based research and advocacy group. "The role of the servicer is to be the person in charge of that property's disposition. You're seeing situations where servicers are not living up to that standard."

City neighborhoods where 80 percent of the population is African-American account for 71.1 percent of red-flag properties, according to Woodstock.

In some cases, lenders might be skirting city rules for property upkeep even after they repossessed properties.

Woodstock found that as of the end of September, 57.1 percent of the estimated 4,468 single-family, likely vacant homes that became bank-owned from Jan. 1, 2006, to June 30, 2010, were not registered with the city as vacant, as they are supposed to be...

[Demeter]

48. US cancels 'virtual fence' along Mexican border. What's Plan B?

http://news.yahoo.com/s/csm/356842

The dream of a high-tech barrier stretching from one end of America’s southern border to the other – originally hailed by then-President George W. Bush as “the most technically advanced border security initiative” ever – is officially burst.

In announcing that it would pull the plug on the troubled “virtual fence” project, the US Department of Homeland Security (DHS) said Friday it would instead pursue a region-by-region approach, with different parts of the US border protected in different ways as dictated by terrain and other area-specific conditions...

Almost from the onset, the virtual fence – known as the Secure Border Initiative network, or SBInet – ran into problems. As pilot projects were built in two spots in Arizona along the border with Mexico, cost overruns mounted. Just as worrisome was that the technology – in the form of camera-topped surveillance towers that was supposed to pinpoint for border agents in a distant command post the exact location of illegal border-crossers – was often flummoxed by conditions on the ground such as terrain and weather.

“Cameras don’t come down off the poles and grab people by the ankle and arrest them,” T.J. Bonner, president of the National Border Patrol Council

In all, the government spent almost $1 billion on the virtual fence project since its inception in 2005, as contractor Boeing Co. endeavored to work out the kinks and refine SBInet’s capabilities. In the end, though, the cost per mile of coverage made it grossly inefficient: It is operational along 53 miles of Arizona’s 386-mile border with Mexico...By contrast, the DHS expects that security for the rest of Arizona’s border can be buttressed for $750 million, by using commercially available surveillance measures, unmanned drones, thermal imaging, and other equipment.

KILLING THE ECONOMY HAS PRETTY MUCH SOLVED THE BORDER PROBLEM--EXCEPT FOR THE DRUG DEALERS. I SUPPOSE, A COUPLE MORE YEARS, AND NO ONE WILL BE ABLE TO AFFORD DRUGS, EITHER, AND THE PROBLEM WILL HAVE GONE AWAY COMPLETELY--EXCEPT THEN THEY WILL PROBABLY BE TRYING TO KEEP PEOPLE IN THE US!

[Demeter]

49. SPENT ABOUT AN HOUR TRYING TO GET BACK ONLINE

The tech thinks my modem, circa 2004, is due for replacement--but sales doesn't open until tomorrow--if they don't take holidays, that is.

Speaking of holidays--the Markets are closed Monday, so this thread or a reasonable facsimile will continue through Monday night.

So, it's not too late to post the latest economic news or favorite animal story!

[Demeter]

51. LOOK OUT, IT'S LARRY! Job-growth prospects better: Summers

http://www.marketwatch.com/story/job-growth-prospects-better-summers-2011-01-16?siteid=YAHOOB

The prospects for the beginning of significant U.S. employment growth and reduction in unemployment are improving, a former top Obama administration official said Sunday.

“The foundation for prosperity, growth and profitability in the U.S. today is far stronger than it was two years ago,” Lawrence Summers, former chief economic adviser to President Barack Obama, told Fareed Zakaria on CNN.

In a wide-ranging interview about the deficit and jobs, Summers argued that output improvements historically precede employment improvement. Summers was the director of Obama’s National Economic Council between January 2009 and December 2010.

Summers said that as demand increases, companies first ask employees to do more, then offer them overtime and finally hire more people...


THE REMOVAL OF LARRY SUMMERS FROM THE LEVERS OF POWER HAS GOT TO BE GOOD FOR A COUPLE OF MILLION JOBS, RIGHT THERE...STFU, LARRY!

[Demeter]

52. German economy continues rise with record figures for 2010

http://www.dw-world.de/dw/article/0,,14763174,00.html

Germany continues to be the standout achiever among the 17 countries that share the euro currency, with official data showing Wednesday that the German economy grew by a strong 3.6 percent last year.

The GDP growth figures - Germany's most powerful since reunification in 1990 - come on the back of a surge in export activity and signs of improvements in domestic demand. Germany is the world's second-biggest exporter after China.

The preliminary 2010 results announced by the Federal Statistics Office compare with a 4.7-percent contraction in the economy in 2009 during Germany's worst post-war recession...the employment rate in Germany has climbed to an all-time high of 40.5 million people, reducing the need for some public spending.

Officials have also launched an austerity plan aimed at creating savings of 80 billion euros ($104 billion) by 2014...

[Demeter]

53. German levy to weigh more on banks than expected

http://uk.reuters.com/article/idUKLDE70B1EQ20110112

Germany's levy on banks to raise funds for future bailouts will likely be steeper than previously expected, according to a draft government paper obtained by Reuters on Wednesday.

The levy will now only nominally be capped at 15 percent of earnings per year, according to a draft on the implementation of the charge.

Banks whose contribution is capped in one year will still be liable to pay the amount due in excess of the cap in subsequent years when earnings are stronger. The measure will likely hit bigger banks with more volatile earnings hardest, such as Deutsche Bank (DBKGn.DE), the country's largest lender.

The BdB banking association said the measure undermined the 15 percent cap, designed to prevent the levy weighing too heavily on banks which will need to use retained profit to raise capital buffers under a global accord known as Basel III...

[Demeter]

54. Auto Work Force Gets Dividend From Industry’s Rebound

http://www.nytimes.com/2011/01/13/business/13auto.html?_r=2&hp

The sweeping overhaul and surprising recovery of the American auto industry is about to pay off handsomely for the blue-collar workers at Ford and General Motors.

The two big Detroit carmakers will announce profit-sharing checks this month for their hourly workers, perhaps the largest in a decade, company officials and industry analysts say.

While the payouts — expected to top $5,000 at Ford — underscore the turnaround being celebrated at the Detroit auto show this week, they also foreshadow the enormous challenge awaiting the rebounding companies: how to maintain and build on their financial health while keeping their historically restive work force in line.

All three Detroit car companies are preparing to negotiate new contracts with the United Automobile Workers union this summer. Hovering over the talks will be both the dark days leading up to the federal bailouts of G.M. and Chrysler in 2009, and the renewed sense of optimism permeating the domestic industry...The gap in labor costs between Detroit and the foreign-owned factories in the United States has narrowed considerably. Ford’s total labor cost for a worker — a combination of wages, benefits and pensions — has been reduced more than 20 percent and is now about $59 an hour, compared to $56 at Toyota, according to the Center for Automotive Research in Ann Arbor, Mich. ..

[bread_and_roses]

64. No bonus will ever be as valuable as what they lost

- and I'm not just talking money.

[Demeter]

55. In their fight with banks over mortgage losses, investors get on borrowers' side

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/12/AR2011011205564.html?hpid=sec-business

The fight between big banks and investors who lost a fortune on mortgage-backed securities is shifting from private litigation to the public arena...While the investors have been angry at the banks for several years for the losses, their legal efforts have not gotten far, mostly because of the difficulty of organizing enough peers for class-action lawsuits and of prying information from the lenders. But the recent uproar over the banks' foreclosure practices has given the investors a way to pressure lenders outside the courts.

As Congress begins discussing potential mortgage servicing legislation, and as the group of 50 state attorneys general investigating problems with foreclosures continues to hammer out details of a settlement with the banks, the investors find themselves fortuitously aligned with borrowers who are facing foreclosure and who have the sympathy of lawmakers.
ad_icon

The Association of Mortgage Investors, a Washington-based group that represents hedge funds, state pension funds, charitable endowments and other investors, on Wednesday fired the latest salvo by issuing a "white paper" that delineated its views on what would constitute an acceptable settlement between the banks and the state attorneys general. The investor group is calling for improvements to servicing and transparency that the banks have resisted in the past...

[Demeter]

56. Geithner: The first man blamed becomes last man standing on economic team

http://thehill.com/business-a-lobbying/137121-geithner-first-man-blamed-becomes-last-man-standing

Treasury Secretary Timothy Geithner has fended off repeated calls for his resignation to become the last man standing from President Obama’s original economic team...“Tim earned the respect of everyone in the White House during those very difficult early days. He was steady and focused at a time of maximum pressure and peril,” Axelrod said. “And when he spoke, you always had the sense that he had thought things through in a really careful and responsible way.”..“I think a lot of people underestimated Secretary Geithner,” said Douglas Elliott, a former investment banker and now fellow at the Brookings Institution...Observers say Geithner has learned how to navigate the high-octane political skirmishes that come with the territory at Treasury...

Amid the turnover, the administration has tapped Geithner to lead the charge on what is expected to be one of the first majors fight in the new Congress: approving legislation raising the debt ceiling for the federal government.

On Thursday, Geithner fired off a feisty letter to congressional lawmakers on the debt limit...Boehner responded to the letter by saying that while America cannot be allowed to default on its debt, the American people would not stand for an increase to be passed without serious action being taken on spending. He did not mention Geithner by name in the rebuttal, however.

Geithner has enjoyed a run of good news as some reviled bailout efforts have begun to wind down...As for how long Geithner might continue on as secretary, he has said in the past that he serves at the pleasure of the president, and will do so for as long as he’ll have him.

[DemReadingDU]

57. The Automatic Earth: Zombie Money Kills Real People

Very long, but interesting read over at The Automatic Earth

1/14/11 Zombie Money Kills Real People

Ilargi: There are a number of fallacies - or delusions, if you will- concerning our economies that are set to inflict enormous - in many cases lethal- damage in both our own rich lives and those of people elsewhere in the world who are far less well-off than we still are - for now. These fallacies are closely connected, which adds greatly to their insidiousness as well as the perverse influence they have both on ourselves, and on our awareness of what's happening around us. And whatever there may be that we can't change overnight, we can at least try to comprehend some issues, file them, and move on. Let’s do these first:

1. Recovery
2. Inflation
3. Food prices


1: Recovery

There is no economic recovery, there hasn't been one in the past five years, and there won't be one for a very long time to come. Claiming that we are seeing a recovery today equals claiming that a society can borrow its way into recovery. I'm not going there, and I strongly advise you to not do it either.

There will be a Keynesian faction which clings to the theory that says it is indeed possible to borrow your way up, but that's a mere mirage, since it would require a surge in real productivity, i.e. outside of the service industry. Where and how have we increased production since the crisis started? Where have we created the great deal of additional value required to dig ourselves out of the hole? Obviously, nowhere. The vast majority of "jobs created" is in the service sector, while manufacturing today counts for less than 10% of US jobs. And no, flipping burgers does not create value.

2: Inflation

The fact that there’s all that zombie money around (or zombie credit, to be precise) leads many to believe the US witnesses inflation. Not true. First off, inflation is not the same as rising prices. Prices can rise because of different causes: scarcity, speculation and (real) inflation. And it’s important to be able to identify which of these causes is in play. If you call all price rises inflation, you lose the ability to distinguish between the causes, which means you lose a crucial analytical tool. There may be those who would like nothing better than for us to lose that tool, but it’s not smart to give in.

I know the media has force-fed the incorrect definition of inflation to the masses, and I know there are plenty of people who say rising prices is all they care about, not monetary theory. However, a clear view of causation is essential when it comes to defining your reaction to rising or falling prices, and prices that rise because of scarcity demand a totally different set of actions than those that do because of a rise in total supply of money and credit, combined with velocity of money, which is what inflation truly is.

3: Food prices

Let’s start with the news that the Tunisian president has fled his country, and the military's taken over, according to Al Jazeera. Mass protests are ongoing in Morocco and Algeria. The riots in Tunisia are not all about food prices, but they were certainly a substantial factor. And more, much more, of the same is on the horizon, in many different places. But food prices this time around are not rising because of widespread dramatic shortages, at least not so far.

The consequence is that the zombie money is now allowed to drive up food prices to levels which make sure that millions of people around the world will go hungry, and will revolt as a result of that. Blankfein, Dimon et al have long since realized that they can't maintain their velvet “God's work" thrones just by robbing Americans of all they're worth. Their losses are far too great. They need to have access to everyone's wealth all over the world.
.
.
Cue Tunisia. Where our zombie money kills real people. Today.

much much more for each of the 3 issues...
http://theautomaticearth.blogspot.com/2011/01/january-14-2011-zombie-money-kills-real.html

[Demeter]

61. A Smart, Honest and Honorable Woman

Elizabeth Warren could use some help....

That is the main problem in America--every idiot chatters without first having a good definition of terms. Buzz words are used as weapons to destroy credibility, obfuscate reality, and belittle those who can't play the buzzword game.

[DemReadingDU]

65. Richard Cordray

1/6/11
Richard Cordray, the outgoing attorney general of Ohio, who will run the bureau’s enforcement division. Mr. Cordray, a Democrat who narrowly lost his re-election bid in November, has become a top critic of Wall Street and has sued some prominent players in the financial crisis, including the credit rating agencies.

http://dealbook.nytimes.com/2011/01/06/consumer-watchdog-builds-up-its-ranks/

[Pale Blue Dot]

59. States Will Soon Have To Start Paying Interest on Their Massive Unemployment Borrowing

Sometimes it's time to pay the piper. And sometimes that piper is the federal government. And sometimes the piper wants more than $1 billion. Soon.

Because of the high jobless rate and past fiscal irresponsibility, 30 states have collectively had to borrow more than $40 billion from the federal government just to keep unemployment insurance checks in the mail. A provision in the stimulus bill made those loans interest-free for an extended grace period.

But no more. Efforts to include an extension of the grace period in Obama's tax cut extension enacted at the end of last year failed, and the first batch of 14 states will have to start paying interest before the end of this year. Given that state budgets need to be hammered out in advance, that means state legislatures will soon face tough choices as they come back in session.

The amounts due range from California and Michigan, which each face payments of more than $300 million dollars, to Kansas, which will owe about $6 million. (Fun fact: That's $2 for every Kansan.) And because of federal rules, states can't use unemployment insurance taxes to make interest payments, which means cash-strapped states will have to take that money from their general budgets, so there will be less money for roads, schools and other priorities.

http://www.propublica.org/article/states-will-soon-have-to-start-paying-interest-on-their-massive-unemploymen

[Demeter]

62. Obama can just forgive the debt

Of course, he won't, but that's because it's the Blue states that are in trouble, including his base in Illinois, and that would be favoritism...as opposed to bailing out Red States, which is bipartisanship.

He's an economic idiot, for sure. And cold-hearted, for all the eloquence, which turns off like a faucet.

[bread_and_roses]

63. cold hearted - yes

i have to agree, with sorrow. The unemployed, the forclosed upon, the still forgotten youth, our Brothers and Sisters of Color, First Peoples - a scrap here and there, and a remarkable cold abstraction in the face of their suffering.

[Pale Blue Dot]

66. Why A Record Steep Curve Means The End Of The Fed's Subsidies To Banks

Over the past week, one of the less noticed and more notable developments, was that the 2s10s quietly climbed back to just short of all time record wides: at 273 bps, the curve is just 13 basis point away from the all time record 286 bps achieved on February 2, 2010. For those who still don't understand how this most recent gift to the banks by the Fed and the government works, the math is that for every 100 bps in spread widening, banks make profits by borrowing free at the 2 Year and lending out at the 10 Year spread (on a Price x Volume basis, although as we will discuss momentarily while the price (i.e. spread) may be there the volume is missing), even as home prices decline by about 12% for each percentage point. In other words, in the past year the entire double dip in home prices can be attributed to the spike in long-term rates, which have in turn caused mortgage rates to jump to year highs. All of this has been predicated by increasing concerns that the Fed will allow runaway inflation, as a result pushing 10 and 30 Year spreads (and gold) ever higher. And while traditionally, a steep curve implies substantial bank profits, this time it is really is different, as demand for mortgages, by far the biggest bank product beneficiary from rising LT interest rates, is non-existent - recent new and refinancing mortgage applications are plumbing 15 year lows, meaning that even if banks make exorbitant profits on a spread basis, there is just not enough of them to go around, which in turn means that banks once again have to rely on accounting gimmicks such as declining reserve provisions to pad their books. And unfortunately for the banks, every incremental basis point increase from here on out only means accelerating home price deflation (regardless of how many days in a row cotton, wheat and whiskey closes limit up), which will wreak havoc on myth of any "recovery." This is in fact the most salient point of Scott Minerd's of Guggenheim latest letter: while the bulk of his latest thoughts is focused on Europe, we believe that the critical part if really that dealing with US interest rates. As he concludes: "The story in housing remains a compelling reason yields on the 10-year note above 4 percent are simply not sustainable at this juncture." We complete agree, which also means that the strawman of higher bank earnings due to the yield curve is now dead and buried. Alas for all the bank bulls, from this point on the only direction the curve can go is down... Unless of course the Fed really loses control of the long end in which case all bets are off and QE3 is sure include purchases of MBS.

http://www.zerohedge.com/article/why-record-steep-curve-means-end-feds-subsidies-banks

[DemReadingDU]

67. Are the markets open today?

[Pale Blue Dot]

68. Nope. They're closed for the holiday. nt

[DemReadingDU]

69. 60 Minutes: Sports Bettor Billy Walter's Winning Streak

1/16/11 60 Minutes: Sports Bettor Billy Walter's Winning Streak
Las Vegas Professional Gambler Tells "60 Minutes" He's Never Had a Losing Year

Walters has built an empire from his gambling. And at the age of 64, he isn't slowing down. He owns four golf courses, eight car dealerships and a ton of stock. But it was on Wall Street he says where he was taken for a ride.

"I've been swindled out of quite a bit quite a bit of money on the stock market. And I bought a lot of Enron stock once. And I got swindled. I bought a lotta WorldCom stock, got swindled. I bought a lotta Tyco stock. I got swindled," he told Logan.

His disdain for Wall Street is one of the reasons Walters decided to talk to "60 Minutes" - a chance he says to make the point that the gambling world is not as shady as most people think.

"I ran into a lotta bad guys, a lotta thieves. I mean, they'd steal the Lord's Supper. But I can tell ya, percentage-wise, I ran into many more with suits and ties on than I have with the gamblers," he told Logan.

"So you would say that the hustler from Vegas got hustled by Wall Street?" Logan asked.

"There's no doubt about it," Walters replied.
http://www.cbsnews.com/stories/2011/01/13/60minutes/main7243443.shtml?tag=contentMain;contentBody

[bread_and_roses]

70. Suicidal Capitalism

That's not actually the title of the article - it's a phrase that occurs toward the end, but I thought it summed things up pretty well:

http://www.alternet.org/environment/149552/vision%3A_8_reasons_global_capitalism_makes_our_lives_worse_--_and_how_we_can_create_a_new_kind_of_economy_/?page=entire

Vision: 8 Reasons Global Capitalism Makes Our Lives Worse -- And How We Can Create a New Kind of Economy
A new film explores how globalization has resulted in crises of the economy, the environment and the human spirit -- and points the way to a new path. by Tara Lohan

To many of us, a world where no one goes hungry, where there is no unemployment, where people are happy and they have spacious homes and lots of leisure time seems like fantasy. But it's not a fantasy for Helena Norberg-Hodge -- she saw it firsthand in the tiny Himalayan region of Ladakh, a remote mountain community that borders Tibet.

During the course of 35 years there, she also saw what happened when Ladakh was suddenly thrown open to the outside world in the 1970s and subsidized roads brought subsidized goods to the region. The local economy was undermined, the cultural fabric was torn apart. Unemployment, pollution and divisiveness emerged for the first time.

Thence follows a list of the ways global capitalism is destroying us and our planet.

She forgot inequality.

Links at the end to books, websites.

[DemReadingDU]

71. Apple CEO Steve Jobs to take medical leave

1/17/11 Apple CEO Steve Jobs Says Board Has Granted Him Medical Leave Of Absence

Jobs also says that he will continue as CEO and be involved in major strategic decisions for the company. As a reminder Apple accounts for about 20% of the Nasdaq. As a further reminder, the last time it was even rumored the COO was leaving, the stock tumbled $20 in the span of a few milliseconds. German listed Apple shares fall 1.8% following the news.

Memo from Jobs to employees:

Apple CEO Steve Jobs today sent the following email to all Apple employees:

Team,

At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.

I have asked Tim Cook to be responsible for all of Apple’s day to day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.

I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.

Steve


http://www.zerohedge.com/article/apple-ceo-steve-jobs-says-board-has-granted-him-medical-leave-absence


edit:

1/17/11
While it’s unclear what the reason is for the medical leave, Jobs’ previous medical history includes Pancreatic cancer as well as a liver transplant. In 2004, Jobs contracted Pancreatic Cancer, which he beat. Then Jobs underwent a liver transplant in 2009, and also made a full recovery. During Jobs’ absence in 2009, COO Tim Cook took over Apple’s day-to-day activities, similar to this situation.
http://techcrunch.com/2011/01/17/steve-jobs-to-take-medical-leave-of-absence-stays-on-as-ceo/

[Demeter]

72. Utah's "Quiet Title Law" Bypasses MERS, Awards Homes Free & Clear; Homeowner's $417,000 Debt Erasede

http://globaleconomicanalysis.blogspot.com/2011/01/utahs-quiet-title-law-bypasses-mers.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29


The Salt Lake Tribune has an interesting article on Utah's "Quiet Title Laws", MERS, clouded titles, and record keeping. Several people won titles free and clear to their houses or condos when debts as great as $417,000 were dismissed in court. Here are a few snips.

A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers.

The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred.

Last year, the owner of the Draper property contacted attorney Walter T. Keane to help him deal with lenders, though Keane won’t say what the problem was and the owner declined an interview request.

The lawsuit over the title to the townhouse named Garbett Mortgage and Citibank FSB as the holders of promissory notes as recorded on trust deeds filed with the recorder’s office. Integrated Title Services was listed as trustee of the Garbett Mortgage trust deed, while First American Title was the trustee of the CitiBank trust deed.

But there also was another entity listed on the trust deeds called the Mortgage Electronic Registration Systems (MERS). The Mortgage Bankers Association, the Washington, D.C.-based trade group that represents major mortgage lenders, created MERS in the mid-1990s.

Under the state’s quiet title laws, Keane said he did not have to name MERS or serve it legal papers in the lawsuit because it was not the legal owner of title to the property. Those were title companies. In addition, attorneys contend, MERS cannot be the “beneficiary” or holder of the promissory note because it readily has admitted it has no financial interest in any notes or mortgages.

What happened next is easy to explain. First American did not know who could collect payments. Nor did Garbett Mortgage who told the court it had no interest in the property. Integrated Title withdrew as a trustee.

After four months of waiting, 3rd District Judge Glen Iwasaki awared the title free and clear to Keane's client. According to the article, Keane has two other successes.

Moreover, another attorney, Abraham Bates got a "Quiet Title" on a home where a whopping $417,000 was owed. In that case, Bates named the original lender and trustee. Like attorney Keane, Bates said it was not necessary to serve MERS legal papers.

Please see the article for other interesting details.

Over 100 Lawsuits In Progress...SEE LINK

[Demeter]

73. What's Behind the Right Wing's Bizarre Obsession With the Gold Standard?

http://www.alternet.org/story/149550/what%27s_behind_the_right_wing%27s_bizarre_obsession_with_the_gold_standard?page=entire


In the wake of the Panic of 1893, the nation was suffering from a period of deflation — the downward spiral of prices and wages. Farmers were among the hardest hit. Crop prices dropped to the point where many faced financial ruin. Something was needed to raise their incomes, since the infamous laissez-faire “invisible hand” was not working for them.

The 1896 Democratic Party presidential candidate William Jennings Bryan campaigned against the Republican economic plan of setting the value of the dollar to the value of the amount of gold the United States held in reserve. The GOP – then as now – were tied to credit interests who are advantaged by the high value of debt. In accepting the nomination, Bryan gave his famous Cross of Gold Speech, in which he declared, “Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not you shall not crucify mankind upon a cross of gold.” Bryan was accusing the Republicans of failing to employ commodity or “demand-pull” inflation (as opposed to wage inflation, an increase in prices for commodities such as agricultural products, petroleum or minerals) as a means if checking deflation.

Back then, before the creation of the Federal Reserve System, Bryan was arguing for a monetary standard based upon bimetallism — one that would have established a fixed rate of exchange between gold and silver. The economic landscape has changed since then, but the role of governmental action to improve the standard of living remains an issue.

Now, more than a century after Bryan’s historic speech, and almost eighty years since FDR ended it, the gold standard is rising in our national discourse like a zombie from the grave in a bad horror movie. It is again the mantra of the right, ranging from libertarians Ron and Rand Paul, to Mama Grizzly Sarah Palin, to the populist ramblings of Glenn Beck and even to some on the religious right such as Robert P. George. Interestingly, it was one of several anti-government rants echoed by Tucson shooter Jared Lee Loughner...

[Demeter]

74. Goldman Sachs to Gently Tweak Business Practices

http://www.truthdig.com/eartotheground/item/goldman_sachs_to_tweak_business_practices_20110110/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Truthdig%2FEarToTheGround+Truthdig+|+Ear+to+the+Ground

Despite drawing the wrong kind of attention to themselves over the last two-plus years with news of murky dealings in “structured products” and concern over the bank’s role in the subprime mortgage crisis, execs at Goldman Sachs apparently believe that the way they’ve been doing business just needs a tweak here and there rather than a complete makeover, according to The New York Times.

What’s more, this news comes at the tail end of a nine-month review process Goldman launched last spring, using some familiar faces, rather than independent agents, to do the investigative work. —KA

DealBook in The New York Times:

Unprompted by the agency, the firm initiated the review in May. The committee that led the study consisted only of Goldman executives, including E. Gerald Corrigan and J. Michael Evans, a rising star and possible successor to Mr. Blankfein.

As part of the process, the committee conducted hundreds of interviews with staff members. It also hired two consulting firms, which reached out to Goldman clients. Some complained that the investment bank should be more forthcoming about its role in transactions. While much of the feedback from clients was “flattering,” Mr. Evans said, the firm was also told there was room for improvement, particularly in the areas of transparency and communication.

The report includes 39 recommendations, approved by the board in December. On Monday, Mr. Blankfein briefed Goldman partners, including senior managers, in a closed-door, offsite meeting in Connecticut.

“We believe the recommendations of the committee will strengthen the firm’s culture in an increasingly complex environment,” the report concluded. “In particular, our approach must be: not just ‘can we’ undertake a given business activity, but ‘should we.’ ”

MORE: http://dealbook.nytimes.com/2011/01/10/goldman-sachs-to-fine-tune-business-practices/?hp

[Demeter]

75. Sen. Rand Paul Holds Debt Ceiling Hostage To 44 Percent Cuts In Every Government Program

http://wonkroom.thinkprogress.org/2011/01/14/rand-paul-deb/
http://wonkroom.thinkprogress.org/2011/01/14/rand-paul-deb/

Sen. Rand Paul (R-KY) has already made it abundantly clear that he expects Republicans to demand concessions in return for raising the nation’s debt ceiling, which will have to be done sometime in the coming months. Like a slew of equally irresponsible Republicans, Paul has issued demands that he wants fulfilled in return for his vote to increase the debt limit, essentially holding the credit-worthiness of the United States hostage to his brand of radical fiscal conservatism.

Last night, Paul was asked about his stance on the debt ceiling by Fox News’ Sean Hannity, where he replied that the only way he will vote to increase the debt limit is if Congress adopts “an ironclad rule that we will balance the budget from here on after”:

HANNITY: So it will take what to get your vote to raise the debt ceiling?

PAUL: I think an ironclad rule that we will balance the budget from here on after, and that’s what it’s going to take. Not a rule that they can break. You know, they passed pay-as-you-go, they broke it 700 times in the late nineties and the early part of this century. It has to be a very strict rule, so we have to have different rules that they are forced to obey.

VIDEO CLIP AT LINK

[Demeter]

76. How Switching to a Sustainable Lifestyle Can Make Financial Sense

http://www.alternet.org/story/149483/vision%3A_how_switching_to_a_sustainable_lifestyle_can_make_financial_sense?page=entire

Converting to alternative energy is a lifestyle choice that you won't regret.

In 2010, we converted a large shed and a small one to solar energy. Costs were $500 for the small system, $5,000 for the large. When showing a group around the other day, a young man asked about payback and, when I estimated 9-10 years at the current electric rates, he suggested that the conversion was a choice based on lifestyle rather than economics.

I might have answered that the conversion had something to do with supporting a technology that’s ready for prime time, or I might have said that the electric co-op rates will inevitably go up, probably doubling, making the payback more like 5 years, or I might have said something about the environment. And, if I had remembered, I could have mentioned that a tax rebate will help us with some of the costs, but, in truth, I didn’t have an answer. I should have confessed that the conversion to off-grid power for these two sheds was my New Year’s resolution:...The day they “went live” with the power, the roofers turned off their gas generator and plugged in every power tool in the truck. That brought another payoff — four good construction guys learning about solar energy.

So, yes, the conversion to alternative energy is a lifestyle choice. These two systems have delivered electricity — that was the goal — above and beyond what I expected. And, yes, we’ve run the batteries completely down by hooking a whole lot of stuff to them including a freezer and, yes, we’ll need to think about how we use these two sheds. But even after a complete depletion of the batteries and two days of clouds when the electricity just trickled back, the systems were restored fully after a couple of hours of sunshine.

It’s time for new resolutions. I can recommend going solar, or any other kind of lifestyle change. Learn something, educate others, explore possibilities and try something new.

[Demeter]

77. Why U Should Feel Cheated, Deceived, Sickened by America's Stunning Inequality, Even If UR DoingWell

http://www.alternet.org/story/149477/why_you_should_feel_cheated%2C_deceived_and_sickened_by_america%27s_stunning_inequality%2C_even_if_you%27re_doing_well?page=entire

If middle- and upper-middle-class families had the same share of the economic pie as in 1980, they'd be making an average of $12,500 more per year...That bears repeating: $12,500 of my money every year to the richest 1 percent, and $600 more to pay my share of their tax cuts!

Inequality in the U.S. doesn't get the attention it deserves. Many of us brush it off, thinking, "So the rich get richer -- it's always been that way." Or we think: "I'm doing OK myself – and I want to be really rich someday, too."

The lopsided distribution of wealth in the U.S. doesn't get the blame it deserves for our budget problems, either. On the contrary, since our economic system is based on individual freedom, most of us believe in the inalienable right to make unlimited amounts of money. The thought of taking back a greater share from innovative and industrious business leaders is (shudder) "socialism."...

The massive redistribution of income from the middle classes to the rich over the last 30 years is like a malignant tumor that doesn't appear on the surface but eventually destroys the whole body. Every one of the 90 percent of Americans who makes less than $114,000 a year should be aware of this – and they should be angry.

MORE

[Demeter]

78. Vision: How We Can Turn Foreclosed Strip Malls and Parking Lots into Parks

http://www.alternet.org/story/149508/vision%3A_how_we_can_turn_foreclosed_strip_malls_and_parking_lots_into_parks?page=entire

I'D THINK FOOD FARMS AND ENERGY FARMS WOULD BE MORE USEFUL--HOW MANY PARKS DOES A PEOPLE NEED? MAYBE A FEW MANUFACTURING "PARKS", EVEN.

[Demeter]

79. Illinois Wakes Up

http://www.nytimes.com/2011/01/17/opinion/17mon1.html

For years, Illinois, like so many states, pretended that it had not fallen off a budgetary cliff. It was spending too much and taking in too little revenue, but every year it would kick its problems into the next. Unable to pay its bills, it finally accepted reality last week and raised taxes on incomes and businesses — a first step toward getting its house in order.

The action was immediately ridiculed by several governors around the nation who are still pretending that they can cut their way out of the enormous shortfalls they face, without raising taxes. Wisconsin and Indiana predicted a windfall of angry corporations and residents would head their way from Illinois. Even Gov. Chris Christie, the New Jersey Republican, vowed to fly to Illinois to invite businesses there to defect to his state.

That makes great political theater. But businesses and voters in Illinois, and around the country, should take a closer look at the facts and figures, including their own.

After 22 years of not raising income taxes, Illinois saw its budget shortfall grow to $15 billion. It had the lowest state credit rating in the nation, and it wasn’t paying its bills to hospitals and schools....The Illinois tax rate was low before and remains low for big states. The income tax will rise from a flat 3 percent to a flat 5 percent. That will cause pain at the lower and middle levels of the economic scale, but the state’s millionaires will probably stay put. (The top rate is 10.55 percent in California, 8.97 percent in New Jersey and New York, and 7.75 percent in Wisconsin.)...Illinois’s corporate tax is going up to 9.5 percent from 7.3 percent, but that by itself is unlikely to send businesses packing. What businesses crave most is a stable environment in which to make profits, and Illinois was anything but stable. Businesses tend not to like it when health and education systems break down...

[Demeter]

80. Bill Daley: Chicago's First Family Abandons Working People and Goes Wall Street

http://blog.buzzflash.com/node/12192

Bill Daley is a vivid metaphor of the Democratic Party abandonment of the working class.

Back in the day, when I was a full-time advocate for handgun control, I got to know Richard M. Daley (the outgoing mayor of Chicago) and his brother Bill a bit. In fact, I first met both of them when Richard M. was still Cook County State's Attorney and the "mayor in waiting," and Bill - the younger of the two - was known as the brains of the family.

They were both completely down-to-earth people - and I suppose they still are. They had no airs, smugness or arrogance about them. That was when the Daley family base was still the South Side neighborhood of Bridgeport - near the hallowed grounds of their beloved White Sox - a working-class enclave of bungalows.

But over the last ten years, I haven't seen much of them. My passion moved into journalism, Richard M. has served as mayor for more than 20 years (likely to be succeeded by corporatist Rahm Emanuel next year), and Bill Daley moved from being a lawyer to heading a union bank (Amalgamated) and then solidly into the Wall Street private sector, while still advising his brother and the Democratic Party (he was co-chair of Al Gore's presidential campaign)...

[Demeter]

81. How a Red Herring About WikiLeaks Killed Whistleblower Protections

http://www.truth-out.org/how-a-red-herring-about-wikileaks-killed-whistleblower-protections66701

[Demeter]

83. The Nation: The Too-Big-To-Fail President

http://www.npr.org/2011/01/07/132732475/the-nation-the-too-big-to-fail-president

[Demeter]

84. The Rise and Fall of Employer Sanctions

http://www.truth-out.org/the-rise-and-fall-employer-sanctions66680

Workplace raids by gun-wielding Immigration and Customs Enforcement (ICE) agents that resulted in the mass arrests of dozens and sometimes hundreds of employees have ceased under the Obama administration. But "silent raids," or audits of companies' records by federal agents, that replaced them have resulted in the firing of thousands of undocumented workers. The administration defends these "softer, gentler" operations, yet the result is the same: workers who are here to support their families are out of work...

[Demeter]

85. A Common Currency, Rather Than Common Sense (ESTONIA JOiNS EU) KRUGMAN

http://www.truth-out.org/a-common-currency-rather-than-common-sense66721

Congratulations are in order for Estonia, and also perhaps condolences. The nation officially joined the euro zone on Jan. 1 — an impressive achievement, symbolic of the country’s transformation from former Soviet province to good European citizen.

But the cost of the adventure so far has included a Depression-level slump. Gross domestic product is growing again, but only after falling 18 percent since 2007. International Monetary Fund projections show Estonia’s G.D.P. failing to regain its 2007 level through 2015. Unemployment has also risen to almost 18 percent, and is expected to remain above 10 percent into 2014. So, congratulations to Estonia — but condolences, too. This wasn’t the glittering entrance to the euro you were promised years ago.

I must point out that Europe’s recent struggles with the common currency have somewhat vindicated the “euroskeptics” — all those people (me included) who had doubts about the euro project from the beginning.

So what prompted those doubts? Economists like myself and Barry Eichengreen assessed the proposed currency in terms of the optimum currency area theory, which basically says that there are both benefits and costs to two or more nations’ adopting a common currency...

[Demeter]

86. Arizona, where the American Dream went to die (DON'T BLAME ME, TANSY!)

I'M ONLY THE AGGREGATOR!

http://www.philly.com/philly/blogs/attytood/Arizona_where_the_American_Dream_went_to_die.html

...The real factors behind this Arizona Nightmare -- venal banks, too much borrowing, too much outsourcing of jobs that, unlike home construction, would have been permanent and stable -- were too abstract, especially for the toxic soup of talk radio. It is tragic how a state that once prided itself on Barry Goldwater-style can-do self-reliant libertarianism devolved into blaming The Other the minute that things went south here. Virulent anti-immigrant nativism -- occasionally sprinkled with things like neo-Nazism -- grew into the desert, as did fear of Muslims, to the point where an architecturally unusual new Christian church in Phoenix had to declare in a giant banner that it was not Islamic. Political heroes were now those like Arpaio who didn't just pursue reactionary policies but actually heaped humiliation and degradation on The Other, in sweltering outdoor prison camps. Ditto with members of Congress suddenly out of step with the new zeitgeist -- moderate Democrats like Harry Mitchell and Gabrielle Giffords were not just to be disagreed with but to be physically threatened with vandalism or worse. Meanwhile, guns became a statewide obsession, as lawmakers competed to see just how lax an environment they could create, where it was legal to bring concealed firearms just about anywhere....

[Demeter]

87. Pension Envy

http://www.truth-out.org/pension-envy66760

ABOUT THE ANTI-UNION, ANTI-PUBLIC EMPLOYEE CAMPAIGNS

[Demeter]

89. Matt Taibbi, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America

http://blog.buzzflash.com/node/12211

Of all the books written about Wall Street, no one conveys informed outrage about the pillaging of America by financial gamblers better than Matt Taibbi. A writer for Rolling Stone, Taibbi writes with the abandonment of Hunter Thompson and the roiling indignation of Norman Mailer.

In "Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America," Taibbi puts the blame squarely on America's economic and political elite for turning the nation's financial destiny into a gambling casino.

As the fabric of American society unravels, nothing causes more social friction than a deteriorating economy. Taibbi doesn't attempt to maintain a "reasoned" analytical tone. He's furious at the highway robbery that took place in southern Manhattan, with a thumbs up from the Federal Reserve and the DC government establishment.

Fight bullets with knowledge. Support Truthout/BuzzFlash and learn about the theft of our financial well-being by making a contribution to Truthout/BuzzFlash and receiving a gift copy of "Griftopia." SEE LINK

[Demeter]

90. Why Call Them Green?

http://prospect.org/cs/articles?article=why_call_them_green

Monday was the deadline for public comments on the Bureau of Labor Statistics' proposal on gathering data on green jobs. It was a minor step in an obscure, slow-moving process most Americans aren't watching.

The public commentary period that just ended is part of a larger federal effort to formalize our understanding of what a green job is and count, for the first time, how many green jobs already exist and how fast the sector is growing. It's both critical and frustratingly, agonizingly slow-moving. In the meantime, we've pumped millions of dollars into green-jobs training programs, and politicians have touted the idea that a full economic recovery hinges on using green jobs to revitalize the manufacturing sector.

So, what is a green job? The two-part BLS definition, which the bureau began working on in early 2010, was released last September. It focuses on the degree of environmental impact: Green jobs must either be in industries that produce goods or provide services that benefit the environment or conserve natural resources, or must be jobs in which workers' duties involve making their establishment's production processes more environmentally friendly.

That definition was rightly criticized as overly broad. While nearly everyone would include installing solar panels as a green job, what about an architect who designs a green house? (Under the proposed definition, both would count.) Moreover, the definition also largely ignores how we define environmental benefit: Houses, for example, are held to standards supplied by the U.S. Green Building Council in its Leadership in Energy and Environmental Design Green Building Rating System, which awards points based on green materials and processes used. A luxury house in the suburbs with Energy Star appliances and sustainable wood flooring would qualify as green, never mind if the future resident drives her SUV 30 miles daily to work...

[Demeter]

91. Banks marketing eurozone bond to be named

Bankers say they have rarely seen such demand for debt with some of the wealthiest sovereign and private funds eager to snap up the bond designed to help fund the Irish bail-out

Read more >>
http://link.ft.com/r/2SRI11/D48AKQ/4VXHZ/ZBS71J/8AN64G/QR/t?a1=2011&a2=1&a3=17


FRESH MEAT!

[Demeter]

92. US manufacturers raise prices as input costs surge

A growing number of North American industrial companies are pushing up prices – and warning of further increases to come – in the wake of fast-rising raw material costs.

Read more >>
http://link.ft.com/r/2SRI11/D48AKQ/4VXHZ/ZBS71J/M9CKNI/QR/t?a1=2011&a2=1&a3=17

[Demeter]

93. China asks JPMorgan to back credit effort

Beijing has asked the investment bank to invest in a scheme to provide credit guarantees for small and medium enterprises in the country, helping them to access financing

Read more >>
http://link.ft.com/r/2SRI11/D48AKQ/4VXHZ/ZBS71J/9Z3OWO/QR/t?a1=2011&a2=1&a3=17

SO, BY VALENTINE'S DAY, WILL WE KNOW IF THIS IS A SUCKER, OR A SWEETHEART DEAL?

[Demeter]

94. Hu questions future role of US dollar

On the eve of a state visit to Washington China’s president says “the current international currency system is the product of the past”

Read more >>
http://link.ft.com/r/EB8122/ZBSPJD/HI3M9/403XP5/5CJBMQ/CM/t?a1=2011&a2=1&a3=17

THE GAUNTLET HAS BEEN THROWN...

[Demeter]

95. Indonesian crop failures add to food fears

Indonesia is in the grip of crop failures brought on by nearly a year of heavy rain, threatening millions of jobs and raising food prices for tens of millions of families

Read more >>
http://link.ft.com/r/EB8122/ZBSPJD/HI3M9/403XP5/HDGMSB/CM/t?a1=2011&a2=1&a3=17

[Demeter]

96. Pledge boosts Europe’s pipeline plans

José Manuel Barroso has hailed as ‘a major breakthrough’ a pledge from Ilham Aliyev, Azerbaijan’s president, to supply ‘substantial volumes of gas’ to Europe

Read more >>
http://link.ft.com/r/EB8122/ZBSPJD/HI3M9/403XP5/3O9TZK/CM/t?a1=2011&a2=1&a3=17

JUST KEEP A LOOKOUT FOR THAT BIG BEAR TO THE NORTH OF YOU...

[Demeter]

97. Mohamed El-Erian - Europe is running fast to stand still

The two main proposals to be discussed at Monday's meeting of EU finance ministers would do nothing fundamentally to address the unsustainable stock of debt and its adverse impact on growth, investment and employment. Instead, it would facilitate an even larger and quicker transfer of debt from the private sector to the public sector.

Read more >>
http://link.ft.com/r/CTBPCC/BMB22K/T10SH/GK03AM/6VFC0J/1G/t?a1=2011&a2=1&a3=17

IT'S THE SAME STORY ALL OVER, MOH.

[Demeter]

98. The Foreclosure Dump

http://www.cnbc.com/id/41059824/

...Sharga estimates as many as a quarter of a million foreclosures that should have happened in 2010 will now be pushed into the 2011 numbers, and added to an already huge supply of bank owned properties. The four biggest banks already have close to $7 billion worth of foreclosed properties (REO) on their books, and Fannie and Freddie have about $24 billion collectively. While REO sales make up about one third of all sales in the current market, there is an estimated 3 year supply....


I also know there have been many discussions brewing within the government and at the banks with hedge funds looking to buy up bulk foreclosures. So far no big deals we know of, but they're coming for sure. The government may even be considering incentives to get more investors to buy foreclosures, which I blogged about last month:

http://www.cnbc.com/id/40590863/

[Demeter]

99. I'm going to close out this thread with MLK's Video Speech "A Time to Break Silence"

A Time to Break Silence

http://www.informationclearinghouse.info/article2564.htm

A VIDEO RECORDING IN TWO PARTS, AND TRANSCRIPT FOLLOWING...


This has been a momentous week for me personally--the Condo Association's annual meeting was a great success for everyone, and a personal satisfaction. Our suit against NCB progresses. The weather is bitterly cold, but still both cars run and we aren't sick yet. The unopened email didn't decline, but neither did it grow...I'm at 159, and hope to bring that down a bit during the week.

And then while the US and Israel destabilized Lebanon yet again, the people of Tunisia rose and threw out their dictator. Best of luck and good timing, Tunisia!

I'm hopeful that one day soon, the US and Israel will suffer a similar liberation. What cannot continue, will not continue, especially if China says so.

[Demeter]

100. HAVE A GOOD WEEK, EVERYONE!

KEEP THOSE POSTS COMING!

[DemReadingDU]

101. Thank you for starting it off!